Federal Reserve Bulletin, 1993-03

VOLUME 79 • NUMBER 3 • MARCH 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 167 MONETARY POLICY REPORT 193 STATEMENT TO THE CONGRESS TO THE CONGRESS Alan Greenspan, Chairman, Board of Gover- Although the economy and the financial mar- nors, identifies the major tendencies visible in kets continue to face difficult adjustments, the economy and says that several economic economic growth in 1993 most likely will indicators are distinctly encouraging and that proceed at a moderate pace. The growth of the Federal Reserve will seek to foster finanoutput probably will be supported by further cial conditions to encourage maximum susgains in productivity, the ultimate source of tainable growth in the economy, before the increased real income and improved living Joint Economic Committee, January 27,1993. standards over the long run. In addition, (Chairman Greenspan presented identical tesincreases in employment are expected to be timony before the Senate Committee on the large enough to bring further gradual declines Budget on January 28, 1993.) in the unemployment rate over the course of 1993. Inflation is expected to remain subdued, 197 ANNOUNCEMENTS boding well for sustained expansion in 1993 and beyond. Statement by Chairman Greenspan regarding the announcement that E. Gerald Corrigan plans to step down as President of the Federal 188 THE HERFINDAHL-HIRSCHMAN INDEX Reserve Bank of New York. The Herfindahl-Hirschman index is a statisti- Appointment of new members to the Concal measure of concentration that is used by sumer Advisory Council. the Department of Justice and the Federal Issuance of final rule to carry out provisions Reserve in the analysis of the competitive of sections 202(d) and 210 of the Federal effects of horizontal mergers. It is useful in Deposit Insurance Corporation Improvement analyzing horizontal mergers because such Act of 1991 that affect bank holding compamergers affect market concentration, and econies and foreign banking organizations with nomic theory and considerable empirical evioperations in the United States. dence suggest that, other things equal, the concentration of firms in a market is an impor- Issuance of final rule to implement portions of tant element of market structure and a deter- the Foreign Bank Supervision Enhancement minant of competition. Act of 1991. Decision on MSA designations. 190 INDUSTRIAL PRODUCTION AND Approval of an alternative method to adjust CAPACITY UTILIZATION the 10 percent revenue test for ineligible secu- Industrial production rose 0.3 percent in rities held by section 20 subsidiaries. December, compared with an upward-revised Proposal to amend Regulations H, K, and Y gain of 0.7 percent in October and a rise of to implement a uniform multiagency criminal 0.4 percent in November. Total industrial referral form. capacity utilization edged up in December, to 79.3 percent, the highest rate since Novem- Preliminary figures available on operating ber 1991. income of the Federal Reserve Banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Revised Lists of Marginable OTC Stocks and A69 GUIDE TO STATISTICAL RELEASES AND of Foreign Margin Stocks now available. SPECIAL TABLES 203 LEGAL DEVELOPMENTS A72 INDEX TO STATISTICAL TABLES Various bank holding company, bank service A74 BOARD OF GOVERNORS AND STAFF corporation, and bank merger orders; and pending cases. A76 FEDERAL OPEN MARKET COMMITTEE AND STAFF; ADVISORY COUNCILS A1 FINANCIAL AND BUSINESS STATISTICS A78 FEDERAL RESERVE BOARD These tables reflect data available as of PUBLICATIONS January 29, 1993. A80 MAPS OF THE FEDERAL RESERVE A3 GUIDE TO TABULAR PRESENTATION SYSTEM A4 Domestic Financial Statistics A44 Domestic Nonfinancial Statistics A82 FEDERAL RESERVE BANKS, BRANCHES, A53 International Statistics AND OFFICES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress Report submitted to the Congress on February 19, with which the economy had to contend. Indeed, 1993, pursuant to the Full Employment and Bal- the performance of the U.S. economy stands in anced Growth Act of 19781 sharp contrast to that of a number of major foreign industrial economies that appear still to be laboring to regain forward momentum. MONETARY POLICY AND THE ECONOMIC Employment has grown since the middle of last OUTLOOK FOR 1993 year, but at only a gradual pace. Hiring has been damped by the ability of firms to meet their output Last July, when the Federal Reserve Board pre- objectives through hefty increases in productivity. sented its semiannual monetary policy report to the The unemployment rate, which had risen in the first Congress, there was considerable uncertainty about half of 1992 in conjunction with a surge in the the prospects for the economy in the second half of share of the working-age population in the labor 1992. After a promising start at the beginning of force, turned down thereafter as labor force particithe year, growth of the economy had slowed once pation fell back. The unemployment rate in January again in the spring, and various structural adjust- of this year was 7.1 percent, more than half a ments that had been impeding the pace of the percentage point below the peak rate of last expansion retained considerable force. However, summer. with drag from the structural adjustments expected Price developments remained favorable in the to diminish gradually over time and with the econ- second half of 1992, and the rise in the consumer omy continuing to benefit from the substantial eas- price index over the four quarters of the year ing of money market conditions that the System amounted to about 3 percent, matching the low rate had implemented over the years, the most likely achieved in the previous year. Consumer energy prospect for the economy was thought to be one of prices turned back up in 1992, but the prices of moderate growth in the second half of the year. other goods and services that enter into the CPI In the event, economic growth did indeed pro- generally rose less rapidly than they had in 1991. ceed at an improved pace in the second half of Although the CPI spurted Vi percent this past 1992, although the pickup did not start to become month, the underlying trends in labor costs and evident in the incoming economic data until well prices remain encouraging. The success to date in into the autumn. Fueled by strong increases in keeping inflation in check, while restoring growth, household and business spending, real gross has had highly salutary effects on financial markets domestic product rose at an annual rate of 3.6 per- and on the process of financial reconstruction, the cent in the second half of the year. The increase continuing progress of which is essential to the over the four quarters of the year amounted to achievement of renewed and sustainable prosperity. 2.9 percent. This was the largest gain in output The hesitant pace of the economy evident in since 1988, and, while far from robust by the incoming information throughout much of last year, standards of past cyclical upswings in activity, it along with notable weakness in the monetary and was a much stronger performance than many credit aggregates and steady gains against inflation, analysts—inside and outside government—had prompted the Federal Reserve to ease monetary thought likely, given the extraordinary headwinds conditions three times, bringing short-term rates down another full percentage point over the year. The discount rate was reduced to 3 percent, and 1. The charts for the report are available on request fromP ubli-short-term rates generally are now at their lowest cations Services, Board of Governors of the Federal Reserve Syslevels since the early 1960s. tem, Washington, DC 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

168 Federal Reserve Bulletin • March 1993 Long-term rates also fell, on balance. Declines term debt. This shift in the focus of financing were limited at times, however, by concerns about efforts toward the capital markets, a process that prospective federal budget deficits and about the has been in progress for the last couple of years, possibility that inflation might begin to move has helped to redress financial distortions that higher as the expansion proceeded. Notable accompanied the buildup of debt and the rapid rise decreases in long rates were registered in late 1992 in some asset prices in the 1980s. and early 1993, as inflation remained subdued and The low level of credit demanded from depositoas statements by Administration officials suggested ries has meant that these institutions have not that they would seek only limited near-term fiscal needed to seek large volumes of deposits. As a stimulus and that proposals to make substantial consequence, rates paid on deposits have been adcuts in the federal budget deficit over time were justed downward rapidly as short-term market rates under serious consideration. The trade-weighted have declined. Savers, reacting to the lower deposit foreign exchange value of the dollar in terms of the rates and to attractive returns on bonds and equity, other Group of Ten currencies appreciated on have shifted funds from M2 deposits into the capibalance over the course of 1992 and rose further tal markets. One method savers have used to capduring the first weeks of 1993. The dollar bene- ture these higher capital market yields has been the fited from the improved performance of the U.S. purchase of bond and stock mutual funds, which economy relative to conditions in other industrial ate not included in the monetary aggregates and countries. which together experienced record inflows in 1992. Growth of the monetary aggregates slowed last Moreover, consumer loan rates have fallen by less year despite an acceleration in nominal spending than deposit rates, and households appear to be and income. For the year, M2 advanced 1.9 per- using M2 assets to repay consumer debt or restrain cent, below the 2lA percent lower end of its target its growth. The combination of rate incentives, range. M3 also came in under its 1 percent to desires to strengthen balance sheets, and the greater 5 percent target range, growing only 0.5 percent. availability at low transaction cost of a broadened The Federal Reserve did not make greater efforts to array of savings vehicles beyond traditional deposboost growth to within these ranges because, as the its appear to have distorted, at least for a time, the year went on, it became increasingly clear that traditional relationship between levels of M2 and slow growth of the broad money aggregates did not M3 assets and given levels of spending. indicate that financial market conditions were Although growth of M2 and M3 was very weak impeding the expansion of spending and income. last year, Ml accelerated to 14.3 percent, the sec- In fact, growth of nominal GDP exceeded that of ond fastest annual increase recorded in the official M2 by 31/2 percentage points last year and that of series, which begins with 1959. This pickup owed M3 by 43/4 percentage points. Not only did data on in part to the expansion of spending, but it mainly spending itself show a firming trend over the year, reflected the tendency for rates on liquid deposits but narrow money (Ml) and reserves were expand- to adjust downward less rapidly than those on time ing rapidly—suggesting to some that liquidity deposits. In response, savers shifted substantial was quite ample—and the growth of debt, while volumes of funds from maturing time deposits to restrained, was considerably in excess of that of the NOW accounts. In addition, businesses boosted broader monetary aggregates. their demand deposits substantially. To support Nominal GDP growth last year, which picked up this growth in transactions deposits, the Federal to 5.4 percent from 3.5 percent in 1991, was fueled Reserve added substantial volumes of reserves in by spending that was financed largely outside 1992. Total reserves increased 20 percent last year, banks and other depositories, whose liabilities con- and the monetary base, which includes currency stitute the lion's share of the monetary aggregates. outstanding as well as reserves, increased 10.5 per- Spurred in part by advances in equity prices and by cent, the highest rate ever registered in the official declines in longer-term interest rates, businesses series. and households strengthened their balance sheets Decisions to strengthen balance sheets had a by raising funds in bond, mortgage, and equity smaller but significant effect on debt growth. The markets and repaying bank loans and other short- debt of nonfinancial sectors is estimated to have Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 169 expanded 4.6 percent, only slightly faster than in an incentive to shift funds out of monetary assets 1991 and just above the lower end of its monitoring and into capital markets—a process facilitated by range. With debt growing less rapidly than income the growing availability of mutual funds at banks and with declines in market interest rates allowing and thrift institutions. higher-cost debt to be rolled over at lower rates, Given that these and other forces tending to households and businesses made substantial further channel funds around depository institutions and progress in reducing debt-service burdens. hence to raise velocity (the ratio of nominal GDP to money) seem likely to persist in 1993, a downward adjustment of the money ranges is appropri- Monetary Objectives for 1993 ate to take account of the expected atypical behavior of velocity: Money growth lower than normally The aim of the Federal Open Market Committee in expected would be sufficient to support substantial 1993 is to promote financial conditions that will growth in income. With this in mind, the Commithelp to maintain the greater momentum that the tee made a technical downward adjustment in the economy developed in 1992 and to consolidate the target growth ranges for M2 and M3, reducing the trend toward lower inflation. The objectives for the upper and lower ends of each range by V2 percentmonetary aggregates in 1993 were set with that aim age point (table 1). in mind. The strength of the influences depressing money At its July 1992 meeting, the Committee had growth relative to income remains somewhat provisionally chosen the same ranges for 1993 as it uncertain, however. If they persist in 1993 to the was confirming for 1992—2Vi percent to 6V2 per- same extent as in 1992, growth of M2 and M3 in cent for M2 and 1 percent to 5 percent for M3, with the lower portions of their reduced target ranges a monitoring range for the nonfinancial debt aggre- would be consistent with substantial further growth gate of 4Vi percent to 8V2 percent. At that time, the of nominal spending. Alternatively, the upper ends Committee noted that the extent and duration of of the target ranges would accommodate ample deviations of money growth from historical rela- provision of liquidity to support further economic tionships remained highly uncertain and that the expansion, even if the growth of money and income actual setting, in February, of 1993 ranges consis- were to begin coming into more normal alignment tent with the basic policy objectives would need to and the recent high rate of increase in velocity were be made in light of additional experience and to slow. The Committee will continue to examine analysis. money growth as the year unfolds for evidence on At its February meeting, in reviewing the ranges developing economic and financial conditions. As provisionally chosen for 1993, the Committee in the past, the Federal Reserve will also be guided noted that nominal spending had accelerated con- by a careful assessment of a wide variety of other siderably in 1992 despite the quite-sluggish growth financial and economic indicators. The Commitof M2 and M3 throughout the year. The Committee tee's primary concern, as in 1992, will remain viewed this development as underscoring the fostering financial conditions conducive to susimportance that special, and historically anoma- tained economic expansion and a noninflationary lous, forces have had in restraining the growth of environment. broad money relative to spending. Although the intensity of some of these forces might diminish in 1993, as borrowers and lenders achieve more com- 1. Ranges for growth of monetary and debt aggregates1 fortable balance sheet positions, the forces are Percent unlikely to disappear. For example, the substantial volume of liquid securities on banks' balance sheets suggested that banks will not become vigorous bidders for deposits in 1993 even if, as expected, lending picks up. In addition, the yield 1. Change from average for fourth quarter of preceding year to average curve, although it had begun to flatten a bit early in for fourth quarter of year indicated. Ranges for monetary aggregates are targets; range for debt is a monitoring range. the new year, is likely to continue to provide savers 2. Domestic nonfinancial sector. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

170 Federal Reserve Bulletin • March 1993 For debt growth, which has been less damped by Bank presidents cited the degree of momentum that special forces than has the expansion of the broader appears to have developed in the economy in the monetary aggregates, last year's range was retained latter part of 1992 and early 1993. The various for 1993. Federal debt growth again is likely to be balance sheet problems that apparently retarded substantial. Growth of the debt of nonfederal sec- growth of the economy during the early phases of tors is expected to accelerate somewhat as borrow- the current expansion, while by no means fully ers' balance sheets continue to improve, as inter- resolved, seem to be receding. In addition, such mediaries become more willing to lend, and as the sectors as residential construction, business investeconomy expands. Nevertheless, the growth of ment, and consumer durables clearly are benefiting nonfederal debt is expected to remain below that of from the declines that have occurred in interest nominal GDP, a development the Committee sees rates. as contributing to building the sound financial However, impediments to more rapid expansion foundation crucial to a sustained economic are still present. Government spending for defense expansion. appears likely to continue to decline for some time to come. More broadly, balance sheet repair and Economic Projections for 1993 business restructuring, which have exerted major restraint on economic activity in recent years, are Although the economy and the financial markets still in process, despite the apparent improvement continue to face difficult adjustments, the gover- in business finances in 1992. Indeed, the new nors and Bank presidents think that the most likely year has brought additional announcements of busiprospect for 1993 is that economic growth will ness restructurings in a variety of industries, both proceed at a moderate pace. The growth of output defense-related and other. These changes are leadprobably will be supported by further gains in ing to an economy that is more productive and productivity, the ultimate source of increased real competitive, but at the cost of some dislocation and income and improved living standards over the disruption in the short run. The magnitude of struclong run. In addition, increases in employment are tural changes like these is a special uncertainty in expected to be large enough to bring further grad- the economic outlook for the remainder of the year. ual declines in the unemployment rate over the With regard to the external sector, many foreign course of 1993. Inflation is expected to remain industrial countries are experiencing prolonged subdued, boding well for sustained expansion in economic weakness. Under the circumstances, the 1993 and beyond. growth of U.S. exports, while remaining positive, The governors' and Bank presidents' forecasts of may well fall short of the growth of imports again real GDP growth over the four quarters of 1993 in 1993, exerting a drag on real GDP in contrast to span a range of 2Vi percent to 4 percent, with the the substantial impetus in the period up to early central tendency of the forecasts in a range of 1991. 3 percent to VA percent (table 2). In considering Despite the job cutbacks at some large compathe possible outcomes for 1993, the governors and nies, other firms, especially smaller ones, are add- 2. Economic projections for 1993 1. All urban consumers. 2. Percentage of civilian labor force. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 171 ing to payrolls, albeit cautiously, and total employ- the strengthening of growth in the second half, to a ment has been rising modestly. The governors and 3.6 percent rate, the rise in real GDP over the year Bank presidents expect this pattern to persist, with cumulated to 2.9 percent, the strongest gain since net gains in employment during 1993 likely to 1988. Employment also picked up in 1992, but be sufficient to bring the unemployment rate down rather slowly; the unemployment rate continued to somewhat further over the year. The central ten- move up in the first half of the year, but thereafter dency of the unemployment rate forecasts for the followed a course of gradual decline. Inflation confourth quarter of 1993 extends from 63A percent to tinued to trend lower in 1992, with most broad 7 percent; the remaining forecasts of the System price indexes showing increases that were among officials range down to about 6V2 percent. the smallest since the mid-1960s. The governors' and Bank presidents' forecasts of The growth of household and business expendithe rise in the consumer price index over the four tures picked up appreciably in 1992. Households, quarters of 1993 extend from a low of 2Vi percent for their part, began to spend more freely on motor to a high of 3 percent. Within that range, a large vehicles and other goods, and their purchases of majority of the forecasts are clustered in the span homes also strengthened, spurring additional gains of 1V2 percent to 2% percent. The considerable in residential construction. Businesses began inprogress that has been made in bringing down vesting more heavily in new equipment; much of inflation during the past decade is providing one of the gain went for computers and other electronic the essential underpinnings for the sustained equipment embodying new technologies. Business growth of real living standards over the long run. outlays for nonresidential construction declined, on However, achieving a satisfactory economic per- net, over the year, but by a much smaller amount formance in 1993—and in the years thereafter— than in 1991. In total, the final purchases of housewill depend on initiatives in many types of policy holds and businesses rose about 4lA percent in real other than monetary policy. In coming months, the terms in 1992, after declining in each of the two Congress and the new Administration will be grap- previous years; the 1992 gain matched that of 1988 pling with a host of issues, including those related and otherwise was the largest in eight years. By to fiscal policy, regulatory policy, and foreign trade contrast, governments at all levels continued to be policy. Farsighted approaches are needed in all burdened by huge budget deficits in 1992, and for a those areas if the economy is to perform at its full second year their combined purchases of goods and potential over the long haul. In framing regulatory services changed little in real terms. In addition, policy and foreign trade policy, the Congress and export growth was slowed by weakness of activity the Administration will need to keep an eye on in several foreign industrial economies; despite potential costs and rigidities that could sap the improvement in the second half, the rise in real vigor of a market economy. With regard to fiscal exports of goods and services over the year, policy, credible action to reduce the prospective 3V2 percent, was only about half as large as the size of future federal budget deficits could yield a annual gains in 1990 and 1991. Meanwhile, the very direct and meaningful payoff in the form of faster growth of domestic spending pushed up the lower long-term interest rates than otherwise would growth in imports of goods and services to 9lA perprevail. Such action would encourage capital in- cent in 1992. vestment and would go far toward relieving anxi- Further progress was made in reducing inflation eties that many of the nation's citizens still have last year. The consumer price index excluding food about longer-run economic prospects. and energy—a measure widely used in gauging the underlying trend of inflation—increased about 3V2 percent over the four quarters of 1992; this was a full percentage point less than the increase during THE PERFORMANCE 1991. The total CPI rose about 3 percent over the OF THE ECONOMY IN 1992 four quarters of 1992, the same as in the previous The economy began to exhibit renewed firmness in year; energy prices, which had fallen sharply in 1991, turned up slightly this past year, while 1992, overcoming a host of impediments that have increases in food prices were quite small for the been working to retard the growth of activity. With Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

172 Federal Reserve Bulletin • March 1993 second year in a row. Except for 1986, when the past cyclical standards, but nonetheless the biggest CPI was pulled down by a collapse of world oil since 1988. prices, the increases of the past two years are the Real personal consumption expenditures rose smallest in a quarter century. about 3lA percent over the four quarters of 1992, after essentially no gain over the two previous years. For a considerable part of 1992, the The Household Sector increases in spending were interspersed with stretches of sluggishness. A surge in consumer The financial condition of households improved in expenditures early in the year was followed by 1992. Income growth picked up a little in the listlessness during the spring, and a second jump in aggregate, the strains on household balance sheets spending around midyear was followed by still eased a bit, and the spirits of consumers brightened another bout of slow growth during the summer. markedly toward year-end. Growth in consumer However, the last few months of the year brought spending followed a stop-and-go pattern through fairly sizable advances, boosting the growth of midsummer, but the gains thereafter were steadier consumption expenditures to a rate of more than and fairly sizable overall. Spending for residential 4 percent in the fourth quarter. investment also advanced over the year, by a con- Consumer expenditures for motor vehicles insiderable amount in total. creased about 9 percent over the four quarters of The aggregate wealth of households appears to 1992. More than half the gain came in the fourth have increased further during 1992. With stock quarter, when sales of new vehicles were boosted prices increasing, the value of households' finan- by special promotional incentives and, apparently, cial assets rose moderately, and the value of resi- by a growing perception among consumers that dential real estate also moved up, on average. On better economic conditions lay ahead. At the start the liability side, households remained cautious in of 1993, after some of the more highly publicized taking on new debt in 1992, and the burden of promotional programs had ended, sales of cars and carrying debt continued to ease, owing both to slow light trucks fell sharply for a brief time, but they growth in the volume of debt outstanding and to since appear to have regained strength. More than the further reductions in interest rates, which facili- likely, some fundamental support for sales is comtated the ongoing substitution of new, lower-cost ing from the replacement needs of persons who had debt for old, higher-cost obligations. The incidence put off buying new vehicles during the recession of households experiencing loan-repayment diffi- and the early phases of the recovery. culties diminished over the year. Spending picked up during the second half of Income growth picked up moderately in 1992. 1992 for many items other than motor vehicles, Wages and salaries rose about 4lA percent in with notable gains in categories in which an elenominal terms, after a gain of only 2lA percent in ment of discretion typically enters into households' 1991. In addition, proprietors' incomes benefited purchasing decisions. Real outlays for furniture from the strengthening of economic activity, and, and household equipment rose at an annual rate of with corporate profits on the rise, the dividends nearly 15 percent in the second half of 1992, and paid to shareholders more than reversed their real expenditures for apparel climbed at nearly a decline of the previous year. Transfer payments, 10 percent rate. In total, spending for consumer which had soared as the economy softened in durables other than motor vehicles grew about 1990 and 1991, continued to grow rapidly in 1992. 9 percent in real terms over the four quarters of By contrast, interest income trended sharply lower, 1992, after declining in each of the two previous as the rates of return on household deposits and years. Real outlays for nondurables, which also had other financial assets fell further. Total after-tax fallen in both 1990 and 1991, rose almost 3 percent income got a temporary boost in 1992 from an in the latest year. Real expenditures for services adjustment of federal tax withholdings that took increased about 2 percent during 1992, slightly effect at the start of March. With inflation low, faster than in other recent years. real disposable personal income increased nearly The personal saving rate—the share of dispos- 2V2 percent over the year—not a large gain by able income not used for consumption or other Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 173 outlays—rose moderately in the first half of the in the monthly data on starts is not unusual at this year, when concerns of households about the time of year, however. prospects for the economy apparently led them to Despite the large gains seen in 1992, starts in the adopt more cautious attitudes toward spending. The single-family sector have retraced only part of the rate then turned down in the second half of the year decline that took place in the late 1980s and early as consumers began to spend more freely. The 1990s. Strong impetus for recovery has come from fourth-quarter rate was slightly below the average declines in mortgage interest rates, which have for 1992, but it was well within the range of been considerably lower this past year than they quarterly observations seen over the past several were in 1986, when single-family starts were at years. their most recent annual peak. However, a number Real outlays for residential investment rose of other developments have continued to retard the 15 percent during 1992, climbing to a fourth- recovery of housing activity. Uncertainties about quarter level nearly 25 percent above their reces- job prospects no doubt have deterred some buyers sion low of early 1991. Most of the 1992 rise from taking advantage of the lower rates on home in residential investment came in the form of mortgages. More broadly, recent demographic increased construction of single-family housing trends have been less favorable to growth in the units, which benefited from the further net reduc- demand for single-family housing than were the tion in mortgage interest rates over the course of trends of the mid-1980s. The declines in house the year. Outlays for home improvements, which prices in a number of regions in recent years—and make up about one-fifth of total residential invest- the more general lack of any real price appreciation ment, also increased in 1992, after declining in to speak of—also may have affected demand to each of the three previous years; repair of the some extent; certainly, housing is no longer viewed damage caused by Hurricane Andrew accounted by potential buyers as the sure-fire, high-yield infor part of that gain. By contrast, multifamily hous- vestment that it was once thought to be. ing remained depressed; high vacancy rates and Builders, for their part, have remained a little unfavorable demographic trends continued to be cautious, as have the lenders who finance new big obstacles to new construction activity in that construction. In many cases, houses are being portion of the market. started only when a buyer is lined up; eagerness to As with consumer spending, the gains in single- build in anticipation of future sales is not widely family housing activity tended to come in intermit- apparent. tent bursts through much of 1992. Sales of new In the multifamily sector, the number of units homes surged early in the year, weakened in the started in 1992 was about 75 percent below the spring, surged again during the summer, and then peak rates of the mid-1980s; the sector accounted fell back just a touch in the fourth quarter; on net, for only 6 percent of total residential investment the increase over the year amounted to 12 percent. this past year. The overbuilding that occurred in the Mortgage interest rates, although lower than in multifamily sector in the mid-1980s led to high 1991, exhibited some mild swings during 1992, vacancy rates that have stymied activity ever since. and these swings appear to have contributed to the In that regard, little progress was made in reducing fluctuations in home sales. Proposals early in the vacancy rates for multifamily rental units in 1992, year for a tax credit for first-time homebuyers also despite the greatly diminished level of new conmay have affected the timing of purchases to some struction. The speed at which the excess supply of degree. space can be worked off is being limited by Construction activity in the single-family sector declines in the population of young adults, as well also had its ups and downs in 1992, influenced by as by the slow rate of depreciation of these longunusual weather patterns as well as by the fluctua- lived structures. tions in sales. Nonetheless, the trend over the year as a whole was decidedly upward, and the average The Business Sector level of starts in the fourth quarter was about 20 percent above that of a year earlier. In January, The past year brought moderate increases in activsingle-family starts fell back somewhat; volatility ity in the business sector of the economy. Produc- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

174 Federal Reserve Bulletin • March 1993 tion, sales, and orders rose, on net, over the year, Andrew; in the absence of the hurricane, profits in and business profits continued to swing back up the financial sector would have increased in the from the recession lows of 1991. Many businesses third quarter. continued to undertake major structural changes The economic condition of smaller companies designed to cut costs and enhance efficiency. The also seemed to improve somewhat in 1992. The changes were manifest both through reorganization past year's estimated rise in the profits of nonfarm of existing operations and through investment in proprietors was the largest annual gain since the new technologies. Businesses also continued to mid-1980s; increases had been relatively small over shore up their finances, trimming away debt and the three previous years. building equity. Financial pressures persisted in The net income of farm proprietors turned back the business sector in 1992, but, in general, up in 1992 after a moderate decline in 1991. Farm they seemed to become less acute as the year output rose to a record high in 1992, with strong progressed. gains for both crops and livestock. Prices, mean- Industrial output rose nearly 3 percent from while, lagged year-earlier levels through much of December 1991 to December 1992. Production fell 1992, but most of that slippage in farm prices in the first month of 1992 but then picked up, rising already had taken place by the start of the year; the about Vi percent per month from February through average level of farm prices in December 1992 May. During the summer, the expansion of activity actually was about the same as that a year earlier. seemed to be losing momentum; orders and ship- Farm production expenses edged down for a secments fell slightly, on net, from May to August, ond year as farm operators, like their nonfarm factory inventories backed up a little, and industrial counterparts, continued to maintain tight control production essentially flattened out over a four- over costs. month stretch. However, orders and shipments Business investment in fixed capital rose about began moving up once again in September, and 8 percent in real terms during 1992, more than they increased considerably in the fourth quarter. reversing the decline of the previous year. Spend- Industrial production also picked up once again in ing for equipment increased in each quarter of the fourth quarter, and a further gain, amounting to 1992, and the gains cumulated to nearly 12 percent 0.4 percent, was recorded in January of this year. by the fourth quarter; with spare capacity still Business profits, which had taken a turn for the extensive in most industries in 1992, much of the better late in 1991, improved further during 1992. gain in equipment spending over the year probably The operating profits earned by nonfinancial corpo- was a result of the desire of businesses to modernrations from their domestic operations rose 18 per- ize their operations. Meanwhile, nonresidential cent from the final quarter of 1991 to the third construction spending, which had plunged 14 perquarter of 1992, and a further gain seems implicit cent in 1991, fell by a much smaller amount in in the available data for the fourth quarter. (An 1992—IV2 percent according to the estimate in the actual estimate of fourth-quarter profits will not be most recent GDP report. published by the Commerce Department until late Spending for computers was at the forefront of March.) Profits of these firms have been lifted, in the rise in equipment outlays in 1992. In terms of part, by increases in the volume of output since the annual averages, the nominal outlays for office and end of the recession. In addition, tight control over computing equipment rose about 17 percent; the costs has led to increases in profits per unit of gains in real terms were much greater still, as output. Unit labor costs of nonfinancial corpora- technological advances and competitive market tions have risen only slightly since the start of the conditions combined to continue driving down the current economic expansion, and their net interest price of real, effective computing power. Busicosts have declined sharply, owing to lower interest nesses also boosted their outlays for telecommunirates and restraint in the use of debt. The domestic cations equipment, especially in the second half of profits of financial corporations were strong in the 1992. Spending for motor vehicles strengthened in first half of 1992 but were severely depressed in the 1992, and investment in industrial equipment edged third quarter by the unprecedented losses that insur- up after three years of decline. Spending for airance companies suffered in the wake of Hurricane craft traced out a volatile pattern during 1992 and, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 175 for the year as a whole, was down only moderately Governments at all levels continued to be from the high level of 1991; however, these outlays plagued by severe budgetary imbalances in 1992. closed out the year on a weak note, and prospects At the federal level, the unified budget deficit rose for 1993 are not encouraging, given the losses that about $20 billion in fiscal year 1992, to a level of have been experienced by airline companies and $290 billion. With the economy gradually strengththe related cancellations and stretch-outs of orders. ening, the rate of increase in federal receipts picked The small decline in nonresidential construction up a little, to 3V2 percent, from only 2lA percent in outlays during 1992 reflected some widely diver- fiscal 1991. However, spending once again rose gent trends across the various types of construction faster than receipts; total federal outlays were up activity. Spending for new office buildings fell 4V2 percent in fiscal 1992, after a rise of nearly sharply further during the year, to a fourth-quarter 53/4 percent in the previous fiscal year. level that was about 60 percent below the peak of The rates of growth in total spending in 1991 and the mid-1980s. In addition, real outlays for indus- 1992 may well understate the degree of upward trial structures declined in 1992 for the second year momentum in federal outlays in those years. In in a row, influenced, no doubt, by the current high 1991, total spending was held down considerably levels of unused industrial capacity and by the by a convention used in the federal budget to ongoing trend toward tighter control of inventories account for the flow of contributions to the United and concomitant reductions in needed storage States from its allies in the Gulf War. Those contrispace. Annual outlays for oil and gas drilling also butions were counted as negative defense outlays fell further in 1992; a rise in drilling in the year's rather than additions to receipts. Additional contrifinal quarter probably was prompted mainly by butions from the allied countries were received in a year-end phaseout of certain tax incentives, fiscal year 1992, but they were much smaller than although some drillers may also have been in 1991. Another important factor at work in 1992, responding to an upturn in natural gas prices over however, was a delay in funding the activities of the year. the Resolution Trust Corporation, which kept the Other types of construction activity fared better 1992 outlays for deposit insurance programs much in 1992. Spending for commercial structures other lower than they otherwise would have been. than office buildings moved up over the year, after Excluding the outlays for deposit insurance and sharp declines in both 1990 and 1991, and the the effect of the allied contributions on reported outlays of utilities rose appreciably, boosted by levels of defense spending, federal expenditures environmental requirements as well as by further rose about 6V2 percent in nominal terms in fiscal moderate additions to capacity. Increases in con- year 1992, after an increase of nearly 9 percent in struction spending also were reported for various fiscal year 1991. Spending for entitlements, espetypes of institutional structures, such as religious cially those related to health care and income supfacilities and hospitals. port, continued to grow very rapidly in 1992. In the health area, federal outlays for Medicaid increased The Government Sector nearly 30 percent, and spending for Medicare rose 14 percent. Spending for income security was Government purchases of goods and services, the boosted in 1992 by further large increases in unemportion of government spending that is included in ployment benefits and food stamp disbursements. GDP, increased slightly in real terms over the In dollar terms, the combined rise in outlays for course of 1992, after declining slightly during health care and income security amounted to about 1991. Federal purchases fell Vi percent in real $60 billion. Increased expenditures for social secuterms over the year, as a further decline in real rity added almost another $20 billion. defense purchases more than offset another year of Combined spending for all other programs rose increase in real nondefense purchases. State and only slightly in fiscal year 1992. Within that broad local purchases of goods and services increased and diverse grouping, defense outlays fell sharply about IV2 percent during 1992, a rise slightly larger in nominal terms, once adjustment is made for the than in 1991 but still well below the rates of allied contributions, but some nondefense funcincrease seen through much of the 1980s. tions posted large increases in outlays. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

176 Federal Reserve Bulletin • March 1993 State and local governments saw no relief from rose IV2 percent in annual average terms in 1992, budgetary pressures in 1992. The combined deficit outpacing the growth of nominal GDP by a considin their operating and capital accounts, net of social erable amount. However, for the third year in a insurance funds, widened a bit over the first three row, the increase in receipts fell short of the annual quarters of the year, reversing the small improve- rise in nominal expenditures, which amounted to ment that had been achieved in the latter part of 8 percent in 1992. 1991. As is true at the federal level, a rapidly rising level of mandated transfer payments to individuals The External Sector for health and income support is at the core of the budget difficulties of many states and localities; in The trade-weighted foreign exchange value of the nominal terms, transfer payments in the fourth U.S. dollar, measured in terms of the other G-10 quarter were about 16 percent above the level of a currencies, rose nearly 6 percent on balance from year earlier. December 1991 to December 1992. The dollar Construction spending by state and local govern- increased over the first three months of 1992 amid ments picked up in 1992. According to preliminary expectations of strengthening economic recovery data, the real gain in these outlays amounted to in the United States and slowing economic growth about 3V2 percent over the four quarters of the year. abroad. Over the summer, however, the dollar Spending for highways increased considerably in declined to a point below the previous year's low 1992, and outlays for buildings other than schools as growth of the U.S. economy was perceived to be were strong in the first half of the year. Construc- more sluggish than expected and as the Federal tion of educational facilities, which has been Reserve eased short-term interest rates further. The boosted by increases in the school-age population dollar reversed direction again in the fall, strengthin recent years, rose further in 1992, but the ening sharply in the wake of turmoil in the Euroincrease was small, both in absolute terms and pean Monetary System and, more important, on relative to the gains in most other recent years. evidence of increased momentum in the U.S. eco- Growth in other major categories of state and nomic expansion and sluggish conditions in foreign local expenditures was restrained. Compensation industrial economies. The dollar's rise continued of employees, which accounts for more than half of into the early weeks of 1993. total state and local expenditures, increased about On a bilateral basis, the net rise in the weighted 1 V2 percent in real terms over the four quarters of average dollar over 1992 primarily reflected sharp 1992; in nominal terms, the rise over the year increases in the dollar's value against several Euroamounted to about AV2 percent, similar to that of pean currencies and against the Canadian dollar. 1991 but much less than the nominal increases seen Denmark's rejection of the Maastricht Treaty in in the years before 1991. Restraint on wage growth early June called into question the future of Eurowas widespread in the state and local sector in pean monetary and political union and led to pres- 1992, and although total employment in the sector sures on the exchange rate mechanism (ERM) of grew a little faster than in 1991, hiring freezes, the European Monetary System. In September, furloughs, and layoffs continued to be reported in those pressures intensified enough to force Italy some hard-pressed jurisdictions. State and local and the United Kingdom to withdraw from the purchases of durable and nondurable goods—such ERM, and their currencies depreciated sharply. For things as equipment and supplies—apparently grew the year as a whole, the dollar appreciated against little in real terms over the course of 1992. Real those two currencies by 19 percent and 18 percent purchases of services from outside suppliers appar- respectively. Several other European currencies, ently edged down for the third year in a row. including those of Spain, Portugal, and the Scandi- Many states and localities have implemented tax navian countries, also depreciated sharply against increases in recent years in an effort to bolster the dollar in the autumn. The parity of the French receipts. In addition, grants-in-aid from the federal franc with the German mark was maintained within government have been rising rapidly, and, in 1992, the ERM, but at the cost of relatively high French improvement in the economy helped boost receipts short-term interest rates in the face of a sluggish to some degree. In total, state and local receipts French economy and rising unemployment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 14 The dollar fell more than 7 percent against the the increase occurred in the second half of the year German mark from December 1991 to August and consisted largely of stronger shipments of agri- 1992, as German monetary policy, responding to cultural goods, computers, other machinery, and relatively high German money growth and infla- automotive products. Excluding agricultural prodtion, remained tight longer than market participants ucts and computers, the quantity of exports grew had expected. That decline of the dollar was more only 1 percent in 1992, compared with a rise of than reversed during the fall and winter, however, 6V2 percent in 1991; the slowdown was mainly a as it became clear that German economic activity reflection of sluggish demand in key industrial had turned significantly downward and as German countries. By region of the world, most of the monetary policy was eased somewhat. By mid- increase in exports during 1992 went to areas that February 1993, the dollar was about 5 percent continued to register moderate to fairly strong rates higher against the mark than it had been in Decem- of economic growth—primarily developing counber 1991. tries in Asia and Latin America. Exports to Japan The dollar depreciated about 6 percent on bal- and to European countries, whose growth rates ance against the Japanese yen during 1992 and probably averaged less than 1 percent when early 1993, despite a noticeable decline in Japanese weighted by the shares of those countries in U.S. GDP during the second and third quarters and a exports, actually declined in 1992. significant reduction in Japanese interest rates. The Merchandise imports grew IOV2 percent in real net strengthening of the yen probably can be attrib- terms during 1992. Two categories—oil and comuted, at least in part, to market reactions to a puters, the latter of which includes peripherals and substantial widening of Japan's external surplus. parts—accounted for a significant portion of that The U.S. merchandise trade deficit widened to rise. Oil imports rose 13 percent over the four about $84 billion in 1992, compared with $65 bil- quarters of 1992 as U.S. consumption of petroleum lion in 1991 (Census basis). Imports grew about products recovered from depressed levels in 1991 twice as fast as exports as the U.S. economic recov- and as domestic oil production resumed its longery gained some momentum, while economic run downtrend. U.S. domestic sales of computers growth in U.S. markets abroad was sluggish on were very strong beginning in the summer, fueled average. Early in the year, the deficit narrowed by price wars and by a push on the part of U.S. somewhat when a drop in oil prices lowered the businesses to upgrade PCs and workstations to take value of imports. The deficit widened sharply in the advantage of improvements in software. Most of second quarter, however, when imports surged and the sales were at the lower end of the spectrum of exports remained about unchanged. During the sec- computer products—items that often are imported. ond half of 1992, imports continued to expand Imports of products other than oil and computers somewhat more rapidly than exports, and the defi- increased 5lA percent in 1992 as domestic demand cit increased further. in the United States picked up. The strongest in- The current account balance worsened substan- creases were in a wide range of consumer goods, tially more than the trade deficit, moving from near especially from China and various other developbalance in 1991 to a deficit of $51 billion at an ing countries in Asia. Imports of telecommunicaannual rate over the first three quarters of 1992. tions equipment, electric machinery, and other However, one-time cash transfers associated with types of machinery also showed significant the Gulf War accounted for most of the difference; increases in 1992, for the first time since 1988. these transfers had reduced the current account For the first three quarters of 1992, the substandeficit by $42 billion in 1991, but they reduced it tial current account deficit was more than matched by only about $2 billion at an annual rate during by recorded net capital inflows, both official and the first three quarters of 1992. Excluding these private. Net official inflows amounted to more than transfers, the current account deficit weakened $30 billion at an annual rate, despite substantial somewhat less than the trade deficit, owing to a net outflows associated with intervention sales of strengthening of net service receipts. dollars by major foreign industrial countries. Net U.S. merchandise exports grew 4lA percent in private inflows were almost as large, with banks real terms over the four quarters of 1992. Most of accounting for a large part of these inflows. The Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

178 Federal Reserve Bulletin • March 1993 agencies and branches of Japanese-based banks than through permanent additions to companies' used funds from abroad to substitute for a runoff in own payrolls. CDs outstanding in the United States, while other Nonetheless, the tilt of the overall employment foreign-based banks used funds from abroad to trend was positive, rather than negative as it had help finance asset expansion in the United States. A been in 1990 and 1991. Payroll employment, a reduction in the holdings of Euro-deposits by U.S. measure that is derived from a monthly survey of residents also contributed to the net private capital business establishments, was up about 600,000 durinflow during the first three quarters of the year, but ing 1992 and an additional 100,000 in January. The that reduction was partially reversed in the fourth number of jobs in manufacturing fell further in quarter. 1992, but not as much as in either of the two Although securities transactions contributed lit- previous years; small increases in the number of tle to the net inflow of capital in the first three factory jobs were reported toward year-end and in quarters of 1992, the continued impact of the glo- early 1993. In addition, employment in construcbalization of financial markets was apparent. U.S. tion changed little in 1992, after two years of sharp net purchases of foreign stocks and bonds were decline. very strong, accompanied by a near-record pace of About 900,000 new jobs were created in the foreign bond issues in the United States. During the service-producing sector of the economy in 1992. same period, foreigners added substantially to their The number of jobs in retail trade turned up a little, holdings of U.S. government and corporate bonds; on net, after dropping about one-half million over however, they made net sales of U.S. equities. the two previous years. In addition, firms that pro- U.S. direct investment abroad was very strong in vide services to other businesses recorded strong the first three quarters of 1992. Outflows to Europe employment growth in 1992; more than likely, remained high, while outflows to Latin America these firms were the ones that benefited most from and Asia grew. In contrast, foreign direct invest- the tendency of businesses to purchase labor and ment in the United States fell further, producing a services from other firms rather than hire additional net outflow. The rate of new foreign direct invest- workers of their own. Employment in health serment in the United States has declined dramatically vices, which had remained on a strong upward in recent years from large inflows recorded during trend right through the recession, continued to grow the latter part of the 1980s, partly reflecting the rapidly in 1992. sharp drop in mergers and acquisitions in the U.S. The employment measure that is derived from business sector. In addition, the very low rates of the monthly survey of households was stronger return reported by foreign direct investors on their than the payroll measure in 1992; it showed an holdings in the United States in recent years may increase of about Wi million in the number of have helped discourage new investment. persons holding jobs and by year-end had moved back close to the previous cyclical peak of mid- Labor Market Developments 1990. Reasons for the stronger performance of the household series are not entirely clear. Differences The labor market remained relatively sluggish in in coverage between the household survey and the 1992. Some large companies continued to undergo payroll survey accounted for only a small part of major restructurings or reorganizations, and these the 1992 gap, and other possible explanations are changes led in many cases to permanent work force little more than conjecture at this point. A portion reductions at those firms. More generally, busi- of the gap between the two series was eliminated in nesses remained hesitant to take on new workers, January, as the rise in jobs reported in the payroll even as the recovery progressed. The still-sluggish survey in that month was accompanied by a decline pace of output growth in the first half of the year in the household measure of employment. tended to limit labor requirements during that The number of unemployed persons increased in period. Later on, when firms started to expand the first half of 1992, to a peak in June of nearly output more rapidly, they were able to do so with- 9.8 million. Job losses—many of them apparently out making major long-term hiring commitments. permanent—continued to mount in the first half of Needs for additional workers were met, in many the year, and new job opportunities did not open up cases, through use of temporary-help firms, rather fast enough to fully absorb either those workers or Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 179 others entering the work force for the first time. As relatively large. Many firms, both large and small, a result, the unemployment rate rose more than Vi continued to be pressured by the rising cost of of a percentage point in the first half of the year, to medical care for their employees and by the a June level of 7.7 percent. increased cost of workers compensation insurance; The second-half outcome was more favorable. the difficulty of bringing these costs under control The number of unemployed persons declined about may well have been a serious deterrent to increased one-half million from June to December, and the hiring in 1992. unemployment rate moved down over that period, Despite the further slowdown in nominal comto a level of 7.3 percent at year-end. Some of the pensation per hour in 1992, the purchasing power workers who had been laid off temporarily were of an hour's labor appears to have risen in real recalled in the second half of the year. In addition, terms, as the nominal increase in hourly wages and the number of unemployed workers not expecting benefits, as measured by the employment cost into be recalled—the so-called permanent job dex, outpaced the rise in consumer prices for the losers—also declined; presumably, these workers second year in a row. Real compensation, comeither found new jobs elsewhere in the economy or puted in this manner, had declined sharply in 1990, dropped out of the labor force altogether. A similar and the increase in 1989 had been barely positive. story applied to unemployed new entrants, a cate- Sustained increases in real living standards gory of jobless workers whose ranks were a little depend ultimately on achieving advances in the thinner at the end of 1992 than they had been at productivity of the work force, and on that score midyear. In January of this year, the number of the economy performed well in 1992. Output per unemployed persons fell further, and the unemploy- hour worked in the nonfarm business sector jumped ment rate edged down to 7.1 percent. 3 percent over the year, the largest annual gain In the aggregate, the civilian labor force—the since 1975. Although a portion of this large rise is sum of those persons who are employed and those no doubt a reflection of normal cyclical tendencies, who are looking for work—rose sharply in the first longer-range improvement in productivity growth half of 1992 but changed relatively little thereafter. also may be in progress. The jump in output per Its level in January of 1993 was up about one mil- hour in 1992, combined with the slowing of comlion from that of a year earlier. The labor force pensation gains, held the annual increase in unit participation rate—the proportion of the working- labor costs to just 0.7 percent. age population that is in the labor force—fell over the second half of the year and into January of Price Developments 1993, leaving it about where it had been at the end of 1991. The consumer price index rose 3 percent over the Against a backdrop of slack in labor markets and four quarters of 1992, the same as in the previous in the context of reduced inflation, the rate of rise year. Energy prices, which had fallen in 1991, in workers' hourly compensation continued to slow turned up a little in 1992, but price increases elsein 1992. The employment cost index for private where in the economy were generally smaller than industry—a measure of labor cost that includes those of the previous year. The limited rise in labor both wages and benefits and that covers the entire costs in 1992 was one important factor exerting nonfarm business sector—increased V/i percent restraint on the rate of price increase. In addition, from December of 1991 to December of 1992. The the cost of materials used in production rose only index had risen nearly AVi percent in the previous moderately over the year, as did the prices of goods twelve-month period, and as recently as mid-1990 imported from abroad. Although inflation expecits twelve-month rate of change had exceeded tations, as reported in various surveys of consum- 5 percent. The employment cost index for wages ers and business officials, have remained a step or and salaries increased only 2.6 percent during so above actual inflation rates, they too appear to 1992; this was the smallest annual rise ever re- have moved lower over time. On average, their ported in this measure, which dates back to 1975. recent levels are about in line with—or, according The rate of rise in the cost of benefits provided by to some surveys, less than—the lower bound of the firms to their employees also slowed in 1992, but range of inflation expectations reported during the the size of the increase—5 lA percent—was still 1980s. In view of these recent trends in prices, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

180 Federal Reserve Bulletin • March 1993 labor costs, and inflation expectations, the January apartments and houses apparently were damped by rise of 0.5 percent in the CPI appears to be some- the large amount of vacant housing that was availthing of an aberration. able in many parts of the country. The prices of The CPI for food increased a bit less than other services that are included in the CPI—which l3/4 percent in 1992, the same as in 1991. Not since collectively make up another one-fourth of the total the 1960s has there been a two-year period in index—also slowed appreciably in 1992; nonethewhich the cumulative increase in food prices was less, their overall rate of increase remained relaso small. This low rate of food price inflation in tively high. The costs of medical care services and 1991 and 1992 was, in part, a reflection of the same tuition continued to rise much faster than prices in factors that were working to pull inflation down in general in 1992, and airfares rebounded from their other parts of the economy. In addition, food prices 1991 decline. The CPI for commodities other than have been restrained by favorable supply condi- food and energy rose 2Vi percent during 1992, after tions in the farm sector. Meat production rose fur- an increase of more than 4 percent over the four ther in 1992, and the output of crops soared. Dry- quarters of 1991. Price increases for this broad ness in some regions imparted temporary volatility category of goods were restrained by the cost and to crop prices in late spring. Thereafter, growing price developments in manufacturing: Unit labor conditions turned exceptionally favorable and costs in manufacturing actually declined in 1992, remained so through the summer and into early and the producer price index for finished goods autumn. Unusually wet conditions in some regions rose less than 2 percent. later on in the autumn apparently made only a After falling sharply from mid-1990 to the end small dent in the eventual size of the harvest. of 1991, the prices of industrial commodities gener- The rise in consumer energy prices over the four ally changed little, on balance, during 1992. By the quarters of 1992 amounted to about 2Vi percent. end of 1992, however, prices for some industrial The previous year, energy prices had fallen 8 per- metals had begun to tilt up, consistent with the cent. With no major supply or demand shocks pickup in the pace of industrial expansion toward springing up in world oil markets in 1992, the price year-end, and additional price increases have been of West Texas Intermediate stayed in the relatively reported in some of these markets in early 1993. narrow trading range of about $18 to $23 per The prices of lumber and plywood—following a barrel; the price has remained in that range in the path considerably different from that of most other early part of 1993. At the retail level, price changes commodities—rose substantially during 1992, and for petroleum products were mixed in 1992; the further steep increases have been evident in early price of gasoline rose about 3 percent, while fuel 1993. The surge in prices of these products appears oil prices declined moderately. The CPI for natural to be a reflection of the uptrend in single-family gas rose about 5 percent in 1992, considerably housing construction, weather-related supply dismore than in other recent years. Although much of turbances in some timber regions, and adjustment that rise in gas prices came in the second half of the of the logging industry to environmental restricyear in the wake of supply disruptions caused by tions that have been implemented in some areas of Hurricane Andrew, prices of gas at the wellhead the country. Prices of some other wood products, had already moved up considerably before the such as pulp, also rose sharply at the producer level hurricane hit, in response to a somewhat tighter in 1992. supply-demand balance than had existed over the The recent increases in prices of these raw mateprevious year or so. rials have shown through to some extent to broader The CPI excluding food and energy rose 3.4 per- measures of producer prices. For example, the procent over the four quarters of 1992, a percentage ducer price index for intermediate materials excludpoint less than it had risen in 1991. The slowdown ing food and energy—a price index that encomwas widespread among the various categories of passes a wide range of production materials—rose goods and services that are included in this mea- 1 percent during 1992 after declining about 3A of a sure of core inflation. The rate of rise in the cost of percentage point during 1991, and the past couple shelter—the single most important category in the of months have seen some further pickup in that CPI, with a weight equal to more than one-fourth measure of price change. From an economywide of the total—slowed further in 1992; rents for both perspective, however, that pickup in materials Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 181 prices has not been sufficient to dominate the decel- century, following a series of actions by the Federal eration in labor costs, which account for a far Reserve in the latter part of 1991 that reduced the greater share of total production costs. discount rate and the level around which the federal funds rate was expected to trade to 3Vz percent MONETARY AND FINANCIAL DEVELOPMENTS and 4 percent respectively. Long-term rates were IN 1992 also at lower levels, reflecting the policy actions and a weakening of economic activity in the final Federal Reserve policy in 1992 was directed at quarter of 1991. promoting and extending the recovery from the Evidently in the expectation that these rate cuts 1990-91 recession, in the context of continued would revive the recovery, the stock market began progress toward price stability. The difficulty of the year with strong upward momentum, and the designing and implementing constructive monetary dollar appreciated. However, other evidence that policies during this period has been exceptional. In the economy was picking up remained scanty in 1992, as earlier, economic activity was held back to the initial part of the year, despite the significant an unusual degree by the efforts of households, monetary stimulus already in place and the positive nonfinancial businesses, and some key providers of developments in equity and capital markets. Apart credit to the economy, including commercial banks, from rising housing starts, a phenomenon in part to strengthen their balance sheets. These forces related to special weather and tax factors, the econhave tended to alter the normal relations between omy appeared sluggish and confidence levels were financial flows—particularly those reflected in low. Spending by households and businesses movements in M2 and M3—and the behavior of seemed to be restrained by efforts to strengthen the economy. Under the circumstances, the Federal financial positions, and banks had done little to Reserve has had to take a flexible approach to the reverse the substantial tightening of lending stanuse of money and credit aggregates as intermediate dards that occurred in 1990 and 1991. In view of policy targets; specifically, in light of evidence that the still-tentative nature of the recovery and the expansion in economic activity was being financed solid progress against inflation that had been made to an unusual extent in capital markets rather than to that point, the Federal Open Market Committee through banks and other depositories, the System at its first meeting of 1992 instructed the Manager tolerated shortfalls of M2 and M3 from their target of the Open Market Account at the Federal Reserve ranges. Bank of New York to remain especially alert to evidence that money market conditions might need The Federal Reserve judged it appropriate to to be eased before the next scheduled meeting of ease reserve conditions on three occasions in 1992, the Committee. Such a policy stance biased toward when financial and economic data suggested that ease had prevailed over much of 1991. the economy might be losing momentum. The extent of the easings last year was considerably M2 and M3, which had posted moderate gains less than in 1991, however, as the underlying trend in January, surged in February, owing partly to of the economy overall was more positive. Partly stronger income and earlier sharp declines in shortas a result of the cumulative effect of the monetary term interest rates and partly to special factors— easings of recent years, economic activity acceler- above-average tax refunds and a jump in mortgage ated in 1992 to its fastest pace since 1988. This refinancing, which results in funds being held pickup was achieved even as various measures of temporarily in demand deposits. Underlying money inflation evidenced further slowing, with the growth remained very weak, however, and well "core" inflation rate falling to levels last seen in below that consistent with expectations based on the early 1970s. Thus, 1992 was a year not only of the historical relationship of money with income, financial repair, but also of improved aggregate deposit rates, and market interest rates. In March, economic performance in the United States. as the influence of the special factors abated, M2 was about flat and M3 contracted. The economy seemed to be improving during The Implementation of Monetary Policy much of the first quarter: Retail sales and housing The year 1992 began with short-term interest rates starts were strong, industrial production turned up, at their lowest levels in more than a quarter of a and confidence levels of the business and house- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

182 Federal Reserve Bulletin • March 1993 hold sectors were rising, as was the quality of their growth considerably more than economic activity. balance sheets. The signs of recovery and the mar- Moreover, what restraint balance sheet restructurket view that the prospects for further near-term ing was exerting on spending was seen as likely to monetary ease had faded caused long-term interest abate in view of the considerable progress that by rates to increase, and the dollar rose on foreign then had been made in this area, both by the exchange markets as well. Increases in private borrowing sectors and by depository institutions, as interest rates were less than increases in rates on banks added rapidly to capital. At its mid-May Treasuries, likely reflecting perceived reductions in meeting, the Committee determined that its bias the riskiness of private debt as the economy toward ease in assessing possible intermeeting polstrengthened coupled with concerns about enlarged icy changes was no longer appropriate. Treasury demands on credit markets stemming Data becoming available over subsequent weeks, from discussions of possible fiscal stimulus. Areas however, suggested that the forces restraining ecoof weakness in the economy remained, however— nomic expansion continued to be quite strong. The some attributable to the substantially overbuilt contraction of consumer credit accelerated, and commercial real estate sector and some to the tran- bank loans more generally began to run off. With sition to a smaller defense sector. In addition, the the forces that had been constraining money growth backup in long-term interest rates threatened to intensifying, all three monetary aggregates conslow the pace of balance sheet adjustment and tracted in June. could damp housing and its related industries as Nonfinancial data confirmed that the economy well as business investment spending, and the out- remained slack. Although both nonfarm payroll look for exports clouded. employment and industrial production increased in In early April, the System eased reserve condi- May for the fourth straight month, the unemploytions again. The action was taken on indications ment rate rose sharply, owing to a rising labor force that the monetary aggregates, already at the bottom participation rate. Moreover, homebuying and retail of their target ranges after their flat performance in sales, other than of automobiles, slowed from the March, were beginning to contract, that the balance pace earlier in the year, and demand for U.S. of evidence was beginning to suggest a slowing of exports was held down as growth in some foreign the economic expansion, and that inflation was industrial countries slowed or turned negative while continuing to recede. Short-term interest rates fell other countries struggled to recover from their more than the XA percentage point drop in the downturns in 1991 or remained in recession. trading level of the federal funds rate, as market With the tenor of incoming economic news havparticipants judged the economy sufficiently weak ing become distinctly negative, long-term Treasury to make further near-term monetary easing moves rates, which had been little changed over most of likely. The easing buoyed the stock market, but May and June, turned down around midyear, long-term rates showed a limited response and although they remained above year-end lows. In remained well above year-end levels. light of these developments, and with the down- In the weeks following the easing, the economy ward trend in inflation continuing, the System reinappeared to improve a bit, but the evidence contin- stated its bias toward ease at its midyear meeting. ued to be mixed. Single-family housing starts, Immediately after that meeting, on July 2, with which had contracted in March, fell considerably evidence of a weakening economy confirmed by a further in April, and retail sales were little changed further rise in the unemployment rate, to VA peron balance between February and April. On the cent in June, the Federal Reserve reduced both the other hand, nonfarm payroll employment and in- discount rate and the federal funds rate by Vi perdustrial production continued to expand. Weakness centage point, to 3 percent and V-A percent respecin the monetary aggregates persisted into April, but tively. Banks lowered their prime rate, also by concerns on this front were allayed to some degree V2 percentage point, to 6 percent, leaving its unusuby evidence that this was importantly related to the ally wide spread over market rates intact. ongoing rechanneling of credit away from deposi- Long-term interest rates fell in response to the tory institutions and into capital markets, and by employment data and the monetary easing, and expectations that this rechanneling and other finanthey moved down further into early August as the cial restructuring would continue to damp money incoming economic news continued to be poor. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 183 The drop in yields brought long-term rates to the meeting. In the event, however, an improvement lowest levels since the early 1970s, and the dollar in economic indicators immediately after the meetcontinued to retreat from its peak levels reached in ing, along with evidence of some strength in M2 April. and bank credit, stayed any further easing actions. In early September, with another weak labor Because anticipation of further easing had been report and in the context of contracting industrial built into the structure of interest rates, short-term production and expansion in the monetary and rates backed up after the meeting. Rates also rose at credit aggregates that, while now positive, was the long end, responding to growing expectations weaker than had been expected, reserve conditions that fiscal stimulus could follow the upcoming were eased further and the federal funds rate fell presidential election, as well as to the indications of to around 3 percent. Shorter-term market rates improved economic performance. dropped on this action, bringing them to the neigh- Evidence of greater economic strength continued borhood of zero in real terms. Despite the poor to accumulate in a variety of indicators of produceconomic news and expectations that further easing tion and spending over the fourth quarter. Although moves were in the offing, long-term rates, although this news initially put further upward pressures on they initially declined, drifted back up on renewed longer-term interest rates, these came to be muted concerns that the federal deficit would be enlarged and then reversed as the better economic prospects, by fiscal actions taken to stimulate the economy. along with statements and actions of the incoming Throughout the late summer and early fall, pol- Administration, began to be viewed as reducing the icy was conducted against a background of tension likelihood of outsized fiscal stimulus. Also helping in foreign exchange markets; a strong deutsche to lower longer-term rates was continuing good mark had caused several European countries to news on inflation. These factors, buttressed by an raise interest rates sharply to preserve fixed increasing focus in public discourse on reducing exchange rate relationships with and within the the federal deficit, continued to play an important exchange rate mechanism of the European Mone- role as long-term rates fell further into the new tary System at a time when aggregate demand in year. these countries was slowing or sluggish. The dollar With the better economic news, the Federal continued to decline into early September but then Reserve kept reserve conditions and short-term began to firm. The rise in long-term rates contrib- interest rates unchanged as the year ended, and the uted to the reversal, as did actions by several Euro- Committee at its December meeting decided to pean countries to devalue their currencies, in some move back to a symmetric policy stance. Reflecting cases dropping out of the ERM, and to lower the improved economic outlook, a stock market interest rates. rally developed that rivaled in strength the rally With short-term interest rates in the United at the beginning of the year, and the dollar rose States lower, the monetary aggregates continued to further. expand in September. The implications of the Although the monetary aggregates strengthened strength of M2 were difficult to assess, however, a bit in the fourth quarter, the depressing effects of because it reflected to an uncertain degree the balance sheet restructuring continued to be imporimpact of mortgage refinancing on demand depos- tant, a fact that became clearer once the hard-toits as well as strong foreign demands for U.S. measure temporary boost to deposits deriving from currency. Stronger income also appeared to be con- higher mortgage refinancing abated after October. tributing to money growth, as private employment The velocities of both M2 and M3 rose signifiedged up and the unemployment rate declined in cantly further in the final quarter of the year, con- September. Nevertheless, the outlook for the econ- tributing to the exceptional velocity increases omy remained uncertain. Final demand seemed posted by both measures for the year as a whole. weak and was being met in part through higher imports, holding down industrial production and Monetary and Credit Flows employment, and business and consumer sentiment remained relatively depressed. Credit flows again were quite damped in 1992, and In these circumstances, the Committee estab- money growth was exceptionally weak. Despite an lished a strong bias toward ease at its early October appreciable pickup in nominal GDP growth last Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

184 Federal Reserve Bulletin • March 1993 year, the broad monetary aggregates decelerated Although loan growth at banks remained lackfurther, and expansion of the nonfinancial debt luster, it strengthened in the final quarter of the year aggregate edged up only a bit. As had been the case as the economy began to expand more rapidly. At for the last couple of years, considerable efforts by the same time, the growth of bank holdings of key sectors of the economy to improve balance government securities, which had been very rapid sheets had a significant restraining effect on credit all year, slowed. and, especially, on money growth—a much greater To be sure, the pickup of bank lending toward effect than they had on spending itself. Growth of year-end seemed primarily related to stronger dethe debt of nonfinancial borrowers other than the mand. Banks gave little indication in Federal federal government edged up only lA percentage Reserve surveys that they had begun to ease the point from 1991, to 2Vi percent, as businesses and tighter lending standards and terms that they had households restrained borrowing by financing put in place in 1990 and 1991, and the unusually spending out of cash flow and equity issuance and wide spread of the prime rate over market rates by limiting accumulation of financial assets. The persisted. Banks do seem better positioned to meet expansion of federal debt slowed slightly to a still- increases in demand than they were a few years rapid 103/4 percent, held down by the lack of activ- ago. Not only has their liquidity improved with the ity by the Resolution Trust Corporation (RTC) acquisition of government securities, but they have after April, when it exhausted its legislative author- made substantial progress in improving capital ity to fund losses at savings and loans. Reflecting positions, including leverage ratios—which are the slowdown in the activities of the RTC and the unaffected by asset composition—as both profits improving health of depositories, federal outlays and debt and equity issuance reached record levels attributable to deposit insurance activity fell from in 1992. Moreover, the quality of their assets around $50 billion in 1991 to nil last year. The showed some scattered signs of improvement last total nonfinancial debt aggregate expanded about year; the delinquency rate for bank loans, though 4*/2 percent last year, at the lower end of its moni- still high, began to turn down, as did the rate of toring range. charge-offs. The sluggishness in credit and money growth Other financial intermediaries also have taken last year appeared to represent mainly weak de- steps to strengthen balance sheets, and the availmand, rather than any new tightening of credit ability of credit from these lenders also remains supply terms. At banks, loan flows were depressed, somewhat constrained—though probably not more and, in the absence of appreciable credit demands, so than in 1991. Life insurance companies, for bank asset growth mainly took the form of security example, have suffered from an abundance of bad acquisitions. Some have argued that the shift to loans and remain saddled with poor-quality comgovernment securities over recent years has been mercial real estate loans. Such firms have been motivated by the Basle risk-weighted capital stan- limiting acquisitions primarily to high-quality, easdards, which require capital against loans but not ily marketable assets, meaning that, as in 1991, against many government securities. However, the some medium-sized, below-investment-grade comeffect of these standards appears to be relatively panies found credit from life insurance companies minor. As in 1990 and 1991, banks that had already difficult to obtain in 1992. Some business finance achieved adequate capital positions were the major companies also have experienced high and rising purchasers of U.S. Treasury and agency securities levels of nonperforming loans, many of which were last year, and loan flows were depressed at these secured by commercial real estate, with effects on banks as well. Moreover, other regulatory factors their willingness to make new loans. may be contributing to a reduction in willingness to Downgradings of the manufacturing parents of take deposits and make loans, including rising automobile sales finance companies have led to deposit insurance premiums and the tighter regula- some increases in their funding costs. To date, tions and requirements of new laws governing however, there has been little or no effect on the banks and thrift institutions in recent years. A cost or availability of consumer credit, as these similar pattern of asset growth concentrated in finance companies have increased the volume of government securities occurred at credit unions, loans they have securitized. The availability of which are not subject to the Basle capital standards. credit at thrift institutions likely improved a bit last Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 185 year. Reflecting the declines in interest rates, profits corporations also rose from the already high pace of private sector savings and loan associations had of 1991 and was four times that of the late 1980s reached a record level as of the third quarter, sus- and early 1990s. As a result of debt refinancing and tained by a wide spread between interest earned on sales of equity, corporate net interest payments as a assets and the cost of funds as well as by a decline percentage of cash flow fell for the second year. As in the industry's still high level of troubled assets. declining interest rates allowed firms to reduce debt Weak credit demand and constraints on some burdens, and as the economy advanced, corporate sources of supply have produced generally sluggish debt ratings began to improve and quality spreads borrowing in each major nonfinancial sector other narrowed. than the federal government. Overall household The state and local sector also benefited from the borrowing accelerated slightly but continued mod- rate declines last year, with large amounts of debt erate, as demand was depressed by insecurity about being refinanced, including a large volume that employment as well as by efforts to restructure was called. Net debt growth continued to be modbalance sheets. Declines in mortgage rates pro- erate, however, as this sector's spending remained moted only about a V2 percentage point boost to net constrained. home mortgage growth, but they spurred a substan- Although balance sheet restructuring has damped tial volume of refinancing. Some of the proceeds of credit flows and spending, its greatest impact has mortgage refinancings likely were used to pay been on the monetary aggregates, as an unusually down higher-cost consumer credit. Consumer high proportion of spending in recent years has credit also was held down last year as households been financed outside the depository system, apparently used funds that otherwise would have whose liabilities make up the bulk of the monetary been held in low-yielding deposits to reduce high- aggregates. Some of this spending has been supcost debt. ported through sources other than borrowing, for With the pace of debt accumulation by the example, by issuing equity or restraining the accuhousehold sector damped, and with rates on con- mulation of liquid assets. Depository credit sumer debt falling and mortgage debt being refi- expanded last year, following two years of connanced at lower rates, the ratio of debt-servicing traction, but it continued to shrink as a share of payments to household income declined consider- nonfinancial debt as borrowers concentrated their ably further last year. Another sign of improving credit demands in long-term securities markets— household financial conditions has been recent bonds for corporations and fixed-rate mortgages for trends in delinquency rates. Consumer loan delin- households. quency rates mostly fell last year, although they The sluggish expansion of depository credit was remain at high levels. Home mortgage delinquency echoed in M3, which comprises most—though not rates were little changed on balance last year and all—of the instruments depositories use to finance still somewhat above their pre-recession levels, but their credit extensions. In fact, growth of M3 well below those of the mid-1980s. slowed last year to V2 percent despite the pickup in Business debt grew only slightly last year as depository credit, as depositories relied much more internally generated funds exceeded investment on equity issuance and sales of subordinated debt, spending. Taking advantage of the strong stock and which are not in M3. Large time deposits at banks bond markets, nonfinancial corporations stepped and thrift institutions fell rapidly. The tendency for up their equity issuance and refinanced large vol- spending to be financed outside of depositories, umes of longer-term debt at more favorable rates. along with the latter's reliance on non-M3 funds, In part, the proceeds of these issues were used to produced a sizable increase in M3 velocity last pay down short-term debt, particularly bank loans, year—at a rate far above that of recent years. The thereby lengthening liability structures. rise in velocity of M3 would have been even The hospitality of the capital markets extended greater had it not been for strong inflows into even to lower-graded business borrowers, which institution-only money funds over the first three issued substantially more bonds than in recent quarters of the year. The attractiveness of these years. Overall public gross bond issuance by nonfi- funds increases when short-term interest rates are nancial corporations was well above the 1991 level. falling, a phenomenon caused by the fact that the Likewise, gross equity issuance by nonfinancial funds do not mark to market, so that their yields Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

