Federal Reserve Bulletin, 1993-07

VOLUME 79 • NUMBER 7 • JULY 1993 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 • Richard Spillenkothen • 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 649 PROFITS AND BALANCE SHEET 678 INDUSTRIAL PRODUCTION AND DEVELOPMENTS AT US. COMMERCIAL CAPACITY UTILIZATION FOR APRIL 1993 BANKS IN 1992 Industrial production edged up 0.1 percent U.S. commercial banks in 1992 continued in April, after having shown no change in their recovery from the difficulties of recent March. Total industrial capacity utilization years. Bank profits were $31 Vi billion, an was unchanged at 81.4 percent. increase of $14 billion over 1991, and a record 0.92 percent of average assets. Return on equity also increased sharply, although it 681 STATEMENTS TO THE CONGRESS remained in the range of historical experience. Richard Spillenkothen, Director of the Banks retained a sizable proportion of earn- Board's Division of Banking Supervision and ings, which, along with a substantial issuance Regulation, discusses ways in which the of new debt and equity, significantly bolstered financial needs of individuals and businesses their capital. The restructuring of bank ballocated in economically underserved neighance sheets, which began in 1990, continued borhoods can be accommodated and says that last year, with loan portfolios contracting and improving conditions in the banking system securities holdings expanding. should increase community development lending, before the Subcommittee on General Oversight, Investigations, and the Resolution 674 TREASURY AND FEDERAL RESERVE of Failed Financial Institutions of the House FOREIGN EXCHANGE OPERATIONS Committee on Banking, Finance and Urban The dollar depreciated modestly against most Affairs, May 18, 1993. major currencies during the February-April 684 Lawrence B. Lindsey, Member, Board of Govperiod but declined significantly against the ernors, offers the Board's comments on S.924, Japanese yen amid concerns relating to the the Home Ownership and Equity Protection growing Japanese trade surplus. The dollar's Act of 1993, legislation that requires addidecline over the period was 1.6 percent against tional disclosures to consumers who take out the German mark, 10.9 percent against the "high-cost mortgages" on their homes and Japanese yen, and 3.2 percent on a traderestricts the terms of such mortgages, and says weighted basis. that it is essential to keep the focus of this legislation as narrow as possible to eliminate 676 STAFF STUDIES abusive practices while minimizing adverse consequences that were clearly not intended In The 1989-92 Credit Crunch for Real by the Congress, before the Senate Committee Estate, the authors review current thinking on Banking, Housing, and Urban Affairs, about the causes of this episode and summa- May 19, 1993. rize a variety of data on its duration and extent. The study weighs the relative impor- 689 John P. LaWare, Member, Board of Govertance of the credit crunch and other factors nors, discusses the Federal Reserve's role in that also contributed to the falloff in real estate the government's anti-money-laundering lending; and it considers the long-run outlook . efforts and says that the Federal Reserve has for the supply of mortgage credit. worked to develop and implement programs Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

and procedures in the bank supervision, cur- be acceptable during the intermeeting period. rency, and payments system areas that The reserve conditions contemplated at this enhance the government's ability to detect and meeting were expected to be consistent with a deter money laundering activities in financial resumption of moderate growth in M2 and institutions, before the House Committee on M3 over the second quarter. Banking, Finance and Urban Affairs, May 26, 1993. 705 LEGAL DEVELOPMENTS Various bank holding company, bank service 695 ANNOUNCEMENTS corporation, and bank merger orders; and pending cases. Meeting of the Consumer Advisory Council. Reduction in prior approval requirements for A1 FINANCIAL AND BUSINESS STATISTICS futures commission merchant activities. These tables reflect data available as of Request for comments on whether to retain, May 26, 1993. modify, or terminate a provision in Regulation O; proposed rule to expand the definition A3 GUIDE TO TABULAR PRESENTATION of "financial institution" in section 402 of the Federal Deposit Insurance Corporation A4 Domestic Financial Statistics Improvement Act. A44 Domestic Nonfinancial Statistics A53 International Statistics Publication of Guide to the Flow of Funds Accounts. A69 GUIDE TO STATISTICAL RELEASES AND SPECIAL TABLES 696 MINUTES OF THE FEDERAL OPEN MARKET COMMITTEE MEETING OF A70 INDEX TO STATISTICAL TABLES MARCH 23, 1993 At its meeting on March 23, 1993, the Com- A72 BOARD OF GOVERNORS AND STAFF mittee adopted a directive that called for maintaining the existing degree of pressure on A74 FEDERAL OPEN MARKET COMMITTEE reserve positions and that did not include a AND STAFF; ADVISORY COUNCILS presumption about the likely direction of any adjustment to policy during the intermeeting A76 FEDERAL RESERVE BOARD period. Accordingly, the directive indicated PUBLICATIONS that in the context of the Committee's longrun objectives for price stability and sustain- A78 MAPS OF THE FEDERAL RESERVE able economic growth, and giving careful SYSTEM consideration to economic, financial, and monetary developments, slightly greater or A80 FEDERAL RESERVE BANKS, BRANCHES, slightly lesser reserve restraint would AND OFFICES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1992 Allan D. Brunner and William B. English, of the Treasury bonds fell only about lA percentage point. Board's Division of Monetary Affairs, prepared Apparently, stubborn expectations of inflation, this article. Anita C. Hartke assisted in the prep- election uncertainties, and deficit fears limited the aration of the data. Thomas Allard and Susan decline in longer rates, tilting upward an already Helfrey provided research assistance. steep yield curve. The brightened macroeconomic picture and U.S. commercial banks in 1992 continued their lower market interest rates clearly contributed to recovery from the difficulties of recent years. Bank the improved performance of U.S. commercial profits were $31V^ billion, an increase of $14 bil- banks. Profits (chart 1) were buoyed by a decline in lion over 1991, and a record 0.92 percent of aver- loan loss provisions to their lowest level since 1988 age assets. Return on equity also increased sharply, (table 1). The drop in provisioning was matched by although it remained in the range of historical a similar decline in charge-offs, and delinquency experience. Banks retained a sizable proportion of rates improved moderately. In addition, the effect earnings, which, along with a substantial issuance of the reduction in market interest rates was smaller of new debt and equity, significantly bolstered their for returns on bank assets than for rates paid on capital. The restructuring of bank balance sheets, bank liabilities. This difference is consistent with which began in 1990, continued last year, with the longer average maturity of bank assets relative loan portfolios contracting and securities holdings to bank liabilities. As a consequence, the spread expanding.1 between interest income and interest expense (the Commercial banks in 1992 benefited from the net interest margin) widened last year. improving U.S. economy. Real gross domestic Financial markets responded favorably to develproduct rose 3 percent, extending the expansion opments in the banking industry as well as to the that began in the spring of 1991, and inflation improved economic outlook. Bank stock prices outremained low. Policy easings by the Federal performed the broader market in 1992, and spreads Reserve pushed short-term rates down about 1 per- between bank debt and Treasury securities narcentage point in 1992, but yields on thirty-year rowed. The robustness of the financial markets encouraged banks to issue record amounts of new capital last year. These new issues, coupled with 1. Except where otherwise indicated, data in this article are from the quarterly Report of Condition and Income (Call Report) for 1. Return on equity and on assets, 1970-92 insured domestic commercial banks and nondeposit trust companies. The data, which cover all such institutions that filed at least Percent Percent one Call Report, consolidate information from foreign and domes- Return on equity tic offices and have been adjusted to take account of mergers. Size categories of such institutions (hereafter called banks), which refer to assets at the start of each year, are as follows: small banks, less than $300 million; medium-sized banks, $300 million to $5 billion; 1.0 — 1 10 large banks, $5 billion or more. The ten largest banks were selected as of December 1991, and this category includes the same banks Return on assets II \ , for all years; mergers in 1992 reduced to eight the number of 0.5 — — 5 institutions in the category. Data for the 1985-91 period have been revised to reflect uniform definitions across time and to incorporate updated Call Report information. Data for years preceding 1985 are not strictly comparable to the 1985-92 data. In the tables, compo- 1 1 t 1 1 1 1 1 1 1 1 1 1 1 1 11 II 1 1 1 Jj nents may not sum to totals because of rounding. 1970 1975 1980 1985 1990 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

650 Federal Reserve Bulletin • July 1993 high levels of retained profits, boosted bank capital commercial banks declined somewhat more rapidly about $32 billion in 1992. This increase raised the in 1992 than in 1991, falling more than 33A percent. industry's capital-asset ratio Vi percentage point, The more rapid decline resulted from a drop in the to more than 7 percent. In addition, banks supple- number of new banks: Only fifty-one charters for mented their total capital positions by issuing new banks were issued in 1992, the lowest number $83/4 billion of subordinated debt. since the early 1950s. (In addition, twenty-one new Bank balance sheets expanded slowly in 1992. charters were issued for bridge banks.) As a result Assets increased just 2lA percent; and, as in 1991, of industry consolidation, employment in the banktotal loans declined, while holdings of U.S. Trea- ing sector declined Vz percent in 1992, about onesury and federal agency securities increased sub- third of the drop reported in 1991. As in 1991, the stantially. Weak loan demand appeared to be the total number of commercial bank branches principal cause of the decline in lending, although increased about Vi percent. In part, the recent continued tightness in standards and terms on new increases in branches are likely the result of banks' loans probably also played a role. Along with the acquisitions of thrifts. lackluster rate of asset growth and the substantial Many of the trends seen in 1992 have lasted into issuance of bank capital, the growth of deposits 1993. Continued improvements in asset quality was weak in 1992—a weakness echoed in sluggish and high net interest margins have contributed to growth of the broader monetary aggregates. robust first-quarter bank profits. Loan growth has The improvements in industry health in 1992 are remained weak, as the composition of banks' assets clearly reflected in measures of bank distress. The continued to shift away from loans and toward number of banks classified by the Federal Deposit securities. In contrast, bank stock prices declined in Insurance Corporation (FDIC) as "problem banks" the spring, apparently as a result of investors' anticfell almost one-fourth, to 787, and their assets ipation that higher interest rates might reduce bank declined by about the same proportion over the profits. year. One hundred federally insured commercial banks failed last year, compared with 108 failures in 1991 and more than 200 in each year from 1987 BALANCE SHEET DEVELOPMENTS through 1989. The consolidation of the banking industry con- Bank balance sheets grew little overall in 1992 tinued in 1992. The FDIC reported 428 unassisted (table 2). Bank lending continued to decline as mergers in 1991, down from 459 the previous year. businesses and households sought to reduce debt Two of these mergers, however—Bank of America burdens, as large businesses shifted toward longwith Security Pacific, and Chemical Bank with term funding, and as banks' terms and standards on Manufacturer's Hanover Trust—involved four of loans remained relatively firm. The weakness in the ten largest banks in the country. The number of lending was mirrored in a rapid accumulation of U.S. Treasury and agency securities. On the liability side, the low volume of lending depressed bank 1. Selected income and expense items, 1989-921 demand for deposit funds. Moreover, banks substi- Percent tuted capital for deposits. (See appendix tables A.l and A.2 for detailed information on income, Item 1989 1990 1991 1992 expenses, and the composition of bank assets and Net interest margin 3.53 3.46 3.61 3.90 liabilities for 1985-92.) Net noninterest margin -1.80 -1.82 -1.93 -1.92 Loss provisions .98 .96 1.02 .77 Securities gain .03 .01 .09 .12 Income before taxes .78 .70 .75 1.33 Taxes and extraordinary items .31 .26 .27 .43 Assets Net income .49 .49 .53 .92 Dividends .44 .42 .43 .42 Total bank assets grew 2lA percent—a small pickup Retained income .04 .07 .10 .51 over the 1 lA percent rise in 1991. The volume of 1. As a percentage of average net consolidated assets. bank loans fell 1 percent, a smaller decline than in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank Profits and Balance Sheet Developments, 1992 651 1991. As in 1991, bank holdings of securities borrowed less, both because of the relatively slow climbed sharply, rising 11 Vi percent. pace of the expansion and because of the success of large firms in substituting longer-term financing for bank borrowing. Loans Responses to the Federal Reserve's periodic Senior Loan Officer Opinion Survey on Bank The behavior of both commercial and industrial Lending Practices (LPS) showed that banks suband consumer loans was similar to that of total stantially tightened their terms and standards on loans; both fell, but less than in 1991. In contrast, commercial and industrial loans during 1990 and real estate loans grew about 2 percent, somewhat early 1991 (chart 2). The respondents attributed less than in 1991. Total loan growth improved in this tightening primarily to the weak economy and most regions. to industry-specific problems, although some of them indicated that capital adequacy or regulatory Commercial and industrial loans. Commercial pressure was a concern. In any case, some tightenand industrial loans fell 4 percent, the third straight ing was to be expected, given the substantial losses year of decline. These loans ran off at banks of all that banks faced as a result of the economic downsizes, although they declined least at smaller banks. turn of 1990-91, the collapse in the commercial On the supply side, banks apparently did not signif- real estate market, and the relaxed underwriting icantly ease their standards and terms on commer- standards in the late 1980s. Terms and standards do cial and industrial loans. On the demand side, firms not appear to have eased until early 1993, however, 2. Annual rate of growth of balance sheet items, 1985-921 Percent Item 1985 1986 1987 1988 1989 1990 1991 1992 Total assets 8.9 7.6 2.0 4.4 5.4 2.7 1.3 2.3 Interest-earning assets 9.7 8.0 3.9 3.9 5.8 2.3 2.0 2.5 Loans 7.9 7.5 4.1 5.7 6.5 2.3 -2.6 -1.1 Commercial and industrial 2.2 4.0 -1.9 1.9 3.1 -.7 -9.1 -4.0 Consumer 15.8 8.6 4.6 7.7 6.3 .5 -2.5 -1.5 Credit card 28.2 17.0 12.0 13.9 12.2 1.9 4.4 -1.9 Installment and other 12.1 5.8 1.8 5.1 3.6 -.1 -5.9 -1.2 Real estate 13.7 17.6 16.6 12.6 12.9 8.8 2.8 2.0 One-four family 9.5 12.1 18.5 12.6 16.4 14.1 7.8 7.6 Other 17.6 22.1 15.1 12.6 10.1 4.4 -1.9 -3.7 Other loans 2.9 -.6 -6.3 -.6 .7 -3.3 -9.8 -2.4 Securities 14.0 10.3 7.5 3.0 4.1 8.3 14.4 11.5 U.S. government 2.5 16.6 9.7 6.5 9.9 16.0 21.6 17.1 U.S. Treasury 9.5 7.4 40.6 -5.8 -13.7 3.5 32.1 24.0 Federal agency -3.2 25.1 -14.8 22.6 33.6 24.1 15.9 12.8 State and local government 33.0 -12.6 -13.9 -12.0 -11.4 -11.5 -12.3 -2.0 Other 32.6 74.3 48.8 11.2 1.3 -1.8 5.7 -7.6 Other interest-earning assets2 13.7 7.1 -2.8 -4.7 4.6 -8.3 9.8 6.7 Non-interest-eaming assets 3.6 5.3 -11.1 8.4 2.4 5.7 -3.5 -.1 Total liabilities 8.8 7.6 2.2 4.1 5.5 2.4 1.0 1.4 Deposits 7.9 7.8 2.3 4.1 4.8 3.9 1.6 .4 Foreign offices 1.9 6.0 -25.9 -7.6 -.3 —4.9 4.0 -4.3 Domestic offices 9.7 8.4 10.1 6.3 5.7 5.2 1.3 1.1 Demand 8.9 13.2 -10.8 .6 .4 .7 -2.0 12.6 Other checkable 17.8 32.8 7.8 7.6 2.5 6.4 14.8 18.6 Savings 23.9 13.6 39.9 1.1 .5 6.5 14.4 13.1 Large time 4.3 -1.0 12.1 9.3 5.1 -5.6 -19.5 -26.2 Small time 3.0 -1.8 7.9 15.4 17.6 14.3 -.6 -12.6 Subordinated notes and debentures 42.3 16.3 3.8 2.4 14.9 23.1 3.8 33.2 Other 12.7 6.4 1.5 4.3 8.6 -5.3 -2.0 5.3 Equity capital 9.8 7.5 -.7 8.9 4.2 6.9 5.8 13.8 MEMO Loss provisions 24.5 24.4 72.8 -6.5 15.3 3.0 -.3 -1.0 1. From year-end to year-end. 2. Includes trading account assets, federal funds sold, and interest-bearing balances. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

652 Federal Reserve Bulletin • July 1993 2. Net percentage of selected large commercial banks (chart 3). The behavior of these spreads since 1990 tightening credit standards, 1990-93' reflects primarily the spread of the prime rate over Percent the federal funds rate, although spreads over the Commercial and industrial loans, by size of borrower prime rate have declined for loans under large commitments. Similarly, spreads over the cost of — — 60 funds for fixed-rate loans—which are primarily to larger customers—have narrowed somewhat over the past two years. These declines may reflect the reduced riskiness of such loans resulting from tighter lending standards. The demand for bank credit in 1992 was sapped by the efforts of firms to lock in long-term financ- Commercial real estate loans, by purpose of loan ing at nominal interest rates not seen since the early 1970s. Similar shifts to long-term finance followed the reductions in long-term interest rates in the mid-1970s and the early 1980s (chart 4). In addition, the robust stock market encouraged many firms to issue equity and to use the proceeds to pay down bank debt. The volume of bond and equity issuance with the primary purpose of retiring bank debt was, by one estimate, considerably more than 1990 1991 1992 1993 1. Net percentage is the percentage of banks reporting tightening minus the the decline in business lending by banks last year. percentage reporting easing. SOURCE. Federal Reserve's Senior Loan Officer Opinion Survey on Bank Lending Practices. Real estate loans. The pace of expansion in real estate loans at commercial banks was 2 percent in 1992, down about 3A percentage point from the despite substantial improvements in the perforpace in 1991. As in 1991, most of the increase in mance of the U.S. economy and significantly higher real estate lending was concentrated in the residenlevels of bank capital in 1992. tial sector, with bank loans for one- to four-family Similarly, data on loan spreads from the Federal mortgages growing IV2 percent last year. Within Reserve's Survey of Terms of Bank Lending to that sector, lending under home equity lines of Business show that rates on floating-rate prime- credit increased 4lA percent in 1992, less than based loans rose sharply relative to the federal one-third the 14V2 percent increase in 1991. Both funds rate in late 1990 and have remained elevated the firmness in residential mortgages and the weakening in borrowing under home equity lines proba- 3. Spread of rates on loans made under commitment over federal funds rate, by size of commitment, 1986-93' 4. Share of short-term business debt in total business debt, and long-term corporate bond yield, 1970-92' Basis points 1. Rates are for floating-rate prime-based loans. SOURCE. Federal Reserve quarterly Survey of Terms of Bank Lending to 1. Bond yield is Moody's average of yields on AAA long-term utility and Business. industrial bonds. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank Profits and Balance Sheet Developments, 1992 653 bly stem, in part, from the use of the proceeds of 5. Vacancy rates for commercial real estate, 1989-92 mortgage refinancings to pay down other, highercost debts, including home equity lines. Responses to the LPS indicate that demand for residential mortgages increased strongly in 1992, while demand for home equity lines of credit increased more modestly. In addition, a few banks reported easing their terms on residential mortgages, and many respondents cited an increased willingness to make general-purpose loans to consumers, including home equity loans. In recent years, an increasing proportion of bank financing of residential mortgages has taken the —19.25 form of mortgage-backed securities, as banks have substituted these securities for the direct holding of residential mortgages. The mortgage-backed securities provide banks with greater liquidity, lower capital charges, increased diversification, and—in the case of Government National Mortgage Association (GNMA) securities—government backing. Mortgage-backed securities now constitute more SOURCE. CB Commercial Real Estate Group, Inc. than one-third of total (direct plus securitized) commercial bank financing of residential mortgages. Commercial real estate markets in 1992 continued to suffer from the effects of excess supply Consumer loans. Consumer loans held by banks created in the 1980s. Vacancy rates for industrial fell IV2 percent in 1992 after dropping 2Vi percent space remained very high after peaking in early in 1991. The slower rate of decline in 1992 was 1992. Vacancy rates for commercial office space attributable to a smaller reduction in the holdings remained high in the first half of 1992 but improved of consumer loans by large banks, in part the result in the second half (chart 5). Commercial real estate of decreased securitization. Taking account of conprices were reported to be still falling at the end of sumer loans that banks securitized and sold, con- 1992, although perhaps more slowly than in 1991. sumer lending by banks increased about V2 percent A January 1993 FDIC survey found that the num- in 1992, a slightly larger increase than that in 1991. ber of examiners and liquidators who thought that In contrast to the pattern in recent years, both credit the real estate market was improving was about card debt and installment and other consumer debt double the number who thought it was deteriorat- declined in 1992. The weakness in consumer lending. Nonetheless, almost one-third of those sur- ing in part appears to have resulted from houseveyed thought that commercial real estate prices holds' use of low-interest bank deposits to pay were declining, and few reported that prices were down relatively high-cost consumer loans— rising. contributing thereby to the weakness in bank The substantial problems facing the commercial deposits, especially small time deposits, and in the real estate market in recent years explain, in part, broader monetary aggregates. As noted above, conthe tightening of standards on such loans reported sumers may also have used the proceeds of mortin the LPS (chart 2). In addition, the tighter stan- gage refinancings to pay down some of their condards likely reflect the realization that standards in sumer debts. the 1980s were insufficiently rigorous. In contrast to the standards on commercial and industrial The regional pattern of loan growth. The growth loans, banks responding to the LPS reported a in bank lending varied substantially across Federal further small net tightening of standards on com- Reserve Districts. All Districts other than San Franmercial real estate loans in 1992. cisco showed improvement over 1991, with several Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

654 Federal Reserve Bulletin • July 1993 3. Loan growth and return on assets, by Federal Reserve District, 1990-921 Percent Loan growth Return on assets DDiissttrriicctt 1990 1991 1992 1990 1991 1992 Boston -13.9 -12.4 -1.0 -.97 -.13 .75 New York -1.4 -4.4 -2.7 .07 .11 .64 Philadelphia 4.2 -1.9 1.6 .94 1.09 1.53 Cleveland 2.4 2.8 3.3 .73 .97 1.32 Richmond 3.3 -4.9 -4.3 .28 .29 .81 Atlanta 3.9 -3.3 3.9 .49 .61 1.04 Chicago 4.6 .1 1.2 .83 .85 .93 St. Louis 5.6 .0 2.9 .88 .93 1.13 Minneapolis 1.6 -3.2 5.2 1.24 1.32 1.61 Kansas City 3.5 1.7 3.3 .64 .84 1.08 Dallas -4.3 -3.1 6.2 .37 .67 1.05 San Francisco 10.9 -1.3 -8.6 1.00 .41 .73 AU banks 2.3 -2.6 -1.1 .49 .53 .92 1. Loan growth calculated from year-end to year-end. Return on assets is net income as a percentage of average net consolidated assets. showing a return to positive growth (table 3). In the accounted for more than 60 percent of the increase Northeast, lending continued to decline in the New in securities holdings between March 1990 and York and Boston Districts, while banks in the Phil- December 1992. adelphia District posted a small increase. Loans Holdings of both U.S. Treasury securities and declined more slowly in the Boston District than federal agency securities grew rapidly in 1992. in the nation as a whole last year, a substantial Treasury securities led the way with growth of improvement in the relative performance of the 24 percent, while holdings of federal agency District over 1990 and 1991. In the Southeast, securities—primarily mortgage-backed securities lending continued to decline in the Richmond Dis- issued by the Federal National Mortgage Associatrict but recovered in the Atlanta District. In the tion (FNMA) and the Federal Home Loan Mort- Midwest (the Cleveland, Chicago, and St. Louis gage Corporation or guaranteed by GNMA—grew Districts), loan growth picked up moderately. Loan 123A percent. growth in the central part of the country (the Min- Some commentators have suggested that banks neapolis, Kansas City, and Dallas Districts) picked have increased their holdings of U.S. Treasury and up strongly in 1992, showing the biggest improve- agency securities as a result of the imposition of ment of any region. In the West (the San Francisco risk-based capital standards. Because these stan- District), lending declined more sharply than in dards assign low or zero risk weights to these 1991, as defense cutbacks and continued problems securities, poorly capitalized banks can raise their with commercial real estate contributed to the risk-weighted capital ratios by substituting U.S. weakness in the regional economy. Treasury and agency securities for loans in their portfolios. Although such a shift has occurred, well-capitalized banks have increased their hold- Securities ings of such securities considerably more than poorly capitalized banks, suggesting that the pri- Bank holdings of securities increased 11V2 percent, mary impetus to the growth in bank securities only 3 percentage points below the 1991 pace. investments arises elsewhere. After three years of rapid growth, securities now In contrast to their holdings of Treasury and account for more than 20 percent of bank assets. agency securities, bank holdings of municipal secu- Although this share is quite high by recent stan- rities continued to run off, although at a slower dards, it is similar to that reached in 1975 and pace than that in 1991. The Tax Reform Act of smaller than the shares reported before the mid- 1986 removed the tax advantages to banks of new 1960s. Much of the recent growth was concen- purchases of these bonds but provided that municitrated in mortgage-backed securities issued or guar- pal securities held by banks at the time of the anteed by federal agencies. Such securities change would be treated under the old rules. As a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank Profits and Balance Sheet Developments, 1992 655 result, bank holdings of municipal securities have attributed the change in desired maturity to existing been declining as those accumulated before the tax or anticipated rules regarding the reporting of secuchange mature or are called. rity values on financial statements. Despite the incentives offered by the steep yield Even if the difference between reported maturity curve, banks do not appear to have increased the and expected maturity is taken into account, bank maturity of their securities holdings. In fact, avail- holdings of securities have maturities that are able data suggest that the average maturity of bank- longer than those of bank loans. Thus, the maturity held securities may have shortened slightly in 1992 of bank assets has increased slightly in recent years (table 4). The reported maturities of mortgage- as a result of the growing share of assets invested backed securities likely overstate their actual in securities. The maturities of bank time deposits expected maturity. Banks are instructed to report have increased since 1990, perhaps as a result of the maturity of these securities based on the stated bank efforts to match the maturities of bank assets maturity of the underlying mortgages, but they and liabilities. The large decline in the share of generally hold the shorter-maturity tranches of time deposits in bank liabilities, however, has more these securities. Responses to questions on a recent than offset the effect of the lengthening of time LPS indicate that a majority of bank-held deposit maturities, leading to a fall in the average mortgage-backed securities have expected maturi- maturity of bank liabilities. ties of less than five years. More than 60 percent of the respondents reported that the average expected maturity of their securities had declined during Off-Balance-Sheet Items 1992. Similarly, a recent survey by the American Bankers Association indicated that the weighted In contrast to the decline in bank loans, unused average maturity of all bank-held securities loan commitments increased to 361/2 percent of declined more than six months in 1992, to assets, from 343/4 percent, during 1992—another 3V2 years. The decline in maturity was largest for indication that the weakness in bank lending small banks, although small banks continue to have reflects weak demand. The credit-equivalent value somewhat longer average maturities than medium- of all interest rate contracts at banks (including the sized and large banks have. About one-fourth of value of interest rate swaps, futures contracts, forthe LPS respondents indicated that a further short- ward contracts, and option contracts) increased to ening of maturities was desirable. Most of them 1.8 percent of bank assets at the end of 1992—up from 1.7 percent at the end of 1991 and 1.0 percent 4. Maturity structure of selected assets and liabilities at at the end of 1990. The credit-equivalent value of year-end, 1990-921 all foreign exchange contracts (including the value Percent of exchange rate swaps, commitments to buy for- Account eign exchange, and option contracts) edged down 1990 1991 1992 and maturity range slightly, from 4.2 percent of commercial bank Loans and leases assets at the end of 1991 to 4.0 percent at the end of Three months or less 51.2 49.0 48.5 1992, but remains well above the year-end 1990 Three months-one year ... 14.3 15.7 16.0 One-five years 22.5 23.7 23.9 level of 3.6 percent. As they were in past years, More than five years 12.1 11.6 11.7 Total 100 100 100 most of these instruments are held by the ten largest banks.2 Securities Three months or less 11.7 123 12.6 In contrast, the volume of bank letters of credit Three months-one year ... 14.3 13.7 14.0 One-five years 34.3 34.5 37.0 outstanding declined for the second consecutive More than five years 39.7 39.5 36.3 Total 100 100 100 year in 1992. The total amount of letters of credit (the sum of financial standby, performance standby, Time deposits Three months or less 42.1 39.7 36.2 and commercial letters of credit) fell from 6lA per- Three months-one year ... 38.8 39.5 38.5 More than one year 19.1 20.8 25.3 cent of bank assets at the end of 1990 to 5V2 per- Total 100 100 100 1. Maturity ranges of three months to one year include maturities of exactly one year. Maturity ranges of one year to five years include maturities of exactiy five years. 2. See note 1 regarding the ten largest banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

656 Federal Reserve Bulletin • July 1993 cent at the end of 1992. This decline was at least Nontransaction Deposits partly the result of two factors. First, the difficulties faced by the banking system in recent years have Rates on certificates of deposit fell substantially in likely reduced the number of U.S. commercial 1991 and 1992, primarily because of the decline in banks with the high credit ratings needed to pro- market interest rates. As is usual when market rates vide financial standby letters of credit for commer- fall rapidly (chart 6, top panel), rates on savings cial paper issuers. Indeed, financial standby letters deposits declined more slowly than rates on time of credit have declined more rapidly than letters of deposits (chart 6, bottom panel). With a narrowing credit of the other types since 1990. Second, the spread between rates on time deposits and those on new risk-based capital standards require capital savings deposits, small time deposits fell HV2 perbacking for letters of credit with maturities of more cent while savings deposits (including money marthan one year and thus increase their cost. ket deposit accounts) increased 13 percent. Low interest rates on bank deposits also encouraged outflows to stock and bond mutual funds (chart 7). Net monthly flows into long-term bond funds aver- Liabilities aged $91/ billion, while flows into equity funds 2 Against a backdrop of weak loan growth, banks did averaged %llA billion. not aggressively seek deposits in 1992. With asset In addition, banks continued to allow their large growth restrained and capital issuance running at a time deposits, which are relatively costly, to run record pace, bank liabilities grew just IV2 percent. off. Such deposits fell 26 percent in 1992 and Within total liabilities, the composition of deposits almost 20 percent in 1991. shifted toward savings and transaction deposits and sharply away from time deposits. Transaction Deposits The drop in interest rates also contributed to the rapid growth in transaction deposits in 1992. Lower rates on other assets reduced the opportunity cost 6. Selected market rates and retail deposit rates, 1989-93 of holding funds in low-yielding transaction Percent accounts, increasing their attractiveness. In addi- Market rates tion, lower mortgage interest rates led to a surge in —12 mortgage refinancings. The increase in refinancings, in turn, temporarily increased the level of transaction deposits because mortgage servicers hold prepayments of mortgages securitized by GNMA or FNMA in transaction accounts for up to 7. Net flows into mutual funds, 1985-93 Billions of dollars 1. Retail deposit rates at all commercial banks; savings accounts include money market deposit accounts. SOURCE. Federal Reserve Monthly Survey of Selected Deposits. SOURCE. Investment Company Institute. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank Profits and Balance Sheet Developments, 1992 657 six weeks. Over the course of the year, domestic bank profits derived from securities gains declined demand deposits rose 12V2 percent and other in 1992. Net noninterest margins were up only checkable deposits I8V2 percent. slightly, as increases in fee income were largely offset by higher noninterest expenses, which were likely associated with industry consolidation and TRENDS IN PROFITABILITY increases in off-balance-sheet activity. All size categories of banks showed improve- Profitability in the commercial banking industry ments in earnings in 1992, with the large and ten rose sharply last year, with the return on assets largest banks showing the greatest gains. At large jumping from 0.53 to 0.92 percent and the return banks excluding the ten largest, net interest maron equity moving up to 13 percent (chart 1). All gins widened 10 basis points more than the indusmajor components of bank profitability improved try average, and loss provisions fell 15 basis points (table 5). More than half of the increase in net more. The ten largest banks, like other banks, income was attributable to wider net interest mar- enjoyed wider interest margins and a drop in loss gins. These higher margins resulted in part from provisioning last year.3 Unlike other banks, howthe uneven decline in market interest rates during ever, they significantly improved their net noninter- 1991 and 1992, which trimmed the return on rela- est margins by an average of 18 basis points, in tively longer-maturity bank assets by less than the part because of substantial gains from foreign rates paid on shorter-maturity bank liabilities. Inter- exchange transactions. Nonetheless, relatively low est margins also benefited from wider spreads rela- net interest margins and high rates of provisioning tive to market rates as a result of high lending rates kept net income at the ten largest banks well below and unaggressive deposit pricing. In addition, the the industry average. Although small banks posted return on assets improved because of lower provi- the smallest gains in net income compared with sions for future loan losses, as charge-offs and that in 1991 (their rate of provisioning edged down delinquency rates edged down and as the total only 12 basis points), they remained the most profdollar volume of bank loans declined. The drop in itable group in 1992. interest rates helped banks realize higher capital Bank income varied widely by Federal Reserve gains on sales of securities, although the share of District (table 3). The largest improvements in earnings were among Districts that had returns on assets near or below the industry average in 1991. Banks 5. Selected income and expense items, by size of bank, 1990-921 in these Districts, which typically have higher concentrations of commercial real estate loans, bene- Percent fited from reductions in loss provisions and Net Net Year and Net interest noninterest Loss increases in net interest margins. The largest gain size of bank income provisions margin margin in 1992 was recorded by banks in the Boston 1992 District, which reversed their year-earlier losses, All banks .92 3.90 -1.92 .77 Small 1.08 4.34 -2.51 .39 posting an average increase in return on assets of Medium .91 4.22 -2.21 .77 88 basis points. Large, excluding ten largest ... 1.01 3.85 -1.75 .81 Despite higher earnings in 1992, dividend pay- Ten largest .65 3.18 -1.24 1.09 outs as a percentage of average assets were roughly 1991 the same as in recent years. As a result, banks All banks .53 3.61 -1.93 1.02 Small .80 4.09 -2.50 .51 retained a substantial portion of their earnings, Medium .61 3.99 -2.13 1.04 Large, excluding contributing, along with hefty issuance of equity ten largest ... .50 3.46 -1.73 1.21 and subordinated debt, to a significant improve- Ten largest .21 2.92 -1.42 1.20 ment in their capital positions. 1990 All banks .49 3.46 -1.82 .96 The strong 1992 results for banks showed Small .79 4.08 -2.46 .50 Medium .55 3.85 -2.02 1.09 through to the results for bank holding companies, Large, excluding ten largest ... .24 3.27 -1.61 1.30 Ten largest .47 2.68 -1.25 .76 1. As a percentage of average net consolidated assets. 3. See note 1 regarding the ten largest banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