186 Federal Reserve Bulletin • March 1993 tend to exceed market rates when those rates are important method for accomplishing this portfolio declining. shift was mutual funds, which experienced record M2 increased about 2 percent last year, below inflows last year. Not only were yields on these the 2Vi percent lower end of its target range funds attractive, but they have become increasingly (table 3). M2 registered modest growth in the first available through banks and thrift institutions. and last quarters of the year but was about flat over Assets in bond and equity mutual funds (apart from the middle quarters. The underlying weak money those held by institutions and those in IRA and growth appeared to stem from several important Keogh accounts) increased $125 billion last year, factors, many related to the unattractiveness of up from $117 billion in 1991 and an average of holding funds in M2 assets relative to other possi- $30 billion over the previous five years. In 1991 ble uses of savings. and 1992 for the first time, increases in mutual fund Contributing to the relative attractiveness of non- assets exceeded increases in M2. monetary assets was the rapidity with which banks Money growth has also weakened as consumer adjusted down offering rates on retail deposits as loan rates have moved downward less rapidly than market rates declined last year. Banks' unaggres- deposit rates. As a consequence, households face a sive pricing of deposits reflected substantial pay- considerable interest rate incentive, particularly downs of bank debt by households and businesses, after taking account of changes in the tax deductwhich kept loan demand low and banks' need for ibility of consumer interest payments, to use funds funds to finance them quite limited. In addition, in deposit accounts to pay down, or limit the accubanks and thrift institutions have been discouraged mulation of, debt. In fact, the rise in consumption from going after deposits by the rising cost of has been accompanied by an unusually small issuing deposits to make loans; among the factors increase in debt, implying that consumption has accounting for this increase have been increases in been financed to a large extent by reducing or deposit insurance rates and higher capital ratios limiting holdings of financial assets. occasioned by market and regulatory forces. The cuts in bank deposit rates were particularly The prompt declines and low level of deposit evident for larger (and presumably more interest rates have combined with several other factors to sensitive) accounts and at longer maturities. Small induce savers to cut back on holdings of assets in time deposits ran off throughout the year. Some of M2. One important influence was the unprece- these funds appeared to flow into more-liquid dented steepness of the yield curve, which was deposit accounts, as rates on small time deposits pulling deposit funds into capital markets. An fell faster than those on savings and checkable 3. Growth of money and debt Percent 1. From average for fourth quarter of preceding year to average for fourth 2. Adjusted for shift to NOW accounts in 1981. quarter of year indicated. 3. From average for preceding quarter to average for quarter indicated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 187 deposits. General purpose and broker-dealer price level and inflation rates that are consistent money market mutual funds (MMMFs) also con- with M2 growth. If the velocity of M2 is rising tracted over the year, despite the yield advantage atypically, slow growth of M2 would not be associthese assets offered vis-a-vis other money market ated with the degree of disinflationary pressures rates in an environment of declining yields. This that would be predicted by the P* model, which appeared to be another example of the attraction assumes normal velocity behavior. In fact, consisthat bond and equity mutual funds and other capital tent with the notion that velocity is behaving abnormarket instruments provided to investors last year. mally, the model, using actual M2 growth, under- MMMFs grew in October and November, however, predicted inflation in 1992. perhaps reflecting capital losses in bond funds The growth of M2 over the year was entirely resulting from the rise in long-term rates in Sep- attributable to its currency and transactions deposit tember and October. components, as Ml growth surged to about The overall effect of the unusual forces that have 14lA percent in 1992. This performance reflected been influencing M2 is summed up by the behavior the advance in income growth but stemmed mainly of its velocity, which accelerated for the second from declines in both short- and long-term interest year in a row, to a 3V2 percent rate, despite the rates. Long-term rate declines prompted large volsharp downward trend in short-term interest rates umes of mortgage-rate refinancings, particularly in over this period. Over previous decades, the veloc- the first and last quarters. Because a large portion ity of M2 and short-term rates had moved together of prepayments are held in demand deposits until in a reasonably predictable way. This occurred the mortgage servicer remits the funds, the level of because deposit rates lagged market rates. When, demand deposits is temporarily boosted by mortfor example, short-term rates fell, deposit rates gage refinancings. Falling short-term rates boosted dropped by less, providing an incentive to shift demand deposits by lowering the opportunity cost assets from market instruments to deposits and of holding them and by increasing the amount of depressing velocity. However, because of the deposits businesses needed to hold under compenunusual configuration of forces discussed above, sating balance arrangements. In addition, NOW these incentives to hold M2 have not followed their accounts were boosted by funds shifted from small usual pattern in the current cycle. As noted, despite time deposits, as rates on the latter fell faster than the drop in short-term interest rates, a combination those offered on the former. Growth in NOW of the steep yield curve, sluggish adjustment accounts last year accelerated from the already of loan rates, and other factors has decreased, not brisk pace of 1991, and demand deposits posted the increased, the incentives to hold M2 in the last largest increase since at least 1959. year. In other words, the opportunity cost—the To accommodate the growth in transactions earnings given up—in holding M2 actually has deposits associated with the process of easing widened, rather than narrowed as has happened reserve conditions, the Federal Reserve supplied in the past when market interest rates fell, and large volumes of new reserves in 1992. Total this helps to explain why M2 velocity has risen reserves grew at around 20 percent, more than atypically. twice the rate of increase in 1991. Currency growth Another indication of the unusual behavior of also was rapid, in part owing to shipments abroad, the velocity of M2 is the recent performance of the and as a consequence the monetary base increased Board staff's P* model in predicting inflation. The IOV2 percent last year—the highest growth rate model is premised on reasonably stable M2 veloc- in the Board's official series, which begins in ity over time and under this premise predicts the 1959. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

188 The Herfindahl-Hirschman Index Stephen A. Rhoades, of the Board's Division of in 1992. These numerical guidelines are used by Research and Statistics, prepared this technical the Federal Reserve as the first step in analyzing note. the effect on competition of bank mergers. The guidelines, as applied to banking, specify that if a The Herfindahl-Hirschman index, better known as bank merger would result (1) in a post-merger HHI the Herfindahl index, is a statistical measure of in a market of less than 1,800 or (2) in a change in concentration. It has achieved an unusual degree of the HHI of less than 200 (less than 50 in other visibility for a statistical index because of its use by industries), it is likely that the market structure the Department of Justice and the Federal Reserve would not reach a concentration level, or concenin the analysis of the competitive effects of merg- tration would not increase enough, such that firms ers. The Herfindahl index can be used to measure in the market would have the market power to concentration in a variety of contexts. For example, maintain prices above the competitive level for a it can be used to measure the concentration of significant period. income (or wealth) in U.S. households and also The HHI is only one element in the analysis of market concentration, that is, the degree of concen- the competitive effects of bank mergers. However, tration of the output of firms in banking or indus- because of the importance attached to market contrial markets. It is useful in analyzing horizontal centration as an indicator of competition and the mergers because such mergers affect market con- relative ease of calculating the HHI, this index centration, and economic theory and considerable serves as an efficient screening device for regulaempirical evidence suggest that, other things equal, tors and as a planning tool for bankers. At the the concentration of firms in a market is an impor- Federal Reserve, the HHI is calculated by includtant element of market structure and a determinant ing 100 percent of the deposits of commercial of competition. However, despite its visibility, the banks in a market and at least 50 percent of the Herfindahl index is sometimes not understood in deposits of thrift institutions. If the post-merger terms of its use, measurement, or interpretation in HHI does not exceed the numerical guidelines, it is merger analysis. generally presumed that the merger would not be To facilitate and simplify the application of the seriously anticompetitive, and no further analysis is antitrust laws regarding mergers, in 1982 the conducted. If, on the other hand, the post-merger Department of Justice published formal numerical HHI exceeds the numerical guidelines, a detailed guidelines for horizontal mergers (those between economic analysis of competition is undertaken to firms operating in the same product and geographic determine whether other factors, such as potential markets) based on the Herfindahl index (HHI).1 In competition, indicate that the market would be 1985, the Justice Department proposed somewhat more (or less) competitive than the HHI alone modified numerical guidelines for mergers in the suggests. banking industry and published revised guidelines The HHI accounts for the number of firms in a market, as well as concentration, by incorporating 1. The index was developed independently by the economists the relative size (that is, market share) of all firms A.O. Hirschman (in 1945) and O.C. Herfindahl (in 1950). Hirsch- in a market. It is calculated by squaring the market man presented the index in his book, National Power and the shares of all firms in a market and then summing Structure of Foreign Trade (Berkeley: University of California Press, 1945). Herfindahl's index was presented in his unpublished the squares, as follows: doctoral dissertation, "Concentration in the U.S. Steel Industry" (Columbia University, 1950). For more detail on the background of n the index, see Albert O. Hirschman, "The Paternity of an Index," HHI = Z(M5,)2, American Economic Review (September 1964), pp. 761-62. i = i Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

189 where MS represents the market share of firm i and notion in economics that the greater the concentrat there are n firms in the market. The following tion of output in a small number of firms (a high example of calculating the HHI before and after HHI), the greater the likelihood that, other things a merger illustrates the use of the formula. Assume equal, competition in a market will be weak. In that there are four banks in a market. Bank A holds contrast, if concentration is low, reflecting a large 40 percent of bank deposits in the market, Bank B number of firms with small market shares (a low holds 30 percent, Bank C holds 20 percent, and HHI), competition will tend to be vigorous. The Bank D holds 10 percent. Substituting these values HHI reaches a maximum value of 10,000 when a in the formula gives the HHI for bank deposits in monopoly exists in which one firm has 100 percent this market: of the market, that is, the HHI = (100)2 = 10,000. In contrast, the HHI takes on a very small value, (40)2 + (30)2 + (20)2 + (lO)2. theoretically approaching zero, in a purely competitive market in which there are many firms with Completing this calculation gives the before- small market shares. For example, in a market with merger HHI: 100 firms that each have a 1 percent share of the market, the HHI = (l^2 + (1 )2... (l )2 = 100. 2 100 1,600 + 900 + 400 + 100 = 3,000. The following table provides a sense of what different values of the HHI imply for the concentra- Next assume that Bank C, with 20 percent of the tion of a market, assuming that all firms in the market, acquires Bank D, which has 10 percent of market have the same market share. For example, the market. The HHI after the merger would be row 2 of the table indicates that a market with five firms of equal size (that is, each with 20 percent of (40)2 + (30)2 + (20 + lO)2. the market) would have an HHI of 2,000. Completing this calculation gives the post-merger HHI: Number of firms Market share HHI of equal size in of each firm the market (percent) 1,600 + 900 + 900 = 3,400. 1,000 10 10.0 2,000 5 20.0 3,300 3 33.3 The merger therefore increased the HHI by 400, 5,000 2 50.0 from 3,000 to 3,400. Further examination of this example reveals that the HHI gives much heavier weight to firms with In conclusion, note that, although the HHI is a large market shares than to firms with small shares useful tool in merger analysis, particularly as an as a result of squaring the market shares. This initial screening device, other factors are considfeature of the HHI corresponds to the theoretical ered in an economic analysis of competition. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

190 Industrial Production and Capacity Utilization Released for publication January 15 ment advanced further, but the output of energyrelated products and materials, as well as of con- Industrial production rose 0.3 percent in December, struction supplies, declined. For the fourth quarter compared with an upward-revised gain of 0.7 per- as a whole, total industrial production grew at a cent in October and a rise of 0.4 percent in Novem- 3.7 percent annual rate; the gain in the previous ber. The December rise of 5.0 percent in the output quarter was 2.3 percent. At 110.5 percent of its of motor vehicles and parts accounted for much of 1987 average, total industrial production in Decemthe overall gain. The production of business equip- ber was 2.9 percent above its year-ago level. Total Industrial production indexes Twelve-month percent change Twelve-month percent change Total industry Products Materials Nondurable Manufacturing manufacturing Durable manufacturing Capacity and industrial production Ratio scale, 1987 production = 100 Ratio scale, 1987 production =100 Total industry Manufacturing Capacity Capacity Production Production Percent of capacity Percent of capacity Total industry Manufacturing Utilization Utilization All series are seasonally adjusted. Latest series, December. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

191 Industrial production and capacity utilization Industrial production, index, 1987= 1001 Percentage change CCCaaattteeegggooorrryyy 11999922 19922 DDeecc.. 11999911 ttoo Sept.r Oct/ Nov.' Dec.P Sept.' Oct.' Nov.' Dec.? DDeecc.. 11999922 Total 108.9 109.7 110.1 110.5 -.2 .7 .4 3 2.9 Previous estimate 108.8 109.3 109.7 -.3 .5 .4 Major market groups Products, total 109.6 110.7 111.1 111.4 -.2 1.0 .3 .3 2.8 Consumer goods 110.7 111.9 112.0 112.4 -.1 1.2 .1 .3 3.0 Business equipment 125.4 126.8 128.3 129.4 -.4 1.2 1.1 .9 6.6 Construction supplies 97.1 98.6 98.8 98.4 -1.4 1.6 .2 -.4 3.6 Materials 107.9 108.2 108.7 108.9 -.2 .3 .4 .2 3.0 Major industry groups Manufacturing 109.8 110.6 111.1 111.7 -.3 .7 .5 .5 3.3 Durable 108.2 109.5 110.2 111.0 -.9 1.2 .7 .7 3.7 Nondurable 111.8 111.9 112.3 112.6 .4 .2 .4 .2 2.8 Mining 98.3 99.1 99.8 100.0 -.5 .8 .8 .2 1.2 Utilities 110.2 110.9 109.7 107.6 1.3 .6 -1.0 -1.9 -.2 Capacity utilization, percent 1991 1992 Average, Low, High, 1967-92 1982 1988-89 Dec. Sept.r Oct.' Nov.1 Dec.p Total 82.0 71.8 85.0 78.7 78.6 79.0 79.2 79.3 2.1 Manufacturing 81.3 70.0 85.1 77.7 77.5 77.9 78.2 78.4 2.4 Advanced processing 80.8 71.4 83.6 76.6 76.0 76.4 76.5 76.8 2.9 Primary processing . 82.3 66.8 89.0 80.2 81.3 81.8 82.4 82.5 1.0 Mining 87.4 80.6 87.2 86.2 85.6 86.3 87.0 87.1 .1 Utilities 86.6 76.2 92.3 83.4 84.6 85.1 84.1 82.5 1.0 1. Seasonally adjusted. r Revised, 2. Change from preceding month. p Preliminary. industrial capacity utilization edged up in Decem- production of nondurable materials changed little ber, to 79.3 percent, the highest rate since Novem- in December as a decline in paper materials about ber 1991. offset increases in textiles and chemicals. When analyzed by market group, the data show When analyzed by industry group, the data show that the December output of consumer goods that output in manufacturing increased 0.5 percent excluding motor vehicles was about unchanged in December and grew at a 4.0 percent annual rate from the preceding month as declines in consumer in the fourth quarter. Factory utilization rose energy products, particularly gasoline and utility 0.2 percentage point in December, to 78.4 percent, output for residential use, offset gains in goods for and has risen nearly 1 percentage point since the home, such as appliances. The production of September. In the past few months, operating rates most other major sectors within consumer goods have grown strongly in both primary and advanced was little changed. The output of business equip- processing industries. Among primary processing ment other than autos and trucks increased 0.5 per- industries, large advances that occurred in pricent as production of information processing equip- mary metals and fabricated metals at least partly ment and industrial equipment advanced further. reflected the recent strength in motor vehicles. The The output of materials, led by widespread gains overall rise in the utilization rate for advanced within durables, increased 0.2 percent; however, processing industries was concentrated in nonthe production of energy materials fell sharply, electrical equipment and in motor vehicles and mainly as a result of reduced utility output. The parts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

192 Federal Reserve Bulletin • March 1993 In December, output at utilities fell sharply and eration during the month. Production at mines was little changed from a year ago. The December increased slightly, as activity at coal mines and oil decline in utility output is based on preliminary and gas well drilling activity rose further. • data that show a large decline in electricity gen- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

193 Statement to the Congress Statement by Alan Greenspan, Chairman, Board ending in December, a full percentage point less of Governors of the Federal Reserve System, than during 1991. before the Joint Economic Committee, U.S. Although several economic indicators are dis- Congress, January 27, 1993 tinctly encouraging, this is not to say that we have clear sailing ahead. As I indicated when I appeared before this committee last March, The Federal Reserve will submit its semiannual households and businesses have been struggling report on monetary policy to the Congress in just to redress structural imbalances unparalleled in a few weeks, after our upcoming Federal Open the postwar period. The speculative bidding-up Market Committee meeting. At that time, I will of real estate and other asset prices over the be in a position to address more specifically our course of the 1980s fostered an excessive accuexpectations for economic growth and inflation mulation of debt and assets. The subsequent and also the ranges of money and credit expan- weakening of asset prices in the early 1990s left sion that we anticipate to be consistent with the the balance sheets of many households and busachievement of our goal of maintaining maximum inesses strained with debt overload. Banks and sustainable growth in the economy by fostering a other intermediaries that had financed the stable, noninflationary financial environment. buildup suffered losses that severely eroded cap- Under the circumstances, my opening remarks ital. The pressures to work down debt, reinthis morning will focus primarily on identifying forced by understandably more conservative the major tendencies visible in our economy lending practices, slowed economic growth. today. Some time ago I likened these pressures to head- The available data suggest that economic ac- winds of 50 miles per hour. tivity has been increasing at a firmer pace of late. Those headwinds have now slackened some- After having risen at only about a Wi percent what. But they have not disappeared. The proannual rate, on average, over the first five quar- cess of balance sheet adjustment, while becomters of the expansion, real gross domestic prod- ing less of a restraint on the economy, will uct increased at about a V/i percent rate in the doubtless be with us for some time. In addition, third quarter of 1992. The advance estimate of we are coping with a sizable retrenchment in the the Bureau of Economic Analysis for fourth- national defense area. And, although U.S. doquarter growth, which will be released tomor- mestic demand appears to be improving, many of row, is expected by many analysts to show a our key trading partners are experiencing disapsubstantial gain as well. Meanwhile, industrial pointing economic performance, which is acting production posted a healthy advance over the as a drag on our exports and our output. final three months of 1992, with solid growth for Much of the strength suggested by the incoma broad range of industries. ing U.S. data has been in the consumer sector. The recent news on the inflation front has also The speedup in consumption comes after a pebeen quite favorable, as businesses have contin- riod of more conservative spending behavior, ued their efforts to contain production costs and when many households seem to have focused on to boost efficiency. All told, the increase in the paying down debts and shoring up balance consumer price index excluding food and ener- sheets, so badly pressured by the events of gy—a measure that is widely used as a rough recent years. The relative strength of spending, proxy for the underlying trend of inflation—was thus, may reflect the improvement that has been just 3.3 percent over the twelve-month period achieved to date in the financial health of house- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

194 Federal Reserve Bulletin • March 1993 holds. Debt-to-income ratios have fallen slightly, prove fleeting if overall labor market conditions and debt-servicing burdens have declined quite remain subdued. Indeed, despite signs of modest noticeably, in large part because of the reduc- improvement in the past few months, since the tions in interest rates. At the same time, the recession trough in March 1991, employment has value of household financial assets has been shown essentially no net change on the payroll buoyed by the rise in stock prices last year. basis and only a modest increase in the household Moreover, concerns about housing prices, which series. probably were a key reason why consumers were Of course, the softness in employment in the so distressed for much of the past few years, current expansion is partly the counterpart of seem to have lessened. another development—namely, a dramatic im- The strengthening of the housing market may provement in productivity. Since the recession also be important in a more specific way. Sales of ended in early 1991, productivity has grown at an single-family homes have picked up, and when average annual rate of about 2Vi percent, a betterexisting homes are sold, the capital gains that than-expected performance given the relatively usually have accumulated over time can be real- slow pace of the economic recovery to date. ized. The buyer of the home typically takes out a The corporate restructuring and downsizing mortgage that is greater than that paid off by the efforts that have been associated with the recent seller. The difference largely reflects the realized productivity gains have in part been a response capital gain of the seller who receives unencum- to the profit squeeze that emerged during the bered cash, only part of which is apparently 1990-91 recession. These efforts also have been added to a down payment on a subsequent home spurred by increasing costs of health insurance purchase. Such cash provides the seller with and other fringe benefits, which have restrained additional liquid funds to spend on consumer hiring and encouraged a surge in the use of goods and services. temporary workers. But restructuring also seems History suggests that this is just what has been to have reflected an effort to capitalize on new happening. The marked rise in existing home sales opportunities for greater efficiency. Although we in recent months has added to households' pur- cannot be sure how or why these new opportuchasing power by enabling them to realize capital nities have arisen, I suspect they are the product gains at an increasing rate, thereby helping to fuel of the accelerating advances in computer softthe growth in consumer spending. Homeowners ware and applications. Past large accumulations also have an opportunity to liquify capital gains of computer hardware did not seem to have the when refinancing an existing mortgage, and refi- expected effects on productivity. But a new nancing surged in the latter part of 1992. Realized synergy of hardware and software applications or liquified capital gains are not accounted for in may finally be showing through in a significant the computation of the official saving rate; there- increase in labor productivity. fore the recent decline in the official saving rate These far-reaching changes in the production probably overstates the drop in the flow of saving processes in manufacturing and in the means by as perceived by households. However, unless which services are produced and distributed home sales, mortgage refinancing, and the associ- have apparently yet to run their course, although ated equity extraction continue to rise, there is a one must assume that the pace of restructuring limit to how much longer this factor can fuel the will surely slow. Accordingly, we may see less of growth of consumer spending. The measured per- a tapering off in productivity gains in coming sonal saving rate is at a relatively low level, and quarters than past cyclical experience would further outsized increases in consumption are not suggest. That prospect is highly favorable in very likely in the absence of a sustained pickup in terms of the longer-run potential output of the income growth. economy and our international competitiveness, Consequently, a significant consideration, in but it would also imply some continuing adjustterms of the outlook for consumer demand, is the ments in the work force in the near term. employment picture. The optimism revealed in The push to acquire state-of-the-art technology the recent surveys of consumer attitudes may has also been providing a discernible thrust to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to the Congress 195 capital spending in recent quarters—and likely development of a secondary market in commerwill continue to do so. Real outlays for office and cial mortgages will help liquify the market in computing equipment have soared as firms con- commercial real estate itself. However, if probtinue the transition to the more powerful and lems in commercial real estate persist, credit cost-effective machines that are now available, conditions for small and riskier business may ease and purchases of communications equipment only gradually for some time. continue to be boosted by, among other things, Soft property prices, engendered by high vathe shift to fiber-optic networks. Demand for cancy rates and sluggish demand for space, are other, more traditional types of equipment now likely to continue to restrain commercial conappears to be growing as well. The improved struction spending in 1993, and the prospects for pace of economic expansion has doubtless lifted multifamily housing are not much better. In addisales expectations, and the marked increases in tion, budgetary pressures on state and local govprofits and cash flow over the past year are ernments remain intense. providing funds for new purchases. Meanwhile, we must continue to work through Problems, however, remain in several areas, the sizable adjustment in military spending that although with some lessening of concern. Chief has been under way since the late 1980s. From a among them are the ongoing difficulties in the longer-run perspective, the defense cutbacks credit area. Depressed demand is doubtless the carry the anticipation of substantial benefits for major explanation for weak loan growth at banks the U.S. economy. By freeing up resources that and many other intermediaries. However, in- can then be devoted to improving the nation's creased regulation presumably has also played a stock of productive physical and human capital, role. Moreover, lenders, seeking to protect their they should ultimately lead to higher living stancapital positions, have been extremely cautious. dards. In the short run, of course, lower defense Although they seem to have stopped tightening spending is a depressant on economic activity and credit terms, a significant easing is not yet evident. on jobs and incomes. For industries and regions Commercial real estate has accounted for much that rely heavily on military spending, the disloof the asset quality problems at financial institu- cations may well be sizable. In industries that tions. Until real estate values clearly stabilize, depend on defense expenditures for at least 50 banks and other intermediaries are not apt to percent of their output, employment has fallen become substantially more eager lenders. The more than 20 percent (300,000 jobs) since 1987. liquidity of real estate markets remains impaired, And in California, where the share of civilian and lenders are uncertain about the value of employment in defense-related jobs may be alcollateral and the appropriate level of reserves most twice the national average, the unemployagainst nonperforming loans. The risk that further ment rate has risen to about 10 percent, nearly 3 reserving may be necessary has led banks to percentage points above the national average. bolster book capital, widen lending margins, and In addition, our export performance is being approach new credits with caution. It is not nec- restrained by developments abroad. Countries essary for real estate values to rise to reduce this that earlier had been growing at least moderately risk, but lenders need to be more confident that have shown clear signs of slower growth, or prices will not continue to fall and that, if neces- outright declines, in economic activity. In both sary, they can sell collateral expeditiously at rea- Germany and Japan, real output fell for part of sonably predictable prices. Although there are 1992, and growth for the year as a whole was some initial signs that commercial real estate substantially less than in 1991. Many of the other markets in some regions are finding a bottom, countries of continental Europe have recorded uncertainty remains high. Having accumulated only weak growth. And in Canada and the United substantial liquid assets and rebuilt capital, banks Kingdom, signs of recovery from prolonged reseem well positioned to meet increased loan de- cession have ranged between weak and elusive. mand, especially once collateral uncertainty di- Foreign officials have reacted to these developminishes. Endeavors by both the Resolution Trust ments with measures intended to boost spending Corporation and private parties to encourage the and to promote recovery. In Japan, official inter- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

196 Federal Reserve Bulletin • March 1993 est rates have been lowered nearly 3 percentage consistent with our broader economic objectives points since the start of 1991, and a supplemen- would be slower than indicated by normal histortary budget of additional government spending ical relationships of money and spending—and has just been passed. In Germany, the choice of that a technical adjustment to our monetary policy steps has been complicated by the special growth ranges might thus be in order. That assesscircumstances associated with the massive task of ment is wholly technical and should not be interunifying the economies of eastern and western preted as indicative of any change in monetary Germany. Monetary conditions have been eased policy per se. Partly in view of these developsomewhat, but continued rapid money growth and ments, the Federal Reserve cannot rely exclupersistent inflation have made officials cautious. sively on money supply growth relative to its In the other European countries tied to Germany targets in formulating monetary policy. In any through the exchange rate commitments of the event, the Federal Open Market Committee will European Monetary System, scope for aggressive reexamine this issue, along with other, broader monetary easing has been limited. This has led considerations, when it meets next week to set some countries to relax that commitment, at least monetary policy goals for 1993. for a time, and to ease monetary policy. Regardless of the specific ranges established I will, of course, be discussing Federal Reserve for the growth of money and credit over the monetary policy in detail when I present the coming year, the objectives of monetary policy Federal Reserve System's Humphrey-Hawkins remain unchanged: We are seeking to foster Report to the Congress next month. However, let financial conditions that will encourage maxime comment briefly on an issue that has arisen mum sustainable growth in the economy. As I, recently regarding the ranges for monetary growth and my colleagues, have stressed, a noninflationin 1993. The issue, as I indicated in my letter to ary environment is a precondition to such a goal. Senator Sasser earlier this month, is that an un- For the coming year we will continue to play a usual portion of aggregate spending has continued constructive role in supporting an extension of to be financed by credit that is granted outside of the recent more hopeful signs of solid growth, banks and other depositories—evidently a side while endeavoring to avoid any excesses that effect of the balance sheet restructuring process might lead to a flare-up of inflationary pressures that I referred to earlier.1 Should the phenomenon down the road. Such a course will help the persist in 1993, it implies that growth in M2 economy emerge from the financial difficulties of recent years, maintain the progress toward price stability that has been achieved thus far, 1. The attachment to this statement is available from and thereby promote a sustainable economic Publications Services, Board of Governors of the Federal Reserve System, Washington, DC 20551. expansion. • Chairman Greenspan presented identical testimony before the Committee on the Budget, U.S. Senate, January 28, 1993. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

197 Announcements STATEMENT BY CHAIRMAN GREENSPAN designated Chairman. His term will run through December 1993. Jean Pogge, Vice President of Chairman Alan Greenspan, on behalf of the Fed- South Shore Bank in Chicago, Illinois, was desigeral Reserve Board, issued on January 5, 1993, the nated Vice Chairman. Her term on the council following statement regarding the announcement expires in December 1994. that E. Gerald Corrigan planned to step down as The ten new members are the following: President of the Federal Reserve Bank of New York: Douglas D. Blanke St. Paul, Minnesota President Corrigan has had an extraordinary career in central banking and public service. His unique grasp of Mr. Blanke is the Director of Consumer Policy for the financial markets and their operation, both domestically State of Minnesota's Office of Attorney General. He has and internationally, and his expertise in crisis manage- been with the Attorney General's Office since 1978 and in ment has served the nation exceedingly well during his his current position since 1991. He is responsible for the tenure as President of the Federal Reserve Bank of New overall development of consumer protection policy and York and earlier, as President of the Federal Reserve priorities, legislative and regulatory initiatives, consumer Bank of Minneapolis, and in other roles in the System. education, and strategic planning on consumer issues, His contributions to monetary and financial policy, to including credit-related activities. Mr. Blanke recently banking supervision and regulation and to international joined with the International Credit Association to prepare a cooperation and coordination in these areas are legion. teaching unit called "I'm CreditWise" to help high school His wise judgment and practical advice will be sorely students learn the importance of handling credit responsibly. missed by the Board, by the Federal Reserve System generally and by the nation as well. We wish him well in whatever future endeavor he undertakes. Michael Ferry On a personal note, I will miss him as a friend and St. Louis, Missouri confidant whose judgment I have valued highly during Mr. Ferry has been a Staff Attorney in the Consumer Unit my years as Federal Reserve Chairman. of Legal Services of Eastern Missouri since 1979. The majority of Mr. Ferry's work for Legal Services is in the field of consumer law, particularly consumer credit, although he has litigated cases in other areas, including APPOINTMENT OF NEW MEMBERS TO THE shelter for the homeless and prison conditions. As commu- CONSUMER ADVISORY COUNCIL nity education coordinator, he oversees the program's educational efforts in the community. Mr. Ferry also supervises The Federal Reserve Board named on January 19, clinical and work-study law students from the law schools 1993, ten new members to its Consumer Advisory at both St. Louis University and Washington University, where he is an Adjunct Professor of Law. He writes a Council to replace those members whose terms weekly newspaper column on legal topics for the St. Louis have expired and designated a new Chairman and Post-Dispatch. Vice Chairman of the council for 1993. The Consumer Advisory Council was established by the Congress in 1976, at the suggestion of Norma L. Freiberg New Orleans, Louisiana the Board, to advise the Board on the exercise of its duties under the Consumer Credit Protection Act Ms. Freiberg has been the Executive Director of the New and on other consumer-related matters. The thirty- Orleans Neighborhood Development Foundation since 1988. Her responsibilities include administration of a nonmember council, with staggered three-year terms profit education and advocacy program for low- and of office, meets three times a year. moderate-income homebuyers. She is also responsible for Denny D. Dumler, Senior Vice President of the the administration of an annual operating budget of approx- Colorado National Bank in Denver, Colorado, was imately $240,000. Ms. Freiberg is in charge of the Founda- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

198 Federal Reserve Bulletin • March 1993 tion's fundraising for operating expenses and permanent leadership, the chamber has grown to more than 1,000 financing for clients. She identifies and negotiates revenue- members and is the largest black chamber of commerce in producing projects and is also the negotiator and the country. The Dallas Black Chamber of Commerce is liaison with appropriate offices and departments of the city nationally recognized for its initiatives and successes and is government. frequently called on to provide counsel, training, and direction to the 250-plus other minority chambers of commerce representing thousands of small business owners throughout Lori Gay the country. Mr. Houston began his career when he was Los Angeles, California recruited into a bank management program by Chase Manhattan Bank in 1968. He left banking in 1978 to start his Ms. Gay is the Executive Director of the Los Angeles own business. Neighborhood Housing Service. She has worked for NHS since 1985 and in the community development field for fifteen years. Her efforts have been focused on rebuilding Jim West impoverished communities and creating mechanisms for Tijeras, New Mexico community empowerment and ownership. The mission of NHS is to rebuild neighborhoods within the city of Los Mr. West is President of Jim West Financial Group, a Angeles for the primary benefit of the residents, using a firm that he started in 1987. Mr. West specializes in busipublic-private partnership that includes financial institu- ness development, financial planning, budget and cash flow tions, insurance companies, local businesses, government, analysis, government and board training, and economic and community residents. development. Previously he was the vice president of the American Indian National Bank. His duties included commercial lending, credit and finance, business development, project evaluation, and financial planning. Bonnie Guiton Charlottesville, Virginia Ms. Guiton is Dean of the Mclntire School of Commerce, Grace W. Weinstein University of Virginia. Previously she was Secretary of the Englewood, New Jersey State and Consumer Services Agency of California where Ms. Weinstein, a financial writer and consultant, is curshe had oversight of fourteen state departments. Ms. Guiton rently a columnist for Good Housekeeping magazine and served as Special Adviser for Consumer Affairs and Direcconsulting editor for the New Jersey Investor Section of the tor of the U.S. Office of Consumer Affairs for President Star-Ledger, Newark, New Jersey. She is the author of nine Bush. She also headed the U.S. Delegation to the Commitbooks, including the Lifetime Book of Money Management. tee on Consumer Policy of the Organisation for Economic She has written feature articles, primarily on personal Co-operation and Development. For President Reagan, Ms. finance and business topics, for a variety of magazines, Guiton served as an Assistant Secretary in the U.S. Departincluding Money, Working Mother, Woman's Day, and ment of Education and as Vice-Chair of the U.S. Postal Rate Kiplinger's Personal Finance. Ms. Weinstein receives Commission. letters from all over the country, and many of them have questions about consumer financial services and credit— how to establish it, how to manage it, and how to under- Ronald Homer stand its accompanying rights and responsibilities. She is a Boston, Massachusetts frequent guest on radio and television call-in shows. Mr. Homer has been the Chairman and Chief Executive Officer of the Boston Bank of Commerce since 1983. In Robert O. Zdenek 1990 he was named chairman of the board of directors of Washington, DC the bank. During 1979-83, Mr. Homer was affiliated with Freedom National Bank of New York, first as a senior vice Since 1980 Mr. Zdenek has been the President of the president and senior loan officer and subsequently as execu- National Congress for Community Economic Development tive vice president and chief operating officer. He is a past (the trade association of community development corporapresident of the American Bankers Association and cur- tions). He designs and participates in a range of public rently serves as chairman of its Steering Committee for the policy initiatives that have significantly increased the stat- Center for Community Development. Mr. Homer also serves ure of community-based development organizations. Mr. as a director for New England Telephone and the New Zdenek developed and implemented a diversified fundrais- England Student Loan Marketing Corporation (NellieMac). ing campaign that raises more than $1 million yearly from twenty to thirty foundations and corporations. He has given numerous speeches and published more than thirty articles Thomas L. Houston and chapters on community development and other topics. Dallas, Texas Mr. Houston has been the Executive Director of the Other Council members whose terms continue Dallas Black Chamber of Commerce since 1982. Under his through 1993 and 1994 are listed below (together Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 199 with the expiration date of each one's term of Henry Jaramillo, Jr., President, Ranchers State Bank, Belen, New Mexico, December 31, 1993 office). Lowell N. Swanson, President (Retired), United Finance Barry Abbott, Partner, Morrison & Foerster, San Fran- Company, Portland, Oregon, December 31, 1994 cisco, California, December 31,1994 Michael W. Tierney, Director, Local Initiatives Support John R. Adams, Corporate Vice President and Compli- Corporation, Washington, D.C., December 31, 1994 ance Officer, CoreStates Financial Corporation, Philadelphia, Pennsylvania, December 31, 1994 John A. Baker, Senior Vice President, Equifax, Inc., ISSUANCE OF FINAL RULE TO CARRY OUT Atlanta, Georgia, December 31, 1994 PROVISIONS OF THE FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT Veronica E. Barela, Executive Director, NEWSED ACT OF 1991 Community Development Corporation, Denver, Colorado, December 31, 1993 The Federal Reserve Board issued on January 5, Mulugetta Birru, Executive Director, Urban Redevelop- 1993, a final rule to carry out provisions of section ment Authority of Pittsburgh, Pittsburgh, Pennsylvania, 202(d) and 210 of the Federal Deposit Insurance December 31, 1994 Corporation Improvement Act of 1991 (FDICIA) that affect bank holding companies and foreign Genevieve Brooks, Deputy Borough President, Office of banking organizations with operations in the United the Bronx Borough President, Bronx, New York, Decem- States. ber 31, 1994 The final rule, which is effective February 4, Toye L. Brown, Director, Massachusetts Bay Transporta- 1993, replaces an interim rule adopted in April tion Authority, Boston, Massachusetts, December 31, 1993 1992 and amends Regulation Y (Bank Holding Companies and Change in Bank Control) to specify Edmund Mierzwinski, Consumer Advocate, U.S. Public additional factors that the Federal Reserve must Interest Research Group, Washington, D.C., December 31, consider in acting on applications submitted under 1994 the Bank Holding Company Act to acquire a bank. John V. Skinner, President & Chief Executive Officer, Jewelers Financial Services, Inc., Irving, Texas, December 31, 1994 ISSUANCE OF FINAL RULE TO IMPLEMENT PORTIONS OF THE FOREIGN BANK Cathy Cloud, Enforcement Program Director, National Fair Housing Alliance, Washington, D.C., December 31, SUPERVISION ENHANCEMENT ACT OF 1991 1994 The Federal Reserve Board issued on January 12, Michael D. Edwards, President, Prairie Security Bank, 1993, a final rule implementing portions of the Yelm, Washington, December 31, 1994 Foreign Bank Supervision Enhancement Act of 1991. The final rule amends the Board's Regula- Donald A. Glas, President, First State Federal Savings tion K (International Banking Operations) and Regand Loan Association, Hutchinson, Minnesota, December 31, 1993 ulation Y (Bank Holding Companies and Change in Bank Control). The rule is effective immediately Joyce Harris, President and Chief Executive Officer, and replaces an interim regulation issued in April Teleco Community Credit Union, Madison, Wisconsin, 1992. December 31, 1993 The amendments to Regulation K reflect the Board's new authority to supervise and regulate Gary S. Hattem, Vice President, Community Developforeign banks that conduct or seek to conduct a ment Group, New York, New York, December 31, 1994 banking business in the United States. The rule Julia E. Hiler, Executive Vice President, Sunshine Mort- requires that foreign banks seeking to conduct gage Corporation, Marietta, Georgia, December 31, 1993 direct banking operations in the United States must Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

200 Federal Reserve Bulletin • March 1993 be subject to comprehensive supervision by their test is based on the revenue earned from ineligible home-country authorities on a consolidated basis. and total securities activities. The alternative test The amendment to Regulation Y requires a for- will index revenue to interest rate changes, compareign banking organization to file an application ing current interest rates for various portfolio durawith the Board to acquire more than 5 percent of tions with rates of corresponding durations in the shares of a U.S. bank or bank holding company. September 1989. The Board is also requesting additional com- A company can elect to use either the original ments on the definition of representative office and 10 percent revenue standard or the alternative the types of activities such an office may conduct. indexed revenue test for purposes of calculating These comments must be received by March 15, compliance. 1993. PROPOSED ACTIONS DECISION ON MSA DESIGNATIONS The Federal Reserve Board issued for public com- The Federal Reserve Board announced on January ment on January 6,1993, proposed amendments to 22, 1993, that lenders covered by Regulation C its Regulations H (Membership of State Banking (Home Mortgage Disclosure) should continue to Organizations in the Federal Reserve System), K use, through 1993, the Metropolitan Statistical Area (International Banking Operations), and Y (Bank (MSA) designations that were in place during most Holding Companies and Change in Bank Control) of 1992. to implement a uniform multiagency criminal The Office of Management and Budget issued referral form. Comments were requested by Februnew designations before year-end 1992, and lendary 10, 1993. ers covered by the Home Mortgage Disclosure Act ordinarily would be required to use the new MSA boundaries for identifying property locations beginning January 1, 1993. The Board, however, has PRELIMINARY FIGURES AVAILABLE decided to delay implementing this change in MSA ON OPERATING INCOME designations so that lenders have adequate time to OF THE FEDERAL RESERVE BANKS make the necessary programming changes for data collection. Preliminary figures released on January 13, 1993, indicate that operating income of the Federal Reserve Banks amounted to $20,234 billion during APPROVAL OF AN ALTERNATIVE METHOD TO 1992. Net income before payment of dividends, ADJUST THE 10 PERCENT REVENUE TEST additions to surplus, and payments to the Treasury totaled $17,348 billion. About $16,774 billion was The Federal Reserve Board announced on January paid to the U.S. Treasury during 1992. 26, 1993, approval of an alternative method to Federal Reserve System income is derived priadjust the 10 percent revenue test limiting ineligi- marily from interest earned on U.S. government ble securities activities of section 20 subsidiaries of securities that the Federal Reserve has acquired bank holding companies. through open market operations. Income from The alternative method is effective immediately the provision of financial services amounted to and is designed to accommodate changes in the $757 million. level and structure of interest rates since the reve- Operating expenses of the twelve Reserve Banks nue test was last examined in September 1989 and and their branches totaled $1,440 billion. Also, to preserve the same level of activity. $175 million for earnings credits were granted to Section 20 of the Glass-Steagall Act prohibits a depository institutions under the Monetary Control member bank from being affiliated with a company Act of 1980. Assessments to Reserve Banks for that is "engaged principally" in underwriting and Board expenditures totaled $129 million, and the dealing in bank ineligible securities. The current cost of currency amounted to $295 million. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 201 Net deductions from income amounted to eign list, and the one addition brings the number of $959 million. Net deductions from income resulted foreign equity securities on the list to 302. primarily from unrealized losses on assets denomi- The changes that have been made to the revised nated in foreign currencies to reflect current market OTC list, which now contains 3,160 OTC stocks, exchange rates. These unrealized losses were par- are as follows: tially offset by gains on the sales of assets denominated in foreign currencies and securities from the • One hundred eighteen stocks have been System Open Market Account. Statutory dividends included for the first time, 103 under National to member banks were $172 million. Market System (NMS) designation Under the policy established by the Board of • Thirty-six stocks previously on the list have Governors at the end of 1964, all net income after been removed for substantially failing to meet the the statutory dividend to member banks and the requirements for continued listing amount necessary to equate surplus to paid-in capi- • Thirty-eight stocks have been removed for tal is transferred to the U.S. Treasury as interest on reasons such as listing on an national securities Federal Reserve notes. exchange or involvement in an acquisition. The OTC List is published by the Board for the REVISED LISTS OF MARGINABLE OTC information of lenders and the general public. It STOCKS AND OF FOREIGN MARGIN STOCKS includes all OTC securities designated by the Board NOW AVAILABLE pursuant to its established criteria as well as all OTC stocks designated as NMS securities for The Federal Reserve Board published on January which transaction reports are required to be made 22, 1992, a revised List of Marginable OTC Stocks pursuant to an effective transaction reporting plan. for over-the-counter (OTC) stocks that are subject Additional OTC securities may be designated as to its margin regulations. Also published was the NMS securities in the interim between the Board's List of Foreign Margin Stocks for foreign equity quarterly publications and will be immediately securities that are subject to Regulation T (Credit marginable. The next publication of the Board's by Brokers and Dealers). The lists were effective list is scheduled for March 1993. February 9, 1993, and superseded the previous lists Besides NMS-designated securities, the Board that were effective November 9, 1992. will continue to monitor the market activity of The foreign list specifies those foreign equity other OTC stocks to determine which stocks meet securities that are eligible for margin treatment at the requirements for inclusion and continued inclubroker-dealers. There were no deletions to the for- sion on the OTC List. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

203 Legal Developments FINAL RULE—AMENDMENTS TO REGULATIONS CBL Medical Inc.: Warrants (expire 12-21-93) G, T, U AND X Cencor, Inc.: $1.00 par common Congress Street Properties, Inc.: $.10 par common The Board of Governors is amending 12 C.F.R. Parts CrownAmerica, Inc.: No par common 207, 220, 221, and 224, its Regulations G, T, U, and X Crystal Oil Company: Series A, $.01 par convertible (Securities Credit Transactions; List of Marginable preferred OTC Stocks; and List of Foreign Margin Stocks). The List of Marginable OTC Stocks (OTC List) is com- Eastland Financial Corporation: $.01 par common prised of stocks traded over-the-counter (OTC) in the United States that have been determined by the Board First Bank of Philadelphia: $2.00 par common of Governors of the Federal Reserve System to be First New York Bank for Business: $.10 par common subject to the margin requirements under certain Fed- FLS Holdings, Inc.: Series A, $.01 par convertible eral Reserve regulations. The List of Foreign Margin preferred Stocks (Foreign List) represents foreign equity securities that have met the Board's eligibility criteria Hotelecopy, Inc.: $.01 par common under Regulation T. The OTC List and the Foreign List are published four times a year by the Board. This ILIO, Inc.: $.01 par common; Warrants (expire document sets forth additions to and deletions from 08-31-93) the previous OTC List and an addition to the Foreign Indiana Financial Investors, Inc.: No par common List. Both Lists were last published on October 29, 1992, and effective on November 9, 1992. KMS Industries, Inc.: $.08 par common Effective February 8, 1993, accordingly, pursuant to sections 7 and 23 of the Securities Exchange Act of Marine Drilling Company: Rights (expire 12-23-92) 1934, as amended (15 U.S.C. 78g and 78w), and in Meritor Savings Bank: $1.00 par common accordance with 12 C.F.R. 207.2(k) and 207.6 (Regulation G), 12 C.F.R. 220.2(u) and 220.17 (Regulation T), and 12 C.F.R. 221.20 and 221.7 (Regulation U), Networks Electronic Corporation: $.25 par common there is set forth below a listing of deletions from and Newport Electronics, Inc.: $.01 par common additions to the OTC List and an addition to the Foreign List. Piedmont Federal Corporation: $.01 par common Deletions from the List of Marginable OTC Quartz Mountain Gold Corp.: No par common Stocks Rocky Mount Undergarment Co., Inc.: $.01 par com- Stocks Removed for Failing Continued Listing mon Requirements Sanborn, Inc.: Series A, convertible preferred stock; Action Auto Rental, Inc.: $.01 par common Warrants (expire 08-07-96) Adtec, Inc.: $.01 par common Second National Bancorporation: $1.00 par common Aegis Group PLC: American Depositary Receipts Sheffield Industries, Inc.: $.01 par common Aero Systems, Inc.: $.02 par common Simtek Corporation: $.01 par common; Warrants Artel Communications Corporation: $.01 par common (expire 03-06-96) Sun Microsystems, Inc.: 63/s% convertible subordi- Burritt Interfinancial Bancorporation: $1.00 par com- nated debentures mon Symbolics, Inc.: $.01 par common Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

204 Federal Reserve Bulletin • March 1993 Stocks Removed for Listing on a National Western Capital Investment Corp.: $1.00 par common Securities Exchange or Being Involved in an Wetterau Incorporated: $1.00 par common Acquisition Additions to the List of Marginable OTC Stocks Advanced Telecommunications Corporation: $.02 par common Aaron Rents, Inc.: Class B, $.50 par common Affiliated Bankshares of Colorado, Inc.: $5.00 par Ace Cash Express, Inc.: $.01 par common common ACX Technologies, Inc.: $.01 par common American Biodyne, Inc.: $.01 par common Alpha-Beta Technology, Inc.: $.01 par common American Funeral Services Corp.: $.06 par common American Educational Products, Inc.: $.01 par com- Archive Corporation: $.01 par common mon Amfed Financial, Inc.: $.01 par common Betz Laboratories, Inc.: $.10 par common ANB Corporation: No par common Brandon Systems Corporation: $.10 par common Autofinance Group, Inc.: No par common Carmike Cinemas, Inc.: Class A, $.03 par common BankUnited, A Savings Bank (Florida): Class A, $.01 CCNB Corporation: $1.00 par common par common Century Medicorp, Inc.: No par common Belize Holdings Inc.: $.01 par non-voting ordinary Chesapeake Utilities Corporation: $.48% par common shares CK Federal Savings Bank: $1.00 par common Books-A-Million, Inc.: $.01 par common Compusa, Inc.: No par common Boomtown, Inc.: $.01 par common BPI Environmental, Inc.: Warrants (expire 10-08-94); First Commercial Bancshares, Inc.: $1.00 par common Warrants (expire 10-08-96) First Florida Banks, Inc.: $1.00 par common Brooktrout Technology, Inc.: $.01 par common Flagship Financial Corporation: $.01 par common Fleer Corporation: $.01 par common Canterbury Educational Services, Inc.: $.001 par common Hadson Energy Resources Corp.: $.10 par common Casino Magic Corporation: $.01 par common Healthsource, Inc.: $.10 par common Celebrity, Inc.: $.01 par common Home Financial Corporation: $1.00 par common Central Mortgage Bancshares, Inc. (Missouri): $1.00 HomeTrust Bank of Georgia: $1.00 par common par common Horizon Industries, Inc.: No par common Citation Computer Systems, Inc.: $.01 par common Citizens National Corporation (Florida): $2.50 par INB Financial Corporation: No par common common Insituform Group, Ltd.: Ordinary shares, par Vi pence Commercial Bancorp (Oregon): $2.50 par common Comptronix Corporation: 63/4% convertible subordi- Moorco International, Inc.: $.01 par common nated debentures Compuware Corporation: $.01 par common Patlex Corporation: $.10 par common Continental Savings of America, A Federal Savings & Phoenix Resource Companies, Inc.: $.01 par common Loan Association (California): Series A, non-cumulative convertible preferred Ramsey - HMO, Inc.: $.001 par common Copley Pharmaceutical, Inc.: $.01 par common Corel Corporation: No par common Savannah Foods & Industries, Inc.: $.25 par common Cortech, Inc.: $.002 par common; Units (expire Summit Holding Corporation: $.625 par common 05-24-94) Sunair Electronics, Inc.: $.10 par common Creative Biomolecules, Inc.: $.01 par common Tejas Gas Corporation: $.25 par common Danka Business Systems, PLC: American Depositary Receipts Ultra Bancorp: $.01 par common DEP Corporation: Class A, $.01 par common Uni-Marts, Inc.: Class A, $.10 par common Dial Page, Inc.: $.01 par common Value Health, Inc.: No par common E-Z-EM, Inc.: Class B; $.10 par common Viratek, Inc.: $.10 par common Edmark Corporation: No par common Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 205 Edusoft Ltd.: Ordinary shares (NIS .1 par) Miles Homes, Inc.: $.10 par common Embrace Systems Corporation: $.001 par common Energy Research Corporation: $.0001 par common Neoprobe Corporation: $.001 par common; Class E, Environmental Technologies Corporation: $.01 par Warrants (expire 11-10-96) common; Warrants (expire 12-17-97) Networth, Inc.: $.01 par common Exstar Financial Corporation: $.01 par common NPM Healthcare Products, Inc.: $.01 par common NU Horizons Electronics Corporation: $.01 par com- F.N.B. Corporation: Series B convertible preferred, mon $25.00 stated value Financial Security Corporation: $.01 par common Olicom A/S: DKK $.25 par common FONIC, Inc.: $.01 par common; Warrants (expire Olympic Financial Ltd. (Minnesota): $.01 par common 05-01-93) Orion Pictures Corporation: $.25 par common Fortune Bancorp, Inc. (Florida): Series A, 8% par convertible preferred Patterson Dental Company: $.01 par common Fresh Choice, Inc.: $.001 par common Peoplesoft, Inc.: $.01 par common Fritz Companies, Inc.: $.01 par common Physicians Clinical Laboratory, Inc.: $.01 par common GBC Technologies, Inc.: $.01 par common Platinum Software Corporation: $.001 par common Gray Communications Systems, Inc.: No par common President Riverboat Casinos, Inc.: $.01 par common Purolator Products Company: $.01 par common Ha-Lo Industries, Inc.: No par common Haggar Corporation: $.10 par common Rand Capital Corporation: $.10 par common HCC Insurance Holdings, Inc.: $1.00 par common Raven Industries, Inc.: $1.00 par common Health Management Systems, Inc.: $.01 par common Res-Care, Inc.: No par common Home Savings Bank, F.S.B. (Florida): $1.00 par com- Rottlund Company, Inc., The: $.01 par common mon HS Resources, Inc.: $.001 par common Seacor Holdings, Inc.: $.01 par common Hyal Pharmaceutical Corporation: No par common Simmons First National Corporation (Arkansas): Class A, $5.00 par common ImageAmerica, Inc.: $.01 par common Snapple Beverage Corporation: $.01 par common Infu-Tech, Inc.: $.01 par common Sport Chalet, Inc.: $.01 par common Interfirst Bankcorp, Inc. (Michigan): $.01 par common St. Mary Land & Exploration Company: $.01 par IQ Software Corporation: $.00033 par common common ISG International Software Group, Ltd.: Ordinary Sterling Bancshares, Inc. (Texas): $1.00 par common shares (NIS .1) Syratech Corporation: $.01 par common Kankakee Bancorp, Inc. (Illinois): $.01 par common Taco Cabana, Inc.: Class A, $.01 par common Kemet Corporation: $.01 par common Tracor, Inc.: $.01 par common; Warrants (expire Kendall International, Inc.: $.01 par common 12-31-2001) Trident Microsystems, Inc.: $.001 par common Landoptics Ltd.: Ordinary shares (NIS .02) Ligand Pharmaceuticals Incorporated: Convertible U.S. Physical Therapy, Inc.: $.01 par common Class A, $.001 par common Ultralife Batteries, Inc.: $.10 par common Liposome Company, Inc., The: Depositary shares United Waste Systems, Inc.: $.001 par common USA Classic, Inc.: $.01 par common Main Street & Main, Inc.: $.001 par common; Warrants (expire 09-04-96) Matritech, Inc.: $.01 par common Vision-Sciences, Inc.: $.01 par common Mayflower Group, Inc.: No par common MB Communications, Inc.: $.001 par common Washington Mutual Savings Bank: Series C, $1.00 par Media Vision, Inc.: $.001 par common non-cumulative perpetual preferred; Series D, $1.00 Memtec Limited: American Depositary Receipts par convertible perpetual preferred Micro Warehouse, Inc.: $.01 par common Western Water Company: No par common Microtest, Inc.: $.001 par common Whitman Medical Corporation: No par common Midland Financial Group, Inc.: No par common Wholesome & Hearty Foods, Inc.: No par common Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

206 Federal Reserve Bulletin • March 1993 Addition to the List of Foreign Margin Stocks 2. Section 211.2 is amended by revising paragraph (t) to read as follows: Jefferson Smurfit Group, PLC: Ordinary shares, £.25 par value Section 211.2—Definitions. (t) Representative office means an office that: FINAL RULE—AMENDMENT TO REGULATION K (1) Engages solely in representational and administrative functions, such as soliciting new business or The Board of Governors is amending 12 C.F.R. Parts acting as liaison between the organization's head 211, 225, 263, and 265, its Regulation K (International office and customers in the United States; and Banking Operations) and Regulation Y (Banking Hold- (2) Does not have authority to make any business ing Companies and Change in Bank Control), imple- decision (other than decisions relating to the premmenting portions of the Foreign Bank Supervision ises or personnel of the representative office) for the Enhancement Act of 1991 (FBSEA), Subtitle A of account of the organization it represents, including Title II of the Federal Deposit Insurance Corporation contracting for any deposit or deposit-like liability Improvement Act of 1991, which made changes to the on behalf of the organization. authority of the Board of Governors of the Federal Reserve System (Board) under the International Bank- * * * * * ing Act of 1978 (IBA). These changes generally provided the Board with new authority to approve the 3. Section 211.21 is redesignated as section 211.20. establishment of U.S. offices by foreign banks and to Newly designated section 211.20 is amended by revisregulate and supervise the U.S. operations of foreign ing paragraphs (b)(3) through (b)(8) and by adding new banks. The final rule replaces the previous interim rule paragraphs (b)(9) and (c) to read as follows: and reflects the Board's authority with respect to the supervision and regulation of foreign banks that con- Section 211.20—Authority, purpose, and duct or seek to conduct a banking business in the scope. United States. The Board has also requested additional comment on aspects of the final rule concerning j|e $ $ $ $ representative offices of foreign banks. Lastly, the final rule amends Regulation Y to reflect the require- (b) * * * ment that a foreign banking organization must file an (3) Board approval of the establishment of an office application with the Board under the Bank Holding of a foreign bank in the United States under sections Company Act (BHC Act) in order to acquire more 7(d) and 10(a) of the IBA (12 U.S.C. 3105(d), than 5 percent of the shares of a U.S. bank or bank 3107(a)); holding company. (4) The termination by the Board of a foreign bank's Effective January 28, 1993, 12 C.F.R. Parts 211, representative office, state branch, state agency, or 225, 263, and 265 are amended as follows: commercial lending company subsidiary under sections 7(e) and 10(b) of the IBA (12 U.S.C. 3105(e), 3107(b)) and the transmission of a recommendation Part 211—International Banking Operations to the Office of the Comptroller of the Currency to terminate a federal branch or federal agency under 1. The authority citation for 12 C.F.R. Part 211 con- section 7(e)(5) of the IBA (12 U.S.C. 3105(e)(5)); tinues to read as follows: (5) The examinaion of an office or affiliate of a foreign bank in the United States as provided in Authority: Federal Reserve Act (12 U.S.C. 221 et seq.); sections 7(c) and 10(c) of the IBA (12 U.S.C. Bank Holding Company Act of 1956, as amended 3105(c), 3107(c)); (12 U.S.C. 1841 et seq.); the International Banking Act (6) The disclosure of supervisory information to a of 1978 (Pub. L. 95-369; 92 Stat. 607; 12 U.S.C. 3101 foreign supervisor under section 15 of the IBA et seq.); the Bank Export Services Act (title II, Pub. L. (12 U.S.C. 3109); 97-290, 96 Stat. 1235); the International Lending Super- (7) The limitations on loans to one borrower by state vision Act (title IX, Pub. L. 98-181, 97 Stat. 1153; branches and state agencies of a foreign bank under 12 U.S.C. 3901 et seq.); and the Export Trading Com- section 7(h)(2) of the IBA (12 U.S.C. 3105(h)(2)); pany Act Amendments of 1988 (title III, Pub. L. (8) The limitation of a state branch and a state 100-418, 102 Stat. 1384 (1988)). agency to conducting only activities that are permis- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 207 sible for a federal branch under section 7(h)(1) of the does not include renewal of the license of an existing IBA (12 U.S.C. 3105(h)(1)); and office. (9) The deposit insurance requirement for retail (f) Commercial lending company means an organizadeposit taking by a foreign bank under section 6 of tion, other than a bank or an organization operating the IBA (12 U.S.C. 3104). under section 25 of the Federal Reserve Act (FRA) (c) Additional requirements. Compliance by a foreign (12 U.S.C. 601-604a), organized under the laws of any bank with the requirements of this subpart and the state, that maintains credit balances permissible for an laws administered and enforced by the Board does not agency and engages in the business of making comrelieve the foreign bank of responsibility to comply mercial loans. Commercial lending company includes with the laws and regulations administered by the any company chartered under Article XII of the banklicensing authority. ing law of the State of New York. (g) Comptroller means the Office of the Comptroller of 4. Section 211.22 is redesignated as section 211.21 and the Currency. is revised to read as follows: (h) Control has the same meaning assigned to it in section 2 of the BHC Act (12 U.S.C. 1841), and the terms controlled and controlling shall be construed Section 211.21—Definitions. consistently with the term control. (i) Domestic branch means any place of business of a The definitions contained in section 211.2 in subpart A foreign bank, located in any state, that may accept of this part apply to this subpart except as a term is domestic deposits and deposits that are incidental to or otherwise defined in this section: for the purpose of carrying out transactions in foreign (a) Affiliate, of a foreign bank or of a parent of a foreign countries. bank, means any company that controls, is controlled (j) A foreign bank engages directly in the business of by, or is under common control with, the foreign bank banking outside of the United States if the foreign or the parent of the foreign bank. bank engages directly in banking activities usual in (b) Agency means any place of business of a foreign connection with the business of banking in the counbank, located in any state, at which credit balances are tries where the foreign bank is organized or operating, maintained, checks are paid, money is lent, or, to the (k) To establish means to: extent not prohibited by state or federal law, deposits (1) Open and conduct business through an office; are accepted from a person or entity that is not a (2) Acquire directly, through merger, consolidation, citizen or resident of the United States. Obligations or similar transaction with another foreign bank, the shall not be considered credit balances unless they are: operations of an office that is open and conducting (1) Incidental to, or arise out of the exercise of, business; other lawful banking powers; (3) Acquire an office through the acquisition of a (2) To serve a specific purpose; foreign bank subsidiary that will cease to operate in (3) Not solicited from the general public; the same corporate form following the acquisition; (4) Not used to pay routine operating expenses in (4) Change the status of an office; or the United States such as salaries, rent, or taxes; (5) Relocate an office from one state to another. (5) Withdrawn within a reasonable period of time (1) Federal agency, federal branch, state agency, and after the specific purpose for which they were state branch have the same meanings as in section 1 of placed has been accomplished; and the IBA (12 U.S.C. 3101). (6) Drawn upon in a manner reasonable in relation to (m) Foreign bank means an organization that is orgathe size and nature of the account. nized under the laws of a foreign country and that (c) Banking subsidiary, with respect to a specified engages directly in the business of banking outside of foreign bank, means a bank that is a subsidiary as the the United States. The term foreign bank does not terms bank and subsidiary are defined in section 2 of include a central bank of a foreign country that does the BHC Act (12 U.S.C. 1841). not engage or seek to engage in a commercial banking (d) Branch means any place of business of a foreign business in the United States through an office, bank, located in any state, at which deposits are (n) Foreign banking organization means a foreign received and that is not an agency, as that term is bank, as defined in section 1(b)(7) of the IBA defined in paragraph (b) of this section. (12 U.S.C. 3101(7)), that operates a branch, agency, or (e) Change the status of an office means convert a commercial lending company subsidiary in the United representative office into a branch or an agency, an States, or that controls a bank in the United States, agency into a branch, a federal branch into a state and any company of which the foreign bank is a branch, or a federal agency into a state agency, but subsidiary. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

208 Federal Reserve Bulletin • March 1993 (o) Home country, with respect to a foreign bank, paragraphs (a) through (h) of newly designated section means the country in which the foreign bank is char- 211.23 are redesignated as paragraphs (b) through (i) tered or incorporated. respectively, and a new paragraph (a) is added and (p) Home country supervisor, with respect to a foreign reserved. bank, means the governmental entity or entities in the foreign bank's home country with responsibility for 7. Sections 211.25 through 211.29 are redesignated as the supervision and regulation of the foreign bank, sections 211.24 through 211.28, respectively, and are (q) Licensing authority means: revised to read as follows: (1) The relevant state supervisor, with respect to an application to establish a state branch, state agency, Section 211.24—Approval of offices of foreign commercial lending company, or representative ofbanks; procedures for applications; standards fice of a foreign bank; or for approval; representative office activities and (2) The Comptroller, with respect to an application standards for approval; preservation of existing to establish a federal branch or federal agency. authority. (r) Office or office of a foreign bank means any branch, agency, representative office, or commercial lending company subsidiary of a foreign bank in the United (a) Board approval of offices of foreign banks— States. (1) Prior Board approval of branches, agencies, or (s) The parent of a foreign bank means any company of commercial lending companies of foreign banks. which the foreign bank is a subsidiary; the immediate (i) Except as otherwise provided in paragraph parent of a foreign bank is the company of which the (a)(3) of this section, a foreign bank shall obtain foreign bank is a direct subsidiary; and the ultimate the approval of the Board before it: parent of a foreign bank is the parent of the foreign (A) Establishes a branch, agency, or commerbank that is not the subsidiary of any other company, cial lending company subsidiary in the United (t) Regional administrative office means a representa- States; or tive office that: (B) Acquires ownership or control of a commer- (1) Is established by a foreign bank that operates one cial lending company subsidiary. or more branches, agencies, commercial lending (2) Prior Board approval of representative offices of companies, or banks in the United States; foreign banks. Except as otherwise provided in (2) Is located in the same city as one or more of the paragraphs (a)(2) or (a)(3) of this section, a foreign foreign bank's branches, agencies, commercial lend- bank shall obtain the approval of the Board before it ing companies, or banks in the United States; and establishes a representative office in the United (3) Manages, supervises, or coordinates the opera- States. tions of the foreign bank or its affiliates, if any, in a (i) Prior notice for regional administrative offices. particular geographic region. After providing 45 days' prior written notice to (u) Relevant state supervisor means the state entity the Board, a foreign bank may establish a regional that is authorized to supervise and regulate a state administrative office. The Board may waive the branch, state agency, commercial lending company, or 45-day period if it finds that immediate action is representative office. required by the circumstances presented. The (v) Representative office means any place of business notice period shall commence at the time the of a foreign bank, located in any state, that is not a notice is accepted. The Board may suspend the branch, agency, or subsidiary of the foreign bank, period or require Board approval prior to the (w) State means any state of the United States or the establishment of such an office if the notification District of Columbia. raises significant policy, prudential, or supervi- (x) Subsidiary means any organization 25 percent or sory concerns. more of whose voting shares is directly or indirectly (ii) General consent for representative offices. owned, controlled, or held with the power to vote by a The Board grants its general consent for a foreign company, including a foreign bank or foreign banking bank to establish a representative office that organization, or any organization that is otherwise solely engages in limited administrative functions controlled or capable of being controlled by a foreign that are clearly defined, are performed in connecbank or foreign banking organization. tion with the banking activities of the foreign bank, and that do not involve contact or liaison 5. Section 211.23 is redesignated as section 211.22. with customers or potential customers (such as separately maintaining back office support sys- 6. Section 211.24 is redesignated as section 211.23, tems), provided that the foreign bank notifies the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 209 Board in writing within 30 days of the establish- acquisition of a foreign bank or foreign banking ment of the representative office. organization that owns or controls more than (3) After-the-fact Board approval. Where a foreign 5 percent of any class of the voting securities of a bank proposes to establish a branch, agency, repre- U.S. bank or bank holding company, sentative office, or commercial lending company in (b) Procedures for application—(1) Filing application. the United States through the acquisition of, or An application for the Board's approval pursuant to merger or consolidation with, a foreign bank with an this section shall be filed in the manner prescribed office in the United States, the Board may, in its by the Board. discretion, allow the acquisition, merger, or consol- (2) Publication requirement—(i) General. Except idation to proceed before an application to establish with respect to a proposed transaction where the office has been filed or acted upon under this more extensive notice is required by statute or as section if: otherwise provided in paragraphs (b)(2)(ii) and (i) The foreign bank or banks resulting from the (b)(2)(iii) of this section, the applicant shall pubacquisition, merger, or consolidation will not di- lish a notice in a newspaper of general circulation rectly or indirectly own or control more than in the community in which the applicant proposes 5 percent of any class of the voting securities of, to engage in business. The notice shall state that or control, a U.S. bank; an application is being filed as of the date of the (ii) The Board is given reasonable advance notice notice and provide the name of the applicant, the of the proposed acquisition, merger, or consolida- subject matter of the application, the place where tion; comments should be sent, and the date by which (iii) Prior to consummation of the acquisition, comments are due pursuant to paragraph (b)(3) of merger, or consolidation, each of the relevant this section. The applicant shall furnish with its foreign banks commits in writing to comply with application to the Board a copy of the notice, the the procedures for an application under this sec- date of its publication, and the name and address tion within a reasonable period of time or has of the newspaper in which it was published. already filed an application; and (ii) Exception. The Board may modify the publi- (iv) Each of the relevant foreign banks commits in cation requirement of paragraph (b)(2)(i) of this writing to abide by the Board's decision on the section in appropriate circumstances. application, including, if necessary, a decision to (iii) Federal branch or federal agency. In the case terminate the activities of any such U.S. office, as of an application to establish a federal branch or the Board or the Comptroller may require. federal agency, compliance with the publication (4) Notice of change in ownership or control or procedures of the Comptroller shall satisfy the conversion of existing office. A foreign bank with a publication requirement of this section. Com- U.S. office shall notify the Board in writing within ments regarding the application should be sent to 10 days of either: the Board and the Comptroller. (i) A change in the foreign bank's ownership or (3) Written comments. Within 30 days after publicacontrol where the foreign bank is acquired or tion as required in paragraph (b)(2) of this section, controlled by another foreign bank or company any person may submit to the Board written comand the acquired foreign bank with a U.S. office ments and data on an application. The Board may continues to operate in the same corporate form extend the 30-day comment period if the Board as prior to the change in ownership or control; or determines that additional relevant information is (ii) The conversion of a branch to an agency or likely to be provided by interested persons or if representative office, an agency to a representa- other extenuating circumstances exist. tive office, a state branch to a federal branch, or a (4) Board action on application—(i) Time limits. state agency to a federal agency. The Board shall act on an application from a (5) Transactions subject to approval under Regula- foreign bank within 60 calendar days after the tion Y. Subpart B of the Board's Regulation Y foreign bank has been notified that its application (12 C.F.R. 225.11-225.14) governs the acquisition has been accepted, unless the Board determines by a foreign banking organization of direct or indi- that the public interest will be served by providing rect ownership or control of any voting securities of additional time to review the application and a bank or bank holding company in the United notifies the applicant that the 60-day period is States if the acquisition results in the foreign bank- being extended. ing organization's ownership or control of more than (ii) Additional information. The Board may re- 5 percent of any class of voting securities of a U.S. quest any information in addition to that supplied bank or bank holding company, including through in the application when the Board believes that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

210 Federal Reserve Bulletin • March 1993 additional information is necessary for its deci- (E) Evaluates prudential standards, such as sion. capital adequacy and risk asset exposure, on a (5) Coordination with other regulators. Upon re- worldwide basis. ceipt of an application by a foreign bank under this (2) Discretionary standards. In acting on any applisection, the Board shall promptly notify, consult cation under this subpart, the Board may take into with, and consider the views of the licensing account: authority. (i) Consent of home country supervisor. Whether (c) Standards for approval—(1) Mandatory stan- the home country supervisor of the foreign bank dards— (i) General. As specified in section 7(d) of has consented to the proposed establishment of a the IBA (12 U.S.C. 3105(d)), the Board may not branch, agency, or commercial lending company approve an application to establish a branch or an subsidiary; agency, or to establish or acquire ownership or (ii) Financial resources. The financial resources of control of a commercial lending company, unless the foreign bank (including the foreign bank's it determines that: capital position, projected capital position, profit- (A) Each of the foreign bank and any parent ability, level of indebtedness, and future prosforeign bank engages directly in the business of pects) and the condition of any U.S. office of the banking outside the United States and is subject foreign bank; to comprehensive supervision or regulation on (iii) Managerial resources. The managerial rea consolidated basis by its home country super- sources of the foreign bank, including the compevisor; and tence, experience, and integrity of the officers and (B) The foreign bank has furnished to the Board directors; the integrity of its principal shareholdthe information that the Board requires in order ers; management's experience and capacity to to assess the application adequately. engage in international banking; and the record (ii) Basis for determining comprehensive super- of the foreign bank and its management of comvision or regulation on a consolidated basis. In plying with laws and regulations, and of fulfilling determining whether a foreign bank and any any commitments to, and any conditions imposed parent foreign bank is subject to comprehensive by, the Board in connection with any prior applisupervision or regulation on a consolidated ba- cation; sis, the Board shall determine whether the for- (iv) Sharing information with supervisors. eign bank is supervised or regulated in such a Whether the foreign bank's home country supermanner that its home country supervisor re- visor and the home country supervisor of any ceives sufficient information on the worldwide parent of the foreign bank share material informaoperations of the foreign bank (including the tion regarding the operations of the foreign bank relationships of the bank to any affiliate) to with other supervisory authorities; assess the foreign bank's overall financial condi- (v) Assurances to Board. Whether the foreign tion and compliance with law and regulation. In bank has provided the Board with adequate assurmaking such a determination, the Board shall ances that information will be made available to assess, among other factors, the extent to which the Board on the operations or activities of the the home country supervisor: foreign bank and any of its affiliates that the Board (A) Ensures that the foreign bank has adequate deems necessary to determine and enforce comprocedures for monitoring and controlling its pliance with the IBA, the BHC Act, and other activities worldwide; applicable federal banking statutes; these assur- (B) Obtains information on the condition of the ances shall include a statement from the foreign foreign bank and its subsidiaries and offices bank describing the laws that would restrict the outside the home country through regular re- foreign bank or any of its parents from providing ports of examination, audit reports, or other- information to the Board; wise; (vi) Compliance with U.S. law. Whether the (C) Obtains information on the dealings and foreign bank and its U.S. affiliates are in complirelationships between the foreign bank and its ance with applicable U.S. law, and whether the affiliates, both foreign and domestic; applicant has established adequate controls and (D) Receives from the foreign bank financial procedures in each of its offices to ensure conreports that are consolidated on a worldwide tinuing compliance with U.S. law, including basis, or comparable information that permits controls directed to detection of money launderanalysis of the foreign bank's financial condi- ing and other unsafe or unsound banking praction on a worldwide, consolidated basis; tices. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 211 (3) Additional factor. In acting on an application, Section 211.25—Termination of offices of the Board may consider the needs of the commu- foreign banks. nity and the history of operation of the foreign bank and its relative size in its home country, (a) Grounds for termination—(1) General. Under secprovided, however, that the size of the foreign tions 7(e) and 10(b) of the IBA (12 U.S.C. 3105(e), bank shall not be the sole factor in determining 3107(b)), the Board may order a foreign bank to whether an office of a foreign bank should be terminate the activities of its representative office, approved. state branch, state agency, or commercial lending (4) Board conditions on approval. The Board may company subsidiary if the Board finds that: impose such conditions on its approval as it deems (i) The foreign bank is not subject to comprehennecessary, including a condition which may permit sive supervision or regulation on a consolidated future termination of any activities by the Board or, basis by its home country supervisor in accorin the case of a federal branch or a federal agency, dance with section 211.24(c)(1) of this subpart; or by the Comptroller, based on the inability of the (ii) (A) There is reasonable cause to believe that foreign bank to provide information on its activities the foreign bank or any of its affiliates has or those of its affiliates that the Board deems neces- committed a violation of law or engaged in an sary to determine and enforce compliance with U.S. unsafe or unsound banking practice in the banking laws. United States; and (d) Representative offices—(1) Activities. A represen- (B) As a result of such violation or practice, the tative office may engage in: continued operation of the foreign bank's rep- (i) Representational and administrative functions resentative office, state branch, state agency, or in connection with the banking activities of the commercial lending company subsidiary would foreign bank which may include soliciting new not be consistent with the public interest or business for the foreign bank, conducting re- with the purposes of the IBA, the BHC Act, or search, acting as liaison between the foreign the Federal Deposit Insurance Act (FDI Act) bank's head office and customers in the United (12 U.S.C. 1811 etseq.). States, performing any of the activities described (2) Additional ground. The Board may also enforce in 12 C.F.R. 250.141(h), or performing back office any condition imposed in connection with an order functions, but shall not include contracting for issued under section 211.24 of this subpart. any deposit or deposit-like liability, lending (b) Factor. In making its findings under this section, money, or engaging in any other banking activity the Board may take into account the needs of the for the foreign bank; and community as well as the history of operation of the (ii) Other functions for or on behalf of the foreign foreign bank and its relative size in its home country, bank or its affiliates, such as operating as a provided, however, that the size of the foreign bank regional administrative office of the foreign bank, shall not be the sole determining factor in a decision to but only to the extent that such other functions terminate an office. are not banking activities and are not prohibited (c) Consultation with relevant state supervisor. Except by applicable federal or state law or by ruling or in the case of termination pursuant to paragraph (d)(3) order of the Board. of this section, before issuing an order terminating the (2) Standards for approval of representative of- activities of a state branch, state agency, representafices. As specified in section 10(a)(2) of the IB A tive office, or commercial lending company subsidiary (12 U.S.C. 3107(a)(2)), in acting on the application under this section, the Board shall request and conof a foreign bank to establish a representative sider the views of the relevant state supervisor. office, the Board shall take into account to the (d) Termination procedures—(1) Notice and hearing. extent it deems appropriate the standards for ap- Except as otherwise provided in paragraph (d)(3) of proval set out in paragraph (c) of this section. this section, an order issued under paragraph (a)(1) (3) Additional requirements. The Board may im- of this section shall be issued only after notice to the pose any additional requirements that it deter- relevant state supervisor and the foreign bank and mines to be necessary to carry out the purposes of after an opportunity for a hearing. the IBA. (2) Procedures for hearing. Hearings under this (e) Preservation of existing authority. Nothing in this section shall be conducted pursuant to the Board's subpart shall be construed to relieve any foreign Rules of Practice for Hearings (12 C.F.R. part 263). bank or foreign banking organization from any oth- (3) Expedited procedure. The Board may act witherwise applicable requirement of federal or state law, out providing an opportunity for a hearing if it including any applicable licensing requirement. determines that expeditious action is necessary in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

212 Federal Reserve Bulletin • March 1993 order to protect the public interest. When the Board during each 12-month period (beginning on the date finds that it is necessary to act without providing an the most recent examination of the office ended) by: opportunity for a hearing, the Board, solely in its (1) The Board; discretion, may provide the foreign bank that is the (2) The FDIC, if the branch of the foreign bank subject of the termination order with notice of the accepts or maintains insured deposits; intended termination order, grant the foreign bank (3) The Comptroller, if the branch or agency of the an opportunity to present a written submission foreign bank is licensed by the Comptroller; or opposing issuance of the order, or take any other (4) The state supervisor, if the office of the foreign action designed to provide the foreign bank with bank is licensed or chartered by the state. notice and an opportunity to present its views concerning the order. Section 211.27—Disclosure of supervisory (e) Termination of federal branch or federal agency. information to foreign supervisors. The Board may transmit to the Comptroller a recommendation that the license of a federal branch or (a) Disclosure by Board. The Board may disclose federal agency be terminated if the Board has reason- information obtained in the course of exercising its able cause to believe that the foreign bank or any supervisory or examination authority to a foreign bank affiliate of the foreign bank has engaged in conduct for regulatory or supervisory authority if the Board deterwhich the activities of a state branch or state agency mines that disclosure is appropriate for bank supervimay be terminated pursuant to this section. sory or regulatory purposes and will not prejudice the (f) Voluntary termination. A foreign bank shall notify interests of the United States. the Board at least 30 days prior to terminating the (b) Confidentiality. Before making any disclosure of activities of any office. Notice pursuant to this para- information pursuant to paragraph (a) of this section, graph is in addition to, and does not satisfy, any other the Board shall obtain, to the extent necessary, the federal or state requirements relating to the termina- agreement of the foreign bank regulatory or supervition of an office or the requirement for prior notice of sory authority to maintain the confidentiality of such the closing of a branch pursuant to section 39 of the information to the extent possible under applicable FDI Act (12 U.S.C. 1831p). law. Section 211.28—Limitation on loans to one Section 211.26—Examination of offices and borrower. affiliates of foreign banks. (a) Limitation. Except as otherwise provided in para- (a) Conduct of examinations—(1) Examination of graph (b) of this section, the total loans and extensions branches, agencies, commercial lending compa- of credit by all the state branches and agencies of a nies, and affiliates. The Board may examine any foreign bank outstanding to a single borrower at one branch or agency of a foreign bank, any commercial time shall be aggregated with the total loans and lending company or bank controlled by one or more extensions of credit by all federal branches and federal foreign banks or one or more foreign companies that agencies of the same foreign bank outstanding to such control a foreign bank, and any other office or borrower at the time and shall be subject to the affiliate of a foreign bank conducting business in any limitations and other provisions of section 5200 of the state. Revised Statutes (12 U.S.C. 84), and the regulations (2) Examination of representative offices. The Board promulgated thereunder, in the same manner that may examine any representative office in the man- extensions of credit by a federal branch or federal ner and with the frequency it deems appropriate. agency are subject to section 4(b) of the IBA (b) Coordination of examinations. To the extent pos- (12 U.S.C. 3102(b)) as if such state branches and sible, the Board shall coordinate its examinations of agencies were federal branches and agencies. the U.S. offices and U.S. affiliates of a foreign bank (b) Preexisting loans and extensions of credit. Any with the licensing authority and, in the case of an loans or extensions of credit to a single borrower that insured branch, the Federal Deposit Insurance Corpo- were originated prior to December 19, 1991, by a state ration (FDIC), including through simultaneous exam- branch or state agency of the same foreign bank and inations of the U.S. offices and U.S. affiliates of a that, when aggregated with loans and extensions of foreign bank. credit by all other branches and agencies of the foreign (c) Annual on-site examinations. Each branch, bank, exceed the limits set forth in paragraph (a) of agency, or commercial lending company subsidiary of this section, may be brought into compliance with a foreign bank shall be examined on-site at least once such limitations through routine repayment, provided Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 213 that any new loans or extensions of credit, including sition is also by a foreign banking organization and renewals of existing unfunded credit lines or exten- otherwise subject to section 225.11(f) of this subpart. sions of the dates of maturity of existing loans, to the same borrower shall comply with the limits set forth in Part 263—Rules of Practice for Hearings paragraph (a) of this section. 8. A new section 211.29 is added and reserved to read 1. The authority citation for 12 C.F.R. part 263 is as follows: revised to read as follows: Section 211.29—Applications by state-licensed Authority: 5 U.S.C. 504; 12 U.S.C. 248, 324, 504, 505, branches and agencies to conduct activities not 18170), 1818, 1828(c), 1847(b), 1847(d), 1884(b), permissible for federal branches— 1972(2)(F), 3105, 3107, 3108, 3907, 3909; 15 U.S.C. 21, 78o-4, 78o-5, and 78u-2. [Reserved]. 2. Section 263.51 is amended by revising paragraph (c) to read as follows: Part 225—Bank Holding Companies and Change in Bank Control Section 263.51—Definitions. 1. The authority citation for 12 C.F.R. part 225 con- (c) Institution has the same meaning as that assigned to tinues to read as follows: it in section 263.3(f) of subpart A, and includes any foreign bank with a representative office in the United Authority: 12 U.S.C. 18170(13), 1818, 1831i, States. 1843(c)(8), 1844(b), 1972(1), 3106, 3108, 3907, 3909, 3310, and 3331-3351. Part 265—Rules Regarding Delegation of Authority 2. Section 225.11 is amended by revising paragraph (f) to read as follows: 1. The authority citation for 12 C.F.R. part 265 con- Section 225.11—Transactions requiring Board tinues to read as follows: approval. Authority: 12 U.S.C. 248(i) and (k). (f) Transactions by foreign banking organization. Any 2. Section 265.6 is amended by revising paragraph transaction described in paragraphs (a) through (e) of (b)(2) and by adding a new paragraph (f) to read as this section by a foreign banking organization (as follows: defined in 12 C.F.R. 211.21(n)) that involves the acquisition of an interest in a U.S. bank or in a bank Section 265.6—Functions delegated to General holding company for which application would be re- Counsel. quired if the foreign banking organization were a bank holding company. (b) * * * 3. Section 225.12 is amended by revising paragraph (f) (2) Disclosure to foreign authorities. To make the to read as follows: determinations required for disclosure of information to a foreign bank regulatory or supervisory Section 225.12—Transactions not requiring authority, and to obtain, to the extent necessary, the Board approval. agreement of such authority to maintain the confidentiality of such information to the extent possible under applicable law (12 C.F.R. 211.27). (f) Acquisition of foreign banking organization. The acquisition of a foreign banking organization (as defined in 12 C.F.R. 211.21(n)) where the foreign bank- (f) International banking. (1) With the concurrence of ing organization does not directly or indirectly own or the Board's Director of the Division of Banking control a bank in the United States, unless the acqui- Supervision and Regulation, to grant a request by a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

214 Federal Reserve Bulletin • March 1993 foreign bank to establish a branch, agency, commer- United States pursuant to section 211.24 of cial lending company, or representative office Regulation K (12 C.F.R. 211.24), provided through certain acquisitions, mergers, consolida- that: tions, or similar transactions, and to file an after-the- (A) The foreign bank previously received apfact application for the Board's approval to establish proval from the Board to establish a branch, that office pursuant to section 211.24(a)(3) of Regu- agency, or commercial lending company in the lation K (12 C.F.R. 211.24(a)(3)); and United States pursuant to section 211.24 of (2) To modify the requirement that a foreign bank Regulation K (12 C.F.R. 211.24); and that has applied to establish a branch, agency, com- (B) The application raises no significant policy mercial lending company, or representative office or supervisory issues. pursuant to section 211.24(a) of Regulation K (ii) Representative office. To approve an applica- (12 C.F.R. 211.24(a)) shall publish notice of the tion by a foreign bank to establish a representative application in a newspaper of general circulation in office in the United States pursuant to section the community in which the applicant proposes to 211.24 of Regulation K (12 C.F.R. 211.24), proengage in business as provided in section vided that: 211.24(b)(2)(ii) of Regulation K (12 C.F.R. (A) The foreign bank previously received ap- 211.24(b)(2)(ii)). proval from the Board to establish a branch, agency, commercial lending company, or rep- 3. Section 265.7 is amended by revising paragraph resentative office in the United States pursuant (d)(8) to read as follows: to section 211.24 of Regulation K (12 C.F.R. 211.24); and Section 265.7—Functions delegated to Director (B) The application raises no significant policy of Division of Banking Supervision and or supervisory issues. Regulation. * * * $ ^ * * * (8) Conduct and coordination of examinations. To authorize the conduct of examinations of the U.S. ORDERS ISSUED UNDER BANK HOLDING offices and affiliates of foreign banks as provided in COMPANY ACT sections 7(c) and 10(c) of the IBA (12 U.S.C. 3105(c), 3107(c)), and, where appropriate, to coor- Orders Issued Under Section 3 of the Bank dinate those examinations with examinations of Holding Company Act the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the state entity that is authorized to supervise or regulate a state branch, state agency, commercial FCFT, Inc. lending company, or representative office. Princeton, West Virginia Order Approving Acquisition and Merger of a Bank and Establishment of Branches 4. Section 265.11 is amended by adding paragraph (d)(ll) to read as follows: FCFT, Inc., Princeton, West Virginia ("FCFT"), a Section 265.11—Functions delegated to Federal bank holding company within the meaning of the Bank Reserve Banks. Holding Company Act ("BHC Act"), has applied under section 3 of the BHC Act (12 U.S.C. § 1842), to acquire Peoples Bank of Rich wood, Inc., Richwood, ^^ * * * West Virginia ("Peoples Bank"). A subsidiary bank of (11) Establishment of additional office by foreign FCFT, First Community Bank, Inc., Princeton, West bank— Virginia ("FCFT Bank"), also has applied to merge (i) Additional branch, agency, or commercial Peoples Bank into FCFT Bank pursuant to section lending company. To approve an application by 18(c) of the Federal Deposit Insurance Act a foreign bank to establish an additional branch, (12 U.S.C. § 1828(c)) (the "Bank Merger Act"), and agency, or commercial lending company in the to establish branches at the present offices of Peoples Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 215 Bank pursuant to section 9 of the Federal Reserve Act Herfindahl-Hirschman Index ("HHI") for this market (12 U.S.C. § 338).1 would increase by 625 points to 3261.5 Notice of the applications, affording interested per- The BHC Act and the Bank Merger Act prohibit the sons an opportunity to submit comments, has been Board from approving the FCFT proposal if the effect published (57 Federal Register 48,385 (1992)) and of this proposal would be to substantially lessen comgiven in accordance with applicable law. As required petition in the Nicholas County banking market unless by the Bank Merger Act, reports on the competitive the Board finds "that the anticompetitive effects of the effects of the merger were requested from the United proposed transaction are clearly outweighed in the States Attorney General, the Office of the Comptroller public interest by the probable effect of the transaction of the Currency, and the Federal Deposit Insurance in meeting the convenience and needs of the commu- Corporation. The time for filing comments has ex- nity to be served."6 The courts have concluded that a pired, and the Board has considered the applications proposed transaction does not substantially lessen and all the comments received in light of the factors set competition in a banking market if the proposal inforth in the BHC Act, the Bank Merger Act, and the volves a troubled financial institution and there is no Federal Reserve Act. reasonable alternative to the proposal that would FCFT is the sixth largest commercial banking orga- result in less injury to competition.7 nization in West Virginia, controlling deposits of Initially, the Board notes that a number of factors $527.4 million, representing 3.3 percent of the total indicate that the competitive effects of the proposal deposits in commercial banking organizations in the may be overstated by the increase in HHI. Peoples is state.2 Peoples Bank controls deposits of $31.9 mil- experiencing financial weakness and has not been a lion, representing less than 1 percent of the total viable competitor. Following consummation, two deposits in commercial banking organizations in the other commercial banks will remain in the market. state. Upon consummation of this proposal, FCFT These banks are subsidiaries of the two largest West would become the fifth largest commercial banking Virginia commercial banking institutions8 and each organization in West Virginia, controlling deposits of controls at least 30 percent of the deposits held by $559.3 million, representing 3.5 percent of the total depository institutions in the Nicholas County banking deposits in commercial banking organizations in the market. state. The Board has also carefully considered the public FCFT and Peoples Bank compete directly in the benefits associated with this proposal, including the Nicholas County banking market in West Virginia.3 financial condition of Peoples Bank and potential costs FCFT is the third largest commercial banking or thrift associated with the bank's resolution. In this regard, organization (together "depository institutions"), con- FCFT's proposal will resolve financial difficulties extrolling deposits of $52.8 million, representing approx- perienced by Peoples without any federal government imately 22.3 percent of total deposits in depository assistance and will ensure that communities previinstitutions in the market ("market deposits").4 Peo- ously served by Peoples Bank will continue to be ples Bank is the fourth largest depository institution in served by a viable competitor in the market. the Nicholas County banking market, controlling de- The facts of record also indicate that these benefits posits of $32.7 million, representing approximately are not likely to result from other means less injurious 14 percent of market deposits. Upon consummation of to competition. In this case, Peoples Bank undertook this proposal, FCFT would become the largest depos- substantial efforts to find a buyer both in and out of the itory institution in the Nicholas County banking market, controlling deposits of $85.5 million, representing approximately 36.3 percent of market deposits. The 5. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (1984), a market in which the post-merger HHI is above 1800 is considered to be highly concentrated. In such markets, the Justice Department is likely to challenge a merger that increases the HHI by more than 50 points. The Department of Justice has informed the Board that, as a general matter, a bank merger or 1. These branches are at: 16 West Main Street, Richwood; Red Oak acquisition will not be challenged, in the absence of other factors Plaza, Craigsville; and Route 39, Nettie, all in West Virginia. indicating anticompetitive effects, unless the post-merger HHI is at 2. State banking data are as of June 30, 1992. Market deposit data least 1800 and the merger increases the HHI by 200 points. The Justice are as of June 30, 1991. Department has stated that the higher-than-normal HHI thresholds for 3. The Nicholas County banking market is approximated by Nich- screening bank mergers for anticompetitive effects implicitly recogolas County, West Virginia. nize the competitive effect of limited-purpose lenders and other 4. Market deposit data are based on calculations in which the non-depository financial entities. deposits of thrift institutions are included at 50 percent. The Board 6. See 12 U.S.C. §§ 1842(c)(2) and 1828(c)(6). previously has indicated that thrift institutions have become, or have 7. See United States v. Third National Bank in Nashville, 390 U.S. the potential to become, major competitors of commercial banks. See 171, 189 (1967); FleetlNorstar Financial Group, Inc., 77 Federal Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); Reserve Bulletin 750 (1991). National City Corporation, 70 Federal Reserve Bulletin 743 (1984). 8. These institutions are One Valley Bancorp and Key Centurion. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

216 Federal Reserve Bulletin • March 1993 state. FCFT has emerged as the only purchaser for the BHC Act and section 18(c)(6) of the Bank Merger Act, bank. Nicholas County is a rural banking market and is the transaction may be consummated on or after the relatively unattractive for entry, because of low em- fifth calendar day following the effective date of this ployment and poor commercial and population growth Order, but not later than three months after the prospects. effective date of this Order, unless such period is The Department of Justice has informed the Board extended for good cause by the Board or by the that it has no objection to the proposal. The West Federal Reserve Bank of Richmond, pursuant to del- Virginia Bank Commissioner has approved the acqui- egated authority. sition on the grounds that the benefits of the acquisi- By order of the Board of Governors, effective tion to the public outweigh any adverse competitive January 19, 1993. effects. Based on all the facts of record, the Board concludes that the competitive effects in the Nicholas Voting for this action: Chairman Greenspan and Governors County banking market are not significantly adverse Mullins, Angell, Kelley, La Ware, Lindsey, and Phillips. and in any event are outweighed by the public benefits associated with FCFT's acquisition of Peoples Bank. JENNIFER J. JOHNSON Associate Secretary of the Board In reaching this conclusion, the Board has considered comments from several residents ("Protestants") al- FCNB Corp leging that the proposal would result in a reduction in Frederick, Maryland competition. The financial and managerial resources and future Order Approving the Acquisition of Shares of a prospects of FCFT, FCFT Bank, and Peoples Bank Bank Holding Company are consistent with approval. The Board also finds that considerations relating to the convenience and needs FCNB Corp, Frederick, Maryland ("FCNB"), a bank of the communities to be served and the other superholding company within the meaning of the Bank visory factors the Board must consider under section 3 Holding Company Act ("BHC Act"), has applied of the BHC Act and the Bank Merger Act are also consistent with approval of this proposal.9 under section 3 of the BHC Act (12 U.S.C. § 1842) to acquire up to 14.9 percent of the voting shares of FCFT Bank also has applied under section 9 of the HomeTown Bancorp, Inc., Myersville, Maryland Federal Reserve Act to establish branches at some of ("HomeTown").1 the present offices of Peoples Bank. The Board has Notice of the application, affording interested perconsidered the factors it is required to consider when sons an opportunity to submit comments, has been reviewing applications pursuant to section 9 of the duly published (57 Federal Register 54,792 (1992)). Federal Reserve Act and finds those factors to be The time for filing comments has expired, and the consistent with approval. Board has considered the application and all com- Based on the foregoing and other facts of record, the ments received in light of the factors set forth in Board has determined that the applications should be, section 3(c) of the BHC Act. and hereby are, approved. This approval is specifically FCNB is the 18th largest commercial banking conditioned upon compliance by FCFT and its subsidorganization in Maryland, controlling deposits of iaries with the commitments made in connection with $292.7 million, representing less than 1 percent of total these applications. For purposes of this action, comdeposits in commercial banks in the state.2 Homemitments and conditions will both be considered con- Town is the 60th largest commercial banking organiditions imposed in writing and, as such, may be zation in Maryland, controlling deposits of $48.8 milenforced in proceedings under applicable law. lion, representing less than 1 percent of total deposits The West Virginia Bank Commissioner has indiin commercial banks in the state. cated that an emergency exists requiring expeditious FCNB has indicated that it does not intend to action. Accordingly, as provided in section 11 of the control HomeTown and has proposed to acquire the voting shares of HomeTown as a passive investment. 9. Protestants have also commented that the proposal would result As part of this proposal, FCNB has made a number of in increased unemployment in the Richwood, West Virginia, area. In response to this allegation, FCFT has indicated that due to its anticipated consolidation of existing physical facilities, approximately one-third fewer employees would be needed to operate Peoples Bank 1. FCNB currently holds approximately 4.9 percent of Homeand First Community Bank, Inc., Princeton, West Virginia, the Town's voting stock, and proposes to acquire an additional 10 percent subsidiary of FCFT that under the proposal would merge with Peoples of HomeTown's shares. HomeTown is a bank holding company by Bank. Based on all the facts of record, the Board does not find that virtue of its ownership of 100 percent of the voting shares of these comments cause the balance of the convenience and needs Myersville Bank, Myersville, Maryland ("Bank"). factors to be inconsistent with approval of this proposal. 2. State deposit data are as of June 30, 1992. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 217 commitments, previously accepted by the Board in influence over HomeTown upon consummation of this similar proposals,3 in order to ensure that FCNB will proposal. not control HomeTown as a result of the proposed The Board's inquiry does not end, however, with its share acquisitions. In particular, FCNB has commit- finding that FCNB would not control HomeTown. The ted that it will not, without the Board's prior approval: Board is required under section 3(c) of the BHC Act to (1) Exercise or attempt to exercise a controlling consider, among other factors, the competitive effects influence over the management or policies of Home- of the proposal, the financial and managerial resources Town or its bank subsidiaries; and future prospects of the companies and banks (2) Have or seek to have any employee or represen- concerned, and the effect of the proposal on the tative serve as an officer, agent or employee of convenience and needs of the communities to be HomeTown or its bank subsidiaries; served. (3) Take any action causing HomeTown or its bank In this regard, the Board has received comments subsidiaries to become a subsidiary of FCNB ; from HomeTown and several individuals (collectively, (4) Acquire or retain shares that would cause the "Protestants") who have objected to FCNB's procombined interests of FCNB and its officers, direc- posal, alleging that the application is opposed by tors and affiliates to equal or exceed 25 percent of community leaders and by management, shareholders, the outstanding voting shares of HomeTown; and customers of HomeTown and Bank. In particular, (5) Seek or accept representation on the board of Protestants assert that: directors of HomeTown; (1) FCNB has failed to disclose its intention to (6) Propose a director or slate of directors in oppo- acquire control of HomeTown; sition to a nominee or slate of nominees proposed by (2) The proposal will cause adverse competitive the management or board of directors of Home- effects and an adverse impact on HomeTown's Town; financial condition; (7) Attempt to influence the dividend policies or (3) HomeTown represents a poor investment opporpractices of HomeTown or its bank subsidiaries; tunity for FCNB; and (8) Solicit or participate in soliciting proxies with (4) FCNB's application has disrupted HomeTown's respect to any matter presented to the shareholders business plans. of HomeTown; (9) Attempt to influence the loan and credit deci- Protestants also have commended Bank's operations, sions or policies of HomeTown and its bank subsid- financial condition, banking services, and customer iaries, the pricing of services, any personnel deci- and community relations, and contend that these possion, the location of any offices, branching, the itive features of Bank will be diminished if Bank is hours of operation, or similar activities of Home- acquired by a larger institution located outside the Town and its bank subsidiaries; community.4 (10) Dispose or threaten to dispose of shares of The Board has carefully considered Protestants' HomeTown in any manner as a condition of specific comments in light of the factors the Board must action or nonaction by HomeTown; or (11) Enter into any other banking or nonbanking transactions with HomeTown, except that FCNB 4. Certain of the Protestants also have alleged that FCNB currently may establish and maintain deposit accounts with controls 6.6 percent of HomeTown's voting shares without having obtained prior approval from the Federal Reserve System. These bank subsidiaries of HomeTown, provided that the Protestants believe that FCNB's current 4.9 percent ownership interaggregate balances of all such accounts do not est should be aggregated with the 1.7 percent of HomeTown's voting exceed $500,000 and that the accounts are main- shares which Protestants allege are controlled by an FCNB shareholder ("Shareholder"). Protestants' argument appears to be based tained on substantially the same terms as those upon the fact that both Shareholder and FCNB purchased interests in prevailing for comparable accounts of persons unaf- HomeTown from the same seller in October 1991. In response to filiated with HomeTown. Protestants' allegations, FCNB has represented that: (1) Shareholder owns less than 5 percent of FCNB's outstanding common shares; Based on the facts of record and FCNB's commit- (2) Shareholder is not an officer or director of FCNB or any of its subsidiaries or affiliates; and ments, the Board has concluded that FCNB would not (3) FCNB does not control these shares in any respect, directly or acquire control or the ability to exercise a controlling indirectly, and does not have any agreement, arrangement, or understanding with Shareholder concerning the voting, acquisition, or disposition of the HomeTown stock. FCNB also has stated that it has no knowledge as to whether 3. See, e.g., Summit Bancorp, Inc., 77 Federal Reserve Bulletin 952 Shareholder still controls the HomeTown stock in question. In light of (1991); The Summit Bancorporation, 75 Federal Reserve Bulletin 712 all of the facts of record, including representations made by FCNB, (1989); United Counties Bancorporation, 75 Federal Reserve Bulletin the Board has concluded that these allegations do not warrant denial 714 (1989). of this application. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

218 Federal Reserve Bulletin • March 1993 consider under section 3(c) of the BHC Act. FCNB Based on the foregoing and other facts of record, has indicated that it does not intend to alter the and subject to and in reliance upon representations operations of HomeTown or Bank in any respect upon and commitments made by FCNB, the Board has consummation of the share acquisitions, and has pro- determined that the application should be, and hereby posed to invest in HomeTown on a passive basis. In is, approved. The Board's approval is specifically this regard, FCNB has made a number of commit- conditioned upon compliance by FCNB with all of the ments, discussed above, to ensure that FCNB does commitments made in connection with this application not exercise a controlling influence over the operations and with the conditions referenced in this Order. For of HomeTown. The Board also notes that FCNB is purposes of this action, the commitments and condirequired to obtain prior Board approval before altering tions relied on in reaching this decision shall be the nature of its passive investment or increasing its deemed to be conditions imposed in writing by the share ownership, and that Protestants would have an Board and, as such, may be enforced in proceedings opportunity at that time to present their views as to under applicable law. whether FCNB should be permitted to exercise con- The transaction shall not be consummated before trol over HomeTown. the thirtieth calendar day following the effective date The Board previously has noted that one company of this Order, or later than three months after the need not acquire control of another in order to lessen effective date of this Order, unless such period is competition between them substantially.5 In this case, extended for good cause by the Board or by the however, FCNB and HomeTown do not compete with Federal Reserve Bank of Richmond, acting pursuant each other in any banking market. On the basis of all of to delegated authority. the facts of record, including the considerations dis- By order of the Board of Governors, effective cussed above, the Board has concluded that consum- January 25, 1993. mation of this proposal would not result in a significantly adverse effect on competition in any relevant Voting for this action: Chairman Greenspan and Governors banking market. Mullins, Angell, Kelley, Lindsey, and Phillips. Absent and The Board also has reviewed the financial resources not voting: Governor LaWare. of FCNB in light of the size and nature of the proposed JENNIFER J. JOHNSON investment, and has concluded on the basis of all of Associate Secretary of the Board the facts of record that these resources, as well as other considerations relating to the financial and man- KeyCorp agerial resources and future prospects of FCNB, Albany, New York HomeTown, and their respective subsidiaries, are consistent with approval of this application. The Key Bancshares of New York, Inc. Board also has concluded that the other factors it is Albany, New York required to consider under section 3(c) of the BHC Act, including convenience and needs considerations, Order Approving Acquisition of a Savings Bank are consistent with approval of this application.6 KeyCorp and Key Bancshares of New York, Inc., both of Albany, New York (together, "KeyCorp"), bank holding companies within the meaning of the 5. See note 3, supra, and cases cited therein. Bank Holding Company Act ("BHC Act"), have 6. Some Protestants have requested that the Board hold a public applied for the Board's approval under section 3 of the meeting or hearing on this application. The Board is not required under section 3 of the BHC Act to hold a public meeting or hearing BHC Act (12 U.S.C. § 1842) to acquire all of the unless the primary supervisor for the bank to be acquired disapproves voting shares of The National Savings Bank of Althe proposal. In this case, the primary supervisor for the institution to bany, Albany, New York ("National").1 be acquired has not objected to FCNB's proposal. Under its rules, the Board may, in its discretion, hold a public Notice of the application, affording interested permeeting or hearing on an application to clarify factual issues related to sons an opportunity to submit comments, has been the application and to provide an opportunity for testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). The Board has care- published (57 Federal Register 49,084 (1992)). The fully considered Protestants' requests, and the written comments time for filing comments has expired, and the Board submitted by Protestants. In the Board's view, interested parties have had ample opportunity to submit and have submitted substantial written comments that have been considered by the Board. In light of the foregoing and all of the facts of record, the Board has determined 1. In connection with KeyCorp's proposed acquisition of National, that a public meeting or hearing is not necessary to clarify the factual KeyCorp has requested Board approval under section 3 of the BHC record in this application, or otherwise warranted in this case. Act to acquire an option to purchase up to 19.9 percent of the voting Accordingly, the request for a public meeting or hearing on these shares of National. This option will become moot upon consummation applications is hereby denied. of KeyCorp's application to acquire National. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 219 has considered the application and all comments re- In order to mitigate the anticompetitive effects that ceived in light of the factors set forth in section 3(c) of would result from consummation of this proposal in the BHC Act. the Plattsburgh banking market, KeyCorp has commit- KeyCorp is the sixth largest commercial banking ted to divest several branches in this market that hold, organization in New York, controlling two banking in the aggregate, at least $98 million in deposits.7 subsidiaries with $11 billion in deposits, representing Accounting for these divestitures, the share of the 4.3 percent of the total deposits in commercial banking Plattsburgh banking market controlled by KeyCorp organizations in the state.2 National is the 44th largest will increase by less than one percent.8 KeyCorp has thrift organization in New York, controlling $574.6 further committed that, in the event the divestitures million in deposits, representing less than 1 percent of cannot be effected as proposed, its divestitures will not the total deposits in commercial banking organizations result in an increase in market concentration that in the state. Upon consummation of this transaction, would exceed the Department of Justice guidelines. In KeyCorp would remain the sixth largest commercial light of the relatively small increase in market concenbanking organization in New York, controlling tration after the proposed divestiture, the fact that ten $11.6 billion in deposits, representing 4.5 percent of depository institution competitors would remain in the the total deposits in commercial banking organizations market, and other facts of record, the Board concludes in the state. that consummation of this proposal, with the proposed divestitures, would not have a significantly adverse Competitive Effects competitive effect in the Plattsburgh market. KeyCorp is the largest depository institution in the KeyCorp and National compete directly in the Pitts- Albany banking market, controlling deposits of burgh3 and Albany4 banking markets in New York. In $1.9 billion, representing 15.3 percent of total deposits the Plattsburgh banking market, KeyCorp is the larg- held by depository institutions in the market. National est commercial banking or thrift organization ("depos- is the 16th largest depository institution in the market, itory institution"), controlling deposits of $298.5 mil- controlling deposits of $203.3 million, representing lion, representing 33.6 percent of total deposits in 1.6 percent of total deposits held by depository instidepository institutions in the market ("market depos- tutions in the market. Upon consummation of this its").5 National is the fifth largest depository institu- proposal, KeyCorp would remain the largest deposition in the market, controlling deposits of $63.1 mil- tory institution in the market, controlling total deposits lion, representing 7.1 percent of market deposits. of $2.3 billion, representing 18.2 percent of the total Upon consummation of this proposal, KeyCorp would deposits in depository institutions in the Albany marremain the largest depository institution in the Platts- ket. The HHI would increase 95 points to a level of burgh banking market, controlling deposits of 841, and 38 depository institutions would remain in the $424 million, representing 44.6 percent of market market. deposits. The Herfindahl-Hirschman Index ("HHI") Based on all the facts of record, and for the reasons would increase by 732 points to 2503.6 discussed above, the Board believes that consummation of this proposal would not have a significantly 2. Deposit data are as of June 30, 1992. 3. The Plattsburgh banking market is approximated by Clinton and Essex Counties in New York. 4. The Albany banking market is approximated by Albany, Colum- 200 points. The Justice Department has stated that the higher than bia, Fulton, Greene, Hamilton, Montgomery, Rensselaer, Saratoga, normal threshold for an increase in the HHI when screening bank Schenectady, Schoharie, Warren and Washington Counties in New mergers and acquisitions for anti-competitive effects implicitly recog- York. nizes the competitive effect of limited-purpose lenders and other 5. Market data are as of June 30, 1991. Market share data are based non-depository financial entities. on calculations in which the deposits of thrift institutions are included 7. KeyCorp has committed to execute final sales agreements to at 50 percent. The Board previously has indicated that thrift institu- effect these divestitures prior to the consummation of the acquisition tions have become, or have the potential to become, major competi- of National, and to consummate these divestitures within 180 days of tors of commercial banks. See Midwest Financial Group, 75 Federal consummation of the acquisition of National. KeyCorp also has Reserve Bulletin 386 (1989); National City Corporation, 70 Federal committed that, in the event it is unsuccessful in completing the Reserve Bulletin 743 (1984). divestiture within 180 days of consummation of the proposal, Key- 6. Under the revised Department of Justice Merger Guidelines, 49 Corp will transfer the relevant office or offices to an independent Federal Register 26,823 (June 29, 1984), a market in which the trustee that has been instructed to sell the office promptly. See, e.g., post-merger HHI is above 1800 is considered to be highly concen- BankAmerica Corporation, 78 Federal Reserve Bulletin 338, 340 trated. In such markets, the Justice Department is likely to challenge (1992); United New Mexico Financial Corporation, 77 Federal Rea merger that increases the HHI by more than 50 points. The Justice serve Bulletin 484, 485 (1991). Department has informed the Board that a bank merger or acquisition 8. KeyCorp would remain the largest depository institution in the generally will not be challenged (in the absence of other factors Plattsburgh banking market, controlling approximately $326.6 milindicating anti-competitive effects) unless the post-merger HHI is at lion in deposits, representing approximately 34.3 percent of market least 1800 and the merger or acquisition increases the HHI by at least deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

220 Federal Reserve Bulletin • March 1993 adverse effect on competition in the Plattsburgh, Al- ing Cherry Hill National Bank, Medford, New Jersey bany, or any other relevant banking markets. ("Cherry Hill").1 Notice of the application, affording interested per- Other Considerations sons an opportunity to submit comments, has been published (57 Federal Register 45,060 (1992)). The time for filing comments has expired, and the Board The financial and managerial resources, supervisory has considered this application and all comments factors and future prospects of KeyCorp, its subsidreceived in light of the factors set forth in section 3(c) iaries, and National, are consistent with approval of of the BHC Act. this proposal. Considerations relating to the conve- Meridian, with approximately $11.9 billion in connience and needs of the communities to be served and solidated assets, controls two subsidiary banks located the other factors the Board must consider under secin Pennsylvania and one subsidiary bank located in tion 3 of the BHC Act are also consistent with ap- Delaware.2 Cherry Hill is the 50th largest commercial proval of this proposal. banking organization in New Jersey, controlling de- Based on the foregoing and all the facts of record, posits of $110.0 million, representing less than 1 perthe Board has determined that the application should cent of the deposits in commercial banking organizabe, and hereby is, approved. The Board's approval of tions in the state. this proposal is expressly conditioned on compliance with the commitments made by KeyCorp in connec- Douglas Amendment tion with this application, including the divestiture commitments made by KeyCorp, and with the condi- Section 3(d) of the BHC Act, the Douglas Amendtions referenced in this Order. For purposes of this ment, prohibits the Board from approving an appliaction, these commitments and conditions relied on in cation by a bank holding company to acquire any reaching this decision are deemed to be conditions bank located outside the bank holding company's imposed in writing by the Board in connection with its home state, unless such acquisition is "specifically findings and decision, and, as such, may be enforced in authorized by the statute laws of the State in which proceedings under applicable law. such bank is located, by language to that effect and This transaction shall not be consummated before not merely by implication."3 For purposes of the the thirtieth day following the effective date of this Douglas Amendment, the home state of Meridian is Order, or later than three months after the effective Pennsylvania.4 The New Jersey interstate banking date of this Order, unless such period is extended for statute expressly authorizes an out-of-state bank good cause by the Board or by the Federal Reserve holding company, such as Meridian, to acquire a Bank of New York, acting pursuant to delegated New Jersey bank, such as Bank and Cherry Hill, authority. subject to certain conditions.5 After careful review of By order of the Board of Governors, effective the relevant statutes, and in light of the facts of January 19, 1993. record, the Board concludes that Meridian's acquisition of Cherry Hill complies with the New Jersey Voting for this action: Chairman Greenspan and Governors interstate banking statute, and that Board approval Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips. of this proposal is not prohibited by the Douglas Amendment. Approval of this proposal is condi- JENNIFER J. JOHNSON tioned upon Meridian receiving all required state Associate Secretary of the Board regulatory approvals. Meridian Bancorp, Inc. Reading, Pennsylvania Order Approving Acquisition of a Bank 1. Cherry Hill will merge into Bank, with Bank to be the surviving entity. This merger will require regulatory review and approval by the FDIC under the Bank Merger Act, 12 U.S.C. § 1828(c). Meridian Bancorp, Inc., Reading, Pennsylvania ("Me- 2. Asset and deposit data are as of June 30, 1992. ridian"), a bank holding company within the meaning 3. 12 U.S.C. § 1842(d). of the Bank Holding Company Act ("BHC Act"), has 4. A bank holding company's home state is that state in which the total deposits of all banking subsidiaries of the bank holding company applied for the Board's approval under section 3(a)(3) were largest on July 1, 1966, or the date on which the company of the BHC Act (12 U.S.C. § 1842(a)(3)) to establish a became a bank holding company, whichever is later. Id. de novo bank, Meridian Bank, New Jersey, Cherry 5. See, National Westminster Bank PLC, 74 Federal Reserve Bulletin 142 (1988); CoreStates Financial Corporation, 72 Federal Hill, New Jersey ("Bank"), for the purpose of acquir- Reserve Bulletin 798 (1986). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 221 Competitive, Financial, Managerial and Supervisory employees on the boards and committees of these Considerations organizations. Two of these commenters also urge the Board to approve Meridian's application on the basis Meridian does not currently operate a banking subsid- of Meridian's CRA activities, and believe that Meridiary in New Jersey. Based on all of the facts of record ian should be encouraged to continue its current level in this case, the Board concludes that consummation of CRA activities. of this proposal would not have a significantly adverse The Board also has received comments from New effect on competition or the concentration of banking Jersey Citizen Action ("Protestant") criticizing the resources in any relevant banking market. The Board CRA performance of Meridian and of Cherry Hill. In also concludes, based on all of the facts of record in general, Protestant asserts that Meridian's level of this case, that the financial and managerial resources6 CRA performance in New Jersey will not be equal to and future prospects of Meridian, its subsidiary banks, its CRA performance in Pennsylvania, because Merid- Bank, and Cherry Hill, and the other supervisory ian has not sufficiently considered the needs of the factors that the Board must consider under the BHC communities to be served in New Jersey.8 Act, are consistent with approval of this proposal. Record of Performance Under the CRA Convenience and Needs Considerations A. CRA Performance Examination In considering this application, the Board is required under the CRA to take into account the records of The CRA requires the federal financial supervisory Meridian, its subsidiary banks, and Cherry Hill under agencies to encourage financial institutions to help the Community Reinvestment Act (12 U.S.C. § 2901 meet the credit needs of the local communities in et seq.) ("CRA"). The Board has received more than which they operate consistent with the safe and sound twenty comments from a variety of community orga- operation of such institutions. To accomplish this end, nizations located in Pennsylvania supporting the ef- the CRA requires the appropriate federal supervisory forts of Meridian to help meet the credit needs of the authority to "assess the institution's record of meeting entire communities it serves.7 For example, comment- the credit needs of its entire community, including ers commend Meridian for its participation and efforts low- and moderate-income neighborhoods, consistent in a variety of lending and community development with the safe and sound operation of such institution," activities, including providing home mortgages on and to take this record into account in its evaluation of flexible terms and credit counseling to low- and mod- bank holding company applications."9 The CRA and erate-income homebuyers, loans and grants to com- the Statement of the Federal Financial Supervisory munity organizations for the acquisition, rehabilita- Agencies Regarding the Community Reinvestment Act tion, construction, and operation of affordable ("Agency CRA Statement")10 indicate that a CRA housing, bridge funding to community organizations examination is an important and often controlling involved in government assisted redevelopment factor in the consideration of an institution's CRA projects, and leadership and technical assistance record and that these reports will be given great weight through the service of numerous Meridian officers and in the applications process.11 The Board notes that Meridian Bank, Reading, Pennsylvania ("Meridian Bank"), Meridian's lead banking subsidiary, accounting for approximately 6. The Board has considered a comment alleging that a subsidiary bank of Meridian has employed wrongful demand and collection 87 percent of Meridian's consolidated assets, received procedures in connection with loans made to a minority-owned an "outstanding" rating from its primary federal regpartnership. On the basis of all the facts of record, including the Federal Reserve Bank of Philadelphia's investigation and relevant reports of examination by the Reserve Bank, the Board concludes that this comment does not raise issues that would warrant a denial of this 8. Protestant also criticizes Meridian's failure to enter into a application. See also Meridian Bancorp, Inc., 78 Federal Reserve reinvestment agreement with Protestant that would provide specific Bulletin 942 (1992). lending goals and a monitoring process by a community organization. 7. Commenters in support of Meridian's application include the Protestant also alleges that Meridian's proposed CRA activities for following: The Allegheny West Foundation, a community develop- Cherry Hill lack specificity and are deficient in the following areas: ment corporation that rehabilitates deteriorated housing and develops (1) Community contacts to ascertain credit needs; large-scale, tax-assisted rental housing projects; Greater Germantown (2) Marketing and advertising programs; Housing Development Corporation, a community development cor- (3) Types of credit products for low- and moderate-income consumporation that has undertaken a large-scale, mixed-use redevelopment ers; and project; Philadelphia Neighborhood Housing Services, which pro- (4) Participation in community development projects and charitable vides home improvement loans, housing rehabilitation assistance, and contributions. financial counseling to individuals; Community Action Agency of 9. 12 U.S.C. § 2903. Delaware County, Inc., which encourages urban homesteading; and 10. 54 Federal Register 13,742 (1989). the Redevelopment Authority of the City of Bethlehem. 11. Id. at 13,745. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

222 Federal Reserve Bulletin • March 1993 ulator, the Federal Reserve Bank of Philadelphia, at its new advisory committee at Bank for that division, most recent examination for CRA performance as of corresponding to the six geographic divisions and July 1, 1991.12 The Board also has recently concluded advisory committees that currently exist at Meridian's that the CRA performance records of Meridian's sub- subsidiary banks in Pennsylvania and Delaware. The sidiary banks are generally consistent with approval of advisory committees are composed of leaders from an application under the convenience and needs factor non-profit, public sector, minority, and religious orgain the BHC Act.13 Cherry Hill, which will account for nizations, in addition to Meridian employees. The less than 1 percent of Meridian's consolidated assets, advisory committees review loan data and marketing received a "needs to improve" CRA performance information, and have the authority and the ability to rating from the OCC as of September 30, 1991, and organize themselves to respond to more specific credit previously as of December 31, 1989. needs.14 The staff of the Corporate Community Affairs Department reviews the minutes of these meetings to B. Corporate Policies assist it in evaluating and developing the subsidiary banks' products. Meridian has committed to implement at Bank the Meridian has further committed that Bank will tar- Meridian Community Partnership Loan Program get specific low- and moderate-income neighborhoods ("MCPLP") that has been in place at Meridian's in New Jersey, participate in New Jersey state and current subsidiary banks since 1988. Under MCPLP, local loan programs and FHA and VA home mortgage Meridian has appointed a CRA officer at each subsid- programs, enter into projects with local housing iary bank, who is in charge of a Corporate Community groups on a case-by-case basis, and utilize the income Affairs Department, to implement and administer the levels and purchase price maximums set by the New program. Each bank also has established a CRA Jersey Housing and Mortgage Finance Agency in Monitoring Committee, which includes senior officers developing and administering loan products targeted at of the bank, to meet quarterly to review the bank's low- and moderate-income borrowers. CRA performance, to make CRA-related policy decisions, and to make regular presentations of CRA C. Ascertainment and Marketing Efforts matters to the bank's board of directors. Meridian also has committed to establish a new Meridian uses a variety of methods to gather and geographic operating division for New Jersey and a analyze information concerning the credit needs of the communities it serves, to develop products, services, and marketing programs to serve those needs, includ- 12. Meridian's remaining subsidiary banks have been rated as ing the needs of minority and low- and moderatefollows: Delaware Trust Company, Wilmington, Delaware, received income individuals in those communities, and to meaan "outstanding" performance rating from the FDIC on July 20,1990; and The First National Bank of Pike County, Milford, Pennsylvania, sure the receptivity of those communities to those received a "satisfactory" performance rating from the OCC on marketing efforts. Meridian's methods include an ex- August 30, 1992. tensive program of calls on community organizations The CRA examination of Meridian Bank noted some areas for improvement in its record of CRA performance in the Harrisburg, and public sector agencies, focus group sessions Pennsylvania MSA. Even noting these weaknesses, Meridian Bank among customers, non-customers, and employees,15 received an "outstanding" CRA performance rating. In Protestant's surveys of customers and non-customers, demoview, Meridian's CRA performance in Cherry Hill, without Protestant's proposed reinvestment agreement, will suffer the same weak- graphic research, including the use of census tract nesses found in Harrisburg because Protestant believes the Harrisburg MSA demographically resembles the areas of New Jersey served by Cherry Hill. Meridian did not begin its lending operations in the Harrisburg MSA until late 1990, following its acquisition of three branches of a failed savings association. Accordingly, its CRA programs are not as well-established in this service area as in other 14. In one division in Pennsylvania, the advisory committee has service areas in Pennsylvania. However, Meridian Bank has initiated formed four subcommittees, each of which focuses on a separate several steps designed to assist in meeting the credit needs of all developmental objective. The small business sub-committee helped communities in the Harrisburg MSA. For example, Meridian Bank establish a small business loan program for minority businesses. In has hired additional staff and instituted CRA training programs at the another division, the advisory committee established a Community Harrisburg branches. Meridian Bank also has supported the credit Credit Committee, composed of senior lending officers and commucounseling and homebuyer workshop programs of the Harrisburg Fair nity leaders, to help meet credit needs in Berks County, Pennsylvania. Housing Council through financial contributions and the participation The committee meets monthly, and decides as a group whether to of Meridian officers. The bank also has contributed to the South approve or decline loan requests generated by community groups in Central Pennsylvania Housing Development Fund, to support the that area. As of May 1992, there were outstanding IS loans approved renovation of 60 homes in downtown Harrisburg, and is negotiating by the committee in the aggregate amount of approximately $86,000, with the Tri-County Housing Development Corporation concerning its with no delinquencies. credit needs for a multi-phase rehabilitation project in downtown 15. Meridian recently hired a bilingual focus group consultant to Harrisburg. In addition, Meridian Bank has sponsored a regional conduct research among black and Hispanic individuals. This consultminority small business trade fair in Harrisburg. ant's work has been used in a video, radio, and print advertising 13. Meridian Bancorp Inc., supra. campaign for mortgage lending. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 223 data, and on-going analysis of loan data.16 MCPLP D. Lending and Other Activities staff also meet with Meridian's divisional advisory committees to learn about community needs. The Meridian offers a variety of products and services Meridian Community Forum, a speakers bureau de- under MCPLP, including fourteen permanent mortsigned to educate the communities Meridian serves gage loan types, four construction loan and permanent about its credit products, also serves as a means for financing facilities, and various special credit pro- Meridian to learn from these communities about their grams, designed to meet the credit needs of low- and credit needs. moderate-income homebuyers. Meridian participates The Meridian marketing program is approved, mon- in federal and state programs, such as FHA and itored, and analyzed by senior management, and Pennsylvania Housing Finance Agency loan proreaches all communities it serves. Advertising directed grams, and has developed its own lending programs as to minority and low- and moderate-income individuals well. For example, the Meridian Community Partneris a distinct part of its advertising program, and ship Mortgage offers first-time homebuyers a reduced Meridian uses minority newspapers, business directo- interest rate, a reduced application fee, and financing ries, and radio stations to deliver these marketing for up to 95 percent of the purchase price. Meridian programs to these persons. Many materials have been has begun negotiations with the appropriate housing produced in Spanish, Spanish language radio and print finance and community development agencies in New advertising and ATMs have been used, and a toll-free Jersey to participate in their programs of governmenbilingual mortgage information line has been estab- tally insured, guaranteed, or subsidized loan programs lished. Mass mailings have been made to Hispanic as well. civic, community, and service organizations. In Har- In addition, Meridian has committed that Bank will risburg, Meridian has used direct mail advertising to help meet the credit needs of communities, including realtors doing business in low- and moderate-income low- and moderate-income neighborhoods, in the serareas to encourage the use of Pennsylvania Housing vice area of Bank in New Jersey. For example, Bank Finance Agency low-interest mortgage loans, and a will make a minimum of $5 million in loans in the video and print media campaign targeted at individuals aggregate over three years in New Jersey in a number with limited income was conducted in the fall of 1992 of areas intended to serve low- and moderate-income to promote mortgage lending. Meridian also has advermembers of the community. This includes at least tised at special events in Philadelphia, including Diver- $3 million in residential mortgage and home improvesCity, an annual celebration of Black History Month, ment loans utilizing flexible underwriting criteria, reand events sponsored by the United Black Business duced down payments, and New Jersey Housing and Association of Philadelphia and the Philadelphia His- Mortgage Finance Agency funding programs. At least panic Chamber of Commerce. $1 million will be invested in low-income housing tax In New Jersey, Meridian has developed a list of credits, and at least $500 thousand will be invested in media that effectively reach low- and moderate-in- community development organizations for the acquicome areas, and has initiated a calling program to meet sition and rehabilitation of housing, for new construcwith local groups involved in creating affordable hous- tion of affordable housing, and for economic developing, shelter and social services for the homeless, and ment projects. Another $500 thousand will be economic development. Meridian has helped to form earmarked for start-up small businesses that provide the Collaborative Lending Initiative of Camden, which goods and services to low- and moderate-income comwill provide over $1 million in construction, bridge, munities, stabilize and revitalize deteriorated neighand permanent financing to qualified community de- borhoods, and create long-term job employment opvelopment groups. Meridian also has met with a num- portunities. ber of community groups in New Jersey, including Jersey Counseling and Housing Development, Inc., Camden Peace Mission, Volunteers of America, Cam- E. HMDA Data and Lending Practices den Neighborhood Housing Services, and St. Joseph's Carpenters Society, and with several small business The Board has reviewed the 1990 and 1991 HMDA owners. data reported by Meridian in light of Protestant's comments, including comments relating to the effectiveness of certain MCPLP programs and the level of Meridian's commitment to compliance with CRA out- 16. On the basis of this data, Meridian Bank introduced a new loan side of the state of Pennsylvania. Data cited by Protproduct, NEED (Necessary Emergency Expense Disbursement) estant indicate disparities in rates of housing-related Loans, in amounts up to $1,500, repayable at an interest rate one-half percent below the prevailing consumer loan rate. loan applications and in application approvals that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

224 Federal Reserve Bulletin • March 1993 vary by racial or ethnic group in Harrisburg and in of credit counseling. Meridian has provided personnel, Delaware. counseling materials, and technical assistance to the Because all banks are obligated to ensure that then- Bucks County Tenant Association to develop a similar lending practices are based on criteria that assure not program. In 1991, together with other community only safe and sound lending, but also assure equal lenders, Meridian created a comprehensive loan counaccess to credit by creditworthy applicants regardless selor training program for community groups, in order of race, the Board is concerned when the record of an to develop a sustained supply of qualified applicants institution indicates disparities in lending to minority under the Delaware Valley Mortgage Plan. applicants. The Board recognizes, however, that HMDA data alone provide only an incomplete mea- G. Conclusion Regarding Convenience and sure of an institution's lending in its community. The Needs Factors Board also recognizes that HMDA data have limitations that make the data an inadequate basis, absent The Board has carefully considered all of the facts of other information, for conclusively determining that record, including the comments filed in this case, in an institution has engaged in illegal discrimination in reviewing Meridian's CRA record under the BHC Act. making lending decisions. Based on a review of the entire record of performance, The most recent examinations of Meridian Bank and including information provided by Protestant and the of Delaware Trust Company, Wilmington, Delaware, other commenters, the performance examinations by for CRA performance found no evidence of illegal the banks' primary regulators, and Meridian's plans for discrimination. In addition, the examination of Merid- instituting its CRA program at Cherry Hill in New ian Bank found that its board of directors and senior Jersey, the Board believes that the efforts of Meridian management periodically assess the adequacy of its and its subsidiary banks to help meet the credit needs of implemented nondiscriminatory policies, procedures, all segments of the community served by these banks, and training programs through internal reviews and including low- and moderate-income neighborhoods, management reporting systems. Meridian Bank's poli- are consistent with approval of this application.18 cies and procedure manuals were found to contain The CRA requires insured depository institutions in information that is intended to inform operating person- a multi-state banking organization to meet their CRA nel of the provisions of the various consumer regula- responsibilities in every state in which the organizations adopted to prevent discriminatory or illegal credit tion operates an insured depository institution, not just practices. Many of the staff meet directly with commu- in the home state of the lead bank subsidiary. In this nity groups to review needs and discuss products and case, Protestant has raised concerns principally reprograms. Each mortgage loan application that is de- garding Meridian's dedication following its acquisition clined is reviewed by a senior mortgage lender, and a of Cherry Hill to meeting the credit needs of low- and senior MCPLP lender meets approximately every 45 moderate-income neighborhoods in New Jersey. days with the Meridian mortgage lending department Many of the CRA policies and programs to be implestaff to further review the files of declined applications. mented in New Jersey are modeled on programs Meridian's mortgage denial figures also are discussed currently in place at Meridian's subsidiary banks in with the bank's advisory committees.17 Pennsylvania and Delaware. The Board believes that Meridian also has taken a number of other steps the "outstanding" rating for CRA performance afdesigned to enhance a loan applicant's ability to obtain a residential mortgage loan or other loan products. These programs have primarily involved participation 18. Protestant has requested a public hearing on the issues raised in with community development organizations in providits comments. Section 3(b) of the BHC Act does not require the Board ing credit counseling and personal financial manage- to hold a hearing on an application unless the appropriate supervisory ment workshops. For example, for several years Me- authority for the bank to be acquired makes a timely written recommendation of denial of the application. In this case, the Board has not ridian has provided board representation, counseling received such a recommendation. materials, and financial support to the Philadelphia Generally, under the Board's rules, the Board may, in its discretion, Council for Community Advancement in its programs hold a public hearing 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). The Board has carefully considered this request. In the Board's view, Protestant has had 17. Meridian denies Protestant's assertion that the decline in loan ample opportunity to present written submissions, and Protestant has volume under certain MCPLP programs last year reflects a lack of submitted lengthy written comments that have been considered by the commitment by Meridian to these programs, and attributes the decline Board. On the basis of all of the facts of record, the Board has to general economic conditions. Meridian also maintains that its determined that a public meeting or hearing is not necessary to clarify emphasis on lending programs for first-time homebuyers as opposed the factual record in this application, or otherwise warranted in this to refinancings reflects the assessment of credit needs by its advisory case, and the request for a public meeting or hearing on this applicacommittees and community leaders. tion is denied. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 225 forded these banks reflects Meridian's willingness to Act"), has applied under section 4(c)(8) of the BHC assist in meeting credit needs in each community in Act (12 U.S.C. § 1843(c)(8)) and section 225.23(a)(3) which it is located, and to address promptly areas of the Board's Regulation Y (12 C.F.R. 225.23(a)(3)), where improvements can be made to help meet com- for its wholly owned subsidiary, NationsBanc Finanmunity credit needs. Meridian has committed to im- cial Services Corporation, Tucker, Georgia plement at Bank the corporate policies and programs ("NBFSC"), to acquire certain assets and assume currently in place at Meridian Bank, and to undertake certain liabilities of Chrysler First Inc., Allentown, additional initiatives in New Jersey specifically de- Pennsylvania ("CFI"), and of certain subsidiaries and signed to assist in meeting the credit needs of all of its affiliates of CFI and thereby engage in general conservice communities. The Board expects Meridian to sumer and commercial lending pursuant to section fulfill its CRA responsibilities in New Jersey, and will 225.25(b)(1) of the Board's Regulation Y (12 C.F.R. continue to review its performance in the applications 225.25(b)(1)).1 process. Notice of these applications, affording interested Based on the foregoing, including the conditions and persons an opportunity to submit comments, has been commitments described in this Order and those made published (57 Federal Register 57,067 (1992)). The in this application, and all of the facts of record, the time for filing comments has expired, and the Board Board has determined that the application should be, has considered these applications and all comments and hereby is, approved. The Board's approval is received in light of the factors set forth in sections specifically conditioned upon compliance with the 4(c)(8) and 4(c)(13) of the BHC Act. commitments made by Meridian in connection with NationsBank, with total consolidated assets of this application. All of the commitments and condi- $118.7 billion, is the fourth largest banking organizations relied upon by the Board in reaching its decision tion in the United States. NationsBank operates are commitments imposed in writing by the Board in eleven subsidiary banks and engages directly and connection with its findings and decision, and may be through subsidiaries in a variety of permissible nonenforced in proceedings under applicable laws. This banking activities.2 approval also is conditioned upon Meridian receiving NationsBank proposes to acquire loan receivables all necessary Federal and state approvals. The trans- of approximately $1.1 billion, as well as certain mortactions approved in this Order shall not be consum- gage and other loan servicing rights and certain incimated before the thirtieth calendar day following the dental assets. NationsBank would engage through effective date of this Order, or later than three months NBFSC in consumer lending and commercial lending, after the effective date of this Order, unless such as well as in the servicing of consumer and commercial period is extended for good cause by the Federal loans, both for itself and others. The Board previously Reserve Bank of Philadelphia, pursuant to delegated has determined by regulation that these activities are authority. closely related to banking. 12 C.F.R. 225.25(b)(1). By order of the Board of Governors, effective Under section 4 of the BHC Act, the Board also is January 4, 1993. required to determine that the performance of the proposed activities by NationsBank "can reasonably Voting for this action: Chairman Greenspan and Governors be expected to produce benefits to the public . . . that Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips. outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair com- JENNIFER J. JOHNSON petition, conflicts of interests, or unsound banking Associate Secretary of the Board practices." 12 U.S.C. § 1843(c)(8). Consummation of this proposal can reasonably be expected to result in Orders Issued Under Section 4 of the Bank public benefits, including an increased capacity to fund Holding Company Act loans, increased efficiency, and reduced operating expenses. NationsBank Corporation Charlotte, North Carolina 1. NationsBank also proposes under section 4(c)(13) of the BHC Order Approving Applications to Engage in Act for NBFSC, either through a United States or Canadian subsid- Consumer and Commercial Lending iary or subsidiaries, to acquire certain assets and assume certain liabilities of Chrysler First Commercial Corporation Inc. and Chrysler Credit Canada Ltd., both of Ontario, Canada, and to engage in NationsBank Corporation, Charlotte, North Carolina consumer and commercial lending activities in Canada that are substantially similar to the activities to be engaged in by NBFSC in the ("NationsBank"), a bank holding company within the United States. meaning of the Bank Holding Company Act ("BHC 2. Data are as of September 30, 1992. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

226 Federal Reserve Bulletin • March 1993 The record does not indicate that consummation of Voting for this action: Chairman Greenspan and Governors this proposal is likely to result in any significantly Mullins, Kelley, Lindsey, and Phillips. Absent and not votadverse effects, such as undue concentration of re- ing: Governors Angell and La Ware. sources, decreased or unfair competition, conflicts of JENNIFER J. JOHNSON interests, or unsound banking practices that are not Associate Secretary of the Board outweighed by the public benefits. The Board has received comments from two organizations expressing Order Approving Modifications to Section 20 concern that a substantial portion of the mortgage Orders loans held by CFI may have arisen from lending transactions in which the party originating the loan Order Approving Modifications to Section 20 Orders engaged in unfair or unscrupulous practices. In reto Allow Use of Alternative Index Revenue Test to sponse to these concerns, NationsBank has indicated Measure Compliance with the 10 Percent Limit on that NBFSC will apply its own underwriting criteria Bank-Ineligible Securities Activities and operating guidelines to the origination and servicing of loans after consummation of the proposal and Beginning in 1987 the Board has approved, under that these criteria and guidelines will be in full comsection 4(c)(8) of the Bank Holding Company Act pliance with all applicable laws and regulations. The (12 U.S.C. § 1843(c)(8)), applications by a number of administrative procedures, lending policies, and perbank holding companies to establish separate subsidsonnel training of NationsBank appear to be satisfaciaries ("section 20 subsidiaries") to underwrite and tory to assure compliance by NBFSC with all applicadeal in securities that a bank may not underwrite or ble consumer lending laws and regulations and to deal in directly ("ineligible securities").1 In order to address any instances of noncompliance in a prompt ensure compliance with section 20 of the Glassand effective manner. Steagall Act, which prohibits a member bank from On the basis of all of the facts of record, including being affiliated with a company that is "engaged printhe commitments made by Applicant in this case, the cipally" in underwriting and dealing in securities,2 the Board has determined that the balance of public inter- Board found that a section 20 subsidiary's underwritest factors that it must consider under section 4(c)(8) ing and dealing in ineligible securities may not be a of the BHC Act is favorable and consistent with substantial activity of the subsidiary. In particular, the approval. Board provided that the amount of revenue the sub- Based upon the foregoing and all of the other facts of sidiary may derive in any quarter from such ineligible record, including commitments made by Nationssecurities activities may not exceed 10 percent of the Bank, the Board has determined that the applications total revenue of the subsidiary for that quarter, when should be, and hereby are, approved. The Board's revenue is averaged over a rolling 8-quarter period. determination is subject to all of the commitments made in connection with these applications as well as I. Proposed Modifications to the 10 Percent all of the conditions set forth in the Board's Regulation Revenue Limit Y, including the Board's authority to require modification or termination of the activities of a bank holding On July 23, 1992, the Board requested public comment company or any of its subsidiaries as the Board finds on two methods for creating an alternative to the necessary to assure compliance with, and to prevent 10 percent revenue test.3 The Board took this action in evasion of, the provisions of the BHC Act and the response to historically unusual changes in the level Board's regulations and orders thereunder. All of the and structure of interest rates, which have distorted commitments and conditions relied upon by the Board the revenue test as a measure of the relative imporin reaching its decision are conditions imposed in tance of ineligible securities activities in a manner that writing in connection with the Board's findings and was not anticipated when the Board established the 10 decision and, as such, may be enforced in proceedings percent limit in September 1989. The Board noted that under applicable law. short-term interest rates had declined sharply in recent The transaction approved in this Order shall not be months but that there had been very little correspondconsummated later than three months after the effective date of this Order, unless such period is extended for good cause by the Board or by the Federal Reserve 1. E.g., Citicorp, 73 Federal Reserve Bulletin 473 (1987); J.P. Bank of Richmond, acting pursuant to delegated au- Morgan & Co., 75 Federal Reserve Bulletin 192 (1989). As of thority. December 31, 1992, 30 bank holding companies are authorized under section 4(c)(8) to underwrite and deal in ineligible securities. By order of the Board of Governors, effective 2. 12 U.S.C. § 377. January 13, 1993. 3. 57 Federal Register 33,507. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 227 ing decline in longer term rates, producing an unusu- limit would be computed based on assets rather than ally wide difference between short- and long-term revenue.5 rates. In its request for public comment, the Board noted II. Adoption of Alternative Indexed Revenue that since eligible securities4 tend to be shorter term Test than ineligible securities, recent revenue data suggested that the current unusually sharp increase in the After review of relevant information, the Board has steepness of the yield curve has caused the revenue decided to modify its section 20 orders to allow section earned by at least some section 20 subsidiaries from 20 subsidiaries to measure compliance with the "enholding eligible securities to decline in relation to gaged principally" test in section 20 on the basis of an ineligible revenue, even though the relative proportion indexed revenue test, as described in the request for of eligible and ineligible securities activities being public comment. To use the indexed revenue test as an conducted by these subsidiaries has remained essen- alternative to the current revenue test section 20 tially unchanged. Thus, the Board found that this subsidiaries must notify the Federal Reserve of such decline in the eligible revenue base of section 20 an election and may not alter that election for two subsidiaries could be attributed to extraordinary fac- years. tors beyond the control of the subsidiary rather than to an increase in the relative importance of its ineligible Compliance with the Glass-Steagall Act activities. Accordingly, the Board stated that the results produced by the revenue test, due to their The Board believes that measuring compliance with dependence on interest rates, may not be as reliable as the "engaged principally" standard based on a test the Board had anticipated when the 10 percent limit that indexes revenues according to interest rate conwas established. ditions prevailing when the current 10 percent revenue The Board proposed two alternatives to the current test was adopted is fully consistent with section 20 of revenue test designed to take into account the current the Glass-Steagall Act. As noted above, the Board in unforeseen alteration in historic interest rate relation- 1987 concluded that a bank affiliate would not be ships. First, the Board proposed that current interest "engaged principally" in ineligible securities activities and dividend revenue from eligible and ineligible se- for purposes of section 20 if those activities are not curities could be adjusted to approximate the revenue "substantial" relative to other activities of the subsidthat would have been derived if interest rate condi- iary, i.e., do not exceed 10 percent of the subsidiary's tions were those that existed in September 1989. total activities.6 This view was upheld by the courts.7 Under this proposed modification, current interest and Although the statutorily-imposed "engaged princidividend revenue for each quarter would be increased pally" limitation on ineligible activities represents a or decreased by an adjustment factor provided by the "hard and fast limit" that may not be administratively modified,8 nothing in section 20 itself dictates what Board according to the average duration of a subsidcriteria must be used to determine compliance with iary's eligible and ineligible securities portfolios. The that limit. Indeed, the statutory term "engaged prinadjustment factor would represent the ratio of interest cipally" is "intrinsically ambiguous."9 Thus, the statrates on Treasury securities in September 1989 to ute gives the Board discretion in selecting the criteria average interest rates on Treasury securities in the most recent quarter for obligations having that particular duration. On July 29, 1992, as supplemental information to the request for public comment, the 5. Under the proposed asset-based test, a section 20 subsidiary would be viewed as in compliance with section 20 for any quarter if the Board published a table of adjustment factors based on average daily assets held in connection with underwriting and dealing interest rates prevailing in the second quarter of 1992 in ineligible securities for that quarter, when added to the average that could be used under the proposed indexing daily assets held in connection with ineligible securities activities for the previous seven quarters, does not exceed 10 percent of the average method. daily total assets of the subsidiary for that quarter and the previous Second, the Board proposed an alternative test seven quarters. under which compliance with the current 10 percent 6. Bankers Trust New York Corp., 73 Federal Reserve Bulletin 139, 140-45 (1986); Citicorp, supra, 73 Federal Reserve Bulletin at 481-86 (1986). 7. Securities Industry Association v. Board of Governors, 839 F.2d 47, 62-67 (2d Cir.), cert, denied, 486 U.S. 1059 (1988); Securities Industry Association v. Board of Governors, 847 F.2d 890, 894-99 (D.C. Cir. 1988). 4. Bank-eligible or "eligible" securities are those securities that a 8. Securities Industry Association v. Board of Governors, 839 F.2d national bank may underwrite or deal in pursuant to at 68. 12 U.S.C. § 24(7), and include obligations of the United States, and 9. Id., at 63; See Securities Industry Association v. Board of obligations of states and their political subdivisions. Governors, 847 F.2d at 894. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