658 Federal Reserve Bulletin • July 1993 whose return on assets averaged 0.82 percent, more 8. Reserves for loan losses, loss provisions, and net charge-offs as a percentage of loans, 1977-92 than double the return in 1991 and the highest rate since 1988. The return on equity for holding com- Percent panies was 12 percent, also the highest since 1988. Assets of holding companies grew 2l/i percent; the pace of that growth and its composition was similar to that at banks—securities at holding companies rose 143/4 percent, and loans and leases declined l3/4 percent. Asset Quality and Loss Provisions 1978 1982 1986 1990 For the industry as a whole, asset quality improved Detailed data on net charge-offs and delinquenin 1992 (table 6). Net charge-offs were VA percent cies by type of loan are available for medium-sized of outstanding loans, compared with 1V2 percent in and large banks and for all banks with foreign 1991. Similarly, the average delinquency rate offices (chart 9). Seasonally adjusted charge-off improved, dropping to 5lA percent from 6 percent. and delinquency rates for most major types of In light of this progress, banks reduced their rate of loans moved below their 1991 highs. For commerloss provisioning to P/4 percent of loans, down cial and industrial loans, they dropped to the lower from more than IV2 percent in 1991. On balance, end of the ranges seen during the last ten years. provisions for the year slightly exceeded net Although delinquencies on real estate loans moved charge-offs, and loss reserves as a percentage of loans continued to edge up (chart 8). Loan quality 9. Charge-off and delinquency rates, by type of loan, improved for most size categories of banks, but the 1982-921 ten largest continued to have relatively high chargeoff and delinquency rates, especially on commer- Percent cial real estate loans. 6. Measures of loan quality, by size of bank, 1990-921 Percent Net Delinquency Loss Year and size of bank charge-offs rate provisions 1992 All banks 1.29 5.24 1.31 Small .58 3.82 .72 Medium 1.20 4.55 1.28 Large, excluding ten largest 1.43 5.10 1.34 Ten largest 1.77 7.53 1.79 1991 All banks 1.58 5.90 1.65 Small .77 4.32 .92 Medium 1.36 5.21 1.65 Large, excluding ten largest 1.69 6.13 11..9922 — 2 Ten largest 2.37 7.69 1.87 1990 All banks 1.42 5.23 1.64 1982 1984 1986 1988 1990 1992 Small .70 4.20 .89 Medium 1.16 4.38 1.69 1. For medium-sized and large banks and for all banks with foreign Large, excluding offices, seasonally adjusted. Charge-off rate series begin in 1982:Q 1; rates ten largest 1.72 5.42 2.03 are annualized charge-offs, net of recoveries, divided by average outstand- Ten largest 1.92 6.85 1.18 ing loans. Delinquency rate series begin in 1982:Q4; delinquent loans are nonaccrual loans and those accruing interest but more than thirty days past 1. As a percentage of average outstanding loans. Delinquent loans are due. The delinquency rates are the average level of delinquent loans for the nonaccrual loans and those that are accruing interest but are more than thirty period divided by the average level of outstanding loans for the period. days past due. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank Profits and Balance Sheet Developments, 1992 659 down, charge-offs remained particularly high, in Interest income and expense for the various bank large part because of lingering problems with com- size categories differed markedly. These differmercial real estate. ences can be traced to variations in the quality and Banks' experiences with commercial real estate the relative maturities of the groups' assets and loans have varied markedly (table 7).4 The propor- liabilities. Interest margins for small and mediumtion of loan portfolios devoted to commercial real sized firms were the highest of the four groups in estate loans has tended to be lower at larger banks 1992 (chart 10). Compared with larger-sized banks, than at smaller ones, but the delinquency rates at banks in these two groups tend to have more assets larger banks have been much higher. Although that are better quality and have longer maturities. most large banks have made some progress in In addition, these banks are likely to tie their busicleaning up their holdings of commercial real estate ness loans more to the prime rate than to market loans, delinquency rates remain stubbornly high for rates. The widening of the spread of the prime rate the ten largest banks and banks in the Boston, New over market rates (chart 3) has helped these banks York, and San Francisco Federal Reserve Districts. to maintain higher rates of return on their loan portfolios. On the liability side, medium-sized banks were also able to obtain larger reductions in Interest Income and Expense interest expenses by sharply reducing their reliance on time deposits to fund asset growth. Although interest income as a percentage of average assets was 112 basis points lower in 1992 than in 1991, interest expense fell more, 141 basis points; hence, net interest margins at banks wid- Noninterest Income and Expense ened 29 basis points. Several factors contributed to higher net interest margins in 1992, but the bulk of For the banking industry as a whole, noninterest the increase was attributable to changing interest expenses edged up 13 basis points relative to averrate relationships, which include the results of a age assets while noninterest income increased by steeper yield curve, relatively high lending rates, and unaggressive deposit pricing. As a consequence, although the gross rate of return on assets 7. Commercial real estate loans, by size of bank and by fell 125 basis points, rates paid on deposits fell Federal Reserve District, 1991-921 more, 180 basis points. Percent To a lesser extent, net interest margins were As a share Delinquency rate SSiizzee ooff bbaannkk,, of total loans bolstered by changes in the composition of bank aanndd DDiissttrriicctt assets and liabilities. On the asset side, banks 1991 1992 1991 1992 shifted about 2Va percent of their asset portfolios Size of bank from loans to securities, which tend to have some- Small 19.82 20.48 5.33 4.23 Medium 22.50 21.22 9.06 8.19 what longer maturities than bank loans do. Still, Large, excluding ten largest 18.32 17.78 13.29 11.36 about 35 V2 percent of bank loans and leases at the Ten largest 13.20 12.25 20.89 23.23 end of 1992 had maturities greater than one year, a District proportion virtually unchanged from the end of 22.29 19.70 18.43 13.08 New York 14.48 12.95 21.99 22.50 1991 (table 4). By contrast, on the liability side, Philadelphia 13.82 13.65 9.73 8.21 Cleveland 14.50 14.11 8.87 7.09 banks decreased the average maturity of their Richmond 24.61 23.64 11.29 9.13 deposits by substituting away from time deposits 24.09 23.44 7.97 6.29 Chicago 17.28 17.64 5.87 5.57 toward liquid deposits and other funding sources, St. Louis 18.76 18.90 5.30 4.17 Minneapolis 10.89 11.00 5.76 4.72 such as subordinated debt and equity. Kansas City 18.64 18.18 6.40 5.56 Dallas 17.94 17.29 7.48 5.63 San Francisco 22.22 22.69 10.43 12.14 4. Commercial real estate loans are measured as the sum of All banks 18.57 17.99 11.55 10.63 construction and land development loans secured by real estate; real estate loans secured by nonfarm nonresidential properties; and 1. See text note 4 for definition of commercial real estate loans. Delinloans to finance commercial real estate, construction, and land quent loans are nonaccrual loans and those that are accruing interest but are development activities not secured by real estate. more than thirty days past due. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

660 Federal Reserve Bulletin • July 1993 10. Interest income, interest expense, and net interest 11. Noninterest income, noninterest expense, and net margin as a percentage of average assets, by size of noninterest margin as a percentage of average assets, bank, 1980-92 by size of bank, 1980-92 Percent Percent Gross interest income Noninterest income Gross interest expense Net noninterest margin + — 0.5 1980 1982 1984 1986 1988 1990 1992 14 basis points. Thus, the negative spread between noninterest income and expenses narrowed slightly 1980 1982 1984 1986 1988 1990 1992 in 1992 after widening 11 basis points in 1991. An important part of the turnaround in noninterest margins was the increase in fee income other than were also able to keep noninterest expenses in service charges on deposits. This pickup in reve- check. Small banks have had weaker growth in nues was about offset, however, by higher noninter- off-balance-sheet activity and, most likely, in assoest expenses that probably arose from industry ciated expenses. In addition, smaller-sized instituconsolidation and increases in off-balance-sheet tions had higher quality assets than banks in other activity. size categories in 1992 and may have had lower Noninterest margins for the ten largest banks expenses for collection and legal services related to increased 18 basis points, well above the industry poor asset performance. average (chart 11). Noninterest income at these banks was boosted in part by larger earnings on foreign exchange transactions. This group of banks Changes in Capital was also able to hold down noninterest expenses in 1992, primarily by cutting occupancy costs. In Despite the surge in net income in 1992, banks contrast, while noninterest income increased at trimmed slightly their dividend payout rates, from medium-sized and large banks other than the ten 0.43 percent of average assets in 1991 to 0.42 perlargest, expenses increased by more, and noninter- cent last year. Consequently, retained income est margins at those banks fell slightly. increased five-fold, to %\1VA billion (table 8). Noninterest margins at small banks were Banks further augmented their capital positions unchanged in 1992. Fee income for these banks is with substantial issues of new equity and subordimore closely tied to service charges on deposits, nated debt. On an annual average basis, total equity which were also unchanged in 1992. These banks capital rose Vi percentage point, to more than Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank Profits and Balance Sheet Developments, 1992 661 8. Retained income and change in total equity capital, by size of bank, 1985-921 Millions of dollars except as noted Item and size of bank 1985 1986 1987 1988 1989 1990 1991 1992 Retained income All banks 9,312 8,008 -8,122 11,085 1,309 2,287 3,359 17,386 Small 2,115 1,258 1,459 1,689 2,360 1,965 2,238 4,043 Medium 3,224 2,887 1,611 2,278 2,068 189 853 3,622 Large, excluding ten largest ... 2,647 2,235 -4,518 2,484 1,123 -1,429 238 5,985 Ten largest 1,325 1,627 -6,673 4,634 -4,243 1,562 31 3,736 Net change in equity capital All banks 14,990 12,686 -1,235 16,066 8,258 14,091 12,705 31,950 Small 5,359 3,732 3,933 4,096 4,454 4,747 4,172 5,841 Medium 4,732 4,526 3,273 3,354 3,628 4,208 4,397 6,865 Large, excluding ten largest ... 3,119 2,385 -3,717 3,872 2,753 2,486 3,976 9,339 Ten largest 1,781 2,042 -4,723 4,743 -2,577 2,650 161 9,906 Change in equity capital (percent) All banks 9.8 7.5 -.7 8.9 4.2 6.9 5.8 13.8 Small 10.1 6.9 7.3 7.5 8.0 8.4 7.2 10.0 Medium 11.2 9.5 6.3 6.1 6.5 7.2 7.1 10.5 Large, excluding ten largest ... 10.6 6.9 -9.0 9.5 5.6 4.5 6.3 13.1 Ten largest 6.2 6.4 -13.9 16.2 -7.3 8.1 .5 27.5 Change in equity capital attributable to retained income (percent) All banks 62.1 63.1 69.0 15.9 16.2 26.4 54.4 Small 39.5 33.7 37.1 41.2 53.0 41.4 53.6 69.2 Medium 68.1 63.8 49.2 67.9 57.0 4.5 19.4 52.8 Large, excluding ten largest ... 84.9 93.7 64.2 40.8 6.0 64.1 Ten largest 74.4 79.7 97.7 58.9 19.3 37.7 1. Change in equity capital calculated from year-end to year-end. . . . Not applicable. 7 percent of average assets. The increase in capital 12. Stock price indexes, and spread of interest rates paid on bank subordinated debt over rates on comparable was particularly impressive for the ten largest Treasury securities, 1988-93 banks because of the relatively sharp improvement in their profits, a cut in dividend payments of Index, January 15, 1992 = 100 one-third, and a significant issuance of new capital. Stock prices Banks' issuance of capital was aided by the strong performance of bank securities in 1992 (chart 12). Stock prices of regional and money center banks continued the rapid growth that characterized 1991, rising about four times faster than the S&P 500 stock index in 1992. Interest-rate spreads on bank holding company subordinated debt over Treasury securities, which peaked at more than 450 basis points in 1990, continued to decline, dropping below 100 basis points late in the year. The recent increases in the capitalization of U.S. banks have been driven in part by three regulatory changes. First, under the Basle Accord, U.S. bank regulators imposed minimum capital adequacy guidelines in 1990 that became fully phased in on December 31, 1992. Under these guidelines, banks are expected to hold tier 1 capital—mainly com- 1988 1990 1992 mon equity and perpetual preferred stock—of at 1. Data in top panel are for nine money center and twenty regional banks as defined by Salomon Brothers. Data in lower panel are secondary least 4 percent of risk-weighted assets. They must market yield spreads for a subset of these banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

662 Federal Reserve Bulletin • July 1993 also hold total capital—tier 1 plus tier 2—of at premiums for undercapitalized banks with poor least 8 percent of risk-weighted assets. Tier 2 capi- evaluations will be 31 basis points. tal consists primarily of subordinated debt, non- With the large increases in capital achieved in tier-1 preferred stock, and the allowance for loan 1992, most banks appeared to have satisfactory losses. U.S. regulators have independently imposed capital levels by year-end: The average bank had limits on leverage based on banks' supervisory tier 1 capital equal to nearly 10 percent of riskratings. For the best-rated banks, tier 1 capital must weighted assets and total capital of more than be at least 3 percent of unweighted assets. In prac- 12 percent of risk-weighted assets (chart 13). Capitice, however, most banks are required to hold tal ratios were highest for small banks; and, on tier 1 capital of at least 4 percent of unweighted average, even the largest banks had tier 1 capital of assets. 6Vi percent of risk-weighted assets and total capital The second regulatory change was the Federal of 11 percent of risk-weighted assets. At year-end, Deposit Insurance Corporation Improvement Act about 94 percent of all U.S. banks, accounting for of 1991 (FDICIA), enacted on December 19, 1991. 89 percent of bank assets, were either well capital- Among other things, the legislation set more strin- ized or adequately capitalized. A large majority of gent limits on bank capital, requiring U.S. regula- banks had substantial cushions of capital, with tors to establish five capital zones: well capitalized, almost 80 percent of banks in the well-capitalized adequately capitalized, undercapitalized, signifi- category. Well-capitalized banks accounted for cantly undercapitalized, and critically undercap- nearly two-thirds of bank assets. italized. To be well capitalized, for example, a Even though most banks were well capitalized at commercial bank must have total capital of at least the start of 1992, capital grew strongly during the 10 percent of risk-weighted assets, tier 1 capital of year. Apparently, banks wanted to hold considerat least 6 percent of risk-weighted assets, and tier 1 ably more capital than required by statutes. Study capital of at least 5 percent of total assets. Banks of the behavior of individual banks suggests that with sufficient capital but weak supervisory ratings many have set internal capital targets that are may, however, be assigned to a lower capital zone. higher than the regulatory minimums. Banks have With these limits, which became effective one found that increased capital, besides inviting less year after the enactment of FDICIA, the law regulatory scrutiny, lowers the rates they pay on imposed restrictions on the activities of banks that uninsured liabilities. are not well capitalized. For example, banks that are only adequately capitalized must obtain a waiver from the FDIC in order to accept brokered DEVELOPMENTS IN 1993 deposits, and they must apply to the FDIC for pass-through deposit insurance for pension plan Many of the trends seen in 1992 carried through deposits. Constraints on undercapitalized institu- into the first quarter of 1993. Bank profits were tions are more stringent. Finally, banks' demand for capital in 1992 was 13. Risk-based capital ratios, by size of bank, fourth quarter, 1991 and 19921 boosted by the introduction of risk-based deposit insurance premiums on January 1, 1993. Under the new FDIC rules, a bank's premium is determined by a two-step evaluation of the risk the bank poses to the Bank Insurance Fund. First, banks are divided into well-capitalized, adequately capitalized, and undercapitalized groups. Then each group is further divided into three subgroups based on regulators' evaluations of the institutions. Wellcapitalized banks with strong evaluations will pay a premium of 23 basis points, the smallest premium 1991 1992 currently allowed under FDICIA and the same that All Small Medium Large, excluding Ten largest all banks paid in 1992. At the other extreme, the 1. See text for explanation of capital tiers and risk weights. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank Profits and Balance Sheet Developments, 1992 663 strong in the first quarter because of high net inter- business credit without being essential to sound est margins and low charge-offs. Balance sheet banking. Two of the changes were particularly adjustments continued, with bank loans declining noteworthy: First, the regulatory agencies agreed to further in the first quarter and securities holdings allow strong and well-managed banks to establish a rising rapidly. Banks continued to augment their limited portfolio of "character" loans—loans to capital through both high retained earnings and creditworthy small and medium-sized businesses new capital issues. Bank stock prices declined in that will not be subject to examiner criticism based the spring, however, apparently because investors on documentation. Second, the agencies proposed anticipated that higher interest rates might lower raising the minimum size of real estate loans requirbank profits. ing formal appraisals, from $100,000 to $250,000. In March the federal banking agencies The appraisal requirement had been singled out by announced their intention to change regulatory LPS respondents as a substantial constraint on lendrequirements that may have restricted the supply of ing to small businesses. A.l. Report of income, all insured domestic commercial banks and nondeposit trust companies, 1985-92 Millions of dollars Item 1985 1986 1987 1988 1989 1990 1991 1992 Operating income, total 279,102 273,603 286,602 317,966 368,059 375,729 350,140 323,366 Interest income 247,836 237,477 244,740 272,323 316,389 319,968 289,288 256,356 Loans 183,462 175,480 180,368 201,542 237,319 238,491 213,879 185,900 Balances due from depositories 13,767 11,209 11,963 13,497 1155,,001122 1122,,557733 99,,006677 77,,441111 Gross federal funds sold and repurchase agreements 9,556 9,115 9,012 10,352 12,999 12,530 9,120 5,907 Securities (excluding trading account) 37,709 38,339 39,441 42,005 46,631 50,977 52,552 51,818 Tax exempt 6,269 10,708 9,199 8,132 7,236 6,282 5,378 4,658 Taxable 31,440 27,631 30,243 33,873 39,394 44,694 47,174 47,160 Trading account assets 3,341 3,334 3,956 4,926 4,429 5,398 4,670 5,319 Noninterest income 31,266 36,125 41,862 45,643 51,670 55,761 60,852 67,010 Service charges on deposits 7,370 7,972 8,734 9,453 10,236 11,419 12,812 14,116 Other operating income 23,896 28,154 33,128 36,190 41,434 44,342 48,040 52,894 Operating expense, total 257,426 255,342 280,306 284,688 344,170 352,812 327,726 281,594 Interest expense 157,128 142,680 144,951 164,984 204,560 204,647 167,607 122,426 Deposits 130,650 117,442 115,604 129,442 157,055 161,228 138,684 98,690 Deposits in foreign offices 30,129 24,450 26,024 28,474 33,609 34,087 25,169 21,431 Deposits in domestic offices 100,521 92,992 89,580 100,968 123,445 127,141 113,515 77,260 Transaction accounts n.a. n.a. 8,353 9,018 9,352 9,758 9,719 7,051 Savings (including MMDAs) n.a. n.a. 28,412 29,795 32,128 33,260 31,063 23,029 Large denomination certificates of deposit 22,973 19,774 19,677 23,491 30,314 27,844 20,441 11,459 Other time deposits n.a. n.a. 33,138 38,664 5511,,665522 5566,,227799 5522,,229922 3355,,772200 Gross federal funds purchased and repurchase agreements 16,586 15,890 15,918 18,625 24,849 22,730 14,370 9,259 Other 9,891 9,347 13,430 16,916 22,656 20,688 14,552 14,477 Loss provisions 17,829 22,206 37,712 17,502 31,071 31,965 34,248 26,556 Noninterest expense 82,469 90,457 97,643 102,202 108,539 116,201 125,871 132,612 Salaries, wages, and employee benefits 40,044 43,013 45,329 46,879 49,299 52,007 53,513 55,449 Occupancy expense 13,327 14,542 15,311 15,909 16,646 17,513 17,878 18,137 Other operating expenses 29,099 32,901 37,004 39,415 42,594 46,681 54,480 59,026 Securities gains 1,552 3,934 1,444 275 793 470 2,897 3,951 Income before taxes 23,227 22,195 7,739 33,553 24,682 23,386 25,311 45,722 Taxes 5,620 5,258 5,410 10,015 9,616 7,844 8,279 14,505 Extraordinary items 228 277 201 812 311 651 686 412 Net income 17,835 17,213 2,530 24,351 15,377 16,194 17,719 31,630 Cash dividends declared 8,524 9,206 10,652 13,266 14,068 13,906 14,360 14,244 Retained income 9,312 8,008 -8,122 11,085 1,309 2,287 3,359 17,386 n.a. Not available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

664 Federal Reserve Bulletin • July 1993 A.2. Portfolio composition, interest rates, and income and expense, all insured domestic commercial banks and nondeposit trust companies, by size of bank, 1985-92 A. All banks Item 1985 1986 1987 1988 1989 1990 1991 1992 Balance sheet items as a percentage of average consolidated assets including loss reserves Interest-earning assets 86.64 87.06 87.50 88.04 87.97 87.86 88.09 88.36 Interest-bearing balances at depositories .. 5.58 5.13 5.22 4.97 4.36 3.55 3.02 2.78 Loans 59.92 59.48 59.68 60.44 61.23 61.13 60.18 57.97 Commercial and industrial 21.99 20.67 19.71 19.19 18.80 18.21 17.05 15.53 U.S. addressees 17.27 16.69 16.34 16.28 16.29 15.75 14.76 13.33 Foreign addressees 4.71 3.98 3.36 2.91 2.51 2.47 2.29 2.20 Consumer 10.95 11.28 11.26 11.53 11.71 11.59 11.27 10.84 Credit card 2.61 2.96 3.12 3.41 3.64 3.72 3.82 3.76 Installment and other 8.34 8.33 8.14 8.11 8.08 7.87 7.45 7.08 Real estate 15.75 16.76 18.74 20.53 22.16 23.49 24.46 24.47 Construction and land development 3.19 3.48 3.84 4.00 4.09 3.94 3.35 2.60 Farmland .41 .43 .46 .49 .50 .50 .52 .55 One- to four-family residential 7.25 7.39 8.10 9.06 10.00 11.03 12.08 12.70 Home equity n.a. n.a. n.a. 1.12 1.40 1.64 1.92 2.05 Other n.a. n.a. n.a. 7.94 8.60 9.39 10.16 10.65 Multifamily residential .44 .49 .56 .58 .60 .62 .65 .74 Nonfarm nonresidential 4.00 4.41 5.18 5.74 6.26 6.66 7.12 7.19 Booked in foreign offices .46 .55 .59 .67 .71 .74 .75 .68 To depository institutions 2.86 2.49 2.36 2.13 1.87 1.67 1.48 1.27 Foreign governments 1.55 1.42 1.33 1.20 1.02 .77 .74 .72 Agricultural production 1.52 1.22 1.02 .97 .94 .94 1.00 1.01 Other loans 4.47 4.73 4.29 3.83 3.64 3.36 3.11 3.12 Lease-financing receivables .83 .91 .96 1.05 1.09 1.10 1.07 1.01 Securities 15.49 16.14 16.76 16.89 16.88 17.36 18.63 20.85 U.S. government and other debt 10.66 10.82 12.43 13.26 13.53 14.49 16.08 18.44 U.S. government securities 9.56 9.22 10.02 10.32 10.85 11.94 13.59 16.08 U.S. Treasury 4.54 4.29 5.72 5.51 4.91 4.50 4.98 6.38 U.S. government agency and corporation obligations 5.02 4.93 3.98 4.81 5.94 7.44 8.61 9.70 Government-backed mortgage pools .95 1.12 2.07 2.55 3.22 4.02 4.44 4.45 Collateralized mortgage obligations n.a. n.a. n.a. n.a. n.a. 1.33 2.03 3.07 Other 4.07 3.81 1.91 2.25 2.72 2.09 2.14 2.18 Other debt securities 1.09 1.60 2.41 2.94 2.68 2.55 2.49 2.36 State and local government 4.83 5.32 4.34 3.63 3.10 2.60 2.24 2.05 Taxable n.a. n.a. .06 .06 .08 .08 .07 .08 Tax-exempt 4.83 5.32 4.28 3.57 3.02 2.52 2.17 1.96 Equity1 n.a. n.a. n.a. n.a. .29 .26 .31 .36 Trading account assets 1.21 1.55 1.32 1.26 1.23 1.44 1.74 2.30 Gross federal funds sold and reverse repurchase agreements 4.44 4.77 4.51 4.48 4.27 4.39 4.51 4.46 Non-interest-earning assets 12.55 12.01 11.12 10.37 10.53 10.60 10.32 10.06 Interest-bearing liabilities 72.27 72.44 73.01 74.20 74.88 75.35 75.36 74.13 Deposit liabilities 61.02 60.07 60.41 61.07 61.64 62.44 63.42 61.93 In foreign offices 12.18 11.15 10.87 10.25 9.54 9.11 8.41 8.24 In domestic offices 48.84 48.92 49.54 50.83 52.10 53.33 55.01 53.69 Other checkable deposits 4.54 5.15 5.96 6.15 6.03 6.10 6.61 7.53 Savings (including MMDAs) 16.44 17.45 18.17 17.44 16.16 16.47 17.86 20.20 Large denomination time deposits ... 11.46 10.88 10.83 11.48 12.07 11.38 9.85 7.43 Small denomination time deposits ... 16.40 15.44 14.59 15.75 17.84 19.39 20.68 18.54 Gross federal funds purchased and repurchase agreements 7.66 8.22 8.02 7.89 8.10 7.90 6.98 6.91 Other 3.58 4.15 4.58 5.23 5.14 5.00 4.96 5.29 Non-interest-bearing liabilities 21.52 21.31 20.91 19.74 18.85 18.35 18.07 18.81 Demand deposits 15.39 15.75 15.13 14.02 13.29 12.59 12.38 13.03 MEMO Money market liabilities 35.20 34.71 34.65 35.18 35.16 33.72 30.52 28.22 Loss reserves .80 .93 1.38 1.59 1.50 1.54 1.59 1.58 Total equity capital 6.21 6.25 6.08 6.06 6.26 6.31 6.57 7.06 Average consolidated assets including loss reserves (billions of dollars) 2,593 2,799 2,962 3,097 3,234 3,391 3,434 3,497 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank Profits and Balance Sheet Developments, 1992 665 A.2.—Continued A. All banks Item 1985 1986 1987 1988 1989 1990 1991 1992 Effective interest rate (percent) Rates earned Interest-earning assets 11.13 9.88 9.41 9.98 11.10 10.65 9.52 8.27 Taxable equivalent 11.49 10.35 9.65 10.19 11.26 10.77 9.63 8.37 Loans, gross 11.98 10.77 10.21 10.78 11.98 11.45 10.33 9.17 Net of loss provisions 10.81 9.41 8.07 9.85 10.41 9.92 8.68 7.86 Securities 9.44 8.49 7.94 8.04 8.56 8.66 8.26 7.14 Taxable equivalent 10.67 10.29 8.87 8.78 9.11 9.12 8.64 7.46 U.S. government and other debt 10.44 9.13 8.18 8.21 8.83 8.91 8.44 7.21 State and local 5.09 7.17 7.26 7.38 7.44 7.38 7.25 6.83 Equity1 n.a. n.a. n.a. n.a. 7.72 7.23 6.07 5.15 Trading account assets 10.10 7.83 10.02 12.63 11.11 10.20 7.52 6.41 Rates paid Interest-bearing liabilities 8.27 6.97 6.61 7.12 8.39 7.91 6.39 4.65 Interest-bearing deposits 8.17 6.92 6.38 6.81 7.85 7.55 6.30 4.50 In foreign offices 9.48 7.79 7.89 8.89 10.87 10.72 8.54 7.32 In domestic offices 7.85 6.72 6.04 6.39 7.30 7.00 5.96 4.06 Other checkable deposits n.a. n.a. 4.54 4.74 4.81 4.77 4.31 2.69 Savings (including MMDAs) n.a. n.a. 5.29 5.52 6.17 5.97 5.07 3.25 Large denomination time deposits ... 8.73 7.34 6.86 7.37 8.63 8.02 6.66 4.89 Small denomination time deposits ... n.a. n.a. 6.98 7.28 8.27 7.95 6.88 5.14 Gross federal funds purchased and repurchase agreements 7.97 6.78 6.51 7.28 9.19 7.99 5.72 3.65 Income and expenses as a percentage of average net consolidated assets Gross interest income 9.75 8.70 8.43 8.98 9.99 9.60 8.59 7.47 Taxable equivalent 10.06 9.11 8.64 9.17 10.13 9.72 8.69 7.56 Loans 7.22 6.43 6.22 6.65 7.49 7.16 6.35 5.42 Securities 1.48 1.41 1.36 1.39 1.47 1.53 1.56 1.51 Gross federal funds sold and reverse repurchase agreements .38 .33 .31 .34 .41 .38 .27 .17 Other .67 .53 .54 .60 .62 .53 .41 .37 Gross interest expense 6.18 5.23 4.99 5.44 6.46 6.14 4.98 3.57 Deposits 5.14 4.30 3.98 4.27 4.96 4.84 4.12 2.88 Gross federal funds purchased and repurchase agreements .65 .58 .55 .61 .78 .68 .43 .27 Other .39 .34 .46 .56 .72 .62 .43 .42 Net interest margin 3.57 3.47 3.44 3.54 3.53 3.46 3.61 3.90 Taxable equivalent 3.88 3.88 3.65 3.73 3.67 3.57 3.71 3.99 Loss provisions .70 .81 1.30 .58 .98 .96 1.02 .77 Noninterest income 1.23 1.32 1.44 1.51 1.63 1.67 1.81 1.95 Service charge on deposits .29 .29 .30 .31 .32 .34 .38 .41 Foreign related .06 .06 .09 .07 .07 .08 .08 .10 Other .88 .97 1.05 1.12 1.24 1.25 1.35 1.44 Noninterest expense 3.24 3.32 3.36 3.37 3.43 3.49 3.74 3.87 Salaries and employee benefits 1.58 1.58 1.56 1.55 1.56 1.56 1.59 1.62 Occupancy .52 .53 .53 .52 .53 .53 .53 .53 Other 1.14 1.21 1.28 1.30 1.34 1.40 1.62 1.72 Net noninterest margin -2.01 -2.00 -1.92 -1.86 -1.80 -1.82 -1.93 -1.92 Securities gains .06 .14 .05 .01 .03 .01 .09 .12 Income before taxes .91 .81 .27 1.11 .78 .70 .75 1.33 Taxes .22 .19 .19 .33 .30 .24 .25 .42 Extraordinary items .01 .01 .01 .03 .01 .02 .02 .01 Net income .70 .63 .09 .80 .49 .49 .53 .92 Cash dividends declared .34 .34 .37 .44 .44 .42 .43 .42 Retained income .37 .29 -.28 .37 .04 .07 .10 .51 MEMO Return on equity 11.07 9.84 1.40 12.98 7.59 7.57 7.86 12.80 i. As in the Call Report, equity securities are combined with "other debt securities" before 1989. n.a. Not available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