228 Federal Reserve Bulletin • March 1993 for determining when ineligible securities activities interest rate conditions prevailing in 1989 exist during become substantial. the current quarter. In the Board's view, the proposed indexed revenue For this reason, the Board finds no merit in the test is consistent with the language and purposes of allegations of commenter the Securities Industry Assection 20 and is a permissible means to measure sociation (the "SIA") that the indexed revenue test compliance with the "engaged principally" standard would permit the ineligible securities activities of set forth in that section. When the revenue limit was section 20 subsidiaries to become substantial in violainitially established, the Board found that revenue is an tion of section 20. Rather than allowing the relative appropriate factor for assessing whether a section 20 level of ineligible securities activities to increase, as subsidiary is engaged principally in ineligible activities the SIA asserts, the index formula represents a more because revenue is an "objective and meaningful mea- refined method for measuring whether a section 20 sure of the importance of the activity to the enterprise subsidiary has exceeded the level of ineligible activity as a whole and reflects the level of risk involved in the that the Board believed to be substantial when it set activity."10 As noted above, the 10 percent revenue the 10 percent limit.11 limit has been judicially upheld as a reasonable inter- The Board also finds that the fact that the current pretation of the language of section 20. As explained unusual yield curve may have an impact on only some below, the proposed indexing modification is designed section 20 subsidiaries does not preclude the adoption to treat current interest and dividend revenue as if such of the indexed revenue test, since the Board believes revenue had been earned under interest rate conditions that the current test does in fact produce less reliable that prevailed in September 1989, when the existing results than the indexed adjustment for those compa- 10 percent revenue limit was established. There can be nies. no reasonable dispute that the 10 percent revenue limit, as applied under those interest rate conditions, is con- The Proposed Alternative Asset-Based Test sistent with the terms and purposes of the "engaged principally" test. The Board does not find it necessary at this time to decide whether to adopt the proposed alternative Indexed Revenue Test as an Appropriate asset-based test because the Board is unable to deter- Measure of Substantial Activity mine satisfactorily at this time the potential practical effect of such a test. The Board finds that the proposed indexed revenue test is a reasonably reliable method for measuring the Continued Use of Current Revenue Test substantiality of ineligible securities activities in light of the current highly unusual interest rate structure. Many banking organizations that commented on the First, it is not disputed that the size of the recent proposed modifications to the 10 percent limit stated decline in short-term interest rates as compared to the that the proposed indexing of the current revenue test, decline in long-term rates is historically significant, which would adjust revenue according to the duration and has resulted in a steepness of the yield curve that of the eligible and ineligible securities portfolio, would is highly unusual. The comments also confirm that impose additional costly and burdensome recordkeepcurrent interest rate conditions have, at least for some ing and compliance requirements. For example, a section 20 subsidiaries, caused an artificial decline in number of banking organizations stated that their the eligible revenue base and that this in turn has made section 20 subsidiaries do not have in place computer the revenue test a less reliable indicator of the relative systems to calculate the duration of all of the securities mix of eligible and ineligible activities than the Board in their portfolio on a regular basis. had anticipated when the 10 percent limit was adopted Accordingly, the Board believes that it is appropriin 1989. ate to allow section 20 subsidiaries the option of The commenters also do not contest that the method continuing to use the current unadjusted revenue test proposed by the Board of indexing eligible and ineligible revenue, which adjusts revenue based on com- 11. The Board also finds without merit the SIA's concerns that parable rates on Treasury securities based for categounder the current revenue test some section 20 subsidiaries have made ries of average portfolio duration, will reasonably incursions into underwriting markets traditionally dominated by nonapproximate what current revenue would be if the bank firms. Although the Board initially imposed a separate market share test because of perceived weaknesses in using revenue alone as the sole measure of "engaged principally" (Bankers Trust New York Corporation, 73 Federal Reserve Bulletin at 146), the market share test was rejected by the court on judicial review as inconsistent with 10. Bankers Trust New York Corporation, 73 Federal Reserve the statute and a revenue-only measure was upheld. Securities Indus- Bulletin at 145; Citicorp, 73 Federal Reserve Bulletin at 484. try Association v. Board of Governors, 839 F.2d at 67-68. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 229 to measure compliance with the "engaged principally" 2. The subsidiary determines the appropriate adstandard. Each existing section 20 subsidiary that justment factor corresponding to the duration of elects to use the indexed revenue test for the current the eligible and ineligible assets from the table of quarter shall notify the relevant Federal Reserve Bank adjustment factors published by the Board for that of this fact within 30 days of publication of this order. quarter. Thereafter, any existing section 20 subsidiary that 3. The subsidiary adjusts its current interest and elects to use the indexed revenue test shall notify the dividend revenue from its eligible and its ineligible appropriate Reserve Bank no later than 30 days prior activities by the appropriate adjustment factors. to the beginning of the calendar quarter during which 4. The subsidiary adds the adjusted eligible and the indexed test will be used. Upon making this ineligible interest and dividend revenue to the other selection, the subsidiary will be required to continue types of revenue earned by the subsidiary to calcuusing the indexed revenue test for a period of at least late an adjusted ratio of ineligible to total revenue two years. After such a period, the subsidiary may for that quarter. change its compliance measurement if it chooses. The Board believes that it is necessary to require a section Several commenters have raised various technical 20 subsidiary to continue to comply with the test that questions with regard to the method for computing it chooses for a set period of time in order to guard average duration of assets for purposes of this foragainst potential manipulation that may occur should a mula. Specifically, the Board is aware that there may subsidiary be permitted to continually switch between be diversity of opinion with respect to calculating the two alternative tests. duration of certain securities, such as obligations containing explicit options (e.g., callable securities) Operation of the Indexed Revenue Test and those with imbedded options (e.g., collateralized mortgage obligations ("CMOs") with prepayment op- As with the current revenue test, under the indexed tions). To ensure uniformity, the Board's staff will revenue test a subsidiary will be in compliance with attempt to address these issues in revising the FR Y-20 section 20 for any quarter if adjusted revenue from and in responding to specific inquiries. ineligible securities underwriting and dealing activities To reduce burden and ensure uniform treatment, the for that quarter, when added to the adjusted revenue staff has been directed, to the extent possible, to rely from ineligible securities activities for the seven pre- on regulatory precedent in addressing these types of vious quarters, do not exceed 10 percent of adjusted issues. For example, callable bonds would be considtotal gross revenues of the subsidiary for that quarter ered to have a maturity equivalent to the first call and the previous seven quarters. date.13 Alternatively, it would be proper, where feasi- Under the indexing method, current revenue will be ble, to use the methodology contained in the Federal adjusted by a series of factors supplied by the Board Financial Institutions Examination Council policy that vary according to the average duration of the statement on investments (i.e., the so-called "stress securities portfolio of the section 20 subsidiary. For test") to calculate appropriate duration for CMOs and each category of average duration the adjustment similar products.14 factor represents the ratio of interest rates in Septem- With regard to the timing of the Board's publication ber 1989 on Treasury securities to the average interest of the table of adjustment factors, the Board intends to rates in the most recent quarter. These adjustment publish the table applicable to each quarter at the factors will then be applied to current interest and beginning of that quarter based on average interest dividend revenue. rates prevailing during the immediately prior quarter. To use the indexing method in conjunction with the Although the use of prior quarter rates will not necestables to be provided for any given quarter, a section sary produce adjustments that directly mirror the 20 subsidiary must adhere to the following procedure. interest rate conditions likely to be faced by section 20 1. The subsidiary calculates the average duration of subsidiaries in the coming quarter, the differences in its eligible assets and of its ineligible assets.12 rates from quarter to quarter are unlikely to be highly significant, and publication of the applicable adjust- 12. In the proposal for modifications of the 10 percent revenue limit, the Board noted that computation of duration on a daily basis Board is requiring that section 20 subsidiaries that choose to use the appeared to be the most appropriate method, since interest and indexing method compute duration on a weekly basis. dividends are earned on securities held as of the end of the day. 13. See Municipal Securities Rulemaking Board Rule G-15, Cus- Several commenters said that daily computation of duration would be tomer Confirmations. unduly burdensome and suggested monthly or quarterly computation. 14. See Federal Reserve Regulatory Service, pages 3-484.8 through After considering the comments as well as other facts of record, the 3-484.11. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

230 Federal Reserve Bulletin • March 1993 ment factors at the beginning of the quarter should subsidiaries upon which the Board relied in proposing provide for greater predictability in meeting the limits. the alternative tests. The SIA believed that access to A table of the factors that will be used to adjust such data is essential in order to allow it to adequately revenue earned during the first quarter of 1993 is assess the proposal. attached to this Order. The Board does not believe that it is necessary to The Board recognizes that some section 20 subsid- extend the comment period or hold a public hearing on iaries do not currently have available sufficient prior this proposal. The Board previously held a public data related to the duration of their assets to initially hearing on defining the term "engaged principally" in measure compliance with an indexed revenue test over section 20 of the Glass-Steagall Act in connection with past quarters. Accordingly, while the Board will retain the Board's first section 20 order in Citicorp. This the eight-quarter rolling average method of measuring interpretation is only a modest procedural adjustment, compliance with the "engaged principally" test, the however, and does not involve the major policy issues indexed revenue test will be implemented on a pro- the Board faced in initially allowing bank holding comspective basis only. Accordingly, to determine com- panies to engage in ineligible securities underwriting pliance with the indexed revenue test during the first and dealing. In addition, the Board has generally only two-year period after election of this test, adjusted held public hearings on matters when written submisrevenues from ineligible securities activities for each sions are an inadequate means for the public to express quarter during this two-year period, when added to the an opinion on a proposal. The Board believes that in adjusted revenues from ineligible securities activities this case, written submissions have been an adequate for each previous quarter during the period, may not means for the public to comment on the proposal. exceed 10 percent of the section 20 subsidiary's As for the data to which the SIA requested access, adjusted total gross revenues for that quarter and all it appears that the release of data on the level of previous quarters during the initial two-year period. ineligible securities activities for a specific section 20 After the end of the initial two-year period, compli- subsidiary would not be warranted. The Board and ance would be measured on the rolling eight-quarter other federal agencies generally do not disclose to the average basis described above. public commercial or financial information about a The Board is in the process of modifying the FR person that could harm that person's competitive Y-20 (Financial Statements for a Bank Holding Com- position in the marketplace.15 In this case, data about pany Subsidiary Engaged in Ineligible Securities Un- the composition of the portfolios of various section 20 derwriting and Dealing) instructions and reporting subsidiaries could be potentially harmful to the comform to take into account the adoption of an indexed petitive position of these subsidiaries, since their comrevenue test. The FR Y-20 is used by the Board to petitors could learn the relative mix of their eligible collect data for off-site monitoring of compliance with and ineligible activities and whether the ineligible the Board's revenue test and certain Board conditions, activities might have to be curtailed because of the and monitoring of general financial condition. 10 percent limit. The Board notes that the factual circumstances that prompted the decision to modify Other comments the current revenue test, the current unusual interest rate conditions, are a matter of public record.. In Two commenters cite recent allegations that some addition, in order to assist the section 20 subsidiaries banking organizations unlawfully tied credit services and the public in assessing how the indexed revenue with investment banking services offered by their test would operate in practice, the Board has pubsection 20 subsidiaries and assert that adoption of the lished a sample table of adjustment factors, based on proposed adjustment would increase the possibility for historic interest rate data, that could be used in applyillegal tying. However, as explained above, this pro- ing the indexed revenue test. posal is not designed to expand ineligible activities and A final procedural issue relates to the process under allegations of illegal tying are currently under review which a section 20 subsidiary may change its method by Board staff. of compliance with the "engaged principally" test. The Board's Regulation Y requires a notice to be filed Procedural issues with the Board to alter a nonbanking activity in any material respect from that considered by the Board in The SI A, in initially commenting on the Board's acting on the application to engage in the activity.16 As proposal, requested that the Board extend the original comment period by 90 days and hold a public hearing to discuss the proposal. The SIA also requested that 15. See, e.g., 5 U.S.C. § 552(b)(4). the Board disclose the data on operations of section 20 16. 12 C.F.R. 225.23(b)(3). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 231 noted above, the Board views the changes adopted to Dissenting Statement of Governors Mullins and the revenue test as procedural adjustments to account Angell for distortion caused by changes in interest rates. It is not the Board's intention, and the Board does not We believe that the indexed revenue test is an unduly believe, that its action will materially alter the activity complex and burdensome solution to the problem it is of engaging in ineligible securities underwriting and intended to address, i.e., the unreliability of the curdealing for those section 20 subsidiaries that choose to rent 10 percent revenue limit on the ineligible securiadopt an indexed revenue test. Accordingly, the Board ties activities of section 20 subsidiaries due to the will not require a section 20 subsidiary that adopts the unusual structure of interest rates at the present. As indexed revenue test to file a formal notice pursuant to indicated by many of the comments on this proposal, Regulation Y before making this change, but merely to the indexed revenue test will impose extensive new notify the relevant Federal Reserve Bank of the test it recordkeeping and reporting obligations. is choosing to measure its compliance with the "en- Rather than merely fine-tuning the current test, we gaged principally" standard. believe that a more fundamental and efficient approach to this problem is appropriate. In light of the unreliability of the current revenue test, the Board should di- III. Raising the Percentage Limitation rectly consider an increase in the 10 percent level. As the Board's Order recognizes, the specific limits of the statutory directive that a section 20 subsidiary not be A large number of commenters who favored adjusting engaged principally, or substantially, in ineligible secuthe current revenue test also suggested that the Board rities activities are by no means precise. Therefore, the raise the current percentage limitation from 10 percent Board has, in our judgment, a considerable degree of to as high as 25 percent. Because this suggestion goes latitude in selecting the appropriate quantitative level beyond the scope of the Board's current proposal, no for applying the engaged principally standard. action is now being taken with respect to the The Board selected the 10 percent level without the 10 percent limit. benefit of the recent experience with unanticipated interest rate relationships, which have now shown the IV. Conclusion unreliability of the current test. Moreover, the Board has now had considerable experience in reviewing the overall operations of the section 20 subsidiaries, and in Accordingly, for the reasons and subject to the condilight of this experience we believe that it is now tions set forth in this Order, the Board concludes that appropriate to revisit the issue of the proper measure the proposed indexed revenue test, as an alternative to for determining whether a section 20 subsidiary is the existing 10 percent revenue limit on the ineligible engaged principally in ineligible securities activities. In securities activities of section 20 subsidiaries, is conour view, addressing the issue of whether an increase sistent with section 20 of the Glass-Steagall Act. Accordingly, the Board modifies its prior section 20 Factors to adjust interest income orders to permit section 20 subsidiaries to use this Ratio of interest rates in September 1989 to fourth quarter 1992 indexed revenue test under the conditions prescribed in this Order. This modification applies to all section Duration Factor 20 subsidiaries and is effective immediately. This modification does not affect in any other way the Months 1 2.70 authorizations to engage in securities underwriting and 3 2.52 6 2.42 dealing granted by the Board in its prior section 20 12 2.30 Orders and is subject to the Board's continuing author- Years ity to reexamine limitations on such activities estab- 2 1.83 3 1.62 lished on section 20 subsidiaries in these prior Orders. 4 1.43 By order of the Board of Governors, effective 5 1.35 6 1.28 January 26, 1993. 7 1.25 10 1.14 20 1.03 Voting for this action: Chairman Greenspan and Governors 30 0.97 Kelley, La Ware, Lindsey, and Phillips. Voting against this action: Governors Mullins and Angell. NOTE: Adjustment factors were calculated using secondary-market quotes of the yields on Treasury bills for durations of three, six, and twelve months and on STRIPSs, or zero-coupon Treasury securities, WILLIAM W. WILES for durations two years and greater. Data are averages of Wednesday Secretary of the Board observations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

232 Federal Reserve Bulletin • March 1993 in the quantitative level of activity should be permitted First Union has consolidated assets of approxito take into account this recent experience would be mately $48.3 billion, and controls five banks in Florconsistent with the basic objectives of the Glass- ida, Georgia, South Carolina, North Carolina, and Steagall Act. Tennessee.3 Upon consummation of this proposal, January 26, 1993 First Union would become the fourth largest commercial banking organization in Virginia, controlling Orders Issued Under Sections 3 and 4 of the deposits of $5.6 billion, representing approximately Bank Holding Company Act 10.2 percent of the deposits in commercial banks in the state.4 First Union Corporation Charlotte, North Carolina Douglas Amendment Order Approving Acquisition of a Bank Holding Section 3(d) of the BHC Act, the Douglas Amend- Company ment, prohibits the Board from approving an application by a bank holding company to acquire any First Union Corporation, Charlotte, North Carolina bank located outside of the bank holding company's ("First Union"), a bank holding company within the home state, unless such acquisition is "specifically meaning of the Bank Holding Company Act ("BHC authorized by the statute laws of the State in which Act"), has applied under section 3(a)(3) of the BHC Act such bank is located, by language to that effect and (12 U.S.C. § 1842(a)(3)) to acquire Dominion Bank- not merely by implication."5 For the purposes of the shares Corporation, Roanoke, Virginia ("Dominion"), Douglas Amendment, the home state of First Union and thereby indirectly acquire its six subsidiary banks: is North Carolina.6 The Board has previously deter- Dominion Bank, N.A., Roanoke, Virginia; Dominion mined that the interstate banking statutes of Mary- Bank of Washington, N.A., Washington, D.C.; Domin- land, Tennessee, Virginia and the District of Columion Bank of Maryland, N.A., Rockville, Maryland; bia permit a North Carolina bank holding company to Dominion Bank of Middle Tennessee, Nashville, Ten- acquire banking organizations in those jurisdictions.7 nessee; Merchants & Planters Bank, Newport, Tennes- In considering this proposal, the Board has analyzed see; and Citizens Union Bank, Rogersville, Tennes- the interstate banking statutes of all the states insee.1 First Union also has applied under section 4(c)(8) volved and of the District of Columbia and has of the BHC Act (12 U.S.C § 1843(c)(8)) to acquire the concluded that First Union is authorized under these nonbanking subsidiaries of Dominion.2 statutes to acquire the banking subsidiaries of Dominion located in these states and the District of Notice of the applications, affording interested per- Columbia.8 Accordingly, Board approval of this prosons an opportunity to submit comments, has been posal is not prohibited by the Douglas Amendment. published (57 Federal Register 52,776 (1992)). The Approval of this proposal, however, is conditioned time for filing comments has expired, and the Board has considered the applications and all comments received in light of the factors set forth in sections 3(c) and 4(c)(8) of the BHC Act. 3. Asset data are as of September 30, 1992. 1. Upon consummation of this proposal, Dominion will merge with 4. State deposit data are as of June 30,1992. Market deposit data are and into First Union Corporation of Virginia, a wholly owned subsid- as of June 30, 1991. iary of First Union. In connection with the proposed acquisition, First 5. 12 U.S.C. § 1842(d). Union has also requested Board approval under section 3 of the BHC 6. A bank holding company's home state is that state in which the Act to acquire an option to purchase 19.9 percent of the voting shares operations of the bank holding company's banking subsidiaries were of Dominion. This option will become moot upon consummation of principally conducted on July 1, 1966, or the date on which the First Union's application to acquire Dominion. company became a bank holding company, whichever is later. The 2. First Union has applied to acquire the following Dominion operations of a bank holding company are considered principally nonbanking subsidiaries: conducted in that state in which the total deposits of all such banking (1) Dominion Bankshares CDC, Inc., Roanoke, Virginia, and subsidiaries are largest. thereby engage in community development activities pursuant to 7. See NCNB Corporation, 78 Federal Reserve Bulletin 141 (1992). section 225.25(b)(6) of the Board's Regulation Y; 8. Each of these state statutes permit a bank holding company (2) Dominion Trust Company, Roanoke, Virginia, and Dominion located in North Carolina to acquire a bank in each respective state. Trust Company of Tennessee, Nashville, Tennessee, and thereby See Md. Fin. Inst. Code Ann. § 5-1001 et seq.;V&. Code Ann. § 6.1engage in trust company activities within the Commonwealth of 399; D.C. Code Ann. §§ 26-801, 802(a)(1); Tenn. Code Ann. §§ 45- Virginia and the State of Tennessee, respectively, pursuant to 12-102, 103. The Tennessee statute conditions entry on the requiresection 225.25(b)(3) of the Board's Regulation Y, and ment that the out-of-state bank holding company not hold more than (3) Old Dominion Leasing, Inc., Roanoke, Virginia, and thereby 16.5 percent of the total deposits held by all federally insured financial engage in leasing personal property pursuant to section 225.25(b)(5), institutions located in Tennessee. Upon consummation of this transand in making and servicing loans pursuant to section 225.25(b)(1) action, First Union would hold approximately 4.3 percent of the of the Board's Regulation Y. federally insured deposits in Tennessee. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 233 upon First Union's receiving all required state regu- Union and Dominion, and their respective subsidiarlatory approvals.9 ies, and the other supervisory factors that the Board must consider under section 3 of the BHC Act, are Competitive, Financial, Managerial and Supervisory consistent with approval. Considerations Convenience and Needs Considerations First Union and Dominion compete directly in the Washington, D.C.10 and Nashville, Tennessee11 bank- In acting upon an application to acquire a depository ing markets. Upon consummation of this proposal, institution under the BHC Act, the Board must con- First Union would become the ninth largest commer- sider the convenience and needs of the communities to cial bank or thrift organization ("depository institu- be served, and take into account the records of the tion") in the Washington, D.C. banking market, con- relevant depository institutions under the Community trolling deposits of $1.6 billion, representing Reinvestment Act (12 U.S.C. § 2901 et seq.) approximately 3.5 percent of total deposits in deposi- ("CRA"). The CRA requires the federal financial tory institutions in the Washington, D.C. banking supervisory agencies to encourage financial institumarket.12 First Union would become the fourth largest tions to help meet the credit needs of the local comdepository institution in the Nashville banking market, munities in which they operate, consistent with the controlling deposits of $806.9 million, representing safe and sound operation of such institutions. To approximately 8.1 percent of total deposits in deposi- accomplish this end, the CRA requires the appropriate tory institutions in the Nashville banking market. federal supervisory authority to "assess the institu- After considering the number of competitors remain- tion's record of meeting the credit needs of its entire ing in the respective markets, the relatively small community, including low- and moderate-income increase in concentration as measured by the Herfin- neighborhoods, consistent with the safe and sound dahl-Hirschman Index ("HHI"),13 market share, and operation of such institution," and to take that record into account in its evaluation of bank holding company all other facts of record, the Board concludes that applications.14 consummation of the proposal would not result in a significantly adverse effect on competition in the The Board has received comments from several Washington, D.C. banking market, the Nashville bank- organizations and individuals ("Protestants") that ing market, or any other relevant banking market. raise issues regarding the efforts by First Union and The Board also concludes that the financial and Dominion to meet the credit needs of their entire managerial resources and future prospects of First communities, including low- and moderate-income neighborhoods.15 In particular, the Protestants criticize First Union's policies with regard to residential 9. The appropriate banking supervisors in Maryland, Tennessee, mortgage lending, participation in government-insured Virginia and the District of Columbia have each indicated preliminar- loan programs and small business loans. Protestants ily that First Union's proposed acquisition of banking institutions in its also raise concerns about First Union's ability to meet state is not prohibited by the relevant state banking statutes. 10. The Washington, D.C. banking market is defined as the Wash- the credit needs of communities currently serviced by ington, D.C., Ranally Metropolitan Area. Dominion, and the absence of an acceptable plan for 11. The Nashville banking market is approximated by Davidson, future community reinvestment. Moreover, Protes- Robertson, Sumner, Williamson, Wilson, and Rutherford Counties in Tennessee. tants question First Union's record of lending to 12. Market share data are based on calculations in which the minorities, citing data filed under the Home Mortgage deposits of thrift institutions are included at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. See Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). 14. 12 U.S.C. § 2903. 13. First Union's presence in the Washington, D.C. banking market 15. One of the Protestants has raised concerns regarding branch is de minimis and the HHI for this market would not increase as a closings by First Union in Florida. First Union has responded that result of this proposal. The HHI in the Nashville banking market almost all branches were closed following in-market acquisitions and would increase 5 points to 1439. Under the revised Department of that these offices were consolidated into other First Union branches Justice Merger Guidelines (49 Federal Register 26,823 (June 29, with the result that no low-income areas were deprived of branch 1984)), a market in which the post-merger HHI is between 1000 and operations. In addition, First Union National Bank of Florida has 1800 is considered moderately concentrated. The Justice Department formal procedures for opening and closing offices that were reviewed has informed the Board that a bank merger or acquisition generally and found to be adequate by the bank's primary regulator. In this will not be challenged (in the absence of other factors indicating regard, First Union's policy requires that special efforts be made to anti-competitive effects) unless the post-merger HHI is at least 1800 consult with local community leaders before a formal decision is made and the merger increases the HHI by 200 points. The Justice Depart- to close a branch that will significantly impact a low- and moderatement has stated that the higher than normal HHI thresholds for income community. The Federal Deposit Insurance Corporation Imscreening bank mergers for anti-competitive effects implicitly recog- provement Act of 1991 also requires a bank to provide its customers nize the competitive effect of limited-purpose lenders and other at least 30 days notice prior to closing any branch, and provide to the non-depository financial entities. bank's primary regulator 90 days' prior notice. 12 U.S.C. § 1831p. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

234 Federal Reserve Bulletin • March 1993 Disclosure Act ("HMDA"), as evidence that First standing" or "satisfactory" ratings during the most Union's lending is marked by low levels of applica- recent examinations for CRA performance.20 tions from minorities and low approval rates of loans to minorities.16 B. Corporate Policies The Board has carefully reviewed the CRA performance records of First Union, Dominion, and their First Union has in place the types of policies outlined respective subsidiary banks, as well as all comments in the Agency CRA Statement that contribute to an received regarding this application, First Union's re- effective CRA program, and will implement these sponses to those comments, and all of the other policies in all Dominion banks. The board of directors relevant facts of record in light of the CRA, the of First Union has adopted a written CRA plan which Board's regulations, and the Statement of the Federal includes goals, objectives, and methodology for self- Financial Supervisory Agencies Regarding the Com- assessment. The First Union board has established a munity Reinvestment Act ("Agency CRA State- Corporate CRA Steering Committee to supervise and ment").17 monitor First Union's overall compliance with this plan. In addition, each First Union bank maintains a Record of Performance Under the CRA State CRA Self-Assessment Committee to assess compliance with corporate CRA policy and to assist in A. CRA Performance Examination developing and implementing action plans to respond to demonstrated needs for change in performance.21 The Agency CRA Statement provides that a CRA Each bank has a CRA Coordinator and local advisory examination is an important and often controlling boards, comprised of business, community, and edufactor in the consideration of an institution's CRA cation leaders, who discuss current CRA data and record, and that these reports will be given great issues. First Union and each of its subsidiary banks weight in the applications process.18 The Board notes also conduct regular CRA self-assessments, and acthat all of First Union's subsidiary banks have been tively support CRA training for all bank personnel. examined for CRA performance and have received "outstanding" or "satisfactory" ratings during the C. Ascertainment and Marketing most recent examinations of their CRA performance. In particular, First Union's lead subsidiary bank, First Union ascertains community credit needs First Union National Bank of North Carolina, Char- through various community outreach programs. For lotte, North Carolina ("First Union Bank-NC"), example, First Union representatives conduct regureceived an "outstanding" rating for CRA perfor- larly scheduled interviews with representatives of mance from the Office of the Comptroller of the community groups and other people knowledgeable Currency ("OCC") in May 1992.19 In addition, all of about community needs. First Union representatives Dominion's subsidiary banks have received "out- attend local focus group discussions and make ongoing needs ascertainment calls on businesses, consumers, government agencies, community-based organizations and advocacy groups.22 Recently there has been an additional emphasis on increased education of mem- 16. One of the Protestants also raised concerns about the minority bers of the public. For example, First Union Bank-NC hiring and promotion practices of First Union. First Union maintains that it actively promotes employment opportunities for minorities. While the Board fully supports affirmative programs designed to promote equal opportunity in every aspect of a bank's personnel 20. These banks and their CRA examination dates include: Dominpolicies and practices in the employment, development, advance- ion Bank, N.A., Roanoke, Virginia, November 1991; Dominion Bank ment, and treatment of employees, the Board believes that the alleged of Maryland, N.A., Rockville, Maryland, November 1991; Dominion deficiencies in First Union's general personnel and employment Bank of Washington, N.A., Washington, D.C., September 1991; practices are beyond the scope of the factors that the Board may Dominion Bank of Middle Tennessee, Nashville, Tennessee, August properly consider under the CRA, or the convenience and needs 1990; Merchants and Planters Bank, Newport, Tennessee, February factor of the BHC Act. 1991; and Citizens Union Planters Bank, Newport, Tennessee, Octo- 17. 54 Federal Register 13,742 (1989). ber 1990. With the exception of Dominion Bank of Middle Tennessee, 18. Id. at 13,745. which was rated "outstanding" for CRA, all of the other Dominion 19. First Union's other subsidiary banks have received the follow- subsidiaries listed above received "satisfactory" CRA ratings from ing CRA ratings: First Union National Bank of Georgia, Clardston, their primary regulators. Georgia, received a "satisfactory" rating from the OCC in April 1992; 21. In its most recent examination of First Union Bank-NC, the First Union National Bank of Florida, Jacksonville, Florida, received OCC noted that First Union's CRA plan has proven to be effective in a "satisfactory" rating from the OCC in April 1992; First Union managing the bank's overall CRA efforts. National Bank of South Carolina, Greenville, South Carolina, re- 22. In the past 24 months, First Union has made over 6,000 needs ceived a "satisfactory" rating from the OCC in May 1992; and First ascertainment calls to help determine how First Union can best meet Union National Bank of Tennessee, Nashville, Tennessee, received a the needs of its local communities, especially the needs of low- and "satisfactory" rating from the OCC in May 1992. moderate-income neighborhoods. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 235 conducts seminars for consumers and small business farm loans totalling $85 million. Of this total, 353 loans owners throughout the state. (15%) were extended to small businesses that were in In addition, First Union uses various market re- low- and moderate-income areas. First Union search programs to formally ascertain the credit needs Bank-NC has recently committed to provide addiof low- and moderate-income communities. On a pe- tional funding to local small businesses and to vest riodic basis, all consumer loans and consumer deposits future loan approvals for this fund with the loan are geocoded. Each institution analyzes the geo- committee of the West Charlotte Business Incubator. graphic distribution of all consumer loans and deposits In addition, in its most recent examination, the OCC to help determine the extent to which First Union is rated First Union Bank-NC "outstanding" with regard serving all areas of its communities, with particular to marketing and types of credit offered, citing these emphasis on service to low- and moderate-income and other programs. areas. First Union also analyzes the results of the With regard to residential lending, First Union acascertainment process and census tract data in its tively provides residential mortgage loans, housing efforts to determine unmet credit needs, and outlines rehabilitation loans, and home improvement loans. remedial actions if the analysis indicates inadequate For example, in December 1989, First Union CRA performance. Bank-NC introduced the affordable home mortgage First Union markets its products and services loan for people earning 80 percent or less of the through a variety of advertising activities, including county's median household income. In addition, First print advertising in media targeted to low- and moder- Union Bank-NC's Charlotte office markets opportuniate-income individuals and minorities, brochures pro- ties for credit to 35 low-income census tracts within its moting financial seminars, flyers, and doorhangers delineated community, and from January through Ocpromoting bank credit products. Bank subsidiaries tober 1992 successfully originated $21.2 million in also purchase advertising on radio stations targeted to various types of consumer and mortgage loans in these minority and low- and moderate-income individuals. census tracts. This marketing program has been enhanced by mail First Union actively participates in the Charlotteinserts in bank statements to all bank customers, and Mecklenburg Housing Partnership, a consortium of direct mail campaigns to religious leaders outlining local banks that was established to facilitate making banking products available to members of the commu- mortgage loans in low-income areas. This partnership nity. First Union State Advertising Managers review concentrates on low-income housing consisting of new all advertising efforts to assure that they are informa- single-family residences, new multi-family residences, tive and responsive to low- and moderate-income and the rehabilitation of existing housing. In order to communities. First Union also solicits business facilitate these purchases, below-market interest rate through outreach to community groups, realtors and loans are made available through this partnership.23 other organizations that can assist in soliciting new The Raleigh office of First Union Bank-NC has business in low- and moderate-income communities. recently purchased the entire $3 million issue of special purchase bonds issued by the North Carolina D. Lending and Other Activities Housing Finance Agency. These bonds will fund second mortgages on low-income, first-time homeowner First Union participates in a number of governmental properties throughout North Carolina. First Union programs designed to help meet the housing-related Bank-NC also offers flexible underwriting criteria and credit needs of low- and moderate-income borrowers. relaxed credit terms for its home improvement loan For example, First Union is an active participant in the program. HUD/Farmers Home Administration, FHA, and VA government insured lending programs. In addition, E. HMDA Data and Lending Practices First Union Mortgage Corporation, Charlotte, North Carolina, First Union's mortgage subsidiary, has pro- The Board has reviewed the 1990 and 1991 HMDA duced approximately $42 million in loans through the data reported by First Union in light of Protestants' North Carolina Finance Agency's single-family first- comments. Data cited by the Protestants indicate time homebuyer program since the program began in disparities in rates of housing-related loan applications 1985. and in approvals and denials that vary by racial and With respect to small business lending, First Union ethnic group in areas served by First Union. participates in a number of Small Business Administration loan programs and actively supports local small 23. In response to one of the Protestants comments concerning business development. For example, during 1991, Dominion's community development efforts, First Union has commit- First Union Bank-NC made 2,401 small business and ted to continue and expand these programs. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

236 Federal Reserve Bulletin • March 1993 Because all banks are obligated to ensure that their facts of record, the Board concludes that the convelending practices are based on criteria that assure not nience and needs considerations, including the CRA only safe and sound lending, but also assure equal performance records of all bank subsidiaries, are conaccess to credit by creditworthy applicants regardless sistent with approval of this application.24 of race, the Board is concerned when the record of an institution indicates disparities in lending to minority Nonbanking Activities applicants. The Board recognizes, however, that HMDA data alone provide only a limited measure of First Union has also applied, pursuant to section any given institution's lending in its community. The 4(c)(8) of the BHC Act, to engage in community Board also recognizes that HMDA data have limita- development, trust, personal property leasing, and tions that make the data an inadequate basis, absent loan servicing activities. As noted above, these activother information, for conclusively determining ities are permissible for bank holding companies under whether an institution has engaged in illegal discrimi- the Board's Regulation Y, and First Union proposes to nation on the basis of race or ethnicity in making conduct these activities in accordance with the lending decisions. Board's regulations. The most recent CRA examinations of all First In light of the facts of record, the Board concludes Union bank subsidiaries found no evidence of illegal that First Union's acquisition of Dominion's nonbankdiscrimination. In this regard, the OCC's examination ing subsidiaries would not significantly affect compeof First Union's lead subsidiary bank, First Union tition in any relevant market. Furthermore, there is no Bank-NC, took into account preliminary 1991 HMDA evidence in the record to indicate that consummation data. First Union also periodically assesses the ade- of this proposal is likely to result in any significantly quacy of the implementation of its nondiscriminatory adverse effects, such as undue concentration of repolicies, procedures, and training programs through sources, decreased or unfair competition, conflicts of internal review and management reporting systems. interests, or unsound banking practice. Accordingly, First Union reviews all forms, disclosures, contracts the Board has determined that the balance of public and other legal documents for potential discriminatory interest factors it must consider under section 4(c)(8) factors. In addition, each State CRA Coordinator, of the BHC Act is favorable and consistent with regulatory compliance division, and the corporate approval of First Union's application to acquire Doauditors of First Union review bank lending areas to minion's nonbanking subsidiaries. ensure that no discriminatory practices are present. First Union has undertaken a number of steps to Conclusion improve its lending to minorities and low- and moderate-income neighborhoods. For example, First Union Based on the foregoing, including the conditions and has an ongoing Fair Lending Program designed to commitments described in this Order and those made ensure that all applicants, regardless of race, have in this application, and all of the facts of record, the equal access to credit. First Union also aggressively Board has determined that these applications should markets its credit opportunities to potential consumers be, and hereby are, approved. The Board's approval is in low- and moderate-income areas. specifically conditioned upon compliance by First Union with all the commitments made in connection with this application. The commitments and condi- F. Conclusion Regarding Convenience and tions relied on by the Board in reaching this decision Needs Factors are deemed to be conditions imposed in writing by the Board in connection with its findings and decision, and The Board has carefully considered the entire record, as such may be enforced in proceedings under appliincluding the comments filed in this case, in reviewing cable law. This approval is also conditioned upon First the convenience and needs factor under the BHC Act. Based on a review of the entire record of performance, including information provided by Protestants and by 24. One Protestant has raised concerns regarding potential unemthe bank's primary regulators, and the commitments ployment in the Roanoke County, Virginia, area. First Union has made by First Union, the Board believes that the responded that it will reduce its work force in the short term, but that efforts of First Union and Dominion to help meet the these reductions will be phased in throughout 1993. In addition, First Union intends to create new jobs in the Roanoke area by consolidating credit needs of all segments of the communities served future acquisitions into its Roanoke headquarters and by transferring by First Union and Dominion, including low- and positions into the Roanoke area. Based on all the facts of record, the Board does not believe that these comments cause the balancing of the moderate-income neighborhoods, are consistent with convenience and needs factors to be inconsistent with approval of this approval. In this light, and on the basis of all of the proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 237 Union's receiving all necessary Federal and state ap- establish and operate a branch office at each of the provals. Portage and Michigan City locations of these The determinations as to the nonbanking activities branches. are subject to all of the conditions contained in the Notice of the applications, affording interested Board's Regulation Y, including those in sections persons an opportunity to submit comments, has 225.4(d) and 225.23(b)(3) (12 C.F.R. 225.4(d) and been published in accordance with the Bank Merger 225.23(b)(3)), and to the Board's authority to require Act and the Board's Rules of Procedure (12 C.F.R. such modification or termination of the activities of a 262.3(b)). As required by the Bank Merger Act, holding company or any of its subsidiaries as the reports on the competitive effects of the proposal Board finds necessary to assure compliance with, or to were requested from the United States Attorney prevent evasions of, the provisions and purposes of General, the Office of the Comptroller of the Curthe BHC Act and the Board's regulations and orders rency, and the Federal Deposit Insurance Corporaissued thereunder. tion. The time for filing comments has expired, and The banking acquisitions should not be consum- the Board has considered the applications and all the mated before the thirtieth calendar day following the comments received in light of the factors set forth in effective date of this Order, and the banking and the Bank Merger Act and the Federal Reserve Act. nonbanking acquisitions shall not be consummated 1st Source Bank, with total assets of approxilater than three months after the effective date of this mately $1.4 billion, is the 11th largest commercial Order, unless such period is extended for good cause banking institution in Indiana.2 Starke County Bank, by the Board or the Federal Reserve Bank of Rich- with total assets of approximately $44.3 million, is mond, acting pursuant to delegated authority. the 129th largest commercial banking institution in By order of the Board of Governors, effective Indiana. January 11, 1993. Competitive, Financial, and Managerial Voting for this action: Chairman Greenspan and Governors Considerations Mullins, Kelley, and Phillips. Absent and not voting: Governors Angell, La Ware, and Lindsey. This proposal represents a reorganization of existing offices of depository institutions that already are JENNIFER J. JOHNSON controlled by the same bank holding company. The Associate Secretary of the Board Board notes that competitive considerations were reviewed when 1st Source Bank acquired Farmers State Bank of Wyatt, Wyatt, Indiana,3 a competitor Order Issued Under Bank Merger Act in the LaPorte County, Indiana banking market4 with Starke County Bank, which at that time also was 1st Source Bank owned by 1st Source.5 This acquisition did not result South Bend, Indiana in any significantly adverse competitive effects in the LaPorte County, Indiana banking market. On the Order Approving Acquisition of Branches basis of all the facts of record, the Board has concluded that consummation of this proposal would 1st Source Bank, South Bend, Indiana ("1st Source not result in a significantly adverse effect on compe- Bank"), a state member bank, has applied for the tition in any relevant banking market. Board's approval under the Bank Merger Act The financial and managerial resources and future (12 U.S.C. § 1828(c)) to acquire the assets and liabilprospects of 1st Source Bank and Starke County ities of two branches of 1st Source Bank of Starke Bank also are consistent with approval of this County, Hamlet, Indiana ("Starke County Bank").1 proposal. These branches are located in Portage and Michigan City, both in Indiana. 1st Source Bank also has applied for the Board's approval, pursuant to section 9 of the Federal Reserve Act (12 U.S.C. § 321), to 2. State asset data are as of June 30, 1992. 3. See 78 Federal Reserve Bulletin 574 (1992). 4. The LaPorte County, Indiana banking market is approximated by LaPorte County, except for New Durham, Clinton, Cass, Dewey, and 1. 1st Source Bank and Starke County Bank are subsidiaries of 1st Prairie Townships; Olive and Warren Townships in St. Joseph Source Corporation, South Bend, Indiana ("1st Source"). Under the County; and Pine Township in Porter County, all in Indiana; plus New proposed transaction, Starke County Bank would transfer to 1st Buffalo, Three Oaks, Galien, and Weesaw Townships in Berrien Source Bank approximately $6.0 million in assets, and 1st Source County, Michigan. Bank would assume liabilities of approximately $6.9 million. 5. See 73 Federal Reserve Bulletin 755 (1987). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

238 Federal Reserve Bulletin • March 1993 Convenience and Needs Considerations Reserve Bank of Chicago as of February 3, 1992 ("February Examination"). In considering the convenience and needs of the communities to be served by these institutions under B. Lending and Other Activities the Bank Merger Act, the Board has taken into account the records of 1st Source Bank and Starke 1st Source Bank offers several loan products and County Bank under the Community Reinvestment Act programs designed to assist in meeting the housing- (12 U.S.C. § 2901 et seq.) ("CRA"). The CRA re- related credit needs of all the communities it serves, quires the federal financial supervisory agencies to including low- and moderate-income borrowers. For encourage financial institutions to help meet the credit example, single-family home credit products include needs of the local communities in which they operate special products offered through the bank's Home consistently with the safe and sound operation of such Ownership Opportunity Program ("HOOP")9 in addiinstitutions. To accomplish this end, the CRA requires tion to conventional mortgage loans and products the appropriate federal supervisory authority to "as- offered in government-sponsored loan programs sess the institution's record of meeting the credit through agencies such as the Federal Housing Adminneeds of its entire community, including low- and istration.10 1st Source Bank is a founding member of moderate-income neighborhoods, consistent with the the Community Home Buyers Corporation, which is a safe and sound operation of such institution", and to non-profit entity currently being organized to provide take that record into account in its consideration of loans to low- and moderate-income borrowers who do applications for deposit facilities.6 not qualify for customary mortgage financing.11 1st In connection with these applications, the Board has Source Bank also participates in the "Gold Leaf received comments from an organization ("Protes- Mortgage Program" of the Indiana Housing Finance tant") alleging that 1st Source Bank's housing-related Authority, which provides low interest rate mortgages lending in low- and moderate-income communities in for first time home buyers and persons purchasing the South Bend, Indiana area is inadequate. Protestant homes in targeted inner-city areas. In addition, 1st also maintains that 1st Source Bank has made a Source Bank offers home improvement loan products disproportionately low number of home mortgage both on standard terms and through the HOOP proloans to low-income minorities as compared with the gram, and a full range of other consumer credit prodnumber of such loans made to low-income whites on ucts, including credit cards, installment and home the basis of 1990 data filed under the Home Mortgage equity loans, and student loan products. Disclosure Act ("HMDA"). 1st Source Bank also offers a full range of traditional The Board has carefully reviewed the CRA perfor- commercial loan products, which include small busimance records of 1st Source Bank and Starke County ness and other CRA-related lending programs. 1st Bank and all of the other relevant facts of record in Source Bank is a significant lender to small businesses light of the CRA, the Board's regulations, and the in its service communities, including low- and moder- Statement of the Federal Financial Supervisory Agen- ate-income areas. In 1991, the bank made 31 percent of cies Regarding the Community Reinvestment Act its business development calls in low- and moderate- ("Agency CRA Statement").7 income census tracts, which resulted in approximately $2 million in small business loan originations. 1st Record of Performance Under the CRA Source Bank also is an active participant in loan programs sponsored by the Small Business Adminis- A. CRA Performance Examinations tration, having made 22 SBA loans in 1991 totalling approximately $3.4 million. In addition, the bank is The Agency CRA Statement provides that a CRA actively involved in community development efforts examination is an important and often controlling through affiliations with community groups, the purfactor in the consideration of an institution's CRA chase of municipal and industrial revenue bonds, and record and that these reports will be given great weight loans made in urban enterprise zones, and to churches in the applications process.8 In this regard, 1st Source Bank received a "satisfactory" rating at the examination for CRA performance conducted by the Federal 9. The HOOP program covers both conventional and governmentsponsored loan products for both home purchase and home improvement, and offers special features including reduced down payment requirements and more flexible underwriting criteria. 10. The February Examination concluded that 1st Source Bank 6. See 12 U.S.C. § 2903. actively participates in government-sponsored loan programs. 7. 54 Federal Register 13,742 (1989). 11. 1st Source Bank has $3 million committed to this initiative over 8. Id. at 13,745. a three-year period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 239 and other non-profit organizations. The Board notes 1st Source Bank's ascertainment and marketing that the February Examination concluded that the efforts also are designed to assist in meeting housingbank's aggregate loan volume for all types of loans, related credit needs in these areas. Ascertainment including small business, consumer, and housing- efforts include bank representatives' personal contacts related loans, was reasonable. with members of the community and affiliations with community organizations, as well as a formal business C. HMD A Data and Lending Practices development program. These ascertainment activities have resulted in the creation of a special loan program The Board has reviewed the 1990 and 1991 HMDA targeted at low-income segments of the bank's comdata reported by 1st Source Bank in light of Protes- munity. Marketing efforts, similarly, are varied and tant's comments12 and the February Examination.13 thorough and include media designed to reach the The Board notes that the February Examination found bank's entire delineated community. These efforts are no evidence of illegal discrimination or other illegal part of 1st Source Bank's formal CRA program. In credit practices at 1st Source Bank. In this regard, the general, 1st Source Bank has instituted the types of examination specifically considered the results of the policies and procedures that the Board and the other 1990 HMDA data and the preliminary results of the federal bank supervisory agencies have indicated con- 1991 HMDA data.14 The Board notes that in 1991, 1st tribute to an effective CRA program. The bank has Source Bank made 4.8 percent of its conventional appointed a CRA officer and a CRA committee to mortgage loans, 15.4 percent of its government-spon- monitor CRA compliance and to assure that senior sored mortgage loans, and 16.7 percent of its home management and the board of directors are informed improvement loans in the South Bend area to minority of CRA issues and the institution's CRA performance. credit applicants. The Board also notes that minority In addition, 1st Source Bank has appointed a CRA residents constitute approximately 11.3 percent of the Advisory Board comprised of members of senior manpopulation of the South Bend, Indiana MSA. agement and community representatives. The bank 1st Source Bank has implemented a number of also has adopted a detailed CRA plan and a formal measures designed to increase the volume of its hous- CRA policy statement. ing-related lending in low-and moderate-income and minority areas. 1st Source Bank recently has instituted Conclusion on Convenience and Needs Factor a special loan review process for low- and moderateincome and minority customers, and has opened a new branch office in a city neighborhood to serve low- and The Board has carefully considered all of the facts of moderate-income and minority segments of its com- record, including the comments filed in this case, in munity. In addition, 1st Source Bank has increased its reviewing the convenience and needs factor under the marketing efforts directed toward low- and moderate- Bank Merger Act. Based on a review of the entire income customers, become a member of the Commu- record of these applications, including the most recent nity Home Buyers Corporation, and instituted the CRA performance examinations of the institutions HOOP program for low- and moderate-income bor- involved in this case, the Board believes that the rowers. The Board expects that these measures, when efforts of 1st Source Bank and of Starke County Bank fully implemented, will result in further improvements to help meet the credit needs of all segments of the in the CRA lending record of 1st Source Bank in low- communities served by these institutions, including and moderate-income and minority areas. low- and moderate-income neighborhoods, and all other convenience and needs considerations, are consistent with approval of these applications. 12. In this regard, the Board notes that the data discussed in The Board recognizes that the record compiled in Protestant's comments do not report all of 1st Source Bank's HMDA- these applications points to some areas for possible related lending activity for 1990. Corrected data were submitted to the improvement in the CRA performance of 1st Source Board and furnished to Protestant. 13. Under the HMDA, banks are required to report information Bank. The Board expects 1st Source Bank to conregarding both loan approvals and denials to banking agencies and the tinue its progress in addressing the housing-related public. This information includes data on the race, gender and income credit needs of low- and moderate-income and miof individual applicants, as well as the location of the property securing the potential loan and the disposition of the application. nority neighborhoods in its service communities, and 14. The Board previously has stated that HMDA data alone provide of other segments of such communities, and to only a limited measure of an institution's lending in the communities implement fully the CRA plans and programs disit serves. The Board also recognizes that HMDA data have limitations that make the data an inadequate basis, absent other information, for cussed in this Order and in 1st Source Bank's reconclusively determining whether an institution has engaged in illegal sponse to Protestant's comments. 1st Source Bank's discrimination on the basis of race or ethnicity in making lending progress in these areas will be considered in future decisions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

240 Federal Reserve Bulletin • March 1993 applications by 1st Source or its subsidiaries to (12 U.S.C. § 1828(c)) (the "Bank Merger Act") to expand their deposit-taking facilities. merge with The State Bank, West, Jackson, Wyoming ("State Bank"), an affiliated bank, with Bank as the Other Factors surviving entity.1 Bank also has applied under section 9 of the Federal Reserve Act (12 U.S.C. § 321) to 1st Source Bank also has applied under section 9 of establish a branch at the current location of State the Federal Reserve Act (12 U.S.C. § 321) to estab- Bank. lish branches at the present sites of Starke County Notice of the applications, affording interested per- Bank in Portage and Michigan City, both in Indiana. sons an opportunity to submit comments, has been The Board has considered the factors it is required to given in accordance with the Bank Merger Act and the consider in applications for establishing and operat- Board's Rules of Procedure (12 C.F.R. 262.3(b)). As ing branches, and has concluded that the financial required by the Bank Merger Act, reports on the condition of 1st Source Bank, the general character competitive effects of the merger were requested from of its management, and the proposed exercise of the United States Attorney General, the Office of the corporate powers, as well as CRA and other conve- Comptroller of the Currency ("OCC"), and the Fednience and needs considerations, are consistent with eral Deposit Insurance Corporation ("FDIC"). The approval and the purposes of section 9 of the Federal time for filing comments has expired, and the Board Reserve Act.15 has considered the applications and all comments Based on the foregoing and other facts of record, the received in light of the factors set forth in the Bank Board has determined that the applications should be, Merger Act and in section 9 of the Federal Reserve and hereby are, approved. This approval is specifically Act. conditioned upon compliance by 1st Source Bank with United Bancorporation, with total consolidated asall of the commitments made in connection with these sets of $307 million,2 operates three banking subsidapplications and with the conditions referenced in this iaries in Wyoming.3 United Bancorporation is the Order. For purposes of this action, the commitments fourth largest commercial banking organization in Wyand conditions relied on in reaching this decision are oming, controlling approximately $263.6 million in both conditions imposed in writing by the Board and, commercial bank deposits, representing approxias such, may be enforced in proceedings under appli- mately 6.3 percent of total deposits in commercial cable law. The acquisition shall not be consummated banking organizations in the state.4 before the thirtieth calendar day after the effective In view of the fact that Bank and State Bank are date of this Order, or later than three months after the subsidiaries of the same bank holding company, and effective date of this Order, unless such period is based on all the other facts of record, the Board extended for good cause by the Board or by the concludes that the proposed transaction would have Federal Reserve Bank of Chicago, acting pursuant to no adverse effect on existing competition, and would delegated authority. not increase the concentration of resources, in any By order of the Board of Governors, effective relevant banking market. January 4, 1993. The Board has received comments from a bank in Jackson ("Protestant") alleging that Bank's proposal Voting for this action: Chairman Greenspan and Governors represents the establishment of a de novo branch in Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips. Jackson in contravention of Wyoming law.5 JENNIFER J. JOHNSON Associate Secretary of the Board 1. Both Bank and State Bank are wholly owned subsidiaries of United Bancorporation of Wyoming, Inc., Jackson, Wyoming ("United Bancorporation"). In June 1992, the Federal Reserve Bank of The Jackson State Bank Kansas City, acting pursuant to delegated authority, approved United Jackson, Wyoming Bancorporation's application to acquire 100 percent of the stock of State Bank. See letter dated June 15, 1992, from Thomas M. Hoenig, President, Federal Reserve Bank of Kansas City, to W. Richard Order Approving the Merger of Banks Scarlett, Chairman, United Bancorporation, Inc. 2. Asset data are as of September 30, 1992. 3. In addition to Bank and State Bank, United Bancorporation owns The Jackson State Bank, Jackson, Wyoming 99.9 percent of the outstanding voting shares of Shoshone First ("Bank"), a state member bank, has applied under National Bank, Cody, Wyoming. section 18(c) of the Federal Deposit Insurance Act 4. Deposit data are as of June 30, 1992. 5. Protestant also raises concerns regarding the competitive effects of the proposal. Since the proposal represents the corporate reorganization of the parent holding company's existing ownership interest, the merger would not result in significantly adverse anticompetitive 15. See 12 U.S.C. §§ 322, 2903. effects. In examining State Bank's charter application, the Wyoming Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 241 Wyoming branching law prohibits a state bank from banking regulators, and Bank's proposal was found establishing a de novo branch in any community where to be consistent with Wyoming law.9 another bank already exists.6 Since there are four Interpretations by state officials, as well as the banking institutions located in Jackson, Bank would specific statutory provisions, support the conclusion appear to be prohibited from establishing a de novo that Wyoming law provides separate means of estabbranch in this community. lishing branches. For example, the branch-by-merger A separate provision of Wyoming law authorizes a authorization, enacted by the Wyoming legislature bank that merges with a second bank to retain, operate prior to the de novo branching authorization, specifies and maintain the offices of the second bank and to that its provisions do not authorize de novo branchcontinue to provide services or functions at these ing.10 The Board believes that by interpreting each locations.7 Applicant argues that this provision gov- provision as providing a separate authorization for erns the merger proposed in this case and authorizes establishing a branch — either de novo or by merger— Bank to retain the branch in Jackson. both statutory provisions may be given full effect.11 Protestant disputes the applicability of the branch- The facts of record also indicate that the proposal by-merger provision to this proposal and contends that involves the merger of separately incorporated, charto permit the establishment of a branch under its tered and capitalized institutions.12 State Bank's officprovisions would constitute an evasion of Wyoming's ers and employees do not directly perform any serbranch limitations. Bank's parent holding company vices for customers of Bank other than those services had stated for the record that it intended to establish a that would be provided for customers of other area branch in the future at State Bank's Jackson location. banks.13 State Bank also maintains its own separate Protestant notes that State Bank has only been oper- books of account, issues its own distinctive checks ating for six months, and that Bank and State Bank and uses its own stationery. Moreover, State Bank's have the same directors. customers are able to deposit and withdraw their funds The Attorney General for the State of Wyoming with respect to their accounts only at State Bank. The and the State Banking Commissioner have both Board has previously found that such factors are indicated that Wyoming law provides separate stat- useful in determining that a bank has been operated as utory authorizations for establishing branches and a stand-alone institution and not as a de facto branch that Bank may establish a branch in Jackson by of an affiliate.14 For the reasons stated above, the merging with State Bank notwithstanding Wyoming's Board concludes that Bank's proposal is consistent limitation on de novo branching.8 Protestant's arguments were fully presented in the initial proceedings to charter State Bank and renewed in Bank's application to merge with State Bank. In each proceeding, 9. See Bank Charter Decision dated February 14, 1992, by the Protestant's arguments were rejected by the State Wyoming State Banking Board, and letter dated October 30, 1992, from Sue E. Mecca, State Banking Commissioner, Wyoming Division of Banking, to W. Richard Scarlett, Chairman, The Jackson State Bank, approving Bank's branch application. 10. Wyo. Stat. Ann. § 13-4-104(c). 11. Protestant disputes this construction and argues that the requirement in the branch-by-merger provision that retained offices provide services in the same manner as "had the consolidation or merger not State Banking Commissioner was required under Wyoming law to occurred" was intended to prevent a branch not otherwise authorized consider, among other factors, the ability of the Jackson community under Wyoming law from being retained. See Wyo. Stat. Ann. to support State Bank. Wyo. Stat. Ann. § 13-2-207 et seq. (Supp. § 13-4-104(b). This construction however, conflicts with the Attor- 1992). The order approving State Bank's charter on February 14, ney General's conclusion that the de novo and branch-by-merger 1992, by the Wyoming State Banking Board, took Protestant's com- provisions of Wyoming law provide separate means of establishing a petitive concerns into account. branch in Wyoming. 6. Wyo. Stat. Ann. § 13-2-702. 12. State Bank was chartered in February 1992, and has been in 7. Wyo. Stat. Ann. § 13-4-104. The context of the statutory refer- operation six months. In its most recent consolidated report of ence to "banking house" and "office" indicates that these terms condition, filed with the Wyoming Department of Audit, State Bank include a "branch." Wyo. Stat. Ann. § 13-4-104(b). reported receiving deposits in excess of $3 million between July 1992 8. See letter dated January 5,1993, from Joseph B. Meyer, Attorney and September 1992. General, State of Wyoming, to Sue E. Mecca, State Banking Com- 13. In this regard, State Bank has public notices declaring that State missioner, Wyoming Division of Banking. In previously considering Bank is not a branch of Bank, and does not conduct transactions on the effect of a State law, the Board has examined the statute itself, behalf of Bank. judicial interpretations of that law and, in the absence of judicial 14. See Grandview Bank and Trust Co. v. Board of Governors of the interpretations, the opinions of the State's Attorney General or the Federal Reserve System, 550 F.2d 415 (8th Cir. 1977), cert, denied, State's relevant administrative agency. When the Board has con- 434 U.S. 821 (1977); North Hills Bank v. Board of Governors of the cluded that the opinion of the State authority is well reasoned, Federal Reserve System, 506 F.2d 623 (8th Cir. 1974). See also consistent with the statutory language and not inconsistent with the Commerce Bancshares, Inc., 64 Federal Reserve Bulletin 803 (1978); apparent intent of the statute or its legislative history, the Board has United Banks of Colorado, Inc., 64 Federal Reserve Bulletin 37 accorded deference to the State authority. See Bancorp of Missis- (1978); First International Bancshares, Inc., 63 Federal Reserve sippi, 72 Federal Reserve Bulletin 257 (1986). Bulletin 744 (1977). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

242 Federal Reserve Bulletin • March 1993 with Wyoming's authorization for retaining a branch with all the commitments made in its application. For after a bank merger. purposes of this action, the commitments discussed in The financial and managerial resources and future this order are considered conditions imposed in writprospects of Bank, State Bank and United Bancorpo- ing by the Board in connection with its findings and ration are consistent with approval. The Board also decisions, and, as such, may be enforced in proceedfinds that considerations relating to the convenience ings under applicable law. and needs of the community to be served are consis- This transaction should not be consummated before tent with approval. The Board also has considered the the thirtieth calendar day following the effective date factors it is required to consider when approving of this Order, or later than three months after the applications for establishment of branches pursuant to effective date of this Order, unless such period is section 9 of the Federal Reserve Act and finds those extended for good cause by the Federal Reserve Bank factors to be consistent with approval. of Kansas City, acting pursuant to delegated authority. Based on the foregoing and other facts of record, the By order of the Board of Governors, effective Board has determined that the application should be, January 25, 1993. and hereby is, approved.15 The Board's approval is specifically conditioned upon compliance by Bank Voting for this action: Chairman Greenspan and Governors Mullins, Angell, Kelley, Lindsey, and Phillips. Absent and not voting: Governor La Ware. 15. Protestant has requested that the Board hold a public meeting or hearing on these applications. The Board is not required under the JENNIFER J. JOHNSON Bank Merger Act or the Federal Reserve Act to hold a public hearing or meeting in this case. Under the Board's rules, the Board may, in its Associate Secretary of the Board 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). The Board has carefully considered this request. In the Board's Board has determined that a public meeting or hearing is not necessary view, interested parties have had a sufficient opportunity to present to clarify the factual record in these applications, or otherwise written submissions, and have submitted substantial written com- warranted in this case. Accordingly, the request for a public meeting ments that have been considered by the Board. In light of this, the or hearing on these applications is hereby denied. 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 Grenada Sunburst System Eastover Bank for Sunburst Bank, January 22, 1993 Corporation, Savings, Grenada, Grenada, Mississippi Jackson, Mississippi Mississippi 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 243 Section 3 Effective Applicant(s) Bank(s) Date Texas East BanCorp, Inc., CBC, Inc., January 29, 1993 Jacksonville, Texas Shreveport, Louisiana TFC, Inc., Shreveport, Louisiana WhiFin, Inc. Shreveport, Louisiana Cherokee Bancorp, Inc., Long view, Texas Timpson Financial Corporation, Timpson, Texas Whitehouse Financial Corporation, Whitehouse, Texas 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 Citizens Bancshares of Elmwood Financial Minneapolis December 31, 1992 Woodville, Inc., Services, Inc., Woodville, Wisconsin Elmwood, Wisconsin CNB Financial Corporation, Security State Bank of Kansas City January 7, 1993 Kansas City, Kansas Fort Scott, Fort Scott, Kansas The Employees Stock Ownership Southwest Georgia Atlanta December 30, 1992 Plan and Trust of Southwest Financial Corporation, Georgia Financial Corporation, Moultrie, Georgia Moultrie, Georgia The First National Bank of The First National Bank St. Louis January 12, 1993 Berryville Employee Stock of Berryville, Ownership Trust, Berryville, Arkansas Berryville, Arkansas First National Bank of Sauk Sauk Centre Financial Minneapolis January 14, 1993 Centre Retirement Savings Services, Inc., Plan and Trust, Sauk Centre, Minnesota Sauk Centre, Minnesota First Rushmore Bancorporation, First Rushmore Minneapolis January 8, 1993 Inc., Bancshares, Inc., Worthington, Minnesota Rushmore, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

244 Federal Reserve Bulletin • March 1993 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank Date First Wilton Bancshares, Ltd., First State Bank of Minneapolis December 28, 1992 Wilton, North Dakota Wilton, Wilton, North Dakota Florida Barnett Corporation, Barnett Bank of Atlanta January 13, 1993 Jacksonville, Florida Hillsborough County, Tampa, Florida F.S.B. Properties, Inc., ESOP, F.S.B. Properties, Inc., Kansas City January 8, 1993 Quinton, Oklahoma Quinton, Oklahoma Hopeton Bancshares, Inc., The Hopeton State Bank, Kansas City December 31, 1992 Hopeton, Oklahoma Hopeton, Oklahoma Lucan Bancshares, Inc., State Bank of Lucan, Minneapolis January 8, 1993 Lucan, Minnesota Lucan, Minnesota Mark Twain Bancshares, Inc., First Shawnee St. Louis December 30, 1992 St. Louis, Missouri Bancshares, Inc., Shawnee, Kansas Mercantile Bancorporation Inc., The First National Bank St. Louis January 22, 1993 St. Louis, Missouri of Flora, Flora, Illinois Northome Bancshares, Inc., First State Bank of Minneapolis January 4, 1993 Northome, Minnesota Northome, Northome, Minnesota OMNIBANCORP, Met-State Corp., Kansas City December 30, 1992 Denver, Colorado Kansas City, Missouri Prairie State Bancshares, Inc., Jent, Inc., Kansas City January 13, 1993 Oakley, Kansas Oakley, Kansas United Missouri Bancshares, Farmers Banshares of Kansas City January 6, 1993 Inc., Abilene, Inc., Kansas City, Missouri Abilene, Kansas United Subsidiary, Inc., Kansas City, Missouri United Missouri Bancshares, Overland Park Kansas City January 6, 1993 Inc., Bancshares, Inc., Kansas City, Missouri Overland Park, Kansas United Subsidiary, Inc., Kansas City, Missouri Upper Rio Grande Bank The Rio Grande County Kansas City January 8, 1993 Corporation, Bank, Del Norte, Colorado Del Norte, Colorado Wally Bancorp, Inc., Community Bank of Kansas City January 8, 1993 Parker, Colorado Parker, Parker, Colorado Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 245 Section 4 Nonbanking Reserve Effective Applicant(s) Activity/Company Bank Date BankAmerica Corporation, First Associates San Francisco December 30, 1992 San Francisco, California Financial, Inc., Tampa, Florida Barnett Merger Corporation, Barnett Banks Trust Atlanta January 28, 1993 Jacksonville, Florida Company, N.A., Jacksonville, Florida Citizens Bankshares, Inc., Wisconsin Finance Chicago December 30, 1992 Shawano, Wisconsin Corporation, Shawano, Wisconsin Norwest Corporation, Boris Systems, Inc., Minneapolis January 14, 1993 Minneapolis, Minnesota East Lansing, Michigan Norwest Corporation, Norwest Insurance Minneapolis January 7, 1993 Minneapolis, Minnesota Wyoming, Inc., Wheatland, Wyoming Withee Bank Shares, Inc., to engage de novo in the Chicago January 21, 1993 Withee, Wisconsin ownership and development of a low-income housing project Sections 3 and 4 Nonbanking Reserve Effective Applicant(s) Activity/Company Bank Date Tower Bancshares, Inc., Tower Soudan Agency, Minneapolis January 8, 1993 Cloquet, Minnesota Inc., Tower, Minnesota State Bank of Tower, Tower, Minnesota APPLICATIONS APPROVED UNDER BANK MERGER ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Applicant(s) Bank(s) ^Date^ Suntrust Banks, Inc., Sun Bank/Gulf Coast, January 26, 1993 Atlanta, Georgia Sarasota, Florida Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

246 Federal Reserve Bulletin • March 1993 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 Fifth Third Bank, The First National Bank, Cleveland January 7, 1993 Cincinnati, Ohio Dayton, Ohio First Florida Bank, Barnett Bank of Atlanta January 13, 1993 Tampa, Florida Hillsborough County, Tampa, Florida First Florida Bank, Barnett Bank of Tampa, Atlanta January 13, 1993 Tampa, Florida N.A., Tampa, Florida PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits Fields v. Board of Governors. No. 92-3920 (6th Cir., against the Federal Reserve Banks in which the Board filed September 14, 1992). Federal Tort Claims Act of Governors is not named a party. complaint alleging misrepresentation during the application process. The district court for the Northern District of Ohio granted the Board's motion to Sisti v. Board of Governors, No. 93-0033 (D.D.C., dismiss on August 10, 1992. On September 14, 1992, filed January 6, 1993). Challenge to Board staff the plaintiff filed a notice of appeal. The action was interpretation with respect to margin accounts. voluntarily dismissed by plaintiff/appellant on De- U.S. Check v. Board of Governors. No. 92-2892 cember 18, 1992. (D.D.C., filed December 30, 1992). Challenge to partial denial of request for information under the State of Idaho, Department of Finance v. Board of Freedom of Information Act. Governors. No. 92-70107 (9th Cir., filed Febru- CBC, Inc. v. Board of Governors. No. 92-9572 (10th ary 24, 1992). Petition for review of Board order Cir., filed December 2, 1992). Petition for review of returning without action a bank holding company civil money penalty assessment against a bank application to relocate its subsidiary bank from holding company and three of its officers and Washington to Idaho. The Board's brief was filed on directors for failure to comply with reporting re- June 29, 1992. Oral argument was held October 6, quirements. 1992. DLG Financial Corporation v. Board of Governors. In re Subpoena Served on the Board of Governors, No. 392 Civ. 2086-G (N.D. Texas, filed October 9, Nos. 91-5427, 91-5428 (D.C. Cir., filed Decem- 1992). Action to enjoin the Board and the Federal ber 27,1991). Appeal of order of district court, dated Reserve Bank of Dallas from taking certain en- December 3, 1991, requiring the Board and the forcement actions, and seeking money damages on Office of the Comptroller of the Currency to produce a variety of tort and contract theories. On October confidential examination material to a private liti- 9, 1992, the court denied plaintiffs' motion for a gant. On June 26,1992, the court of appeals affirmed temporary restraining order. On November 20, the district court order in part, but held that the bank 1992, the Board filed a motion to dismiss. On examination privilege was not waived by the agen- December 17, 1992, plaintiffs filed an amended cies' provision of examination materials to the excomplaint. amined institution, and remanded for further consid- Zemel v. Board of Governors. No. 92-1057 (D. District eration of the privilege issue. On August 6,1992, the of Columbia, filed May 4, 1992). Age Discrimination district court ordered the matter held in abeyance in Employment Act case. pending settlement of the underlying action. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 247 First Interstate BancSystem of Montana, Inc. v. Final Decision and Order Board of Governors, No. 91-1525 (D.C. Cir., filed November 1, 1991). Petition for review of Board's This is an administrative civil money penalty action order denying on Community Reinvestment Act by the Board of Governors of the Federal Reserve grounds the petitioner's application under section System (the "Board") against a bank holding com- 3 of the Bank Holding Company Act to merge with pany, CBC, Inc. ("CBC"), and three officers and Commerce BancShares of Wyoming, Inc. On De- directors of CBC, Lynell G. Skarda, Langdon L. cember 14, 1992, the court granted the parties' Skarda, and Kent Carruthers (collectively "Responjoint motion to dismiss the case. dents"). On April 5, 1991, the Board issued Notices of Board of Governors v. Kemal Shoaib. No. CV 91- Assessment of Civil Money Penalties (the "Notices") 5152 (C.D. California, filed September 24, 1991). against each of the Respondents pursuant to Action to freeze assets of individual pending ad- 12 U.S.C. § 1818(i)(2) and 12 U.S.C. § 1847(b). The ministrative adjudication of civil money penalty Notices alleged, inter alia, that the individual Responassessment by the Board. On October 15, 1991, the dents have been responsible for CBC's failure to file court issued a preliminary injunction restraining annual reports with the Board containing consolidated the transfer or disposition of the individual's asfinancial statements for the year 1988 that have been sets. certified by an independent public accountant, as Board of Governors v. Ghaith R. Pharaon. No. required by the Board's Regulation Y and Form FR Y-6.1 As explained in the Notices, CBC failed to 91-CIV-6250 (S.D. New York, filed September 17, comply with the Board's requirements in connection 1991). Action to freeze assets of individual pending with the 1988 and 1989 Y-6 reports filed by CBC in administrative adjudication of civil money penalty March, 1989 and March, 1990, respectively, even assessment by the Board. On September 17, 1991, though on August 30, 1988, those requirements were the court issued an order temporarily restraining upheld by the United States Court of Appeals for the the transfer or disposition of the individual's as- Tenth Circuit in litigation commenced by CBC against sets. the Board.2 Fields v. Board of Governors. No. 3:91CV069 (N.D. The Board's Notices assessed penalties in the Ohio, filed February 5, 1991). Appeal of denial of amounts of $10,000 each against CBC and Lynell request for information under the Freedom of Infor- Skarda and $5,000 each against Langdon Skarda and mation Act. The Board's motion for summary judg- Kent Carruthers. Respondents opposed the Board's ment was granted in part and its motion to dismiss assessments and requested a hearing. The case was was denied on June 23, 1992. The action was dis- subsequently referred to Administrative Law Judge missed on January 15, 1993. Paul S. Cross. In this case, the material facts are not disputed by the parties. Instead, respondents dispute whether, in FINAL ENFORCEMENT DECISION ISSUED BY THE light of the uncontested facts, an assessment of civil BOARD OF GOVERNORS money penalties is warranted. Respondents also contest the amount of the penalties that should be as- In the Matter of sessed. Accordingly, the parties entered into written CBC, INC., stipulations as to the relevant facts upon which these Clovis, New Mexico and matters should be decided. After the parties submitted LYNELL G. SKARDA, LANGDON L. SKARDA, proposed findings of fact and conclusions of law, an and KENT CARRUTHERS oral argument was held before the Administrative Law Institution-Affiliated Parties of Judge on June 1, 1992. CBC, Inc., Clovis, New Mexico 1. The Board's Form Y-6 requires each bank holding company to submit an annual report within 90 days of the end of the company's fiscal year. The report must include the company's most recent two Respondents. year comparative financial statements. Thus, financial statements for 1988 would be submitted with both the 1988 and 1989 Y-6 reports. In addition, a company with total consolidated assets of $150 million Docket Nos. 90-033-CMP-BHC or more must file consolidated financial statements that are certified 90-033-CMP-I1 by an independent public accountant and that are prepared in accordance with generally accepted accounting principles. 90-033-DMP-I2 2. CBC, Inc. v. Board of Governors, 855 F.2d 688 (10th Cir. 1988), 90-033-CMP-I3 cert, denied, 489 U.S. 1096 (1989). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