666 Federal Reserve Bulletin • July 1993 A.2. Portfolio composition, interest rates, and income and expense, all insured domestic commercial banks and nondeposit trust companies, by size of bank, 1985-92 B. Banks with less than $300 million in assets Item 1985 1986 1987 1988 1989 1990 1991 1992 Balance sheet items as a percentage of average consolidated assets including loss reserves Interest-earning assets 89.89 90.03 90.59 90.92 91.01 91.10 91.32 91.46 Interest-bearing balances at depositories .. 2.88 3.06 3.25 3.17 2.34 1.77 1.56 1.15 Loans 54.55 53.57 53.65 54.70 55.58 55.30 54.36 53.35 Commercial and industrial 14.50 13.76 12.86 12.44 12.06 11.45 10.39 9.63 U.S. addressees 14.46 13.74 12.83 12.42 12.03 11.42 10.36 9.60 Foreign addressees Consumer 13.15 12.48 11.94 11.48 11.56 11.18 10.58 9.57 Credit card .89 .85 1.04 .94 1.04 1.08 1.37 1.00 Installment and other 12.26 11.63 10.90 10.55 10.53 10.10 9.21 8.57 Real estate 20.77 21.86 23.90 25.94 27.25 28.21 28.81 29.79 Construction and land development 2.25 2.28 2.18 2.24 2.31 2.37 2.14 1.95 Farmland 1.22 1.34 1.52 1.67 1.76 1.82 1.91 2.04 One- to four-family residential 11.08 11.48 12.74 14.04 14.77 15.28 15.77 16.26 Home equity n.a. n.a. n.a. .80 .97 1.18 1.25 1.30 Other n.a. n.a. n.a. 13.23 13.80 14.10 14.52 14.96 Multifamily residential .50 .54 .61 .62 .64 .66 .69 .76 Nonfarm nonresidential 5.72 6.22 6.85 7.36 7.76 8.07 8.31 8.78 Booked in foreign offices To depository institutions .80 .56 .57 .68 .67 .47 .46 .19 Foreign governments Agricultural production 4.15 3.53 3.1*6 3.11 3.17 3.23 3.43 3.52 Other loans .96 1.16 1.00 .84 .67 .57 .50 .47 Lease-financing receivables .21 .21 .20 .20 .19 .18 .17 .17 Securities 26.87 26.37 27.27 27.64 27.42 27.92 29.58 31.85 U.S. government and other debt 18.94 18.43 20.70 22.05 22.18 23.07 25.01 27.16 U.S. government securities 18.22 17.36 18.54 19.28 19.85 20.92 22.75 25.14 U.S. Treasury 3.91 3.63 9.63 9.68 8.66 8.65 9.13 10.18 U.S. government agency and corporation obligations 14.31 13.73 7.56 9.60 11.19 12.27 13.62 14.96 Government-backed mortgage pools 1.51 1.35 2.60 3.17 3.73 4.52 5.53 5.46 Collateralized mortgage obligations n.a. n.a. n.a. n.a. n.a. .95 1.53 2.66 Other 12.80 12.38 4.% 6.43 7.46 6.80 6.56 6.84 Other debt securities .72 1.07 2.15 2.77 2.33 2.15 2.26 2.01 State and local government 7.93 7.94 6.57 5.59 4.90 4.50 4.20 4.26 Taxable n.a. n.a. .16 .19 .22 .23 .23 .27 Tax-exempt 7.93 7.94 6.41 5.40 4.68 4.27 3.97 3.99 Equity1 n.a. n.a. n.a. n.a. .39 .35 .37 .43 Trading account assets .05 .06 .07 .05 .08 .08 .06 .06 Gross federal funds sold and reverse repurchase agreements 5.53 6.98 6.35 5.35 5.59 6.02 5.76 5.05 Non-interest-earning assets 9.43 9.19 8.56 8.22 8.12 8.03 7.77 7.61 Interest-bearing liabilities 74.43 75.00 75.73 76.24 76.46 77.17 77.79 77.15 Deposit liabilities 71.90 72.77 73.45 73.79 74.25 74.97 75.83 75.06 In foreign offices In domestic offices 71.79 72.65 73.39 73.73 74.19 74.89 75.76 74.99 Other checkable deposits 7.88 8.81 10.13 10.41 10.22 10.31 10.81 12.17 Savings (including MMDAs) 21.19 22.26 23.28 21.91 19.45 18.57 19.14 21.94 Large denomination time deposits ... 11.74 11.54 10.98 11.14 11.33 11.07 10.28 8.34 Small denomination time deposits ... 30.97 30.03 29.01 30.27 33.20 34.95 35.53 32.54 Gross federal funds purchased and repurchase agreements 1.76 1.49 1.38 1.57 1.42 1.32 1.31 1.35 Other .78 .74 .90 .89 .78 .87 .66 .74 Non-interest-bearing liabilities 17.44 16.95 16.11 15.47 15.05 14.27 13.64 14.04 Demand deposits 15.16 14.86 14.12 13.50 12.98 12.18 11.58 12.09 MEMO Money market liabilities 14.16 13.67 13.18 13.53 13.47 13.21 12.20 10.40 Loss reserves .69 .77 .85 .87 .87 .87 .92 .93 Total equity capital 8.13 8.06 8.16 8.29 8.49 8.56 8.57 8.81 Average consolidated assets including loss reserves (billions of dollars) 688 701 693 687 688 697 703 698 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank Profits and Balance Sheet Developments, 1992 667 A. 2.—Continued B. Banks with less than $300 million in assets Item 1985 1986 1987 1988 1989 1990 1991 1992 Effective interest rate (percent) Rates earned Interest-earning assets 11.30 10.22 9.53 9.77 10.52 10.31 9.64 8.41 Taxable equivalent 11.56 10.74 9.87 10.02 10.74 10.51 9.82 8.58 Loans, gross 12.53 11.54 10.83 11.02 11.77 11.56 11.02 9.81 Net of loss provisions 11.07 9.90 9.59 10.03 10.89 10.67 10.09 9.09 Securities 9.64 8.70 7.90 7.93 8.39 8.45 8.06 6.98 Taxable equivalent 10.26 10.29 8.94 8.63 9.02 9.00 8.53 7.40 U.S. government and other debt 10.53 9.23 8.02 8.00 8.55 8.63 8.21 7.05 State and local 2.79 7.47 7.50 7.58 7.60 7.48 7.20 6.72 Equity1 n.a. n.a. n.a. n.a. 7.98 7.95 7.01 5.44 Trading account assets 9.59 8.76 9.40 14.88 14.40 11.35 9.02 7.02 Rates paid Interest-bearing liabilities 7.96 6.86 6.13 6.39 7.14 6.98 6.14 4.41 Interest-bearing deposits 7.96 6.86 6.11 6.36 7.10 6.96 6.14 4.42 In foreign offices In domestic offices 7.96 6.86 6.11 6.36 7.10 6.96 6.14 4.42 Other checkable deposits n.a. n.a. 4.93 4.98 5.08 5.02 4.60 3.13 Savings (including MMDAs) n.a. n.a. 5.35 5.48 5.82 5.74 5.16 3.60 Large denomination time deposits ... 8.69 7.35 6.56 7.13 8.37 7.91 6.77 4.86 Small denomination time deposits ... n.a. n.a. 6.96 7.18 8.03 7.88 6.95 5.34 Gross federal funds purchased and repurchase agreements 7.84 6.58 6.31 6.94 8.48 7.71 5.73 3.70 Income and expenses as a percentage of average net consolidated assets Gross interest income 10.28 9.31 8.75 9.00 9.71 9.53 8.93 7.79 Taxable equivalent 10.51 9.79 9.05 9.23 9.91 9.71 9.09 7.94 Loans 6.90 6.24 5.87 6.08 6.60 6.47 6.05 5.28 Securities 2.61 2.32 2.18 2.22 2.32 2.38 2.40 2.25 Gross federal funds sold and reverse repurchase agreements .50 .50 .45 .44 .56 .53 .35 .18 Other .27 .25 .25 .26 .23 .15 .13 .08 Gross interest expense 6.05 5.27 4.72 4.94 5.53 5.45 4.84 3.44 Deposits 5.84 5.11 4.56 4.75 5.34 5.29 4.72 3.36 Gross federal funds purchased and repurchase agreements .14 .10 .09 .12 .13 .10 .07 .05 Other .06 .06 .07 .07 .07 .07 .04 .03 Net interest margin 4.23 4.04 4.03 4.06 4.18 4.08 4.09 4.34 Taxable equivalent 4.47 4.52 4.33 4.29 4.39 4.26 4.25 4.49 Loss provisions .81 .88 .67 .55 .49 .50 .51 .39 Noninterest income .86 .87 .90 .92 1.00 1.02 1.12 1.14 Service charge on deposits .42 .41 .40 .40 .41 .42 .44 .45 Foreign related Other .44 .46 .49 .51 .59 .60 .68 .70 Noninterest expense 3.44 3.47 3.43 3.43 3.48 3.48 3.62 3.65 Salaries and employee benefits 1.66 1.63 1.61 1.62 1.65 1.64 1.65 1.69 Occupancy .53 .53 .51 .51 .50 .49 .49 .48 Other 1.25 1.31 1.30 1.31 1.32 1.35 1.48 1.48 Net noninterest margin -2.58 -2.60 -2.53 -2.51 -2.48 -2.46 -2.50 -2.51 Securities gains .07 .15 .03 .01 .01 .00 .06 .09 Income before taxes .93 .72 .86 1.00 1.22 1.12 1.13 1.54 Taxes .20 .15 .25 .30 .37 .34 .35 .48 Extraordinary items .01 .02 .02 .02 .02 .01 .01 .02 Net income .74 .58 .62 .72 .87 .79 .80 1.08 Cash dividends declared .43 .40 .41 .47 .52 .50 .47 .49 Retained income .31 .18 .21 .25 .35 .29 .32 .59 MEMO Return on equity 9.02 7.11 7.49 8.62 10.12 9.08 9.19 12.11 1. See note 1, table A.2.A (all banks), n.a. Not available. . . . Not applicable. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

668 Federal Reserve Bulletin • July 1993 A.2. Portfolio composition, interest rates, and income and expense, all insured domestic commercial banks and nondeposit trust companies, by size of bank, 1985-92 C. Banks with $300 million to $5 billion in assets Item 1985 1986 1987 1988 1989 1990 1991 1992 Balance sheet items as a percentage of average consolidated assets including loss reserves Interest-earning assets 87.24 87.72 88.32 88.96 89.07 88.91 89.13 89.21 Interest-bearing balances at depositories .. 4.29 3.30 3.11 2.85 2.48 1.93 1.82 1.38 Loans 59.54 60.70 62.45 63.65 63.91 63.08 61.49 58.75 Commercial and industrial 19.13 18.28 18.12 17.63 17.54 16.38 14.76 12.89 U.S. addressees 18.63 17.92 17.83 17.44 17.38 16.25 14.62 12.71 Foreign addressees .51 .35 .29 .18 .16 .13 .14 .18 Consumer 13.97 15.01 14.91 16.17 15.28 15.16 14.66 14.19 Credit card 3.54 4.51 4.46 5.63 4.82 5.05 5.31 5.40 Installment and other 10.43 10.50 10.46 10.55 10.46 10.11 9.35 8.79 Real estate 17.63 19.12 22.15 23.61 25.53 26.41 27.47 27.37 Construction and land development 4.14 4.33 4.82 4.84 4.74 4.26 3.65 2.82 Farmland .20 .21 .24 .25 .27 .27 .28 .33 One- to four-family residential 7.69 8.19 9.21 10.19 11.30 12.28 13.19 14.07 Home equity n.a. n.a. n.a. 1.69 2.07 2.25 2.50 2.53 Other n.a. n.a. n.a. 8.51 9.23 10.03 10.69 11.54 Multifamily residential .54 .62 .65 .63 .68 .71 .81 .91 Nonfarm nonresidential 5.05 5.75 7.21 7.70 8.53 8.86 9.53 9.21 Booked in foreign offices .01 .01 .02 .01 .01 .03 .00 .03 To depository institutions 2.06 1.62 1.31 1.13 1.00 1.17 .99 .83 Foreign governments .45 .37 .32 .24 .16 .10 .06 .04 Agricultural production .66 .57 .46 .45 .43 .45 .50 .55 Other loans 4.82 4.92 4.38 3.62 3.14 2.57 2.22 2.08 Lease-financing receivables .81 .81 .80 .80 .82 .85 .84 .80 Securities 17.94 18.03 17.99 17.96 18.22 18.83 20.96 23.57 U.S. government and other debt 12.08 11.82 13.10 13.92 14.48 15.40 17.90 20.79 U.S. government securities 10.88 10.17 10.95 11.15 11.89 13.18 15.51 18.59 U.S. Treasury 7.89 7.08 6.80 6.37 5.87 5.39 6.28 7.57 U.S. government agency and corporation obligations 2.99 3.09 4.13 4.78 6.02 7.79 9.22 11.02 Government-backed mortgage pools .96 1.10 2.14 2.47 3.02 3.85 4.30 4.73 Collateralized mortgage obligations n.a. n.a. n.a. n.a. n.a. 1.90 2.71 3.85 Other 2.03 1.99 2.00 2.31 3.00 2.04 2.22 2.44 Other debt securities 1.20 1.65 2.16 2.77 2.59 2.23 2.40 2.19 State and local government 5.86 6.21 4.89 4.04 3.43 3.11 2.68 2.31 Taxable n.a. n.a. .04 .04 .04 .06 .07 .07 Tax-exempt 5.86 6.21 4.84 4.00 3.38 3.05 2.62 2.24 Equity1 n.a. n.a. n.a. n.a. .36 .32 .37 .46 Trading account assets .31 .36 .22 .33 .38 .52 .30 .55 Gross federal funds sold and reverse repurchase agreements 5.17 5.34 4.55 4.16 4.09 4.55 4.56 4.96 Non-interest-earning assets 11.99 11.40 10.67 9.98 9.89 9.92 9.49 9.35 Interest-bearing liabilities 71.74 72.07 73.10 74.83 75.56 76.07 76.01 74.71 Deposit liabilities 60.15 60.12 61.27 61.62 62.85 64.35 65.50 64.39 In foreign offices 2.92 2.41 2.31 2.23 2.15 1.70 1.58 1.34 In domestic offices 57.23 57.71 58.96 59.41 60.70 62.65 63.91 63.06 Other checkable deposits 5.23 5.99 7.12 7.21 7.05 7.18 7.83 9.01 Savings (including MMDAs) 20.42 21.67 22.37 20.80 19.33 19.57 20.56 23.03 Large denomination time deposits ... 13.56 12.81 12.58 12.79 12.73 12.26 10.42 7.96 Small denomination time deposits ... 18.02 17.25 16.88 18.60 21.60 23.64 25.10 23.06 Gross federal funds purchased and repurchase agreements 8.95 9.03 8.94 9.14 9.20 8.22 7.27 7.17 Other 2.64 2.92 2.90 4.06 3.51 3.50 3.24 3.15 Non-interest-bearing liabilities 21.92 21.41 20.32 18.61 17.75 17.08 16.90 17.85 Demand deposits 18.54 18.27 17.30 15.63 14.70 13.95 13.59 14.20 MEMO Money market liabilities 27.96 27.06 26.63 28.12 27.49 25.63 22.46 19.58 Loss reserves .77 .88 1.01 1.06 1.04 1.17 1.37 1.44 Total equity capital 6.33 6.51 6.57 6.57 6.69 6.84 7.09 7.44 Average consolidated assets including loss reserves (billions of dollars) 707 768 814 868 867 901 903 927 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank Profits and Balance Sheet Developments, 1992 669 A.2.—Continued C. Banks with $300 million to $5 billion in assets Item 1985 1986 1987 1988 1989 1990 1991 1992 Effective interest rate (percent) Rates earned Interest-earning assets 10.90 9.92 9.43 9.93 10.75 10.39 9.54 8.14 Taxable equivalent 11.49 10.49 9.79 10.18 10.96 10.55 9.68 8.26 Loans, gross 11.82 10.82 10.23 10.78 11.61 11.19 10.40 9.14 Net of loss provisions 10.85 9.56 8.97 9.70 10.43 9.49 8.74 7.86 Securities 9.16 8.26 7.73 7.87 8.37 8.51 8.16 6.91 Taxable equivalent 10.92 10.09 8.85 8.63 9.01 9.00 8.58 7.22 U.S. government and other debt 10.21 8.94 7.98 8.08 8.65 8.78 8.35 6.96 State and local 6.89 6.94 7.04 7.16 7.30 7.32 7.23 6.83 Equity1 n.a. n.a. n.a. n.a. 7.15 6.93 5.77 4.88 Trading account assets 8.41 7.28 7.06 6.40 7.49 9.76 7.21 4.94 Rates paid Interest-bearing liabilities 7.84 6.71 6.20 6.66 7.64 7.18 6.03 4.15 Interest-bearing deposits 7.82 6.70 6.10 6.50 7.36 7.04 6.04 4.17 In foreign offices 8.60 7.00 6.75 7.55 8.97 8.12 6.29 4.25 In domestic offices 7.78 6.69 6.07 6.47 7.30 7.01 6.03 4.17 Other checkable deposits n.a. n.a. 4.63 4.77 4.86 4.75 4.28 2.69 Savings (including MMDAs) n.a. n.a. 5.31 5.54 6.13 5.97 5.11 3.33 Large denomination time deposits ... 8.61 7.26 6.78 7.48 8.72 8.03 6.57 4.75 Small denomination time deposits ... n.a. n.a. 7.14 7.45 8.31 8.02 7.08 5.35 Gross federal funds purchased and repurchase agreements 7.86 6.61 6.42 7.41 9.01 7.85 5.58 3.42 Income and expenses as a percentage of average net consolidated assets Gross interest income 9.65 8.84 8.50 8.98 9.77 9.43 8.68 7.41 Taxable equivalent 10.16 9.35 8.83 9.20 9.96 9.57 8.81 7.52 Loans 7.12 6.68 6.55 7.00 7.58 7.22 6.53 5.49 Securities 1.68 1.54 1.43 1.44 1.55 1.63 1.74 1.66 Gross federal funds sold and reverse repurchase agreements .43 .36 .29 .30 .38 .37 .27 .17 Other .42 .26 .23 .24 .26 .21 .14 .09 Gross interest expense 5.82 5.03 4.65 5.08 5.90 5.58 4.69 3.19 Deposits 4.87 4.20 3.84 4.10 4.72 4.62 4.05 2.76 Gross federal funds purchased and repurchase agreements .73 .62 .59 .69 .85 .66 .42 .25 Other .22 .22 .23 .30 .32 .29 .23 .18 Net interest margin 3.82 3.82 3.85 3.89 3.87 3.85 3.99 4.22 Taxable equivalent 4.34 4.32 4.17 4.12 4.06 3.99 4.12 4.33 Loss provisions .59 .78 .81 .70 .77 1.09 1.04 .77 Noninterest income 1.40 1.42 1.38 1.43 1.41 1.50 1.60 1.70 Service charge on deposits .34 .34 .35 .35 .36 .37 .41 .43 Foreign related .01 .01 .02 .00 .01 .01 .01 .01 Other 1.05 1.07 1.01 1.08 1.04 1.12 1.18 1.26 Noninterest expense 3.66 3.63 3.57 3.56 3.49 3.52 3.73 3.91 Salaries and employee benefits 1.72 1.65 1.58 1.51 1.49 1.48 1.49 1.52 Occupancy .57 .55 .53 .51 .50 .49 .50 .50 Other 1.36 1.42 1.46 1.54 1.50 1.55 1.75 1.89 Net noninterest margin -2.26 -2.21 -2.19 -2.13 -2.08 -2.02 -2.13 -2.21 Securities gains .04 .13 .04 .00 .01 .01 .08 .10 Income before taxes 1.02 .96 .89 1.06 1.04 .75 .90 1.35 Taxes .19 .19 .26 .31 .32 .21 .30 .45 Extraordinary items .01 .01 .01 .01 .00 .01 .00 .00 Net income .84 .77 .64 .75 .73 .55 .61 .91 Cash dividends declared .37 .38 .43 .48 .48 .53 .51 .51 Retained income .47 .39 .20 .27 .24 .02 .10 .40 MEMO Return on equity 12.96 11.50 9.45 11.18 10.65 7.83 8.39 11.90 1. See note 1, table A.2.A (all banks). n.a. Not available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

670 Federal Reserve Bulletin • July 1993 A.2. Portfolio composition, interest rates, and income and expense, all insured domestic commercial banks and nondeposit trust companies, by size of bank, 1985-92 D. Banks with more than $5 billion in assets, excluding ten largest Item 1985 1986 1987 1988 1989 1990 1991 1992 Balance sheet items as a percentage of average consolidated assets including loss reserves Interest-earning assets 84.97 85.62 86.30 87.19 86.93 87.01 87.03 87.88 Interest-bearing balances at depositories .. 7.93 7.06 6.67 6.32 5.35 4.67 4.19 4.46 Loans 63.50 61.75 61.77 62.28 63.05 62.22 60.94 58.83 Commercial and industrial 26.59 25.14 23.62 23.24 22.08 21.37 19.96 18.54 U.S. addressees 21.96 21.56 20.83 21.06 20.67 20.11 18.80 17.50 Foreign addressees 4.63 3.58 2.79 2.18 1.41 1.26 1.16 1.04 Consumer 10.30 10.69 11.39 11.15 12.74 12.26 11.76 11.16 Credit card 4.29 4.26 4.68 4.35 5.72 5.46 5.07 4.79 Installment and other 6.01 6.43 6.71 6.80 7.02 6.80 6.69 6.37 Real estate 12.50 12.79 14.86 17.26 19.01 20.27 21.39 21.83 Construction and land development 4.26 4.61 4.86 4.98 5.25 4.87 3.90 2.87 Farmland .07 .09 .09 .11 .12 .12 .13 .14 One- to four-family residential 4.77 4.50 5.39 6.54 7.44 8.51 10.11 11.20 Home equity n.a. n.a. n.a. 1.07 1.39 1.68 2.09 2.37 Other n.a. n.a. n.a. 5.47 6.05 6.83 8.02 8.83 Multifamily residential .34 .31 .37 .43 .44 .47 .54 .69 Nonfarm nonresidential 2.89 3.11 3.92 4.93 5.58 6.12 6.54 6.81 Booked in foreign offices .17 .17 .22 .12 .18 .17 .17 .12 To depository institutions 3.85 3.04 2.77 2.21 1.74 1.52 1.52 1.39 Foreign governments 2.11 1.81 1.61 1.30 .84 .49 .37 .31 Agricultural production .46 .33 .29 .26 .29 .29 .30 .30 Other loans 6.64 6.73 5.81 5.21 4.70 4.42 4.19 3.96 Lease-financing receivables 1.06 1.22 1.41 1.63 1.65 1.59 1.46 1.35 Securities 9.32 12.36 13.55 13.68 14.03 15.01 16.03 18.71 U.S. government and other debt 6.00 7.57 9.75 10.63 11.22 12.83 14.18 17.11 U.S. government securities 5.34 6.52 7.58 7.81 8.89 10.62 12.08 14.85 US. Treasury 3.98 4.47 4.82 4.54 3.98 3.43 3.70 6.07 U.S. government agency and corporation obligations 1.36 2.06 2.76 3.27 4.91 7.19 8.38 8.79 Government-backed mortgage pools .93 1.45 2.05 2.71 3.94 5.13 5.37 4.85 Collateralized mortgage •"•»• li '.'.'/it -Jflj '.v'il obligations n.a. n.a. n.a. n.a. n.a. 1.64 2.43 3.45 Other .43 .60 .71 .56 .97 .42 .58 .49 Other debt securities .67 1.05 2.17 2.82 2.34 2.21 2.10 2.26 State and local government 3.32 4.79 3.80 3.05 2.62 2.00 1.62 1.36 Taxable n.a. n.a. .02 .02 .05 .03 .02 .03 Tax-exempt 3.32 4.79 3.78 3.03 2.57 1.97 1.60 1.34 Equity1 n.a. n.a. n.a. n.a. .21 .18 .23 .24 Trading account assets 1.23 1.50 1.00 .85 .80 .82 1.11 .97 Gross federal funds sold and reverse repurchase agreements 2.98 2.95 3.30 4.06 3.70 4.28 4.76 4.91 Non-interest-earning assets 14.11 13.34 12.12 10.92 11.57 11.40 11.23 10.38 Interest-bearing liabilities 71.35 71.19 72.27 74.12 75.26 75.83 74.90 73.48 Deposit liabilities 53.21 50.82 51.85 54.48 55.94 56.71 58.47 56.65 In foreign offices 14.99 12.62 11.58 10.70 8.43 7.46 6.40 6.33 In domestic offices 38.22 38.19 40.27 43.79 47.51 49.25 52.08 50.32 Other checkable deposits 3.02 3.44 4.03 4.39 4.62 4.79 5.37 6.34 Savings (including MMDAs) 13.06 13.83 14.99 14.88 14.43 15.50 17.70 20.19 Large denomination time deposits ... 12.14 11.51 12.45 14.12 15.19 13.64 11.54 8.40 Small denomination time deposits ... 10.00 9.41 8.81 10.39 13.28 15.33 17.46 15.39 Gross federal funds purchased and repurchase agreements 13.09 14.81 14.27 13.08 12.90 12.84 10.61 10.82 Other 5.05 5.56 6.15 6.55 6.42 6.28 5.82 6.00 Non-interest-bearing liabilities 23.25 23.33 22.53 20.96 19.36 18.60 19.15 19.77 Demand deposits 15.89 16.92 15.95 14.56 13.58 13.07 13.42 14.19 MEMO Money market liabilities 45.50 44.74 44.66 44.66 43.08 40.35 34.51 31.73 Loss reserves .92 1.05 1.58 1.89 E 1.50 1.59 1.73 1.74 Total equity capital 5.40 5.48 5.20 4.93 5.38 5.56 5.96 6.75 Average consolidated assets including •• ^^Jiis loss reserves (billions of dollars) 574 654 764 852 959 1,048 1,095 1,132 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank Profits and Balance Sheet Developments, 1992 671 A.2.—Continued D. Banks with more than $5 billion in assets, excluding ten largest Item 1985 1986 1987 1988 1989 1990 1991 1992 Effective interest rate (percent) Rates earned Interest-earning assets 10.99 9.65 9.16 9.58 11.01 10.42 9.18 7.91 Taxable equivalent 11.37 10.15 9.35 9.77 11.16 10.52 9.26 7.99 Loans, gross 11.60 10.38 9.80 10.17 11.63 11.05 9.80 8.67 Net of loss provisions 10.52 9.07 7.10 9.19 9.86 9.02 7.88 7.33 Securities 9.12 8.21 7.91 8.11 8.77 8.86 8.32 7.19 Taxable equivalent 10.97 10.45 8.73 8.88 9.32 9.21 8.62 7.43 U.S. government and other debt 10.31 8.99 8.24 8.37 9.11 9.12 8.46 7.23 State and local 6.81 6.96 7.06 7.22 7.30 7.28 7.25 6.85 Equity1 n.a. n.a. n.a. n.a. 8.71 8.02 7.12 6.20 Trading account assets 9.60 6.82 6.66 7.96 8.65 8.14 6.35 5.06 Rates paid Interest-bearing liabilities 8.29 6.93 6.66 7.06 8.44 7.74 6.10 4.26 Interest-bearing deposits 8.22 6.94 6.50 6.89 8.07 7.49 6.16 4.26 In foreign offices 9.36 7.69 7.78 8.84 11.13 10.08 8.31 6.83 In domestic offices 7.79 6.70 6.14 6.42 7.54 7.10 5.90 3.95 Other checkable deposits n.a. n.a. 4.38 4.37 4.50 4.61 4.12 2.42 Savings (including MMDAs) n.a. n.a. 5.23 5.51 6.33 6.04 4.96 3.07 Large denomination time deposits ... 8.73 7.50 7.09 7.41 8.70 8.09 6.70 5.04 Small denomination time deposits ... n.a. n.a. 7.14 7.29 8.58 8.04 6.83 5.06 Gross federal funds purchased and repurchase agreements 8.09 6.88 6.57 7.17 9.31 8.11 5.69 3.58 Income and expenses as a percent of average net consolidated assets Gross interest income 9.44 8.34 8.14 8.58 9.82 9.36 8.24 7.12 Taxable equivalent 9.77 8.77 8.31 8.76 9.96 9.45 8.32 7.19 Loans 7.46 6.44 6.22 6.52 7.54 7.08 6.16 5.22 Securities .87 1.05 1.10 1.15 1.26 1.36 1.36 1.36 Gross federal funds sold and reverse repurchase agreements .23 .20 .23 .29 .36 .37 .28 .20 Other .88 .65 .59 .62 .66 .55 .44 .34 Gross interest expense 6.16 5.15 4.98 5.41 6.53 6.09 4.79 3.27 Deposits 4.55 3.69 3.49 3.87 4.63 4.37 3.74 2.51 Gross federal funds purchased and repurchase agreements 1.12 1.05 .97 .99 1.24 1.13 .67 .42 Other .50 .40 .52 .56 .65 .59 .38 .34 Net interest margin 3.28 3.19 3.16 3.17 3.29 3.27 3.46 3.85 Taxable equivalent 3.61 3.62 3.33 3.34 3.43 3.36 3.54 3.92 Loss provisions .69 .81 1.71 .62 1.15 1.30 1.21 .81 Noninterest income 1.32 1.42 1.54 1.60 1.87 1.85 2.05 2.25 Service charge on deposits .26 .27 .28 .30 .31 .34 .41 .46 Foreign related .05 .05 .07 .06 .06 .06 .05 .05 Other 1.01 1.10 1.18 1.24 1.50 1.45 1.59 1.74 Noninterest expense 3.02 3.10 3.24 3.18 3.35 3.46 3.78 4.00 Salaries and employee benefits 1.48 1.48 1.47 1.45 1.47 1.47 1.51 1.54 Occupancy .47 .49 .48 .48 .50 .50 .50 .51 Other 1.06 1.13 1.28 1.24 1.38 1.49 1.78 1.95 Net noninterest margin -1.70 -1.68 -1.70 -1.58 -1.48 -1.61 -1.73 -1.75 Securities gains .07 .17 .05 .00 .04 .03 .14 .14 Income before taxes .96 .87 -.20 .96 .71 .40 .66 1.43 Taxes .23 .20 .07 .27 .19 .16 .19 .44 Extraordinary items .01 .02 .00 .02 .00 .01 .03 .02 Net income .73 .68 -.27 .71 .51 .24 .50 1.01 Cash dividends declared .26 .33 .34 .41 .39 .38 .47 .47 Retained income .48 .35 -.61 .30 .12 -.14 .02 .54 MEMO Return on equity 13.19 12.05 -5.02 13.94 9.31 4.25 8.10 14.66 1. See note 1, table A.2.A (all banks). n.a. Not available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

672 Federal Reserve Bulletin • July 1993 A.2. Portfolio composition, interest rates, and income and expense, all insured domestic commercial banks and nondeposit trust companies, by size of bank, 1985-92 E. Ten largest banks Item 1985 1986 1987 1988 1989 1990 1991 1992 Balance sheet items as a percentage of average consolidated assets including loss reserves Interest-earning assets 83.93 84.64 84.76 85.08 85.14 84.75 85.28 85.09 Interest-bearing balances at depositories .. 7.88 7.47 8.08 7.78 7.24 5.60 4.17 3.49 Loans 62.96 62.02 60.17 59.84 60.96 62.68 63.01 60.03 Commercial and industrial 29.25 26.23 24.11 22.88 22.40 22.33 21.90 19.82 U.S. addressees 14.53 13.63 13.16 12.78 13.22 13.05 13.14 11.26 Foreign addressees 14.72 12.60 10.95 10.09 9.18 9.27 8.77 8.56 Consumer 5.71 6.38 6.14 6.20 6.20 6.70 7.03 7.37 Credit card 1.91 2.11 1.92 1.94 1.92 2.14 2.47 2.72 Installment and other 3.81 4.27 4.22 4.25 4.28 4.55 4.56 4.65 Real estate 11.08 12.62 13.83 15.31 17.43 20.05 21.20 19.84 Construction and land development 2.19 2.66 3.22 3.47 3.47 3.69 3.35 2.52 Farmland .07 .07 .06 .06 .08 .08 .08 .07 One- to four-family residential 4.80 5.03 5.14 5.79 7.29 9.07 10.11 9.94 Home equity n.a. n.a. n.a. .78 1.02 1.28 1.59 1.67 Other n.a. n.a. n.a. 5.01 6.27 7.79 8.51 8.27 Multifamily residential .38 .48 .61 .65 .66 .66 .56 .57 Nonfarm nonresidential 1.92 2.27 2.51 2.65 3.00 3.42 3.87 3.76 Booked in foreign offices 1.73 2.10 2.28 2.69 2.93 3.12 3.24 2.98 To depository institutions 5.13 4.94 4.95 4.76 4.23 3.61 3.02 2.67 Foreign governments 3.98 3.69 3.53 3.49 3.24 2.68 2.81 2.85 Agricultural production .54 .45 .36 .33 .29 .30 .31 .28 Other loans 5.93 6.29 5.81 5.39 5.66 5.45 5.09 5.64 Lease-financing receivables 1.34 1.43 1.43 1.48 1.51 1.56 1.64 1.56 Securities 5.84 7.05 8.33 8.81 9.00 8.99 9.17 10.32 U.S. government and other debt 4.19 4.95 6.30 6.92 7.20 7.70 8.12 9.32 U.S. government securities 2.41 2.31 3.06 3.43 3.63 3.91 4.70 6.28 U.S. Treasury 1.97 1.64 1.52 1.47 1.40 1.06 1.32 1.81 U.S. government agency and corporation obligations .44 .67 1.54 1.96 2.23 2.84 3.38 4.48 Government-backed mortgage pools .34 .57 1.47 1.85 2.02 2.18 2.21 2.54 Collateralized mortgage obligations n.a. n.a. n.a. n.a. n.a. .57 1.06 1.88 Other .10 .10 .07 .10 .21 .10 .11 .05 Other debt securities 1.78 2.63 3.23 3.49 3.57 3.79 3.42 3.04 State and local government 1.65 2.11 2.03 1.89 1.62 1.06 .76 .66 Taxable n.a. n.a. .01 .01 .02 .02 .01 .01 Tax-exempt 1.65 2.11 2.03 1.88 1.60 1.04 .75 .66 Equity1 n.a. n.a. n.a. n.a. .22 .23 .29 .34 Trading account assets 3.50 4.50 4.23 4.15 3.95 4.68 6.05 8.63 Gross federal funds sold and reverse repurchase agreements 3.75 3.59 3.95 4.51 3.98 2.80 2.89 2.61 Non-interest-eaming assets 15.21 14.33 13.12 12.33 12.22 12.69 12.43 12.79 Interest-bearing liabilities 71.31 71.41 70.98 71.49 72.07 72.07 72.92 71.55 Deposit liabilities 57.21 55.80 55.77 55.86 55.74 56.47 56.36 54.52 In foreign offices 33.41 31.11 31.01 29.96 28.97 28.88 27.81 27.51 In domestic offices 23.80 24.70 24.77 25.90 26.77 27.58 28.55 27.01 Other checkable deposits 1.47 2.04 2.53 2.75 2.69 2.68 2.94 3.10 Savings (including MMDAs) 9.80 11.19 11.62 11.92 11.53 12.11 13.57 15.02 Large denomination time deposits ... 8.16 7.39 6.82 6.93 7.81 7.42 6.23 4.40 Small denomination time deposits ... 4.36 4.08 3.81 4.30 4.74 5.38 5.80 4.49 Gross federal funds purchased and repurchase agreements 7.73 7.90 6.68 6.22 6.76 6.72 6.65 5.84 Other 6.38 7.71 8.52 9.42 9.57 8.89 9.92 11.19 Non-interest-bearing liabilities 23.98 23.77 24.63 23.93 23.14 23.34 22.17 23.01 Demand deposits 11.59 12.69 12.67 11.85 11.49 10.66 10.12 10.67 MEMO Money market liabilities 57.04 55.39 54.49 53.90 54.46 53.31 51.95 50.45 Loss reserves .85 1.04 2.12 2.59 2.64 2.56 2.29 2.12 Total equity capital 4.71 4.82 4.39 4.58 4.80 4.59 4.92 5.44 Average consolidated assets including loss reserves (billions of dollars) 624 676 691 689 720 744 734 740 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank Profits and Balance Sheet Developments, 1992 613 A.2.—Continued E. Ten largest banks Item 1985 1986 1987 1988 1989 1990 1991 1992 Effective interest rate (percent) Rates earned Interest-earning assets 11.30 9.69 9.55 10.78 12.26 11.61 9.91 8.83 Taxable equivalent 11.51 9.94 9.58 10.91 12.28 11.68 9.95 8.87 Loans, gross 11.95 10.37 10.07 11.38 13.12 12.24 10.45 9.42 Net of loss provisions 10.79 9.10 6.73 10.73 10.74 11.06 8.58 7.63 Securities 9.84 8.81 8.69 8.64 9.08 9.20 8.95 8.12 Taxable equivalent 11.42 10.60 8.96 9.49 9.18 9.59 9.18 8.37 U.S. government and other debt 10.91 9.45 9.07 8.90 9.46 9.53 9.25 8.32 State and local 7.09 7.29 7.50 7.68 7.66 7.52 7.60 7.41 Equity1 n.a. n.a. n.a. n.a. 7.06 5.78 4.21 4.03 Trading account assets 10.43 8.20 11.18 14.49 12.13 10.82 7.84 6.74 Rates paid Interest-bearing liabilities 9.10 7.41 7.51 8.53 10.49 9.92 7.54 6.12 Interest-bearing deposits 8.85 7.24 6.93 7.72 9.16 9.03 7.09 5.43 In foreign offices 9.61 7.89 8.02 9.03 10.93 11.11 8.76 7.66 In domestic offices 7.76 6.40 5.57 6.21 7.26 6.80 5.46 3.20 Other checkable deposits n.a. n.a. 3.29 4.43 4.42 4.33 3.93 1.90 Savings (including MMDAs) n.a. n.a. 5.18 5.56 6.54 6.20 5.09 2.95 Large denomination time deposits ... 9.13 7.21 7.17 7.45 8.63 7.95 6.49 4.71 Small denomination time deposits ... n.a. n.a. 6.25 7.14 8.34 7.75 6.07 3.70 Gross federal funds purchased and repurchase agreements 7.95 6.87 6.53 7.42 9.28 7.93 5.97 4.17 Income and expenses as a percentage of average net consolidated assets Gross interest income 9.55 8.26 8.36 9.45 10.76 10.21 8.67 7.79 Taxable equivalent 9.73 8.47 8.39 9.57 10.77 10.27 8.71 7.83 Loans 7.46 6.35 6.17 6.92 8.19 7.83 6.70 5.76 Securities .58 .64 .74 .78 .84 .85 .83 .85 Gross federal funds sold and reverse repurchase agreements .31 .27 .28 .36 .37 .25 .17 .12 Other 1.20 1.00 1.17 1.39 1.36 1.28 .97 1.06 Gross interest expense 6.75 5.49 5.69 6.43 7.95 7.53 5.75 4.61 Deposits 5.19 4.17 4.11 4.49 5.31 5.33 4.19 3.13 Gross federal funds purchased and repurchase agreements .71 .60 .50 .57 .74 .63 .43 .27 Other .84 .73 1.07 1.37 1.90 1.58 1.14 1.21 Net interest margin 2.81 2.77 2.67 3.03 2.81 2.68 2.92 3.18 Taxable equivalent 2.98 2.98 2.70 3.14 2.82 2.74 2.96 3.22 Loss provisions .72 .78 2.05 .39 1.49 .76 1.20 1.09 Noninterest income 1.37 1.60 1.96 2.08 2.19 2.24 2.37 2.59 Service charge on deposits .12 .13 .16 .19 .21 .23 .26 .28 Foreign related .18 .18 .26 .23 .22 .28 .26 .34 Other 1.07 1.28 1.54 1.66 1.76 1.73 1.85 1.96 Noninterest expense 2.77 3.01 3.20 3.30 3.42 3.49 3.79 3.83 Salaries and employee benefits 1.40 1.53 1.60 1.64 1.66 1.71 1.77 1.79 Occupancy .51 .56 .58 .61 .62 .64 .66 .64 Other .86 .92 1.02 1.06 1.14 1.15 1.36 1.40 Net noninterest margin -1.40 -1.41 -1.24 -1.22 -1.23 -1.25 -1.42 -1.24 Securities gains .06 .12 .07 .03 .03 .01 .04 .11 Income before taxes .74 .69 -.54 1.44 .13 .68 .34 .96 Taxes .27 .22 .16 .45 .38 .27 .16 .31 Extraordinary items .00 .00 .00 .08 .03 .06 .03 .00 Net income .47 .47 -.70 1.07 -.22 .47 .21 .65 Cash dividends declared .26 .23 .28 .38 .39 .26 .21 .14 Retained income .22 .25 -.98 .69 -.60 .21 .00 .51 MEMO Return on equity 9.87 9.60 -15.73 22.85 -4.39 10.14 4.25 11.87 1. See note 1, table A.2.A (all banks). n.a. Not available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