248 Federal Reserve Bulletin • March 1993 Based on the stipulated facts, the pleadings submit- the litigation was pending. CBC never sought a stay of ted, and the arguments made at the hearing, the the Board's requirements from the court. Thus, after Administrative Law Judge issued a recommended the Board's requirements were upheld by the Court of decision and order on June 9, 1992, in which he Appeals in 1988, good faith required that Respondents recommended that the Board impose penalties against abide by the Court of Appeals' ruling with respect to each of the Respondents in the amounts set forth in the the 1988 financial statements. Notices. The Judge also adopted proposed findings of CBC's financial statements for subsequent years fact and conclusions of law. On July 15, 1992, Respon- have been certified in compliance with the Board's dents filed exceptions to the Judge's recommended requirements. This has been considered as a mitigating decision and order and to his proposed findings and factor that weighs against assessing larger penalties in conclusions. this case, but it is not sufficient in light of the other Upon review of the administrative record, including factors discussed below to lead the Board to conclude the exceptions filed by Respondents, the Board hereby that no penalties should be assessed in this case. issues its Final Decision and Order. The Board adopts, The Board is also authorized to consider "such and incorporates herein by reference, the Administra- other factors as justice may require." tive Law Judge's Decision and Recommended Order 12 U.S.C. §§ 1847(b)(2), 1818(i)(2)(G). The Board beand proposed Findings of Fact and Conclusions of lieves that one such factor is whether the parties Law, as supplemented below, together with the rea- involved in the violations derived any economic bensoning and citations contained therein. Accordingly, efit from the misconduct. See 12 C.F.R. 263.62. Rethe Board hereby assesses civil money penalties in the spondents submitted evidence for the record indicatamounts of $10,000 each against CBC and Lynell G. ing the likely cost of obtaining certified financial Skarda; and $5,000 each against Langdon L. Skarda statements for the 1988 fiscal year. This cost was and Kent Carruthers. estimated by an accounting firm to be approximately Pursuant to the applicable statutes, the Board must $30,000 to $60,000. CBC also asserted that it actually take into account the appropriateness of the penalties paid about $10,000 to obtain non-certified statements with respect to several mitigating factors: the size of from an independent accounting firm. Thus, CBC financial resources and good faith of each of the saved between approximately $20,000 and $50,000 in Respondents; the gravity of the violations, the history auditor's fees. Under these circumstances, the penalof previous violations and such other matters as justice ties assessed by the Board, which total $30,000, are may require. 12 U.S.C. §§ 1847(b)(2), 1818(i)(2)(G). In reasonably calculated to ensure that Respondents do light of the fact that the parties have stipulated to the not derive substantial economic benefit from the viomaterial facts and because the legal issues were deter- lations.3 mined previously by the Court of Appeals, the Board Respondents attempt to compare the Board's ashas focused particular attention on those factors. sessments in this case to the amounts assessed in other In considering the "gravity" of the violations, the cases. Such comparisons are of little relevance. A Board notes that its reporting requirements are central determination as to the appropriate amount of any to its responsibility to supervise bank holding compa- monetary penalty necessarily depends on the facts and nies. The requirement of certified financial statements circumstances of the particular case. Thus, the ensures that the accounting systems and internal con- amounts assessed in the cases cited by Respondents trols of a holding company will be reviewed by inde- are not useful in this case. pendent experts. The certification provides the Board The Board also offered Respondents an opportunity with an increased measure of reliability regarding the to demonstrate that their financial resources warranted financial statements. See CBC, Inc. v. Board of Gov- the assessment of smaller amounts. On June 21, 1990, ernors, supra, 855 F.2d at 691. The independent audit the Board's General Counsel wrote to Respondents to makes it easier to uncover fraud, misappropriation, or advise them that the Board's staff intended to recomnegligence in the operation of the institution. Respon- mend the assessment of civil money penalties against dents' refusals to comply with the applicable reporting them. At that time, Respondents were requested to requirements, were not trivial, nor were they technical submit financial statements and any evidence that deficiencies. Penalties are warranted in order to deter would mitigate against the assessment of a civil money Respondents and others from future noncompliance. penalty. On July 5, 1990, a reply was submitted on Respondents' willful and continuing noncompliance behalf of all of the Respondents, but no financial following CBC's unsuccessful legal challenge evidences a lack of good faith. The record reflects that in March, 1987 the Board expressly denied CBC's re- 3. There is no authority to support Respondents' claim that the Board must consider as a mitigating factor, the amounts that they have quest for a stay of the certification requirement while expended in defending this proceeding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 249 information was included. Respondents also failed to offender along with Lynell Skarda, who as controlling submit any such information to the Administrative shareholder of CBC has played the leading role in Law Judge. orchestrating CBC's noncompliance. Evidence concerning the size of a respondent's NOW, THEREFORE, IT IS HEREBY ORfinancial resources is inherently within the control of DERED, pursuant to section 8(i) of the Federal Dethe respondent. Consequently, the Board does not posit Insurance Act, as amended (12 U.S.C. carry the entire burden of proof concerning the Re- § 1818(i)), and section 8(b) of the Bank Holding spondents' financial condition. See Stanley v. Board of Company Act, as amended (12 U.S.C. § 1847(b)), that Governors, 940 F.2d 267, 274 (7th Cir. 1991). After the below-named respondents are hereby assessed, giving Respondents an opportunity to supplement the and shall forfeit and pay as hereinafter provided, civil record, which they did not take, the Board has based money penalties in the amounts specified below: its assessments on the information available to it from 1. CBC, Inc. is hereby assessed and shall forfeit and reports of inspections of CBC and from reports of pay a civil money penalty in the amount of Ten examinations of CBC's subsidiary bank. Thousand Dollars ($10,000); Together, Lynell and Langdon Skarda own over 2. Lynell G. Skarda is hereby assessed and shall 99 percent of CBC's shares. CBC's assets largely forfeit and pay a civil money penalty in the amount consist of its investment in its subsidiary bank. CBC's of Ten Thousand Dollars ($10,000); total equity was $18.2 million as of December 31, 1990 3. Langdon L. Skarda is hereby assessed and shall and was $15.3 million as of June 30, 1991.4 CBC has forfeit and pay a civil money penalty in the amount received substantial dividends from its subsidiary of Five Thousand Dollars ($5,000); and bank in recent years, which in turn have been used by 4. Kent Carruthers is hereby assessed and shall CBC to pay substantial dividends to its shareholders. forfeit and pay a civil money penalty in the amount The record also reflects that as the president of CBC's of Five Thousand Dollars ($5,000). subsidiary bank, Kent Carruthers receives compensation adequate to support the penalty assessed against IT IS FURTHER ORDERED, that payment of the him. Thus, the amounts assessed are consistent with assessed penalties set forth herein shall be made on or each Respondent's financial resources and do not before the sixtieth day following the effective date of constitute any undue burden. this Order, payable in full to the order of the Board of There are mitigating factors weighing in Respon- Governors of the Federal Reserve System, who shall dents' favor, such as the fact that for 1989 and all make remittance of the same to the Treasury of the subsequent years, CBC has complied with the certifi- United States as required by statute. Payment of the cation requirements. However, the relatively small assessed penalty shall be transmitted to: amounts assessed are consistent with this fact and the fact that Respondents do not have a history of other William W. Wiles, Secretary violations. Board of Governors of the Federal The violations charged in this case are continuing. Reserve System They have been outstanding since March 29, 1989, the 20th and C Streets, N.W. date on which CBC's Y-6 report for 1988 was filed. Washington, D.C. 20551. Consequently, as of April 5, 1991, the date that the Board's Notices were issued, the total amount that By order of the Board of Governors, effective this could have been assessed against each of the Respon- 17th day of November, 1992. dents was over $600,000. After consideration of the required factors, however, the Board has assessed WILLIAM W. WILES penalties representing only a fraction of the maximum Secretary of the Board amount authorized by the statute. Nevertheless, the assessments reflect the Board's judgment that the imposition of penalties for the Respondents' knowing FINAL ENFORCEMENT ORDERS ISSUED BY THE violation of the Board's reporting requirements is BOARD OF GOVERNORS appropriate in order to deter future noncompliance. The greater amounts imposed upon CBC and Lynell Joe R. Clarke, III Skarda are warranted because CBC is the principal Forest, Mississippi The Federal Reserve Board announced on January 26, 1993, the issuance of an Order of Assessment of a Civil 4. The June 30, 1991 data was not yet available at the time the Board's Notices were issued. Money Penalty against Joe R. Clarke, III, an institu- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