674 Treasury and Federal Reserve Foreign Exchange Operations This quarterly report, covering the period Febru- The yen's appreciation was particularly proary through April 1993, provides information on nounced in February, when many market partici- Treasury and System foreign exchange operations. pants expected the Group of Seven (G-7) to It was presented by William J. McDonough, Execu- announce support for a stronger yen after its meettive Vice President of the Federal Reserve Bank of ing at the end of the month. However, the meeting New York and Manager of the System Open Market did not result in a call for yen appreciation. Account. John W. Dickey was primarily responsible The yen's rise paused temporarily throughout for preparation of the report.1 most of March in response to indications that policymakers were focusing on the merits of revitaliz- The dollar depreciated modestly against most major ing Japan's economy as a means both to address currencies during the February-April period but Japan's current account surplus and to promote declined significantly against the Japanese yen more satisfactory economic performance globally. amid concerns relating to the growing Japanese Consequently, market attention shifted to the trade surplus. Over the period, the dollar declined progress the Japanese government was making in 1.6 percent against the German mark, 10.9 percent developing a new supplementary fiscal package to against the Japanese yen, and 3.2 percent on a stimulate the Japanese economy as well as to the trade-weighted basis.2 anticipated repatriation of funds by Japanese com- On April 27, the U.S. monetary authorities inter- panies ahead of the fiscal year-end. vened in the foreign exchange markets, purchasing The yen's rise resumed in late March. Comments $200 million against the yen in amounts shared by Japanese officials on March 31 that yen appreciequally by the Treasury and the Federal Reserve. ation was inevitable and acceptable if it remained DEVELOPMENTS IN DOLLAR EXCHANGE 1. Federal Reserve reciprocal currency arrangements MARKETS Millions of dollars The Japanese yen appreciated throughout the Amount of Institution facility, period. Japanese trade data released on February 5 April 30, 1993 indicated that the 1992 Japanese current account Austrian National Bank 250 surplus was materially higher than in 1991. Subse- National Bank of Belgium 1,000 Bank of Canada 2,000 quent observations about the contribution that the National Bank of Denmark 250 Bank of England 3,000 exchange rate might make to correct Japan's wid- Bank of France 2,000 ening trade surplus, and a perceived acquiescence Deutsche Bundesbank 6,000 Bank of Italy 3,000 to gradual yen appreciation by Japanese officials, Bank of Japan 5,000 contributed to the dollar's decline from its period Bank of Mexico 700 high of ¥125.20 on February 2. Netherlands Bank 500 Bank of Norway 250 Bank of Sweden 300 Swiss National Bank 4,000 1. The charts for the report are available from Publications Bank for International Settlements Services, Board of Governors of the Federal Reserve System, mail Dollars against Swiss francs 600 stop 138, Washington, DC 20551. Dollars against other authorized European 2. The dollar's movements on a trade-weighted basis are mea- currencies 1,250 sured using an index developed by the staff of the Board of Total 3300,,110000 Governors of the Federal Reserve System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

675 2. Drawings and repayments by foreign central banks under special swap arrangements with the U.S. Treasury1 Millions of dollars; drawings or repayments (-) Outstanding as Outstanding as Central bank drawing Amount of of January 31, February March April of April 30, on the U.S. Treasury facility 1993 1993 Central Reserve Bank of Peru 470.02 ... ... 470.0 -470.0 1. Data are on a value-date basis. Components may not add to totals 2. Represents U.S. Treasury's arrangement with Peru as part of a multilatbecause of rounding. eral credit facility. gradual, along with the April 13 announcement that The German Bundesbank reduced its official disthe fiscal stimulus package of ¥13.2 trillion would count rate and its Lombard rate each 100 basis allocate a larger-than-expected portion to immedi- points in a series of steps undertaken during the ate economic recovery, gave continued strength to February-April period to stimulate the weakening the yen through April. German economy. After official rate reductions, the The dollar hit a historical low of ¥109.15 against mark depreciated slightly against many European the yen on April 27. Later that day, the U.S. mone- currencies. Tensions within the European exchange tary authorities purchased $200 million against the rate mechanism diminished, although the Spanish yen in operations coordinated with another mone- peseta faced repeated selling pressure. tary authority. U.S. officials also indicated that [t]he Administration believes that exchange rates should reflect fundamentals, and attempts to arti- OTHER OPERATIONS ficially influence or manipulate exchange rates are inappropriate. Moreover, excessive volatility The Federal Reserve and the Treasury's exchange is counterproductive for growth. Therefore we stabilization fund (ESF) each realized profits of are monitoring developments closely and stand $22.0 million from the sales of yen in the market. ready to cooperate in exchange markets with our Cumulative bookkeeping or valuation gains on out- G-7 partners as conditions may warrant. standing foreign currency balances as of the end of April were $4,152.0 million for the Federal In response, the dollar stabilized and then traded Reserve and $3,221.8 million for the ESF. between ¥112.10 and ¥111.05 for the remaining The Federal Reserve and the ESF regularly days of the period. invest their foreign currency balances in a variety The dollar-mark exchange rate was relatively of instruments that yield market-related rates of stable. The dollar traded between DM1.6730, return and that have a high degree of liquidity and reached on March 11, and DM1.5640, reached on credit quality. A portion of the balances is invested April 26. in securities issued by foreign governments. As of the end of April, the Federal Reserve and the ESF 3. Net profits or losses (-) on U.S. Treasury held either outright or under repurchase agreements and Federal Reserve foreign exchange operations1 $9,376.6 million and $9,438.9 million respectively Millions of dollars in foreign government securities valued at end-ofperiod exchange rates. U.S. Treasury Exchange In other operations, the Treasury, through the Period and item Stabilization Fund ESF, participated in a $900 million multilateral facility to assist Peru in repaying its arrears to Valuation profits and losses on outstanding assets and liabilities international creditors. The Treasury's share of the as of January 31, 1993 facility was $470 million, established by a special Realized, February 1- arrangement with Peru on March 9. The total April 30, 1993 Valuation profits and losses on amount of the facility was drawn on March 18 and outstanding assets and liabilities as of April 30, 1993 3,221.8 repaid in full on the same day. The facility expired on March 31. • 1. Data are on a value-date basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

676 Staff Studies The staff members of the Board of Governors of the and do not necessarily indicate concurrence by the Federal Reserve System and of the Federal Reserve Board of Governors, by the Federal Reserve Banks, Banks undertake studies that cover a wide range of or by members of their staffs. economic and financial subjects. From time to time Single copies of the full text of each study are the studies that are of general interest are pub- available without charge. The titles available are lished in the Staff Studies series and summarized in shown under "Staff Studies" in the list of Federal the FEDERAL RESERVE BULLETIN. The analyses Reserve Board publications at the back of each and conclusions set forth are those of the authors BULLETIN. STUDY SUMMARY THE 1989-92 CREDIT CRUNCH FOR REAL ESTATE James T. Fergus and John L. Goodman, Jr. Prepared as a staff study in winter 1992-93 Private construction declined sharply during the dence and hypotheses about the credit crunch but late 1980s and early 1990s. Spending on both resi- does not undertake rigorous statistical tests. dential construction projects and nonresidential Among the main findings are the following: projects fell about one-third. The decline became especially pronounced during 1990 when financial • The building boom of the 1980s generated institutions that are the traditional sources of credit surplus space in many markets, almost guaranteeto real estate were reducing their mortgage lending. ing that construction and lending would subse- According to many reports, not only credit for quently decline even if credit supplies had not construction but also loans on existing properties tightened. Credit cutbacks did, however, affect the became more difficult to acquire during this period. timing of the decline in construction and property This study reviews current thinking about the values. causes of the 1989-92 "credit crunch" in real • Surveys of various market participants confirm estate and summarizes a variety of data on the that the terms and availability of credit for developduration and extent of this episode. It weighs the ment and construction financing and for permanent relative importance of the credit crunch and other financing of commercial real estate tightened befactors that also contributed to the falloff in real ginning in 1989; this tightening continued into estate lending; and it considers the long-run out- 1992, before stabilizing in late 1992 and early look for the supply of mortgage credit. 1993. The objective of this study is to provide a histor- • The ready availability and concessionary pricical record that may help analysts interpret market ing of mortgage credit that characterized the early developments the next time real estate markets turn and mid-1980s is unlikely to return in the foreseedown. Accordingly, it catalogs the statistical evi- able future, although the appeal of this type of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

677 credit for some lenders guarantees that some fund- most other segments of the mortgage market. The ing will remain available for projects with solid outlook for the supply of home mortgage credit is prospects of profitability. quite positive, absent any major adverse changes in • The supply of home mortgage credit has not the role of the federally related secondary market been significantly restricted, despite the cutbacks in agencies. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

678 Industrial Production and Capacity Utilization for April 1993 Released for publication May 14 March storm, and strong increases in the production of computers continued; a return to more nor- Industrial production edged up 0.1 percent in April, mal temperatures led, however, to a sharp drop in after having shown no change in March. Overall the output of utilities. At 110.0 percent of its 1987 output recovered from declines caused by the annual average, total industrial production was Industrial production indexes Twelve-month percent change Twelve-month percent change Materials Products Nondurable manufacturing 1988 1989 1990 1991 1992 1993 1988 1989 1990 1991 1992 1993 Capacity and industrial production Ratio scale, 1987 production = 100 Ratio scale, 1987 production =100 — Total industry — 140 — Manufacturing — 140 Capacity Capacity — 120 120 ^ " - 100 " \ " ^ " 100 — P r o d u c t i on s* Production 80 80 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Percent of capacity Percent of capacity Total industry Manufacturing 90 90 Utilization Utilization ^ ^^ " - 80 ^ " 80 70 70 1 1 1 1 1 1 1981 1983 1985 1987 1989 1991 1993 1981 1983 1985 1987 1989 1991 1993 All series are seasonally adjusted. Latest series, April. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

679 Industrial production and capacity utilization1 Industrial production, index, 1987=100 Percentage change CCaatteeggoorryy 11999933 19932 AApprr.. 11999922 ttoo Jan.r Feb.1 Mar.r Apr.P Jan.r Feb/ Mar.r Apr.P AApprr.. 11999933 Total 109.3 109.9 109.9 110.0 3.4 Previous estimate 111.4 112.0 112.0 Major market groups Products, total3 108.5 109.1 109.1 109.1 .3 .5 .1 -.1 3.6 Consumer goods ... 107.6 108.2 108.1 107.9 .1 .6 -.1 -.2 2.4 Business equipment 131.2 131.8 132.9 134.0 1.2 .5 .8 .8 11.1 Construction supplies 94.8 97.3 97.2 96.3 .4 2.6 -.1 -.9 2.9 Materials 110.4 111.0 111.0 111.4 .4 .6 .0 .3 3.2 Major industry groups Manufacturing 109.9 110.5 110.6 111.0 .7 .5 .1 .4 4.2 Durable 112.9 113.9 114.0 114.4 1.0 .9 .1 .4 6.7 Nondurable 106.4 106.4 106.4 106.8 .3 .0 .0 .3 1.2 Mining 98.3 95.6 95.4 96.1 .0 -2.7 -.2 .8 -1.3 Utilities 112.8 117.4 117.3 113.1 -3.4 4.0 -.1 -3.6 .9 Capacity utilization, percent 1992 1993 Average, Low, High, 1967-92 1982 1988-89 Apr. Jan. Feb. Mar.1 Apr.P Total 81.9 71.8 84.8 79.9 81.2 81.5 81.4 81.4 1.6 Manufacturing 81.2 70.0 85.1 78.8 80.3 80.5 80.5 80.7 1.8 Advanced processing 80.7 71.4 83.3 77.3 78.9 78.9 79.1 79.2 2.2 Primary processing . 82.2 66.8 89.1 82.3 83.5 84.4 83.9 84.1 .8 Mining 87.4 80.6 87.0 86.5 87.9 85.5 85.4 86.1 -.9 Utilities 86.7 76.2 92.6 85.7 85.4 88.8 88.6 85.4 1.3 1. Data seasonally adjusted or calculated from seasonally adjusted 3. Contains components in addition to those shown, monthly data. r Revised, 2. Change from preceding month. p Preliminary. 3.4 percent above its year-ago level. Total indus- ever, the output of industrial equipment was trial capacity utilization was unchanged at unchanged, remaining at about the level of last 81.4 percent. November. The output of transit equipment When analyzed by market group, the data show declined again because of decreases in auto and that the output of consumer goods decreased aircraft production. The production of equipment 0.2 percent, after having been about unchanged in related to defense and space programs continued to March. The production of automotive products contract. The output of construction supplies declined for the second month because auto assem- declined nearly 1 percent, after having changed blies were cut back. Nonetheless, the production of little in March; the output of lumber and related other durable consumer goods increased 0.6 per- products has dropped more than 1 percent in each cent; in particular, the output of carpeting of the past two months. Even so, the output of rebounded from a storm-related decline in March. construction supplies remains more than 1 percent The output of nondurable consumer goods higher than its fourth-quarter average. The producdecreased 0.3 percent. The residential use of elec- tion of both durable and nondurable materials tricity and the production of consumer fuels fell. increased more than xh percent. Within durables, The production of business equipment moved up the output of semiconductors and other computeragain, as the production of computers continued to related materials continued to increase, and the increase at more than 3 percent per month. How- production of motor vehicle parts rose. Within Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

680 Federal Reserve Bulletin • July 1993 nondurables, the output of both paper and chemi- of nonelectrical machinery rose about 1 percentage cals posted gains. The production of energy materi- point, whereas the operating rate in the aerospace als dropped nearly 1 percent, with the drop in industry continued to decline. Factory utilization in electricity generation more than offsetting the primary-processing industries rose 0.2 percentage pickup in the production of coal. point; utilization gained at makers of textile and When analyzed by industry group, the data show paper products and weakened at lumber mills. that within manufacturing, output increased The output at mines, boosted by higher coal 0.4 percent, and capacity utilization increased production, increased 0.8 percent. A return to sea- 0.2 percentage point, to 80.7 percent. Capacity sonal temperatures led to a decline of more than utilization in advanced-processing industries was 3V2 percent in the output of utilities. • little changed: The operating rate at manufacturers Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

681 Statements to the Congress Statement by Richard Spillenkothen, Director, RECENT DEVELOPMENTS IN THE Division of Banking Supervision and Regulation, BANKING INDUSTRY Board of Governors of the Federal Reserve System, before the Subcommittee on General Over- The Federal Reserve's support for programs sight, Investigations, and the Resolution of designed to foster access by all Americans to fair Failed Financial Institutions of the Committee and reasonable credit, particularly to those who on Banking, Finance and Urban Affairs, U.S. live in economically distressed urban and rural House of Representatives, May 18, 1993 areas, must be understood within the context of another of its roles—that of ensuring the safety and soundness of the banking system. Indeed, Thank you for inviting me to appear before the the capacity of any bank to accommodate the subcommittee today to discuss ways in which the credit needs of its community is directly proporfinancial needs of individuals and businesses tionate to its strength and stability. Fortunately, located in economically underserved neighbor- after a sustained period of great financial stress, hoods can be accommodated. More particularly, the banking industry has been staging an encouryou asked me to delineate the factors related to aging recovery and appears poised to increase its the condition of the banking system and the lending activities. constraints within its legal and regulatory struc- As you know, the availability of credit has ture that may be inhibiting investment in these been constrained over the past few years as neighborhoods. banks sought to reverse debilitating industry My testimony today will be somewhat wide- trends by improving the quality of their loan ranging because many factors contribute to portfolios, building loan-loss reserves, restoring neighborhoods being underserved in their credit capital, and cutting expenses. As part of this needs. But even so, I will not be able to cover all process, credit standards were tightened, and of these factors today. many borrowers, who had previously found ac- I will begin by addressing recent conditions in cess to credit relatively easy, experienced much the banking industry and the economy that have greater difficulties in obtaining financing. Coninhibited lending of all types and, more particu- currently, many borrowers scaled back their larly, lending for community development activ- business activities in response to economic unities. Then I will discuss briefly some of the certainties and sought to strengthen their own regulatory burdens that have served to raise the balance sheets by reducing their reliance on costs of providing banking services and have credit. Among other adverse consequences, this restrained the availability of credit generally. action has had a deleterious effect on community I will further highlight the incentives in place development activities. that encourage financial institutions to engage in Conditions in the banking system are much community development activities, as well as better now than they have been in some time several existing mechanisms that banking insti- because of bank efforts and a propitious combitutions can use to meet the needs of financially nation of lower interest rates and a somewhat distressed urban and rural areas. I will also stronger economy, which has enabled banks to delineate several initiatives that the Federal Re- offset the lingering effects of troubled loans with serve developed and implemented in conjunction strengthened earnings and increased capital. Alwith its ongoing efforts to encourage community though businesses and consumers still appear to development lending. be wary of overextending their reliance on bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

682 Federal Reserve Bulletin • July 1993 credit, banks are generally in a much stronger change will reduce some of the relatively high position to seek out creditworthy borrowers. costs associated with smaller commercial loans Indeed, bankers, regulators, businesses, and that has dampened lending activity in this segconsumers have learned valuable, albeit hard, ment and should have a positive effect on such lessons regarding prudent lending and borrowing lending. practices that will likely contribute to a sustained Additionally, the agencies will soon be proposimprovement in the economy. ing revisions to the real estate appraisal requirements defined by the Financial Institutions Reform, Recovery and Enforcement Act. These ADDITIONAL BARRIERS TO LENDING revisions will improve the climate for real estate lending while still ensuring that real estate loans It has become increasingly clear that the nation's are extended on a safe and sound basis. They will banking system is laboring under a heavy regu- particularly benefit the large number of small latory burden. This conclusion has been reached businesses that have obtained, or are seeking, by several private studies. A study completed by loans secured by liens on business premises or the Federal Financial Institutions Examination other real estate. Public comment will also be Council, and submitted to the Congress at the sought on these proposed changes before they end of last year to carry out a mandate of the are adopted, and the agencies expect that com- Federal Deposit Insurance Corporation Improve- ments will assist them in identifying particular ment Act, reached the same conclusion. To the burdens that appraisal requirements may be havextent that this burden has affected the ability of ing on community development loans. banks to lend, or has affected their pricing, it has Although these efforts cannot be expected to no doubt also affected community development completely alleviate the shortfalls in credit availlending. ability that this subcommittee seeks to address, The federal financial institutions regulatory they will help reduce impediments to small busagencies have been working to alleviate such iness lending, a result that must invariably have a burdens on insured depositories for some time. positive effect on the communities that are the Last year, the agencies conducted reviews of focus of your concern. Moreover, in seeking their regulations and policies to identify those ways to improve credit availability generally, the that should be changed to alleviate burdens. agencies have been sensitive to the needs of Several actions resulted from this endeavor. community development lending. For example, In particular, revisions were made to risk- in revising the risk-based capital rules to lower based capital standards that reduced capital re- capital requirements on multifamily housing quirements for certain loans, additional guide- loans pursuant to a requirement of the Resolution lines on assessing the quality of real estate loans Trust Corporation Reform and Refinancing Act, were provided to examiners, and an examination the agencies are being careful to include the appeals process was put in place. financing of community development for cooper- More recently, the Administration has asked ative housing projects. Additionally, the agencies that the agencies conduct yet another review to are actively considering several proposals defind ways to reduce burdens and streamline the signed to promote the securitization of small regulatory process. Again, to promote credit business and other community development availability, the federal financial institutions reg- loans in conjunction with a Federal Financial ulatory agencies have identified actions that can Institutions Examination Council study. These be taken that will achieve that end without com- proposals could both promote the liquidity of promising safety and soundness standards. such loans and contribute to the expansion of These actions, some of which have been taken community development activities. while others are soon to be adopted, include Furthermore, after having summarized its findeliminating impediments to lending to small and ings of actions that might be taken to alleviate medium-sized businesses through a reduction of burden within the existing legal framework, the documentation requirements for such loans. This Federal Financial Institutions Examination Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 683 Council indicated that it would undertake the ment programs or private grants providing some additional project of reviewing applicable stat- sort of subsidy to the projects undertaken. utes to see what changes can be made, consistent For example, banks and bank holding compawith safety and soundness considerations and nies are permitted to form Community Developother appropriate objectives, to reduce regula- ment Corporations (CDCs). CDCs allow financial tory burden. The results of that review are to be organizations to make equity investments so long sent to the Congress later this year. This effort as these investments are designed primarily to should identify several positive actions that can promote the community welfare. Thus, banks be taken. may go beyond the usual lending function to provide equity capital to worthy projects. A variation of the CDC that is experiencing INCENTIVES TO increased popularity is the multibank, or non- COMMUNITY DEVELOPMENT ACTIVITY bank, CDC, commonly referred to as a "consortium" CDC. These entities pool the resources of There are clear incentives to financial institutions several financial institutions and invest in largeto provide community development services. scale community development projects to share The Community Reinvestment Act (CRA) re- the risks and rewards of community development minds financial institutions that they have an lending. These consortia are generally organized obligation to assist in meeting the credit needs of on a regional basis and are particularly attractive their entire community and requires the federal to participating institutions that do not individufinancial institutions regulatory agencies to en- ally possess the expertise or resources necessary courage institutions to fulfill these needs. to engage in larger investments. Federal Reserve Moreover, the regulatory agencies have al- Banks have provided technical and organizaways considered banks' performance in meeting tional assistance to financial institutions seeking the needs of their communities when considering to enter community development activities applications by these institutions. Thus, as the through both individual and consortium CDCs. banking industry experiences an intensified pe- An additional variation on CDCs is investment riod of consolidation, there are undeniable incen- in limited partnerships formed to invest in one or tives to financial institutions to develop appropri- more community development projects. Finally, ate CRA programs to ensure that expansion bank holding companies are able to invest diplans are not inhibited by adverse CRA ratings. rectly in single-purpose community development projects. MECHANISMS AND STRUCTURES FOR COMMUNITY DEVELOPMENT COMPLEXITIES OF COMMUNITY DEVELOPMENT LENDING Several mechanisms are in place through which institutions can carry out community develop- As with other forms of financing, community ment activities. The most common and time- development lending is a specialized activity that honored is also the most simple: lending and cannot be mastered without the foresight, dediinvesting by banks to meet the convenience and cation, and resources typically allocated to any needs of the communities they serve. But there successful business venture. Indeed, by their are also several other mechanisms that, although nature certain community development activities somewhat more complicated, may be used to are highly specialized and so are quite compliexpand the impact of bank activity. These other cated. community development activities take less tra- For example, many community development ditional, but nonetheless widely available, forms. projects involve the rehabilitation of substandard Typically, they involve a combination of public housing. To make such activities successful, and private financing, with banks providing the from both an economic and a social viewpoint, it expertise in structuring financing and govern- is often necessary that these ventures be of a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

684 Federal Reserve Bulletin • July 1993 scope sufficient to make a positive impact on an ably approach community development lending. entire neighborhood. Rehabilitating a single Indeed, before bankers are willing to devote building in a severely blighted area may not, in additional resources to these activities, they may some circumstances, prove to be a success; need help in identifying creative approaches to however, rehabilitating several key buildings in business development that can lead to safe, rethe same neighborhood may spark additional warding lending opportunities within low- and development and is more likely to produce a moderate-income communities. successful result. Given the advantages of scale We have also heard of instances in which bankin such community development activities, ers believe that examiners were not cognizant of projects of this nature will typically require a the specialized nature of community development significant mobilization of resources and may loans. Because of this, the Federal Reserve has involve federal, state, and local governments, developed community development finance semprivate charitable organizations, and many dif- inars for presentation to senior System examinferent private businesses. In light of these re- ers. This program complements other more-longquirements, the successful community develop- standing efforts designed to introduce examiners ment lender must be knowledgeable about the to community development lending activities low- and moderate-income neighborhoods it within the current examiner training curriculum. seeks to serve, must be familiar with the sources Despite the efforts I have described for you and forms of government and private support for today, more can be learned about community such lending, and must possess the experience development lending. Pursuant to a study on the necessary to effectively assess and apply avail- risks and returns of community development able resources. In other words, successful com- lending required by the Housing and Community munity development lending calls for skills that Development Act of 1992, the Federal Reserve go beyond traditional banking experience. has scheduled several roundtables with community development lenders to develop information about successful lending techniques and to iden- EDUCATIONAL AND INFORMATIONAL tify impediments to more lending. Although these PROGRAMS roundtables have only recently been instituted, we believe that they will provide information from With that in mind, the Federal Reserve has the grassroots level that will give us an increased developed several educational and informational appreciation of the conditions necessary to faciliprograms designed to encourage increased com- tate such activities. munity development lending. These efforts have In summary, we should all be encouraged by included numerous Community Affairs confer- improving conditions in the banking system. ences, seminars, and workshops for bankers and These improvements should increase community others focusing on such topics as CRA and development lending. Moreover, the continuing HMD A compliance, options for bank participa- efforts by the regulatory agencies to reduce regtion in low- and moderate-income housing devel- ulatory burden and educate both bankers and opment, and housing finance in rural areas. examiners will have a positive impact on credit The Community Affairs staff members at the availability generally—including lending to dis- Reserve Banks provide technical assistance and advantaged urban neighborhoods and rural comadvice to individual banks about ways to profit- munities. • Statement by Lawrence B. Lindsey, Member, I am glad to appear before your committee today Board of Governors of the Federal Reserve Sys- to offer the Board's comments on S.924, the tem, before the Committee on Banking, Hous- Home Ownership and Equity Protection Act of ing, and Urban Affairs, U.S. Senate, May 19, 1993. The bill would amend the Truth in Lending 1993 Act (TILA) to require additional disclosures to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 685 consumers who take out "high-cost mortgages" cannot afford to repay their loans and who risk on their homes and to restrict the terms of such losing their homes through foreclosure. Given mortgages. the particular concern about these practices in The bill is a commendable effort to address the Boston, the Federal Reserve Bank of Boston has complex issue generically called "reverse redlin- investigated these practices there by meeting ing" that has received considerable public atten- with public officials and community groups to tion over the past two years. It is clear that the work on a practical response, working with afsponsors have attempted to narrowly target the fected borrowers, and conducting workshops on bill to areas of abuse, without overburdening the deceptive credit practices. The Bank also regeneral market. If the bill progresses further, I viewed the activities of one large nonbank subthink it is extremely important to maintain this sidiary of a bank holding company in considerfocus. As my comments will make clear, it is the able detail. Board's view that failure to maintain a tight focus Through all of these efforts we have come to in the drafting of this bill entails substantial risk appreciate the severity of the problems that to many legitimate forms of consumer credit. high-cost mortgages cause some borrowers. We can all agree that the abuses this bill seeks However, it has also become clear that finding a to remedy involve some truly heartwrenching solution—that itself does not have adverse conpersonal tragedies. Some homeowners—often el- sequences—is a very difficult undertaking. The derly, with substantial equity in their homes but problem is multifaceted and complicated. with little income—have been targeted by home improvement contractors, loan brokers, finance companies, and mortgage companies for aggres- GENERAL COMMENTS ON sive promotion of credit. Sometimes the poten- THE LEGISLATIVE PROPOSAL tial borrowers seek the credit to consolidate other loans that are about to mature. They also The bill would define a high-cost mortgage as one obtain this type of credit for home repairs or that meets at least one of the following characother emergencies. teristics: (1) the annual percentage rate (APR) When the "dust settles," these borrowers may exceeds the yield on U.S. Treasury securities find that they have paid a high number of loan having maturities comparable to the transaction origination and broker points (often financed in by more than 10 percentage points; (2) the conthe borrowed amount) and have agreed to a loan sumer's percentage of total monthly debt to with an interest rate at the highest levels in the income exceeds 60 percent after the transaction market—sometimes with monthly payments that is consummated; or (3) all points and other fees even exceed their monthly income and often with paid before closing exceed 8 percent of the loan a balloon payment due. In some cases, it is amount. We strongly support the bill's exclusion maintained that borrowers have been defrauded from its coverage home purchase loans and openbecause the terms of their credit have been end home equity lines of credit. misrepresented to them. Apparently, in a sub- The proposed disclosures for high-cost mortstantial number of cases, borrowers are unable to gages would be required three days before loan keep up the payments, and they end up losing consummation. The special disclosures for these their homes through foreclosure. mortgages would be made earlier than the disclo- My colleagues and I, as well as officers and sures that are already required under the TILA staff members throughout the Federal Reserve (required before consummation) and would pro- System, have been closely following these issues vide the borrower three days before closing to and have, like the members of this committee, review these special disclosures and to decide been actively considering how such abuses might whether to close the loan. be prevented in the future. Board members have Under the bill, consumers would receive informet with delegations of aggrieved homeowners mation about the effect of the security interest in and have been distressed to hear firsthand of the home, the APR, a statement of the contheir plight. We talked with those who currently sumer's remaining monthly income after having Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

686 Federal Reserve Bulletin • July 1993 made the payments on the transaction, informa- loans would agree to any (even high-cost) terms tion about variable rate features, and a statement after full disclosure to fend off losing their that submitting a loan application and receiving homes. Ordinarily, given the choice of addressdisclosures does not obligate the consumer to ing a consumer protection issue with disclosure complete the transaction. The TIL A already re- requirements or credit restrictions, we would opt quires some of this information (or some form of for informing consumers about their credit it) to be given before consummation of the trans- choices, such as through TILA disclosures. We action. The bill would also amend the TIL A to believe the credit market works best when it is restrict the terms of high-cost mortgage loans— unencumbered and when consumers have the for example, by prohibiting prepayment penal- information they need to compare available ties, balloon payments, and negative amortiza- credit terms. tion in such loans. Enforcement of these With high-cost mortgages, however, consumrequirements is accomplished through the federal ers are already required to receive a substantial regulatory agencies and the courts, which could amount of disclosures about the terms of the issue a judgment against a creditor for actual loan. They receive the APR, a disclosure of the damages, civil penalties of up to $1,000 per security interest and the payment schedule on violation (up to $500,000 in a class action), and, such loans, for example, although later than is under the bill, forfeiture of all interest and fees proposed under the bill. The benefit of the special earned. disclosures in advance of this information is less In general, we believe that these problems than obvious because most of these homeowners should be addressed in a way that benefits con- already have three days after closing to review sumers without undue compliance burden on their existing cost disclosures and to cancel the creditors. For instance, overly restricting credit transaction under current law.1 contract terms could create the risk that the cost Obviously despite these protections, there are of credit could increase or that it could be shut off problems today. Borrowers nevertheless enter altogether to marginal borrowers, or to those into these high-cost obligations. It appears that borrowers who happen to need credit because of few if any rescind these high-cost transactions special circumstances. The bill might create a after having received cost disclosures—even disincentive to lending to these borrowers be- consumers who may have been misled about cause a technical violation of even one of the their credit terms or were subjected to highproposed disclosure requirements could subject pressure sales tactics. Thus, despite the good a creditor to the serious monetary penalties men- intentions of the sponsors and our own usual tioned above. The risk of substantial litigation is preference for disclosure rules over other restriclikely to deter many legitimate lenders from tions, we have doubts whether simply increasing entering this market. This should make us all the the information given will have much positive more careful to avoid having unintended results impact. affect legitimate borrowers. Thus, it may be that the more realistic way to Everyone wants to protect consumers—partic- address these various problems is through some ularly those whose age or income makes them of the substantive restrictions proposed in secvulnerable to abusive lending practices—against tion 2 of the bill. The principal substantive relosing their homes, perhaps their only substantial striction under the TILA now affecting these assets. Appealing as it is to assume that more loans—the right of rescission—could be endisclosure will cause people to act prudently, the hanced somehow for high-cost loans—for exam- Board is not convinced that more TILA information—even if provided separately from and earlier than all other disclosures—will effectively 1. More than twenty years ago, a federal "cooling-oflf" deter consumers from entering into high-cost period was established in the TILA to resolve the problems mortgages or ensure that they better understand caused homeowners by high pressure home improvement contractors. Under the TILA, consumers have a right to the possible consequences. For example, it is rescind most credit (except home purchase loans) secured by likely that people facing default on pre-existing the home—not just credit sales—including most refinancings. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 687 pie, by lengthening the rescission period—as an ing a loan as "high cost" unless a substantially alternative to adopting restrictions on credit higher spread is adopted. terms. This may prove particularly efficacious in Second, consider the 60 percent of income cases in which the borrower is actively solicited criterion. I have regularly opposed the use of by a broker or lender, rather that having initiated such factors because income is often a poor guide the credit shopping. We would be happy to work to the ability to repay a loan. Consider first what with committee staff on such an alternative, I call the "widow situation." Let us imagine a although I am not confident that high-cost mort- widow who is left with her home, a little income gage borrowers who may desperately need credit (say, earnings on her husband's life insurance), would be any more likely to rescind their loans and some real estate that could be fixed up and with greater disclosures about rescission or a sold to improve her financial situation. She is longer "cooling-off" period than they are now. consuming the capital represented by the life insurance proceeds. She realizes that it cannot continue, and indeed that is the reason why she is SPECIFIC COMMENTS ON seeking to liquidate some of her property. But it THE LEGISLATIVE PROPOSAL is easy to imagine that the financing costs on the repairs she must undertake will exceed 60 per- We have attached, for the committee's informa- cent of her income on a short-term basis. Would tion, detailed comments on the entire bill.2 How- you put at risk her ability to borrow by defining ever, I would like to make a few comments on her loan as "high cost" simply because of her the provisions. Our objective is to have the temporary low income? Again, I think that using Congress avoid the unintended consequence of simply one of the three criterion listed as suffiterminating legitimate credit options in the pro- cient for that definition creates an overly broad cess of enacting this bill. We suggest that the scope for this bill. definition of a high-cost mortgage be changed to A second class of individuals who would be be a transaction in which two or more of the unintended victims of this legislation would be conditions are satisfied. Consider each point in people who are starting small businesses and turn: using their homes as equity for fixed-term second First, consider the criterion that high-cost mortgages. Because the incomes of these individloans bear interest rates at more than 10 points uals are temporarily depressed, use of income as above the current rate on Treasury securities of the sole criterion for the high-cost designation is equal duration. I can understand that 10 percent- particularly ill advised. Yet these types of mortage points may seem to be a large spread. In the gages may be the best source of credit available present rate environment, however, this criterion to these potential entrepreneurs. implies an interest rate threshold of 14 percent to Preliminary research at the Federal Reserve 15 percent. Yet many individuals, and not just suggests that many government-sanctioned mortthose with low and moderate incomes, currently gages implicitly involve loans to families that finance moderate-sized home repair items by require that more than 60 percent of their income using their credit cards. The effective interest be used for credit purposes. In 1987, for examrate on these cards may well be in the 18 percent ple, roughly 10 percent to 12 percent of all to 21 percent range. It does not seem appropriate FHA-insured refinancings involved borrowers to consider extensions of credit at 14 percent or with debt-to-income ratios greater than 60 per- 15 percent rates as high-cost when individuals cent. To avoid limiting the availability of credit now often assume much higher rates to accom- under government-sponsored programs, you plish the same purpose. The interest rate alone might consider exempting these mortgages from should not be considered the basis for establish- coverage under the legislation. Finally, the third criterion, an 8 percent limit on points and fees, is unduly restrictive for small 2.The attachment to this statement is available from Publoans. For many reasons, including the paperlications Services, Board of Governors of the Federal Reserve System, Washington, DC 20551. work costs imposed by law and regulation, a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