250 Federal Reserve Bulletin • March 1993 tion-affiliated party of the Bank of Forest, Forest, the Federal Reserve Bank of Dallas and Daingerfield Mississippi. Bancshares, Inc., Daingerfield, Texas. WRITTEN AGREEMENTS APPROVED BY FEDERAL PT Bank Niaga RESERVE BANKS Jakarta, Indonesia Daingerfield Bancshares, Inc. The Federal Reserve Board announced on January 14, Daingerfield, Texas 1993, the execution of a Written Agreement between the Federal Reserve Bank of San Francisco and the PT The Federal Reserve Board announced on January 12, Bank Niaga, Jakarta, Indonesia, and its Los Angeles 1993, the execution of a Written Agreement between Agency. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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 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 • March 1993 Domestic Financial Statistics—Continued A55 Foreign branches of U.S. banks—Balance sheet data A57 Selected U.S. liabilities to foreign official REAL ESTATE institutions A36 Mortgage markets A37 Mortgage debt outstanding REPORTED BY BANKS IN THE UNITED STATES CONSUMER INSTALLMENT CREDIT A57 Liabilities to and claims on foreigners A3 8 Total outstanding and net change A58 Liabilities to foreigners A38 Terms A60 Banks' own claims on foreigners A61 Banks' own and domestic customers' claims on foreigners FLOW OF FUNDS A61 Banks' own claims on unaffiliated foreigners A62 Claims on foreign countries—Combined A39 Funds raised in U.S. credit markets domestic offices and foreign branches A41 Summary of financial transactions A42 Summary of credit market debt outstanding A43 Summary of financial assets and liabilities REPORTED BY NONBANKING BUSINESS ENTERPRISES IN THE UNITED STATES Domestic Nonfinancial Statistics A63 Liabilities to unaffiliated foreigners A64 Claims on unaffiliated foreigners SELECTED MEASURES A44 Nonfinancial business activity—Selected SECURITIES HOLDINGS AND TRANSACTIONS measures A45 Labor force, employment, and unemployment A65 Foreign transactions in securities A46 Output, capacity, and capacity utilization A66 Marketable U.S. Treasury bonds and A47 Industrial production—Indexes and gross value notes—Foreign transactions A49 Housing and construction A50 Consumer and producer prices A51 Gross domestic product and income INTEREST AND EXCHANGE RATES A52 Personal income and saving A67 Discount rates of foreign central banks A67 Foreign short-term interest rates A68 Foreign exchange rates International Statistics A69 Guide to Statistical Releases and SUMMARY STATISTICS Special Tables A53 U.S. international transactions—Summary A54 U.S. foreign trade SPECIAL TABLE A54 U.S. reserve assets A54 Foreign official assets held at Federal Reserve A71 Assets and liabilities of life insurance companies, 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 NonfinancialS tatistics • March 1993 1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 1992 1992 MMoonneettaarryy aanndd ccrreeddiitt aaggggrreeggaattee Q1 Q2 Q3 Q4 Aug. Sept. Oct. Nov. Dec. Reserves of depository institutions2 1 Total 23.4 14.9 9.3 27.9 20.2 24.4 42.0 20.9r 9.1 2 Required 23.5 15.4 9.9 27.4 21.3 23.4 40.9 22. lr 6.8 3 Nonborrowed 24.0 14.8 8.4 29.2 21.1 23.7 45.6 21.8 8.7 4 Monetary base3 9.2 7.1 10.5 13.4 16.6 16.7 14.3 8.7 9.2 Concepts of money, liquid assets, and debt* 5 Ml 16.5 9.8 10.3 17.6 15.7 19.1 22.7r 13.9* 6.2 6 M2 4.2 .4 .2 3.6 3.3 3.7 5.3r 3.5 -1.2 7 M3 2.2 -1.3 -.1 .9 3.9 \.9 ,5r 1.9* -4.4 8 L 1.5 ,6r i.r n.a. 4.1r 4.2r 2.0r 5.4 n.a. 9 Debt 4.3 5.4 4.2 n.a. 3.9 3.3 2.7 6.4 n.a. Nontrgnsaction components 10 In M2* -.1 -3.0 -3.6 -1.8 -1.4 -2.4r -1.6r — .7r -4.2 11 In M3 only6 -7.4 -9.3 -1.6 -12.2 6.5 -6.6 -23.4r —6.5r -20.9 Time and savings deposits Commercial banks 12 Savings, including MMDAs 19.1 12.0 10.0 13.2 13.4 16.7 14.7 10.5r 5.4 13 Smalltime7. -18.9 -13.3 -16.7 -16.9 -19.4 -16.8 -18.0 -18.0 -10.8 14 Large time8,9 -18.2 -14.8 --1166..00)) -16.8 -10.2 -16.7 -25.81 -11.81 -8.7 Thrift institutions 15 Savings, including MMDAs 22.4 18.8 8.4 9.3 9.2 10.8 8.8 10.4r 5.6 16 Small time7 -24.3 -29.4 -17.7 -20.9 -17.2 -15.9 -26.6 -20.91 -20.6 17 Large time8'* -29.7 -36.7 -17.1 -11.9 -22.4 -3.5 -1.8 -24.7 -23.5 Money market mutual funds 18 General purpose and broker-dealer -.3 -4.0 -8.2 -1.0 -6.8 -17.2 10.1 3.8 -5.2 19 Institution-only 26.9 20.0 40.0 -24.1 54.9 .0 -64.1 -12.3 -54.3 Debt components4 20 Federal 10.0 14.4 10.8 n.a. 9.7 5.0 -1.4 10.5 n.a. 21 Nonfederal 2.5 2.5 1.9 n.a. 1.9 2.7 4.1 5.0 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 ahd 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 fiind 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 Oct. Nov. Dec. Nov. 18 Nov. 25 Dec. 2 Dec. 9 Dec. 16 Dec. 23 Dec. 30 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 321,292 327,923r 335,875 327,866 329,972 330,125 329,388 333,627 338,688 342,157 U.S. government securities 2 Bought outright—System account 282,073 288,434 295,258 286,364 291,828 292,902 293,520 294,929 296,138 297,076 3 Held under repurchase agreements ... 858 2,640 3,780 4,402 2,092 1,301 470 1,865 6,119 6,432 Federal agency obligations 4 Bought outright 5,534 5,534 5,477 5,534 5,534 5,534 5,534 5,485 5,450 5,434 5 Held under repurchase agreements ... 69 145 174 177 122 63 6 0 103 546 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 29 81 62 49 153 134 11 20 59 78 8 Seasonal credit 115 39 18 39 34 26 17 18 20 18 9 Extended credit 0 0 1 0 0 0 0 2 1 0 10 Float 572 575r 1,311 624 333 636 441 1,592 831 2,386 11 Other Federal Reserve assets 32,041 30,474r 29,795 30,677 29,876 29,529 29,389 29,717 29,969 30,187 12 Gold stock 11,059 11,059 11,057 11,059 11,059 11,059 11,058 11,057 11,057 11,056 13 Special drawing rights certificate account . 10,018 10,018 8,663 10,018 10,018 10,018 10,018 8,304 8,018 8,018 14 Treasury currency outstanding 21,361r 21,396r 21,447 21,395r 21,404r 21,413 21,427 21,441 21,455 21,469 ABSORBING RESERVE FUNDS 15 Currency in circulation 320,222r 324,505r 330,563 324,927r 325,584r 327,253 328,045 329,149 331,166 334,120 16 Treasury cash holdings 518 504 515 500 495 525 521 517 512 510 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 4,946 5,617 6,011 5,184 5,787 5,602 5,076 5,002 7,764 6,320 18 Foreign 330 284 201 247 199 183 177 203 220 207 19 Service-related balances and adjustments 5,782 5,898 5,953 6,006 5,756 6,066 5,788 5,845 5,780 6,335 20 Other 286 293 295 301 284 292 270 293 313 290 21 Other Federal Reserve liabilities and capital 8,108 7,834 8,109 7,887 8,177 7,984 7,728 8,052 8,399 8,402 22 Reserve balances with Federal Reserve Banks 23,540 25,460 25,394 25,286 26,169 24,709 24,286 25,369 25,063 26,518 End-of-month figures Wednesday figures Oct. Nov. Dec. Nov. 18 Nov. 25 Dec. 2 Dec. 9 Dec. 16 Dec. 23 Dec. 30 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 320,055 331,113r 342,513 321,990 329,480 329,617 328,943 334,709 347,401 343,648 U.S. government securities2 Bought outright—System account . 282,877 292,696 295,011 286,719 292,340 293,076 293,426 297,995 296,066 296,212 Held under repurchase agreements 0 3,256 7,463 150 343 1,415 75 0 13,132 5,130 Federal agency obligations Bought outright 5,534 5,534 5,413 5,534 5,534 5,534 5,534 5,450 5,450 5,413 Held under repurchase agreements 0 254 631 0 0 0 5 0 277 646 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions Adjustment credit 11 10 671 155 834 11 14 15 87 39 Seasonal credit 70 25 4 39 30 22 17 22 19 16 Extended credit 0 0 0 0 0 0 3 2 0 1 10 Float 500 -20"^ 3,255 100 707 247 323 1,501 2,181 5,906 11 Other Federal Reserve assets 31,064 29,358r 30,067 29,293 29,692 29,312 29,546 29,724 30,190 30,286 12 Gold stock 11,060 11,059 11,056 11,059 11,059 11,059 11,058 11,057 11,056 11,056 13 Special drawing rights certificate account .. 10,018 10,018 8,018 10,018 10,018 10,018 10,018 8,018 8,018 8,018 14 Treasury currency outstanding 21,377r 21,413r 21,483 21,395r 21,404r 21,413 21,427 21,441 21,455 21,469 ABSORBING RESERVE FUNDS 15 Currency in circulation 320,363r 327,261r 334,737 325,lllr 326,970r 327,659 328,654 329,863 333,200 335,001 16 Treasury cash holdings 505 525 508 490 525 522 518 513 510 508 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 4,413 6,985 7,492 6,504 6,074 4,760 4,605 6,958 6,568 7,270 18 Foreign 415 229 206 162 185 167 196 221 178 254 19 Service-related balances and adjustments 6,039 6,066 6,183 6,006 5,756 6,066 5,788 5,845 5,780 6,335 20 Other 317 296 372 288 278 294 273 266 305 266 21 Other Federal Reserve liabilities and capital 7,271 7,759 7,984 7,903 8,088 7,552 7,848 8,069 8,344 8,278 22 Reserve balances with Federal Reserve Banks | 23,186 24,481r 25,590 17,998 24,084 25,087 23,563 23,490 33,045 26,279 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 Nonfinancial Statistics • March 1993 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RReesseerrvvee ccllaassssiiffiiccaattiioonn 1990 1991 1992 1992 Dec. Dec. Dec. June July Aug. Sept. Oct. Nov.r Dec. 1 Reserve balances with Reserve Banks 30,237 26,659 25,368 21,223 21,206 21,272 22,627 23,626 25,462 25,368 2 Total vault cash 31,786 32,513 34,535 31,729 32,145 32,457 32,343 32,992r 32,457 34,535 3 Applied vault cash 28,884 28,872 31,170 28,273 28,617 28,890 28,894 29,510 29,205 31,170 4 Surplus vault cash 2,903 3,641 3,365 3,456 3,528 3,567 3,448 3,482r 3,252 3,365 5 Total reserves 59,120 55,532 56,538 49,4% 49,823 50,162 51,521 53,136 54,666 56,538 6 Required reserves 57,456 54,553 55,389 48,584 48,857 49,227 50,527 52,062 53,624 55,389 7 Excess reserve balances at Reserve Banks ... 1,664 979 1,150 913 965 935 994 1,074 1,043 1,150 8 Total borrowings at Reserve Banks8 326 192 124 229 284 251 287 143 104 124 9 Seasonal borrowings 76 38 18 149 203 223 193 114 40 18 10 Extended credit 23 1 1 0 0 0 0 0 0 1 Biweekly averages of daily figures for weeks ending 1992 Sept. 2 Sept. 16 Sept. 30 Oct. 14 Oct. 28 Nov. 11 Nov. 25 Dec. 9r Dec. 23 Jan. 6 1 Reserve balances with Reserve Banks 20,991 23,439 22,048 23,810 23,031 25,535 25,730 24,548 25,209 26,569 2 Total vault cash 32,541 31,625 33,033 32,929 33,334r 32,398r 34,315 34,770 34,374 3 Applied vault cash , 28,8% 28,438 29,351 29,438 29,790 28,539 29,117 30,918 31,373 31,099 4 Surplus vault cash 3,645 3,187 3,682 3,491 3,544r 3,151r 3,281r 3,397 3,397 3,275 5 Total reserves 49,887 51,876 51,399 53,248 52,821 54,074 54,846 55,466 56,582 57,668 6 Required reserves 48,820 51,081 50,217 52,099 51,750 53,346 53,485 54,625 55,357 56,304 7 Excess reserve balances at Reserve Banks ... 1,067 795 1,182 1,149 1,071 728 1,361 841 1,225 1,364 8 Total borrowings at Reserve Banks 258 321 259 185 118 66 138 95 60 269 9 Seasonal borrowings 226 187 1% 146 95 53 37 22 19 12 10 Extended credit9 0 0 0 0 0 0 0 0 2 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 A7 1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS Large Banks' Millions of dollars, averages of daily figures 1992, week ending Monday SSoouurrccee aanndd mmaattuurriittyy Oct. 5 Oct. 12 Oct. 19 Oct. 26 Nov. 2 Nov. 9 Nov. 16 Nov. 23 Nov. 30 Federal funds purchased, repurchase agreements, and other selected borrowings From commercial banks in the United States 1 For one day or under continuing contract 76,088 73,095 74,222 67,637 67,714 73,286 72,781 72,061 73,350 2 For all other maturities 13,207 14,234 14,254 14,797 15,148 15,385 16,007 15,626 16,355 From other depository institutions, foreign banks and official institutions, and U.S. government agencies 3 For one day or under continuing contract 17,986r 16,750 22,663 23,327 19,074 18,264 18,965 22,633 17,881 4 For all other maturities 19,541 18,368 17,428 18,688 17,500 18,309 19,459 20,839 19,294 Repurchase agreements on U.S. government and federal agency securities Brokers and nonbank dealers in securities 5 For one day or under continuing contract 11,333 14,483 13,088 15,647 14,849 12,884 13,790 11,784 6 For all other maturities 17,946r 18,789r 18,906r 20,719r 20,699 20,852 20,203 21,173 20,397 All other customers 7 For one day or under continuing contract 25,847r 24,517 23,481 23,164 23,464 22,855 22,846 23,570 20,912 8 For all other maturities 12,271r 12,631 12,159 12,719 13,206 12,731 12,882 12,860 15,722 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 47,192 40,377 41,392 37,812 40,066 38,858 40,289 34,923 3377,,228855 10 To all other specified customers2 26,564 22,468 19,175 20,103 17,793 18,799 21,181 21,060 20,546 1. Banks with assets of $4 billion or more as of Dec. 31, 1988. 2. Brokers and nonbank dealers in securities, other depository institutions, Data in this table also appear in the Board's H.5 (507) weekly statistical release. foreign banks and official institutions, and U.S. government agencies. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic NonfinancialS tatistics • March 1993 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels Adjustment credit1 Seasonal credit2 Extended credit3 FFeeddeerraall RReesseerrvvee BBaannkk 1/ O 29 n /9 3 Effective date Previous rate 1/2 O 9 n /9 3 Effective date Previous rate 1/2 O 9 n / 93 Effective date Previous rate Boston 3 7/2/92 3.5 3.15 1/21/93 3.15 3.65 1/21/93 3.65 New York 7/2/92 1/21/93 1/21/93 Philadelphia 7/2/92 1/21/93 1/21/93 Cleveland 7/6/92 1/21/93 1/21/93 Richmond 7/2/92 1/21/93 1/21/93 Atlanta 7/2/92 1/21/93 1/21/93 Chicago 7/2/92 1/21/93 1/21/93 St. Louis 7/7/92 1/21/93 1/21/93 Minneapolis 7/2/92 1/21/93 1/21/93 Kansas City... . 7/2/92 1/21/93 1/21/93 Dallas 7/2/92 1/21/93 1/21/93 San Francisco ... 3 7/2/92 3.5 3.15 1/21/93 3.15 3.65 1/21/93 3.65 Range of rates for adjustment credit in recent years4 Range (or F.R. Range (or F.R. Range (or F.R. Effective date A le l v l e F l) . — R. Ba o n f k Effective date A le l v l e F l) . — R. B o an f k Effective date A le l v l e F l) . — R. B o a f n k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1977 1981—May 5 13-14 14 1986—Aug. 21 5.5-6 5.5 8 14 14 22 5.5 5.5 1978—Jan. 9 6-6.5 6.5 Nov. 2 13-14 13 20 6.5 6.5 6 13 13 1987—Sept. 4 5.5-6 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—July 20 11.5-12 11.5 1988—Aug. 9 6-6.5 6.5 10 7.25 7.25 23 11.5 11.5 11 Aug. 21 7.75 7.75 Aug. 2 11-11.5 11 Sept. 22 8 8 3 11 11 1989—Feb. 24 6.5-7 7 Oct. 16 8-8.5 8.5 16 10.5 10.5 27 7 7 20 8.5 8.5 27 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. 12 9.5-10 9.5 13 9.5 9.5 1991—Feb. 1 6-6.5 6 1979—July 20 10 10 Nov. 22 9-9.5 9 4 6 6 Aug. 17 10-10.5 10.5 26 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 11 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—Apr. 9 8.5-9 9 7 4.5 4.5 13 9 9 Dec. 20 3.5-4.5 3.5 1980—Feb. 15 12-13 13 Nov. 21 8.5-9 8.5 24 3.5 3.5 19 13 13 26 8.5 8.5 May 29 12-13 13 Dec. 24 8 8 1992—July 2 3-3.5 3 30 12 12 7 3 3 June 13 11-12 11 1985—May 20 7.5-8 7.5 16 11 11 24 7.5 7.5 29 10 10 IInn eeffffeecctt JJaann.. 2299,, 11999933 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. 21 6.5-7 6.5 Dec. 5 12-13 13 July 11 6 6 1. Available on a short-term basis to help depository institutions meet tempo- ordinarily is charged on extended-credit loans outstanding less than thirty days; rary needs for hinds 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 subsequently raised to 3 percent on Dec. 5,1980, and to 4 percent on May 5, tained deposit drains, impaired access to money market funds, or sudden 1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981, and to 2 deterioration in loan repayment performance) or practices involve only a partic- percent effective Oct. 12, 1981. As of Oct. 1, 1981, the formula for applying the ular institution, or to meet the needs of institutions experiencing difficulties surcharge was changed from a calendar quarter to a moving thirteen-week period. adjusting to changing market conditions over a longer period (particularly at times The surcharge was eliminated on Nov. 17, 1981. of deposit disintermediation). The discount rate applicable to adjustment credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Type of deposit Net transaction accounts 1 $0 million-$46.8 million... 12/15/92 2 More than $46.8 million4.. 12/15/92 3 Nonpersonal time deposits5 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 1 Vi years was reduced from 3 on an annual basis as of June 30. No corresponding adjustment is to be made in percent to \Vi 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 I V4 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 DomesticN onfinancial Statistics • March 1993 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 1992 Type of transaction 1989 1990 1991 May July Aug. Sept. Oct. U.S. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 2 1 G G r r o o s s s s s p a u l r e c s hases 1 1 2 4 , ,2 8 8 1 4 8 2 7 4 , , 2 7 9 3 1 9 20,1 1 5 2 8 0 4,110 0 30 0 6 0 0 27 0 1 595 0 4,072 0 4 3 R Ex ed ch em an p g t e io s ns 23 1 1 2 , , 2 7 1 3 1 0 24 4 1 , , 4 08 0 6 0 277 1 , , 3 0 1 0 4 0 24,275 0 22,392 0 27,755 0 25,041 0 22,268 0 28,907 0 Others within one year 6 5 G G r r o o s s s s s p a u l r e c s h ases 32 0 7 42 0 5 3,04 0 3 0 0 0 0 0 0 0 0 55 0 0 7 Maturity shifts 28,848 25,638 24,454 3,754 2,152 687 5,415 0 9 8 R Ex ed ch em an p g t e io s ns -25,7 5 8 0 3 0 -27,424 0 -28 1 , , 0 0 9 0 0 0 -5,225 0 -1,854 0 -1,669 0 -4,617 0 0 0 One to five years 1 1 0 1 G G r r o o s s s s p sa u l r e c s h ases 1, 4 4 9 3 0 6 2 20 5 0 0 6,583 0 20 0 0 2,278 0 0 0 400 0 3,325 0 20 0 0 12 Maturity shifts -25,534 -21,770 -21,211 -2,113 -3,447 -216 -4,036 0 0 13 Exchanges 23,250 25,410 24,594 4,311 1,854 1,478 3,567 0 0 Five to ten years 1 1 1 1 6 4 5 7 G M G Ex r r a o o c t s s u h s s r a i n s p ty a g u l e r e s s c s h h i a ft s s e s -2 1 ,2 , 2 9 3 2 8 3 1 9 7 4 -2,1 7 1 8 8 0 6 9 0 0 -2 2 1 , , , 0 8 2 3 9 8 7 4 00 -3 6 4 1 6 4 0 0 59 0 0 0 7 -4 1 7 9 1 0 0 1 -4 7 1 0 2 0 0 0 72 0 0 5 0 More than ten years 2 2 1 1 0 1 8 9 M E G G x r r a o o c tu h s s s s r a i n p s ty g a u e l r e s s c s h h i a ft s s e s -1,0 2 6 8 8 0 4 0 6 0 -1 1 , , 6 22 8 0 0 6 1 -1,2 6 3 0 0 7 0 9 5 0 300 0 0 0 655 0 0 0 3 1 5 9 0 0 0 5 73 0 0 1 0 All maturities 2 2 2 2 3 4 G R G e r r o o d s s e s s m s p p a u t l i r e o c s n h s a ses 1 1 1 3 6 3 , , , 3 6 2 3 1 3 7 7 0 2 7 4 5 , , , 5 4 4 9 0 1 1 0 4 31 1 , , 4 0 1 3 0 2 9 0 0 4,310 0 0 3,836 0 0 86 0 0 6 5,927 0 0 4,272 0 0 Matched transactions 25 Gross sales 1,323,480 1,369,052 1,570,456 118,972 126,977 127,051 104,873 116,331 116,024 26 Gross purchases 1,326,542 1,363,434 1,571,534 117,524 129,216 126,137 102,575 115,579 114,917 Repurchase agreements2 27 Gross purchases 129,518 219,632 310,084 38,777 10,792 12,224 39,484 68,697 18,698 28 Gross sales 132,688 202,551 311,752 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 3,107 5,831 6,184 14,244 -13,520 FEDERAL AGENCY OBLIGATIONS Outright transactions 0 0 0 0 3 3 0 1 G G r r o o s s s s p sa u l r e c s h ases 0 0 5 0 32 Redemptions 442 183 292 160 Repurchase agreements2 33 Gross purchases 38,835 41,836 22,807 1,281 402 94 601 3,222 1,778 34 Gross sales 40,411 40,461 23,595 1,281 402 94 548 1,800 3,253 35 Net change in federal agency obligations . -2,018 -1,085 -1 1,385 -1,475 -85 36 Total net change in System Open Market Account -12,073 26,078 28,644 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 All 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 1992 1992 Dec. 2 Dec. 9 Dec. 16 Dec. 23 Dec. 30 Oct. 31 Nov. 30 Dec. 31 Consolidated condition statement ASSETS 1 Gold certificate account 11,059 11,058 11,057 11,056 11,056 11,060 11,059 11,056 2 Special drawing rights certificate account 10,018 10,018 8,018 8,018 8,018 10,018 10,018 8,018 3 Coin 476 485 487 476 455 519 491 446 Loans 4 To depository institutions 33 34 39 107 56 80 35 675 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 5,450 5,450 5,413 5,534 55,,553344 55,,441133 8 Held under repurchase agreements 0 5 0 277 646 0 254 631 9 Total U.S. Treasury securities 294,491 293,501 297,995 309,198 301,342 282,877 295,952 302,474 10 Bought outright2 293,076 293,426 297,995 296,066 296,212 282,877 292,696 295,011 11 Bills 140,160 140,210 144,779 142,850 142,9% 136,716 139,780 141,794 12 Notes 117,879 118,179 118,179 118,179 118,179 112,576 117,879 118,179 13 Bonds 35,037 35,037 35,037 35,037 35,037 33,584 35,037 35,037 14 Held under repurchase agreements 1,415 75 0 13,132 5,130 0 3,256 7,463 15 Total loans and securities 300,058 299,074 303,484 315,031 307,456 288,491 301,775 309,192 16 Items in process of collection 6,452 5,780 9,594 8,418 11,756 5,136 1,912 8,378 17 Bank premises 1,029 1,026 1,026 1,028 1,028 1,024 1,029 1,026 Other assets 18 Denominated in foreign currencies 22,157 22,179 22,200 21,832 21,852 23,067 22,150 21,514 19 All other4 6,134 6,408 6,634 7,529 7,468 7,020 6,245 7,738 20 Total assets 357,384 356,027 362,499 373,387 369,089 346,334 354,679 367,368 LIABILITIES 21 Federal Reserve notes 307,244 308,230 309,421 312,731 314,494 300,010 306,863 314,208 22 Total deposits 36,705 34,765 37,384 46,228 40,960 34,484 37,840 40,148 23 Depository institutions 31,484 29,690 29,963 39,177 33,170 29,339 30,348 32,079 24 U.S. Treasury—General account 4,760 4,605 6,958 6,568 7,270 4,413 6,985 7,492 25 Foreign—Official accounts 167 196 221 178 254 415 229 206 26 Other 294 273 266 305 266 317 2% 372 27 Deferred credit items 5,882 5,184 7,624 6,084 5,356 4,568 2,216 5,028 28 Other liabilities and accrued dividends5 1,818 1,781 1,780 1,990 1,873 1,805 1,894 1,876 29 Total liabilities 351,649 349,960 356,210 367,033 362,683 340,868 348,814 361,260 CAPITAL ACCOUNTS 30 Capital paid in 3,029 3,029 3,049 3,054 3,054 3,040 3,028 3,054 31 Surplus 2,542 2,592 2,618 2,640 2,649 2,419 2,546 3,054 32 Other capital accounts 164 446 622 660 702 8 291 0 33 Total liabilities and capital accounts 357,384 356,027 362,499 373,387 369,089 346,334 354,679 367,368 MEMO 34 Marketable U.S. Treasury securities held in custody for foreign and international accounts 289,879 294,508 287,761 288,854 290,166 293,014 285,765 291,393 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to Bank) 360,239 363,102 365,832 364,870 363,714 357,540 359,274 363,479 36 LESS: Held by Federal Reserve Bank 52,995 54,872 56,411 52,139 49,220 57,530 52,410 49,271 37 Federal Reserve notes, net 307,244 308,230 309,421 312,731 314,494 300,010 306,863 314,208 Collateral held against notes, net: 38 Gold certificate account 11,059 11,058 11,057 11,056 11,056 11,060 11,059 11,056 39 Special drawing rights certificate account 10,018 10,018 8,018 8,018 8,018 10,018 10,018 8,018 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. Treasury and agency securities 286,167 287,155 290,346 293,657 295,420 278,933 285,787 295,134 42 Total collateral 307,244 308,230 309,421 312,731 314,494 300,010 306,863 314,208 1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly 3. Valued monthly at market exchange rates. statistical release. For ordering address, see inside front cover. 4. Includes special investment account at the Federal Reserve Bank of Chicago 2. Includes securities loaned—fully guaranteed by U.S. Treasury securities in Treasury bills maturing within ninety days. pledged with Federal Reserve Banks—and excludes securities sold and scheduled 5. Includes exchange-translation account reflecting the monthly revaluation at to be bought back under matched sale-purchase transactions. market exchange rates of foreign exchange commitments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Nonfinancial Statistics • March 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 Dec. 2 Dec. 9 Dec. 16 Dec. 23 Dec. 30 Oct. 30 Nov. 30 Dec. 31 1 Total loans 33 34 39 107 56 80 35 675 2 Within fifteen days 14 18 37 107 55 35 23 673 3 Sixteen days to ninety days 20 16 2 0 1 46 12 1 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 294,491 293,501 297,995 309,199 308,435 282,877r 295,952 302,474 10 Within fifteen days2 13,981 11,646 15,213 22,913 18,785 3,203r 8,620 12,824 11 Sixteen days to ninety days 68,541 69,629 72,049 71,996 70,610 73,197r 75,398 70,610 12 Ninety-one days to one year 95,604 95,561 94,069 97,624 103,582 93,205r 95,569 103,582 13 One year to five years 69,757 69,957 69,957 69,957 68,750 69,627r 69,757 68,750 14 Five years to ten years 18,803 18,903 18,903 18,903 18,903 17,014 18,803 18,903 15 More than ten years 27,805 27,805 27,805 27,805 27,805 26,631 27,805 27,805 16 Total federal agency obligations 5,534 5,539 5,450 5,727 6,059 5,534 5,788 6,044 17 Within fifteen days2 55 60 37 504 836 114 647 821 18 Sixteen days to ninety days 886 886 959 769 810 843 548 810 19 Ninety-one days to one year 1,109 1,109 1,024 1,024 1,064 l,198r 1.1091 1,064 20 One year to five years 2,608 2,608 2,592 2,592 2,511 2,503 2,608 2,511 21 Five years to ten years 722 722 6% 696 6% 722r 722 6% 22 More than ten years 154 154 142 142 142 154 154 142 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 ¥ 1989 1990 1991 1992 Dec. Dec. Dec. Dec. May June July Aug. Sept. Oct. Nov. Dec. Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS2 1 Total reserves3 40.56 41.83 45.60 54.48 49.49 49.23 49.49 50.32 51.35 53.14 54.07 54.48 2 Nonborrowed reserves4 40.29 41.51 45.41 54.35 49.34 49.01 49.21 50.07 51.06 53.00 53.97r 54.35 3 Nonborrowed reserves plus extended credit 40.31 41.53 45.41 54.35 49.34 49.01 49.21 50.07 51.06 53.00 53.97r 54.35 4 Required reserves 39.64 40.17 44.62 53.33 48.49 48.32 48.52 49.39 50.35 52.07 53.03r 53.33 5 Monetary base 267.77 293.29 317.25 350.78 328.58 329.64 332.26 336.87 341.55 345.61 348.11 350.78 Not seasonally adjusted 6 Total reserves 41.77 43.07 46.98 56.10 48.62 49.25 49.52 49.81 51.11 52.66 54.13 56.10 7 Nonborrowed reserves 41.51 42.74 46.78 55.98 48.47 49.02 49.24 49.56 50.83 52.52 54.03 55.98 8 Nonborrowed reserves plus extended credit3. 41.53 42.77 46.78 55.98 48.47 49.02 49.24 49.56 50.83 52.52 54.03 55.98 9 Required reserves 40.85 41.40 46.00 54.95 47.62 48.33 48.56 48.88 50.12 51.59 53.09 54.95 10 Monetary base9 271.18 296.68 321.07 354.59 328.37 330.94 334.09 336.59 340.11 343.66 347.92r 354.59 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS' 11 Total reserves" 62.81 59.12 55.53 56.54 48.83 49.50 49.82 50.16 51.52 53.14 54.67r 56.54 12 Nonborrowed reserves 62.54 58.80 55.34 56.42 48.67 49.27 49.54 49.91 51.23 52.99 54.56 56.42 13 Nonborrowed reserves plus extended credit . 62.56 58.82 55.34 56.42 48.67 49.27 49.54 49.91 51.23 52.99 54.56 56.42 14 Required reserves 61.89 57.46 54.55 55.39 47.83 48.58 48.86 49.23 50.53 52.06 53.62 55.39 15 Monetary base . 292.55 313.70 333.61 360.91 333.79 336.43 339.87 342.49 346.21 349.81 354.25r 360.91 16 Excess reserves13 .92 1.66 .98 1.15 1.00 .91 .97 .94 .99 1.07 1.04 1.15 17 Borrowings from the Federal Reserve .27 .33 .19 .12 .16 .23 .28 .25 .29 .14 .10 .12 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 Monetary 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 NonfinancialS tatistics • March 1993 1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES1 Billions of dollars, averages of daily figures 1992 IItteemm 1989 1990 1991 1992 Dec. Dec. Dec. Dec. Sept. Oct. Nov. Dec. Seasonally adjusted Measures2 1 Ml 794.1 826.1 898.1 1,024.3 988.6 l,007.3r 1,019.0 1,024.3 2 M2 3,227.3 3,339.0 3,439.8 3,504.0 3,481.9 3,497.2r 3,507.4r 3,504.0 3 M3 4,059.8 4,114.6 4.171.0 4,175.9 4,183.0r 4,184.7r 4,191.2r 4,175.9 4 L 4,890.6 4,965.2 4.988.1 n.a. 5,041.6r 5,049.9"^ 5,072.5 n.a. 5 Debt 10,076.7 10,751.3 11,201.3 n.a. 11,596.5 ll,622.8r 11,684.7 n.a. Ml components 6 Currency 222.6 246.8 267.3 292.5 286.4 288.4 290.01 292.5 7 Travelers checks 7.4 8.3 8.2 8.6 8.3 8.6 8.6 8.6 8 Demand deposits5 279.0 277.1 289.5 338.9 327.8 336.2 339.2 338.9 9 Other checkable deposits6 285.1 293.9 333.2 384.3 366.1 374.0 381.2 384.3 Nontransaction components 10 In M2 2,433.2 2,512.9 2,541.7 2,479.7 2,493.2r 2,489.9r 2,488.4r 2,479.7 11 In M3 832.5 775.6 731.2 671.9 701.2 687.5r 683.8r 671.9 Commercial banks 12 Savings deposits, including MMDAs 541.5 581.9 664.9 753.3 •734.4 743.4 749.91 753.3 13 Small time deposits', 531.0 606.4 598.5 507.0 527.3 519.4 511.6 507.0 14 Large time deposits10' 11 398.2 374.0 354.0 300.1 312.0 305.3r 302.3r 300.1 Thrift institutions 15 Savings deposits, including MMDAs 349.7 338.8 377.7 433.9 425.1 428.2 431^ 433.9 16 Small time deposits'. 617.5 562.3 464.5 366.3 387.9 379.3 372.7r 366.3 17 Large time deposits 0 161.1 120.9 83.1 65.2 68.0 67.9 66.5 65.2 Money market mutual funds 18 General purpose and broker-dealer . 316.3 348.9 360.5 347.2 344.7 347.6 348.7 347.2 19 Institution-only 107.2 133.7 179.1 194.3 217.2 205.6 203.5 194.3 Debt components 20 Federal debt 2,249.5 2,493.4 2,764.8 n.a. 3,004.8 3,001.4 3,027.7 n.a. 21 Nonfederal debt 7,827.2 8,258.0 8,436.5 n.a. 8,591.7 8,621.4r 8,657.1 n.a. Not seasonally adjusted Measures1 22 Ml 811.9 844.1 917.3 1,046.2 983.0 1,001.2 1,021.9 1,046.2 23 M2 3,240.0 3,351.9 3.453.6 3,520.5 3,473.3 3,492.4r 3,510.8r 3,520.5 24 M3 4,070.3 4,124.7 4.181.7 4,189.4 4,174.2 4,175.2r 4,193.3r 4,189.4 25 L 4,909.9 4,984.9 5,008.3 n.a. 5,031.3r 5,038.8r 5,079.6 n.a. 26 Debt 10,063.6 10,739.9 11,191.4 n.a. 11,569.0 11,600.9* 11,665.6 n.a. Ml components 27 Currency . 225.3 249.5 270.0 295.1 284.7 287.0 290.1 295.1 28 Travelers checks 6.9 7.8 7.7 8.2 8.9 8.7 8.3 8.2 29 Demand deposits5 291.5 289.9 303.0 354.9 325.4 336.0 343.4 354.9 30 Other checkable deposits6 288.1 2%.9 336.5 388.1 364.0 369.5 380.1 388.1 Nontransaction components 31 In M2 2,428.1 2,507.8 2,536.3 2,474.3 2,490.3 2,491,2r 2,488.8r 2,474.3 32 In M38 830.3 772.8 728.0 669.0 700.9 682.8r 682.6r 669.0 Commercial banks 33 Savings deposits, including MMDAs 543.0 580.0 662.4 750.2 733.4 742.1 749.5r 750.2 34 Small time deposits®. 529.5 606.3 598.7 507.3 527.0 520.4 512.1 507.3 35 Large time deposits10, 11 397.1 373.0 352.8 299.0 313.2 305.4 301.91 299.0 Thrift institutions 36 Savings deposits, including MMDAs 347.6 337.7 376.3 432.0 424.6 427.5 431.6 432.0 37 Small time deposits'. 616.0 562.2 464.6 366.5 387.6 380.1 373. lr 366.5 38 Large time deposits 162.0 120.6 82.8 65.0 68.3 67.9 66.4 65.0 Money market mutual funds 39 General purpose and broker-dealer 314.6 346.8 358.1 344.7 343.5 345.9 347.6 344.7 40 Institution-only 107.8 134.4 180.3 195.5 210.0 199.8 202.2 195.5 Repurchase agreements and eurodollars 41 Overnight 77.5 74.7 76.2 73.5 74.2 75.2r 74.8r 73.5 42 Term 178.5 158.3 127.7 127.9 123.7 125.5r 128.4r 127.9 Debt components 43 Federal debt 2,247.5 2,491.3 2,765.0 n.a. 2,993.9 2,998.1 3.028.3 n.a. 44 Nonfederal debt 7,816.2 8,248.6 8,426.4 n.a. 8,575.0 8,602.9r 8.637.4 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 owed to depository institutions, the U.S. government, and foreign ing MMDAs) and small time deposits (time deposits—including retail RPs—in banks and official institutions, less cash items in the process of collection and amounts of less than $100,000), and (3) balances in both taxable and tax-exempt Federal 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 Nonfinancial Statistics • March 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 11998899 22 11999900 22 1199991122 May June July Aug. Sept. Oct. DEBITS TO Seasonally adjusted Demand deposits 1 All insured banks 256.150.4 277,916.3 281,050.1 292,177.4 302.259.2 336,868.4 298,612.4 340,723.8 328,491.6 2 Major New York City banks.. 129,319.9 131,784.0 140.905.5 154,225.3 149.743.3 179,593.4 154,231.2 184,557.7 177,490.5 3 Other banks 126.830.5 146,132.3 140.144.6 137,952.1 152,515.9 157,275.0 144,381.2 156,166.1 151,001.1 4 ATS-NOW accounts4 2,910.5 3,349.6 3,624.6 3,552.6 4,070.7 4,024.0 3,594.2 3,940.5 3,637.9 5 Savings deposits5 547.5 558.8 1,377.4 3,241.4 3,838.9 3,724.9 2,995.9 3,274.9 2,957.1 DEPOSIT TURNOVER Demand deposits3 735.1 800.6 817.6 771.2 814.2 910.5 779.4 880.7 823.4 6 All insured banks 3,421.5 3,804.1 4,391.9 4,438.0 4,470.1 5,425.1 4,445.7 5,350.4 4,900.0 7 Major New York City banks.. 408.3 467.7 449.6 400.9 451.6 466.9 414.4 443.2 416.3 8 Other banks 9 ATS-NOW accounts4 15.2 16.5 16.1 13.7 15.6 15.3 13.5 14.7 13.3 10 Savings deposits5 3.0 2.9 3.3 4.4 5.1 5.0 4.1 4.6 4.2 DEBITS TO Not seasonally adjusted Demand deposits 11 All insured banks 256,133.2 277,400.0 280,922.8 290,950.2 311,175.8 336,160.9 310,646.4 329,854.7 336,605.4 12 Major New York City banks.. 129,400.1 131,784.7 140,563.0 153,163.7 154,953.8 178,555.6 162,973.4 178,998.2 182,584.2 13 Other banks 126,733.0 145,615.3 140,359.7 137,786.5 156,222.0 157,605.3 147,673.1 150,856.4 154,021.2 14 ATS-NOW accounts4 2,910.7 3,342.2 3,622.4 3,515.5 4,032.5 3,925.6 3,669.6 3,938.9 3,660.0 15 MMDAs 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 3,031.2 3,472.9 3,461.5 3,110.6 3,317.2 3,395.4 DEPOSIT TURNOVER Demand deposits3 17 All insured banks 735.4 799.6 817.5 785.8 842.5 903.0 824.6 852.6 842.5 18 Major New York City banks.. 3,426.2 3,810.0 4,370.1 4,551.3 4,668.3 5,312.2 4,867.0 5,205.2 5,023.1 19 Other banks 408.0 466.3 450.6 409.3 464.7 465.4 430.2 428.0 424.1 20 ATS-NOW accounts4 15.2 16.4 16.1 13.7 15.6 15.2 14.0 14.9 13.6 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 4.3 4.9 4.8 4.3 4.6 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 1992 Item Jan. Feb. Mar. Apr. May June Julyr Aug.r Sept.r Oct/ Nov/ Dec. Seasonally adjusted 1 Total loans and securities1 2,852.0 2,854.8 2,863.1 2,877.5 2,877.6 2,883.7 2,884.4 2,898.6 2,914.4 2,923.8 2,935.7 2,944.9 2 U.S. government securities 566.2 571.2 579.5 592.3 601.7 611.7 619.5 634.1 639.0 645.4 652.8 661.3 3 Other securities 179.7 180.5 178.1 178.5 177.1 175.5 177.8 178.1 178.2 179.7 178.7 176.1 4 Total loans and leases1 2,106.1 2,103.1 2,105.5 2,106.7 2,098.8 2,096.5 2,087.1 2,086.4 2,097.2 2,098.7 2,104.1 2,107.5 5 Commercial and industrial ..... 617.3 613.2 610.9 609.2 607.3 604.6r 602.7 601.0 603.4 602.6 605.3 602.9 6 Bankers acceptances held2... 7.2 7.2 6.9 6.5 6.6 6.1 6.7 6.5 6.3 7.3 7.7 7.2 7 Other commercial and industrial 610.1 606.0 603.9 602.7 600.7 598.6 596.0 594.5 597.1 595.4 597.7 595.7 8 U.S. addressees 603.7 599.5 597.3 595.8 593.5 591.6r 588.7 587.0 589.2 587.3 589.7 587.7 9 Non-U.S. addressees3 6.5 6.5 6.7 6.9 7.1 6.91 7.3 7.5 7.8 8.1 7.9 8.0 10 Real estate 873.5 877.5 879.4 881.4 882.6 881.3r 879.1 879.2 883.1 886.7 889.1 889.8 11 Individual 363.1 363.6 362.2 360.7 358.9 359. lr 358.7 357.3 356.6 355.1 354.6 354.8 12 Security 59.4 57.1 60.4 64.9 61.6 63.9 60.7 62.5 66.1 65.7 64.4 66.0 13 Nonbank financial institutions 40.8 42.6 43.7 42.7 43.0 42.0 40.8 41.7 44.3 44.3 45.2 45.0 14 Agricultural 33.7 33.5 34.3 34.4 34.3 34.8 34.9 35.3 35.4 35.0 34.7 34.6 15 State and political subdivisions 28.0 28.1 28.0 27.7 27.2 26.8 26.3 26.0 26.0 25.5 25.2 24.9 16 Foreign banks 7.2 6.7 6.5 6.5 6.9 7.5 7.8 7.1 8.0 7.2 6.8 6.9 17 Foreign official institutions 2.3 2.1 2.1 2.0 2.0 2.0 2.1 2.1 2.1 2.1 2.5 2.5 18 Lease-financing receivables 31.5 31.6 31.5 31.6 31.7 31.8r 30.8 30.7 30.8 30.6 30.5 30.5 19 All other loans 49.2 47.1 46.5 45.6 43.3 42.5r 43.2 43.4 41.7 43.8 45.8 49.4 Not seasonally adjusted 20 Total loans and securities1 2,848.8 2,857.4 2,864.0 2,876.6 2,873.1 2,884.5r 2,876.8 2,895.0 2,913.7 2,926.3 2,941.3 2,950.4 21 U.S. government securities 565.7 575.1 584.9 594.5 601.8 610.7 616.7 631.8 636.8 644.0 654.0 656.3 22 Other securities 180.3 180.5 178.2 178.1 176.8 175.6r 176.9 178.2 178.2 180.0 178.9 176.3 23 Total loans and leases1 2,102.8 2,101.8 2,100.8 2,104.0 2,094.6 2,098.3r 2,083.2 2,085.0 2,098.7 2,102.3 2,108.4 2,117.8 24 Commercial and industrial ..... 614.2 612.4 613.5 612.1 609.6 606.6r 602.5 599.3 600.6 601.1 604.1 604.4 25 Bankers acceptances held ... 7.2 7.4 6.9 6.3 6.6 6.2 6.3 6.3 6.3 7.3 7.9 7.5 26 Other commercial and industrial 606.9 605.0 606.7 605.8 603.0 600.4r 5%. 2 593.0 594.3 593.9 596.2 596.9 27 U.S. addressees 600.0 598.1 599.8 598.6 595.9 593.lr 588.9 585.6 586.6 586.4 588.8 589.3 28 Non-U.S. addressees 6.9 6.9 6.9 7.2 7.1 7.3r 7.3 7.4 7.7 7.5 7.4 7.6 29 Real estate 872.9 874.5 875.9 880.2 883.2 881.6 880.3 881.2 884.0 888.1 890.6 890.0 30 Individual 367.4 363.6 359.7 358.1 357.3 357.01 356.1 356.4 357.9 356.0 356.0 359.4 31 Security 59.0 61.7 62.2 66.4 58.2 63.8 58.7 60.7 64.0 65.9 65.1 67.3 32 Nonbank financial institutions 41.3 42.3 43.1 42.3 42.3 42.3 41.0 42.0 43.7 43.8 45.4 46.6 33 Agricultural 33.2 32.7 33.0 33.4 33.9 35.0 35.6 36.2 36.4 35.9 35.1 34.6 34 State and political subdivisions 28.4 28.2 28.0 27.6 27.3 26.8 26.1 25.9 25.9 25.5 25.2 24.8 35 Foreign banks 7.0 6.6 6.4 6.4 6.8 7.2 7.7 7.0 8.0 7.5 7.2 7.4 36 Foreign official institutions 2.3 2.1 2.1 2.0 2.0 2.0 2.1 2.1 2.1 2.1 2.5 2.5 37 Lease-financing receivables .... 31.8 31.7 31.7 31.6 31.7 31.6r 30.6 30.6 30.7 30.7 30.6 30.5 38 All other loans 45.4 46.0 45.2 44.0 42.3 44.3r 42.6 43.7 45.4 45.6 46.8 50.3 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 NonfinancialS tatistics • March 1993 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1 Billions of dollars, monthly averages 1992 Source of funds Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov.r Dec. Seasonally adjusted 1 Total nondeposit funds 283.1 286.8 287.0 290.0 289.6 292.0 292.4 297.9r 304.7 304.2 308.1 312.4 2 Net balances due to related foreign offices3 ... 43.4 42.0 45.1 49.3 54.2 60.2 61.8 59.0 61.9 65.4 68.6 71.4 3 Borrowings from other than commercial banks in United States 239.6 244.8 241.9 240.7 235.4 231.9 230.6 238.9 242.8 238.7 239.5 241.0 4 Domestically chartered banks 156.5 159.8 155.8 152.8 147.6 144.3 142.8 149.1 150.8 151.9 150.8 151.5 5 Foreign-related banks 83.1 84.9 86.1 87.9 87.8 87.5 87.7 89.8 91.9 86.8 88.7 89.5 Not seasonally adjusted 6 Total nondeposit funds 279.0 287.4 290.9 287.2 295.4 293.5 288.9 294.9 302. lr 305.5 312.8 310.6 1 Net balances due to related foreign offices ... 44.1 42.2 45.5 47.8 56.7 59.8 58.3 57.4 61.3r 64.7 69.7 74.9 8 Domestically chartered banks -4.6 -.7 -.7 -5.0 -4.3 -6.4 -7.0 -9.3 -11.0 -12.8 -11.7 -15.0 9 Foreign-related banks 48.7 42.9 46.3 52.9 60.9 66.2 65.3 66.6 72.3 77.5 81.3 89.8 10 Borrowings from other than commercial banks in United States 234.9 245.2 245.4 239.4 238.8 233.7 230.6 237.5 240.8 240.8 243.2 235.7 11 Domestically chartered banks 152.2 160.3 158.9 150.8 150.2 144.5 141.4 147.4 149.8 152.9 155.2 150.3 12 Federal funds and security RP borrowings 148.8 156.8 155.7 147.4 146.4 140.4 137.2 143.5 146.0 149.4 151.1 146.4 1133 Other6 3.4 3.5 3.3 3.4 3.9 4.1 4.2 3.9 3.8 3.6 4.1 4.0 14 Foreign-related banks 82.7 84.9 86.5 88.5 88.5 89.2 89.2 90.2 91.0 87.9 87.9 85.4 MEMO Gross large time deposits1 15 Seasonally adjusted 416.0 413.7 406.9 399.9 396.7 392.4 386.1 384.6 381.2 373.4r 370.1 365.1 16 Not seasonally adjusted 413.6 412.6 407.4 398.8 398.0 393.7 385.9 386.2 382.4 373.4 369.7 364.0 U.S. Treasury demand balances at commercial banks 17 Seasonally adjusted 27.8 19.5 21.8 19.9 17.0 25.8 21.9 32.6 25.4 22.4 19.4 20.5 18 Not seasonally adjusted 33.1 25.2 20.1 17.7 21.0 25.2 19.7 22.4 28.7 21.9 16.5 19.5 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 Nov. 4r Nov. LLR Nov. 18r Nov. 25r Dec. 2 Dec. 9 Dec. 16 Dec. 23 Dec. 30 ALL COMMERCIAL BANKING INSTITUTIONS2 Assets 1 Loans and securities 3,102,194 3,110,375 3,104,864 3,113,179 3,124,835 3,128,500 3,126,879 3,116,138 3,118,734 2 Investment securities 787,211 789,910 787,653 788,833 796,728 794,734 793,218 795,589 798,474 3 U.S. government securities 623,344 626,806 624,739 625,592 633,984 632,474 631,188 633,187 635,476 4 Other 163,867 163,103 162,915 163,241 162,744 162,260 162,030 162,402 162,998 5 Trading account assets 42,073 41,533 45,636 42,819 41,976 39,281 37,490 35,476 35,076 6 U.S. government securities 25,497 25,564 28,987 27,780 27,610 25,660 24,295 21,293 20,755 7 Other securities 3,375 3,300 3,097 2,727 2,653 2,655 2,743 3,191 2,935 8 Other trading account assets 13,202 12,669 13,553 12,312 11,713 10,965 10,452 10,991 11,386 9 Total loans 2,272,909 2,278,932 2,271,574 2,281,527 2,286,131 2,294,486 2,296,171 2,285,073 2,285,183 10 Interbank loans 165,458 172,880 165,943 171,418 172,013 178,924 179,369 168,628 161,498 11 Loans excluding interbank 2,107,452 2,106,052 2,105,631 2,110,109 2,114,118 2,115,562 2,116,802 2,116,446 2,123,685 12 Commercial and industrial 603,132 602,577 603,563 605,552 605,658 601,806 604,450 604,795 606,185 13 Real estate 891,076 892,805 889,967 889,217 889,734 891,583 891,599 889,021 888,562 14 Revolving home equity 73,413 73,511 73,513 73,452 73,381 73,418 73,352 73,109 73,219 15 Other 817,663 819,293 816,454 815,765 816,353 818,165 818,247 815,912 815,343 16 Individual 356,343 355,021 355,843 356,073 357,203 357,045 358,083 360,692 361,940 17 All other 256,901 255,649 256,257 259,267 261,523 265,129 262,671 261,938 266,998 18 Total cash assets 210,395 223,068 207,168 220,501 223,599 204,635 219,622 233,909 236,138 19 Balances with Federal Reserve Banks 27,764 28,813 20,818 26,321 28,329 25,566 26,428 35,116 29,078 20 Cash in vault 28,919 30,963 32,578 31,198 33,128 32,526 32,437 31,351 36,339 21 Demand balances at U.S. depository institutions.. 30,209 32,531 29,263 32,138 31,053 29,650 30,734 34,099 35,478 22 Cash items 80,060 87,125 79,980 86,883 86,083 72,810 87,261 92,096 93,614 23 Other cash assets 43,443 43,637 44,530 43,961 45,005 44,128 42,743 41,142 41,834 24 Other assets 302,193 299,996 293,728 288,974 293,899 294,384 300,286 295,681 296,473 25 Total assets 3,614,781 3,633,439 3,605,760 3,622,654 3,642,332 3,627,518 3,646,787 3,645,728 3,651,345 Liabilities 26 Total deposits 2,517,443 2,522,843 2,495,139 2,515,315 2,531,353 2,512,200 2,537,228 2,529,217 2,541,635 27 Transaction accounts 747,568 752,622 734,553 754,824 769,001 748,327 776,012 780,688 799,332 28 Demand, U.S. government 3,392 2,442 2,820 4,287 3,518 2,919 5,904 5,208 5,901 29 Demand, depository institutions 40,109 42,244 38,688 43,541 41,209 38,575 41,985 43,298 43,534 30 Other demand and all checkable deposits 704,068 707,936 693,046 706,997 724,274 706,833 728,123 732,182 749,897 31 Savings deposits (excluding checkable) 747,962 751,324 744,406 743,576 747,634 751,797 752,146 741,783 740,900 32 Small time deposits 643,966 642,110 639,993 638,829 638,404 637,568 637,757 636,240 634,829 33 Time deposits over $100,000 377,947 376,787 376,187 378,086 376,315 374,508 371,314 370,507 366,575 34 Borrowings 499,408 514,068 500,974 491,902 503,142 508,197 497,930 501,147 498,988 35 Treasury tax and loan notes 8,097 18,701 6,924 6,965 13,481 6,016 23,348 18,020 29,773 36 Other 491,311 495,367 494,050 484,937 489,661 502,181 474,582 483,127 469,215 37 Other liabilities 332,570 331,105 344,713 349,903 341,074 339,678 345,665 349,763 342,903 38 Total liabOities 3,349,421 3,368,016 3,340,825 3,357,120 3,375,569 3,360,075 3,380,822 3,380,127 3,383,526 39 Residual (assets less liabilities)3 265,361 265,423 264,935 265,534 266,763 267,443 265,965 265,601 267,818 Footnotes appear on the following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Nonfinancial Statistics • March 1993 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKS1 Wednesday figures—Continued Millions of dollars 1992 Nov. 4r Nov. llr Nov. 18r Nov. 25r Dec. 2 Dec. 9 Dec. 16 Dec. 23 Dec. 30 DOMESTICALLY CHARTERED COMMERCIAL BANKS4 Assets 40 Loans and securities 2,753,949 2,755,782 2,749,112 2,753,601 2,765,984 2,763,408 2,763,606 2,746,699 2,750,768 41 Investment securities 726,177 727,787 726,164 726,785 733,311 731,828 729,438 731,933 733,344 42 U.S. government securities 583,774 585,714 583,880 584,554 591,872 590,909 588,545 591,031 592,588 43 Other 142,403 142,074 142,285 142,231 141,440 140,919 140,892 140,902 140,756 44 Trading account assets 42,073 41,533 45,636 42,819 41,976 39,281 37,490 35,476 35,076 45 U.S. government securities 25,497 25,564 28,987 27,780 27,610 25,660 24,295 21,293 20,755 46 Other securities 3,375 3,300 3,097 2,727 2,653 2,655 2,743 3,191 2,935 47 Other trading account assets 13,202 12,669 13,553 12,312 11,713 10,%5 10,452 10,991 11,386 48 Total loans 1,985,698 1,986,462 1,977,311 1,983,997 1,990,697 1,992,300 1,9%,678 1,979,291 1,982,347 49 Interbank loans 144,252 146,687 138,998 143,606 146,391 149,887 153,166 140,843 139,414 50 Loans excluding interbank 1,841,446 1,839,775 1,838,314 1,840,391 1,844,307 1,842,413 1,843,512 1,838,448 1,842,934 51 Commercial and industrial 440,951 440,225 439,809 441,164 440,535 437,054 438,318 437,155 438,799 52 Real estate 838,460 840,169 837,337 836,558 837,634 839,343 839,256 836,726 836,899 53 Revolving home equity 73,413 73,511 73,513 73,452 73,381 73,418 73,352 73,109 73,219 54 Other 765,047 766,658 763,824 763,106 764,253 765,925 765,904 763,617 763,680 55 Individual 356,343 355,021 355,843 356,073 357,203 357,045 358,083 360,692 361,940 56 All other 205,692 204,360 205,325 206,5% 208,934 208,971 207,854 203,875 205,2% 57 Total cash assets 182,982 195,592 178,932 192,364 1%,328 178,146 193,263 207,261 210,263 58 Balances with Federal Reserve Banks 27,364 28,021 20,345 25,643 27,855 24,830 25,%3 34,263 28,626 59 Cash in vault 28,885 30,926 32,542 31,163 33,093 32,492 32,398 31,313 36,303 60 Demand balances at U.S. depository institutions 28,744 31,005 27,904 30,782 29,678 28,277 29,263 32,511 33,928 61 Cash items 77,884 84,816 77,686 84,573 83,870 70,657 84,884 89,926 91,415 62 Other cash assets 20,105 20,824 20,456 20,205 21,834 21,936 20,737 19,142 20,1% 63 Other assets 179,741 179,027 171,132 170,853 175,446 178,021 180,028 175,905 177,233 64 Total assets 3,116,672 3,130,401 3,099,175 3,116,818 3,137,759 3,119,576 3,136,897 3,129,866 3,138,264 Liabilities 65 Total deposits 2,358,265 2,363,536 2,336,013 2,353,840 2,370,994 2,352,255 2,376,687 2,367,568 2,381,492 66 Transaction accounts 736,810 742,082 724,189 744,277 758,379 738,006 765,093 769,721 788,351 67 Demand, U.S. government 3,392 2,441 2,819 4,286 3,518 2,919 5,894 5,207 5,901 68 Demand, depository institutions 37,413 39,843 36,329 41,120 38,653 36,135 39,516 40,680 40,993 69 Other demand and all checkable deposits 6%,006 699,798 685,041 698,870 716,208 698,952 719,683 723,834 741,458 70 Savings deposits (excluding checkable) 743,142 746,449 739,677 738,7% 742,887 746,978 747,401 737,219 736,379 71 Small time deposits 641,352 639,500 637,406 636,238 635,816 634,980 635,173 633,673 632,279 72 Time deposits over $100,000 236,961 235,505 234,742 234,528 233,913 232,291 229,022 226,954 224,483 73 Borrowings 363,5% 373,713 366,576 364,8% 369,956 373,200 367,774 370,431 366,604 74 Treasury tax and loan notes 8,097 18,701 6,924 6,%5 13,481 6,016 23,348 18,020 29,773 75 Other 355,499 355,012 359,652 357,931 356,475 367,184 344,426 352,411 336,831 76 Other liabilities 133,024 131,302 135,225 136,122 133,620 130,251 130,044 129,840 125,923 77 Total liabilities 2,854,884 2,868,552 2,837,814 2,854,857 2,874,569 2,855,706 2,874,505 2,867,838 2,874,019 78 Residual (assets less liabilities)3 261,787 261,849 261,362 261,961 263,190 263,870 262,392 262,028 264,245 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 Nov. 4 Nov. 11 Nov. 18 Nov. 25 Dec. 2 Dec. 9 Dec. 16 Dec. 23 Dec. 30 ASSETS 1 Cash and balances due from depository institutions 108,767r 115,447r 105,584r 114,987r 117,322 104,461 116,371 126,932 126,520 2 U.S. Treasury and government securities 271,276 272,236 274,025 273,052 278,047 274,311 270,960 266,867 267,390 3 Trading account 22,714 23,108 26,016 25,096 25,049 22,347 21,605 18,717 18,509 4 Investment account 248,562 249,128 248,008 247,955 252,999 251,964 249,356 248,151 248,880 5 Mortgage-backed securities1 81,130 81,048 79,697 82,286 83,439 83,217 82,132 81,644 81,676 All others, by maturity 6 One year or less 27,639 28,115 28,925r 29,321r 29,363 30,427 29,598 29,848 30,942 7 One year through five years 76,981 77,436 78,035r 76,163r 77,433 76,233 76,193 76,317 75,350 8 More than five years 62,811 62,528 61,351 60,186 62,764 62,087 61,433 60,342 60,913 9 Other securities 55,567r 55,375r 55,191r 54,771r 54,594 54,562 54,673 55,055 54,462 10 Trading account 3,270 3,196 2,993 2,624 2,552 2,554 2,659 3,091 2,834 11 Investment account 52,297r 52,180* 52,198r 52,147r 52,042 52,008 52,014 51,964 51,628 12 State and political subdivisions, by maturity 20,634 20,621 20,613 20,586 20,485 20,497 20,471 20,448 20,398 13 One year or less 3,220 3,217 3,213 3,223 3,216 3,276 3,271 3,264 3,258 14 More than one year 17,414 17,405 17,399 17,364 17,269 17,221 17,200 17,184 17,139 15 Other bonds, corporate stocks, and securities 31,663r 31,559* 31,585r 31,561r 31,557 31,511 31,542 31,516 31,230 16 Other trading account assets 12,974 12,449 13,334 12,086 11,487 10,741 10,230 10,767 11,157 17 Federal funds sold2 82,011 84,964 79,924 82,073 86,492 89,244 92,013 79,033 80,080 18 To commercial banks in the United States 54,221 56,981 49,537 53,874 55,827 57,321 63,043 54,734 54,599 19 To nonbank brokers and dealers 22,699 22,805 25,468 23,919 25,152 26,261 23,932 19,412 20,781 20 To others 5,091 5,179 4,919 4,281 5,513 5,661 5,037 4,888 4,701 21 Other loans and leases, gross 980,063r 979,466r 977,71C 982,253r 982,607 980,339 985,361 984,798 987,319 22 Commercial and industrial 279,647r 278,903r 279,126r 280,797r 280,242 277,122 278,558 277,121 278,560 23 Bankers acceptances and commercial paper 2,146 2,328 2,349 2,649 2,463 2,516 2,459 2,246 2,068 24 All other 277,50C 276,575r 276,777r 278,148r 277,780 274,606 276,099 274,875 276,492 25 U.S. addressees 275,73C 274,901r 275,127r 276,397r 275,928 272,783 274,316 273,192 274,869 26 Non-U.S. addressees 1,771 1,673 1,650 1,751 1,852 1,823 1,784 1,683 1,623 27 Real estate loans 401,025r 402,796r 400,777r 399,776r 400,248 402,199 402,476 399,945 399,724 28 Revolving, home equity 42,974r 43,143r 43,117r 43.06C 43,001 43,047 43,006 42,769 42,772 29 All other 358,052r 359,654r 357,660" 356,716r 357,247 359,152 359,470 357,176 356,952 30 To individuals for personal expenditures 176,742 175,966 176,346 176,71lr 177,383 177,831 180,228 181,925 182,545 31 To financial institutions 39,36c 39,179r 39,374r 39,919r 40,610 38,780 37,538 37,496 38,284 32 Commercial banks in the United States 14,477r 14,793r 15,383r 15,166r 15,400 14,929 13,879 13,839 14,516 33 Banks in foreign countries 1,976 1,927 1,758 2,459 2,517 2,245 2,424 2,448 2,160 34 Nonbank financial institutions 22,906r 22,459r 22,233r 22,294r 22,693 21,607 21,235 21,209 21,608 35 For purchasing and carrying securities 14,492 14,818 14,056 16,323 13,556 15,944 15,205 16,988 15,605 36 To finance agricultural production 6,116 6,015 5,957 5,901 5,846 5,796 5,887 5,805 5,962 37 To states and political subdivisions 15,067r 15,057r 14,988r 14,987r 14,807 14,725 14,677 14,676 14,727 38 To foreign governments and official institutions 1,426 1,337 1,397 1,326 1,447 1,299 1,421 1,342 1,384 39 All other loans 21,820 21,166 21,511 22,354 24,310 22,528 25,247 25,351 26,061 40 Lease-financing receivables 24,367r 24,229* 24,18c 24.16C 24,157 24,114 24,124 24,149 24,468 41 LESS: Unearned income 2,647 2,638 2,363 2,329 2,293 2,259 2,286 2,289 2,290 42 Loan and lease reserve5 37,399 37,449 37,507 37,401 37,470 37,663 37,616 37,362 36,469 43 Other loans and leases, net 940,017r 939,379* 937,841r 942,523r 942,844 940,417 945,459 945,147 948,561 44 Other assets 163,695 163,139 157,612 157,349* 160,398 164,073 166,401 162,076 160,679 45 Total assets 1,634,305 1,642,990 1,623,511 L,636,842R 1,651,184 1,637,808 1,656,107 1,645,877 1,648,847 Footnotes appear on the following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic NonfinancialS tatistics • March 1993 1.26 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued Millions of dollars, Wednesday figures 1992 Account Nov. 4 Nov. 11 Nov. 18 Nov. 25 Dec. 2 Dec. 9 Dec. 16 Dec. 23 Dec. 30 LIABILITIES 46 Deposits 1,123,989 1,126,347 1,109,473 l,123,858r 1,136,181 1,120,485 1,143,025 1,132,683 1,142,988 47 Demand deposits 264,307 268,261 260,881 275,801r 282,192 265,626 287,067 287,827 300,331 48 Individuals, partnerships, and corporations 214,953r 219,424r 212,104r 221,752r 228,485 216,581 230,749 230,367 241,787 49 Other holders 49,354r 48,837r 48,777r 54,049"^ 53,707 49,044 56,318 57,460 58,544 50 States and political subdivisions 9,032 8,406 8,481 9,867 10,754 9,611 10,466 10,049 9,947 51 U.S. government 2,070 1,471 1,703 2,677 2,129 1,824 3,623 3,318 3,416 52 Depository institutions in the United States ... 22,802r 24,535r 22,132r 25,769r 23,526 21,674 24,082 25,132 25,797 53 Banks in foreign countries 5,144 5,127 5,000 5,714 5,927 5,578 5,876 6,0% 6,011 54 Foreign governments and official institutions .. 882 718 698 682 907 861 619 653 558 55 Certified and officers' checks 9,424 8,580 10,763 9,339 10,464 9,497 11,652 12,212 12,815 56 Transaction balances other than demand deposits4 . 116,118 114,698 113,443 113,745 117,007 116,446 117,184 118,457 119,813 57 Nontransaction balances 743,564 743,389 735,149 734,312 736,981 738,414 738,774 726,400 722,843 58 Individuals, partnerships, and corporations 716,627 716,508 708,176 707,490 710,666 711,972 712,697 701,103 698,804 59 Other holders 26,936 26,880 26,973 26,822 26,315 26,442 26,077 25,297 24,039 60 States and political subdivisions 22,236 22,136 22,279 22,065 21,643 21,799 21,425 20,691 20,614 61 U.S. government 2,355 2,363 2,385 2,354 2,336 2,338 2,343 2,332 1,240 62 Depository institutions in the United States ... 2,036 2,069 1,993 2,088 2,029 1,979 1,976 1,952 1,873 63 Foreign governments, official institutions, and banks . 310 312 316 316 307 325 332 321 312 64 Liabilities for borrowed money3 271,436 278,776 272,522 271,604 274,936 280,458 276,782 276,992 272,582 65 Borrowings from Federal Reserve Banks 0 0 125 783 0 0 0 0 0 66 Treasury tax and loan notes 6,606r 15,770r 5,187 5,151r 11,144 4,424 19,877 14,526 24,929 67 Other liabilities for borrowed money 264,830 263,006r 267,210 265,669r 263,791 276,034 256,905 262,467 247,654 68 Other liabilities (including subordinated notes and debentures) 104,173 102,714 106,564 107,309 104,682 101,079 100,958 100,610 %,462 69 Total liabilities 1,499,597 1,507,837 1,488,559 l,502,770r 1,515,798 1,502,022 1,520,765 1,510,286 1,512,032 70 Residual (total assets less total liabilities)7 134,708 135,152 134,952 134,071 135,386 135,786 135,342 135,592 136,816 MEMO 71 Total loans and leases, gross, adjusted, plus securities' 1,333,193 l,332,716r l,335,264r l,335,196r 1,342,000 1,336,947 1,336,315 1,327,948 1,331,293 72 Time deposits in amounts of $100,000 or more 123,005 121,893 121,532 121,719 121,573 120,149 117,682 115,908 113,940 73 Loans sold outright to affiliates9 1,061 1,060 1,040 1,014 1,007 999 970 %2 954 74 Commercial and industrial 476 477 476 465 460 457 457 456 452 75 Other 585 583 563 549 547 542 513 506 502 76 Foreign branch credit extended to U.S. residents1®... 24,887 24,919 24,670 25,001 24,813 24,939 24,799 24,614 24,318 77 Net due to related institutions abroad -15,530 -14,202 -13,777 -10,893 -15,298 -19,739 -17,005 -16,446 -16,885 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 Nov. 4 Nov. 11 Nov. 18 Nov. 25 Dec. 2 Dec. 9 Dec. 16 Dec. 23 Dec. 30 1 Cash and balances due from depository institutions 18,468 18,513 19,050 18,980 18,367 17,815 17,723 17,927 17,381 2 U.S. Treasury and government agency securities 2244,,994477 25,916 25,767 25,882 26,565 26,216 26,904 26,5% 27,064 3 Other securities 8,307 8,130 7,967 8,122 8,242 8,257 8,172 8,318 8,618 4 Federal funds sold 20,230 22,959 22,560 24,260 22,902 27,300 22,244 25,954 22,331 5 To commercial banks in the United States ... 4,647 7,089 7,431r 7,908r 7,081 8,734 6,995 8,111 4,940 6 To others2 15,582 15,870 15,130" 16,352r 15,820 18,566 15,249 17,844 17,391 7 Other loans and leases, gross 161,280 162,078 163,627 164,107 164,014 164,171 167,227 167,695 169,255 8 Commercial and industrial 97,667r 97,777r 98,631r 99,018r 99,460 99,237 100,023 100,938 110000,,777722 9 Bankers acceptances and commercial paper 2,650 2,749 2,837 2,695 2,697 2,513 2,494 2,540 2,451 10 All other 95,017r 95,028r 95,793r 96,323r 96,763 96,724 97,529 98,398 98,320 11 U.S. addressees 92,042r 92,132r 92,842r 93,395r 93,788 93,655 94,507 95,404 95,231 12 Non-U.S. addressees 2,975 2,896 2,951 2,927 2,975 3,069 3,022 2,994 3,089 13 Loans secured by real estate 34,882 34,895 34,891 34,910 34,540 34,632 34,701 34,669 34,249 14 To financial institutions 22,896r 23,373r 23,701r 23,892r 23,667 23,542 24,754 24,371 26,148 15 Commercial banks in the United States.. 6,046 6,276 6,435 6,320 5,892 5,923 6,457 5,908 6,164 16 Banks in foreign countries 2,240" 2,137r 2,094r 2,281r 2,158 2,200 2,075 2,101 2,119 17 Nonbank financial institutions 14,609 14,960 15,172 15,291 15,617 15,419 16,221 16,362 17,866 18 For purchasing and carrying securities 3,355 3,509 3,816 3,829 3,656 4,269 5,163 5,122 5,219 19 To foreign governments and official institutions 363 353 354 356 376 366 365 375 364 20 All other 2,118 2,171 2,234 2,102 2,315 2,124 2,221 2,221 2,503 21 Other assets (claims on nonrelated parties) .. 31,908 31,852 30,885 30,505 30,791 30,423 31,224 30,712 30,730 22 Total assets3 308,838 311,999 314,273 313,793 312,983 315,145 316,394 320,224 318,440 23 Deposits or credit balances due to other than directly related institutions 102,280 102,228 102,670 104,805 103,964 104,931 105,761 105,603 104,983 24 Demand deposits 3,614 3,689 3,658 3,817 3,794 3,581 4,164 3,898 4,079 25 Individuals, partnerships, and corporations 2,898 2,976 2,976 3,074 2,948 2,803 3,096 3,014 3,252 26 Other 716 713 681 743 847 778 1,068 883 827 27 Nontransaction accounts 98,666 98,539 99,012 100,988 100,170 101,350 101,597 101,705 100,904 28 Individuals, partnerships, and corporations 71,297 70,462 70,502 72,072 70,872 70,850 71,241 71,315 71,043 29 Other 27,370 28,077 28,511 28,916 29,298 30,499 30,356 3300,,339900 29,861 30 Borrowings from other than directly related institutions 94,723 97,909 93,730 88,545 92,880 94,150 90,755 91,148 92,318 31 Federal funds purchased 46,807 48,966 44,681 41,874 46,626 46,602 46,244 44,625 49,349 32 From commercial banks in the United States 13,640 15,198 12,870 14,521 16,271 15,867 18,926 12,891 14,748 33 From others 33,167 33,768 31,811 27,353 30,354 30,734 27,319 31,733 34,601 34 Other liabilities for borrowed money 47,915 48,943 49,049 46,672 46,254 47,549 44,511 46,523 42,%9 35 To commercial banks in the United States 9,537 9,532r 10,683 10,272 9,635 9,982 10,184 10,427 10,357 36 To others 38,378 39,41 lr 38,367 36,399 36,619 37,567 34,327 36,0% 32,611 37 Other liabilities to nonrelated parties 30,917 32,258 30,303 30,874 30,847 30,688 29,984 30,954 31,772 38 Total liabilities6 308,838 311,999 314,273 313,793 312,983 315,145 316,394 320,224 318,440 MEMO 39 Total loans (gross) and securities, adjusted7.. 204,071 205,718 206,056r 208,142r 208,749 211,286 211,095 214,545 216,164 40 Net due to related institutions abroad 37,220 37,053 43,153 47,631 43,190 44,412 46,994 49,498 46,307 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 NonfinancialS tatistics • March 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 June July Aug. Sept. Oct. Nov. Commercial paper (seasonally adjusted unless noted otherwise) 11 AAllll iissssuueerrss 358,997 458,464 525,831 561,142 530,300 542,205 547,242 545,801 549,731 558,468 561,909 FFiinnaanncciiaall ccoommppaanniieess11 DDeeaalleerr--ppllaacceedd ppaappeerr 22 TToottaall 102,742 159,777 183,622 215,123 214,445 234,212 226,943 231,586 233,977 231,132 231,384 33 BBaannkk--rreellaatteedd ((nnoott sseeaassoonnaallllyy aaddjjuusstteedd))33 1,428 1,248 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. DDiirreeccttllyy ppllaacceedd ppaappeerr44 44 TToottaall 174,332 194,931 210,930 199,835 183,195 171,321 179,725 173,772 179,731 182,059 180,177 55 BBaannkk--rreellaatteedd ((nnoott sseeaassoonnaallllyy aaddjjuusstteedd))33 43,173 43,155 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 66 NNoonnffiinnaanncciiaall ccoommppaanniieess55 81,923 103,756 131,279 146,184 132,660 136,672 140,574 140,443 136,023 145,277 150,348 Bankers dollar acceptances (not seasonally adjusted)6 7 Total 70,565 66,631 62,972 54,771 43,770 37,767 37,733 37,090 37,814 37,599 37,651 Holder 8 Accepting banks 10,943 9,086 9,433 9,017 11,017 9,680 9,225 9,372 10,436 10,236 10,301 9 Own bills 9,464 8,022 8,510 7,930 9,347 8,129 7,808 7,927 9,073 8,764 9,156 10 Bills bought 1,479 1,064 924 1,087 1,670 1,551 1,417 1,446 1,363 1,472 1,145 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 1,338 1,269 1,851 1,803 1,204 1,289 13 Others 58,658 56,052 52,473 44,836 31,014 26,749 27,239 25,866 25,575 26,159 26,061 Basis 14 Imports into United States 16,483 14,984 15,651 13,095 12,843 11,569 11,825 11,600 12,227 12,116 12,133 15 Exports from United States 15,227 14,410 13,683 12,703 10,351 9,062 9,015 7,861 8,051 7,849 7,673 16 All other 38,854 37,237 33,638 28,973 20,577 17,135 16,893 17,628 17,536 17,633 17,846 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 Period Av r e a r t a e ge Period Av r e a r t a e 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- 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 1993— Jan. 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 11999900 11999911 11999922 Sept. Oct. Nov. Dec. Nov. 27 Dec. 4 Dec. 11 Dec. 18 Dec. 25 MONEY MARKET INSTRUMENTS 1 Federal funds1'2,3 8.10 5.69 3.52 3.22 3.10 3.09 2.92 3.10 3.37 2.94 2.93 2.94 2 Discount window borrowing ,4 6.98 5.45 3.25 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 8.15 5.89 3.71 3.25 3.22 3.25 3.71 3.22 3.70 3.80 3.75 3.62 4 3-month 8.06 5.87 3.75 3.24 3.33 3.66 3.67 3.79 3.86 3.72 3.68 3.58 5 6-month 7.95 5.85 3.80 3.26 3.33 3.67 3.70 3.79 3.86 3.73 3.71 3.63 Finance paper, directly placed3,5,7 6 1-month 8.00 5.73 3.62 3.13 3.14 3.20 3.68 3.19 3.66 3.74 3.70 3.61 7 3-month 7.87 5.71 3.65 3.08 3.24 3.59 3.58 3.70 3.74 3.58 3.56 3.51 8 6-month 7.53 5.60 3.63 3.11 3.23 3.56 3.52 3.64 3.68 3.53 3.51 3.50 Bankers acceptances3,5* 9 3-month 7.93 5.70 3.62 3.10 3.19 3.51 3.44 3.60 3.65 3.48 3.42 3.34 10 6-month 7.80 5.67 3.67 3.13 3.19 3.51 3.47 3.60 3.65 3.48 3.43 3.39 Certificates qf deposit, secondary 11 1-month 8.15 5.82 3.64 3.14 3.11 3.23 3.57 3.33 3.97 3.72 3.50 3.34 12 3-month 8.15 5.83 3.68 3.13 3.26 3.58 3.48 3.67 3.73 3.54 3.44 3.35 13 6-month 8.17 5.91 3.76 3.17 3.27 3.60 3.55 3.69 3.75 3.56 3.53 3.47 14 Eurodollar deposits, 3-month3,10 8.16 5.86 3.70 3.15 3.30 3.67 3.50 3.78 3.80 3.54 3.48 3.38 U.S. Treasury bills Secondary market ' 15 3-month 7.50 5.38 3.43 2.91 2.86 3.13 3.22 3.24 3.30 3.24 3.21 3.18 16 6-month 7.46 5.44 3.54 2.96 3.04 3.34 3.36 3.43 3.45 3.36 3.38 3.32 17 1-year 7.35 5.52 3.71 3.06 3.17 3.52 3.55 3.60 3.64 3.55 3.60 3.49 Auction average ' ' 18 3-month 7.51 5.42 3.45 2.97 2.84 3.14 3.25 3.27 3.31 3.29 3.26 3.16 19 6-month 7.47 5.49 3.57 3.01 2.98 3.35 3.39 3.45 3.46 3.37 3.43 3.32 20 1-year 7.36 5.54 3.75 3.02 3.12 3.61 3.57 n.a. n.a. n.a. 3.57 n.a. U.S. TREASURY NOTES AND BONDS Constant maturities12 21 1-year 7.89 5.86 3.89 3.18 3.30 3.68 3.71 3.76 3.82 3.72 3.76 3.64 22 2-year 8.16 6.49 4.77 3.89 4.08 4.58 4.67 4.69 4.78 4.65 4.72 4.63 23 3-year 8.26 6.82 5.30 4.42 4.64 5.14 5.21 5.24 5.35 5.19 5.25 5.14 24 5-year 8.37 7.37 6.19 5.38 5.60 6.04 6.08 6.12 6.20 6.04 6.10 6.03 25 7-year 8.52 7.68 6.63 5.96 6.15 6.49 6.46 6.52 6.59 6.43 6.47 6.39 26 10-year 8.55 7.86 7.01 6.42 6.59 6.87 6.77 6.86 6.91 6.77 6.79 6.68 27 30-year 8.61 8.14 7.67 7.34 7.53 7.61 7.44 7.56 7.56 7.44 7.44 7.36 Composite 28 More than 10 years (long-term) 8.74 8.16 7.52 7.08 7.26 7.43 7.30 7.41 7.44 7.30 7.31 7.22 STATE AND LOCAL NOTES AND BONDS Moody's series^ 29 Aaa 6.96 6.56 n.a. 5.92 6.10 6.05 n.a. 6.05 5.89 n.a. n.a. n.a. 30 Baa 7.29 6.99 n.a. 6.27 6.51 6.46 n.a. 6.46 6.24 n.a. n.a. n.a. 31 Bond Buyer series 7.27 6.92 6.44 6.25 6.41 6.36 6.22 6.26 6.28 6.22 6.25 6.19 CORPORATE BONDS 32 Seasoned issues, all industries15 9.77 9.23 8.55 8.26 8.41 8.51 8.35 8.47 8.46 8.37 8.36 8.30 Rating group 33 Aaa 9.32 8.77 8.14 7.92 7.99 8.10 7.98 8.06 8.06 8.00 7.99 7.93 34 Aa 9.56 9.05 8.46 8.17 8.32 8.40 8.24 8.36 8.36 8.26 8.24 8.18 35 A 9.82 9.30 8.62 8.31 8.49 8.58 8.37 8.54 8.48 8.39 8.37 8.32 36 Baa 10.36 9.80 8.98 8.62 8.84 8.96 8.81 8.91 8.92 8.82 8.82 8.75 37 A-rated, recently offered utility bonds16 10.01 9.32 8.52 8.11 8.40 8.51 8.27 8.48 8.35 8.27 8.24 8.18 MEMO: Dividend-price ratio17 38 Preferred stocks 8.96 8.17 7.46 7.14 7.22 7.43 7.45 7.45 7.50 7.49 7.43 7.41 39 Common stocks 3.61 3.26 2.99 3.00 3.07 2.98 2.90 2.94 2.94 2.90 2.91 2.86 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 Nonfinancial Statistics • March 1993 1.36 STOCK MARKET Selected Statistics 1992 IInnddiiccaattoorr 11999900 11999911 11999922 Apr. May June July Aug. Sept. Oct. Nov. Dec. Prices and trading volume (averages of daily figures) Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 183.66 206.35 229.00 224.55 228.55 224.68 228.17 230.07 230.13 226.97 232.84 239.47 2 Industrial 226.06 258.16 284.26 281.60 285.17 279.54 281.90 284.44 285.76 279.70 287.80 290.77 3 Transportation 158.80 173.97 201.02 201.28 207.88 202.02 198.36 191.31 191.61 192.30 204.63 212.35 4 Utility 90.72 92.64 99.48 94.92 98.24 97.23 101.18 103.41 102.26 101.62 101.13 103.85 5 Finance 133.21 150.84 179.29 171.05 175.89 174.82 180.96 180.47 178.27 181.36 189.27 196.87 6 Standard & Poor's Corporation (1941-43 = 10)' 335.01 376.20 415.75 407.41 414.81 408.27 415.05 417.93 418.48 412.50 422.84 435.64 7 American Stock Exchange (Aug. 31, 1973 = 50? 338.32 360.32 391.28 388.06 392.63 385.56 384.07 385.80 382.67 371.27 387.75 392.69 Volume of trading (thousands of shares) 8 New York Stock Exchange 156,359 179,411 202,558 206,251 182,027 195,089 194,138 174,003 191,774 204,787 208,221 222,736 9 American Stock Exchange 13,155 12,486 n.a. 14,096 13,455 11,216 10,722 11,875 11,198 11,966 14,925 16,523 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers 28,210 36,660 43,990 38,750 39,890 39,690 39,640 39,940 41,250 41,590 43,630 43,990 Free credit balances at brokers* 11 Margin accounts 8,050 8,290 8,970 8,780 7,700 7,780 7,920 8,060 8,060 8,355 8,500 8,970 12 Cash accounts 19,285 19,255 22,510 16,400 18,695 19,610 18,775 18,305 19,650 18,700 19,310 22,510 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 1992 AAccccoouunntt 11999900 11999911 Jan. Feb. Mar. Apr. May June July1" Aug.* Sept.* Oct. SAIF-insured institutions 1 Assets 1,084,821 919,979 909,014 906,142 883,407 872,026 870,334 861,508r 856,371 856,146 847,367 846,679 2 Mortgages 633,385 551,322 545,728 541,734 552299,,115588 552244,,995544 552211,,991111 551166,,661166rr 551122,,226644 551122,,007777 550088,,883355 550022,,669900 3 Mortgage-backed securities 155,228 129,461 127,371 127,766 112255,,227722 112244,,776633 112244,,222255 112233,,445544 112222,,336688 112200,,442211 112200,,223311 112200,,221155 4 Contra-assets to mortgage assets1 . 16,897 12,307 11,917 11,608 10,979 10,959 11,120 11,273r 11,044 11,164 11,064 10,631 5 Commercial loans 24,125 17,139 16,827 16,050 15,400 15,075r 14,607 14,024r 13,929 13,525 13,425 13,635 6 Consumer loans 48,753 41,775 40,857 39,908 38,717 37,999 3377,,886688rr 37,403 3377,,223300 3377,,111111 3366,,774422 3355,,995566 7 Contra-assets to nonmortgage loans'.. 1,939 1,239 1,314 1,115 -1,008 980 949 946 910 920 975 922 8 Cash and investment securities 146,644 120,077 118,610 121,969 119,543 116,462 120,763 119,384 120,220 124,140 120,1% 126,590 9 Other2 95,522 73,751 72,653 71,637 67,387 64,711 63,029* 62,843r 62,315 60,956 59,987 59,146 10 Liabilities and net worth . 1,084,821 919,979 909,014 906,142 883,407 872,026 870,334 861,508r 856,371 856,146 847,367 846,679 11 Savings capital 835,4% 731,937 721,099 717,026 703,811 689,777 688,199 682,535 676,141 672,354 667,027 660,682 12 Borrowed money 197,353 121,923 119,915 118,554 110,031 111,262 110,126 108,943 109,036 110,109 110,020 114,124 13 FHLBB 100,391 65,842 62,642 63,138 62,628 62,268 61,439 62,760 62,359 62,225 64,103 63,065 14 Other 96,962 56,081 57,273 55,416 47,403 48,994 48,687 46,183 46,677 47,884 45,917 51,059 15 Other 21,332 17,560 18,941 21,329 18,295 18,883 19,626 17,751 18,570 20,523 18,037 19,872 16 Net worth 30,640 48,559 49,009 49,233 51,271 52,103 52,383 52,279* 52,624 53,159 52,282 52,002 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** July Aug. Sept. Oct. Nov. Dec. U.S. budget1 1 Receipts, total 1,031,308 1,054,265 1,091,631 79,080 78,218 118,344 76,833 74,635 113,757 2 On-budget 749,654 760,382 789,205 55,977 55,434 92,813 55,057 51,221 89,661 3 Off-budget 281,654 293,883 302,426 23,103 22,784 25,531 21,776 23,414 24,0% 4 Outlays, total 1,251,766 1,323,757 1,381,791 122,226 102,920 112,943 125,621* 107,365 152,702 5 On-budget 1,026,701 1,082,072 1,129,475 99,935 79,128 86,709 103,781* 83,446 116,641 6 Off-budget 225,064 241,685 252,316 22,291 23,792 26,235 21,841 23,919 36,061 7 Surplus or deficit (-), total -220,458 -269,492 -290,160 -43,146 -24,702 5,400 -48,788* -32,730 -38,945 8 On-budget -277,047 -321,690 -340,270 -43,958 -23,694 6,104 -48,724* -32,225 -26,980 9 Off-budget 56,590 52,198 50,110 812 -1,008 -704 -65 -505 — 11,965 Source of financing (total) 10 Borrowing from the public 220,101 276,802 310,918 26,839 38,841 9,853 -1,552 61,%9 21,078 11 Operating cash (decrease, or increase (-)) ... 818 -1,329 -17,305 9,542 1,523 -22,807 39,420 -7,346 -3,175 12 Other 2 -461 -5,981 -3,453 6,765 -15,662 7,554 10,920* -21,893 21,042 MEMO 13 Treasury operating balance (level, end of period) 40,155 41,484 58,789 37,505 35,982 58,789 19,369 26,715 29,890 14 Federal Reserve Banks 7,638 7,928 24,586 6,923 6,232 24,586 4,413 6,985 7,492 15 Tax and loan accounts 32,517 33,556 34,203 30,581 29,749 34,203 14,956 19,729 22,399 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 NonfinancialS tatistics • March 1993 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS1 Millions of dollars Fiscal year Calendar year Source or type 1991 1992 1992 1991 HI H2r Oct. Nov. Dec. RECEIPTS 1 All sources 1,054,265 1,091,631 540,504 519,293 561,125 540,867 76,833 74,635 113,757 2 Individual income taxes, net 467,827 476,465 232,389 234,949 237,052 246,%5 37,288 33,099 51,172 4 3 P W re it s h i h d e e l n d t ial Election Campaign Fund . 404,15 3 2 2 408,35 3 2 0 193,44 3 0 1 210,5521 198,86 1 8 9 215,59 1 1 0 34,5150 33,0850 48,1890 5 Nonwithheld 142,693 149,342 109,405 33,2% 112,328 39,377 3,583 1,775 3,666 6 Refunds 79,050 81,259 70,487 8,900 74,163 8,011 809 1,760 683 Corporation income taxes 7 Gross receipts 113,599 117,951 58,903 54,016 61,681 58,022 4,291 2,312 23,721 8 Refunds 15,513 17,680 7,904 8,649 9,402 7,219 2,194 833 772 9 Social insurance taxes and contributions, net 396,011 413,689 214,303 185,839 224,569 192,599 29,594 32,900 31,918 10 Employment taxes and contributions2 370,526 385,491 199,727 175,802 208,110 180,758 28,135 30,264 31,252 11 Self-employment taxes and contributions 25,457 24,421 22,150 3,306 20,433 3,988 0 0 0 1 1 2 3 O U t n h e e m r p n l e o t y r m ec e e n i t p i t n s4 s urance 2 4 0 , , 5 92 6 2 3 2 4 3 , , 7 4 8 1 8 0 1 2 2 , , 2 2 7 9 9 6 8 2 , , 7 3 2 1 1 7 1 2 4 , , 3 0 8 7 9 0 9 2, , 4 3 4 9 5 7 1, 4 0 2 3 6 4 2,2 3 7 6 0 6 2 42 4 1 5 14 Excise taxes 42,430 45,570 20,703 24,629 22,389 23,456 3,670 4,082 4,014 15 Customs deposits 15,921 17,359 7,488 8,694 8,145 9,497 1,666 1,503 1,539 1 1 6 7 E M s i t s a c t e e ll a a n n d e o g u if s t r t e a c x e e i s p ts5 2 1 2 1 , , 8 1 5 3 2 8 2 1 7 1 , , 1 1 9 4 5 3 5 8 , , 6 9 3 9 1 1 1 5 3 , , 5 5 0 0 7 8 1 5 0 , , 7 9 0 9 1 2 1 5 1 , , 7 8 3 1 3 5 1 1 , , 0 4 2 9 7 1 9 6 5 1 4 8 1, 9 2 5 0 9 6 OUTLAYS 18 All types 1,323,757 1,381,791 632,153 694,474 705,068 723,777r 125,621R 107,365 152,702 19 National defense 272,514 298,361 122,089 147,669 146,%3 155,501 27,412 20,819 30,010 20 International affairs 16,167 16,106 7,592 7,691 8,464 9,911 2,126 4,018 1,170 21 General science, space, and technology . 15,946 16,409 7,4% 8,472 7,952 8,521 1,410 1,612 1,571 22 Energy 2,511 4,509 1,235 1,698 1,442 3,109 607 529 525 23 Natural resources and environment 18,708 20,017 8,324 11,130 8,625 11,617 3,341 1,801 1,540 24 Agriculture 14,864 14,997 7,684 7,418 7,514 8,881 2,270 2,139 3,428 25 Commerce and housing credit 75,639 9,514 17,992 36,534 15,583 -7,843 -2,262 -2,417 -1,874 26 Transportation 31,531 33,337 14,748 17,093 15,681 18,477 2,933 2,981 2,983 27 Community and regional development .. 7,432 7,411 3,552 3,783 3,901 4,540 1,028 728 774 28 Education, training, employment, and social services 45,248 21,234 23,224 20,922 3,797 3,882 4,393 29 Health 71,183 89,570 35,608 41,459 43,698 47,223 8,021 7,420 8,191 30 Social security and medicare 373,495 406,512 190,247 193,098 205,443 232,109 35,320 33,346 59,837 31 Income security 171,618 198,073 88,778 87,805 105,911 99,272 18,300 14,188 18,689 32 Veterans benefits and services 31,344 34,133 14,326 17,425 15,597 18,561 4,078 1,743 4,148 33 Administration of justice 12,295 14,450 6,187 6,574 7,438 7,283 1,121 1,277 1,236 3 3 4 5 G N e et n e in ra t l e r g e o s v t6 e rnment 1 1 9 1 5, , 0 3 1 5 2 8 19 1 9 2 , , 4 9 2 3 9 9 98 5 , ,2 5 1 5 2 6 9 6 9 , , 7 1 9 4 4 9 10 5 0 , , 5 3 3 2 8 4 9 8 8 , , 1 5 3 4 8 9 1 2 6 , , 5 4 2 6 9 3 16,1 1 4 0 8 6 1 2 6 , , 3 5 0 5 6 9 36 Undistributed offsetting receipts -39,356 -39,280 -18,702 -20,436 -18,229 -20,914 -2,7% -2,954 -2,783 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 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 1 Federal debt outstanding 3,397 3,492 3,563 3,683 3,820 3,897 4,001 4,083 n.a. 2 Public debt securities 3,365 3,465 3,538 3,665 3,802 3,881 3,985 4,065 4,177 3 Held by public 2,537 2,598 2,643 2,746 2,833 2,918 2,977 3,048 n.a. 4 Held by agencies 828 867 895 920 969 964 1,008 1,016 n.a. 5 Agency securities 33 27 25 18 19 16 16 18 n.a. 6 Held by public 32 26 25 18 19 16 16 18 n.a. 7 Held by agencies 0 0 0 0 0 0 0 0 n.a. 8 Debt subject to statutory limit 3,282 3,377 3,450 3,569 3,707 3,784 3,891 3,973 4,085 9 Public debt securities 3,281 3,377 3,450 3,569 3,706 3,783 3,890 3,972 4,085 10 Other debt1 0 0 0 0 0 0 0 0 0 MEMO 11 Statutory debt limit 4,145 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 1992 TTyyppee aanndd hhoollddeerr 11998899 11999900 11999911 11999922 Q1 Q2 Q3 Q4 1 Total gross public debt 2,953.0 3,364.8 3,801.7 4,177.0 3,881.3 3,984.7 4,064.6 4,177.0 By type 2 Interest-bearing 2,931.8 3,362.0 3,798.9 4,173.9 3,878.5 3,981.8 4,061.8 4,173.9 3 ' Marketable 1,945.4 2,195.8 2,471.6 2,754.1 2,552.3 2,605.1 2,677.5 2,754.1 4 Bills 430.6 527.4 590.4 657.7 615.8 618.2 634.3 657.7 5 Notes 1,151.5 1,265.2 1,430.8 1,608.9 1,477.7 1,517.6 1,566.4 1,608.9 6 Bonds 348.2 388.2 435.5 472.5 443.8 454.3 461.8 472.5 7 Nonmarketable1 986.4 1,166.2 1,327.2 1,419.8 1,326.2 1,376.7 1,384.3 1,419.8 8 State and local government series 163.3 160.8 159.7 153.5 157.8 161.9 157.6 153.5 9 Foreign issues 6.8 43.5 41.9 37.4 42.0 38.7 37.0 37.4 10 Government 6.8 43.5 41.9 37.4 42.0 38.7 37.0 37.4 11 Public .0 .0 .0 .0 .0 .0 .0 .0 12 Savings bonds and notes 115.7 124.1 135.9 155.0 139.9 143.2 148.3 155.0 13 Government account series3 695.6 813.8 959.2 1,043.5 956.1 1,002.5 1,011.0 1,043.5 14 Non-interest-bearing 21.2 2.8 2.8 3.1 2.8 2.9 2.8 3.1 By holder* 15 U.S. Treasury and other federal agencies and trust funds 707.8 828.3 968.7 963.7 1,007.9 1,016.3 16 Federal Reserve Banks 228.4 259.8 281.8 267.6 276.9 296.4 17 Private investors 2,015.8 2,288.3 2,563.2 2,664.0 2,712.4 2,765.5 18 Commercial banks 164.9 171.5 233.4R 256.6r 267.2 270.0 19 Money market funds 14.9 45.4 80.0 84.0" 79.4 79.4 20 Insurance companies 125.1 142.0 168.7r n.a. m.9 181.3 185.0 n.a. 21 Other companies 93.4 108.9 150.8 166.0 175.0 180.8 22 State and local treasuries 487.5 490.4 520.3r 521.8r 528.5 530.0 Individuals 23 Savings bonds 117.7 126.2 138.1 142.0 145.4 150.3 24 Other securities 98.7 107.6 125.8 126.1 129.7 130.9 25 Foreign and international5 392.9 421.7 455.0" 471.2r 492.9 499.0 26 Other miscellaneous investors 520.7 674.5 691. lr 719.5r 713.1 740.0 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 NonfinancialS tatistics • March 1993 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions1 Millions of dollars, daily averages 1992 1992, week ending IItteemm Sept. Oct. Nov. Nov. 4 Nov. 11 Nov. 18 Nov. 25 Dec. 2 Dec. 9 Dec. 16 Dec. 23 Dec. 30 IMMEDIATE TRANSACTIONS2 By type of security U.S. Treasury securities 1 Bills 41,374 46,771 44,020r 38,757 43,157 48,055 45,226 4400,,554422 4488,,333366 4444,,220011 3377,,331144 3399,,441199 Coupon securities, by maturity 2 Less than 3.5 years 41,727 49,532 52,718 46,690 55,239 58,383 52,940 41,997 43,175 36,669 39,085 21,867 3 3.5 to 7.5 years 37,765r 45,749 39,539 39,983 32,844 44,604 43,507 29,678 35,377 30,726 29,754 16,245 4 7.5 to 15 years 20,476 20,425 18,198 16,570 21,160 21,250 14,912 15,299 18,371 12,126 12,070 7,594 5 15 years or more 14,240 14,672 13,861 12,805 14,747 19,200 99,,%%77 1100,,006644 1144,,880033 1100,,446688 1100,,779922 88,,335588 Federal agency securities Debt, by maturity 6 Less than 3.5 years 4,979 4,824 5,451 5,378 4,642 5,850 5,941 4,960 6,356 5,431 5,674 5,229 7 3.5 to 7.5 years 588 718 471 619 562 444 412 286 901 494 502 345 8 7.5 years or more 803 1,040 751 661 862 818 683 671 775 777744 882277 993322 Mortgage-backed 9 Pass-throughs 13,673 15,889 17,254r 14,440 21,114r 20,003 14,719 13,217 19,565 14,763 13,252 8,435 10 All others 4,218 3,232 3,545 2,143 2,076 3,095 4,845 6,457 2,753 2,119 3,438 3,007 By type of counterparty Primary dealers and brokers 11 U.S. Treasury securities 98,684 115,212 106,461 100,125 104,753 111199,,661188 110066,,000055 8877,,662255 9999,,667722 8811,,554422 7788,,663311 5555,,887799 Federal agency securities 12 Debt 1,371 1,697 1,191 1,201 1,057 1,415 1,037 1,271 1,527 1,366 1,201 805 13 Mortgage-backed 7,552 8,254 9,763r 8,069 11,456r 1100,,556633 88,,992200 99,,002233 1100,,336666 77,,999955 77,,667799 44,,553322 Customers 14 U.S. Treasury securities 56,898r 61,936 61,875r 54,679 62,394 71,874 6600,,554477 4499,,995555 6600,,339900 5522,,664488 5500,,338844 3377,,660033 Federal agency securities 15 Debt 4,999 4,885 5,483 5,457 5,009 5,6% 5,999 4,645 6,505 5,333 5,802 5,700 16 Mortgage-backed 10,339 10,867 ll,035r 8,513 11,734r 12,535 10,644 10,651 11,952 8,887 9,011 6,910 FUTURES AND FORWARD TRANSACTIONS4 By type of deliverable security U.S. Treasury securities 17 Bills 2,969 3,689 3,245 2,332 4,354 33,,330066 33,,114488 22,,448888 44,,992233 22,,442211 11,,000044 11,,008877 Coupon securities, by maturity 1188 Less than 3.5 years 1,915 2,253 2,235 2,106 2,493 2,444 2,120 1,680 1,960 1,548 1,840 1,570 19 3.5 to 7.5 years 1,853 1,969 1,906 1,250 2,019 2,323 2,490 1,734 1,150 995 480 20 7.5 to 15 years 2,950 3,050 3,548 3,219 3,202 3,818 3,683 3,719 3,253 2,262 2,277 1,028 21 15 years or more 10,091 10,612 8,782 8,545 8,963 10,917 77,,223322 77,,331155 88,,664455 66,,445555 66,,003333 33,,992299 Federal agency securities Debt, by maturity 22 Less than 3.5 years 67 67 161 65 201 185 202 58 25 108 198 86 23 3.5 to 7.5 years 88 66 117 127 102 50 144 235 38 37 4 NA 24 7.5 years or mpre 13 20 16 20 23 11 12 23 3311 1166 1177 7 Mortgage-backed 2 2 5 6 P O a t s h s e - r t s h 3 r oughs 1 2 6 , , 4 5 7 7 6 1 17 1, , 7 8 7 5 2 2 r 15 1 , , 8 1 0 3 1 2 1 1 6 , , 5 5 4 9 1 6 19,7 6 4 9 4 1 19 1 , , 0 89 0 9 0 10, 7 8 4 4 8 2 11, 4 1 4 2 4 4 17, 8 0 4 7 3 8 1 1 5 , , 1 57 5 5 2 9 1 , , 1 0 4 7 5 0 3,8 3 1 6 1 5 OPTIONS TRANSACTIONS5 By type of underlying security U.S. Treasury, coupon securities, by maturity 27 Less than 3.5 years 1,084 1,317 1,683 1,452 2,582 1,549 1,041 2,167 2,640 1,192 945 976 28 3.5 to 7.5 years 618 837 824 1,201 1,389 450 727 305 717 214 313 72 29 7.5 to 15 years 825 742 817 827 664 561 1,320 493 309 313 363 227 30 15 years or more 2,009 1,623 1,607 1,786 1,331 11,,440099 22,,117722 975 11,,119911 726 992222 225533 Federal agency, mortgagebacked securities 31 Pass-throughs 452 299 344 331 377 250 458 243 523 328 279 173 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 are based on the number of trading specify delayed delivery. All futures transactions are included regardless of time days in the period. Immediate, forward, and futures transactions are reported at to delivery. Forward contracts for U.S. Treasury securities and federal agency principal value, which does not include accrued interest; options transactions are debt securities are included when the time to delivery is more than five business 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 for several types of options transactions—U.S. Treasury securities, bills; 3. Includes such securities as collateralized mortgage obligations (CMOs), real Federal agency securities, debt; and mortgage-backed securities, other than estate mortgage investment conduits (REMICs), interest-only securities (16s), pass-throughs—are no longer available because activity is insufficient. 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 item Sept. Oct. Nov. Nov. 4 Nov. 11 Nov. 18 Nov. 25 Dec. 2 Dec. 9 Dec. 16 Dec. 23 Positions2 NET IMMEDIATE POSITIONS3 By type of security U.S. Treasury securities 1 Bills 14,539 11,475 17,896 7,010 18,995 16,273 16,193 2299,,772255 2211,,557744 1199,,443344 1144,,113366 Coupon securities, by maturity 2 Less than 3.5 years -1,572 804 1,755 -3,377 1,837 -36 5,415 3,131 2,369 -3,290 2,760 3 3.5 to 7.5 years -13,702 -13,685 -12,280 -9,605 -12,851 -15,583 -10,483 -11,515 -8,953 -8,366 -4,713 4 7.5 to 15 years -10,785 -13,207 -9,567 -14,128 -7,500 -9,597 -8,945 -9,643 -10,755 -9,477 -9,475 5 15 years or more 5,795 6,617 5,040 4,893 3,918 5,642 5,461 5,295 7,865 6,647 6,870 Federal agency securities Debt, by maturity 6 Less than 3.5 years 6,040 6,724r 6,384 6,778 6,657 6,963 5,349 6,325 4,854 4,271 4,339 7 3.5 to 7.5 years 3,033 2,955 3,127 2,850 3,115 3,262 3,090 3,230 3,434 3,338 3,270 8 7.5 years or more 4,284 4,190 3,418 3,795 3,363 33,,440066 33,,444444 33,,117733 33,,118866 22,,889911 33,,556611 Mortgage-backed 9 Pass-throughs 29,518 32,278 27,626 22,742 32,924 35,699 25,404 15,923 25,614 31,688 26,285 10 All others 27,455 26,559 25,622 28,469 27,048 24,480 23,715 25,614 2244,,994488 2233,,993311 2244,,995511 Other money market instruments 11 Certificates of deposit 3,852 3,501 3,006 2,922 3,309 2,883 2,959 2,886 2,619 2,770 2,915 12 Commercial paper 6,389 6,374 6,930 6,598 6,182 6,155 8,163 7,603 7,557 7,952 6,963 13 Bankers acceptances 1,053 790 864 955 1,036 825 771 737 633 745 737 FUTURES AND FORWARD POSITIONS5 By type of deliverable security U.S. Treasury securities 14 Bills -5,557 -2,336 2,797 861 1,760 3,670 4,048 2,825 -3,416 -2,250 -1,839 Coupon securities, by maturity 15 Less than 3.5 years 1,448 731 2,105 1,950 2,894 1,683 2,292 1,455 213 676 805 16 3.5 to 7.5 years 2,078 2,286 1,206 1,075 1,155 3,408 -88 113 -475 164 653 17 7.5 to 15 years 526 2,882 2,614 4,274 2,620 2,459 1,605 2,908 3,005 1,207 679 18 15 years or more -4,380 -4,237 -5,164 -3,731 -2,929 -4,550 -7,444 -7,107 --88,,443355 --77,,222255 -7,320 Federal agency securities Debt, by maturity 19 Less than 3.5 years -10 134 1 47 -49 -77 67 52 -25 -48 -107 20 3.5 to 7.5 years -73 -21 91 -15 53 36 179 184 -42 -150 -186 21 7.5 years or more -44 -1 -6 3 -60 20 -2 22 48 -72 2 Mortgage-backed 22 Pass-throughs -13,731 -14,399 -7,047 -3,487 -13,725 -13,350 -4,891 5,258 -3,089 -8,007 -2,167 23 All others 6,241 5,757 1,911 2,796 2,051 2,436 2,312 -291 301 270 1,059 24 Certificates of deposit -242,241 -172,555 -125,734 -164,770 -145,399 -119,575 -105,692 -103,656 -98,216 -61,988 -60,495 Financing6 Reverse repurchase agreements 25 Overnight and continuing 209,905 214,066 212,407 215,839 215,108 220,611 195,045 218,703 214,392 212,857 198,940 26 Term 310,234 341,487r 334,946r 344,226r 348,937 317,222 348,655 313,556 342,095 331,503 345,100 Repurchase agreements 27 Overnight and continuing 369,411 383,324 362,658 364,770 373,293 390,803 308,595 382,367 372,052 389,052 337,172 28 Term 285,332 317,708 329,023r 322,515 324,063 299,795 393,142 292,323 327,548 312,390 362,823 Securities borrowed 29 Overnight and continuing 100,438 101,102 104,323 102,129 102,475 107,833 105,872 101,581 102,386 101,888 103,292 30 Term 42,957 44,03 lr 44,288 42,728 44,206 42,295 47,876 43,419 46,363 46,610 48,108 Securities loaned 31 Overnight and continuing 5,791 6,186 5,033 5,519 5,692 4,561 4,825 4,672 4,736 5,184 5,797 32 Term 850 772r 552r 586 605 491 543 551 507 808 1,530 Collateralized loans 33 Overnight and continuing 17,750 17,160 15,145 15,992 15,387 16,502 14,333 13,364 17,503 16,147 18,446 MEMO: Matched book7 Reverse repurchase agreements 34 Overnight and continuing 144,415 146,398 153,621 148,347 151,507 158,088 149,643 160,115 162,231 162,453 153,369 35 Term 267,773 295,545r 286,973r 288,973r 300,868 271,120 299,366 270,766 298,925 288,629 298,748 Repurchase agreements 36 Overnight and continuing 188,263 196,777 188,995 183,458 190,071 206,694 163,019 203,508 195,252 206,104 176,149 37 Term 215,996 240,478r 244,151r 245,976r 251,280 218,975 278,568 219,775 247,556 234,114 267,633 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 different types of collateralization. 5. Futures positions reflect standardized agreements arranged on an exchange. NOTE. Data for futures and forward commercial paper and bankers acceptances and Forward positions reflect agreements made in the over-the-counter market that for term financing of collateralized loans are no longer available because of insufficient specify delayed delivery. All futures positions are included regardless of time to activity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic NonfinancialS tatistics • March 1993 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1992 AAggeennccyy 11998888 11998899 11999900 11999911 June July Aug. Sept. Oct. 1 Federal and federally sponsored agencies 381,498 411,805 434,668 442,772 457,662 457,369 464,773 475,606 479,978 2 Federal agencies 35,668 35,664 42,159 41,035 40,388 39,773 40,034 41,319 41,470 3 Defense Department 8 7 7 7 7 7 7 7 7 4 Export-Import Bank ' 11,033 10,985 11,376 9,809 8,156 8,156 8,156 7,698 7,698 5 Federal Housing Administration4 150 328 393 397 432 194 229 301 309 6 Government National Mortgage Association certificates of participation 0 0 0 0 0 0 0 0 0 7 Postal Service6 6,142 6,445 6,948 8,421 10,123 10,123 10,123 10,123 10,123 8 Tennessee Valley Authority 18,335 17,899 23,435 22,401 21,670 21,293 21,519 23,190 23,333 9 United States Railway Association6 0 0 0 0 0 0 0 0 0 10 Federally sponsored agencies7 345,832 375,428 392,509 401,737 417,274 417,5% 424,739 434,287 438,508 11 Federal Home Loan Banks 135,836 136,108 117,895 107,543 106,050 107,343 108,564 110,830 112,436 12 Federal Home Loan Mortgage Corporation 22,797 26,148 30,941 30,262 32,479 33,959 34,295 36,750 34,108 13 Federal National Mortgage Association 105,459 116,064 123,403 133,937 149,013 147,377 150,280 155,232 159,764 14 Farm Credit Banks 53,127 54,864 53,590 52,199 51,805 49,241 52,137 52,734 52,510 15 Student Loan Marketing Association9 22,073 28,705 34,194 38,319 38,020 39,765 39,552 38,830 39,766 16 Financing Corporation 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 142,850 134,873 179,083 185,576 180,848 177,700 174,003 164,422 159,899 Lending to federal and federally sponsored agencies 20 Export-Import Bank 11,027 10,979 11,370 9,803 8,150 8,150 8,150 7,692 77,,669922 21 Postal Service6 5,892 6,195 6,698 8,201 9,903 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 4,790 23 Tennessee Valley Authority 16,955 16,519 14,055 10,725 9,025 8,475 7,275 7,175 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 44,784 43,209 43,009 42,979 42,979 26 Rural Electrification Administration 19,246 19,265 18,890 18.562 18,199 18,227 18,238 18,143 18,172 27 Other 26,324 23,724 70,896 84,931 85,%7 84,916 82,608 73,710 69,188 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 .n 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 8. 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 ii oo ss rr ss uu uu ee ss ee oo rr iissssuueerr,, 11998899 11999900 11999911 May June July Aug. Sept. Oct. Nov. Dec. 1 All issues, new and refunding1 113,646 120,339 154,402 16,935 24,084 17,386 19,774 18,698 21,092 14,133 19,577 By type of issue 2 General obligation 35,774 39,610 55,100 5,995 8,806 7,136 7,005 7,461 7,733 5,203 6,024 3 Revenue 77,873 81,295 99,302 10,940 15,278 10,250 12,769 11,237 13,359 8,930 13,553 By type of issuer 4 State 11,819 15,149 24,939 1,165 2,063 2,836 2,933 1,710 2,742 861 2,141 5 Special district or statutory authority2 71,022 72,661 80,614 11,031 16,477 10,040 11,203 11,054 13,113 9,619 11,946 6 Municipality, county, or township 30,805 32,510 48,849 4,739 5,544 4,510 n.a. 5,934 5,237 3,653 5,490 7 Issues for new capital 84,062 103,235 116,953 9,259 14,096 7,565 11,993 10,496 13,760 8,028 8,010 By use of proceeds 8 Education 15,133 17,042 21,121 1,651 2,132 1,747 1,737 1,237 2,083 1,800 4 1 9 0 T U r t a il n it s i p e o s r a ta n t d i o c n o nservation 1 6 1 , , 8 4 7 2 0 7 1 1 1 1 , , 7 6 3 5 9 0 2 1 1 3 , , 0 3 3 9 9 5 1, 7 6 7 6 1 9 2 1 , , 6 8 1 5 8 1 6 57 2 1 9 2 2 , , 6 1 0 3 4 0 2 1 , , 2 9 6 7 5 7 3 1 , , 3 3 4 6 0 4 9 53 6 1 0 1 I 11 Social welfare 16,703 23,099 25,648 2,045 4,266 887 767 1,869 2,365 1,070 n.a. 12 Industrial aid 5,036 6,117 8,376 133 724 91 503 1,176 367 581 1 13 Other purposes 28,894 34,607 30,275 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 Apr. May June July Aug. Sept. Oct. Nov. 1 All issues' 377,836 339,052 465,389 28,953r 44,947 47,985 46,107r 36,872r 43,028r 38,604r 34,395 2 Bonds2 319,965 298,814 389,968 23,615r 38,031 38,988 39,630r 31,596r 37,718r 31,638r 29,896 By type of offering 3 Public, domestic 179,694 188,778 287,076 22,241r 35,059 35,960 37,705r 28,342r 36,37 lr 30,500r 28,300 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 1,373 2,972 3,027 1,924 3,254 1,347 l,909r 2,197 By industry group 6 Manufacturing 74,736 51,779 86,627 4,170 6,046 7,263 5,509 4,720 55,,997744rr 77,,997755rr 33,,110055 7 Commercial and miscellaneous 50,268 40,719 36,681 2,351 2,472 1,630 3,488r 2,139r 2,374r 2,781r 2,393 8 Transportation 10,221 12,776 13,598 140 621 899 766 393 677 290 0 9 Public utility 18,611 17,621 23,949 3,467r 3,041 4,251 6,834r 4,509r 5,216r 3,638r 1,254 10 Communication 9,276 6,687 9,431 1,205 1,590 1,028 2,081 1,053 l,191r 427r 374 11 Real estate and financial 156,853 169,231 219,682 12,282 24,261 23,916 20,951 18,783 22,285 16,528r 22,769 12 Stocks2 57,870 40,165 75,467 5,338 6,916 8,997 6,477 5,276 5,310 6,966 4,499 By type of offering 13 Public preferred 6,194 4,360r 17,408 334 1,552 2,933 2,413 1,148 1,233 2,901 1,540 14 Common 26,030 n.a.r 47,860 5,004 5,364 6,090 4,064 4,129 4,077 4,065 2,958 15 Private placement 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 11,,558866 2,499 3,000 857 713 307 1,779 288 17 Commercial and miscellaneous 7,446 10,171 19,418 1,099 2,080 1,079 1,599 1,315 602 940 1,366 18 Transportation n.a. n.a. n.a. 122 176 1,064 n.a. 0 59 53 475 19 Public utility 3,090 416 3,474 577 826 610 564 921 595 359 150 20 Communication n.a. n.a. n.a. 211 12 0 n.a. 0 1,051 99 22 21 Real estate and financial 34,028 19,738 25,507 1,743 1,324 3,271 3,457 2,327 2,695 3,735 2,369 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 NonfinancialS tatistics • March 1993 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets Millions of dollars 1992 IItteemm11 11999900 11999911 Apr. May June July Aug. Sept. Oct/ Nov. 1 Sales of own shares2 344,420 464,488 52,309 48,127 51,457 54,915 50,627 50,039 52,214 52,019 2 Redemptions of own shares 288,441 342,088 39,302 31,409 37,457 34,384 35,223 37,862 37,134 34,126 3 Net sales3 55,979 122,400 13,007 16,718 14,000 20,703 15,404 12,177 15,080 17,893 4 Assets4 568,517 807,001 870,011 897,211 911,218 951,806 957,145 978,507 983,151 1,020,092 5 Cash5 48,638 60,937 67,632 67,270 69,508 72,732 77,245 76,498 75,808 79,765 6 Other 519,875 746,064 802,379 829,941 841,710 879,074 879,900 902,009 907,343 940,327 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 Q3 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 1993 IInndduussttrryy 11999911 11999922 1199993311 Q2 Q3 Q4 Q1 Q2 Q3 Q4 QL1 1 Total nonfarm business 528.39 547.39 576.55 525.02 526.59 529.87 535.72 540.91 547.53 565.40 576.07 Manufacturing 2 Durable goods industries 77.64 74.07 76.08 79.31 74.94 76.40 74.19 74.26 71.84 75.98 77.30 3 Nondurable goods industries 105.17 99.41 106.49 107.20 102.55 102.66 99.79 97.52 100.39 99.95 106.63 Nonmanufacturing 4 Mining 10.02 9.25 9.97 10.08 10.09 9.99 8.87 9.18 9.09 9.87 10.97 Transportation 5 Railroad 5.95 6.91 7.43 6.25 6.32 5.44 6.65 6.50 6.87 7.64 6.71 6 Air 10.17 9.69 8.63 9.95 9.61 10.41 8.86 9.75 10.13 10.00 8.80 7 Other 6.54 7.06 7.69 6.67 6.63 6.45 6.37 7.27 7.69 6.90 7.96 Public utilities 8 Electric 43.76 48.10 54.23 43.09 43.27 44.75 46.06 48.45 47.73 50.15 52.96 9 Gas and other 22.82 24.09 25.59 22.00 23.25 22.67 22.75 24.19 23.92 25.51 24.74 10 Commercial and otheH 246.32 268.81 280.43 240.46 249.94 251.11 262.17 263.80 269.86 279.42 280.00 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 Liabilities1 Billions of dollars, end of period; not seasonally adjusted 1991 1992 AAccccoouunntt 11998899 11999900 11999911 QL Q2 Q3 Q4 QL Q2 Q3 ASSETS 1 Accounts receivable, gross2 462.9 492.9 480.3 482.9 488.5 484.7 480.3 475.7 477.0 474.7 2 Consumer 138.9 133.9 121.9 127.1 127.5 125.3 121.9 118.4 116.7 117.4 3 Business 270.2 293.5 292.6 291.7 295.2 293.2 292.6 291.6 293.9 289.3 4 Real estate 53.8 65.5 65.8 64.1 65.7 66.2 65.8 65.8 66.4 68.0 5 LESS: Reserves for unearned income 54.7 57.6 55.1 57.2 58.0 57.6 55.1 53.6 51.2 50.8 6 Reserves for losses 8.4 9.6 12.9 10.7 11.1 13.1 12.9 13.0 12.3 12.0 7 Accounts receivable, net 399.8 425.7 412.3 415.0 419.3 414.1 412.3 409.1 413.6 411.8 8 All other 102.6 113.9 149.0 118.7 122.8 136.4 149.0 145.5 139.4 146.5 9 Total assets 502.4 539.6 561.2 533.7 542.1 550.5 561.2 554.6 553.0 558.4 LIABILITIES AND CAPITAL 10 Bank loans 27.0 31.0 42.3 35.6 36.9 39.6 42.3 38.0 37.8 38.3 11 Commercial paper 160.7 165.3 159.5 155.5 156.1 156.8 159.5 154.4 147.7 153.2 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 32.4 34.2 36.5 34.5 34.5 34.S 32.3 15 Not elsewhere classified 162.7 178.2 191.3 182.4 184.5 185.0 191.3 189.8 191.9 191.4 16 All other liabilities 61.5 63.9 69.0 64.3 67.1 68.8 69.0 72.0 73.4 73.7 17 Capital, surplus, and undivided profits 55.2 63.7 64.8 63.4 63.3 63.8 64.8 66.0 67.1 68.1 18 Total liabilities and capital 502.4 539.6 561.2 533.7 542.1 550.5 561.2 554.6 548.4 558.4 1. Includes finance company subsidiaries of bank holding companies but not of companies', securitized pools are not shown since they are not on the books. retailers and banks. Data are amounts carried on the balance sheets of finance 2. Before deduction for unearned income and losses. 1.52 DOMESTIC FINANCE COMPANIES1 Millions of dollars, amounts outstanding, end of period 1992 TTyyppee ooff ccrreeddiitt 11998899 11999900 11999911 June July Aug. Sept. Oct. Nov. Seasonally adjusted 11 TToottaall 481,436 523,023 519,573 520,804 522,834 528,117 527,858 527,323' 529,232 22 CCoonnssuummeerr 157,766 161,070 154,786 154,850 153,588 154,729 155,618 154,501' 156,593 33 RReeaall eessttaattee22 53,518 65,147 65,388 66,433 66,843 67,753 67,717 68,035 67,838 44 BBuussiinneessss 270,152 296,807 299,400 299,521 302,403 305,634 304,523 304,787' 304,801 Not seasonally adjusted 5 484,566 526,441 522,853 524,587 522,686 523,448 524,999 526,874' 528,895 6 Consumer 158,542 161,965 155,677 154,859 154,099 155,529 156,416 155,505' 157,005 7 Motor vehicles 84,126 75,045 63,413 60,056 60,400 60,393 59,806 59,290 58,286 8 Other consumer 54,732 58,818 58,488 56,634 56,568 56,782 56,808 57,013' 58,128 9 Securitized motor vehicles 13,690 19,837 23,166 26,195 25,392 26,852 28,204 27,823 28,964 10 Securitized other consumer 5,994 8,265 10,610 11,974 11,739 11,503 11,598 11,379' 11,626 11 Real estate 53,781 65,509 65,764 66,437 67,065 68,104 68,064 68,477 68,016 12 Business 272,243 298,967 301,412 303,291 301,522 299,815 300,519 302,892' 303,875 n Motor vehicles 90,416 92,072 90,319 90,075 87,686 85,745 85,261 86,747 85,621 14 Retail5 29,505 26,401 22,507 20,674 21,086 20,743 20,407 20,763 19,708 15 Wholesale6 34,093 33,573 31,216 30,505 27,158 n.a. n.a. n.a. n.a. 16 Leasing 26,818 32,098 36,596 38,8% 39,443 39,889 39,506 39,536 39,020 17 Equipment 122,246 137,654 141,399 145,994 145,787 145,790 147,319 147,146 148,202 18 Retail...., 29,828 31,968 30,962 32,610 32,370 32,250 31,571 31,475 31,427 19 Wholesale6 6,452 11,101 9,671 9,194 9,128 9,084 8,994 8,928 8,824 20 Leasing — 85,966 94,585 100,766 104,190 104,289 104,455 106,754 106,743 107,952 21 Other business 57,560 63,774 60,887 57,586 59,099 59,013 58,493 58,898' 59,269 22 Securitized business assets n.a. 5,467 8,807 9,636 8,951 9,268 9,447 10,101 10,782 23 Retail 710 667 576 178 170 158 152 634 607 24 Wholesale n.a. 3,281 5,285 5,231 4,649 5,193 5,378 5,593 5,813 25 Leasing 1,311 1,519 2,946 4,227 4,132 3,917 3,917 3,874 4,362 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. 4. Outstanding balances of pools upon which securities have been issued; these Digitized for FRbAalSanEceRs are no longer carried on the balance sheets of the loan originator. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Nonfinancial Statistics • March 1993 1.53 MORTGAGE MARKETS Conventional Mortgages on New Homes Millions of dollars except as noted 1992 IItteemm 11999900 11999911 11999922 June July Aug. Sept. Oct. Nov. Dec. Terms and yields in primary and secondary markets PRIMARY MARKETS Terms1 1 Purchase price (thousands of dollars) 153.2 155.0 158.1 154.4 173.5 148.4 146.0 159.2 165.4 154.0 2 Amount of loan (thousands of dollars) 112.4 114.0 118.1 116.1 132.6 113.6 109.3 119.7 117.3 117.7 3 Loan-price ratio (percent) 74.8 75.0 76.6 77.3 77.5 78.7 77.0 77.3 75.3 77.7 4 Maturity (years) 27.3 26.8 25.6 25.0 26.4 24.8 25.7 25.2 24.9 26.1 5 Fees and charges (percent of loan amount)2 1.93 1.71 1.60 1.57 1.19 1.62 1.52 1.42 1.54 1.31 6 Contract rate (percent per year) 9.68 9.02 7.98 8.15 7.81 7.72 7.68 7.65 7.81 7.65 Yield (percent per year) 7 OTS series3 10.01 9.30 8.25 8.43 8.00 8.00 7.93 7.90 8.07 7.88 8 HUD series4 10.08 9.20 8.43 8.42 8.14 8.01 7.95 8.29 8.38 8.19 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (HUD series) 10.17 9.25 8.46 8.56 8.12 8.08 8.06 8.29 8.54 8.12 10 GNMA securities 9.51 8.59 7.77 7.90 7.63 7.28 7.31 7.53 7.90 7.57 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 113,329 122,837 142,833 142,148 142,465 142,246 144,904 149,133 153,306 158,119 12 FHA/V A-insured 21,028 21,702 22,168 22,218 22,263 22,199 22,275 22,399 22,372 22,593 13 Conventional 92,302 101,135 120,664 119,930 120,202 120,047 122,629 126,734 130,934 135,526 Mortgage transactions (during period) 14 Purchases 23,959 37,202 75,905 5,809 4,191 3,651 6,779 8,380 7,980 8,832 Mortgage commitments (during periodf 15 Issued 23,689 40,010 74,970 4,662 4,663 6,053 8,880 8,195 6,084 6,185 16 To sell9 5,270 7,608 10,493 1,831 807 10 148 0 237 1,811 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)9 17 Total 20,419 24,131 n.a. 28,621 28,510 29,367 31,629 32,995 n.a. n.a. 18 FHA/V A-insured 547 484 n.a. 426 419 376 371 365 n.a. n.a. 19 Conventional 19,871 23,283 n.a. 28,195 28,091 28,990 31,259 32,630 n.a. n.a. Mortgage transactions (during period) 20 Purchases 75,517 97,727 n.a. 14,222 12,172 13,562 16,391 20,199 n.a. n.a. 21 Sales 73,817 92,478 177,508 13,740 11,849 12,314 14,267 18,771 18,782 18,274 Mortgage commitments (during period)10 22 Contracted 102,401 114,031 n.a. 19,114 26,488 14,212 17,132 27,380 n.a. 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 Q3 Q4 Ql Q2 Q3 1 All holders 3,288,064 3,574,975 3,797,727 3,904,394 3,919,465 3,966,775 3,992,878 4,008,590 By type of property 2 One- to four-family residences 2,208,192 2,435,158 2,644,652 2,755,381 2,777,876 2,831,195 2,870,724 2,900,748 3 Multifamily residences 2%,585 306,762 310,311 307,846 308,648 308,398 300,509 297,840 4 Commercial 698,040 749,031 758,795 758,002 749,767 744,271 738,066 726,150 5 85,247 84,025 83,969 83,165 83,173 82,910 83,579 83,853 By type of holder 6 Major financial institutions 1,831,472 1,931,537 1,914,315 1,860,710 1,846,910 1,825,983 1,806,122 1,794,455 7 Commercial banks 674,003 767,069 844,826 870,937 876,284 880,377 884,598 886,453 8 One- to four-family 334,367 389,632 455,931 478,851 486,572 492,910 4%,518 502,935 9 Multifamily 33,912 38,876 37,015 36,398 37,424 37,710 38,314 38,761 10 Commercial 290,254 321,906 334,648 337,365 333,852 330,837 330,229 324,857 11 Farm 15,470 16,656 17,231 18,323 18,436 18,919 19,538 19,900 12 Savings institutions 924,606 910,254 801,628 719,679 705,367 682,338 659,624 648,082 13 One- to four-family 671,722 669,220 600,154 547,799 538,358 524,536 508,545 501,518 14 Multifamily 110,775 106,014 91,806 81,883 79,881 77,166 74,788 73,722 15 Commercial 141,433 134,370 109,168 89,595 86,741 80,278 75,947 72,508 16 Farm 676 650 500 402 388 358 345 334 17 Life insurance companies 232,863 254,214 267,861 270,094 265,258 263,269 261,900 259,920 18 One- to four-family 11,164 12,231 13,005 11,720 11,547 11,214 11,087 11,007 19 Multifamily 24,560 26,907 28,979 29,%2 29,562 29,693 29,745 29,525 20 Commercial 187,549 205,472 215,121 218,179 214,105 212,865 211,913 210,293 21 Farm 9,590 9,604 10,756 10,233 10,044 9,497 9,155 9,095 22 Federal and related agencies 200,570 209,498 250,761 282,115 282,856 2%,664 297,300 295,874 23 Government National Mortgage Association 26 23 20 20 19 19 23 27 24 One- to four-family 26 23 20 20 19 19 23 27 25 Multifamily 0 0 0 0 0 0 0 0 26 Fanners Home Administration 42,018 41,176 41,439 41,566 41,713 41,791 41,628 41,671 27 One- to four-family 18,347 18,422 18,527 18,598 18,4% 18,488 17,718 17,292 28 Multifamily 8,513 9,054 9,640 9,990 10,141 10,270 10,356 10,468 29 Commercial 5,343 4,443 4,690 4,829 4,905 4,%1 4,998 5,072 30 Farm 9,815 9,257 8,582 8,149 8,171 8,072 8,557 8,839 31 Federal Housing and Veterans' Administrations 5,973 6,087 8,801 10,057 10,733 11,332 11,480 11,768 32 One- to four-family 2,672 2,875 3,593 3,649 4,036 4,254 4,403 4,531 33 Multifamily 3,301 3,212 5,208 6,408 6,697 7,078 7,077 7,236 34 Resolution Trust Corporation 0 0 32,600 52,063 45,822 49,345 44,624 37,099 35 One- to four-family 0 0 15,800 21,957 14,535 15,458 15,032 12,614 36 Multifamily 0 0 8,064 14,451 15,018 16,266 13,316 11,130 37 Commercial 0 0 8,736 15,655 16,269 17,621 16,276 13,356 38 Farm 0 0 0 0 0 0 0 0 39 Federal National Mortgage Association 103,013 110,721 116,628 125,451 128,983 136,506 142,148 144,904 40 One- to four-family 95,833 102,295 106,081 113,6% 117,087 124,137 129,392 131,835 41 Multifamily 7,180 8,426 10,547 11,755 11,8% 12,369 12,756 13,069 42 Federal Land Banks 32,115 29,640 29,416 29,053 28,777 28,776 28,775 28,775 43 One- to four-family 1,890 1,210 1,838 2,124 1,693 1,693 1,693 1,693 44 Farm 30,225 28,430 27,577 26,929 27,084 27,083 27,082 27,082 45 Federal Home Loan Mortgage Corporation 17,425 21,851 21,857 23,906 26,809 28,895 28,621 31,629 46 One- to four-family 15,077 18,248 19,185 21,489 24,125 26,182 26,001 29,039 47 Multifamily 2,348 3,603 2,672 2,417 2,684 2,713 2,620 2,591 48 Mortgage pools or trusts5 811,847 946,766 1,110,555 1,229,836 1,262,685 1,302,217 1,339,172 1,364,537 49 Government National Mortgage Association 340,527 368,367 403,613 422,500 425,295 421,977 422,922 422,255 50 One- to four-family 331,257 358,142 391,505 412,715 415,767 412,574 413,828 413,063 51 Multifamily 9,270 10,225 12,108 9,785 9,528 9,404 9,094 9,192 52 Federal Home Loan Mortgage Corporation 226,406 272,870 316,359 348,843 359,163 367,878 382,797 391,762 53 One- to four-family 219,988 266,060 308,369 341,183 351,906 360,887 376,177 385,400 54 Multifamily 6,418 6,810 7,990 7,660 7,257 6,991 6,620 6,362 55 Federal National Mortgage Association 178,250 228,232 299,833 351,917 371,984 389,853 413,226 429,935 56 One- to four-family 172,331 219,577 291,194 343,430 362,667 380,617 403,940 420,835 57 Multifamily 5,919 8,655 8,639 8,487 9,317 9,236 9,286 9,100 58 Farmers Home Administration 104 80 66 52 47 43 43 41 59 One- to four-family 26 21 17 12 11 10 9 9 60 Multifamily 0 0 0 0 0 0 0 0 61 Commercial 38 26 24 20 19 18 18 18 62 Farm 40 33 26 20 17 16 15 14 63 Private Mortgage Conduits 66,560 77,217 90,684 106,523 106,1% 122,465 120,184 120,545 64 One- to four-family 66,560 77,217 90,684 105,023 104,1% 119,825 120,184 120,545 65 Multifamily 0 0 0 1,500 2,000 2,640 0 0 66 Commercial 0 0 0 0 0 0 0 0 67 Farm 0 0 0 0 0 0 0 0 68 Individuals and others6 444,175 487,174 522,0% 531,734 527,013 541,911 550,284 553,724 69 One- to four-family 266,933 299,986 328,748 333,116 326,860 338,392 346,173 348,405 70 Multifamily 84,389 84,980 87,643 87,149 87,244 86,863 86,538 86,684 71 Commercial 73,423 82,814 86,408 92,360 93,876 97,690 98,687 100,047 72 Farm 19,431 19,395 19,298 19,109 19,034 18,966 18,887 18,588 1. Based on data from various institutional and governmental sources; figures 4. FmHA-guaranteed securities sold to the Federal Financing Bank were for some quarters estimated in part by the Federal Reserve. Multifamily debt reallocated from FmHA mortgage pools to FmHA mortgage holdings in 1986:4 refers to loans on structures of five or more units. because of accounting changes by the Farmers Home Administration. 2. Includes loans held by nondeposit trust companies but not loans held by 5. Outstanding principal balances of mortgage-backed securities insured or bank trust departments. guaranteed by the agency indicated. 3. Includes savings banks and savings and loan associations. Beginning 1987:1, 6. Other holders include mortgage companies, real estate investment trusts, data reported by institutions insured by the Federal Savings and Loan Insurance state and local credit agencies, state and local retirement funds, noninsured Corporation include loans in process and other contra-assets (credit balance pension funds, credit unions, and finance companies. accounts that must be subtracted from the corresponding gross asset categories to yield net asset levels). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Nonfinancial Statistics • March 1993 1.55 CONSUMER INSTALLMENT CREDIT1 Millions of dollars, amounts outstanding, end of period 1992 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11998899 11999900 11999911 June July Aug. Sept. Oct/ Nov. Seasonally adjusted 1 Total 716,825 735,338 727,799 722,919 721,820 720,664 722,104 722,668 723,890 2 Automobile 292,002 284,993 263,003 257,339 257,743 256,944 257,384 257,101 257,809 3 Revolving 199,308 222,950 242,785 247,418 247,332 248,043 250,017 250,485 250,585 4 Other 225,515 227,395 222,012 218,162 216,744 215,677 214,703 215,082 215,496 Not seasonally adjusted 5 Total 728,877 748,524 742,058 719,845 718,599 721,985 724,198 723,058 725,620 By major holder 6 Commercial banks 342,770 347,087 339,565 324,171 323,899 323,866 324,046 324,697 324,833 7 Finance companies 138,858 133,863 121,901 116,690 117,002 117,175 116,650 116,304 116,414 8 Credit unions 93,114 93,057 92,254 92,340 91,778 92,270 92,698 92,686 92,858 9 Retailers 44,154 44,822 44,030 37,438 37,219 38,791 38,778 39,299 40,739 10 Savings institutions 57,253 46,969 40,315 35,782 35,552 35,378 35,069 34,164 33,914 11 Gasoline companies 3,935 4,822 4,362 4,360 4,506 4,542 4,499 4,452 4,365 12 Pools of securitized assets2 .. 48,793 77,904 99,631 109,064 108,643 109,963 112,458 111,456 112,497 By major type of credit3 13 Automobile 292,060 285,050 263,108 257,442 258,104 259,128 260,395 259,312 258,608 14 Commercial banks 126,288 124,913 111,912 106,645 107,722 107,978 108,355 108,068 107,697 15 Finance companies 84,126 75,045 63,413 60,056 60,400 60,393 59,806 59,290 58,286 16 Pools of securitized assets2 18,185 24,428 28,057 31,024 30,454 30,826 31,971 31,757 32,222 17 Revolving 210,310 235,056 255,895 245,092 244,661 247,051 248,692 248,556 251,387 18 Commercial banks 130,811 133,385 137,968 127,925 127,476 126,922 127,234 127,257 128,140 19 Retailers 39,583 40,003 39,352 32,844 32,617 34,167 34,148 34,654 36,057 20 Gasoline companies 3,935 4,822 4,362 4,360 4,506 4,542 4,499 4,452 4,365 21 Pools of securitized assets2 23,477 44,335 60,139 65,784 65,791 66,985 68,252 67,699 68,215 22 Other 226,507 228,418 223,055 217,311 215,834 215,806 215,111 215,190 215,625 23 Commercial banks 85,671 88,789 89,685 89,601 88,701 88,966 88,457 89,372 88,996 24 Finance companies 54,732 58,818 58,488 56,634 56,602 56,782 56,844 57,014 58,128 25 Retailers 4,571 4,819 4,678 4,594 4,602 4,624 4,630 4,645 4,682 26 Pools of securitized assets2 7,131 9,141 11,435 12,256 12,398 12,152 12,235 12,000 12,060 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 IItteemm 11998899 11999900 11999911 May June July Aug. Sept. Oct. Nov. INTEREST RATES Commercial banks2 1 48-month new car 12.07 11.78 11.14 9.52 n.a. n.a. 9.15 n.a. n.a. 8.60 2 24-month personal 15.44 15.46 15.18 14.28 n.a. n.a. 13.94 n.a. n.a. 13.55 3 120-month mobile home 14.11 14.02 13.70 12.82 n.a. n.a. 12.57 n.a. 12.36 4 Credit card 18.02 18.17 18.23 17.97 n.a. n.a. 17.66 n.a. n.a. 17.38 Auto finance companies 5 New car 12.62 12.54 12.41 10.67 10.24 9.94 8.88 8.65 9.51 9.65 6 Used car 16.18 15.99 15.60 14.01 13.89 13.67 13.49 13.44 13.37 13.37 OTHER TERMS3 Maturity (months) 7 New car 54.2 54.6 55.1 54.7 54.4 54.4 53.6 53.3 54.1 54.1 8 Used car 46.6 46.0 47.2 47.9 48.0 48.0 47.9 47.7 47.9 47.8 Loan-to-value ratio 9 New car 91 87 88 89 89 89 90 90 89 89 10 Used car 97 95 96 97 97 97 97 97 97 97 Amount financed (dollars) 11 New car 12,001 12,071 12,494 13,373 13,369 13,570 13,745 13,889 13,885 14,043 12 Used car 7,954 8,289 8,884 9,247 9,201 9,293 9,238 8,402 9,373 9,475 1. Data in this table also appear in the Board's G. 19 (421) monthly statistical 2. Data are available for only the second month of each quarter, release. For ordering address, see inside front cover. 3. At auto finance companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A39 1.57 FUNDS RAISED IN U.S. CREDIT 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 .. 721.2 775.8 740.8 665.0 452.7 455.4 543.3 405.6 406.3 667.5 535.1 379.9 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 577.3 620.7 594.4 418.2 174.4 228.0 266.6 117.2 85.9 298.6 183.2 186.5 By instrument 6 Debt capital instruments 487.2 474.1 441.8 342.3 254.6 296.1 329.9 182.0 210.6 312.9 218.4 196.4 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 78.8 76.7 96.5 81.7 60.3 76.3 77.5 61.3 9 Mortgages 325.0 317.3 303.0 244.0 130.0 183.8 184.8 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 6.3 12.5 -29.4 2.7 -1.3 -31.6 -10.7 12 Commercial 71.6 60.8 42.7 21.0 -9.4 24.6 14.9 -43.8 -33.1 -22.6 -24.9 -54.7 N 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 -22.1 31.2 39.2 -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 .6 14.0 27.2 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 727.4 782.2 750.9 688.9 466.8 518.5 480.1 421.2 447.3 677.3 591.0 410.1 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 .1 .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 • March 1993 1.57—Continued 1991 1992 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11998877 11998888 11998899 11999900 11999911 QL Q2 Q3 Q4 QL Q2 Q3 All sectors 52 Total net borrowing, all sectors 986.4 993.6 971.0 876.0 606.0 627.4 584.1 564.6 647.7 786.2 809.4 656.2 53 U.S. government securities 316.4 274.9 297.3 414.4 426.0 382.0 404.1 444.8 473.2 495.7 551.4 346.4 54 State and local 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 55 Corporate and foreign bonds 125.2 126.3 125.5 102.9 151.4 129.2 179.5 126.6 170.1 56.0 125.9 139.0 56 Mortgages 325.4 317.5 303.0 244.3 130.6 183.9 185.8 46.5 106.2 185.6 67.9 82.9 57 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 58 Bank loans n.e.c 2.7 39.9 41.9 2.8 -27.1 -5.9 -40.9 -6.7 -55.1 -17.2 -3.5 -14.3 59 Open market paper 32.3 75.4 65.9 30.7 -44.0 -20.2 -113.8 -37.0 -4.9 12.4 8.1 26.3 60 Other loans 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 22.1 198.8 112.4 182.3 231.8 268.9 271.7 281.5 305.3 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 56.7 49.3 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 8.1 -3.8 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 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 21.6 49.4 190.5 -135.3 -18.2 139.2 73.5 -252.7 3 Households 180.7 198.9 179.5 172.3 -13.7 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 20.9 -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 104.5 193.6 221.4 186.8 263.5 284.1 197.9 339.6 232.5 145.9 185.5 312.2 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 61.1 244.8 -75.4 27.3 47.8 93.2 -47.4 191.7 42 Checkable deposits and currency 4.1 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 76.3 120.8 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 -1.4 -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 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 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 Nonfinancial Statistics • March 1993 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billions of dollars, end of period 1991 1992 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 J 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 11,,112244..88 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 44..99 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 QL Q2 Q3 Q4 QL Q2 Q3 CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 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 2 Private domestic nonfinancial sectors 2,185.5 2,440.5 2,644.2 2,490.8 2,634.3 2,653.8 2,648.2 2,490.8 2,496.1 2,487.1 2,456.8 3 Households 1,485.1 1,710.1 1,882.3 1,693.6 1,875.4 1,882.0 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 53.1 53.8 53.3 52.9 53.1 51.9 51.3 50.8 5 Nonfinancial corporate business 167.4 180.3 186.9 207.9 174.5 189.7 189.9 207.9 196.2 210.7 211.0 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 5,526.7 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. 366.2 414.9 437.4 474.3 449.5 461.7 470.1 474.3 481.6 488.2 496.9 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 2,296.4 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 • March 1993 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures Monthly data seasonally adjusted, 1987=100 except as noted 1992 MMeeaassuurree 11999900 11999911 11999922 Apr. May June July Aug. Sept. Oct.r Nov/ Dec. 1 Industrial production1 109.2 107.1 108.7 108.1 108.9 108.5 109.4 109.1 108.9* 109.7 110.1 110.5 Market groupings 2 i Pro F d in u a c l t , s, t o t t o a t l a l 1 11 1 0 0 . . 1 9 1 10 0 8 9 . . 1 6 1 10 1 9 1 . . 4 0 1 10 1 9 0 . . 0 6 1 10 1 9 1 . . 7 4 1 1 1 0 0 9 . . 5 0 110191..60 1 1 1 0 1 9 . . 5 8 1 1 1 0 1 9 . . 2 6 r r 1 1 1 1 2 0 . . 4 7 1 1 1 1 2 1 . . 9 1 1 1 1 1 3 1 . . 5 4 4 Consumer goods 107.3 107.5 110.3 110.1 110.8 109.6 110.4 110.8 110.7r 111.9 112.0 112.4 5 Equipment 115.5 112.2 112.0 111.3 112.3 111.6 111.8 112.5 111.9 113.0 114.1 114.9 6 Intermediate 107.7 103.4 104.4 103.9 104.4 104.4 105.1 104.4 104.5r 105.4 105.4 105.1 7 Materials 107.8 105.5 107.5 106.8 107.7 107.6 109.0 108.1 107.9* 108.2 108.7 108.9 Industry groupings 88 Manufacturing 109.9 107.4 109.7 109.0 109.9 109.6 110.2 110.1 109.8r 110.6 111.1 111.7 9 Capacity utilization, manufacturing (percent)2 82.3 78.2 77.8 77.7 78.2 77.8 78.1 77.9 77.5r 77.9 78.2 78.4 10 Construction contracts3 95.3 89.5 n.a. 93.0 86.0 90.0 89.0 90.0 89.0 104.0 92.0 n.a. 11 Nonagricultural employment, total4 107.5 106.0 106.1 106.0 106.2 106.1 106.3 106.2 106.2 106.2 106.3 106.4 12 Goods-producing, total 101.0 96.4 94.8 95.2 95.3 95.0 94.9 94.6 94.3 94.2 94.2 94.2 13 Manufacturing, total 100.5 97.0 95.6 96.1 96.1 95.9 95.9 95.4 95.2 94.9 95.0 95.0 14 Manufacturing, production worker 100.1 96.1 95.2 95.7 95.7 95.4 95.5 94.9 94.6 94.3 94.7 94.7 15 Service-producing 109.5 109.0 109.7 109.5 109.6 109.6 109.9 109.9 110.0 110.1 110.2 110.3 16 Personal income, total 122.7 127.0 n.a. 131.9 132.4 132.5 132.8r m^ 133.6 135.2 135.5 17 Wages and salary disbursements 121.3 124.4 n.a. 127.8 128.6 128.5 128.7r 129.6r 129.5r 130.4 131.3 n.a. 18 Manufacturing 113.5 113.6 n.a. 115.0 115.5 115.1 115.5" 115.3r 115.3r 116.4 116.0 n.a. 19 Disposable personal income 122.9 128.0 n.a. 133.8 134.2 134.4 134.5r 134.6r 135.2 136.8 137.0 n.a. 20 Retail sales6 118.7 119.8 125.6 123.5 124.1 124.0 125.4 125.5 126.5 129.2 128.5 130.0 Prices7 21 Consumer (1982-84=100) 130.7 136.2 140.3 139.5 139.7 140.2 140.5 140.9 141.3 141.8 142.0 141.9 22 Producer finished goods (1982=100) 119.2 121.7 123.2 122.4 123.2 123.9 123.7 123.6r 123.3 124.3 123.9 123.8 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 11999900 11999911 11999922 May June July Aug. Sept. Oct/ Nov/ Dec. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 190,216 191,883 193,542 193,295 193,431 193,588 193,749 193,893 194,051 194,210 194,379 2 Labor force (including Armed Forces)1 126,954 127,421 128,948 129,027r 129,274r 129,316r 129,363r 129,220"^ 128,986 129,259 129,461 3 Civilian labor force 124,787 112255,,330033 112266,,998822 112277,,003399** 112277,,229988rr 112277,,335500** 112277,,440044rr 112277,,227744rr 112277,,006666 112277,,336655 112277,,559911 Employment 4 Nonagricultural industries2 114,728 114,644 114,391 114,394r 114,266r 114,515r 114,562r 114,503r 114,518 114,855 115,049 5 Agriculture 3,186 3,233 3,207 33,,118866rr 33,,224444rr 33,,220077rr 33,,221188 33,,222211rr 33,,116699 33,,220099 33,,226622 Unemployment 6 Number 6,874 8,426 9,384 9,459* 9,788r 9,628r 9,624r 9,550"^ 9,379 9,301 9,280 7 Rate (percent of civilian labor force) 5.5 6.7 7.4 7.4r 7.7r 7.6r 7.6 7.5 7.4 7.3 7.3 8 Not in labor force 63,262 64,462 64,594 64,268r 64,157r 64,272r 64,386r 64,673r 65,065 64,951 64,918 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 109,872 108,310 108,434 108,496 108,423 108,594 108,485 108,497 108,571 108,647 108,711 10 Manufacturing 19,117 18,455 18,192 18,275 18,236 18,242 18,145 18,102 18,046 18,071 18,074 11 Mining 710 691 635 641 634 633 626 620 623 622 620 12 Contract construction 5,133 4,685 4,594 4,632 4,600 4,584 4,591 4,574 4,601 4,584 4,579 13 Transportation and public utilities 5,808 5,772 5,741 5,745 5,745 5,742 5,729 5,738 5,731 5,733 5,737 14 Trade 25,877 25,328 25,120 25,143 25,144 25,156 25,070 25,079 25,115 25,099 25,107 15 Finance 6,729 6,678 6,672 6,681 6,672 6,660 6,661 6,669 6,680 6,669 6,677 16 Service 28,130 28,323 28,903 28,833 28,854 28,971 28,981 29,065 29,152 29,183 29,253 17 Government 18,304 18,380 18,578 18,546 18,538 18,606 18,682 18,650 18,623 18,686 18,664 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 • March 1993 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1992 1992 1992 Ql Q2 Q3R Q4 Ql Q2 Q3 04 Ql Q2 Q3R Q4 Output (1987=100) Capacity (percent of 1987 output) Capacity utilization rate (p ercent) 1 Total industry 107.1 108.5 109.1 110.1 137.0 137.7 138.4 139.1 78.2 78.8 78.8 79.2 2 Manufacturing 108.0 109.5 110.0 111.1 139.7 140.6 141.4 142.2 77.3 77.9 77.8 78.2 3 Primary processing 104.0 105.4 106.4 107.1 129.3 129.6 129.9 130.3 80.5 81.3 81.9 82.2 4 Advanced processing 109.9 111.4 111.7 113.0 144.6 145.6 146.7 147.7 76.0 76.5 76.2 76.5 5 Durable goods 106.6 108.4 108.8 110.2 143.7 144.4 145.2 146.0 74.2 75.0 74.9 75.5 6 Lumber and products 98.5 96.7 98.5 100.5 125.9 126.1 126.3 126.5 78.2 76.7 78.0 79.5 7 Primary metals 102.2 101.7 104.0 105.3 129.1 128.3 127.5 126.7 79.2 79.2 81.5 83.1 8 Iron and steel 103.8 101.6 104.6 107.4 134.1 132.7 131.2 129.8 77.4 76.6 79.7 82.7 9 Nonferrous 100.0 101.7 103.0 102.4 122.1 122.2 122.3 122.4 81.9 83.3 84.3 83.7 10 Nonelectrical machinery 122.1 125.7 128.8 132.1 164.3 165.9 167.4 168.9 74.3 75.8 76.9 78.2 11 Electrical machinery 110.5 111.8 112.6 113.5 147.9 149.1 150.4 151.6 74.7 75.0 74.9 74.8 12 Motor vehicles and parts 91.7 100.5 98.1 103.6 136.2 136.7 137.2 137.7 67.3 73.5 71.5 75.2 13 Aerospace and miscellaneous transportation equipment . 99.3 96.8 94.9 93.7 140.4 140.9 141.5 142.1 70.8 68.7 67.1 65.9 14 Nondurable goods 109.8 110.9 111.6 112.3 134.8 135.6 136.5 137.4 81.5 81.7 81.8 81.7 15 Textile mill products 104.3 106.2 106.6 107.0 118.8 119.2 119.7 120.2 87.9 89.0 89.1 89.0 16 Paper and products 105.8 106.7 108.2 107.4 119.3 119.9 120.5 121.1 88.7 89.0 89.8 88.7 17 Chemicals and products 113.6 116.8 118.0 119.2 143.4 144.3 145.1 146.0 79.2 81.0 81.3 81.6 18 Plastics materials 124.4 129.7 132.4 148.7 150.5 152.2 83.7 86.2 87.0 19 Petroleum products 107.7 109.2 106.9 110.1 121.4 121.5 121.6 121.7 88.7 89.9 87.9 90.5 20 Mining 97.9 98.9 99.2 99.6 114.7 114.7 114.8 114.8 85.3 86.2 86.5 86.8 21 Utilities 107.0 107.4 109.4 109.4 129.5 129.8 130.1 130.4 82.6 82.7 84.1 83.9 22 Electric 109.7 110.3 113.2 112.5 125.6 126.0 126.4 126.8 87.3 87.6 89.5 88.7 Previous cycle2 Latest cycle3 1991 1992 High Low High Low Dec. May June July Aug. Sept.r Oct.r Nov.r Dec.p Capacity utilization rate (percent) 1 Total industry 89.2 72.6 87.3 71.8 78.7 79.1 78.6 79.1 78.8 78.6 79.0 79.2 79.3 2 Manufacturing 88.9 70.8 87.3 70.0 77.7 78.2 77.8 78.1 77.9 77.5 77.9 78.2 78.4 3 Primary processing 92.2 68.9 89.7 66.8 80.2 81.5 81.4 82.7 81.7 81.3 81.8 82.4 82.5 4 Advanced processing 87.5 72.0 86.3 71.4 76.6 76.8 76.3 76.2 76.3 76.0 76.4 76.5 76.8 5 Durable goods 88.8 68.5 86.9 65.0 74.8 75.5 75.0 75.2 75.2 74.4 75.1 75.5 75.9 6 Lumber and products 90.1 62.2 87.6 60.9 75.7 77.2 75.6 79.1 78.3 76.6 79.4 80.0 79.1 7 Primary metals 100.6 66.2 102.4 46.8 78.3 79.5 79.7 82.6 81.8 80.1 81.8 83.2 84.2 8 Iron and steel 105.8 66.6 110.4 38.3 75.5 77.0 77.0 80.8 79.5 78.8 81.5 82.5 84.0 9 Nonferrous 92.9 61.3 90.5 62.2 82.6 83.3 83.9 85.4 85.2 82.2 82.3 84.2 84.5 10 Nonelectrical machinery 96.4 74.5 92.1 64.9 74.7 76.4 76.0 76.6 77.3 76.9 77.5 78.4 78.7 11 Electrical machinery 87.8 63.8 89.4 71.1 75.2 75.3 75.0 75.1 75.1 74.3 74.7 74.9 74.9 12 Motor vehicles and parts 93.4 51.1 93.0 44.5 69.6 75.1 73.3 71.3 72.5 70.8 73.7 74.2 7777..88 13 Aerospace and miscellaneous transportation equipment. 77.0 66.6 81.1 66.9 72.3 68.7 68.2 67.7 67.0 66.4 66.3 66.2 65.4 14 Nondurable goods 87.9 71.8 87.0 76.9 81.6 81.8 81.6 82.0 81.6 81.7 81.7 81.8 81.8 15 Textile mill products 92.0 60.4 91.7 73.8 86.5 89.6 88.2 89.6 88.7 88.9 88.2 89.1 89.7 16 Paper and products 96.9 69.0 94.2 82.0 90.0 88.3 89.3 91.1 88.2 90.0 87.8 89.2 89.0 17 Chemicals and products 87.9 69.9 85.1 70.1 78.9 81.1 81.3 81.5 81.1 81.4 81.3 81.8 81.8 18 Plastics materials 102.0 50.6 90.9 63.4 82.5 87.3 85.9 89.8 86.0 85.1 82.8 19 Petroleum products 96.7 81.1 89.5 68.2 89.5 89.3 89.6 89.8 85.8 88.3 91.5 91.2 88.8 20 Mining 94.4 88.4 96.6 80.6 86.2 86.9 85.4 87.6 86.1 85.6 86.3 87.0 87.1 21 Utilities 95.6 82.5 88.3 76.2 83.4 82.7 82.1 84.1 83.6 84.6 85.1 84.1 82.5 22 Electric 99.0 82.7 88.3 78.7 87.7 87.5 87.0 89.5 89.2 89.9 90.0 89.0 87.2 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 p p r o o r - - a 1 v 99 g 2 . tion Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept.r Oct.r Nov/ Dec." Index (1987 = 100) MAJOR MARKETS 1 Total index 100.0 108.7 107.4 106.6 107.2 107.6 108.1 108.9 108.5 109.4 109.1 108.9 109.7 110.1 110.5 2 Products 60.8 109.4 108.4 107.5 108.1 108.5 109.0 109.7 109.0 109.6 109.8 109.6 110.7 111.1 111.4 3 Final products 46.0 111.0 109.9 108.7 109.4 109.8 110.6 111.4 110.5 111.0 111.5 111.2 112.4 112.9 113.5 4 Consumer goods, total 26.0 110.3 109.1 108.1 108.8 109.3 110.1 110.8 109.6 110.4 110.8 110.7 111.9 112.0 112.4 5 Durable consumer goods 5.6 108.0 104.6 101.3 105.3 106.2 107.9 111.1 109.2 108.6 109.2 106.9 108.5 108.7 111.8 6 Automotive products 2.5 106.7 101.3 94.2 101.6 103.6 106.5 110.6 108.0 106.6 106.8 104.5 108.9 109.2 115.4 7 Autos and trucks 1.5 102.0 96.7 84.3 94.3 95.7 102.5 107.8 104.0 100.5 100.6 98.2 105.9 107.2 116.5 8 Autos, consumer .9 90.0 88.2 79.1 84.8 81.9 93.1 98.6 97.6 92.3 87.2 88.1 88.5 89.4 97.7 9 Trucks, consumer .6 122.1 111.0 93.0 110.2 118.8 118.3 123.3 114.8 114.3 123.1 115.1 135.1 137.1 148.1 10 Auto parts and allied goods... 1.0 113.8 108.2 109.1 112.6 115.5 112.5 114.8 114.0 115.7 116.2 114.0 113.5 112.2 113.8 11 Other 3.1 109.1 107.2 106.9 108.3 108.3 109.1 111.5 110.2 110.3 111.1 108.9 108.2 108.3 108.9 12 Appliances, A/C, and TV .8 104.8 98.9 99.6 102.9 103.5 103.4 107.4 106.2 102.3 110.6 108.5 104.5 103.1 104.6 13 Carpeting and furniture .9 102.4 101.5 101.1 102.4 102.5 104.4 105.9 103.2 103.8 103.6 100.9 100.3 100.8 101.5 14 Miscellaneous home goods ... 1.4 115.8 115.5 114.7 115.0 114.7 115.2 117.3 116.9 118.8 116.1 114.2 115.3 116.0 116.1 15 Nondurable consumer goods 20.4 110.9 110.3 110.0 109.8 110.2 110.7 110.7 109.7 110.8 111.2 111.7 112.9 112.9 112.5 16 Foods and tobacco 9.1 108.4 107.0 107.3 107.4 107.8 107.6 107.7 107.2 108.6 110.1 108.9 109.5 109.5 109.5 17 Clothing 2.6 95.2 96.2 95.0 95.2 95.1 95.3 96.4 95.5 96.8 95.0 95.5 94.9 95.3 95.4 18 Chemical products 3.5 122.2 118.0 118.1 118.3 119.4 120.8 121.4 121.6 121.5 122.0 124.1 126.0 126.9 127.0 19 Paper products 2.5 124.4 126.8 126.8 124.7 124.6 125.1 124.3 121.7 121.9 121.8 124.2 125.6 126.5 126.5 20 Energy 2.7 106.7 109.3 106.8 106.4 107.0 108.9 107.2 104.8 107.4 106.2 108.1 111.9 109.6 106.9 21 Fuels .7 104.7 104.3 103.8 103.5 103.7 105.1 104.0 104.4 105.3 99.0 103.5 110.3 107.9 105.7 22 Residential utilities 2.0 107.4 111.2 108.0 107.5 108.2 110.3 108.4 105.0 108.2 108.9 109.7 112.4 110.2 107.4 23 Equipment 20.0 112.0 110.9 109.4 110.2 110.4 111.3 112.3 111.6 111.8 112.5 111.9 113.0 114.1 114.9 24 Business equipment 13.9 124.5 121.4 119.9 121.0 121.5 123.0 124.5 124.1 124.4 125.9 125.4 126.8 128.3 129.4 25 Information processing and related .. 5.6 141.1 134.0 134.1 134.6 136.0 137.9 139.2 140.4 141.9 143.5 143.5 145.6 147.3 148.2 26 Office and computing 1.9 159.1 160.6 162.4 164.9 168.2 170.5 174.0 178.0 182.0 184.0 187.0 190.0 27 Industrial 4.0 102.3 102.3 100.7 101.3 101.3 101.7 103.4 102.9 103.4 102.7 101.6 102.0 103.9 104.4 28 Transit 2.5 131.4 129.5 124.2 129.2 128.9 131.7 133.3 131.8 128.7 132.6 130.4 133.2 133.7 137.0 29 Autos and trucks 1.2 101.3 96.1 84.9 94.7 95.0 101.3 105.6 101.7 98.1 101.3 99.1 105.6 107.7 114.4 30 Other 1.9 114.2 114.1 113.1 112.2 112.2 113.2 115.0 111.5 112.2 114.4 115.8 116.1 116.8 117.5 31 Defense and space equipment 5.4 83.0 88.1 86.7 86.2 85.6 84.7 84.2 83.6 82.7 81.8 81.1 80.5 80.0 79.4 32 Oil and gas well drilling .6 78.3 75.8 71.8 73.9 76.2 79.2 79.2 74.6 78.6 75.0 74.4 80.2 85.2 88.5 33 Manufactured homes .2 87.9 98.4 99.7 98.7 100.7 100.3 97.1 112.0 106.1 111.2 119.9 127.1 34 Intermediate products, total 14.7 104.4 103.8 103.9 104.0 104.4 103.9 104.4 104.4 105.1 104.4 104.5 105.4 105.4 105.1 35 Construction supplies 6.0 97.4 95.0 95.5 96.0 96.7 96.5 97.8 97.2 98.6 98.5 97.1 98.6 98.8 98.4 36 Business supplies 8.7 109.3 110.0 109.9 109.6 109.7 109.0 109.0 109.4 109.7 108.5 109.6 110.2 110.1 109.8 37 Materials 39.2 107.5 105.8 105.2 105.8 106.1 106.8 107.7 107.6 109.0 108.1 107.9 108.2 108.7 108.9 38 Durable goods materials 19.4 109.9 108.1 107.0 108.1 108.3 108.7 110.4 110.2 111.2 111.1 109.9 110.8 111.7 112.4 39 Durable consumer parts 4.2 100.8 97.0 95.3 97.1 97.9 99.3 102.5 102.9 101.8 103.9 102.3 102.6 102.8 103.3 40 Equipment parts 7.3 116.2 114.2 114.1 115.2 115.1 114.7 116.2 116.2 117.5 117.0 116.4 117.3 118.1 118.9 41 Other 7.9 108.9 108.4 106.7 107.5 107.5 108.1 109.2 108.7 110.2 109.5 108.1 109.2 110.4 111.3 42 Basic metal materials 2.8 108.6 108.1 105.1 107.3 106.3 106.3 108.3 107.7 111.5 110.9 108.1 108.3 111.1 111.9 43 Nondurable goods materials 9.0 109.7 107.1 107.3 107.1 108.9 109.4 109.7 110.4 111.7 110.3 110.5 109.6 110.7 110.8 44 Textile materials 1.2 102.7 98.5 98.9 101.5 102.0 103.2 102.9 102.3 103.9 102.9 103.9 102.7 104.0 104.7 45 Pulp and paper materials 1.9 109.6 109.6 107.4 106.8 107.8 109.2 107.8 110.8 111.8 108.9 112.7 109.6 111.0 110.5 46 Chemical materials 3.8 110.4 107.0 107.6 106.6 109.3 109.9 111.2 110.9 113.4 111.9 110.9 110.3 111.2 111.5 47 Other 2.1 112.4 109.7 111.2 111.2 112.7 112.2 112.4 113.4 112.8 112.6 111.5 112.1 113.2 113.0 48 Energy materials 10.9 101.3 100.4 100.4 100.5 100.1 101.3 101.3 100.6 102.9 100.9 102.0 102.3 101.6 101.2 49 Primary energy 7.2 100.6 100.4 100.5 100.6 98.2 99.8 99.7 99.6 102.3 101.4 101.8 102.5 101.4 101.2 50 Converted fuel materials 3.7 102.6 100.5 100.2 100.4 103.8 104.1 104.3 102.6 104.1 100.0 102.5 102.0 102.1 101.1 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.3 108.9 107.7 107.3 107.6 107.9 108.3 109.0 108.6 109.6 109.3 109.2 109.8 110.2 110.3 52 Total excluding motor vehicles and parts... 95.3 109.2 108.0 107.6 107.8 108.2 108.6 109.2 108.8 109.9 109.6 109.5 110.1 110.5 110.6 53 Total excluding office and computing machines 97.5 107.0 106.1 105.3 105.8 106.1 106.6 107.4 106.8 107.6 107.3 107.0 107.8 108.1 108.4 54 Consumer goods excluding autos and trucks 24.5 110.8 109.8 109.6 109.7 110.2 110.6 110.9 109.9 111.0 111.4 111.4 112.3 112.3 112.1 55 Consumer goods excluding energy 23.3 110.7 109.1 108.3 109.1 109.6 110.3 111.2 110.1 110.7 111.3 111.0 111.9 112.3 113.0 56 Business equipment excluding autos and trucks 12.7 126.8 123.8 123.3 123.6 124.1 125.2 126.4 126.3 127.0 128.3 127.9 128.9 130.3 130.9 57 Business equipment excluding office and computing equipment 12.0 116.1 115.3 113.3 114.3 114.5 115.7 117.1 116.1 115.8 116.8 115.9 117.1 118.3 119.2 58 Materials excluding energy 28.4 109.9 107.8 107.1 107.8 108.5 108.9 110.2 110.3 111.3 110.8 110.1 110.4 111.3 111.9 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • March 1993 2.13—Continued 1987 1991 1992 oup SIC pro- 1992 code por- avg. tion Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept.r Oct/ Nov.r Dec." Index (1987 = 100) MAJOR INDUSTRIES 1 Total index 100.0 108.7 107.4 106.6 107.2 107.6 108.1 108.9 108.5 109.4 109.1 108.9 109.7 110.1 110.5 2 Manufacturing 84.4 109.7 108.1 107.4 108.1 108.5 109.0 109.9 109.6 110.2 110.1 109.8 110.6 111.1 111.7 3 Primary processing 26.7 105.7 103.5 103.6 103.9 104.5 105.0 105.6 105.6 107.3 106.2 105.7 106.4 107.3 107.6 4 Advanced processing 57.7 111.5 110.3 109.2 110.0 110.3 110.8 111.9 111.4 111.6 112.0 111.7 112.5 113.0 113.6 5 Durable goods 47.3 108.5 107.1 105.8 107.0 107.0 107.6 109.1 108.5 109.0 109.2 108.2 109.5 110.2 111.0 6 Lumber and products ... "24 2.0 98.5 95.2 97.4 98.8 99.2 97.2 97.4 95.4 99.8 98.9 96.7 100.3 101.1 100.1 7 Furniture and fixtures... 25 1.4 100.4 100.6 98.7 98.1 98.6 101.1 103.3 100.3 101.0 101.7 100.5 100.4 100.1 100.9 8 Clay, glass, and stone products 32 2.5 96.3 93.0 92.8 94.6 95.0 95.6 96.7 96.6 97.1 96.4 96.1 98.0 98.0 99.0 9 Primary metals 33 3.3 103.2 101.3 102.5 102.7 101.4 100.9 102.0 102.1 105.6 104.3 102.0 103.9 105.5 106.5 10 Iron and steel 331,2 1.9 104.3 101.7 105.0 103.7 102.5 100.9 102.2 101.8 106.4 104.4 103.0 106.2 107.1 108.7 11 Raw steel .1 97.6 103.3 102.7 98.8 99.9 98.5 101.5 105.3 101.9 99.8 101.7 101.5 12 Nonferrous 333-6,9 1.4 101.8 100.8 98.9 101.2 99.9 100.9 101.8 102.5 104.4 104.2 100.5 100.6 110033..11 llttooiiss 13 Fabricated metal products 34 5.4 101.6 101.2 99.7 100.5 100.0 100.6 102.2 102.2 102.6 102.5 101.3 102.3 102.5 103.2 14 Nonelectrical machinery. 35 8.6 127.2 121.9 121.4 121.9 122.9 124.1 126.7 126.4 127.8 129.3 129.1 130.5 132.5 133.4 15 Office and computing machines 357 2.5 176.5 159.1 160.5 162.4 164.9 168.2 170.5 174.0 178.0 182.0 184.0 187.0 190.0 192.9 16 Electrical machinery 36 8.6 111.9 110.6 110.0 110.7 110.9 111.0 112.3 112.2 112.6 111133..00 112.1 112.9 111133..66 111133..99 17 Transportation equipment 37 9.8 97.4 98.0 93.8 96.8 96.5 98.0 99.6 98.2 96.7 97.0 95.6 97.5 9977..99 9999..88 18 Motor vehicles and parts 371 4.7 98.7 94.6 87.1 93.8 94.2 98.5 102.7 100.4 97.7 99.4 97.2 101.3 110022..11 110077..33 19 Autos and light trucks 2.3 100.2 95.5 83.5 92.9 93.7 101.1 106.5 103.0 99.3 9988..66 9966..77 110033..33 110044..66 111133..77 20 Aerospace and miscellaneous transportation equipment.. 372-6,9 5.1 96.1 101.2 99.8 99.6 98.6 97.4 96.8 96.3 95.7 94.9 94.1 94.1 94.0 93.0 21 Instruments 38 3.3 118.3 119.0 118.3 118.6 118.6 119.0 119.8 118.5 118.5 118.2 118.1 117.6 117.6 117.7 22 Miscellaneous 39 1.2 119.7 121.0 121.2 120.0 120.0 118.9 118.4 117.8 120.4 118.2 118.6 119.5 121.9 121.5 23 Nondurable goods 37.2 111.2 109.5 109.5 109.6 110.4 110.7 110.9 111.0 111.7 111.3 111.8 111.9 112.3 112.6 24 Foods "20 8.8 110.0 109.6 109.2 109.6 110.2 109.6 109.3 109.0 109.8 110.6 110.2 110.9 110.8 110.7 25 Tobacco products 21 1.0 105.4 94.7 98.8 99.4 101.3 101.0 102.5 103.6 106.6 115.9 110.5 107.6 108.5 109.6 26 Textile mill products 22 1.8 106.0 102.5 103.1 104.7 105.3 106.3 106.8 105.3 107.1 106.1 106.6 105.9 107.1 107.9 27 Apparel products 23 2.4 97.7 99.0 97.5 97.7 97.8 98.0 99.0 98.1 99.4 97.6 97.6 97.5 97.9 97.5 28 Paper and products 26 3.6 107.0 107.0 107.1 104.6 105.8 107.0 105.8 107.3 109.6 106.3 108.6 106.2 108.1 107.9 29 Printing and publishing .. 27 6.4 113.3 114.5 114.8 114.4 113.8 113.7 113.4 113.0 112.3 111.4 113.2 113.7 112.8 114.3 30 Chemicals and products . 28 8.6 117.1 112.6 112.7 113.4 114.8 115.8 117.0 117.5 118.0 117.6 118.3 118.5 119.4 119.7 31 Petroleum products 29 1.3 108.5 108.6 106.6 106.9 109.7 110.3 108.5 108.9 109.1 104.3 107.4 111.3 111100..99 110088..11 32 Rubber and plastic products 30 3.0 117.2 113.0 113.2 114.0 115.4 116.5 117.1 117.3 118.5 119.0 117.3 118.2 119.3 120.0 33 Leather and products ... 31 .3 85.6 83.2 83.0 81.4 82.9 84.1 86.2 86.2 87.1 84.8 86.4 87.0 88.9 87.1 34 Mining 7.9 98.9 98.8 97.8 98.4 97.5 99.1 99.7 98.0 100.6 98.8 98.3 99.1 99.8 100.0 35 Metal "lO .3 158.2 154.0 144.2 152.9 155.8 154.2 166.4 154.0 163.7 165.6 158.6 155.8 164.9 163.5 36 Coal 11,12 1.2 105.6 107.6 107.3 107.9 103.0 104.0 107.6 98.6 112.0 107.5 103.7 103.9 107.0 107.7 37 Oil and gas extraction 13 5.7 93.4 93.0 92.4 92.7 91.9 94.2 93.4 93.9 94.0 92.4 93.0 94.2 94.0 94.3 38 Stone and earth minerals .. 14 .7 105.8 106.4 104.8 103.5 107.4 105.9 108.0 105.6 106.2 106.4 105.2 104.8 105.9 104.8 3 4 9 0 Ut E ili l t e i c e t s r ic 49I,3PT 7 6. . 0 6 1 1 0 1 7 1 . . 9 0 1 10 0 9 7 . . 9 9 1 10 0 9 6 . . 3 8 1 1 0 0 6 9 . . 4 0 1 1 0 1 7 0 . . 7 7 1 1 0 1 8 1 . . 2 0 1 11 0 0 7 . . 2 3 1 1 0 0 6 9 . . 7 7 1 1 0 1 9 3 . . 3 0 1 1 0 1 8 2 . . 8 7 1 1 1 1 0 3 . . 2 8 1 11 1 4 0 . . 0 9 1 1 1 0 2 9 . . 8 7 1 1 0 1 7 0 . . 6 6 41 Gas 492,3PT 1.6 96.1 100.5 97.5 96.9 96.7 97.7 96.6 95.3 95.4 94.1 97.0 99.1 98.4 96.4 SPECIAL AGGREGATES 42 Manufacturing excluding motor vehicles and parts 79.8 110.3 108.9 108.6 108.9 109.3 109.6 110.3 110.1 110.9 110.7 110.5 111.1 111111..77 111122..00 43 Manufacturing excluding office and computing machines 82.0 107.7 106.6 105.8 106.5 106.8 107.2 108.1 107.6 108.2 108.0 107.6 108.3 108.8 109.3 Gross value (billions of 1982 dollars, annual rates) MAJOR MARKETS 44 Products, total 1,734.8 1,930.8 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 1,937.0 1,971.1 1,979.7 1,986.4 45 Final 1,350.9 1,528.7 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 1,534.6 1,565.3 1,572.2 1,582.4 46 Consumer goods 833.4 907.0 894.5 877.6 890.2 896.2 905.6 912.4 901.3 909.3 905.3 907.1 929.3 928.8 931.4 47 Equipment 517.5 621.7 593.5 591.1 600.6 605.3 612.7 619.7 617.8 621.0 627.5 627.5 636.0 643.4 651.0 48 Intermediate 384.0 402.1 401.0 400.7 398.9 401.2 400.5 403.4 401.1 405.8 403.1 402.4 405.7 407.6 404.0 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 Feb. Mar. Apr. May June July Aug.r Sept.r Oct.r Nov. Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 1,339 1,111 949 1,146 1,094 1,058 1,054 1,032 1,080 1,076 1,125 1,139 1,126 2 One-family 932 794 754 946 907 873 879 872 879 877 913 959 955 3 Two-or-more-family 407 317 195 200 187 185 175 160 201 199 212 180 171 4 Started 1,376 1,193 1,014 1,257 1,340 1,086 1,196 1,147 1,100 1,233 1,222 1,223 1,234 5 One-family 1,003 895 840 1,109 1,068 933 1,019 999 956 1,042 1,051 1,077 1,090 6 Two-or-more-family 373 298 174 148 272 153 177 148 144 191 171 146 144 7 Under construction at end of period1.. 850 711 606 629 657 655 653 643 628 633 639 645 640 8 One-family 535 449 434 464 482 484 484 483 476 480 487 494 497 9 Two-or-more-family 315 262 173 165 175 171 169 160 152 153 152 151 143 10 Completed 1,423 1,308 1,091 1,097 1,127 1,067 1,204 1,184 1,229 1,144 1,125 1,158 1,229 11 One-family 1,026 966 838 908 975 889 1,011 982 1,019 955 937 972 1,001 12 Two-or-more-family 396 342 253 189 152 178 193 202 210 189 188 186 228 13 Mobile homes shipped 198 188 171 197 197 199 189 194 211 198 219 226 241 Merchant builder activity in one-family units 14 Number sold 650 535 507 627 555 546 554 583 616 627 671 616 565 15 Number for sale at end of period1 ... 365 321 283 269 277 274 272 272 271 269 268 267 267 Price of units sold (thousands of dollars)2 16 Median 120.4 122.3 120.0 117.2 120.0 120.0 113.0 124.5 118.0 123.5 119.9 122.8 128.8 17 Average 148.3 149.0 147.0 144.8 144.8 145.0 146.0 146.6 137.7 145.3 142.8 149.6 150.5 EXISTING UNITS (one-family) 18 Number sold 3,346 3,211 3,219 3,490 3,510 3,490 3,460 3,350 3,450 3,310 3,300 3,640 3,830 Price of units sold (thousands of dollars) 19 Median 92.9 95.2 99.7 102.8 104.0 103.3 102.5 105.1 102.7 104.6 103.4 103.4 103.0 20 Average 118.0 118.3 127.4 128.8 130.2 130.6 130.6 133.7 132.2 132.2 131.0 129.4 129.0 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 443,401 442,066 400,955 411,767 421,512 427,585 427,980 426,730 425,700' 419,598 429,291 432,788 441,813 22 Private 345,327 334,153 290,707 294,758 301,142 309,832 306,999 312,182 305,848r 301,984 308,813 314,414 319,644 23 Residential 196,551 182,856 157,837 169,772 172,660 182,644 182,892 184,630 181,162r 184,201 186,343 190,758 193,456 24 Nonresidential, total 148,776 151,297 132,870 124,986 128,482 127,188 124,107 127,552 124,686r 117,783 122,470 123,656 126,188 25 Industrial buildings 20,412 23,849 22,281 21,651 23,721 21,335 21,008 20,285 20,594r 17,862 19,019 18,611 19,009 26 Commercial buildings 65,4% 62,866 48,482 41,591 42,108 40,712 39,643 43,310 39,988r 37,010 39,333 40,277 40,488 27 Other buildings 19,683 21,591 20,797 20,630 21,479 21,409 21,993 21,991 22,228r 21,518 22,068 21,738 23,794 28 Public utilities and other 43,185 42,991 41,310 41,114 41,174 43,732 41,463 41,966 41,876r 41,393 42,050 43,030 42,897 29 Public 98,071 107,909 110,247 117,009 120,370 117,753 120,981 114,548 119,853r 117,614 120,478 118,374 122,169 30 Military 3,520 2,664 1,837 2,206 2,548 2,329 2,668 2,503 2,372r 2,438 3,172 2,299 2,692 31 Highway 28,837 31,154 29,918 32,744 30,895 31,447 32,633 31,496 32,682r 33,451 34,651 32,369 36,422 32 Conservation and development... 5,009 4,607 4,958 5,283 6,197 5,818 5,767 5,889 5,772r 5,382 6,364 6,629 6,8% 33 Other 60,705 69,484 73,534 76,776 80,730 78,159 79,913 74,660 79,027r 76,343 76,291 77,077 76,159 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 • March 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 1992 19921 lll DDD eeevvv eee eee ccc lll ...,,, ,,, 11999911 11999922 111999999222111 DDeecc.. DDeecc.. Mar. June Sept. Dec. Aug. Sept. Oct. Nov. Dec. CONSUMER PRICES2 (1982-84=100) 1 All items 3.1 2.9 3.5 2.6 2.6 2.9 .3 .2 .4 .2 .1 141.9 2 Food 1.9 1.5 1.5 -1.2 4.7 .9 .9 .4 .0 .0 .2 138.7 3 Energy items -7.4 2.0 -6.9 12.5 .4 2.7 -.2 .0 .5 .8 -.6 103.9 4 All items less food and energy 4.4 3.3 4.8 2.8 2.5 3.3 .2 .2 .5 .3 .1 149.2 5 Commodities 4.0 2.5 5.3 2.1 2.1 .6 .2 .2 .3 .1 -.2 133.6 6 Services 4.6 3.7 4.8 2.9 2.6 4.7 .3 .1 .6 .3 .3 158.2 PRODUCER PRICES (1982=100) 7 Finished goods -.1 1.6 1.0 3.3 1.6 .0 .1 .3 .1 -.2 .2 123.8 8 Consumer foods -1.5 1.5 .3 -1.0 3.6 3.3 .9" ,2r .1 -.5 1.2 124.1 9 Consumer energy -9.6 -.1 -7.0 17.9 -.5 -7.8 -,4r 1.4 -1.5 -1.9 76.5 10 Other consumer goods 3.4 2.1 3.6 2.4 1.2 1.2 -.2r ,3r -.1 .2 .2 138.6 11 Capital equipment 2.5 1.6 3.5 .9 .9 .6 .2 .0 -.2 .1 .2 130.1 Intermediate materials 12 Excluding foods and feeds -2.7 1.2 .0 5.4 .3 -.7 .R -,lr .0 -.2 .0 115.2 13 Excluding energy -.8 1.1 1.7 1.7 1.0 .0 ,2r -.R -.2 .0 .2 122.3 Crude materials 14 Foods -5.8 2.8 11.8 1.9 -6.2 4.3 -.4 .6 .6 -.6 1.1 104.4 15 Energy -16.6 1.5 -26.6 51.5 16.4 -17.9 -1.6r 4.4r -.5 .6 -4.9 79.2 16 Other -7.6 5.6 15.0 4.8 2.5 1.2 ,4r -,6r -1.3 -.9 2.6 129.6 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 5,978.5 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 4,108.7 i Durable goods 459.4 464.3 446.1 453.0 450.4 469.4 470.6 482.5 4 Nondurable goods 1,149.5 1,224.5 1,251.5 1,255.3 1,251.4 1,274.1 1,277.5 1,292.8 5 Services 1,914.2 2,059.7 2,190.1 2,205.9 2,241.1 2,279.3 2,309.0 2,333.3 6 Gross private domestic investment 832.3 799.5 721.1 732.8 736.1 722.4 773.2 781.6 7 Fixed investment 798.9 793.2 731.3 732.6 726.9 738.2 765.1 766.6 8 Nonresidential 568.1 577.6 541.1 538.4 528.7 531.0 550.3 549.6 9 Structures 193.3 201.1 180.1 175.6 169.7 170.1 170.3 166.1 10 Producers' durable equipment 374.8 376.5 360.9 362.8 358.9 360.8 380.0 383.5 11 Residential structures 230.9 215.6 190.3 194.2 198.2 207.2 214.8 217.0 12 Change in business inventories 33.3 6.3 -10.2 .2 9.2 -15.8 8.1 15.0 13 Nonfarm 31.8 3.3 -10.3 -1.2 14.5 -13.3 6.4 9.7 14 Net exports of goods and services -79.7 -68.9 -21.8 -27.1 -16.0 -8.1 -37.1 -36.0 15 Exports 508.0 557.0 598.2 602.3 622.9 628.1 625.4 639.0 16 Imports 587.7 625.9 620.0 629.5 638.9 636.2 662.5 675.0 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 1,124.2 18 Federal 401.6 426.4 447.3 447.2 440.8 445.0 444.8 455.2 19 State and local 573.6 616.8 643.2 646.0 649.5 658.0 664.3 669.0 By 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 5,963.5 21 Goods 2,063.6 2,160.1 2,192.8 2,194.9 2,188.4 2,233.6 2,233.2 2,258.4 22 Durable 891.2 920.6 907.6 910.8 905.7 923.6 932.3 943.8 23 Nondurable 1,172.5 1,239.5 1,285.1 1,284.1 1,282.7 1,310.0 1,300.8 1,314.6 24 Services 2,642.2 2,846.4 3,030.3 3,053.6 3,090.3 3,142.2 3,173.4 3,217.8 25 Structures 511.7 509.4 464.7 464.4 465.5 480.1 487.6 487.3 26 Change in business inventories 33.3 6.3 -10.2 .2 9.2 -15.8 8.1 15.0 27 Durable goods 25.2 -.9 -19.3 -7.0 -8.1 -19.3 9.5 2.7 28 Nondurable goods 8.1 7.2 9.0 7.2 17.3 3.5 -1.4 12.3 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 4,933.7 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 4,719.6 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 3,534.3 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 2,923.5 33 Government and government enterprises 478.5 514.8 543.5 544.3 546.4 554.6 561.4 564.3 34 Other 2,107.9 2,228.0 2,268.7 2,280.0 2,298.6 2,323.0 2,339.9 2,359.1 35 Supplement to wages and salaries 513.8 548.4 578.7 582.6 588.7 598.7 605.0 610.8 36 Employer contributions for social insurance 261.9 277.4 290.4 292.0 293.7 299.4 301.5 302.9 37 Other labor income 251.9 271.0 288.3 290.6 295.0 299.2 303.6 307.9 38 Proprietors' income1 347.3 366.9 368.0 367.1 377.9 393.6 398.4 397.4 39 Business and professional 307.0 325.2 332.2 337.6 340.0 353.6 359.9 365.9 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 6.4 42 Corporate profits1 362.8 361.7 346.3 341.2 347.1 384.0 388.4 374.1 43 Profits before tax3 342.9 355.4 334.7 336.7 332.3 366.1 376.8 354.1 44 Inventory valuation adjustment -17.5 -14.2 3.1 -4.8 .7 -5.4 -15.5 -9.7 45 Capital consumption adjustment 37.4 20.5 8.4 9.3 14.1 23.3 27.0 29.7 46 Net interest 452.7 460.7 449.5 450.5 446.9 430.0 420.0 407.3 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 • March 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 11999911 Q3 Q4 Ql Q2 Q3r PERSONAL INCOME AND SAVING 1 Total personal income 4,380.3 4,664.2 4,828.3 4,846.2 4,907.2 4,980.5 5,028.9 5,062.0 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 2,923.5 i Commodity-producing industries 724.2 745.6 737.4 738.8 741.5 736.8 743.1 742.4 4 Manufacturing 542.2 556.1 556.9 559.0 563.9 559.9 564.7 565.5 5 Distributive industries 607.0 634.6 647.4 651.1 652.9 660.9 662.9 667.7 6 Service industries 776.8 847.8 883.9 890.2 904.3 925.3 933.9 949.1 7 Government and government enterprises 478.5 514.8 543.6 544.3 546.4 554.6 561.4 564.3 8 Other labor income 251.9 271.0 288.3 290.6 295.0 299.2 303.6 307.9 Y Proprietors' income1 347.3 366.9 368.0 367.1 377.9 393.6 398.4 397.4 10 Business and professional 307.0 325.2 332.2 337.6 340.0 353.6 359.9 365.9 li 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 6.4 13 Dividends 126.5 140.3 137.0 135.6 134.3 133.9 136.6 141.0 14 Personal interest income 668.2 694.5 700.6 701.8 703.3 684.8 675.2 663.2 15 Transfer payments 625.0 685.8 771.1 777.1 799.8 842.7 859.7 874.1 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 211.4 224.8 238.4 240.1 241.5 246.8 249.3 251.5 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 5,062.0 19 LESS: Personal tax and nontax payments 593.3 621.3 618.7 618.6 622.3 619.6 617.1 628.8 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 4,433.2 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 152.1 175.6 199.6 191.0 219.4 214.6 232.3 203.3 MEMO Per capita (1987 dollars) 23 Gross domestic product 19,555.6 19,513.0 19,077.1 19,094.0 19,066.0 19,158.5 19,181.8 19,288.4 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 12,973.3 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 13,998.0 26 Saving rate (percent) 4.0 4.3 4.7 4.5 5.1 4.9 5.3 4.6 GROSS SAVING 27 Gross saving 741.8 718.0 708.2 679.4 698.2 677.5 682.9 696.9 28 Gross private saving 819.4 854.1 901.5 884.9 934.8 950.1 968.1 992.1 29 Personal saving 152.1 175.6 199.6 191.0 219.4 214.6 232.3 203.3 30 Undistributed corporate profits' 86.9 75.7 75.8 69.0 78.3 104.0 97.7 91.2 31 Corporate inventory valuation adjustment -17.5 -14.2 3.1 -4.8 .7 -5.4 -15.5 -9.7 Capital consumption allowances 3322 Corporate 352.4 368.3 383.0 383.5 386.3 386.1 391.2 407.2 33 Noncorporate 228.0 234.6 243.1 241.4 250.7 245.3 247.0 290.4 34 Government surplus, or deficit (-), national income and product accounts -77.5 -136.1 -193.3 -205.6 -236.6 -272.6 -285.2 -295.2 35 Federal -122.3 -166.2 -210.4 -221.0 -258.7 -289.2 -302.9 -304.4 36 State and local 44.8 30.1 17.1 15.4 22.0 16.6 17.7 9.2 37 Gross investment 742.9 723.4 730.1 709.9 714.6 706.5 713.8 732.0 38 Gross private domestic 832.3 799.5 721.1 732.8 736.1 722.4 773.2 781.6 39 Net foreign -89.3 -76.1 9.0 -22.9 -21.5 -16.0 -59.4 -49.6 40 Statistical discrepancy 1.1 5.4 21.9 30.5 16.4 29.0 30.9 35.1 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 1992 Item 1989 1990 Q3 Q4 Ql Q2 Q3P 1 Balance on current account., -101,142 -90,428 -3,682 -11,087 -7,218 -5,903 -17,802 -14,238 2 Merchandise trade balance -115,668 -108,853 -73,436 -20,174 -18,539 -17,222 -24,558 -26,538 Merchandise exports 361,697 388,705 415,962 104,151 107,851 107,946 107,464 110,812 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 claims -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 -U.'MB" 21 U.S. direct investments abroad, net -28,996 -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 Other U.S. government liabilities 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 i1 U nited 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) 10,738 1,707 -5,604 -4,2 1,023 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 • March 1993 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data seasonally adjusted 1992 IItteemm 11998899 11999900 11999911 May June July Aug. Sept. Oct.r Nov." 1 Exports of domestic and foreign merchandise, (F.A.S. value), excluding grant-aid shipments 363,812 393,592 421,730 35,718 38,165 37,806 35,799 37,882 39,072 37,970 2 General imports (customs value), including merchandise for immediate consumption plus entries into bonded warehouses 473,211 495,311 487,129 42,903 44,957 45,127 44,7% 46,459 46,291 45,558 3 Trade balance -109,399 -101,718 -65,399 -7,185 -6,792 -7,322 -8,997 -8,577 -7,219 -7,588 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 Asset 1990 1991 June July Aug. Sept. Oct. 1 Total 74,609 83,316 77,719 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 11,059 11,059 11,059 11,059 11,060 11,059 3 Special drawing rights ' 9,951 10,989 11,240 11,597 11,702 12,193 12,111 11,561 11,495 4 Reserve position in International Monetary Fund2 9,048 9,076 9,488 9,381 9,625 9,762 9,778 9,261 8,781 5 Foreign currencies 44,551 52,193 45,934 45,055 44,984 45,460 45,579 42,325 40,8% 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 June July Aug. Sept. Oct. Nov. Dec." 1 Deposits 589 369 968 219 264 297 546 415 229 205 Held in custody 2 U.S. Treasury securities 224,911 278,499 281,107 307,337 316,431 318,328 306,971 311,538 308,959 314,481 3 Earmarked gold 13,456 13,387 13,303 13,268 13,261 13,261 13,241 13,201 13,192 13,686 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 AAccccoouunntt May June July Aug. Sept. Oct/ Nov. ASSETS All foreign countries 1 Total payable in any currency 545,366 556,925 548,901 564,816 564,466 537,529 544,815 544,437 554,155 566,518 2 Claims on United States 198,835 188,4% 176,301 182,554 183,933 171,911 163,039 167,258 175,019 177,527 3 Parent bank 157,092 148,837 137,509 145,974 147,626 136,287 128,267 134,019 139,058 141,526 4 Other banks in United States 17,042 13,2% 12,884 11,640 10,418 9,576 9,181 8,083 10,658 10,009 5 Nonbanks 24,701 26,363 25,908 24,940 25,889 26,048 25,591 25,156 25,303 25,992 6 Claims on foreigners 300,575 312,449 303,934 314,569 311,990 311,578 321,631 319,115 318,901 328,306 7 Other branches of parent bank 113,810 135,003 111,729 115,407 115,398 112,177 116,674 118,105 115,589 125,143 8 Banks 90,703 72,602 81,970 86,029 84,534 85,141 87,347 83,912 86,400 85,911 9 Public borrowers 16,456 17,555 18,652 19,194 20,162 19,645 20,423 20,485 20,783 20,378 10 Nonbank foreigners 79,606 87,289 91,583 93,939 91,8% 94,615 97,187 %,613 %,129 %,874 11 Other assets 45,956 55,980 68,666 67,693 68,543 54,040 60,145 58,064 60,235 60,685 12 Total payable in U.S. dollars 382,498 379,479 363,941 370,290 369,561 349,145 340,819 346,633 363,759 374,195 13 Claims on United States 191,184 180,174 169,662 177,311 177,638 166,507 157,405 161,302 169,323 172,022 14 Parent bank 152,294 142,962 133,476 142,874 144,287 133,120 124,737 130,346 136,274 138,408 15 Other banks in United States 16,386 12,513 12,025 11,012 10,016 9,135 8,876 7,476 9,335 9,281 16 Nonbanks 22,504 24,699 24,161 23,425 23,335 24,252 23,792 23,480 23,714 24,333 17 Claims on foreigners 169,690 174,451 167,010 167,054 168,586 162,843 161,500 166,360 173,138 182,061 18 Other branches of parent bank 82,949 95,298 78,114 76,949 76,700 72,250 70,693 72,116 76,106 83,902 19 Banks 48,396 36,440 41,635 42,061 43,307 41,718 40,350 42,281 45,276 45,756 20 Public borrowers 10,961 12,298 13,685 12,994 13,723 13,320 13,661 13,965 13,941 13,995 21 Nonbank foreigners 27,384 30,415 33,576 35,050 34,856 35,555 36,796 37,998 37,815 38,408 22 Other assets 21,624 24,854 27,269 25,925 23,337 19,795 21,914 18,971 21,298 20,112 United Kingdom 23 Total payable in any currency 161,947 184,818 175,599 174,925 171,027 159,317 165,832 161,157 168,063 168,333 24 Claims on United States 39,212 45,560 35,257 37,369 38,096 38,763 37,511 35,891 39,558 38,358 25 Parent bank 35,847 42,413 31,931 34,433 35,343 35,542 34,593 32,929 36,413 35,027 26 Other banks in United States 1,058 792 1,267 970 756 1,065 744 1,067 1,400 925 27 Nonbanks 2,307 2,355 2,059 1,966 1,997 2,156 2,174 1,895 1,745 2,406 28 Claims on foreigners 107,657 115,536 109,692 107,795 104,270 105,990 108,895 106,758 109,919 113,193 29 Other branches of parent bank 37,728 46,367 35,735 35,331 36,952 35,359 37,732 37,977 40,594 45,092 30 Banks 36,159 31,604 36,394 37,548 34,783 36,777 37,711 36,1% 36,701 34,559 31 Public borrowers 3,293 3,860 3,306 3,165 2,995 3,128 3,046 3,371 3,692 3,370 32 Nonbank foreigners 30,477 33,705 34,257 31,751 29,540 30,726 30,406 29,214 28,932 30,172 33 Other assets 15,078 23,722 30,650 29,761 28,661 14,564 19,426 18,508 18,586 16,782 34 Total payable in U.S. dollars 103,208 116,762 105,974 104,392 102,737 98,828 99,610 100,449 107,342 109,479 35 Claims on United States 36,404 41,259 32,418 35,185 35,376 36,133 34,948 33,618 37,359 35,956 36 Parent bank 34,329 39,609 30,370 33,059 33,751 33,936 32,786 31,578 35,299 33,765 37 Other banks in United States 843 334 822 677 627 785 625 711 769 438 38 Nonbanks 1,232 1,316 1,226 1,449 998 1,412 1,537 1,329 1,291 1,753 39 Claims on foreigners 59,062 63,701 58,791 56,615 56,888 56,264 55,812 59,099 61,658 65,164 40 Other branches of parent bank : 29,872 37,142 28,667 27,482 28,541 26,751 26,825 27,986 30,217 34,434 41 Banks 16,579 13,135 15,219 15,348 15,380 15,930 15,565 16,808 17,269 16,848 42 Public borrowers 2,371 3,143 2,853 2,463 2,474 2,653 2,353 2,604 2,515 2,501 43 Nonbank foreigners 10,240 10,281 12,052 11,322 10,493 10,930 11,069 11,701 11,657 11,381 44 Other assets 7,742 11,802 14,765 12,592 10,473 6,431 8,850 7,732 8,325 8,359 Bahamas and Cayman Islands 45 Total payable in any currency 176,006 162,316 168,326 167,139 168,963 153,691 144,089 145,450 153,853 155,974 46 Claims on United States 124,205 112,989 115,244 115,633 114,467 102,850 94,595 %,750 102,619 104,219 47 Parent bank 87,882 77,873 81,520 84,041 83,316 72,107 64,454 68,209 72,185 73,840 48 Other banks in United States 15,071 11,869 10,907 9,729 y 9,118 8,045 8,060 6,562 8,174 8,272 49 Nonbanks 21,252 23,247 22,817 21,863 22,033 22,698 22,081 21,979 22,260 22,107 50 Claims on foreigners 44,168 41,356 45,229 42,828 45,600 41,886 41,315 41,712 42,514 43,981 51 Other branches of parent bank 11,309 13,416 11,098 9,311 9,392 8,678 8,5% 7,753 7,287 8,238 52 Banks 22,611 16,310 20,174 19,658 21,548 18,837 17,570 18,412 19,680 19,947 53 Public borrowers 5,217 5,807 7,161 6,459 7,084 6,728 7,125 7,102 7,120 7,209 54 Nonbank foreigners 5,031 5,823 6,7% 7,400 7,576 7,643 8,024 8,445 8,427 8,587 55 Other assets 7,633 7,971 7,853 8,678 8,8% 8,955 8,179 6,988 8,720 7,774 56 Total payable in U.S. dollars 170,780 158,390 163,771 162,066 163,313 147,905 138,348 139,769 148,865 151,234 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 • March 1993 3.14 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data1—Continued 1992 Account 1991 May June July Aug. Sept. Oct. LIABILITIES All foreign countries 57 Total payable in any currency 545,366 556,925 548,901 564,816 564,466 537,529 544,815 544,437 554,155 566,518 58 Negotiable certificates of deposit (CDs) 23,500 18,060 16,284 14,010 13,040 12,758 14,246 12,389 12,056 12,342 59 To United States 197,239 189,412 198,121 198,897 204,929 192,087 179,246 185,054* 188,517 187,800 60 Parent bank 138,412 138,748 136,431 136,195 143,474 133,051 126,794* 127,573* 132,630 131,619 61 Other banks in United States 11,704 7,463 13,260 13,944 14,009 11,833 10,959* 12,386* 12,259 13,390 62 Nonbanks 47,123 43,201 48,430 48,758 47,446 47,203 41,493 45,095* 43,628 42,791 63 To foreigners 296,850 311,668 288,254 308,394 302,376 301,943 314.910 311,556* 315,654 330,313 64 Other branches of parent bank ... 119,591 139,113 112,033 115,098 116,760 114,226 120,349 119,634 118,019 126,017 65 Banks 76,452 58,986 63,097 68,528 65,983 65,419 68,565 68,537 70,483 74,536 66 Official institutions 16,750 14,791 15,596 19,465 16,399 18,058 18,241 16,724 20,576 20,645 67 Nonbank foreigners 84,057 98,778 97,528 105,303 103,234 104,240 107,755 106,661* 106,576 109,115 68 Other liabilities 27,777 37,785 46,242 43,515 44,121 30,741 36,413 35,438 37,928 36,063 69 Total payable in U.S. dollars 396,613 383,522 370,561 373,679 374,506 354,666 346,377 346,344 364,787 372,117 70 Negotiable CDs 19,619 14,094 11.909 9,643 8,475 8,531 8,755 7,628 6,710 7,503 71 To United States 187,286 175,654 185,286 187,438 192,792 179,395 166,377 170,757* 175,548 175,654 72 Parent bank 132,563 130,510 129,669 130,007 136,273 125,647 119,339* 119,714* 125,122 124,472 73 Other banks in United States 10,519 6,052 11,707 12,840 13,251 10,816 9,866* 11,095* 11,387 12,244 74 Nonbanks 44,204 39,092 43.910 44,591 43,268 42,932 37,172 39,948* 39,039 38,938 75 To foreigners 176,460 179,002 158,993 162,011 158,532 155,352 157,475 155,018* 166,126 175,292 76 Other branches of parent bank ... 87,636 98,128 76,601 76,973 77,604 73,699 74,037 72,947 77,353 82,956 77 Banks 30,537 20,251 24,156 24,090 23,474 22,955 22,973 22,822 25,209 28,404 78 Official institutions 9,873 7,921 10,304 13,102 10,119 11,543 10,713 9,939 12,097 12,342 79 Nonbank foreigners 48,414 52,702 47,932 47,846 47,335 47,155 49,752 49,310* 51,467 51,590 80 Other liabilities 13,248 14,772 14,373 14,587 14,707 11,388 13,770 12,941 16,403 13,668 United Kingdom 81 Total payable in any currency .. 161,947 184,818 175,599 174,925 171,027 159,317 165,832 161,157 168,063 168,333 82 Negotiable CDs 20,056 14,256 11,333 8,458 7,612 7,731 8,083 7,266 6,064 5,636 83 To United States 36,036 39,928 37,720 33,236 36,660 37,164 35,527 35,885 35,399 34,532 84 Parent bank 29,726 31,806 29,834 25,637 28,201 29,104 27,695 27,528 27,427 26,471 85 Other banks in United States 1,256 1,505 1,438 1,638 1,326 1,315 1,632 1,670 1,341 1,689 86 Nonbanks 5,054 6,617 6,448 5,961 7,133 6,745 6,200 6,687 6,631 6,372 87 To foreigners 92,307 108,531 98,167 106,603 100,340 100,738 104,892 101,082 109,358 113,395 88 Other branches of parent bank 27,397 36,709 30,054 30,429 31,464 30,205 31,234 29,839 33,696 35,560 89 Banks 29,780 25,126 25,541 27,549 25,315 25,155 26,435 25,823 28,792 30,609 9ft Official institutions 8,551 8,361 9,670 12,732 10,167 11,091 10,699 9,131 11,687 11,438 91 Nonbank foreigners 26,579 38,335 32,902 35,893 33,394 34,287 36,524 36,289 35,183 35,788 92 Other liabilities 13,548 22,103 28,379 26,628 26,415 13,684 17,330 16,924 17,242 14,770 93 Total payable in U.S. dollars 108,178 116,094 108,755 102,783 101,901 97,565 99,092 95,642 104,521 105,699 94 Negotiable CDs 18,143 12,710 10,076 6,967 5,750 6,139 5,890 5,689 4,213 4,494 95 To United States 33,056 34,697 33,003 28,936 32,300 32,178 30,357 30,330 31,266 30,204 96 Parent bank 28,812 29,955 28,260 24,435 26,720 27,351 25,873 25,700 26,021 25,160 97 Other banks in United States 1,065 1,156 1,177 1,184 1,084 857 1,088 992 866 906 98 Nonbanks 3,179 3,586 3,566 3,317 4,496 3,970 3,396 3,638 4,379 4,138 99 To foreigners 50,517 60,014 56,626 57,489 54,262 52,894 54,381 51,677 59,938 62,899 100 Other branches of parent bank 18,384 25,957 20,800 19,497 20,918 18,634 18,983 17,747 22,080 22,8% 101 Banks 12,244 9,488 11,069 10,799 9,848 9,399 9,289 9,112 10,956 13,050 102 Official institutions 5,454 4,692 7,156 9,915 7,049 7,808 6,956 6,156 8,142 8,459 103 Nonbank foreigners 14,435 19,877 17,601 17,278 16,447 17,053 19,153 18,662 18,760 18,494 104 Other liabilities 6,462 8,673 9,050 9,391 9,589 6,354 8,464 7,946 9,104 8,102 Bahamas and Cayman Islands 105 Total payable in any currency .. 176,006 162,316 168,326 167,139 168,963 153,691 144,089 145,450 153,853 155,974 106 Negotiable CDs 678 646 1,173 1,646 1,894 1,330 1,814 872 1,394 1,939 107 To United States 124,859 114,738 129,872 128,891 130,815 115,589 105,816 108,966r 113,894 116,385 108 Parent bank 75,188 74,941 79,394 76,779 80,998 67,356 64,008r 63,057r 69,201 71,083 109 Other banks in United States 8,883 4,526 10,231 11,085 11,708 9,641 8,522r 9,779* 10,281 10,942 110 Nonbanks 40,788 35,271 40,247 41,027 38,109 38,592 33,286 36,130* 34,412 34,360 111 To foreigners 47,382 44,444 35,200 35,021 34,637 35,136 34,878 34,054* 34,889 35,411 112 Other branches of parent bank 23,414 24,715 17,388 16,842 16,799 17,668 17,315 16,071 15,441 16,287 113 Banks 8,823 5,588 5,662 6,346 6,075 6,390 6,242 6,787 6,987 7,574 114 Official institutions 1,097 622 572 731 770 862 935 984 1,058 932 115 Nonbank foreigners 14,048 13,519 11,578 11,102 10,993 10,216 10,386 10,212* 11,403 10,618 116 Other liabilities 3,087 2,488 2,081 1,581 1,617 1,636 1,581 1,558 3,676 2,239 117 Total payable in U.S. dollars ... 171,250 157,132 163,603 162,280 163,951 148,744 138,864 139,963 148,881 151,325 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 May June July Aug. Sept. Oct.' Nov.p 1 Total1 344,529 360,530r 394,690' 401,950' 404,162' 406,671' 393,758' 405,385 996,107 By type 2 Liabilities reported by banks in the United States 39,880 38,396r 47,452r 51,462' 48,879' 52,078 43,675 60,853 55,257 3 U.S. Treasury bills and certificates3 79,424 92,692 111,224 109,278 114,781 113,307 113,634 104,286 100,702 U.S. Treasury bonds and notes 4 Marketable 202,487 203,677 208,069 213,477' 212,710' 213,407' 208,924' 211,875 211,280 5 Nonmarketable 4,491 4,858 5,021 4,625 4,582 4,476 4,505 4,473 4,503 6 U.S. securities other than U.S. Treasury securities5 18,247 20,907 22,924 23,108 23,210 23,403 23,020 23,898 24,365 By area 7 Western Europe1 167,191 168,365 185,406' 191,377' 194,4651 196,061' 186,434' 194,611 185,416 8 Canada 8,671 7,460 9,347 9,302 9,876 9,990 7,027 8,111 6,396 9 Latin America and Caribbean 21,184 33,554 39,732 39,433 39,146 38,356 37,703 38,504 38,936 10 Asia 138,096 139,465 149,054' 150,207' 150,043' 151,785 151,667 153,555 154,511 11 Africa , 1,434 2,092 2,792 3,265 3,218 2,860 3,360 3,481 3,779 12 Other countries6 7,955 9,592r 8,357' 8,364 7,412 7,617 7,565 7,121 7,067 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 68,071 70,842 85,278 2 Banks' claims 68,983 65,127 66,796 73,195 60,435 58,262 73,174 3 Deposits 25,100 20,491 29,672 26,192 23,270 23,462 29,412 4 Other claims 43,884 44,636 37,124 47,003 37,165 34,800 43,762 5 Claims of banks' domestic customers2 364 3,507 6,309 3,398 2,962 4,375 3,908 1. Data on claims exclude foreign currencies held by U.S. monetary 2. Assets owned by customers of the reporting bank located in the United authorities. States that represent claims on foreigners held by reporting banks for the accounts of the domestic customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics • March 1993 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 1992 Item 1989 May June July Aug. Sept. Oct.r Nov.p HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 736,878 759,634 756,066R 784,837 786,700 777,058 768,819R 793,159' 791,892 2 Banks' own liabilities 577,498 577,229 575,374r 583,972 587,899 571,516 564,071r 585,806r 590,805 3 Demand deposits 22,032 21,723 20,321 19,606 20,930 19,739 21,698 22,474 21,288 4 Time deposits 168,780 168,017 159,649 150,295 151,965 148,254 144,119 143,768r 158,178 5 Other. 67,823 65,822 66,305r 82,901 85,656 82,953 86,61lr 82,484r 91,648 6 Own foreign offices4 318,864 321,667 329,099r 331,170 329,348 320,570 311,643r 337,0801 319,691 7 Banks' custodial liabilities5 159,380 182,405 180,692r 200,865 198,801 205,542 204,748r 207,353r 201,087 8 U.S. Treasury bills and certificates6 91,100 96,796 110,734 130,392 128,672 135,579 135,744 134,894 127,993 9 Other negotiable and readily transferable instruments 19,526 17,578 18,664 18,995 18,020 19,339 18,541 19,341r 19,954 10 Other 48,754 68,031 51,294r 51,478 52,109 50,624 50,463r 53,118r 53,140 11 Nonmonetary international and regional organizations 4,894 5,918 8,981 11,422 12,851 11,321 12,874r 10,810"^ 10,755 12 Banks' own liabilities 3,279 4,540 6,827 9,467 10,628 8,192 9,767r 8,173r 7,029 13 Demand deposits 96 36 43 46 40 24 21 24 73 14 Time deposits 927 1,050 2,714 2,520 3,788 3,008 2,630 2,527r 1,952 15 Other. 2,255 3,455 4,070 6,901 6,800 5,160 7,116r 5,622r 5,004 16 Banks' custodial liabilities5 1,616 1,378 2,154 1,955 2,223 3,129 3,107 2,637 3,726 17 U.S. Treasury bills and certificates6 197 364 1,730 1,461 1,687 2,602 2,654 1,991 3,085 18 Other negotiable and readily transferable instruments7 1,417 1,014 424 494 534 527 453 646 641 19 Other 2 0 0 0 2 0 0 0 0 20 Official institutions9 113,481 119,303 131,088r 158,676 160,740 163,660 165,385 157,309 165,139 21 Banks' own liabilities 31,108 34,910 34,41 lr 43,548 47,574 45,334 48,526 40.524 57,145 22 Demand deposits 2,196 1,924 2,626r 1,319 1,630 1,372 1,676 1,761 1,723 23 Time deposits 10,495 14,359 16,504 19,018 17,570 18,129 18,098 16,238 19,703 24 Other. 18,417 18,628 15,281 23,211 28,374 25,833 28,752 22.525 35,719 25 Banks' custodial liabilities5 82,373 84,393 96,677 115,128 113,166 118,326 116,859 116,785 107,994 26 U.S. Treasury bills and certificates6 76,985 79,424 92,692 111,224 109,278 114,781 113,307 113,634 104,286 27 Other negotiable and readily transferable instruments7 5,028 4,766 3,879 3,717 3,602 3,459 3,466 2,922 3,595 28 Other 361 203 106 187 286 86 86 229 113 29 Banks10 515,275 540,805 522,265r 527,253 526,453 514,526 501,804r 536,759r 524,206 30 Banks' own liabilities 454,273 458,470 459,335r 461,025 459,987 448,210 435,147r 466,796r 454,548 31 Unaffiliated foreign banks 135,409 136,802 130,236r 129,855 130,639 127,640 123,504r 129,716r 134,857 32 Demand deposits 10,279 10,053 8,648r 9,230 9,705 8,442 9,851 10,443 9,741 33 Time deposits2 90,557 88,541 82,857 77,068 80,118 77,229 73,175 74,447 86,300 34 Other. 34,573 38,208 38,731r 43,557 40,816 41,969 40,478r 44,826r 38,816 35 Own foreign offices4 318,864 321,667 329,099r 331,170 329,348 320,570 311,643r 337,080* 319,691 36 Banks' custodial liabilities5 61,002 82,335 62,930r 66,228 66,466 66,316 66,657r 69,963r 69,658 37 U.S. Treasury bills and certificates6 9,367 10,669 7,471 8,946 8,927 9,444 10,429 10,905 10,481 38 Other negotiable and readily transferable instruments7 5,124 5,341 5,694 7,044 6,647 7,129 6,920 7,373r 7,276 39 Other 46,510 66,325 49,765r 50,238 50,892 49,743 49,308r 51,685r 51,901 40 Other foreigners 103,228 93,608 93,732r 87,486 86,656 87,551 88,756 88,281 91,792 41 Banks' own liabilities 88,839 79,309 74,801 69,932 69,710 69,780 70,631 70,313 72,083 42 Demand deposits 9,460 9,711 9,004 9,011 9,555 9,901 10,150 10,246 9,751 43 Time deposits 66,801 64,067 57,574 51,689 50,489 49,888 50,216 50,556 50,223 44 Other3 12,577 5,530 8,223 9,232 9,666 9,991 10,265 9,511 12,109 4 4 5 6 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 8 , , 8 9 4 3 1 l r 1 8 7 , , 7 5 6 5 1 4 1 8 6 , , 7 9 8 4 0 6 1 8 7 , , 7 7 5 7 2 1 1 9 8 , , 3 1 5 2 4 5 1 8 7 , , 3 9 6 6 4 8 1 10 9 , , 1 7 4 0 1 9 47 Other negotiable and readily transferable instruments7 7,958 6,457 8,667 7,740 7,237 8,224 7,702 8,400 8,442 48 Other 1,880 1,503 1,423r 1,053 929 795 1,069 1,204 1,126 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 7,456 7,351 6,976 7,279 7,452r 7,672 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