688 Federal Reserve Bulletin • July 1993 substantial fixed cost is involved in processing rule on unfair and deceptive practices addresses the loan. Indeed, this cost is often cited as the this issue to some degree already. That rule has reason why many banks do not make small loans essentially eliminated holder-in-due-course staat all. An 8 percent limit on points and fees would tus for assignees of consumer credit sale conmake these loans even scarcer. Consider a $2,000 tracts but not of direct loans. Also, the provision loan for a new roof, for example. The 8 point test would create a second, more expansive standard translates to a $160 threshold. By any of the cost for assignee liability than is present in the TILA, standards I am aware of, this amount is uncom- which now specifies that assignees are liable only fortably low. for TILA violations that are apparent on the face Again, I am sure we all agree that we want to of the documents for the loan assigned. In addiavoid the unintended consequence of making tion, the penalties are much more severe (loss of loans more difficult to get. My colleagues and I all finance charges paid) than under existing law. have wrestled with the conflicting tradeoffs in- This potential for increased liability could disvolved. One option is to raise the thresholds courage the purchase, and ultimately the originaproposed for each of the three criteria cited tion, of loans—and therefore restrict the availabove. We believe that a better option is to look ability of credit to marginal borrowers without for a pattern of abusive terms by requiring that alternative sources of credit. two of the three criteria be met before designat- Finally, to the extent that the Congress ing the loan as "high cost." Absent such a chooses not to defer regulatory policy to the change, it would be difficult for us to conclude states, the Board believes a clear and complete that this legislation would not risk significant federal preemption should be considered to clarimpairment of loan availability in many legiti- ify coverage and reduce regulatory compliance mate and non-abusive instances. burdens. Of all of the provisions in section 2 of the bill, the substantive limitations on balloon payments, negative amortization, and prepayment penalties CONCLUSION seem particularly focused on the problems associated with high-cost mortgages. Without the The committee is to be commended for attemptbill's exclusion of home purchase loans, some ing to resolve a complicated and important probcommon balloon mortgage products such as the lem caused by high-cost mortgages. It is clear so-called "7-23" loans could have been affected that the issues raised by high-cost mortgages are by the restrictions. And, without the exclusion, complex and that the appropriate federal rethe negative amortization restrictions might well sponse to the problems they raise is equally freeze out many potential homebuyers from the complicated. Many of these issues, relating to market if the rate environment of the late 1970s fraud and misrepresentation or usury, are alshould return. Further, as mentioned in our ready regulated by the states. Other issues, such attached technical comments, the definition of as disclosure about the cost of credit and the negative amortization may have the unintended ability to rescind a loan entered into through consequence of restricting reverse annuity mort- high-pressure tactics, are already handled to a gages because the balance on these loans in- great degree in federal law. The other issues creases with the payouts to the elderly borrower raised, such as the terms of the credit contract, over the loan term. Thus, I again stress that it is would be addressed in S.924 by imposing restricvery important to keep the focus of the bill tions on the parties' ability to contract for those narrow. terms. Although we do not favor federal restric- We also have some concern about the provi- tions on credit terms, we believe that these sion that would amend the TILA assignee liabil- restrictions would better address the problems ity and expose an assignee to all the claims and created by high-cost mortgages than the addidefenses the consumer could assert against the tional disclosures that have been proposed. creditor from failure to comply with any TILA In crafting the final form of this legislation, it is requirement. The Federal Trade Commission's essential that the committee avoid the problem of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 689 unintended consequences. Given the reported ond mortgage lending to determine how the prodifficulties that some sectors of the economy posed legislation might affect the availability of have in accessing credit, it would be an unfortu- credit. We need to be better informed of this nate outcome of well-intentioned legislation if market, but absent perfect information, it is these sectors were cut out of the credit market essential to keep the focus of this legislation as entirely. I would recommend to this committee narrow as possible to eliminate abusive practices that during the course of their deliberations they while minimizing adverse consequences which solicit information from creditors active in sec- the Congress clearly would not have intended. • Statement by John P. LaWare, Member, Board An example of the Federal Reserve's commitof Governors of the Federal Reserve System, ment in this area was the creation, in January before the Committee on Banking, Finance and 1990, of the Federal Reserve System Working Urban Affairs, U.S. House of Representatives, Group on Money Laundering Activities. Chair- May 26, 1993 man Greenspan created this senior level Working Group to review the Board's initiatives on money I am pleased to appear before the Committee on laundering and identify new ways to contribute Banking, Finance and Urban Affairs to discuss to the federal government's anti-money-launderthe Federal Reserve's role in the government's ing efforts. The Working Group placed special anti-money-laundering efforts. The Federal Re- emphasis on providing assistance to domestic serve places a very high priority on supporting and international law enforcement organizations. efforts to attack the laundering of proceeds from It also developed internal programs and proceillegal activities through our nation's financial dures for Board and Reserve Bank staffs to institutions and, over the past several years, has implement in their normal supervision and reguengaged extensively in anti-money-laundering lation of financial institutions and provision of endeavors. services to banking organizations. The Working We believe that the Federal Reserve has an Group formed three task forces, in the areas of important role to perform in the federal govern- cash, funds transfer, and supervision. The three ment's efforts to detect and deter money laun- task forces focused on identifying areas within dering activities within banking organizations, as the Federal Reserve in which better procedures well as to provide assistance to law enforcement would detect and deter money laundering activagencies in their efforts to suppress these crimi- ities. Many of the activities that I will address nal activities and seize proceeds gained from today are the result of the efforts of the Working them. As I will describe in more detail, the Group and its task forces. Federal Reserve has participated in, and provided assistance to, the federal government's efforts in attempting to eliminate money laundering activities. FEDERAL RESERVE PROGRAMS FOR Currently, the Board, through the varied func- CONTROLLING MONEY LAUNDERING tions that it performs on a routine basis, such as examinations of state member banks and the During the course of each Federal Reserve ex- U.S. branches and agencies of foreign banks, as amination of a state member bank or U.S. branch well as through special projects and various other or agency of a foreign bank, a Bank Secrecy Act programs, monitors financial institutions in an compliance examination is conducted. Such exattempt to stop money laundering activities. We aminations are scheduled to occur every year. have also devoted significant resources to pro- When deemed necessary, Federal Reserve examviding technical assistance and training both to iners may conduct special targeted examinations domestic and foreign law enforcement and bank- of financial institutions if there is reason to ing supervisory agencies. believe that violations of the Bank Secrecy Act Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

690 Federal Reserve Bulletin • July 1993 may be occurring or other suspicious activities System over the past year. Our staff members are are identified. also developing better procedures to review the To conduct effective examinations for compli- operations of U.S. banks in foreign jurisdictions ance with the Bank Secrecy Act, all Federal that do not have laws and regulations comparable Reserve examiners receive training in under- to the Bank Secrecy Act. We have identified standing the basics of money laundering. Exam- several specific areas of foreign operations that iners are also trained in the provisions of the should be reviewed to determine if the U.S. bank Bank Secrecy Act and the Treasury's rules and is susceptible to money laundering activities. regulations implementing it and in identifying To strengthen banks' anti-money-laundering suspicious activity that may be associated with efforts, we have been encouraging financial instimoney laundering. This training is provided dur- tutions to adopt more comprehensive "know ing initial courses that our examiners attend upon your customer" policies to protect them from entering the Federal Reserve System. Additional illegal penetration of their facilities by money training regarding Bank Secrecy Act compliance launderers. The Board believes that the best and related matters is also provided to experi- protection is for banks to possess sufficient enced examiners during the course of supple- knowledge to clearly identify each customer and mental training programs in which they are re- to have a full understanding of the type of quired to participate over their careers, as well as business engaged in by the customer. training programs sponsored by the Federal Fi- It is certainly not sufficient to simply identify nancial Institutions Examination Council and those institutions that are not in compliance with various law enforcement agencies. anti-money-laundering statutes, without taking I must emphasize, however, that even with the action to ensure future compliance. To this end, extensive training provided to our examiners, it is the Board initiates appropriate enforcement acdifficult for even the most experienced bank ex- tions against the domestic and foreign banking aminers to detect sophisticated money laundering organizations that it supervises to address inschemes during the course of an examination. stances of noncompliance. Although the Office of Well-trained examiners are able to determine if Financial Enforcement of the Department of the financial institutions are in compliance with the Treasury initiates civil money penalties against various specific provisions of the Bank Secrecy banking organizations for specific violations of Act. Bank examiners are also able to determine if the Bank Secrecy Act, the Board addresses such financial institutions have in place systems to matters as the lack of internal controls and identify and report to the appropriate law enforce- procedures. For this purpose, the Board may use ment and supervisory agencies any suspicious its cease and desist and civil money penalty activity occurring at or through those institutions. assessment authority. Recent actions to address By identifying institutions that are not in compli- noncompliance in this area include the assessance with the various requirements of the Bank ment of fines of $200,000 each against two foreign Secrecy Act or that do not have systems in place banking organizations that were found to have to report suspicious activity, the Federal Reserve inadequate internal controls and systems to enprovides critical data to government enforcement sure compliance with the Bank Secrecy Act. agencies. To enhance the ability of bank examiners conducting Bank Secrecy Act compliance examina- TRACKING OF CURRENCY BY THE tions, the Board, in late 1991, created a special FEDERAL RESERVE committee of bank examiners with the most experience in Bank Secrecy Act compliance-related One of the initiatives proposed by the Cash Task matters. As a result, procedures for Bank Secrecy Force of the Board's Working Group on Money Act compliance examinations that are better Laundering Activities was the development of a suited to today's changing environment were de- system whereby currency flows to and from Reveloped. These procedures have been successful serve Banks would be monitored on a regular during field tests throughout the Federal Reserve basis and abnormalities in the normal flows, either Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 691 surpluses or deficiencies, would be identified and system. One initiative is known as the "scanning further investigated. During the development of program." Using information relating to susthis project, the Federal Reserve Bank of Dallas pected money launderers supplied by agencies initiated a cash flow study to establish the normal such as the Federal Bureau of Investigation range of cash activities for each of the financial (FBI) and the U.S. Customs Service, the proinstitutions that used that Reserve Bank's cash gram enhances law enforcement's ability to track services. Once these norms had been established, funds transfers through the Fedwire. the Bank was able to identify and investigate Federal Reserve staff members are now meetdeviations in the normal pattern of cash transac- ing with law enforcement agency representatives tions by their customers. in Washington, D.C., and throughout the United The results of the study by the Federal Re- States to acquaint them with the potential uses of serve Bank of Dallas were discussed with various the scanning program. The program has been law enforcement agencies. It was determined used successfully by various law enforcement that the most efficient means of gathering, ana- agencies to date; and, in recent weeks, several lyzing, and disseminating currency flow data Reserve Banks have reported an increased numfrom around the United States was to have each ber of inquiries from law enforcement agencies of the Reserve Banks report all of their cash flow about how to use the program. data to a single federal government agency more In an effort to further augment the ability of the suited to the task of providing financial investi- wire payment systems to track funds transfers, in gative assistance to the law enforcement commu- late 1992 the Federal Reserve recommended that nity. This procedure resulted in the establish- the Federal Financial Institutions Examination ment of an agreement between the Federal Council adopt a policy statement encouraging Reserve and the Financial Crimes Enforcement financial institutions to include complete identi- Network of the Department of the Treasury fying information about the originator and bene- (FinCEN) for each Reserve Bank to provide ficiary of a wire transfer in the payment message. FinCEN, on a monthly basis, specific informa- We took this step because enforcement agencies tion on cash shipments, by denomination, to and indicated that this information would be useful in from the Reserve Banks by their financial insti- conducting investigations. The council's five regtutions. Once FinCEN obtains this information, ulatory agencies have now adopted such a policy it initiates an analysis of the information and statement and distributed it to banking organizaidentifies abnormalities by geographic locale or tions in December 1992. financial institution. This information is then As you are aware, the Federal Reserve and the passed on to law enforcement officials, as well as Department of the Treasury are also engaged in to the responsible supervisory agency for further developing recordkeeping requirements for funds investigation. transfer as a result of provisions of the Annun- Besides the provision of currency flow data to zio-Wylie Anti-Money-Laundering Act. Even FinCEN, each of the Reserve Banks has adopted before this legislation, the Federal Reserve was a "know your customer" policy similar to that actively assisting in the development of funds which the Federal Reserve encourages private transfer recordkeeping requirements. sector financial institutions to adopt. These pol- The design of funds transfer recordkeeping icies are designed to ensure that each Reserve requirements is a very complex and technical Bank has an understanding of the normal busi- undertaking. Although the Board agrees that it ness practices of its cash customers and, there- may be beneficial to use information from funds fore, can identify and review inconsistencies, transfers to investigate money laundering activshould they arise. ity, or to trace the proceeds of such activity, we also have a continuing interest in ensuring the MONEY LAUNDERING AND FEDWIRE efficiency and integrity of the payments system. The impact of any funds transfer recordkeeping Several initiatives are now under way to provide requirements must be carefully weighed to enassistance in tracking funds through the Fedwire sure that they do not result in a degradation in the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

692 Federal Reserve Bulletin • July 1993 efficiency and attractiveness of the large-dollar work closer with Justice staff members to idenpayments system. More important, too onerous tify potential money laundering at or through recordkeeping requirements could have seriously domestic banking organizations or foreign fiadverse consequences for the competitive posi- nancial institutions doing business in the United tion of U.S. financial institutions. We believe States. that recordkeeping requirements are being devel- On the international front, the Federal Reserve oped that will meet the needs of the govern- is an active participant in the Financial Action ment's anti-money-laundering efforts and, at the Task Force, which the Group of Seven (G-7) same time, protect the efficiency and the integrity countries established. Board staff members have of the payments system. a significant role in the U.S. delegation to the Financial Action Task Force and have provided resources to the efforts of the Financial Action COORDINATION WITH FEDERAL LAW Task Force to provide educational assistance to ENFORCEMENT AGENCIES countries that are attempting to understand the money laundering problem and to develop pro- The Federal Reserve routinely coordinates with grams to combat such activity. The staff memfederal law enforcement agencies with regard to bers have traveled to such places as Hungary, anti-money-laundering activities. The scope of Poland, Austria, Singapore, the United Arab this coordination varies from the development Emirates, and Saudi Arabia to provide training and implementation of a criminal referral form and technical assistance under the auspices of that specifically addresses money laundering of- the Task Force. fenses to specific, case-by-case assistance to law enforcement agencies resulting from examinations of financial institutions that appear to be RESOURCES THE FEDERAL RESERVE engaged in violations of the Bank Secrecy Act or HAS COMMITTED TO related offenses. ANTI-MONEY-LAUNDERING INITIATIVES The Board also continues to maintain a close working relationship with the Treasury's Office As I have described, extensive resources have of Financial Enforcement with regard to the been dedicated to the Federal Reserve's antienforcement of the Bank Secrecy Act. As you money-laundering efforts. At a minimum, each are aware, the Office of Financial Enforcement banking organization supervised by the Federal promulgates all regulations with regard to the Reserve receives a regular examination for Bank Secrecy Act that affect financial institu- Bank Secrecy Act compliance, which is an tions; and it is the joint responsibility of the effort that requires significant human resources Federal Reserve, the other federal financial and expense. Besides the use of our examinainstitutions supervisory agencies, and the Office tion force to conduct Bank Secrecy Act examof Financial Enforcement to ensure that finan- inations and special targeted reviews, the cial institutions comply with these rules and Board, in late 1989, augmented the resources regulations. To this end, the Federal Reserve dedicated to this area when it created a new routinely provides the Office of Financial En- senior level staff position within the Division of forcement, on a quarterly basis, with informa- Banking Supervision and Regulation to coordition related to noncompliance with the Bank nate and enhance money-laundering-related Secrecy Act by the domestic and foreign finan- matters. Since December 1989, the Special cial institutions that are examined by us during Counsel appointed to this position has assumed the quarter. responsibility for coordination of matters re- Over the past year, Board staff members also lated to money laundering and Bank Secrecy began a dialogue with the Money Laundering Act compliance, including investigation, en- Section of the Department of Justice's Criminal forcement, and training. Over the past three Division to coordinate better the review of years, the Special Counsel, who is a recognized pertinent intelligence information. We now expert with respect to the Bank Secrecy Act Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 693 and money laundering offenses, has traveled EVALUATION OF THE EFFECTIVENESS OF widely abroad and throughout the United States THE FEDERAL RESERVE'S ANTI-MONEYrepresenting the Board on Bank Secrecy Act- LAUNDERING EFFORTS related training programs and other international matters pertaining to the federal govern- Our anti-money-laundering efforts have been exment's anti-money-laundering efforts. He has tensive over the past several years. We conduct provided assistance to the Departments of State regular Bank Secrecy Act examinations of all the and Treasury, and each of the many other domestic and foreign banking organizations that federal administrative and law enforcement we supervise, and the Board is the only banking agencies responsible for Bank Secrecy Act- agency that has created and staffed senior staff related matters. Last month, the Board added positions dedicated to developing, coordinating, to the staff members of the Special Counsel's and overseeing an anti-money-laundering prooffice by hiring a Senior Special Examiner with gram. Although it is difficult to quantify results in extensive Bank Secrecy Act experience to as- this area, it is important to note that the federal sist the Special Counsel's anti-money-launder- law enforcement community looks toward, and ing efforts. relies on, the Federal Reserve for assistance and guidance with respect to money laundering matters. Further, the international banking supervisory community relies on our extensive expertise ESTIMATES ON MONEY LAUNDERING AND to develop and coordinate international anti- THE EFFECTIVENESS OF CURRENCY money-laundering programs. TRANSACTION REPORTS We expect that the Federal Reserve's Bank Secrecy Act examination program and the no- You have requested that we estimate the table formal enforcement actions addressing amount of funds laundered in the United States Bank Secrecy Act-related deficiencies that have annually. Although the Federal Reserve does been taken by this agency have had some not develop or maintain such statistics, it does deterrent effects. Our staff members have been rely on information that other government advised that many U.S. branches and agencies agencies in this area provided. The Financial of foreign banks have retained legal counsel and Action Task Force estimated that in 1990 the accounting firm consultants to develop en- U.S. share of drug proceeds was $100 billion. hanced internal Bank Secrecy Act compliance More recently, the FBI has estimated that the procedures for their institutions after the amount of money laundered through the United Board's announcements regarding its recent States on a yearly basis from narcotics traffick- enforcement actions. Similarly, the legal proing, as well as other major crimes, is $300 fession and bankers have given increased attenbillion. tion to Bank Secrecy Act compliance matters You also requested our views on the effective- during the course of recent symposiums and ness of the Currency Transaction Reports re- training sessions. This increased attention is quired to be filed by financial institutions for another indication that banking organizations most cash transactions in excess of $10,000. As I and their outside professionals are responding stated previously, the Federal Reserve is re- to the anti-money-laundering efforts of the fedquired to monitor compliance by financial insti- eral departments and agencies responsible for tutions with regulations promulgated by the De- this area. partment of the Treasury. Although the Federal Reserve continues to examine for compliance with the currency reporting requirements, it does CONCLUSION not use the data contained in the Currency Transaction Reports for investigative purposes and, As I have described, over the past several years therefore, has no means by which to assess their the Federal Reserve has taken significant steps effectiveness to the law enforcement community. in all of its relevant areas of responsibility to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

694 Federal Reserve Bulletin • July 1993 develop programs, procedures, and systems to ment programs and procedures in the bank assist in the government's anti-money-launder- supervision, currency, and payments system ing efforts. These efforts have made the Federal areas that enhance the government's ability to Reserve a leader in the bank regulatory com- detect and deter money laundering activities in munity's anti-money-laundering mission. The financial institutions. The continued tuning and Chairman, members of the Board, and the staff improvement of this effort are an established members have worked to develop and imple- Board policy. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

695 Announcements MEETING OF THE CONSUMER ADVISORY should retain, modify, or terminate a provision in COUNCIL Regulation O (Loans to Executive Officers, Directors, and Principal Shareholders of Member The Federal Reserve Board announced that the Banks), which establishes procedures for smaller Consumer Advisory Council met on Thursday, banks to increase their aggregate insider lending June 17. The Council's function is to advise the limit up to 200 percent of unimpaired capital and Board on the exercise of the Board's responsibili- surplus. Comments should be received by July 15, ties under the Consumer Credit Protection Act and 1993. on other matters on which the Board seeks its The Federal Reserve Board on May 13, 1993, advice. requested public comment on a proposed rule to expand the definition of "financial institution" in section 402 of the Federal Deposit Insurance Cor- REDUCTION IN PRIOR APPROVAL poration Improvement Act. The act validates net- REQUIREMENTS FOR FUTURES COMMISSION ting contracts among financial institutions. Com- MERCHANT ACTIVITIES ments should be received by August 20, 1993. The Federal Reserve Board announced on May 25, 1993, that it has taken two steps to reduce the prior PUBLICATION OF GUIDE TO THE FLOW approval requirements for bank holding companies OF FUNDS ACCOUNTS proposing to engage in certain futures commission merchant (FCM) activities. A new Federal Reserve Board publication explains The steps are the following: the principles underlying the flow of funds accounts and describes how the accounts are con- • The Board has delegated additional authority structed. Guide to the Flow of Funds Accounts lists to the Federal Reserve Banks to approve proposals each flow series in the Board's main flow of funds by bank holding companies to act as an FCM. publication, "Flow of Funds Accounts, Flows and • The Board has also modified and, in certain Outstandings" (the Z.l statistical release), and cases, eliminated the prior approval requirements describes how the series is derived from source for bank holding companies that seek to act as an material. The Guide also explains the relationship FCM for additional financial instruments or to act between the flow of funds accounts and the national as an FCM on additional commodities exchanges income and product accounts and discusses the where the bank holding company already has analytical uses of flow of funds data. The Guide approval to engage generally in FCM activities. can be purchased, for $8.50, from Publications Services, Board of Governors of the Federal Reserve System, Washington, DC 20551. • PROPOSED ACTIONS The Federal Reserve Board on May 7, 1993, requested public comment on whether the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

696 Minutes of the Federal Open Market Committee Meeting of March 23,1993 A meeting of the Federal Open Market Committee Mr. Ettin, Deputy Director, Division of Research was held in the offices of the Board of Governors and Statistics, Board of Governors Mr. Winn, Assistant to the Board, Office of Board of the Federal Reserve System in Washington, Members, Board of Governors1 D.C., on Tuesday, March 23, 1993, at 9:00 a.m. Mr. Madigan, Assistant Director, Division of Monetary Affairs, Board of Governors Present: Mr. Hooper, Assistant Director, Division of Mr. Greenspan, Chairman International Finance, Board of Governors Mr. Corrigan, Vice Chairman Ms. Low, Open Market Secretariat Assistant, Mr. Angell Division of Monetary Affairs, Board of Mr. Boehne Governors Mr. Keehn Mr. Kelley Messrs. Beebe, T. Davis, Dewald, Goodfriend, and Mr. LaWare Ms. Tschinkel, Senior Vice Presidents, Mr. Lindsey Federal Reserve Banks of San Francisco, Mr. McTeer Kansas City, St. Louis, Richmond, and Mr. Mullins Atlanta respectively Ms. Phillips Mr. Stern Ms. Browne, and Mr. Sniderman, Vice Presidents, Federal Reserve Banks of Boston and Messrs. Broaddus, Jordan, Forrestal, and Parry, Cleveland respectively Alternate Members of the Federal Open Market Committee Ms. Krieger, Manager, Open Market Operations, Federal Reserve Bank of New York Messrs. Hoenig, Melzer, and Syron, Presidents of the Federal Reserve Banks of Kansas City, At the start of the meeting, the subcommittee St. Louis, and Boston respectively established to review policies relating to the release of Committee information reported on its further Mr. Bernard, Deputy Secretary Mr. Coyne, Assistant Secretary deliberations and proposed a merging of the current Mr. Gillum, Assistant Secretary "Minutes of Actions" and the "Record of Policy Mr. Mattingly, General Counsel Actions" into a new document to be designated Mr. Patrikis, Deputy General Counsel "Minutes of the Federal Open Market Committee Mr. Prell, Economist Meeting." Merging the two documents would put Mr. Truman, Economist in convenient form all the information that is released pertaining to FOMC meetings, and the Messrs. R. Davis, Lang, Lindsey, Rolnick, Rosenblum, Scheld, Siegman, Simpson, and new document would be made public on the same Slifman, Associate Economists schedule as its predecessor documents. The Committee members endorsed the subcommittee's pro- Mr. McDonough, Manager of the System Open posal and by unanimous vote the Committee Market Account approved the "Minutes of the Federal Open Market Ms. Greene, Deputy Manager for Foreign Operations Ms. Lovett, Deputy Manager for Domestic 1. Attended actions portion of meeting relating to discussion of Operations merging minutes of action and policy record into one document. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

697 Committee Meeting" held on February 2-3, 1993; had depressed reported employment in these secthis merged document was scheduled to be released tors in previous months. Since December, initial on March 26, 1993. claims for unemployment insurance had fluctuated The Manager of the System Open Market in a range that was consistent with further modest Account reported on developments in foreign growth in employment. The civilian unemployexchange markets since the previous meeting on ment rate edged lower again in February, to February 2-3, 1993. There were no System open 7.0 percent. market transactions in foreign currencies during Industrial production continued to rise at a fairly this intermeeting period, and thus no vote was brisk pace in January and February. Changes in required of the Committee. mining and utilities were about offsetting on bal- The Deputy Manager for Domestic Operations ance over the two months, but increases in manureported on developments in domestic financial facturing were fairly widespread. Although motor markets and on System open market transactions in vehicle assemblies fell in February from a relagovernment securities and federal agency obliga- tively high January level, the production of contions during the period February 3, 1993, through sumer durables and computers turned up sharply. March 22, 1993. By unanimous vote, the Commit- In addition, increases in output were recorded in tee ratified these transactions. several other categories, including non-energy The Committee then turned to a discussion of the materials and construction supplies. Recent sureconomic outlook and the implementation of mon- veys indicated that new orders for durable goods etary policy over the intermeeting period ahead. A increased further in February, and lean factory summary of the economic and financial informa- inventories coupled with reports of lengthening tion available at the time of the meeting and of the delivery times suggested further gains in industrial Committee's discussion is provided below, fol- output in coming months. Total utilization of induslowed by the domestic policy directive that was trial capacity rose again in February. approved by the Committee and issued to the Fed- Retail sales advanced in February after a fourtheral Reserve Bank of New York. quarter surge and a pause in January. Sales at The information reviewed at this meeting sug- automotive dealers weakened in February. Howgested that economic activity was expanding at a ever, there were sharp increases in sales of building more moderate pace in the early months of 1993 materials and supplies, miscellaneous durable after increasing substantially in the fourth quarter. goods, and nondurable goods other than apparel. Although outlays for business equipment appar- After registering sizable gains late last year, housently remained on a strong upward trajectory, sales ing starts fell substantially in January and retraced of new homes had slackened and consumer spend- only part of that decline in February. The slowing was rising less rapidly. Indicators of production down was concentrated in single-family housing activity also were mixed: Industrial output had starts; multifamily starts were up in February from continued to post solid gains, but homebuilding a historically low level in January. Although morthad been less robust since year-end. Payroll gage interest rates had dropped to the lowest levels employment had strengthened, and the unemploy- in decades, sales of both new and existing homes ment rate had moved down further. Increases in turned down in January from their high December wages had remained subdued in recent months, but levels. advances in consumer and producer prices had Incoming data on orders and shipments of nonbeen larger than those recorded in the latter part of defense capital goods suggested a further brisk 1992. advance in outlays for business equipment in com- Total nonfarm payroll employment rose sharply ing months. In January, a decline in shipments of in February, following generally small advances in nondefense capital goods only partially reversed a previous months, and the length of the average large December rise, as a surge in shipments of workweek remained at the fourth-quarter level. The computing equipment helped sustain the overall strong job gains in construction, services, and retail level. Shipments of complete civilian aircraft trade in February apparently reflected to some posted a solid gain in January. The increase extent a partial reversal of the special factors that appeared to be concentrated in sales to foreign Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

698 Federal Reserve Bulletin • July 1993 purchasers; in the domestic airline industry, intense Producer prices of finished goods were up in competition was forcing cutbacks of unprofitable January and February after changing little over the routes and reductions in both the number of planes fourth quarter. Producer prices of finished foods in service and orders for new planes. Shipments of declined over the first two months of the year, but durable equipment other than computers and air- prices of finished energy products climbed rapidly, craft fell in January to about the level of the fourth and prices of other finished items rose at a faster quarter. On the other hand, the January reading on rate than in 1992. At the consumer level, price new orders for these goods was well above the increases in January and February also were on the average for the fourth quarter, suggesting that addi- high side of the past year's advances. Food prices tional advances in shipments might lie ahead. Non- jumped in January and rose slightly further in Febresidential construction activity was down slightly ruary, while energy prices retraced most of a sharp further in January, reflecting persisting declines in January rise. Excluding food and energy items, office and industrial building in an environment of consumer prices advanced at a substantially faster excess supply and some continuing, though per- pace over the January-February period than in haps lessening, downward pressure on the prices of 1992. Increases in wages, as measured by average such structures. hourly earnings of production or nonsupervisory Business inventories appeared to have edged workers, remained subdued in recent months. The lower in January. In manufacturing, factory stocks advance in average hourly earnings slowed in Febwere drawn down further, and most industries had ruary, and the rise over the twelve months ended in relatively low stocks-to-shipments ratios. Among February was considerably smaller than over the wholesalers, strong January sales pulled down previous twelve-month period. inventories at many types of establishments; in At its meeting on February 2-3, 1993, the Comnumerous cases, a large accumulation of stocks in mittee adopted a directive that called for maintainthe fourth quarter was reversed. For the wholesale ing the existing degree of pressure on reserve posisector as a whole, the inventories-to-sales ratio in tions and that did not include a presumption about January was near the bottom of the range of the the likely direction of any adjustments to policy past two years. Retail inventories rose somewhat during the intermeeting period. Accordingly, the further in January after a large December increase. directive indicated that in the context of the Com- Stocks at automotive dealers accounted for all of mittee's long-run objectives for price stability and the January accumulation. At retail stores other sustainable economic growth, and giving careful than auto dealers, the ratio of inventories-to-sales consideration to economic, financial, and monetary remained within the narrow range observed over developments, slightly greater reserve restraint or the past year. slightly lesser reserve restraint would be acceptable The nominal U.S. merchandise trade deficit wid- during the intermeeting period. The reserve condiened slightly in January but was little changed tions associated with this directive were expected from its average level in the fourth quarter. The to be consistent with little change in the levels of value of both exports and imports dropped sharply M2 and M3 over the two-month period from Januin January from the December levels. The decline ary through March. in imports was spread widely among major trade Open market operations during the intermeeting categories, but the decrease in exports largely period were directed toward maintaining the existreflected a reduction in shipments of aircraft after a ing degree of pressure on reserve positions. Adjuststrong December rise. Among the major foreign ment plus seasonal borrowing averaged only industrialized countries, the level of real activity slightly above expected levels in the three full contracted further in the fourth quarter in Japan, reserve maintenance periods in the intermeeting western Germany, and France; for the first quarter, interval. For the period as a whole, the federal the limited data available were generally weak for funds rate remained close to the 3 percent level that Japan and France but somewhat more mixed for had prevailed in previous months. western Germany. By contrast, economic activity Other short-term interest rates changed little over appeared to be increasing in Canada and the United the intermeeting period, while long-term rates fell Kingdom. appreciably on balance. Bond markets rallied over Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee Meeting 699 most of the period, reflecting market assessments sheets at a time when the expansion of bank credit of improved prospects for significant reductions in was slowing noticeably; in particular, bank lending the federal budget deficit in coming years and the to businesses had been depressed by paydowns consequences for overall spending. Prices of Trea- from the proceeds of heavy bond and stock issusury notes and bonds also were boosted by munici- ance by nonfinancial corporations. Total domestic pal defeasance activity and by perceptions of nonfinancial debt appeared to have expanded someheightened prepayment risks in mortgage-backed what further in January. securities. In early March, interest rates on long- The staff projection prepared for this meeting term Treasury bonds and conventional fixed-rate suggested that economic activity would grow over mortgages reached their lowest levels since 1973, the year ahead at a pace that would foster a further but some of the decline in bond and mortgage rates gradual reduction in margins of unemployed labor subsequently was reversed in response to increased and capital. The projection incorporated the essenapprehension about inflation. Equity prices gener- tial elements of the fiscal proposals recently set ally responded favorably to the drop in long-term forth by the Administration; the effects on aggreinterest rates, but concerns about future changes in gate demand, all other things equal, were expected government policy toward a number of industries, to be small over the next several quarters. Howincluding health care, led to lower prices in some ever, the appreciable declines in long-term interest segments of the equities market. rates that had occurred in recent months—evidently In foreign exchange markets, the trade-weighted partly in response to anticipations of intermediatevalue of the dollar in terms of the other G-10 term deficit reduction—were expected to support currencies fell on balance over the intermeeting substantial additional gains in business and residenperiod. The dollar depreciated through late Febru- tial investment. Consumer spending would be bolary, partly in response to declines in U.S. long-term stered by the progress already achieved in reducing interest rates and incoming data that were seen as debt-service burdens and by a gradual lessening of pointing to some slowing of the expansion in the concerns regarding job security, although the United States. Subsequently, the dollar rebounded higher personal income taxes now envisioned for in the wake of unexpectedly strong U.S. employ- upper-income taxpayers were expected to be an ment statistics, disappointing inflation numbers, inhibiting factor. Increases in export demand would and further signs of weakening economic activity be limited in the near term by the continuing weakabroad. Near die end of the period, the dollar again ness in the economies of the major industrialized dropped against the German mark and other Euro- countries. The persisting slack in resource utilizapean currencies, following a cut by the Bundes- tion was expected to be associated with a return to bank of its discount rate that apparently was less more subdued price increases after a spurt earlier than market participants were expecting. On bal- this year. ance over the period, the dollar was marginally In the Committee's discussion of current and lower against the mark and other European curren- prospective economic conditions, the members cies, but it declined substantially against the Jap- remained encouraged by recent developments that anese yen, reaching an all-time low. they viewed on the whole as tending to confirm M2 and M3 contracted in January and February. their forecasts of sustained economic expansion, Part of the weakness apparently reflected tempo- though at a pace appreciably below that now indirary factors, such as distortions in seasonal adjust- cated for the fourth quarter of 1992. If realized, ment factors and a lull in prepayments of mortgage- such economic growth would be associated over backed securities that reduced deposits held in time with a further gradual decline in unemployassociation with this activity. More fundamentally, ment. While the expansion appeared to have generrelatively attractive returns on capital market ated some momentum, a number of factors were instruments continued to prompt households to likely to limit its strength, including ongoing balshift large amounts of liquid balances into market ance sheet and business restructuring activities, the investments, such as bond and stock mutual fund outlook for a more restrictive federal budget, and shares. In addition, banks continued to issue subor- continuing weakness in key foreign markets. At the dinated debt and equity to improve their balance same time, greatly reduced interest rates and much Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