Nonbank-Reported Data A59 3.17—Continued 1992 IItteemm 11998899 11999900 11999911 Mayr Juner Julyr Aug. Sept. Oct.* Nov.p AREA 1 Total, all foreigners 736,878 759,634 756,066r 784,837r 786,700r 777,058r 768,819* 793,159* 791,892* 800,109 2 Foreign countries 731,984 753,716 747,085r 773,415r 773,849"" 765,737r 755,945r 782,349* 781,137* 790,284 3 Europe 237,501 254,452 249,097r 273,436 279,569* 283,144r 289,388 290,344r 306,499* 313,899 4 Austria 1,233 1,229 1,193 1,337 1,490 1,445 1,427 1,456 1,584 1,358 5 Belgium and Luxembourg 10,648 12,382 13,337 17,346 16,740 16,797 18,449 17,942 21,177* 19,631 6 Denmark 1,415 1,399 937 1,331 1,263 1,348 1,329 1,760 1,788 1,481 7 Finland 570 602 1,341 764 843 720 976 685 949 1,144 8 France 26,903 30,946 31,808 27,005 30,132 28,900 29,456 32,153 34,876* 40,028 9 Germany 7,578 7,485 8,619 8,319 8,068r 8,%7 11,032 14,739 13,810 15,205 10 Greece 1,028 934 765 1,254 1,374 998 934 1,069 872 749 11 Italy 16,169 17,735 13,541 10,055 10,362 10,164 10,992 12,236 11,104 12,500 12 Netherlands 6,613 5,350 7,161 9,572 9,456 9,653 10,422 10,397 9,334 8,397 13 Norway 2,401 2,357 1,866 1,429 1,359 1,421 1,341 1,851 1,577 2,014 14 Portugal 2,418 2,958 2,184 2,391 2,530 2,659 2,664 2,245 2,258 2,255 15 Spain 4,364 7,544 11,391 14,316 15,844 15,313 14,904 15,589 14,602 10,382 16 Sweden 1,491 1,837 2,222 2,007 4,125 3,710 4,162 3,194 5,313* 5,210 17 Switzerland 34,4% 36,690 37,238 36,663 35,987 39,568 40,569 39,314 38,117 41,511 18 Turkey 1,818 1,169 1,598 1,691 1,580 1,789 2,021 2,087 2,524 2,360 19 United Kingdom 102,362 109,555 100,292r 112,828 111,712 lll,913r 111,521 115,747r 114,668* 118,178 20 Yugoslavia 1,474 928 622 524 555 547 554 567 577 575 21 Others in Western Europe" 13,563 11,689 9,274 19,961 21,607r 22,743 21,872 12,867 26,978* 26,621 22 U.S.S.R 350 119 241 436 440 609 525 499 450 601 23 Other Eastern Europe 608 1,545 3,467 4,207 4,102 3,880 4,238 3,947 3,941 3,699 24 Canada 18,865 20,349 21,605 22,581r 20,358 22,350 20,410 22,668 21,378 22,052 25 Latin America and Caribbean 311,028 332,997 345,529r 339,386r 339,161r 325,397r 310,989r 315,512* 308,712* 308,358 26 Argentina 7,304 7,365 7,753r 9,374r 9,698r 10,041r 9,397 9,065 9,387* 8,715 27 Bahamas 99,341 107,386 100,622r 100,035r 101,822r 92,546r 82,571r 76,295* 84,657* 85,180 28 Bermuda 2,884 2,822 3,178 3,009 3,598 4,848 4,782 4,275r 5,889* 6,137 29 Brazil 6,351 5,834 5,704r 5,227r 5,397r 5,311r 5,283 5,393 5,828 5,489 30 British West Indies 138,309 147,321 163,620* 158,227r 156,525r 151,591r 148,164r 159,703* 143,265* 142,757 31 Chile 3,212 3,145 3,283r 3,791r 3,701r 3,605r 3,393 3,440 3,253 2,925 32 Colombia 4,653 4,492 4,661r 4,901r 4,721 4,686r 4,711 4,792 4,767 4,677 33 Cuba 10 11 2 6 3 12 9 33 10* 11 34 Ecuador 1,391 1,379 1,232 1,150 1,137 1,074 1,214 1,073 1,026 1,016 35 Guatemala 1,312 1,541 1,594 1,438 1,447 1,420 1,432 1,416 1,376 1,323 36 Jamaica 209 257 231 242 309 271 272 309 274 271 37 Mexico 15,423 16,650 19,957 20,842 19,491 19,642 20,046 19,650 19,226 19,542 38 Netherlands Antilles 6,310 7,357 5,592 5,347 5,313 5,085 4,825 4,751 4,708 6,101 39 Panama 4,362 4,574 4,695 4,100 4,286 4,457 4,302 4,595 4,115 3,970 40 Peru 1,984 1,294 1,249 1,098 1,156 1,131 1,123 1,143 1,124 1,031 41 Uruguay 2,284 2,520 2,0%r 2,104r 2,169r 2,163r 2,182 2,019 2,087* 2,092 42 Venezuela 9,482 12,271 13,181 11,705 11,448 11,080 10,802 11,101 11,470 11,013 43 Other 6,206 6,779 6,879r 6,790* 6,940r 6,434r 6,481 6,459 6,250* 6,108 44 115566,,220011 136,844 112200,,446622rr 112288,,110000** 112244,,555533rr 112244,,990055rr 112255,,221155** 114444,,114455** 113344,,330022** 113366,,008899 China 45 People's Republic of China 1,773 2,421 2,626 2,364 2,378 2,292 2,508 2,480 2,582 2,550 46 Republic of China (Taiwan) 19,588 11,246 11,491 10,265 9,985 10,277 10,362 9,430 8,617* 8,722 47 Hong Kong 12,416 12,754 14,269 17,885 16,980 16,840 17,775 17,991 17,488* 16,315 48 India 780 1,233 2,418 1,671 1,715 1,567 1,480 1,372 1,234 1,213 49 Indonesia 1,281 1,238 1,463 1,133 1,387 1,256 958 1,507 1,249* 1,232 50 Israel 1,243 2,767 2,015 3,432 2,976 2,850 2,620 2,613 2,208 3,691 51 Japan 81,184 67,076 47,069r 46,200r 44,269r 45,826* 45,683r 64,651* 56,070* 55,374 52 Korea (South) 3,215 2,287 2,587 3,132 2,839 3,288 3,644 3,672 3,531 3,685 53 Philippines 1,766 1,585 2,449 1,630 1,813 1,994 1,920 2,028 2,275 2,222 54 Thailand 2,093 1,443 2,252 6,990 4,586 4,017 4,624 4,517 5,082 5,797 55 Middle Eastern oil-exporting countries 13,370 15,829 15,752 18,297 18,983 19,828 18,938 19,977 19,040 20,266 56 Other 17,491 16,%5 16,071 15,101 16,642 14,870 14,703 13,907 14,926 15,022 57 3,824 4,630 4,825 5,430 5,810 5,516 5,314 5,592 5,843 6,061 58 Egypt 686 1,425 1,621 2,001 2,540 2,324 2,143 2,243 2,598 2,600 59 Morocco 78 104 79 77 87 85 93 100 98 93 60 South Africa 206 228 228 399 248 269 275 190 240 214 61 Zaire 86 53 31 26 29 17 24 14 24 23 62 Oil-exporting countries 1,121 1,110 1,082 1,257 1,232 1,211 1,090 1,339 1,201 1,402 63 Other 1,648 1,710 1,784 1,670 1,674 1,610 1,689 1,706 1,682 1,729 64 Other 4,564 4,444 5,567 4,482 4,398 4,425 4,629 4,088 4,403 3,825 65 Australia 3,867 3,807 4,464 3,211 3,192 3,066 3,322 2,927 2,987 2,654 66 Other 697 637 1,103 1,271 1,206 1,359 1,307 1,161 1,416 1,171 67 Nonmonetary international and regional organizations 4,894 5,918 8,981 ll,422r 12,85 LR ll,321r 12,874r 10,810* 10,755* 9,825 68 International 3,947 4,390 6,485 8,400 9,7% 7,402r 9,65 LR 7,714* 7,708* 6,665 69 Latin American regional16 684 1,048 1,181 2,012r 2,436r 2,699 2,319 2,289 2,139 2,257 70 Other regional 263 479 1,315 1,010 619 1,220 904 807 908 903 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 • March 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 1992 Area and country 11998899 11999900 11999911 May Juner Julyr Aug/ Sept/ Oct/ 1 Total, all foreigners 534,492 511,543 514,339r 504,567r 511,801 502,941 479,705 485,349 493,457 2 Foreign countries 530,630 506,750 508,056r 499,766r 505,807 499,520 475,316 481,178 490,985 3 Europe 119,025 113,093 114,310* 120,712r 126,187 124,453 119,126 117,235 126,114 4 Austria 415 362 327 456 433 647 606 341 373 5 Belgium and Luxembourg 6,478 5,473 6,158 6,487 6,166 6,475 6,344 7,524 6,971 6 Denmark 582 497 686 994 1,436 951 901 1,007 825 7 Finland 1,027 1,047 l,907r 1,536 1,516 1,269 1,081 1,299 817 8 France 16,146 14,468 15,112 14,031 14,440 14,154 13,011 15,004 16,081 9 Germany 2,865 3,343 3,371 4,044 3,311 3,870 4,707 4,074 5,628 10 Greece 788 727 553 492 506 590 619 606 601 11 Italy 6,662 6,052 8,242 10,284r 10,621 10,508 9,876 9,487 9,754 12 Netherlands 1,904 1,761 2,546 2,647r 2,272 2,042 2,075 1,980 2,334 13 Norway 609 782 669 731 722 731 707 639 666 14 Portugal 376 292 344 398 367 382 387 383 327 15 Spain 1,930 2,668 1,881 2,687 3,880 3,730 2,590 3,304 4,630 16 Sweden 1,773 2,094 2,335 2,982r 6,720 5,%7 6,567 5,494 6,698 17 Switzerland 6,141 4,202 4,540 4,144 3,974 3,683 3,934 3,112 3,698 18 Turkey 1,071 1,405 1,063 l,131r 988 1,174 1,002 986 1,177 19 United Kingdom 65,527 65,151 60,395r 62,499r 63,917 62,800 58,861 56,456 60,1% 20 Yugoslavia 1,329 1,142 825 735 697 693 678 674 668 21 Others in Western Europe2 1,302 597 789 894 771 1,227 1,356 1,216 964 22 U.S.S.R 1,179 530 1,970 2,948 3,035 3,153 3,280 3,199 3,190 23 Other Eastern Europe 921 499 597 592 415 407 544 450 516 24 Canada 15,451 16,091 15,113r 16,449r 16,370 17,429 15,151 15,902 16,826 25 Latin America and Caribbean 230,438 231,506 246,137r 238,457r 243,472 234,066 217,582 210,329 213,319 26 Argentina 9,270 6,967 5,869 5,956 5,3% 5,614 4,789 4,560 4,568 27 Bahamas 77,921 76,525 87,138r 84,618r 83,101 74,806 62,615 58,502 64,860 28 Bermuda 1,315 4,056 2,270r 4,283 4,951 6,099 6,302 3,567 2,798 29 Brazil 23,749 17,995 ll,894r 12,183 12,020 12,186 12,286 11,308 11,558 30 British West Indies 68,749 88,565 107,846r 100,337r 106,631 104,133 99,775 99,294 %,708 31 Chile 4,353 3,271 2,805 3,056r 3,228 3,118 3,220 3,320 3,340 32 Colombia 2,784 2,587 2,425 2,328 2,304 2,398 2,322 2,475 2,595 33 Cuba 1 0 0 0 0 0 0 0 5 34 Ecuador 1,688 1,387 1,053 939 936 950 949 920 936 35 Guatemala 197 191 228 171 175 167 189 237 277 36 Jamaica 297 238 158 143 150 151 150 160 147 37 Mexico 23,376 14,851 16,567 16,910* 16,464 16,341 16,564 17,313 16,666 38 Netherlands Antilles 1,921 7,998 1,207 904 920 941 966 1,045 1,080 39 Panama 1,740 1,471 1,560 l,932r 2,208 2,025 2,053 1,945 1,988 40 Peru 771 663 739 667r 720 708 708 732 721 41 Uruguay 929 786 599 717 765 749 799 921 882 42 Venezuela 9,652 2,571 2,516 2,046 2,216 2,360 2,585 2,654 2,702 43 Other 1,726 1,384 1,263 l,267r 1,287 1,320 1,310 1,376 1,488 44 Asia .... 157,474 138,722 125,262r 117,225r 112,365 115,933 116,509 130,614 127,290 China 45 People's Republic of China 634 620 747 729 685 642 6% 636 1,051 46 Republic of China (Taiwan) 2,776 1,952 2,087 1,808 1,778 1,965 1,983 2,054 1,848 47 Hong Kong 11,128 10,648 9,617 9,127 8,272 9,103 8,015 10,087 9,132 48 India 621 655 441 475 458 512 528 499 500 49 Indonesia 651 933 952 1,132 1,085 1,090 1,108 1,089 1,112 50 Israel 813 774 860 874 891 901 920 800 826 51 Japan 111,300 90,699 84,807r 74,3%r 69,231 71,120 71,469 83,201 80,071 52 Korea (South) 5,323 5,766 6,048 5,785r 5,910 6,063 6,201 6,247 6,113 53 Philippines 1,344 1,247 1,910 1,618 1,648 1,635 1,775 1,852 1,8% 54 Thailand 1,140 1,573 1,713 l,714r 1,767 1,716 1,691 1,795 1,764 55 Middle Eastern oil-exporting countries4 10,149 10,749 8,284 13,453 14,505 14,323 14,783 14,613 15,488 56 Other 11,594 13,106 7,7% 6,114 6,135 6,863 7,340 7,741 7,489 57 Africa 5,890 5,445 4,928 4,582 4,548 4,452 4,455 4,333 4,303 58 Egypt 502 380 294 218 256 261 243 256 229 59 Morocco 559 513 575 529 527 4% 483 467 452 60 South Africa 1,628 1,525 1,235 1,128 1,070 1,047 1,066 1,055 1,036 61 Zaire 16 16 4 4 4 4 4 4 4 62 Oil-exporting countries 1,648 1,486 1,298 1,162 1,159 1,157 1,130 1,067 1,056 63 Other 1,537 1,525 1,522 1,541 1,532 1,487 1,529 1,484 1,526 64 Other 2,354 1,892 2,306 2,341r 2,865 3,187 2,493 2,765 3,133 65 Australia 1,781 1,413 1,665 l,199r 1,727 1,937 1,463 1,765 1,951 66 Other 573 479 641 1,142 1,138 1,250 1,030 1,000 1,182 67 Nonmonetary intepational and regional organizations 3,862 4,793 6,283 4,801 5,994 3,421 4,389 4,171 2,472 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 11999911rr Mayr Juner Jul/ Aug/ Sept/ Oct. Nov." 1 Total 555555599999993333333,,,,,,,000000088888887777777 555555577777779999999,,,,,,,000000044444444444444 555555577777779999999,,,,,,,666666688888883333333 555555566666665555555,,,,,,,333333322222221111111 555555555555552222222,,,,,,,111111133333335555555 22 BBaannkkss'' ccllaaiimmss 555555533333334444444,,,,,,,444444499999992222222 555555511111111111111,,,,,,,555555544444443333333 555555511111114444444,,,,,,,333333333333339999999 504,567 555555511111111111111,,,,,,,888888800000001111111 502,941 479,705 444444488888885555555,,,,,,,333333344444449999999 493,457 492,312 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 66666660000000,,,,,,,555555511111111111111 44444441111111,,,,,,,999999900000000000000 33333337777777,,,,,,,111111122222226666666 34,641 33333335555555,,,,,,,999999955555550000000 32,940 32,263 33333331111111,,,,,,,444444422222226666666 31,982 30,876 44 OOwwnn ffoorreeiiggnn ooffffiicceess 2222222%%%%%%%,,,,,,, 000000011111111111111 333333300000004444444,,,,,,,333333311111115555555 333333311111118888888,,,,,,,888888800000000000000 308,254 333333311111114444444,,,,,,,555555599999999999999 302,061 287,523 222222299999997777777,,,,,,,555555599999990000000 297,656 291,361 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 111111133333334444444,,,,,,,888888888888885555555 111111111111117777777,,,,,,,222222277777772222222 111111111111116666666,,,,,,,666666600000002222222 116,789 111111111111111111111,,,,,,,999999977777771111111 113,963 105,987 111111100000005555555,,,,,,,7777777%%%%%%% 112,128 113,409 66 DDeeppoossiittss 77777778888888,,,,,,,111111188888885555555 66666665555555,,,,,,,222222255555553333333 66666669999999,,,,,,,000000011111118888888 70,093 66666663333333,,,,,,,555555522222221111111 62,897 56,294 55555554444444,,,,,,,333333311111116666666 60,877 62,231 77 OOtthheerr 55555556666666,,,,,,,777777700000000000000 55555552222222,,,,,,,000000011111119999999 44444447777777,,,,,,,555555588888884444444 46,696 44444448888888,,,,,,,444444455555550000000 51,066 49,693 55555551111111,,,,,,,444444488888880000000 51,251 51,178 88 AAllll ootthheerr ffoorreeiiggnneerrss 44444443333333,,,,,,,000000088888885555555 44444448888888,,,,,,,000000055555556666666 44444441111111,,,,,,,888888811111111111111 44,883 44444449999999,,,,,,,222222288888881111111 53,977 53,932 55555550000000,,,,,,,555555533333337777777 51,691 56,666 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss33...... 55555558888888,,,,,,,555555599999994444444 66666667777777,,,,,,,555555500000001111111 66666665555555,,,,,,,333333344444444444444 55555553333333,,,,,,,555555522222220000000 66666666666666,,,,,,,777777788888886666666 11111113333333,,,,,,,000000011111119999999 11111114444444,,,,,,,333333377777775555555 11111115555555,,,,,,,222222288888880000000 11111117777777,,,,,,,000000099999998888888 11111115555555,,,,,,,333333344444448888888 11 Negotiable and readily transferable 33333330000000,,,,,,,999999988888883333333 44444441111111,,,,,,,333333333333333333333 33333337777777,,,,,,,111111122222225555555 22222224444444,,,,,,,111111111111114444444 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,,,,,,,555555588888884444444 8888888,,,,,,,555555500000005555555 1144 DDoollllaarr ddeeppoossiittss iinn bbaannkkss aabbrrooaadd,, rreeppoorrtteedd bbyy nnoonnbbaannkkiinngg bbuussiinneessss eenntteerrpprriisseess iinn tthhee UUnniitteedd SSttaatteess 45,767 44,638 39,111 33,432 33,440 34,712 33,223 34,026 34,050 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 Maturity, by borrower and area 1988 1989 Dec/ Mar/ Juner 1 Total 233,184 238,123 206,903 195,302 194,455 196,874 By borrower 2 Maturity of one year or less2 172,634 178,346 165,985 162,573 161,456 162,402 3 Foreign public borrowers 26,562 23,916 19,305 21,050 20,231 20,492 4 All other foreigners 146,072 154,430 146,680 141,523 141,225 141,910 5 Maturity of more than one year, 60,550 59,776 40,918 32,729 32,999 34,472 6 Foreign public borrowers 35,291 36,014 22,269 15,859 16,189 15,147 7 All other foreigners 25,259 23,762 18,649 16,870 16,810 19,325 By area Maturity of one year or less 8 Europe 55,909 53,913 49,184 51,835 52,790 54,955 9 Canada 6,282 5,910 5,450 6,444 6,907 7,935 10 Latin America and Caribbean . 57,991 53,003 49,782 43,597 48,582 49,138 11 Asia 46,224 57,755 53,258 51,059 43,645 41,412 12 Africa 3,337 3,225 3,040 2,549 2,486 2,142 13 Mother3 2,891 4,541 5,272 7,089 7,046 6,820 Maturity of more than one year2 14 Europe 4,666 4,121 3,859 3,878 4,360 6,793 15 Canada 1,922 2,353 3,290 3,595 3,284 3,153 16 Latin America and Caribbean . 47,547 45,816 25,774 18,277 18,196 16,915 17 Asia 3,613 4,172 5,165 4,459 4,729 5,007 18 Africa 2,301 2,630 2,374 2,335 2,191 2,341 19 All other3 501 684 456 185 239 263 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 • March 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 346.2r 338.8 331.5 317.8 325.3r 320.4r 335.7r 341.5 347.6r 355.2r 342.2r 2 G-10 countries and Switzerland 152.7 152.9 143.6 132.1 129.9 129.8r 134.0 137.2r 130.5r 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 7 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 1.91 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 62.3r 59.5r 64.9 68.5 64.8r 65.9 61.6 11 Canada 5.0 5.4 5.0 5.9 6.8 8.2 5.8r 5.8r 6.5r 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 21.8r 22.7 21.2 25.5r 24.9 14 Austria 1.5 1.5 1.6 1.4 1.4 1.1 1.0 .6 .8 .8 .7 15 Denmark 1.1 1.1 1.1 1.1 .9 1.2 .9 .9 .8 1.3 1.5 16 Finland 1.1 1.0 .8 .7 1.0 .8 .6r .7 .8 .8 1.0 17 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 1.3 1.9 1.4 23 South Africa 2.4 2.0 1.9 1.8 1.8 1.8 1.6 1.9 1.8 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 26 Ecuador 1.7 1.3 1.1 1.0 .9 .9 .8 .7 .7 .7 .7 27 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^ 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 9.6r 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 16.6r 17.7 37 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 47 Other Asia3 .9 1.0 1.6 1.7 2.1 2.3 2.3 2.4 2.7 3.1 3.3 Africa 48 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 .0 .0 .0 .0 .0 51 Other Africa3 1.1 1.0 .8 1.0 .8 .8 .8 .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 33..11 53 U.S.S.R .7 .7 .4 .2 .3 .4 .4 .9 1.4 1.7 11..88 54 Yugoslavia 1.8 1.6 1.3 1.2 1.0 1.0 .8 .9 .8 .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 50.0* 48.3 52.7r 52.0r 58.5 56.9 49.6r 57 Bahamas 11.0 5.5 8.9 2.8 8.3r 6.8 6.7 11.9r 14.0" 12.(y 7.6r 58 Bermuda .9 1.7 4.5 4.4 4.4 4.2 7.1 2.3r 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 15.8r 17.4 1188..00 15.4 60 Netherlands Antilles 1.0 2.3 2.2 7.9 1.1 1.4 3.9* 1.2 1.0 ..88 .7 61 Panama 2.5 1.4 1.5 1.4 1.5 1.3 1.3 1.3 1.3 11..44 1.6 62 Lebanon .1 .1 .1 .1 .1 .1 .1 .1 .1 ..11 .1 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 TTyyppee aanndd aarreeaa oorr ccoouunnttrryy 11998888 11998899 11999900** June Sept. Dec. Mar. June Sept." 1 Total 32,952 38,764 46,169 41,774r 43,256r 43,244r 44,170* 44,231r 44,979 2 Payable in dollars 27,335 33,973 40,912 37,258r 38,520* 37,852* 38,719* 37,536* 36,549 3 Payable in foreign currencies 5,617 4,791 5,257 4,516r 4,736* 5,392* 5,451* 6,695* 8,430 By type 4 Financial liabilities 14,507 17,879 21,192 19,562r 21,690* 21,981* 22,339* 22,043 23,314 5 Payable in dollars 10,608 14,035 17,105 16,202r 17,985* 17,869* 18,111* 16,799 16,478 6 Payable in foreign currencies 3,900 3,844 4,087 3,360* 3,705* 4,112* 4,228* 5,244 6,836 7 Commercial liabilities 18,445 20,885 24,977 22,212 21,566 21,263 21,831 22,188* 21,665 8 Trade payables 6,505 8,070 10,683 8,569 8,313 8,310 8,914 9,516* 9,407 9 Advance receipts and other liabilities 11,940 12,815 14,294 13,644 13,253 12,953 12,917 12,672 12,258 10 Payable in dollars 16,727 19,938 23,807 21,056 20,535 19,983 20,608 20,737* 20,071 11 Payable in foreign currencies 1,717 947 1,170 1,157 1,031 1,280 1,223 1,451* 1,594 By area or country Financial liabilities 12 Europe 9,962 11,660 11,086 10,503r 12,343* 12,002* 12,539* 13,091 14,083 13 Belgium and Luxembourg 289 340 394 355 397 217 174 194 256 14 France 359 258 975 937r 2,164* 2,106* 1,997 2,324 2,830 15 Germany 699 464 621 658 682* 682* 666* 836 956 16 Netherlands 880 941 1,081 1,026 1,050 1,056 1,025 979 1,211 17 Switzerland 1,033 541 545 513r 497* 408* 355 490 466 18 United Kingdom 6,533 8,818 6,455 6,018r 6,610* 6,513* 7,415* 7,392 7,522 19 Canada 388 610 229 293 305 267 283 337 320 20 Latin America and Caribbean 839 1,357 4,153 3,808 3,883 4,307 4,047 3,308 3,235 21 Bahamas 184 157 371 375 314 537 3% 343 192 22 Bermuda 0 17 0 12 0 114 114 114 115 23 Brazil 0 0 0 0 6 6 8 10 18 24 British West Indies 645 724 3,160 2,816 2,961 3,047 2,915 22,,116677 2,209 25 Mexico 1 6 5 6 6 7 7 88 12 26 Venezuela 0 0 4 4 4 4 4 4 5 27 Asia 3,312 4,151 5,313 4,947r 5,155* 5,347* 5,375* 5,218 5,586 28 Japan 2,563 3,299 4,077 3,771r 4,006* 4,108* 4,113* 4,122 4,553 29 Middle East oil-exporting countries2 3 2 5 4 19 13 13 10 17 30 Africa 2 2 2 9 3 6 7 0 5 31 Oil-exporting countries 0 0 0 7 2 4 6 0 0 32 Allother4 4 100 409 2 1 52 88 89 85 Commercial liabilities 33 Europe 7,319 9,071 10,310 8,607 8,084 7,808 7,491 7,144* 6,714 34 Belgium and Luxembourg 158 175 275 245 225 248 256 240 173 35 France 455 877 1,218 1,185 992 830 671 659 688 36 Germany 1,699 1,392 1,270 1,040 911 944 878 702* 744 37 Netherlands 587 710 844 729 751 709 574 605 601 38 Switzerland 417 693 775 580 492 488 482 400 369 39 United Kingdom 2,079 2,620 2,792 2,289 2,217 2,310 2,444 2,404 2,262 40 Canada 1,217 1,124 1,261 1,208 1,011 990 1,094 1,077 1,055 41 Latin America and Caribbean 1,090 1,224 1,672 1,619 1,512 1,352 1,701 1,803 1,518 42 Bahamas 49 41 12 5 14 3 13 8 3 43 Bermuda 286 308 538 504 450 310 493 409 338 44 Brazil 95 100 145 180 211 219 230 212 115 45 British West Indies 34 27 30 49 46 107 108 73 85 46 Mexico 217 323 475 358 291 304 375 475 322 47 Venezuela 114 164 130 119 102 94 168 279 147 48 Asia 6,915 7,550 9,483 8,752 8,855 9,330 9,889 10,439* 10,988 49 Japan 3,094 2,914 3,651 3,411 3,363 3,720 3,548 3,537* 3,899 50 Middle Eastern oil-exporting countries • 1,385 1,632 2,016 1,657 1,780 1,498 1,591 1,778 1,813 51 Africa 576 886 844 596 836 713 644 775 674 52 Oil-exporting countries 202 339 422 226 357 327 253 389 337 53 Other4 1,328 1,030 1,406 1,431 1,268 1,070 1,012 950 716 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 • March 1993 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1991 1992 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11998888 11998899 11999900** June Sept. Dec.* Mar.* June* Sept.P 1 Total 33,805 33,173 35,348 37,101r 38,315* 42,635 42,203 41,884 38,443 2 Payable in dollars 31,425 30,773 32,760 35,014* 35,952* 40,068 39,563 38,915 35,525 i Payable in foreign currencies 2,381 2,400 2,589 2,087 2,363 2,567 2,640 2,%9 2,918 By type 4 Financial claims 21,640 19,297 19,874 20,881* 22,536* 25,463 25,355 24,640 21,347 5 Deposits 15,643 12,353 13,577 12,544* 16,188* 17,218 16,964 15,116 12,535 6 Payable in dollars 14,544 11,364 12,552 11,758 15,182 16,343 15,803 13,829 11,477 1 Payable in foreign currencies 1,099 989 1,025 786* 1,006* 875 1,161 1,287 1,058 8 Other financial claims 5,997 6,944 6,297 8,337* 6,348* 8,245 8,391 9,524 8,812 9 Payable in dollars 5,220 6,190 5,280 7,632* 5,611* 7,365 7,644 8,799 7,780 10 Payable in foreign currencies 777 754 1,017 704* 737* 880 747 725 1,032 11 Commercial claims 12,166 13,876 15,475 16,220 15,779 17,172 16,848 17,244 17,0% 12 Trade receivables 11,091 12,253 13,657 14,120 13,429 14,447 14,243 14,743 14,528 13 Advance payments and other claims 1,075 1,624 1,817 2,100 2,350 2,725 2,605 2,501 2,568 14 Payable in dollars 11,660 13,219 14,927 15,623 15,159 16,360 16,116 16,287 16,268 15 Payable in foreign currencies 505 657 548 597 620 812 732 957 828 By area or country Financial claims 16 Europe 10,278 8,463 9,645 11,873* 13,129* 13,546 14,207 13,207 11,229 17 Belgium and Luxembourg 18 28 76 74 76 13 12 25 16 18 France 203 153 371 271 255 312 277 786 809 19 Germany 120 152 367 298 434 342 290 381 321 20 Netherlands 348 238 265 429 420 385 727 732 766 21 Switzerland 217 153 357 433 580 591 682 779 602 22 United Kingdom 9,039 7,4% 7,971 10,222 10,997 11,251 11,631 8,773 7,707 23 Canada 2,325 1,904 2,934 2,015* 2,163* 2,679 2,755 2,534 2,256 24 Latin America and Caribbean 8,160 8,020 6,201 5,926 6,289 7,932 7,070 7,260 6,523 25 Bahamas 1,846 1,890 1,090 457 652 758 415 523 1,099 26 Bermuda 19 7 3 4 19 8 12 12 65 27 Brazil 47 224 68 127 137 192 191 181 135 28 British West Indies 5,763 5,486 4,635 4,957 5,106 6,384 5,912 6,018 4,792 29 Mexico 151 94 177 161 176 321 318 343 222 30 Venezuela 21 20 25 29 32 40 34 32 26 31 Asia 623 590 860 742* 614* 957 966 1,280 995 32 Japan 354 213 523 398 277 385 380 712 481 33 Middle East oil-exporting countries2 5 8 8 4 3 5 3 4 4 34 Africa 106 140 37 64 61 57 60 57 66 35 Oil-exporting countries3 10 12 0 1 1 1 0 0 1 36 All other4 148 180 195 261* 280* 292 297 302 278 Commercial claims 37 Europe 5,181 6,209 7,044 7,464 6,884 7,950 7,894 8,137 7,607 38 Belgium and Luxembourg 189 242 212 220 190 192 181 255 170 39 France 672 964 1,240 1,402 1,330 1,544 1,562 1,563 1,576 40 Germany 669 6% 807 958 858 943 936 908 885 41 Netherlands 212 479 555 707 641 643 646 666 588 42 Switzerland 344 313 301 2% 258 295 328 399 282 43 United Kingdom 1,324 1,575 1,775 1,817 1,807 2,088 2,086 2,173 1,972 44 Canada 983 1,091 1,074 1,241 1,232 1,174 1,176 1,131 1,168 45 Latin America and Caribbean 2,241 2,184 2,375 2,433 22,,449944 2,591 2,572 2,672 3,139 46 Bahamas 36 58 14 16 88 11 11 9 7 47 Bermuda 230 323 246 247 255 263 272 291 245 48 Brazil 299 297 326 309 385 418 364 438 395 49 British West Indies 22 36 40 43 37 41 45 32 43 50 Mexico 461 508 661 710 741 829 892 847 968 51 Venezuela 227 147 192 195 1% 202 206 251 300 52 Asia 2,993 3,570 4,127 4,201 4,282 4,563 4,351 4,462 4,310 53 Japan 946 1,199 1,460 1,645 1,808 1,869 1,780 1,786 1,797 54 Middle Eastern oil-exporting countries2 453 518 460 501 4% 621 635 609 512 55 Africa 435 429 488 428 431 418 418 422 427 56 Oil-exporting countries3 122 108 67 63 80 95 75 73 66 57 Other4 333 393 367 454 456 476 437 420 445 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.- May June Julyr Aug/ Sept/ Oct/ Nov." Nov. U.S. corporate securities STOCKS 1 Foreign purchases 173,293 211,207r 198,400 18,664 16,525 18,547 13,174 13,884 18,701 17,779 2 Foreign sales 188,419 200,116 205,897 18,602 17,537 18,769 14,841 17,034 18,055 16,502 3 Net purchases or sales (-) -15,126 ll,091r -7,497 62 -1,012 -222 -1,667 -3,150 646 1,277 4 Foreign countries -15,197 10,522r -7,506 27 -1,170 -239 -1,622 -3,059 649 1,274 5 Europe -8,479 53r -6,483 278 -1,184 -965 -1,089 -1,683 57 345 6 France -1,234 9 -1,177 -121 -148 10 -46 -234 -92 -50 7 Germany -367 -63 -226 149 -4 -14 -26 -112 -52 47 8 Netherlands -397 -227 -514 76 -217 -14 -54 -107 -43 -29 9 Switzerland -2,866 -131 -78 122 -10 -55 -150 -189 -124 -40 10 United Kingdom -2,980 -352r -4,000 -11 -691 -742 -652 -869 363 359 11 Canada 886 3,845 1,229 230 74 130 -59 -278 -227 43 12 Latin America and Caribbean -1,330 2,177 1,791 43 -109 -24 -24 -90 239 649 13 Middle East1 -2,435 -134 -157 85 51 4 -14 136 -58 -217 14 Other Asia -3,477 4,255 -4,042 -557 141 370 -442 -1,064 778 386 15 Japan -2,891 1,179 -3,796 -401 35 172 -301 -97 191 230 16 Africa -63 153 17 20 -1 -7 -1 14 -21 -18 17 Other countries -298 174 139 -72 -142 253 7 -94 -119 86 18 Nonmonetary international and regional organizations 71 568 9 35 158 17 -45 -91 -3 3 BONDS2 19 Foreign purchases 118,764 153,096 192,337 17,539 16,691 18,343 19,785 17,160 18,404 15,793 20 Foreign sales 102,047 125,637r 156,828 13,222 12,407 16,311 16,620 14,452 14,547 14,062 21 Net purchases or sales (-) 16,717 27,459* 35,509 4,317 4,284 2,032 3,165 2,708 3,857 1,731 22 Foreign countries 17,187 27,59c 34,938 4,388 4,205 2,153 3,150 2,573 3,811 1,566 23 Europe 10,079 13,112r 15,343 1,920 1,420 1,029 1,516 1,818 1,473 -750 24 France 373 847 1,004 -45 364 161 -5 155 -4 -7 25 Germany -377 1,577 1,646 67 11 -37 -13 387 -34 -113 26 Netherlands 172 482 474 123 64 177 22 58 133 135 27 Switzerland 284 656 -618 -40 -53 -13 -94 -51 -23 -260 28 United Kingdom 10,383 8,93lr 11,299 1,496 847 760 1,447 1,319 1,041 -556 29 Canada 1,906 1,623 274 -68 -111 67 -100 48 198 281 30 Latin America and Caribbean 4,328 2,672 8,359 1,022 619 676 878 548 911 510 31 Middle East1 3 1,787 2,821 455 376 239 284 -5 314 489 32 Other Asia 1,120 8,459 8,118 1,088 1,904 231 593 171 967 973 33 Japan 727 5,767 -76 324 740 -710 -1,229 -590 470 412 34 Africa % 52 51 6 -6 22 1 -7 -50 -5 35 Other countries -344 -116 -28 -35 3 -111 -22 0 -2 68 36 Nonmonetary international and regional organizations -471 -131 571 -71 79 -121 15 135 46 165 Foreign securities 37 Stocks, net purchases or sales (-) -9,205 -31,967 -27,595 -909"" 68* -3,244 -2,959 -2,854 -4,185 -3,554 38 Foreign purchases 122,641 120,598 136,794 13,915r 14,638* 13,4% 9,759 13,580 12,292 11,533 39 Foreign sales3 131,846 152,565 164,389 14,824r 14,570* 16,740 12,718 16,434 16,477 15,087 40 Bonds, net purchases or sales (-) -22,412 -14,828 -15,594 -2,749* -1,681* -4,280 275 -1,561 -1,966 -831 41 Foreign purchases 314,645 330,311 442,757 33,514* 40,332* 43,301 45,938 45,747 47,885 51,063 42 Foreign sales 337,057 345,139 458,351 36,263* 42,013* 47,581 45,663 47,308 49,851 51,894 43 Net purchases or sales (-), of stocks and bonds -31,617 -46,795 -43,189 —3,658* -1,613* -7,524 -2,684 -4,415 -6,151 -4,385 44 Foreign countries -28,943 -46,711 -46,586 —3,684* -1,997* -8,383 -2,771 -4,436 -6,178 -4,473 45 Europe -8,443 -34,452 -33,310 -141* -1,494* -5,333 -1,244 -3,282 -6,438 -5,018 46 Canada -7,502 -7,004 -5,402 -710 -852 -2,212 207 -136 -1,015 577 47 Latin America and Caribbean -8,854 759 -2,323 -1,278 -560* 1,631 -430 308 1,092 -1,653 48 Asia -3,828 -7,350 -4,810 -1,235 374* -2,461 -1,376 -1,667 773 1,578 49 Africa -137 -9 -46 -99 7 14 11 -14 -2 42 50 Other countries -180 1,345 -695 -221 528 -22 61 355 -588 1 51 Nonmonetary international and regional organizations -2,673 -84 3,397 26 384 859 87 21 27 88 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 • March 1993 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars Country or area 1990 1991 Jan.- Nov. May June July Aug. Sept/ Oct/ Nov." Transactions, net purchases or sales (-) during period1 1 Estimated total 18,927 19,865 39,365 -7,924 14,444R -1,862 6,458 -5,995 3,538 17,710 2 Foreign countries 18,764 19,687 38,214 -6,945 ll,754r -2,286 6,785 -6,204 4,343 17,723 3 Europe 18,455 8,663 16,391 -7,302 3,828 -2,445 3,450 -4,655 4,682 7,180 4 Belgium and Luxembourg 10 523 2,009 289 -49 331 80 -25 229 369 5 Germany 5,880 -4,725 1,178 329 824 -829 255 900 -8 -1,584 6 Netherlands 1,077 -3,735 -2,119 -338 227 -1,046 367 -239 -40 1,827 7 Sweden 1,152 -663 -461 -3 372 -26 -1,289 -843 202 667 8 Switzerland 112 1,007 268 -579 -mr -703 -87 292 769 1,334 9 United Kingdom -1,259 6,218 21,245 -5,867 1,664 212 3,681 16 4,075 7,0% 10 Other Western Europe 11,463 10,024 -6,379 -1,099 7or -581 428 -4,761 -544 -2,747 11 Eastern Europe 13 13 650 -34 200 197 15 5 -1 218 12 Canada -4,627 -3,019 661 2,627 47 2,520 900 -4,281 458 -1,087 13 Latin America and Caribbean 14,734 10,285 1,143 -320 3,585r -2,869 -1,563 -1,479 -2,002 7,204 14 Venezuela 33 10 528 -1% -149 216 60 31 155 27 15 Other Latin America and Caribbean 3,943 4,179 -2,516 -2,472 l,791r -589 -758 -2,537 -3,315 2,323 16 Netherlands Antilles 10,757 6,097 3,131 2,348 1,943 -2,4% -865 1,027 1,158 4,854 17 -10,952 3,367 22,641 -2,406 4,129 1,783 4,112 4,004 1,495 4,224 18 Japan -14,785 -4,081 7,564 1,085 1,638 2,221 1,887 2,448 -371 3,363 19 313 689 1,103 40 92 149 56 59 -37 119 20 Other 842 -298 -3,725 416 73 -1,424 -170 148 -253 83 21 Nonmonetary international and regional organizations 163 178 1,151 -979 2,690 424 -327 209 -805 -13 22 International 287 -358 942 -747 2,421 365 -133 -31 -903 -38 23 Latin American regional -2 -72 436 -4 127 -68 -75 201 219 -31 MEMO 24 Foreign countries 18,764 19,687 38,214 -6,945 11,754r -2,286 6,785 -6,204 4,343 17,723 25 Official institutions 23,218 1,190 7,603 -2,685 5,408r -767 697 -4,483 2,951 -595 26 Other foreign2 -4,453 18,4% 30,611 -4,260 6,346r -1,519 6,088 -1,721 1,392 18,318 Oil-exporting countries 27 Middle East2 -387 -6,822 4,186 -3,061 947 856 1,093 750 -118 628 28 0 239 11 0 -56 0 0 4 0 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 Jan. 31, 1993 Rate on Jan. 31, 1993 Rate on Jan. 31, 1993 Country Country Country Percent e M ffe o c n t t i h v e e M ffe o c n t t i h v e Percent e M ffe o c n t t i h v e Austria.. 7.88 Oct. 1992 Germany... 8.25 Sept. 1992 Norway 17.0 Nov. 1992 Belgium . 7.5 Oct. 1992 Italy 12.0 Dec. 1992 Switzerland 5.5 Jan. 1993 Canada.. 6.81 Jan. 1993 Japan 3.25 July 1992 United Kingdom 12.0 Sept. 1992 Denmark 9.5 Dec. 1991 Netherlands 7.5 Jan. 1993 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 1993 TTyyppee oorr ccoouunnttrryy 11999900 11999911 11999922 July Aug. Sept. Oct. Nov. Dec/ Jan. 8.16 5.86 3 .Iff 3.40 3.33 3.15 3.30 3.67 3.50 3.22 14.73 11.47 9.56r 10.10 10.27 9.86 8.23 7.16 7.11 6.88 13.00 9.07 6.76 5.58 5.15 5.33 7.57 7.63 7.93 7.03 8.41 9.15 9.42 9.69 9.79 9.37 8.85 8.84 8.93 8.50 8.71 8.01 7.67r 8.67 8.09 7.20 6.28 6.44 6.13 5.52 8.57 9.19 9.25r 9.50 9.73 9.23 8.63 8.66 8.55 8.00 10.20 9.49 10.14 10.11 10.27 10.51 10.82 9.58 10.75 11.69 8 Italy 12.11 12.04 13.91 15.54 15.27 17.54 15.52 14.38 13.60 12.56 9.70 9.30 9.31 9.54 9.71 9.44 8.70 8.64 8.65 8.19 7.75 7.33 4.39 4.32 3.87 3.89 3.85 3.77 3.76 3.70 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 • March 1993 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar except as noted 1992 1993 CCoouunnttrryy//ccuurrrreennccyy uunniitt 11999900 11999911 11999922 Aug. Sept. Oct. Nov. Dec. Jan. 1 Australia/dollar^ 78.069 77.872 73.521 72.479 72.255 71.481 68.984 68.974 67.297 2 Austria/schilling 11.331 11.686 10.992 10.199 10.214 10.436 11.168 11.130 11.368 3 Belgium/franc 33.424 34.195 32.148 29.824 29.917 30.581 32.661 32.545 33.239 4 Canada/dollar 1.1668 1.1460 1.2085 1.1907 1.2225 1.2453 1.2674 1.2725 1.2779 5 China, P.R./yuan 4.7921 5.3337 5.5206 5.4417 5.5048 5.5486 5.6134 5.8106 5.77% 6 Denmark/krone 6.1899 6.4038 6.0372 5.5851 5.6203 5.7278 6.1166 6.1206 6.2319 7 Finland/markka 3.8300 4.0521 4.4865 3.9773 4.4764 4.70% 5.0615 5.1444 5.4242 8 France/franc 5.4467 5.6468 5.2935 4.9119 4.9378 5.0370 5.3706 5.3974 5.4751 9 Germany/deutsche mark 1.6166 1.6610 1.5618 1.4475 1.4514 1.4851 1.5875 1.5822 1.6144 10 Greece/drachma 158.59 182.63 190.81 179.12 182.70 192.50 206.48 209.48 215.97 11 Hong Kong/dollar 7.7899 7.7712 7.7402 7.7318 7.7298 7.7298 7.7348 7.7416 7.7376 12 India/rupee 17.492 22.712 28.156 28.464 28.476 28.477 28.474 28.979 29.043 13 Ireland/pound2 165.76 161.39 170.42 183.26 181.90 177.19 166.17 166.71 163.37 14 Italy/lira 1,198.27 1,241.28 1,232.17 1,100.00 1,176.21 1,309.64 1,364.45 1,412.38 1,491.07 15 Japan/yen 145.00 134.59 126.78 126.23 122.60 121.17 123.88 124.04 124.99 16 Malaysia/ringgit 2.7057 2.7503 2.5463 2.4977 2.5029 2.5044 2.5227 2.5710 2.5985 1 1 8 7 N Ne ew th e Z rl e a a n la d n s/ d g / u d i o l l d l e a r r 2 59 1 . . 6 8 1 2 9 1 5 57 1 . . 8 8 3 7 2 2 0 53 1 . . 7 7 9 5 2 8 7 54 1 . . 0 6 5 3 7 2 2 54 1 . . 1 6 1 3 2 4 8 53 1 . . 9 6 4 7 3 1 7 51 1 . .7 9 8 % 6 2 51 1 . . 5 7 7 7 0 8 8 51 1 . . 2 8 7 1 0 5 5 19 Norway/krone 6.2541 6.4912 6.2142 5.7120 5.8116 6.0562 6.4714 6.6804 6.8721 20 Portugal/escudo 142.70 144.77 135.07 124.98 127.86 132.33 141.71 142.05 145.36 21 Singapore/dollar 1.8134 1.7283 1.6294 1.6077 1.5988 1.6081 1.6338 1.6397 1.6527 22 South Africa/rand 2.5885 2.7633 2.8524 2.7629 2.8037 2.8923 2.9959 3.0140 3.0713 23 South Korea/won 710.64 736.73 784.58 792.56 788.76 786.79 787.09 791.75 794.87 24 Spain/peseta 101.96 104.01 102.38 93.05 98.19 105.74 113.83 112.95 114.62 25 Sri Lanka/rupee 40.078 41.200 44.013 44.050 44.159 44.276 44.404 45.046 46.307 26 Sweden/krona 5.9231 6.0521 5.8258 5.2745 5.3685 5.6006 6.2528 6.8903 7.2536 27 Switzerland/franc 1.3901 1.4356 1.4064 1.2966 1.2780 1.3176 1.4291 1.4219 1.4774 28 Taiwan/dollar 26.918 26.759 25.160 25.120 25.227 25.278 25.405 25.452 25.452 29 Thailand/baht 25.609 25.528 25.411 25.265 25.209 25.253 25.462 25.488 25.523 30 United Kingdom/pound2 178.41 176.74 176.63 194.34 184.65 165.29 152.68 155.10 153.25 MEMO 31 United States/dollar3 89.09 89.84 86.61 80.97 81.98 85.03 90.04 90.50 92.36 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 September 30, 1992 March 1993 A71 Special table follows. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Special Tables A71 4.33 ASSETS AND LIABILITIES Life Insurance Companies Millions of dollars 1991 1992 AAccccoouunntt Qlr Q2r Q3r Q4r Qlr Q2 Q3 Life insurance companies1 1 Assets 1,505,318 1,538,731 1,551,201 1,580,733 1,611,440 1,643,699 Securities 2 Government 241,289 252,888 269,490 279,675 288,271 302,448 3 United States2 210,685 221,138 241,935 251,334 257,940 270,085 4 State and local 11,329 11,909 10,228 10,355 10,461 11,013 5 Foreign3 19,275 19,841 17,327 17,986 19,870 21,350 6 Business n.a. 771,650 786,769 788,030 808,183 831,135 851,667 7 Bonds 627,396 635,336 623,515 640,478 658,512 671,671 8 Stocks 144,254 151,433 164,515 167,705 172,623 179,996 9 Mortgages 271,674 270,094 265,258 263,269 259,266 253,843 10 Real estate 45,934 47,164 46,711 47,749 48,523 48,875 11 Policy loans 65,391 66,671 66,364 66,900 67,973 69,420 12 Other assets 109,380 115,145 115,348 114,957 116,272 117,446 1. Data are no longer available on a monthly basis for life insurance companies. Source. Estimates by the American Council of Life Insurance for all life 2. Direct and guaranteed obligations. Excludes federal agency issues not insurance companies in the United States. Annual figures are annual-statement guaranteed, which are included as "Business" securities. asset values, with bonds carried on an amortized basis and stocks at year-end 3. Issues of foreign governments and their subdivisions and bonds of the market value. Adjustments for interest due and accrued and for differences International Bank for Reconstruction and Development. between market and book values are not made on each item separately but are included, in total, in "Other assets." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

A73 GOLD Real estate loans—Continued Certificate account, 11 Terms, yields, and activity, 36 Stock, 5, 54 Type of holder and property mortgaged, 37 Government National Mortgage Association, 32, 36, 37 Repurchase agreements, 7, 18, 21, 22, 23 Gross domestic product, 51 Reserve requirements, 9 Reserves HOUSING, new and existing units, 49 Commercial banks, 19 Depository institutions, 4, 5, 6, 13 INCOME, personal and national, 44, 51, 52 Federal Reserve Banks, 11 Industrial production, 44, 47 U.S. reserve assets, 54 Installment loans, 38 Residential mortgage loans, 36 Insurance companies, 29, 37, 71 Retail credit and retail sales, 38, 39,44 Interest rates Bonds, 25 SAVING Consumer installment credit, 38 How of funds, 39, 41,42, 43 Federal Reserve Banks, 8 National income accounts, 51 Foreign central banks and foreign countries, 67 Savings and loan associations, 37, 38, 39. (See also SAIF-insured Money and capital markets, 25 institutions) Mortgages, 36 Savings Association Insurance Funds (SAIF) insured institutions, 27 Prime rate, 24 Savings banks, 27, 37, 38 International capital transactions of United States, 53-67 Savings deposits (See Time and savings deposits) International organizations, 57, 58, 60, 63, 64 Securities (See also specific types) Inventories, 51 Federal and federally sponsored credit agencies, 32 Investment companies, issues and assets, 34 Foreign transactions, 65 Investments (See also specific types) Life insurance companies, 70 Banks, by classes, 19, 20, 21, 22, 23,27 New issues, 33 Commercial banks, 4, 17, 19-22 Prices, 26 Federal Reserve Banks, 11, 12 Special drawing rights, 5, 11, 53, 54 Financial institutions, 37 State and local governments Deposits, 21, 22 LABOR force, 45 Holdings of U.S. government securities, 29 Life insurance companies (See Insurance companies) New security issues, 33 Loans (See also specific types) Ownership of securities issued by, 21, 22 Banks, by classes, 19-22 Rates on securities, 25 Commercial banks, 4, 17, 19-22 Stock market, selected statistics, 26 Federal Reserve Banks, 5, 6, 8,11,12 Stocks (See also Securities) Financial institutions, 27, 37 New issues, 33 Insured or guaranteed by United States, 36, 37 Prices, 26 MANUFACTURING Student Loan Marketing Association, 32 Capacity utilization, 46 Production, 46, 48 TAX receipts, federal, 28 Margin requirements, 26 Thrift institutions, 4. (See also Credit unions and Savings and Member banks (See also Depository institutions) loan associations) Federal funds and repurchase agreements, 7 Time and savings deposits, 4, 14, 18, 19, 20, 21, 22, 23 Reserve requirements, 9 Trade, foreign, 54 Mining production, 48 Treasury cash, Treasury currency, 5 Mobile homes shipped, 49 Treasury deposits, 5, 11, 27 Monetary and credit aggregates, 4, 13 Treasury operating balance, 27 Money and capital market rates, 25 Money stock measures and components, 4, 14 UNEMPLOYMENT, 45 Mortgages (See Real estate loans) U.S. government balances Mutual funds, 34 Commercial bank holdings, 19, 20, 21, 22 Treasury deposits at Reserve Banks, 5, 11, 27 Mutual savings banks (See Thrift institutions) U.S. government securities Bank holdings, 19-22, 23, 29 NATIONAL defense outlays, 28 Dealer transactions, positions, and financing, 31 National income, 51 Federal Reserve Bank holdings, 5, 11, 12, 29 Foreign and international holdings and OPEN market transactions, 10 transactions, 11, 29, 66 Open market transactions, 10 PERSONAL income, 52 Outstanding, by type and holder, 27, 29 Prices Rates, 24 Consumer and producer, 44, 50 U.S. international transactions, 53-67 Stock market, 26 Utilities, production, 48 Prime rate, 24 Producer prices, 44, 50 VETERANS Administration, 36, 37 Production, 44, 47 Profits, corporate, 34 WEEKLY reporting banks, 21-23 REAL estate loans Wholesale (producer) prices, 44, 50 Banks, by classes, 17, 21, 22, 37 Financial institutions, 27 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Federal Reserve Board of Governors and Official Staff ALAN GREENSPAN, Chairman WAYNE D. ANGELL DAVID W. MULLINS, JR., Vice Chairman EDWARD W. KELLEY, JR. OFFICE OF BOARD MEMBERS DIVISION OF INTERNATIONAL FINANCE JOSEPH R. COYNE, Assistant to the Board EDWIN M. TRUMAN, Staff Director DONALD J. WINN, Assistant to the Board LARRY J. PROMISEL, Senior Associate Director THEODORE E. ALLISON, Assistant to the Board for Federal CHARLES J. SIEGMAN, Senior Associate Director Reserve System Affairs DALE W. HENDERSON, Associate Director LYNN S. FOX, Special Assistant to the Board DAVID H. HOWARD, Senior Adviser WINTHROP P. HAMBLEY, Special Assistant to the Board DONALD B. ADAMS, Assistant Director BOB STAHLY MOORE, Special Assistant to the Board PETER HOOPER III, Assistant Director DIANE E. WERNEKE, Special Assistant to the Board KAREN H. JOHNSON, Assistant Director RALPH W. SMITH, JR., Assistant Director LEGAL DIVISION 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 WILLIAM W. WILES, Secretary PETER A. TINSLEY, Deputy Associate Director JENNIFER J. JOHNSON, Associate Secretary MYRON L. KWAST, Assistant Director PATRICK M. PARKINSON, Assistant Director BARBARA R. LOWREY, Associate Secretary MARTHA S. SCANLON, Assistant Director ELLEN MALAND, Assistant Secretary JOYCE K. ZICKLER, Assistant Director JOHN J. MINGO, Adviser DIVISION OF BANKING SUPERVISION AND REGULATION LEVON H. GARABEDIAN, Assistant Director (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 GERALD A. EDWARDS, JR., Assistant Director DIVISION OF CONSUMER 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

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 DAVID L. SHANNON, Director LOUISE L. ROSEMAN, Assistant Director JOHN 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

76 Federal Reserve Bulletin • March 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 P. 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 W. LANG, Associate Economist NORMAND R.V. BERNARD, Deputy Secretary DAVID E. LINDSEY, Associate Economist JOSEPH R. COYNE, Assistant Secretary LARRY J. PROMISEL, Associate Economist GARY P. GILLUM, Assistant Secretary ARTHUR J. ROLNICK, Associate Economist J. VIRGIL MATTINGLY, JR., General Counsel HARVEY ROSENBLUM, Associate Economist ERNEST T. PATRIKIS, Deputy General Counsel KARL A. SCHELD, Associate Economist MICHAEL J. PRELL, Economist CHARLES J. SIEGMAN, Associate Economist EDWIN M. TRUMAN, Economist THOMAS D. SIMPSON, Associate Economist RICHARD G. DAVIS, Associate Economist LAWRENCE SLIFMAN, 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 E. B. ROBINSON, JR., President JOHN B. MCCOY, Vice President MARSHALL N. CARTER, First District EUGENE A. MILLER, Seventh District CHARLES S. SANFORD, JR., Second District ANDREW B. CRAIG, HI, 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 CHARLES R. HRDLICKA, Eleventh District E.B. ROBINSON, JR., Sixth District RICHARD M. ROSENBERG, Twelfth District HERBERT V. PROCHNOW, Secretary WILLIAM J. KORSVIK, Associate Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All CONSUMER ADVISORY COUNCIL 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

A78 Federal Reserve Board Publications For ordering assistance, write PUBLICATIONS SERVICES, Consumer and Community Affairs Handbook. $75.00 per MS-138, Board of Governors of the Federal Reserve System, year. Washington, DC 20551 or telephone (202) 452-3244 or FAX Monetary Policy and Reserve Requirements Handbook. (202) 728-5886. When a charge is indicated, payment should $75.00 per year. accompany request and be made payable to the Board of Securities Credit Transactions Handbook. $75.00 per year. Governors of the Federal Reserve System. Payment from for- The Payment System Handbook. $75.00 per year. eign residents should be drawn on a U.S. bank. Federal Reserve Regulatory Service. 3 vols. (Contains all four Handbooks plus substantial additional material.) $200.00 per year. Rates for subscribers outside the United States are as follows THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNCTIONS. and include additional air mail costs: 1984. 120 pp. Federal Reserve Regulatory Service, $250.00 per year. ANNUAL REPORT. Each Handbook, $90.00 per year. ANNUAL REPORT: BUDGET REVIEW, 1991-92. FEDERAL RESERVE BULLETIN. Monthly. $25.00 per year or THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A MULTI- $2.50 each in the United States, its possessions, Canada, COUNTRY MODEL, May 1984. 590 pp. $14.50 each. and Mexico. Elsewhere, $35.00 per year or $3.00 each. WELCOME TO THE FEDERAL RESERVE. March 1989. 14 pp. ANNUAL STATISTICAL DIGEST: period covered, release date, INDUSTRIAL PRODUCTION—1986 EDITION. December 1986. 440 pp. $9.00 each. number of pages, and price. 1981 October 1982 239 pp. $ 6.50 FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY. December 1986. 264 pp. $10.00 each. 1982 December 1983 266 pp. $ 7.50 1983 October 1984 264 pp. $11.50 FINANCIAL SECTORS IN OPEN ECONOMIES: EMPIRICAL ANALY- 1984 October 1985 254 pp. $12.50 SIS AND POLICY ISSUES. August 1990. 608 pp. $25.00 each. 1985 October 1986 231 pp. $15.00 1986 November 1987 288 pp. $15.00 1987 October 1988 272 pp. $15.00 CONSUMER EDUCATION PAMPHLETS 1988 November 1989 256 pp. $25.00 Short pamphlets suitable for classroom use. Multiple copies are 1980-89 March 1991 712 pp. $25.00 available without charge. 1990 November 1991 185 pp. $25.00 1991 November 1992 215 pp. $25.00 Consumer Handbook on Adjustable Rate Mortgages SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES Consumer Handbook to Credit Protection Laws OF CHARTS. Weekly. $30.00 per year or $.70 each in the A Guide to Business Credit for Women, Minorities, and Small United States, its possessions, Canada, and Mexico. Else- Businesses where, $35.00 per year or $.80 each. How to File A Consumer Credit Complaint THE FEDERAL RESERVE ACT and other statutory provisions Series on the Structure of the Federal Reserve System affecting the Federal Reserve System, as amended through The Board of Governors of the Federal Reserve System August 1990. 646 pp. $10.00. The Federal Open Market Committee REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL Federal Reserve Bank Board of Directors RESERVE SYSTEM. Federal Reserve Banks ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— Organization and Advisory Committees Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. A Consumer's Guide to Mortgage Lock-Ins Vol. II (Irregular Transactions). 1969. 116 pp. Each vol- A Consumer's Guide to Mortgage Settlement Costs ume $2.25; 10 or more of same volume to one address, A Consumer's Guide to Mortgage Refinancings $2.00 each. Home Mortgages: Understanding the Process and Your Right Introduction to Flow of Funds. 1980. 68 pp. $1.50 each; 10 or to Fair Lending more to one address, $1.25 each. Making Deposits: When Will Your Money Be Available? Federal Reserve Regulatory Service. Looseleaf; updated at When Your Home is on the Line: What You Should Know least monthly. (Requests must be prepaid.) About Home Equity Lines of Credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A79 STAFF STUDIES: Summaries Only Printed in the 160. BANKING MARKETS AND THE USE OF FINANCIAL SER- Bulletin VICES BY SMALL AND MEDIUM-SIZED BUSINESSES, by Gregory E. Elliehausen and John D. Wolken. September Studies and papers on economic and financial subjects that are 1990. 35 pp. of general interest. Requests to obtain single copies of the full text or to be added to the mailing list for the series may be sent 161. A REVIEW OF CORPORATE RESTRUCTURING ACTIVITY, 1980-90, by Margaret Hastings Pickering. May 1991. to Publications Services. 21pp. 162. EVIDENCE ON THE SIZE OF BANKING MARKETS FROM Staff Studies 1-145 are out of print. MORTGAGE LOAN RATES IN TWENTY CITIES, by Stephen A. Rhoades. February 1992. 11 pp. 146. THE ROLE OF THE PRIME RATE IN THE PRICING OF 163. CLEARANCE AND SETTLEMENT IN U.S. SECURITIES MAR- BUSINESS LOANS BY COMMERCIAL BANKS, 1977-84, by KETS, by Patrick Parkinson, Adam Gilbert, Emily Gollob, Thomas F. Brady. November 1985. 25 pp. Lauren Hargraves, Richard Mead, Jeff Stehm, and Mary 147. REVISIONS IN THE MONETARY SERVICES (DIVISIA) IN- Ann Taylor. March 1992. 37 pp. DEXES OF THE MONETARY AGGREGATES, by Helen T. Farr and Deborah Johnson. December 1985. 42 pp. 148. THE MACROECONOMIC AND SECTORAL EFFECTS OF THE REPRINTS OF SELECTED Bulletin ARTICLES ECONOMIC RECOVERY TAX ACT: SOME SIMULATION Some Bulletin articles are reprinted. The articles listed below RESULTS, by 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

A80 Maps of the Federal Reserve System 1 jiiiil8iii®3l» ijiiiii BOSTON MINNEAPOLIS!1 2 " iff 7 —— •• NNEEWW YYOORRKK 12 ptfi^sijii^l^^^l^pji 1 i 8 fi 8 l 1 ji CCHHIICCAAGGOO •• CLJLMD • PHILADELPHIA •• SSAANN FFRRAANNCCIISSCCOO Q 10 KANSAS CITYB • ST. Louis LLCHMOND 8 5 ?ZR • ATLANTA 11 ^ ALASKA HAWAII LEGEND Both pages Facing page • Federal Reserve Bank city • Federal Reserve Branch city • Board of Governors of the Federal — Branch boundary Reserve System, Washington, D.C. NOTE The Federal Reserve officially identifies Districts Commonwealth of Puerto Rico and the U.S. Virgin by number and Reserve Bank city (shown on both Islands; the San Francisco Bank serves American pages) and by letter (shown on the facing page). Samoa, Guam, and the Commonwealth of the In the 12th District, the Seattle Branch serves Northern Mariana Islands. The Board of Governors Alaska, and the San Francisco Bank serves Hawaii. revised the branch boundaries of the System most The System serves commonwealths and terri- recently in December 1991. tories as follows: the New York Bank serves the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A81 1-A 2-B 3-C 4-D 5_£ Baltimore^ Pittsburgh / Charlotte NH • Cincinnati MA| Buffalo • ^ CT NJ NY BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 7-G 8-H • Nashville W1 ML Louisville IA Detroit • ILB Jacksonville IN Memphis New Orleans F \ MS Rock y Miami ATLANTA CHICAGO ST. LOUIS 9-1 Helena MINNEAPOLIS 10-J WY 12-L NE / CO Omaha • • > tin ALASKA / Denver • Seattle /- • — Portland Oklahoma City • OR < OK KANSAS CITY CA / NV7 UT 11-K • A / Salt Lake City AZ ' Houston • Los Angel es • I • San Antonio/ HAWAII DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A82 Federal Reserve Banks, Branches, and Offices FEDERAL RESERVE BANK Chairman President Vice President branch, or facility Zip Deputy Chairman First Vice President in charge of branch BOSTON* 02106 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 FredR. 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 Robert D. Nabholz, Jr. Karl W. Ashman Louisville 40232 John A. Williams Howard Wells Memphis 38101 Seymour B. Johnson 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. Hollo way 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 W. Thomas Beard, III Sammie C. Clay Houston 77252 Judy Ley Allen Robert Smith, III1 San Antonio 78295 Erich Wendl 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 at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, New Jersey 07016; Jericho, New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202. 1. Senior Vice President. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Publications of Interest FEDERAL RESERVE CONSUMER CREDIT PUBLICATIONS 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. Business A Consumer's Credit Quid* to far Women, Mortgage Minorities, and Lock-Ins Smalt Businesses Consumer Handbook to Credit Protection k Laws 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 Flow of Funds Quarterly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Publications of Interest FEDERAL RESERVE REGULATORY SERVICE To promote public understanding of its regulatory 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. US. 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