700 Federal Reserve Bulletin • July 1993 improved, if still vulnerable, business and con- The quickening recovery during 1992, especially sumer confidence were positive factors in the in the second half of the year, had received considoutlook. Some members cautioned that even erable impetus from consumer spending, and while though a moderate rate of economic growth could growth in such spending could be expected to be viewed as the most likely outcome over the moderate from its pace in recent quarters, the conforecast horizon, the current expansion differed in sumer sector was viewed as likely to play a key important respects from earlier cyclical recoveries, role in sustaining the expansion this year. Many and in light of the attendant uncertainties a consid- consumers had taken advantage of steep declines in erably different result—in either direction—could interest rates to strengthen their balance sheets and not be ruled out. With regard to the outlook for reduce their debt-service burdens, and they were inflation, the faster increases in consumer prices in now in a much improved position to finance further recent months and a sharp upturn in the prices of growth in their expenditures. The members took certain producer materials tended to raise concerns, note of recent indications of a decline in consumer or at least a degree of unease, with regard to confidence and of some softening in retail sales underlying inflation trends. While these develop- since early in the year. However, the latter appeared ments might well prove to be an aberration rather to be in part the result of recently adverse weather than a signal of intensifying inflation, they did conditions in some major parts of the country, and suggest the need to reassess the likelihood of a consumer confidence was still much improved on further decline in inflation and to be alert to further balance since earlier in the recovery. Accordingly, signs of a sustained upturn. For now, however, the recent developments were not seen in themselves favorable trends in underlying unit labor costs, as harbingers of a weakening consumer spending which were associated in turn with ongoing gains trend over the next several quarters. in productivity and the absence of any firming in Business spending on producers' durable equipwage pressures, led many members to conclude ment also was believed likely to continue to prothat recent price developments did not provide vide appreciable stimulus to the expansion, assumpersuasive evidence of a change in the inflation ing that the much reduced interest rates and outlook. currently favorable business attitudes would be sus- Members continued to report somewhat uneven tained and that proposed investment tax credit legbusiness conditions across the nation. Steady eco- islation eventually would be enacted. At the same nomic growth characterized many parts of the time, business spending for nonresidential struccountry, but business activity remained depressed tures probably would continue to be held back by in some areas and industries, notably those related weakness in office construction stemming from to defense, aerospace, and nonresidential construc- widespread overcapacity. While office building tion. While business sentiment was generally posi- activity was likely to be restrained for an extended tive, many business contacts were uncertain about period, members saw some positive signs that the outlook for demand in their own industries or pointed to a degree of stabilization in this sector, the potential strength of the overall expansion, and including the leveling out or even a marginal recent fiscal policy developments appeared to have pickup in rents and occupancy rates in some marintroduced a further note of caution. This uncer- kets that previously had been severely depressed. A tainty helped to account for the continuing reliance slow turnaround in other building activity was of numerous firms on overtime work to meet grow- reported in some regions, notably for industrial and ing demand rather than incurring the considerable retail structures. costs of adding new workers. Even so, an increas- While the available data on starts of singleing number of contacts were reporting worker family houses in January and February were somerecalls or new hires. One member commented that what disappointing, the members felt that housing job growth could be viewed both as a measure of construction activity had held up relatively well business sentiment and as a necessary element in thus far this year, after allowing for the adverse building or maintaining consumer confidence and weather conditions that had retarded construction thus helping to ensure an enduring economic in some areas. The greatly reduced cost of mortexpansion. gage financing pointed to continuing gains in hous- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee Meeting 701 ing construction despite a rise in costs associated such as labor-saving capital equipment, remained with the sharp jump in lumber prices and a scarcity sizable. of finished building lots in some areas. The members devoted considerable attention to The members agreed that the prospects for over- the discussion of various factors underlying the all spending on business capital goods and housing outlook for inflation. The consumer and producer were vulnerable to shifts in attitudes that might be price indexes had been less favorable in January triggered, for example, by increases in market inter- and February than in the latter part of 1992. Also, est rates associated with an absence of progress in prices of various industrial and construction materireducing the federal budget deficit. The outlook for als had firmed since the start of the year in apparent a significant contraction in the federal deficit was response to rising production and, in some indussubject to considerable uncertainty, especially in tries, to import or environmental restrictions. Aneclight of the still pending decisions to be made with dotal reports of increasing costs and prices had regard to health care programs and their financing. begun to appear with somewhat greater frequency The members recognized that the direct effects of in some areas, and pressures to widen profit marappreciable deficit reduction would tend to con- gins reportedly were strong in a number of indusstrain economic activity, as evidenced by the tries. In their evaluation of recent inflation developimpact in many areas of the defense cutbacks that ments, however, the members generally gave more were already being implemented. Business con- weight to the behavior of unit labor costs, which tacts had expressed concerns about the potential indicated that much of the economy's underlying effects on their industries and local markets of cost structure did not reflect any signs of a pickup various provisions in the proposed legislation. Even in inflationary pressures. Moreover, from a finanso, a more encompassing assessment of the effects cial perspective, extensions of credit and growth in of deficit reduction needed to take account of its overall nonfinancial sector debt were not consistent favorable implications for domestic interest rates. with an economy that was generating significant Moreover, insofar as the nearer-term outlook was inflationary pressures, and the recent behavior of concerned, the fiscal legislation now under consid- long-term debt markets suggested expectations of eration included new spending initiatives and more subdued inflation. Against this background, an investment tax credit that were intended to pro- the recent upturn in consumer and certain commodvide some temporary stimulus to an economic ity prices might well represent a temporary develexpansion that, in the view of many observers, opment such as had occurred previously during the might still be in the process of gathering sustain- current cyclical upswing. In support of this view, able momentum. On balance, substantial deficit members cited various fundamentals that seemed reduction in line with the currently proposed leg- inconsistent with accelerating inflation, including islation was seen as likely to have a positive effect the considerable slack in the utilization of labor on business and consumer confidence, financial and capital resources, strong competitive condimarkets, and the longer-term health of the tions in many markets, the absence of significant economy. lengthening in supplier delivery schedules, and an Several members observed that the outlook for extended period of weak expansion in the broader exports had worsened as a result of weakening monetary aggregates that now encompassed some economic trends in a number of major industrial- recent deceleration in Ml. Nonetheless, the memized nations. Members also commented on the bers acknowledged that recent price developments uncertainties in the outlook for foreign trade associ- had raised a degree of unease in their minds, and ated with a variety of political risks abroad and the their concerns would rise if the recent pace of price persisting protectionism that currently was high- advances were sustained in the months immedilighted by strong opposition to key trade agree- ately ahead. One member observed that a somements now under negotiation or under consider- what faster economic expansion than currently was ation for ratification. Anecdotal information from expected by most members might well serve to business contacts involved in export markets con- intensify inflation pressures. While price developtinued to suggest lagging foreign demand for many ments were notably difficult to predict, most of the U.S. goods; however, backlogs for other products, members concluded that the evidence at this point Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

702 Federal Reserve Bulletin • July 1993 did not confirm a resurgence in inflationary pres- other influences causing a rechanneling of credit sures, and some commented that further modest flows away from depository institutions and boostdisinflation remained a reasonable expectation for ing the velocity of money undoubtedly would perthe next several quarters. sist, though probably with diminishing force. In the Committee's discussion of policy for the Accordingly, the staff foresaw moderate growth of intermeeting period ahead, most of the members M2 and M3 that at midyear would leave these endorsed a proposal to maintain an unchanged aggregates below the lower ends of the Commitdegree of pressure on reserve positions, while two tee's ranges for 1993. Under prevailing circummembers supported an immediate move to tighten stances, such continuing weakness in the broader reserve conditions. In the majority view, the cur- aggregates was not viewed as indicating inadequate rent degree of reserve pressure continued to repre- monetary stimulus. Indeed, a number of members sent a policy stance that was appropriately bal- commented that other indicators suggested that curanced in light of the opposing risks of a faltering rent monetary policy was in fact quite accommodaeconomic expansion and a resurgence of inflation. tive as evidenced for example by low short-term Conditions in credit markets did not provide con- interest rates, especially on an inflation-adjusted firming evidence of the emergence of greater infla- basis. Moreover, Ml, reserves, and the monetary tionary pressures and the need to restrain the base had continued to expand in the first quarter, growth in credit. Indeed, the continuation of bal- though at much reduced rates. One member comance sheet restructuring activities by financial insti- mented that the slowdown in these narrower tutions and the associated caution on the part of monetary measures, which he viewed as important these institutions with regard to extending loans indicators of the thrust of monetary policy, had still appeared to be exerting a significantly inhibit- favorable implications with regard to bringing ing effect on the overall growth in spending and inflation under control. The members agreed that economic activity. Several members acknowledged the considerable uncertainty that continued to surthat a policy of maintaining unchanged reserve round the outlook for broad money relative to conditions and an associated federal funds rate spending implied that forming precise expectations around current levels, which implied that real short- for monetary growth over the months ahead was term rates were near zero or even slightly negative, not feasible. could have inflationary consequences in the event In the Committee's discussion of possible interof a strengthening of the expansion and a sustained meeting adjustments to the degree of reserve prespickup in credit demands. The Committee would sure, members who favored an unchanged policy need to remain alert to such a development. In stance also expressed a preference for retaining the present circumstances, however, an unchanged pol- symmetry of the existing directive. Some observed icy stance seemed most consistent with achieving that a policy change during the intermeeting period, sustained economic expansion in an environment if any, might well be in the direction of a tightening of subdued inflation. The members who favored a move. However, because there was no compelling prompt move toward restraint were persuaded that case in the view of most members for such a move a steady policy incurred an unacceptable risk of at this time and any intermeeting adjustment would halting the progress toward price stability and be made in the light of emerging developments, a indeed of intensifying inflation as the current symmetric directive was warranted. In this connecexpansion matured. In this view, a policy tighten- tion, one member commented that, given the Coming move at this point was likely to counter the mittee's assessment of current economic and finanneed for more substantial and potentially disruptive cial conditions, a tilt in the directive toward tightening actions later. restraint would give a misleading indication of the Committee's current intentions. Members also In the course of the Committee discussion, the noted that a change in policy, should one be called members took account of a staff analysis that for by intermeeting developments, would represent pointed to a resumption of M2 and M3 growth over a shift in the direction of policy and would be the months ahead. This analysis suggested that the likely to have an especially pronounced impact on temporary factors depressing the broader monetary financial markets. aggregates likely would be reversing, but that the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee Meeting 703 At the conclusion of the Committee's discussion, into market investments. Total domestic nonfinancial a majority of the members indicated that they debt appears to have expanded somewhat further in January. favored a directive that called for maintaining the The Federal Open Market Committee seeks monetary existing degree of pressure on reserve positions. and financial conditions that will foster price stability These members also expressed a preference for a and promote sustainable growth in output. In furtherance directive that did not include a presumption about of these objectives, the Committee at its meeting in the likely direction of any adjustment to policy February established ranges for growth of M2 and M3 of 2 to 6 percent and V2 to AVi percent respectively, meaduring the intermeeting period. Accordingly, in the sured from the fourth quarter of 1992 to the fourth context of the Committee's long-run objectives for quarter of 1993. The Committee expects that developprice stability and sustainable economic growth, ments contributing to unusual velocity increases are and giving careful consideration to economic, likely to persist during the year. The monitoring range financial, and monetary developments, the Com- for growth of total domestic nonfinancial debt was set at AVi to 8V2 percent for the year. The behavior of the mittee decided that slightly greater or slightly lesser monetary aggregates will continue to be evaluated in the reserve restraint would be acceptable during the light of progress toward price level stability, movements intermeeting period. The reserve conditions con- in their velocities, and developments in the economy and templated at this meeting were expected to be financial markets. consistent with a resumption of moderate growth in In the implementation of policy for the immediate future, the Committee seeks to maintain the existing M2 and M3 over the second quarter. degree of pressure on reserve positions. In the context of At the conclusion of the meeting, the Federal the Committee's long-run objectives for price stability Reserve Bank of New York was authorized and and sustainable economic growth, and giving careful directed, until instructed otherwise by the Commit- consideration to economic, financial, and monetary developments, slightly greater reserve restraint or tee, to execute transactions in the System account slightly lesser reserve restraint would be acceptable in in accordance with the following domestic policy the intermeeting period. The contemplated reserve condirective: ditions are expected to be consistent with a resumption of moderate growth in the broader monetary aggregates The information reviewed at this meeting suggests over the second quarter. that economic activity has increased at a more moderate pace in the early months of 1993 after expanding robustly in the fourth quarter. Total nonfarm payroll Votes for this action: Messrs. Greenspan, Corrigan, employment registered a sharp increase in February fol- Boehne, Keehn, Kelley, LaWare, McTeer, Mullins, lowing generally small advances in previous months, Ms. Phillips, and Mr. Stern. Votes against this action: and the civilian unemployment rate edged down further Messrs. Angell and Lindsey. to 7.0 percent. Industrial production continued to post solid gains in January and February. Retail sales Messrs. Angell and Lindsey indicated that their increased somewhat further over the first two months of the year after a fourth-quarter surge. Housing starts concerns about the outlook for inflation prompted slipped in early 1993 after registering sizable gains late them to favor an immediate move to tighten reserve last year. Incoming data on orders and shipments of conditions. In their view, such an action was desirnondefense capital goods suggest a further brisk advance able not only to arrest the possible emergence of in outlays for business equipment, while nonresidential construction has remained soft. The nominal U.S. mer- greater inflation but especially to promote further chandise trade deficit was essentially unchanged in Janu- disinflation. They were persuaded that monetary ary from its average level in the fourth quarter, but both policy currently was overly accommodative as sugexports and imports were substantially lower. Increases gested by various indicators such as recent data on in wages have remained subdued, but recent advances in consumer and producer prices, the upswing in comconsumer and producer prices have been larger than those recorded in the latter part of 1992. modity prices, the low level of real short-term Short-term interest rates have changed little since the interest rates, and what in their judgment was a Committee meeting in early February while bond yields relatively depressed foreign exchange value of the have fallen appreciably on balance. In foreign exchange dollar given the comparative strength of the U.S. markets, the trade-weighted value of the dollar in terms economy and international interest rate trends. of the other G-10 currencies declined on balance over the intermeeting period. They noted that the current federal funds rate was M2 and M3 contracted in January and February, probably not sustainable in the long term and that a apparently reflecting transitory factors and further shifts tightening move at this time might well avoid the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

704 Federal Reserve Bulletin • July 1993 need for more sizable and potentially disruptive tions for financial markets and economic growth, policy actions later. but it would in his view preclude an unsettling Mr. Angell also emphasized the risks associated tendency for the debt markets to weaken every with any policy that did not firmly maintain a time newly available data appeared to suggest that disinflationary trend. As he interpreted historical economic growth was strengthening and that furprecedents, the typical result of a policy that toler- ther monetary policy tightening actions therefore ated some inflation was an eventual rise in inflation might be in the offing. In sum, such a policy would leading to permanently higher interest rates with provide for the achievement of the Committee's adverse effects on economic activity. Indeed, he objective of sustaining progress toward price stabilsupported unpegging the federal funds rate to ity, which he believed was necessary for maintaincounter incipient price pressures showing through ing recent higher labor productivity, a permanently in commodity and finished goods prices. He higher saving rate, and a prolonged period of ecobelieved that a clear signal of the Committee's nomic expansion. commitment to price level stability would stabilize It was agreed that the next meeting of the Comthe price of gold along with the exchange value of mittee would be held on Tuesday, May 18, 1993. the dollar and thereby provide a climate for further The meeting adjourned. reductions in long- and intermediate-term interest rates. Such an approach to policy not only would assure a continuing disinflationary trend and even- Normand Bernard tual price stability, with very favorable implica- Deputy Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

705 Legal Developments ORDERS ISSUED UNDER BANK HOLDING in any relevant banking market. Accordingly, the COMPANY ACT Board concludes that competitive considerations are consistent with approval. Orders Issued Under Section 3 of the Bank In considering this application under section 3 of the Holding Company Act BHC Act, the Board is also required to take into account the financial and managerial resources and Community Bankshares, Inc. future prospects of Community and Bank. In this Orangeburg, South Carolina regard, the Board has carefully reviewed comments received from several Bank shareholders ("Protes- Order Approving the Formation of a Bank Holding tants") opposing the formation of Community. Prot- Company estants allege that the proposal will have a negative impact on Bank's financial condition and that the Community Bankshares, Inc., Orangeburg, South proposed officers of Community lack banking experi- Carolina ("Community"), has applied under section ence.4 3(a)(1) of the Bank Holding Company Act (12 U.S.C. Community will be formed by an exchange of shares § 1842 et seq.), to become a bank holding company by and will incur only a small amount of debt for organiacquiring all the voting shares of Orangeburg National zational purposes. Bank is currently in satisfactory Bank, Orangeburg, South Carolina ("Bank").1 condition, and Community's debt-service projections Notice of the application, affording interested per- appear reasonable and indicate that the debt-to-equity sons an opportunity to submit comments, has been ratio would decline in a manner consistent with the published (58 Federal Register 13,265 (1993)). The Board's guidelines.5 time for filing comments has expired, and the Board Community's proposed officers currently occupy has considered the application and all comments re- similar positions in Bank. The Board has carefully ceived in light of the factors set forth in section 3(c) of reviewed the performance of these officers in light of the BHC Act. all information of record, including the assessment of Community is a nonoperating company formed for their managerial performance at Bank contained in the purpose of acquiring Bank. Bank controls deposits reports of examination by Bank's primary regulator, of approximately $49.3 million and is the 42d largest the OCC. On this basis, the Board concludes that commercial banking organization in South Carolina, Protestants' comments regarding the experience and representing less than 1 percent of total deposits in commercial banking organizations in the state.2 Bank operates in the Orangeburg, South Carolina, banking market,3 where it controls 9.3 percent of the total deposits in commercial banking organizations. Bank and its principals are not affiliated with any other 4. Protestants also maintain that formation of Community is unnecessary and not in the best interest of Bank's shareholders. For depository institution. Based on all the facts of record, example, Protestants believe that the proposal represents an attempt the Board believes that consummation of the proposal by the largest shareholder to control Bank, eliminate cumulative voting rights of the existing shareholders, and provide unnecessary would not result in any significantly adverse effects on positions for Bank's management at the holding company level. These competition or the concentration of banking resources considerations, however, relate to matters that were properly resolved by Bank's shareholders at the April 13, 1993, shareholders' meeting held to vote on the proposal. Based on all the facts of record, the Board concludes that these comments do not reflect adversely on 1. Community proposes to merge Bank with Interim Orangeburg the factors that the Board is required to consider under section 3 of the National Bank, a newly chartered national bank and wholly owned BHC Act. See Western Bancshares, Inc. v. Board of Governors, 480 subsidiary of Community. On March 11, 1993, Bank's primary regu- F.2d 749 (10th Cir. 1973). lator, the Office of the Comptroller of the Currency ("OCC"), 5. Protestants argue that Bank's capital could be impaired by approved this proposal ("March 11 approval"). Community's redemption of shares from dissenting shareholders. The 2. Market and deposit data are as of June 30, 1992. OCC's March 11 approval limits borrowings for the purchase of these 3. The Orangeburg, South Carolina, banking market is approxi- shares, and Community has obtained a line of credit in this amount to mated by Orangeburg County, South Carolina. be used only if Community needs to finance such purchases. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

706 Federal Reserve Bulletin • July 1993 background of these individuals do not warrant denial First Colonial Bankshares Corporation of the application.6 Chicago, Illinois For the reasons discussed above, and in light of all facts of record, the Board concludes that the financial Order Denying the Acquisition of Bank Holding and managerial resources and future prospects of Companies Community and Bank and the other supervisory factors that the Board must consider under section 3 of First Colonial Bankshares Corporation, Chicago, Illithe BHC Act are consistent with approval. Consider- nois ("First Colonial"), a bank holding company ations relating to the convenience and needs of the within the meaning of the Bank Holding Company Act community to be served are also consistent with ("BHC Act"), has applied under section 3 of the BHC approval.7 Act (12 U.S.C. § 1842) to acquire all of the voting Based on the foregoing and all the facts of record, shares of: the Board has determined that this application should (1) Hi-Bancorp, Inc. ("Hi-Bancorp"), and thereby be, and hereby is, approved. The Board's approval is indirectly acquire Hi-Bancorp's subsidiary bank, specifically conditioned upon compliance by Commu- the Bank of Highwood, both of Highwood, Illinois; nity with all the commitments made in connection with and this application. The commitments and conditions (2) GNP Bancorp, Inc., ("GNP"), and thereby relied on by the Board in reaching this decision are indirectly acquire GNP's subsidiary bank, New both conditions imposed in writing by the Board in Century Bank, both of Mundelein, Illinois. connection with its findings and decision, and as such may be enforced in proceedings under applicable law. Notice of the applications, affording interested per- This transaction should not be consummated before sons an opportunity to submit comments, has been the thirtieth calendar day following the effective date published (57 Federal Register 62,346 (1992)). The of this Order, or later than three months after the time for filing comments has expired, and the Board effective date of this Order, unless such period is has considered the application and all comments reextended for good cause by the Board or the Federal ceived in light of the factors set forth in section 3(c) of Reserve Bank of Richmond, acting pursuant to dele- the BHC Act. gated authority. First Colonial is the 15th largest commercial bank- By order of the Board of Governors, effective ing organization in Illinois, controlling deposits of May 10, 1993. $1.2 billion, representing 1 percent of the total deposits in commercial banking organizations in the state.1 Voting for this action: Vice Chairman Mullins and Gover- Hi-Bancorp is the 236th largest commercial banking nors Angell, Lindsey, and Phillips. Absent and not voting: organization in Illinois, controlling deposits of Chairman Greenspan and Governors Kelley and La Ware. $79.4 million, representing less than 1 percent of the total deposits in commercial banking organizations in WILLIAM W. WILES the state. GNP is the 281st largest commercial banking Secretary of the Board organization in Illinois, controlling deposits of $66.5 million, representing less than 1 percent of the total deposits in commercial banking organizations in the state. Convenience and Needs Considerations In acting on an application under section 3 of the BHC Act, the Board must consider the convenience and needs of the communities to be served and take into 6. Protestants also allege that Community's proposed management, while serving on Bank's board of directors, has in the past authorized account the records of the relevant depository instituexcessive directors fees. Bank's directors' fees have been increased tions under the Community Reinvestment Act each year from 1988 to 1991. After adverse shareholder comments, (12 U.S.C. § 2109 et seq.) ("CRA"). The CRA re- Bank's directors reduced their fees to their 1990 level. Community has stated that it does not intend to pay additional directors's fees or any quires federal financial supervisory agencies to enother fees to Bank's directors for acting as directors of Community for courage financial institutions to help meet the credit several years. Moreover, directors' fees are subject to examination by needs of the local communities in which they operate the OCC and the Board, and approval of this application does not preclude the Board and the OCC from taking appropriate supervisory action to address the payment of excessive directors' fees. 7. In this regard, Community does not intend to change Bank's focus as a local community banking organization. 1. Deposit data are as of June 30, 1992. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 1QH consistent with the safe and sound operation of such assets,6 has received two consecutive "needs to iminstitutions. To accomplish this end, the CRA requires prove" ratings of its CRA performance from its prithe appropriate supervisory authority to "assess the mary federal supervisor, the Federal Deposit Insurinstitution's record of meeting the credit needs of its ance Corporation ("FDIC").7 First Colonial's entire community, including low- and moderate- remaining subsidiary banks received at least a "satisincome neighborhoods, consistent with the safe and factory" rating from their primary federal supervisors. sound operation of such institution," and to take this record into account in its evaluation of bank holding B. CRA Performance Record of Avenue Bank company applications.2 The Board has carefully reviewed the CRA perfor- Lending Activities. The 1993 examination of Avenue mance of First Colonial, Hi-Bancorp, GNP, and their Bank's CRA performance noted low levels of lending subsidiary banks, in light of the CRA, the Board's in low- to moderate-income and minority portions of regulations, and the jointly issued Statement of the the bank's delineated community.8 In particular, a Federal Financial Supervisory Agencies Regarding the review of the bank's 1991 Home Mortgage Disclosure Community Reinvestment Act ("Agency CRA State- Act ("HMDA") data indicates that less than half of ment").3 The Board also has reviewed comments from Avenue Bank's loans were made inside its delineated three individuals ("Protestants") alleging that First community. These data also indicate that of all the Colonial's subsidiary bank, The Avenue Bank of Oak HMDA-related loans that were made in the delineated Park, Oak Park, Illinois ("Avenue Bank"), previously community, only two of these loans were made in has engaged in and continues to engage in discrimina- minority or low- to moderate-income census tracts tory lending practices, and that the bank is not ade- within the delineated community. Moreover, the 1992 quately addressing the credit needs of its entire delin- HMDA data indicate that Avenue Bank made no eated community.4 HMDA-related loans in minority or low- and moderate-income census tracts in the delineated community. Record of Performance Under the CRA In addition, the 1991 and 1993 examinations found that Avenue Bank does not participate actively in federal A. CRA Performance Examinations lending programs, such as FHA or SBA, even though the 1993 examination found that there appears to be demand for such programs in certain areas in its The Board has stated that a CRA examination is an delineated community. important and often controlling factor in determining whether convenience and needs factors are consistent Ascertainment and Marketing. The 1991 examinawith approval of an expansionary proposal.5 First tion recommended that Avenue Bank develop ascer- Colonial controls 16 subsidiary banks including Ave- tainment programs for the bank's entire delineated nue Bank. Avenue Bank, First Colonial's third largest community, especially the low- to moderate-income subsidiary bank with approximately $162 million in areas of its community. In the 1993 examination, examiners found that little progress had been made in Avenue Bank's ascertainment efforts and that the bank still had not fully implemented a program to ascertain the credit needs of its entire community. In 2. 12 U.S.C. § 2903. this regard, the examination noted that Avenue Bank 3. 54 Federal Register 13,742 (1989). The Agency CRA Statement concentrates its efforts in the relatively affluent areas provides guidance regarding the types of policies and procedures that the supervisory agencies believe financial institutions should have in and does not conduct significant ascertainment efforts place in order to fulfill their responsibilities under the CRA on an ongoing basis and the procedures that the supervisory agencies will use during the application process to review an institution's CRA compliance and performance. 6. Avenue Bank's assets represent approximately 10 percent of The Agency CRA Statement indicates that decisions by agencies to First Colonial's consolidated assets of approximately $1.6 billion. allow financial institutions to expand will be made pursuant to an 7. Avenue Bank's CRA performance was rated "needs to improve" analysis of the institution's overall CRA performance and will be as of December 31, 1991 ("the 1991 examination"), and again as of based on the actual record of performance of the institution. January 15, 1993 ("the 1993 examination"). 4. The Board received additional comments raising similar CRA 8. Avenue Bank's delineated community approximately encomissues regarding Avenue Bank from several other organizations. After passes a two-mile radius from its main office in Oak Park, Illinois, meeting with First Colonial, these protests were withdrawn and these which is located approximately five miles west of downtown Chicago. organizations have submitted comments supporting steps taken by This service area covers Oak Park, Elmwood Park, and River Forest First Colonial to improve its CRA performance record. to the north and west; the Chicago neighborhoods comprising Austin 5. See Gore-Bronson Bancorp, Inc., 78 Federal Reserve Bulletin to the north and east; and parts of Cicero, Berwyn, and Forest Park to 784 (1992); First Interstate BancSystem of Montana, Inc., 77 Federal the south. Avenue Bank's service area differs from the service areas Reserve Bulletin 1007 (1991) ("First Interstate of Montana"); Conti- of other First Colonial subsidiary banks in that relatively affluent nental Bank Corporation , 75 Federal Reserve Bulletin 304 (1989); suburbs (such as Oak Park and River Forest) are commingled with Agency CRA Statement, 54 Federal Register 13,743 (1989). large areas of low- and moderate-income and minority neighborhoods. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

708 Federal Reserve Bulletin • July 1993 in most of the low- and moderate-income neighbor- address CRA concerns are appropriate considerations hoods in the bank's delineated community.9 in the context of an application to expand deposit- The 1991 examination found that Avenue Bank taking facilities only where the applicant otherwise has markets its banking products primarily in the relatively a satisfactory CRA record, where the problems idenaffluent sections of its community. The 1993 examina- tified at the bank do not indicate chronic institutional tion again found that Avenue Bank does not ade- deficiencies or a pattern of CRA deficiencies, and quately market all of its banking products to its entire where the applicant takes immediate and effective delineated service area. In this regard, the 1993 exam- action to address identified deficiencies in the CRA ination states that the majority of bank's advertising is performance of its banks. general in nature, is related to Avenue Bank's mort- The record in this application indicates that Avenue gage program, and has resulted only in a limited Bank does not have a satisfactory record of perfornumber of applicants from the east and northeast mance in place and has had deficiencies in CRA sections of the delineated community. Although noting performance for some time. Over time, the steps that some increase in overall marketing activities, the 1993 First Colonial proposes to implement have the potenexamination criticized the bank for not marketing tial to remedy many of the deficiencies in the Avenue specific programs that would benefit low- and moder- Bank's CRA performance. Given the facts of this case, ate-income individuals. For example, while contacts however, the Board does not believe that it is approwith community groups and individuals in the Austin priate to rely on the future expectations or commitarea indicated a need for home improvement and small ments for future action by First Colonial. business credit, those types of credit are not marketed actively in low- and moderate-income neighborhoods, Conclusion even though Avenue Bank's CRA Statement indicates such credit is available. Accordingly, based on the foregoing, the CRA performance examinations of First Colonial's subsidiary C. Additional CRA Considerations banks, and other facts of record, the Board concludes that considerations relating to the convenience and First Colonial maintains that the issues raised by the needs factor are not consistent with approval of this CRA performance record of Avenue Bank have been expansion proposal. Considerations relating to comaddressed by steps that Avenue Bank recently has petitive, financial resources, managerial resources, initiated or committed to initiate in order to improve and other supervisory factors required by the Board to its CRA-related activities. These initiatives include a be considered under the BHC Act do not lend sufficommitment to establish an annual investment target cient weight to warrant approval of these applicaof $8 million to stimulate growth and development in tions.11 Accordingly, the Board has determined that the low- and moderate-income neighborhoods of its these applications should be, and hereby are, denied. delineated community; establish a youth service pro- The Board notes that this denial is without prejudice to gram; locate a branch in a low- to moderate-income future applications at such time as Avenue Bank's neighborhood; implement affirmative marketing pro- CRA record of performance is in place and its policies and programs are working well. grams to encourage minority applicants; and require additional training for all staff to ensure that Avenue Bank's personnel are attuned to the particular and specialized credit needs of low- to moderate-income communities. 11. Protestants have requested a public hearing or meeting on the issues raised in its comments. Section 3(b) of the BHC Act does not The Board previously has stated that when a bankrequire the Board to hold a hearing or meeting on an application unless ing organization files an application to expand its the appropriate supervisory authority of the bank to be acquired deposit-taking facilities, the organization should ad- makes a timely written recommendation of denial of the application. In this case, the Board has not received such a recommendation. dress its CRA responsibilities and have the necessary Generally, under the Board's rules, the Board may, in its discretion, policies in place and working well.10 In addition, the hold a public hearing or meeting on an application to clarify factual Board has found that commitments for future action to 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, Protestants have had ample opportunity to present written submissions, and Protestants have submitted substantial written comments 9. Although the 1993 examination found weaknesses in Avenue that have been considered by the Board. In light of these facts, and the Bank's overall efforts in the low- and moderate-income and minority Board's decision on this application, the Board has determined that a neighborhoods in its delineated community, the examination noted public hearing or meeting is not necessary to clarify the factual record improvement in the bank's ascertainment efforts in some areas of the in this application, or otherwise warranted in this case. Accordingly, delineated community, especially in the Austin neighborhood. Protestants' request for a public hearing or meeting on this application 10. First Interstate of Montana, 77 Federal Reserve Bulletin at 1009. is denied. 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Legal Developments 709 By order of the Board of Governors, effective 2.9 percent of the deposits in commercial banks in the May 17, 1993. state.4 Voting for this action: Chairman Greenspan and Governors Competitive Effects Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips. First Union and First American compete directly in JENNIFER J. JOHNSON seven banking markets.5 In six of these banking mar- Associate Secretary of the Board kets, consummation of the proposal would result in relatively small increases in the market concentration, First Union Corporation as measured by the Herfindahl-Hirschman Index Charlotte, North Carolina ("HHI"), that would not exceed the threshold standards in the Department of Justice's revised guide- Order Approving Acquisition of a Bank Holding lines6 after considering the competition offered by Company thrift institutions.7 In the Rockbridge-Lexington banking market,8 First First Union Corporation, Charlotte, North Carolina Union is the second largest depository institution,9 ("First Union"), a bank holding company within the controlling deposits of $80.1 million, representing meaning of the Bank Holding Company Act ("BHC 22.7 percent of total deposits in depository institutions Act"), has applied under section 3(a)(3) of the BHC in the market ("market deposits"). First American is Act (12 U.S.C. § 1842(a)(3)) to acquire First Amerithe sixth largest depository institution in the market, can Metro Corp., McLean, Virginia ("First Americontrolling deposits of $25.2 million, representing can"), and thereby indirectly acquire its two subsid- 7.2 percent of market deposits. Upon consummation iary banks, First American Bank of Virginia, McLean, of this proposal, First Union would become the largest Virginia, and First American Bank of Maryland, Silver depository institution in the Rockbridge-Lexington Spring, Maryland.1 Notice of the application, affording interested persons an opportunity to submit comments, has been published (58 Federal Register 18,396 (1993)). The 4. The Board previously has determined that the interstate banking statutes of Maryland and Virginia permit a North Carolina bank time for filing comments has expired, and the Board holding company to acquire banking organizations in those jurisdichas considered the application and all comments re- tions. See First Union Corporation, 79 Federal Reserve Bulletin 232 ceived in light of the factors set forth in section 3(c) of (1993); NCNB Corporation, 78 Federal Reserve Bulletin 141 (1992). Thus, consummation of this transaction is not barred by the Douglas the BHC Act. Amendment to the BHC Act. First Union has consolidated assets of approxi- 5. These are: The Washington D.C. banking market; the Norfolk- Portsmouth banking market; the Newport News-Hampton banking mately $63.2 billion, and controls 12 banks in Virginia, market; the Rockingham-Harrisonburg banking market; the Augusta Maryland, the District of Columbia, Florida, Georgia, County banking market; the Rockbridge-Lexington banking market; South Carolina, North Carolina, and Tennessee.2 and the Winchester banking market. 6. Under the revised Department of Justice Merger Guidelines, 49 Upon consummation of this proposal, First Union Federal Register 26,823 (June 29, 1984), a market in which the would become the third largest commercial banking post-merger HHI is above 1800 is considered to be highly concenorganization in Virginia, controlling deposits of trated. In such markets, the Justice Department is likely to challenge a merger that increases the HHI by more than 50 points. The Justice $7.7 billion, representing approximately 13.9 percent Department has informed the Board that a bank merger or acquisition of the deposits in commercial banks in the state.3 First generally will not be challenged (in the absence of other factors Union also would become the ninth largest commer- indicating anti-competitive effects) unless the post-merger HHI is at least 1800 and the merger or acquisition increases the HHI by at least cial banking organization in Maryland, controlling 200 points. The Justice Department has stated that the higher than deposits of $1.2 billion, representing approximately normal threshold for an increase in the HHI when screening bank mergers and acquisitions for anti-competitive effects implicitly recognizes the competitive effect of limited-purpose lenders and other non-depository financial entities. 7. The Board previously has indicated that thrift institutions have become, or have the potential to become, major competitors of commercial banks. See Midwest Financial Group, 75 Federal Reserve 1. Prior to consummation of this transaction, First American Bank, Bulletin 386 (1989); National City Corporation, 70 Federal Reserve N.A., Washington, D.C., will be merged with First Union's subsidiary Bulletin 1AI (1984). Thus, the Board has regularly included thrift bank, Dominion Bank of Washington, N.A., Washington, D.C. First deposits in the calculation of market share on a 50 percent weighted Union also will indirectly acquire First American Bank of Georgia, basis. See, e.g., First Hawaiian, Inc., 11 Federal Reserve Bulletin 52 N.A. (In Liquidation), Marietta, Georgia, a subsidiary of First Amer- (1991). In considering the competition offered by thrifts in all banking ican Bank of Virginia. markets in this case, thrift deposits are weighted at 50 percent. 2. Asset data are as of March 31, 1993, and reflect First Union's 8. The Rockbridge-Lexington banking market is approximated by recent acquisition of Dominion Bankshares Corporation, Roanoke, Rockbridge County, Virginia. Virginia. 9. In this context, depository institutions include commercial banks, 3. Market deposit data are as of June 30, 1992. savings banks, and savings associations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

710 Federal Reserve Bulletin • July 1993 banking market, controlling deposits of $105.3 million, institutions. To accomplish this end, the CRA requires representing 29.9 percent of market deposits. The HHI the appropriate federal supervisory authority to "aswould increase by 325 points to 2103. sess the institution's record of meeting the credit In order to mitigate the anticompetitive effects that needs of its entire community, including low- and would result from consummation of this proposal in moderate-income neighborhoods, consistent with the the Rockbridge-Lexington banking market, First safe and sound operation of such institutions," and to Union has committed to divest two branches in this take that record into account in its evaluation of bank market.10 Accounting for these divestitures, the HHI holding company applications.12 would increase by 120 points to 1898.11 In this regard, the Board has received comments The Board has sought comments from the United from two organizations ("Protestants"). One Protes- States Attorney General on the competitive effects of tant expressed concern about First Union's branch the proposal. The Attorney General has indicated that, closing policies.13 The other Protestant alleges that subject to the fulfillment by First Union of the dives- First Union discriminates against minorities when titure commitments it has made to the Board in con- approving loan applications.14 The Board has carefully nection with this proposal, there would be no signifi- reviewed the CRA performance record of First Union cantly adverse effects on competition in any relevant and its subsidiary banks, as well as all comments banking market. received regarding this application, the responses to After considering the proposed divestitures in the those comments, and all the other relevant facts of Rockbridge-Lexington banking market, the relatively record in light of the CRA, the Board's regulations, small increases in market concentration in each rele- and the Statement of the Federal Financial Supervivant banking market, the number of depository insti- sory Agencies Regarding the Community Reinvesttution competitors that would remain in each of the ment Act ("Agency CRA Statement").1* The Board markets, the attractiveness of entry of the relevant also notes that First Union's CRA performance record banking markets, and all the other facts of record, the was extensively reviewed by the Board this year in Board concludes that consummation of this proposal, connection with another acquisition proposal. In its with the proposed divestitures, would not have a consideration of this proposal, the Board has taken significantly adverse effect on competition or on the into account the record of First Union's CRA perforconcentration of resources in any relevant banking mance assembled in that application.16 market. Record of Performance Under the CRA Convenience and Needs Considerations A. CRA Performance Examinations In considering an application under the BHC Act, the Board is required to consider the convenience and The Agency CRA Statement provides that a CRA needs of the communities to be served, and take into examination is an important, and often controlling, account the records of the relevant depository institu- factor in the consideration of an institution's CRA tions under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA"). The CRA requires the federal financial supervisory agencies to 12. 12 U.S.C. § 2903. encourage financial institutions to help meet the credit 13. This Protestant also expressed concern about the number of workers who will potentially lose their jobs as a result of this proposal. needs of the local communities in which they operate, First Union has stated in response that it will implement a transition consistent with the safe and sound operation of such plan that will include re-employment assistance information meetings, career management sessions, career transition centers, job update listings, and a flexible hiring policy that will require that displaced employees be considered for vacancies prior to external hiring. 10. First Union has committed to execute final sales agreements to 14. This Protestant also contends that it was denied a right to bid for effect these divestitures prior to the consummation of the acquisition First American. The record indicates that Protestant was not denied of First American, and to consummate these divestitures within 180 an opportunity to bid for First American. In light of all of the facts of days of consummation of the acquisition of First American. First the case, the Board concludes that Protestant's comments regarding Union also has committed that, in the event it is unsuccessful in the bidding process do not reflect adversely on the factors that the completing the divestiture within 180 days of consummation of the Board is required to consider under section 3 of the BHC Act. See proposal, First Union will transfer the relevant office or offices to an Western Bancshares, Inc., v. Board of Governors 480 F.2d 749 (10th independent trustee that has been instructed to sell the office Cir. 1973). promptly. See, e.g., BankAmerica Corporation, 78 Federal Reserve In addition, this Protestant noted that there were no minorities on Bulletin 338, 340 (1992); United New Mexico Financial Corporation, First Union's board of directors. In response, First Union has stated 77 Federal Reserve Bulletin 484, 485 (1991). that First Union's shareholders recently elected a minority director at 11. First Union would become the second largest depository insti- their April 20, 1993, annual meeting. tution in the Rockbridge-Lexington banking market, controlling ap- 15. 54 Federal Register 13,742 (1989). proximately $76.1 million in deposits, representing approximately 16. See First Union Corporation, 79 Federal Reserve Bulletin 232 21.6 percent of market deposits. (1993) ("First Union Order"). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 711 record and that these reports will be given great weight assistance in obtaining financial services at alternative in the applications process.17 In this case, the Board branches and other financial institutions.19 In this notes that all of First Union's subsidiary banks have proposal, First Union has stated that branches with been examined for CRA performance and have re- overlapping service areas may be consolidated, but ceived "outstanding" or "satisfactory" ratings during that these consolidations will not result in a withthe most recent examinations of their CRA perfor- drawal from any existing service area. mance. In particular, First Union's lead subsidiary bank, First Union National Bank of North Carolina, C. Additional Elements of CRA Performance Charlotte, North Carolina ("First Union Bank-NC"), received an "outstanding" rating for CRA perfor- For the reasons more fully stated in the First Union mance from the Office of Comptroller of the Currency Order, the Board believes that First Union has in place ("OCC") in a public examination in May, 1992. In the corporate policies, ascertainment and marketing, addition, all of First American's subsidiary banks have lending and other activities that assist in meeting the received "outstanding" or "satisfactory" ratings dur- credit needs of minorities and low- and moderateing the most recent examinations of their CRA perfor- income neighborhoods. First Union's overall complimance. ance with its CRA plan is supervised and monitored The Board recently reviewed allegations regarding through a corporate CRA steering committee. First the lending practices of First Union that are substan- Union also ascertains community credit needs through tially similar to those raised in this case.18 In that case, a variety of community outreach programs. To assist and in this case, the Board reviewed the CRA exami- in meeting the credit needs of its communities, First nation reports of the subsidiary banks of First Union. Union offers several programs such as the affordable The Board notes that certain of these examinations home mortgage loan, the special home improvement took into account preliminary data for 1991 filed under loan, and the special first advance, all of which are the Home Mortgage Disclosure Act, as well as re- sold exclusively to individuals earning 80 percent or viewed the loan documentation of the banks. These less of the median income of the county where they examinations found no evidence of illegal discrimina- reside. In addition, First Union Mortgage Corporation tion or other illegal credit practices at any First Union provides government-insured mortgage loans to cussubsidiary bank. The Board also has considered steps tomers. First Union also participates in various loan by First Union to improve its lending to minorities and programs including the Small Business Administration in low- and moderate-income neighborhoods. These loan program, the HUD/Farmers Home Administraefforts include an ongoing Fair Lending Program de- tion loan program, and the FHA/VA loan programs. signed to ensure that all applicants, regardless of race, First Union has policies, procedures and training have equal access to credit. The Board expects First programs developed to guard against discrimination in Union to implement these programs fully and in a lending and credit activities. Forms, disclosures and manner that assures equal access to credit. contracts are reviewed by the legal division for potential discriminatory factors. In addition, the State CRA B. Branch Closings coordinators, the regulatory compliance division, and the corporate auditors review bank lending areas to First Union has in place the types of procedures to ensure that no discriminatory practices are present. assess the potential impact of an office closing on the local community, and to ensure that branch closings Conclusion Regarding Convenience and Needs will not deprive low- and moderate-income communi- Factors ties of banking services. First Union has committed to implement these policies in the First American banks. The Board has carefully considered all the facts of In this regard, First Union's branch closing policy record, including the comments filed in this case, in requires review by a First Union state CRA Coordi- reviewing the convenience and needs factor under the nator and the Director of Community Reinvestment to BHC Act. Based on a review of the entire record of assess any impact on low- and moderate-income com- this application, including the most recent CRA permunities. If there is an impact on these communities, formance examinations of the institutions involved in special consultation with leaders of the affected com- this case and the record compiled in the First Union munities is required, and customers are provided 19. The Federal Deposit Insurance Corporation Improvement Act of 1991 also requires a bank to provide its customers at least 30 days' 17. 54 Federal Register 13,745 (1989). notice prior to closing any branch, and provide to the bank's primary 18. See First Union Order. regulator 90 days' prior notice. 12 U.S.C. § 1831p. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

712 Federal Reserve Bulletin • July 1993 Order, the Board believes that the efforts of First 3(a)(1) of the Bank Holding Company Act (12 U.S.C. Union to help meet the credit needs of all segments of § 1842(a)(1)) ("BHC Act") to become a bank holding the communities served, including low- and moderate- company by acquiring 91.1 percent of the voting income neighborhoods, and all other convenience and shares of Rio Blanco State Bank, Rangely, Colorado needs considerations, are consistent with approval of ("Bank"), a state member bank.1 In connection with this application. this transaction, Bank also has applied, pursuant to the Bank Merger Act (12 U.S.C. § 1828(c)), to acquire Other Considerations certain assets and assume certain liabilities of Bank of Rangely, Rangely, Colorado ("Bank of Rangely"), The financial and managerial resources, and future also a state member bank. prospects of First Union, its subsidiaries, and First Notice of the applications, affording interested per- American, and other supervisory factors that the sons an opportunity to submit comments, has been Board must consider under section 3 of the BHC Act published (57 Federal Register 21,657 (1992)). As also are consistent with approval of this proposal. required by the Bank Merger Act, reports on the Based on the foregoing and all the facts of record, competitive effects of the merger were requested from the Board has determined that the application should the United States Attorney General, the Office of the be, and hereby is, approved. The Board's approval of Comptroller of the Currency ("OCC"), and the Fedthis proposal is expressly conditioned on compliance eral Deposit Insurance Corporation ("FDIC"). The with the commitments made by First Union in connec- time for filing comments has expired, and the Board tion with this application, including the divestiture has considered the applications and all comments commitments, and with the conditions referenced in received in light of the factors set forth in the BHC Act this Order. For purposes of this action, these commit- and the Bank Merger Act.2 ments and conditions relied on in reaching this deci- Bank is the 200th largest banking organization in sion are deemed to be conditions imposed in writing by Colorado, controlling deposits of $8.9 million, and the Board in connection with its findings and decision, Bank of Rangely is the 194th largest banking organizaand, as such, may be enforced in proceedings under tion in Colorado, controlling deposits of $10.3 million. applicable law. Upon consummation of the transaction, Rio Blanco This transaction shall not be consummated before would become the 153rd largest banking organization in the thirtieth day following the effective date of this Colorado, controlling deposits of $20.6 million, repre- Order, or later than three months after the effective senting less than 1 percent of the deposits in commerdate of this Order, unless such period is extended for cial banking organizations in the state.3 good cause by the Board or by the Federal Reserve Bank of Richmond, acting pursuant to delegated au- Definition of the Relevant Banking Market thority. By order of the Board of Governors, effective The BHC Act and the Bank Merger Act provide that May 20, 1993. the Board may not approve a proposal submitted under these statutes if the proposal would result in a Voting for this action: Chairman Greenspan and Governors monopoly or the effect of the proposal may be Mullins, Angell, and Kelley. Absent and not voting: Gover- substantially to lessen competition in any relevant nors LaWare, Lindsey, and Phillips. banking market, unless the Board finds "that the anticompetitive effects of the proposed transaction JENNIFER J. JOHNSON are clearly outweighed in the public interest by the Associate Secretary of the Board probable effect of the transaction in meeting the convenience and needs of the community to be Rio Blanco Holding Company served."4 In evaluating the competitive factors in Rangely, Colorado this case, the Board has carefully considered the comments of a number of residents in the Town of Rio Blanco State Bank Rangely ("Rangely"), including customers and Rangely, Colorado shareholders of the Bank of Rangely ("Protes- Order Approving the Formation of a Bank Holding Company and Bank Merger 1. This formation represents a reorganization of interests held by the principal shareholders of Bank. 2. See 12 U.S.C. §§ 1842(c), 1828(c)(5). Rio Blanco Holding Company, Rangely, Colorado 3. Deposit data are as of December 31, 1992. ("Rio Blanco"), has applied pursuant to section 4. 12 U.S.C. §§ 1842(c) and 1828(c)(5). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 713 tants"), who assert that the proposal would result in ly.9 Interviews with Vernal retailers confirmed that significantly adverse competitive effects in the mar- Rangely residents shop in Vernal on a fairly frequent ket for banking services in Rangely.5 basis, and that a number of Vernal retailers advertise The Board and the courts have found that the in publications with a wide circulation in Rangely, relevant banking market for analyzing the competi- including weekly shoppers guides and the Rangely tive effects of a proposal must reflect commercial and newspaper. According to a one-week study of checks banking realities and must consist of the local area cleared by Bank, 16 percent were made payable to where the banks involved offer their services and Vernal residents or businesses. where local customers can practicably turn for alter- Rangely residents surveyed by the Reserve Bank natives.6 The Board has considered all the facts in indicated that they considered Vernal to provide this case, including the comments from the Protes- reasonable alternative banking services, and more tants, information provided by the applicant, and an than half of the residents surveyed stated that they on-site study conducted by the Federal Reserve would consider moving their banking business to Bank of Kansas City ("Reserve Bank") and Board Vernal if they were dissatisfied with the banking staff. On this basis, the Board concludes that the services available in Rangely. The Reserve Bank's relevant geographic market within which to evaluate survey of businesses in Rangely produced very simthe competitive effects of this proposal is the Vernal, ilar results. Utah banking market ("Vernal banking market"), After review of these data and the other facts of which is defined as including: all of Uintah County, record, the Board believes that the record demon- Utah (including Vernal); the western half of Rio strates that customers in Rangely reasonably can and, Blanco County, Colorado (including Rangely); and to some extent, do turn to providers of banking the southwestern portion of Moffat County, Colo- services in Vernal.10 Based on all the facts of record, rado (including the town of Dinosaur). the Board finds that the relevant geographic market in Bank and Bank of Rangely are the only two banking this case is the Vernal banking market as defined organizations in Rangely, a small community located above. in the northwestern corner of Colorado with a population of 2,278 residents.7 Vernal, with a population of Competitive Effects in the Vernal Banking Market over 8,000 residents, is located approximately 52 miles northwest of Rangely and is connected by means of a Applicant would become the smallest of three comtwo-lane highway. It is the closest town having a mercial banking organizations in this market upon population larger than the sparsely populated Rangely, consummation, controlling approximately 14.3 perand Rangely residents must travel twice as far (ap- cent of the commercial banking deposits in the market. proximately 100 miles) to reach another town compa- The Herfindahl-Hirschman Index ("HHI") would inrable in size to Vernal.8 crease by 102 points to 3877.11 The Reserve Bank's investigation indicated that Two other banks would continue to operate in this Rangely residents commute to Vernal on a regular market, and the slight increase in concentration in basis throughout the year because Vernal has a wider this highly concentrated banking market is mitigated range of goods and services than are available local- by the relatively small size of the banks to be merged as a result of this proposal. In addition, credit unions 9. Vernal has three large discount supermarkets, two large discount 5. Protestants assert that the anticompetitive effects of this pro- stores, several restaurants, and cinemas. Rangely, on the other hand, posal: has one moderate size and one small grocery store. Recreational (1) Will result in higher loan interest rates and more expensive facilities in Rangely consist primarily of the municipal recreation banking services; and center. (2) Will force residents of Rangely to seek alternative banking 10. For example, some business owners in Rangely stated that they services from competitors located 50 miles from Rangely, causing either had already opened personal or business accounts with Vernal general inconvenience and undue burden for senior citizens. banks or planned to after consummation of this proposal. 6. See St. Joseph Valley Bank, 68 Federal Reserve Bulletin 673, 674 11. Under the revised Department of Justice Merger Guidelines, 49 (1982). Federal Register 26,823 (June 29, 1984), a market in which the 7. Population data are based on 1990 U.S. Census data. post-merger HHI is above 1800 is considered highly concentrated. In 8. The nearest towns in Colorado that could provide commercial such markets, the Justice Department has informed the Board that a and banking services to Rangely residents are Meeker and Grand bank merger or acquisition generally will not be challenged (in the Junction. Meeker, located approximately 58 miles east of Rangely, is absence of other factors indicating anticompetitive effects), unless the comparable in size to Rangely and offers only slightly more commer- post-merger HHI is at least 1800 points and the merger increases the cial services. Grand Junction, located approximately 100 miles south HHI by 200 points. The Justice Department has stated that the higher of Rangely, is an economic center for western Colorado but is than normal HHI thresholds for screening bank mergers for anticomaccessible only by means of a road that features a slow, winding petitive effects implicitly recognize the competitive effect of limitedmountain passage. purpose lenders and other non-depository financial entities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

714 Federal Reserve Bulletin • July 1993 provide substantial consumer finance and account the financial condition of banks prior to serving at services to some Rangely residents, and recent Bank.15 changes in Colorado law permit de novo entry by In evaluating the managerial resources of an applibanking firms outside the market.12 cant under section 3 of the BHC Act, the Board also The Attorney General has indicated that the pro- considers the competence, experience and integrity of posal would not have significantly adverse effects on the senior management and principal shareholders of competition in any relevant market. Neither the OCC the holding company or bank.16 The Board has carenor the FDIC has objected to consummation of this fully reviewed the comments of Protestants regarding proposal or indicated that the proposal would have the senior management and principal shareholders of any significantly adverse competitive effects. Based Rio Blanco and Bank.17 On the basis of all the facts of on all the facts of record in this case, the Board record, including a review of relevant examination concludes that consummation of this proposal would reports, the Board concludes that these comments do not have a significantly adverse effect on competition not warrant denial of these applications.18 and the concentration of banking resources in the For these reasons, and in light of all the facts of Vernal banking market or any other relevant banking record, the Board concludes that the financial and market. managerial resources and future prospects of Rio Blanco and Bank are consistent with approval. The Other Considerations Board also believes that considerations relating to the convenience and needs of the communities to be The Board is also required under section 3 of the BHC served19 and other factors the Board is required to Act and the Bank Merger Act to consider the financial consider under the BHC Act and the Bank Merger Act and managerial resources of the companies and banks are consistent with approval. involved and the effect of the proposed acquisition on Accordingly, based on the foregoing and all other the future prospects of the bank and applicant organi- facts of record, including the commitments made by zation. The Board has stated that it expects banking Rio Blanco and Bank in these applications, the Board organizations to serve as a source of strength for their has found that these applications should be, and subsidiary banks. When an applicant intends to incur hereby are, approved. The Board's decision is spedebt to finance the acquisition of a small bank, the cifically conditioned on compliance with all of the Board will take into account a full range of financial commitments made in these applications, including and managerial information to evaluate the applicant's ability to serve as a source of strength and maintain adequate capital levels.13 15. Protestants maintain that Bank has a history of poor earnings and that the proposal would jeopardize the safety of depositors in The Board has carefully analyzed the pro forma Bank of Rangely. In addition, Protestants allege that Bank could not capital position and the risk profile of Rio Blanco and adequately insure or collateralize funds of governmental agencies. The Board has carefully considered these comments and, for the Bank and concludes that the financial condition of the reasons discussed above, concludes that these objections do not resultant organization would be generally satisfactory. warrant denial of these applications. In this regard, economies of scale should be realized 16. 12 U.S.C. § 1842(c)(5). 17. Protestants have alleged generally that management of Bank is through more efficient use of Bank's personnel and untrustworthy and have speculated that, because several customers of increased earnings on assets relative to overhead Bank of Rangely own businesses that compete directly with Bank's costs. In addition, the projected debt retirement period principal shareholders, these customers will not be treated equitably. In addition, Protestants have provided accounts of their satisfactory and the pro forma capital levels are consistent with the experiences with management of Bank of Rangely and unsatisfactory Board's guidelines on the formation of small one-bank experiences, including individual loan transactions and disputes over holding companies.14 In June 1992, Bank employed a charges to individual accounts, with Bank. 18. The board of directors of Bank has committed to monitor the new president with substantial experience in improv- cooperation of management and staff and to resolve any issues that ing loan administration and resolving problem loans in might arise by taking into account the best interests of the bank and the community. banks with financial difficulties. The Board has con- 19. Protestants maintain that the proposal will result in a reduction sidered new senior management's record of improving of available banking services and otherwise adversely affect the economy of Rangely. The Board believes that the improvement in financial and managerial resources resulting from the proposal should benefit the community. For example, Bank's improved financial condition will enhance its ability to ascertain and assist in meeting the credit needs of its community. In addition, Bank's lending limit will be increased significantly as a result of the proposal. 12. Effective January 1, 1993, any bank in Colorado may establish The Board also notes that Bank received a "satisfactory" rating in one de novo branch anywhere in Colorado. Colo. Rev. Stat. its most recent examination for performance under the Community § 11—25—103(8)(a). Reinvestment Act ("CRA") from the Reserve Bank as of October 28, 13. Capital Adequacy Guidelines, 12 C.F.R. Part 225, Appendix C. 1991. Bank of Rangely also received a "satisfactory" CRA rating from 14. See 12 C.F.R. Part 225, Appendix C. the Reserve Bank as of December 7, 1992. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 715 the commitments and conditions discussed in this Rockhold BanCorp. Order. For purposes of this action, the commitments Platte City, Missouri and conditions relied upon by the Board in reaching this decision are both conditions imposed in writing Order Approving Formation of a Bank Holding by the Board in connection with its findings and Company decision and, as such, may be enforced in proceedings under applicable law. Rockhold BanCorp., Platte City, Missouri ("Rock- The acquisition of Bank, and the subsequent hold"), has applied under section 3(a)(1) of the Bank merger of Bank and Bank of Rangely, shall not be Holding Company Act ("BHC Act") (12 U.S.C. consummated before the thirtieth calendar day fol- § 1842(a)(1)) to become a bank holding company by lowing the effective date of this Order, and neither acquiring at least 62 percent of the voting shares of transaction may be consummated later than three Bank of Kirksville, Kirksville, Missouri ("Bank"). months following the effective date of this Order, Notice of the application, affording interested perunless such period is extended for good cause by the sons an opportunity to submit comments, has been Board or by the Reserve Bank, acting pursuant to published (58 Federal Register 12,038 (1993)). The time delegated authority. for filing comments has expired, and the Board has By order of the Board of Governors, effective considered the application and all comments received May 26, 1993. in light of the factors set forth in section 3(c) of the BHC Act. Voting for this action: Vice Chairman Mullins and Gover- Rockhold is a nonoperating corporation formed for nors Kelley, Lindsey, and Phillips. Voting against this action: the purpose of becoming a bank holding company Governor Angell. Absent and not voting: Chairman through the acquisition of Bank.1 Bank is the 44th Greenspan and Governor La Ware. largest commercial banking organization in Missouri, controlling deposits of $117.9 million, representing less JENNIFER J. JOHNSON than 1 percent of the total deposits in commercial banks Associate Secretary of the Board in the state.2 Rockhold and Bank do not compete directly in any Dissenting Statement of Governor Angell banking market. Accordingly, consummation of this proposal would not have a significantly adverse effect on competition or the concentration of banking re- The law requires the Board to analyze the effects that sources in any relevant banking market. a bank merger or acquisition proposal would have on In reviewing an application under section 3(c) of the competition in the appropriate geographic market. I do BHC Act, the Board also must consider the financial not agree with the Board's delineation of the appropri- and managerial resources and future prospects of the ate banking market for purposes of analyzing the companies and banks involved in the proposal.3 The competitive effects of this proposal. Board has carefully reviewed the application and all The record in this case does not provide evidence information of record, including relevant reports of to justify a market delineation that would extend examination by Bank's primary Federal supervisor, the beyond Rangely, Colorado to include Vernal, Utah. Federal Deposit Insurance Corporation. On the basis of In particular, Rangely and Vernal are over 50 miles this review, the Board concludes that the financial and apart, and few residents of Rangely have deposit managerial resources and future prospects of Rockhold accounts with or receive credit from financial insti- and Bank are consistent with approval. The Board also tutions in Vernal. The record also indicates that concludes on the basis of all the facts of record that financial institutions in Vernal do not actively solicit deposits or banking business from residents of Rangely. 1. The proposal represents a reorganization of certain existing For these and other reasons, I believe that the ownership interests. appropriate banking market for analyzing the compet- 2. State deposit data are as of June 30, 1992. 3. The Board has carefully considered comments from several itive effects of this proposal is the Town of Rangely. shareholders of Bank ("Protestants") who maintain that Bank will Because this merger would eliminate the only other pay management fees to Rockhold from funds that otherwise would be competitor in the Rangely banking market, I am con- used for dividend payments to Bank's shareholders, and have requested that any approval be conditioned on prohibiting the payment strained under the relevant statutes to vote to deny of management fees by Bank to Rockhold. Rockhold has represented this proposal. that it does not currently plan to charge Bank management fees. The reasonableness of any management fees would be subject to review by Federal bank supervisory agencies as part of the examination of both May 26, 1993 Bank and Rockhold. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

716 Federal Reserve Bulletin • July 1993 convenience and needs considerations, the factor relat- Bank South Corporation, Atlanta, Georgia ("Appliing to access to information,4 as well as all other cant"), has applied, pursuant to section 4(c)(8) of the supervisory factors the Board is required to consider Bank Holding Company Act (12 U.S.C. § 1843(c)(8)) under section 3(c) of the BHC Act, are consistent with ("BHC Act") and section 225.23 of the Board's Regapproval of this application. ulation Y (12 C.F.R. 225.23), to acquire Bank South Based on the foregoing and all other facts of record, Securities Corporation, Atlanta, Georgia ("Compathe Board has determined that the application should ny"), through a corporate reorganization1 and engage be, and hereby is, approved. The Board's approval is de novo in the following activities: specifically conditioned on Rockhold's compliance (1) Underwriting and dealing in revenue obligations with the commitments made in connection with this of states and their political subdivisions, authorities application. All of the commitments and conditions and agencies ("municipal revenue bonds") that are relied upon by the Board in reaching its decision are rated as investment quality by a nationally recogconsidered conditions imposed in writing in connec- nized rating agency; tion with the Board's findings and decision and, as (2) Buying and selling municipal revenue bonds on such, may be enforced in proceedings under applicable the order of investors as a "riskless principal"; law. The transaction approved in this Order shall not (3) Acting as agent in the private placement of be consummated before the thirtieth calendar day municipal revenue bonds, and general obligations of following the effective date of this Order, or later than states, their political subdivisions, authorities and three months after the effective date of this Order, agencies; unless such period is extended for good cause by the (4) Providing discount securities brokerage services Board or by the Federal Reserve Bank of St. Louis, pursuant to section 225.25(b)(15) of the Board's acting pursuant to delegated authority. Regulation Y (12 C.F.R. 225.25(b)(15)); By order of the Board of Governors, effective (5) Providing financial advisory services to states, May 24, 1993. their political subdivisions, authorities and agencies pursuant to section 225.25(b)(4)(v) of the Board's Voting for this action: Chairman Greenspan and Governors Regulation Y (12 C.F.R. 225.25(b)(4)(v)); and Angell, Kelley, LaWare, Lindsey, and Phillips. Absent and (6) Underwriting and dealing in government obliganot voting: Governor Mullins. tions and money market instruments pursuant to section 225.25(b)(16) of the Board's Regulation Y JENNIFER J. JOHNSON (12 C.F.R. 225.25(b)(16)) ("bank-eligible securi- Associate Secretary of the Board ties"). Orders Issued Under Section 4 of the Bank Notice of the application, affording interested per- Holding Company Act sons an opportunity to submit comments, has been published (58 Federal Register 6798 (1993)). The time Bank South Corporation for filing comments has expired, and the Board has Atlanta, Georgia considered the application and all comments received in light of the public interest factors set forth in section Order Approving Application to Engage De Novo in 4(c)(8) of the BHC Act. Underwriting and Dealing in Certain Bank-Ineligible Applicant, with total consolidated assets of Securities on a Limited Basis, and Other $4.3 billion, is the fourth largest commercial banking Securities-Related Activities organization in Georgia.2 Applicant operates banking subsidiaries in Georgia and Florida, and engages in 4. The Board has considered whether the applicant has provided nonbanking activities through one nonbanking subsidadequate assurances that Rockhold will make available to the Board iary. information that the Board determines to be appropriate to assure The Board previously has determined by regulation compliance with various banking laws. In this regard, Protestants have objected to this proposal on the grounds that Bank has refused to that providing financial advisory services, providing provide them access to certain financial records of Bank. The Board has obtained from Rockhold all information that it has deemed appropriate to determine compliance with applicable banking laws. Additionally, there is no evidence in the record to indicate that 1. Applicant proposes that Bank South, N.A., Atlanta, Georgia Rockhold will, in the future, refuse to make information on the ("Bank"), transfer its securities underwriting, dealing, and discount operations and activities of Rockhold and Bank available to the Board brokerage activities to Bank's existing broker-dealer subsidiary, Lex as appropriate, or that the Board will be unable to obtain appropriate Jolley & Co., Atlanta, Georgia ("Lex Jolley"). Applicant will then information through the examination process. In light of all the facts of purchase all of the outstanding shares of Lex Jolley, and change the record, the Board believes that Rockhold has adequately assured the name of the subsidiary to Bank South Securities Corporation, Atlanta, Board that information will be made available and that considerations Georgia ("Company"). relating to access to information are consistent with approval. 2. Data are as of March 31, 1993. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 717 discount securities brokerage services, and underwrit- Private Placement and "Riskless Principal" ing and dealing in bank-eligible securities are activities Activities that are closely related to banking for purposes of section 4(c)(8) of the BHC Act.3 Applicant proposes to Private placement involves the placement of new conduct these activities through Company in accor- securities with a limited number of sophisticated purdance with the Board's regulations. chasers in a nonpublic offering. A financial intermediary in a private placement transaction acts solely as an Underwriting and Dealing in Municipal Revenue agent for the issuer in soliciting purchasers, and does Bonds not purchase the securities and attempt to resell them. Securities that are privately placed are not subject to Applicant proposes to underwrite and deal in munici- the registration requirements of the Securities Act of pal revenue bonds that are rated as investment quality 1933, and are offered only to financially sophisticated by a nationally recognized rating agency. The Board institutions and individuals and not the public. Applipreviously has determined that, subject to the pruden- cant will not privately place registered securities and tial framework of limitations established in previous will only place securities with customers who qualify decisions to address potential conflicts of interests, as accredited investors. unsound banking practices, or other adverse effects, "Riskless principal" is the term used in the securithe proposed underwriting and dealing activities are so ties business to refer to a transaction in which a closely related to banking as to be proper incidents broker-dealer, after receiving an order to buy (or sell) thereto within the meaning of section 4(c)(8) of the a security from a customer, purchases (or sells) the BHC Act. The Board also has determined that the security for its own account to offset a contemporaneconduct of these securities underwriting and dealing ous sale to (or purchase from) the customer.6 "Riskactivities is consistent with section 20 of the Glass- less principal" transactions are understood in the Steagall Act, provided that the underwriting and deal- industry to include only transactions in the secondary ing subsidiary derives no more than 10 percent of its market. Thus, Applicant proposes that Company total gross revenue over any two-year period from would not act as a "riskless principal" in selling underwriting and dealing in securities that a bank may securities at the order of a customer that is the issuer not underwrite or deal in directly ("bank-ineligible of the securities to be sold or in any transaction where securities").4 Applicant has committed that Company Company has a contractual agreement to place the will conduct its underwriting and dealing activities securities as agent of the issuer. Company also would with respect to municipal revenue bonds subject to the not act as a "riskless principal" in any transaction 10 percent revenue test established by the Board in involving a security for which it makes a market. previous Orders.5 The Board previously has determined by Order that, subject to prudential limitations that address the potential for conflicts of interests, unsound banking practices, or other adverse effects, the proposed private placement and riskless principal activities are so 3. See 12 C.F.R. 225.25(b)(4), (b)(15), (b)(16). closely related to banking as to be a proper incident 4. See Citicorp, J.P. Morgan & Company Incorporated, and Bankers Trust New York Corporation, 73 Federal Reserve Bulletin 473 thereto within the meaning of section 4(c)(8) of the (1987) ("Citicorp!Morgan!Bankers Trust Order"), ajfd sub nom. BHC Act.7 The Board also previously has determined Securities Industry Association v. Board of Governors of the Federal that acting as agent in the private placement of secu- Reserve System, 839 F.2d 47 (2d Cir. 1988), cert, denied, 486 U.S. 1059 (1988), as modified by Order Approving Modifications to Section rities and purchasing and selling securities on the order 20 Orders, 75 Federal Reserve Bulletin 751 (1989) ("Modification of investors as a "riskless principal" does not consti- Order"). Company also may provide services that are necessary tute underwriting and dealing in securities for purincidents to the approved activities. Any activity conducted as a necessary incident to the bank-ineligible securities activity must be poses of section 20 of the Glass-Steagall Act, and that treated as part of the bank-ineligible securities activity unless Com- revenue derived from these activities is not subject to pany has received specific approval under section 4(c)(8) of the BHC Act to conduct the activity independently. Until such approval is the 10 percent revenue limitation on bank-ineligible obtained, any revenues from the incidental activity must be treated as securities underwriting and dealing.8 Applicant has ineligible revenue subject to the 10 percent gross revenue limit set committed that Company will conduct its private forth in the CiticorplMorganlBankers Trust Order and the Modification Order. 5. Company will calculate compliance with the 10 percent revenue limitation in accordance with the original method set forth in J.P. Morgan & Company Incorporated, The Chase Manhattan Corpora- 6. See Securities and Exchange Commission Rule 10b-10. 17 C.F.R. tion, Bankers Trust New York Corporation, Citicorp, and Security 249.10b-10(a)(8)(i). Pacific Corporation, 75 Federal Reserve Bulletin 192, 196 (1989), as 7. See Bankers Trust New York Corporation, 75 Federal Reserve opposed to the alternative indexed method set forth in Modification Bulletin 829 (1989) ("Bankers Trust II Order"). Order, 79 Federal Reserve Bulletin 226 (1993). 8. See Bankers II Order. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

718 Federal Reserve Bulletin • July 1993 placement and "riskless principal" activities using the that the framework established pursuant to Citicorp! same methods and procedures, and subject to the Morgan/Bankers Trust will be maintained in all other same prudential limitations established by the Board in respects.11 the Bankers II Order and the J.P. Morgan II Order,9 including the comprehensive framework of restrictions Financial Factors, Managerial Resources, and Other designed to avoid potential conflicts of interests, un- Considerations sound banking practices, and other adverse effects imposed by the Board in connection with underwriting In every case involving a nonbanking acquisition by a and dealing in securities. bank holding company under section 4 of the BHC Act, the Board considers the financial condition and Director Interlocks resources of Applicant and its subsidiaries and the effect of the transaction on these resources.12 Based Applicant has requested that the Board permit director on the facts of this case, the Board concludes that interlocks between Company and its affiliated banks. financial considerations are consistent with approval Applicant proposes that less than a majority, but in of this application. The managerial resources of Apany case no more than two, of the directors of its plicant also are consistent with approval. subsidiary banks be permitted to serve on Company's In order to approve this application, the Board is board of directors. These directors will not be officers required to determine that the performance of the of the affiliated banks, nor will they have authority to proposed activities by Applicant can reasonably be conduct the day-to-day business of the banks or han- expected to produce public benefits that outweigh dle individual bank transactions. No officers of Com- adverse effects under the proper incident to banking pany will be employed by the banks. standard of section (4)(c)(8) of the BHC Act. Under The Board previously has permitted interlocks be- the framework established in this order and prior tween a banking organization and its affiliated section decisions, consummation of this proposal is not likely 20 company.10 In addition, the Board has requested to result in any significant adverse effects, such as comment on modifying the section 20 prudential undue concentration of resources, decreased or unfair framework to permit interlocks with affiliated banks so competition, conflicts of interests, or unsound banking long as a majority of the board is not comprised of practices. Consummation of the proposal would probank officers or directors. Applicant has agreed to vide added convenience to Company's customers. abide by the results of the Board's review. Accord- Accordingly, the Board has determined that the peringly, the Board finds that these limited interlocks formance of the proposed activities by Applicant can should be permitted, since it appears that Company reasonably be expected to produce public benefits that would be operationally distinct from its affiliated would outweigh possible adverse effects under the banks. The Board expects that Applicant will ensure proper incident to banking standard of section 4(c)(8) of the BHC Act. Based on all the facts of record, and subject to the 9. See J.P. Morgan & Company Incorporated, 76 Federal Reserve commitments made by Applicant, as well as all the Bulletin 26 (1990) ("7. P. Morgan II Order"); Bankers Trust II Order, terms and conditions set forth in this order and in the 75 Federal Reserve Bulletin at 829. Among the prudential limitations detailed more fully in those Orders are that Company will maintain above-noted Board Orders, the Board has determined specific records that will clearly identify all "riskless principal" that the application should be, and hereby is, aptransactions, and Company will not engage in any "riskless principal" transactions for any securities carried in its inventory. When acting as proved. Approval of this proposal is specifically cona "riskless principal," Company will engage only in transactions in ditioned on compliance by Applicant and Company the secondary market, and not at the order of a customer that is the with the commitments made in connection with its issuer of the securities to be sold, will not act as "riskless principal" in any transaction involving a security for which it makes a market, application, as supplemented, and with the conditions nor hold itself out as making a market in the securities that it buys and referenced in this and the other referenced Orders. sells as a "riskless principal." Moreover, Company will not engage in The Board's determination also is subject to all of the "riskless principal" transactions on behalf of any foreign affiliates. In addition, Company will not act as a "riskless principal" with respect conditions set forth in Regulation Y, including those in to any securities of investment companies that are advised by Applicant or any of its affiliates. Among the restrictions governing private placement activities are that Company will not privately place registered investment company securities, and will not privately place any 11. The Board's approval of the proposed underwriting and dealing securities of investment companies that are advised by Applicant or activities extends only to Company. These activities may not be any of its affiliates. conducted by Applicant in any other subsidiary without prior Board 10. Synovus Financial Corp., 11 Federal Reserve Bulletin 954, 955 review. Pursuant to Regulation Y, no corporate reorganization of (1991); Banc One Corporation, 76 Federal Reserve Bulletin 756, 758 Company, such as the establishment of subsidiaries of Company to (1990); Canadian Imperial Bank of Commerce, The Royal Bank of conduct the activities, may be consummated without prior Board Canada, Barclays PLC and Barclays Bank PLC, 76 Federal Reserve approval. Bulletin 158 (1990). 12. See 12 C.F.R. 225.25. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 719 sections 225.4(d) and 225.23(b), and to the Board's (1993)). The time for filing comments has expired, and authority to require modification or termination of the the Board has considered the application and all activities of a bank holding company or any of its comments received in light of the public interest subsidiaries as the Board finds necessary to assure factors set forth in section 4(c)(8) of the BHC Act. compliance with, and to prevent evasion of, the pro- Chemical, with total consolidated assets of visions of the BHC Act and the Board's regulations $147.5 billion, operates bank subsidiaries in New and Orders issued thereunder. In approving this trans- York, Texas, New Jersey, and Delaware.1 Chemical action, the Board has relied upon all the facts of record has received approval from the Federal Reserve Sysand all the representations and commitments made by tem to engage directly and through subsidiaries in a Applicant. For the purpose of this action, these com- broad range of permissible nonbanking activities. mitments and conditions shall be deemed conditions Company is currently engaged in limited bankimposed in writing and, as such, may be enforced in ineligible securities underwriting and dealing activities proceedings under applicable law. permissible under section 20 of the Glass-Steagall Act This transaction shall not be consummated later (12 U.S.C. § 377).2 Company also is, and will continue than three months after the effective date of this to be, a broker-dealer registered with the Securities Order, unless such period is extended for good cause and Exchange Commission ("SEC"), and a member by the Board or by the Federal Reserve Bank of of the National Association of Securities Dealers, Inc. Atlanta pursuant to delegated authority. ("NASD"). Accordingly, Company is subject to the By order of the Board of Governors, effective record-keeping, reporting, fiduciary standards, and May 20, 1993. other requirements of the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.), the SEC, and the NASD.3 Voting for this action: Chairman Greenspan and Governors Mullins, Angell, and Kelley. Absent and not voting: Gover- The Board has determined that, subject to the nors LaWare, Lindsey, and Phillips. prudential framework of limitations established in previous decisions to address the potential for conflicts of JENNIFER J. JOHNSON interests, unsound banking practices, or other adverse Associate Secretary of the Board effects, the proposed underwriting and dealing activities in bank-ineligible securities are so closely related Chemical Banking Corporation to banking as to be proper incidents thereto within the New York, New York meaning of section 4(c)(8) of the BHC Act.4 The Board Order Approving an Application to Engage De Novo 1. Asset data are as of March 31, 1993. in Underwriting and Dealing in Certain 2. Company may underwrite and deal in municipal revenue bonds, Bank-Ineligible Securities on a Limited Basis 1-4 family mortgage-backed securities, commercial paper, and consumer-receivable-related securities. 3. Company is currently engaged in a variety of securities-related Chemical Banking Corporation, New York, New York activities: ("Chemical"), a bank holding company within the (1) Underwriting and dealing in obligations that state member banks are authorized to underwrite and deal in under sections 5(c) and 16 meaning of the Bank Holding Company Act ("BHC of the Glass-Steagall Act (12 U.S.C. §§ 335 and 24(7)) pursuant to Act"), has applied under section 4(c)(8) of the BHC section 225.25(b)(16) of Regulation Y (12 C.F.R. 225.25(b)(16)); Act (12 U.S.C. § 1843(c)(8)), and section 225.23 of the (2) Furnishing general economic information and advice to customers pursuant to section 225.25(b)(4)(iv) of Regulation Y (12 C.F.R. Board's Regulation Y (12 C.F.R. 225.23), to engage 225.25(b)(4)(iv)); de novo through its wholly owned subsidiary, Chemi- (3) Providing full-service brokerage services to institutional and retail customers pursuant to sections 225.25(b)(4) and (b)(15) of cal Securities Inc., New York, New York ("Compa- Regulation Y (12 C.F.R. 225.25(b)(4) and (b)(15)); ny"), in underwriting and dealing in, to a limited (4) Acting as agent in the private placement of all types of securities, extent, all types of debt securities, including without including providing related advisory services; (5) Buying and selling all types of securities on the order of investors limitation sovereign debt securities, corporate debt as a "riskless principal"; and securities, debt securities convertible into equity se- (6) Providing financial advisory services of the type described in curities, and securities issued by a trust or other section 225.25(b)(4)(vi) of Regulation Y (12 C.F.R. 225.25(b)(4)(vi)). 4. See Canadian Imperial Bank of Commerce, 76 Federal Reserve vehicle secured by or representing interests in debt Bulletin 158 (1990); J.P. Morgan & Co. Incorporated, et al., 75 obligations ("bank-ineligible securities"). Chemical Federal Reserve Bulletin 192 (1989), ajf d sub nom. Securities Indusproposes to conduct these activities throughout the tries Ass'n v. Board of Governors of the Federal Reserve System, 900 F.2d 360 (D.C. Cir. 1990); Citicorp, et al., 73 Federal Reserve Bulletin United States. 473 (1987), aff d sub nom. Securities Industry Ass'n v. Board of Notice of the application, affording interested per- Governors of the Federal Reserve System, 839 F.2d 47 (2d Cir.), cert, denied, 486 U.S. 1059 (1988) (collectively, "Section 20 Orders"). sons an opportunity to submit comments on the pro- Applicant has committed to conduct the proposed underwriting and posal, has been published (58 Federal Register 16,834 dealing activities using the same methods and procedures, and subject Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

720 Federal Reserve Bulletin • July 1993 also has determined that the conduct of these securi- On the basis of the Reserve Bank's review and all the ties underwriting and dealing activities is consistent facts of record, the Board has determined that Comwith section 20 of the Glass-Steagall Act (12 U.S.C. pany has in place the managerial and operational § 377), provided that the company engaged in the infrastructure and other policies and procedures necunderwriting and dealing activities derives no more essary to comply with the requirements of the Section than 10 percent of its total gross revenue from under- 20 Orders and this order. Accordingly, the Board writing and dealing in bank-ineligible securities over concludes that the financial and managerial considerany two-year period.5 Applicant has committed that ations are consistent with approval of this application. Company will conduct its underwriting and dealing In order to approve this application, the Board also activities with respect to bank-ineligible securities must determine that the performance of the proposed subject to the 10 percent revenue test, and the pruden- activities by Chemical can reasonably be expected to tial limitations established by the Board in previous produce public benefits that would outweigh possible Orders.6 adverse effects under the proper incident to banking The Board has reviewed the capitalization of Chem- standard of section 4(c)(8) of the BHC Act. Under the ical and Company in accordance with the standards set framework established in this and prior decisions, forth in the Section 20 Orders, and finds the capitali- consummation of this proposal is not likely to result in zation of each to be consistent with approval. With any significant adverse effects, such as undue concenrespect to the capitalization of Company, approval of tration of resources, decreased or unfair competition, the requested activities is limited to a level consistent conflicts of interests, or unsound banking practices. with the projections of position size and types of The Board expects that the de novo entry of Applicant securities contained in the application. The Federal into the market for the proposed services in the United Reserve Bank of New York has reviewed the opera- States would provide added convenience to Chemitional and managerial infrastructure of Company, in- cal's customers, and would increase the level of comcluding its computer, audit, and accounting systems, petition among existing providers of these services. and internal risk management procedures and con- Accordingly, the Board has determined that the pertrols. The Reserve Bank has determined that Com- formance of the proposed activities by Chemical could pany has established an adequate operational and reasonably be expected to produce public benefits that managerial infrastructure for the underwriting and would outweigh possible adverse effects under the dealing of corporate debt securities to ensure compliproper incident to banking standard of section 4(c)(8) ance with the requirements of the Section 20 Orders. of the BHC Act. Accordingly, and for the reasons set forth in the Section 20 Orders, the Board concludes that Chemito the same prudential limitations established by the Board in the Section 20 Orders. cal's proposal to engage through Company in the 5. See id. Compliance with the 10 percent revenue limitation shall be proposed activities is consistent with the Glasscalculated in accordance with the method stated in the Section 20 Steagall Act, and is so closely related to banking as to Orders, as modified by the Order Approving Modifications to the Section 20 Orders, 75 Federal Reserve Bulletin 751 (1989); the Order be a proper incident thereto within the meaning of Approving Modifications to the Section 20 Orders, 79 Federal Reserve section 4(c)(8) of the BHC Act, provided Chemical Bulletin 226 (1993); and the Supplement to Order Approving Modifications to Section 20 Orders, 79 Federal Reserve Bulletin 360 (1993) limits Company's activities as provided in the Section (collectively, "Modification Orders"). In this regard, the Board notes 20 Orders, as modified by the Modification Orders. that Chemical has not adopted the Board's alternative indexed reve- The application is hereby approved subject to all the nue test to measure compliance with the 10 percent limitation on bank-ineligible securities activities, and, absent such election, will terms and conditions of those Orders and this order. continue to employ the Board's original 10 percent revenue standard. The Board's approval of this proposal extends only to 6. Chemical also proposes to provide services to customers and activities conducted within the limitations of those engage in other activities that are incidental to the foregoing activities. E.g., providing custodial services and securities clearance services, Orders and this order, including the Board's reservalending securities to and purchasing securities from other dealers and tion of authority to establish additional limitations to third parties, engaging in repurchase and reverse repurchase activities, engaging in hedging transactions for risk-reduction purposes, and ensure that Company's activities are consistent with engaging in foreign exchange transactions to facilitate purchases and safety and soundness, conflict of interest, and other sales of debt securities denominated in currencies other than U.S. relevant considerations under the BHC Act. Underdollars. Company may provide services that are necessary incidents to the proposed underwriting and dealing activities, provided that any writing and dealing in any manner other than as activities conducted as a necessary incident to the bank-ineligible approved in the Section 20 Orders is not within the securities activities must be treated as part of the bank-ineligible scope of the Board's approval and is not authorized for securities activities unless Company has received specific approval under section 4(c)(8) of the BHC Act to conduct the activities Company. independently. Until such approval is obtained, any revenues from the The Board's determination is also subject to all the incidental activities must be counted as ineligible revenues subject to the 10 percent revenue limitations set forth in the Section 20 Orders, terms and conditions set forth in Regulation Y, includas modified by the Modification Orders. ing those in sections 225.4(d) and 225.23(b), and to the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 721 Board's authority to require modification or termina- through the acquisition of the nonbanking subsidiaries tion of the activities of a bank holding company or any of Savings Bank.2 In addition, First Union has reof its subsidiaries as the Board finds necessary to quested Board approval pursuant to section 5(d)(3) of assure compliance with, and to prevent evasion of, the the FDI Act, 12 U.S.C. § 1815(d)(3)(A)(ii), as provisions of the BHC Act, and the Board's regula- amended by the Federal Deposit Insurance Corporations and Orders issued thereunder. The Board's de- tion Improvement Act of 1991, Pub. L. No. 102-242, cision is specifically conditioned on compliance with § 501, 105 Stat. 2236, 2388 (1991), to merge Savings all the commitments made in connection with this Bank with and into Bank. Section 5(d)(3) of the FDI application, including the commitments discussed in Act requires the Board to review any proposed merger this order and the conditions set forth in the above- between a bank owned by a bank holding company noted Board regulations and Orders. These commit- and a savings association in which the resulting instiments and conditions shall be deemed to be conditions tution is insured by the Bank Insurance Fund, and, in imposed in writing by the Board in connection with its reviewing these proposals, to follow the procedures findings and decisions, and may be enforced in pro- and consider the factors set forth in the Bank Merger ceedings under applicable law. Act, 12 U.S.C. § 1828(c).3 This transaction shall not be consummated later Notice of the applications, affording interested perthan three months after the effective date of this order sons an opportunity to submit comments, has been unless such period is extended for good cause by the published (58 Federal Register 15,147 (1993)). As Board, or by the Federal Reserve Bank of New York required by the Bank Merger Act, reports on the acting pursuant to delegated authority. competitive effects of the mergers were requested By order of the Board of Governors, effective from the United States Attorney General, the OCC, May 17, 1993. and the Federal Deposit Insurance Corporation. The time for filing comments has expired, and the Board Voting for this action: Chairman Greenspan and Governors has considered the applications and all comments Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips. received in light of the factors set forth in section 4(c)(8) of the BHC Act and in the Bank Merger Act. JENNIFER J. JOHNSON The Board has determined that the operation of a Associate Secretary of the Board savings association by a bank holding company is closely related to banking for purposes of section First Union Corporation 4(c)(8) of the BHC Act.4 In making this determination, Charlotte, North Carolina the Board required that savings associations acquired by bank holding companies conform their direct and Order Approving Application to Acquire a Savings indirect activities to those permissible for bank holding Bank companies under section 4(c)(8) of the BHC Act. First Union has committed that it will not, as a result of this First Union Corporation, Charlotte, North Carolina transaction, engage in any activities not permitted for ("First Union"), a bank holding company within the bank holding companies under section 4(c)(8) of the meaning of the Bank Holding Company Act ("BHC BHC Act and the Board's Regulation Y.5 The Board Act"), has applied for the Board's approval under section 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) and section 225.23 of the Board's Regu- 2. These nonbanking subsidiaries are: Associated Life Insurance lation Y (12 C.F.R. 225.23), to acquire Georgia Fed- Company (credit life reinsurance activities pursuant to 12 C.F.R. eral Bank, FSB, Atlanta, Georgia ("Savings Bank"), a 225.25(b)(8)(i)); Colonial Mortgage Company (real estate appraisal federal savings bank.1 First Union also has applied to activities pursuant to 12 C.F.R. 225.25(b)(13)); and Southeast Switch, Inc. (data processing and management consulting activities pursuant engage in credit reinsurance, real estate appraisal, data to 12 C.F.R. 225.25(b)(7) and 225.25(b)(ll)). The Board previously processing, and management consulting activities approved the application of First Union to acquire up to 15 percent of Southeast Switch, and First Union currently owns 13.5 percent. Acquisition of the additional shares of Southeast Switch will increase First Union's holdings to 16.7 percent. First Union has stated that it 1. First Union has proposed a two-step transaction to acquire will divest the shares in excess of 15 percent within one year of the Savings Bank. First Union Corporation of Georgia, Atlanta, Georgia acquisition. ("FU-GA"), a wholly owned subsidiary of First Union, will acquire 3. These factors include considerations relating to competition, Savings Bank. Upon consummation of the acquisition, FU-GA pro- financial and managerial resources, future prospects of the existing poses to merge Savings Bank with and into FU-GA's subsidiary bank, and proposed institutions, and the convenience and needs of the First Union National Bank of Georgia, Atlanta, Georgia ("Bank"). communities to be served. 12 U.S.C. § 1828(c). The merger of Savings Bank into Bank is subject to approval by the 4. See 12 C.F.R. 225.25(b)(9). Office of the Comptroller of the Currency ("OCC") under the Federal 5. Savings Bank engages through subsidiaries in insurance agency Deposit Insurance Act ("FDI Act") and the Bank Merger Act. activities and real estate activities that would not be permissible for a 12 U.S.C. §§ 15(d)(3)(A)(i) and 1828(c). bank holding company under the BHC Act. First Union has commit- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

722 Federal Reserve Bulletin • July 1993 previously has determined by regulation that the credit controlling deposits of approximately $754.6 million, life reinsurance, real estate appraisal, data processing, representing approximately 28.9 percent of total deand management consulting activities that First Union posits in depository institutions in the market ("marproposes to conduct are closely related to banking for ket deposits"). The Herfindahl-Hirschman Index purposes of section 4(c)(8) of the BHC Act.6 First ("HHI") for the market would increase 245 points to Union proposes to conduct these activities through 1850.10 subsidiaries of FU-GA in accordance with the Board's The record indicates that the increase in the HHI regulations. may overstate the competitive effects of this proposal First Union operates banks in Georgia, North Caro- in the Augusta banking market. After the proposed lina, South Carolina, Virginia, Florida, and Tennes- acquisition, 13 depository institutions would remain in see, controlling deposits of $37 billion. First Union is the market, ten of which are commercial banking the fourth largest commercial banking organization in organizations, including four large regional bank hold- Georgia, controlling $5.4 billion in deposits in Georgia ing companies. The Augusta banking market also has a commercial banks, representing 9.5 percent of the number of features that make it attractive to entry11 total deposits in commercial banks in the state.7 Sav- and Georgia allows regional interstate banking on a ings Bank is the largest thrift organization in Georgia, reciprocal basis thereby providing a large number of controlling $2.8 billion in deposits. Upon consumma- potential entrants into the market. In light of the tion of this transaction, First Union would become the number and size of the banks remaining in the market, second largest commercial banking organization in the market's attractiveness to entry, the number of Georgia, controlling $8.2 billion in deposits, represent- potential entrants into the market, and other facts of ing 13.8 percent of the total deposits in commercial record in this case, the Board concludes that consumbanking organizations in the state. mation of this proposal would not result in any significantly adverse effect on competition or the concen- Competitive Considerations tration of banking resources in the Augusta banking market that would not be outweighed by the likely Under section 4(c)(8) of the BHC Act and under the public benefits of this transaction. The Board also Bank Merger Act, the Board is required to consider concludes that consummation of this proposal would the competitive effects of this transaction. First Union not have a significantly adverse effect on competition and Savings Bank compete directly in the following in any of the other relevant banking markets.12 banking markets in Georgia: Augusta, Atlanta, Macon, and Savannah. Upon consummation of this proposal, First Union would become the largest depository institution8 in the Augusta9 banking market, 10. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29, 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 Justice ted to terminate all impermissible insurance activities within two years Department has informed the Board that a bank merger or acquisition of consummation of the proposal, and to limit its insurance activities generally will not be challenged (in the absence of other factors to servicing existing policies at the time of consummation, but not indicating anticompetitive effects) unless the post-merger HHI is at renewing these policies, during this two-year period. First Union also least 1800 and the merger increases the HHI by more than 200 points. has committed to terminate all impermissible real estate activities The Justice Department has stated that the higher than normal HHI within two years of consummation and to refrain from undertaking thresholds for screening bank mergers for anticompetitive effects any new impermissible projects or investments during this period. implicitly recognize the competitive effects of limited-purpose lenders 6. See 12 C.F.R. 225.25(b)(7), 225.25(b)(8)(i), 225.25(b)(ll), and and other non-depository financial entities. 225.25(b)(13). 11. Augusta's size makes it a significant urban area, and the Augusta 7. State deposit data are as of June 30,1992, and market deposit data banking market is the largest among the 123 non-MSA markets in are as of June 30, 1991, unless otherwise indicated. Georgia. In addition, the rate of growth in deposits between 1988 and 8. In this context, depository institutions include commercial banks, 1991 was substantially greater in the Augusta banking market than in savings banks, and savings associations. Market share data before other markets in Georgia, including non-MSA and MSA markets. The consummation are based on calculations in which the deposits of thrift Augusta banking market also exceeded other non-MSA markets with institutions are included at 50 percent. The Board previously has respect to population per banking office, total deposits per banking indicated that thrift institutions have become, or have the potential to office, population growth rate, and per capita income. become, significant competitors of commercial banks. See WM Ban- 12. First Union would become the second largest depository insticorp, 76 Federal Reserve Bulletin 788 (1990); National City Corpora- tution in the Atlanta banking market, controlling approximately tion, 70 Federal Reserve Bulletin 743 (1984). Because the deposits of $5 billion in deposits, representing 15.9 percent of market deposits, Savings Bank will be transferred to a commercial bank under this and the HHI would increase 92 points to 1173. In the Macon banking proposal, those deposits are included at 100 percent in the calculation market, First Union would become the fourth largest depository of pro forma market share. See Norwest Corporation, 78 Federal institution, controlling $254.1 million in deposits, representing Reserve Bulletin 452 (1992); First Banks, Inc., 76 Federal Reserve 11.2 percent of market deposits, and the HHI would decrease 3 points Bulletin 669, 670 n.9 (1990). to 1118. First Union would become the second largest depository 9. The Augusta banking market is approximated by Richmond and institution in the Savannah banking market, controlling approximately Columbia Counties in Georgia and Aiken County in South Carolina. $614.6 million in deposits, representing 25.9 percent of market depos- Augusta market deposit data are as of June 30, 1992. its, and the HHI would increase 155 points to 1925. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 723 Other Considerations Union in connection with this application. In addition, The Board's determination is subject to all of the First Union has applied, pursuant to section 4(c)(8) of conditions set forth in Regulation Y, including those in the BHC Act, to acquire a savings association and to sections 225.4(d) and 225.23(b)(3), and to the Board's engage in credit reinsurance, real estate appraisal, data authority to require modification or termination of the processing, and management consulting activities. As activities of a bank holding company or any of its noted above, these activities are permissible for bank subsidiaries as the Board finds necessary to assure holding companies under the Board's Regulation Y, compliance with, and to prevent evasion of, the proand First Union proposes to conduct these activities in visions and purposes of the BHC Act and the Board's accordance with the Board's regulations. There also are regulations and orders issued thereunder. For purnumerous providers of these nonbanking services, and poses of this action, the commitments and conditions this proposal would not significantly affect competition relied on in reaching this decision are both conditions in any relevant market. Furthermore, there is no evi- imposed in writing by the Board in connection with its dence in the record to indicate that consummation of findings and decision, and, as such, may be enforced in this proposal is likely to result in any significantly proceedings under applicable law. adverse effects, such as undue concentration of re- The merger of Savings Bank with and into Bank sources, decreased or unfair competition, conflicts of shall not be consummated before the thirtieth calendar interest, or unsound banking practices that are not day following the effective date of this Order, and the likely to be outweighed by the public benefits of this acquisition of Savings Bank and the nonbanking comproposal. Accordingly, the Board has determined that panies of Savings Bank shall not be consummated later the balance of public interest factors under section than three months after the effective date of this 4(c)(8) of the BHC Act are favorable and consistent Order, unless such period is extended for good cause with approval of First Union's application to acquire by the Board or by the Federal Reserve Bank of Savings Bank and to engage in the nonbanking activi- Richmond, acting pursuant to delegated authority. ties. By order of the Board of Governors, effective The Board also concludes that the financial and May 10, 1993. managerial resources, future prospects of First Union and Savings Bank, and convenience and needs consid- Voting for this action: Vice Chairman Mullins and Govererations are consistent with approval. Moreover, the nors Angell, Lindsey, and Phillips. Absent and not voting: record in this case shows that: Chairman Greenspan and Governors Kelley and La Ware. (1) The transaction will not result in the transfer of WILLIAM W. WILES any federally insured depository institution's federal Secretary of the Board deposit insurance from one federal deposit insurance fund to another; Northern Trust Corporation (2) First Union, FU-GA, and Bank currently meet, Chicago, Illinois and upon consummation of the proposed transaction will continue to meet, all applicable capital standards; and Order Approving an Application to Engage in (3) The proposed transaction would comply with the Futures Commission Merchant Activities Douglas Amendment if Savings Bank were a state bank that First Union was applying to acquire Northern Trust Corporation, Chicago, Illinois ("Apdirectly.13 See 12 U.S.C. § 1815(d)(3). plicant"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has Based on the foregoing and all the facts of record, applied under section 4(c)(8) of the BHC Act the Board has determined that the applications should (12 U.S.C. § 1843(c)(8)), and section 225.23(a)(3) of be, and hereby are, approved. This approval is subject the Board's Regulation Y (12 C.F.R. 225.23(a)(3)), to to First Union obtaining the required approval of the engage de novo through its wholly owned subsidiary, appropriate Federal banking agency for the proposed Northern Futures Corporation, Chicago, Illinois merger under the Bank Merger Act. The Board's ("Company"), in the following futures commission approval of this proposal is expressly conditioned on merchant ("FCM") activities: compliance with the commitments made by First (1) Executing and clearing, executing without clearing, and clearing without executing, as agent for 13. The Board has previously determined that the interstate banking institutional customers, the futures contracts and statutes of Georgia permit a North Carolina holding company to options on futures contracts set forth in Appenacquire banking organizations in Georgia. See NCNB Corporation, 72 Federal Reserve Bulletin 61 (1986). dix A; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

724 Federal Reserve Bulletin • July 1993 (2) Executing and clearing as agent for institutional Using these omnibus accounts, Company, as agent for customers, through omnibus trading accounts with its customers, could purchase and sell any of the unaffiliated FCMs, the futures contracts and options contracts described in section 225.25(b)(18) of Reguon futures contracts set forth in Appendix B; and lation Y or listed in Appendix B through a clearing (3) Providing related investment advisory services. member of the relevant exchange. Alternatively, Com- Applicant proposes to conduct the foregoing activities pany's customers could place orders directly with the throughout the United States. clearing firms with which Company maintains omnibus accounts.5 Notice of the application, affording interested per- In addition, Applicant seeks authority for Company sons an opportunity to submit comments on the pro- to clear trades on the CME and the CBOT that have posal, has been published (58 Federal Register 13,602 been executed by unaffiliated brokers pursuant to (1993)). The time for filing comments has expired, and so-called "give-up agreements."6 Company would not the Board has considered the application and all be the primary clearing member for any non-clearing comments received in light of the public interest member on the CBOT, and would not qualify any factors set forth in section 4(c)(8) of the BHC Act. non-clearing member on the CME.7 Company also Applicant, with total consolidated assets of proposes to execute trades that will be given-up, at a $15.0 billion, is the fourth largest banking organization customer's request, to an unaffiliated FCM for clearin Illinois.1 In addition to Illinois, Applicant operates ance.8 subsidiary banks in Arizona, California, Florida, and Texas.2 Company is an FCM registered with the Commodity Futures Trading Commission ("CFTC"), member clearing firm executes and clears transactions for the nonand is therefore subject to the record-keeping, report- member FCM and its customers. The omnibus account reflects all positions of the FCM's customers, but is divided into separate ing, fiduciary, and other requirements of the Commod- segments for each customer for purposes of calculating margin reity Exchange Act (7 U.S.C. § 1 et seq.) and the quirements, reporting current holdings, and other matters. Applicant CFTC.3 has stated that this service would be provided as an accommodation to institutional customers—the customer would not need to open its own Applicant seeks authority to conduct, through Com- account with a clearing member, Company could broker contracts for which customer trading activity is minimal, and Company would be pany, both execution and clearing activities on the able to provide each customer with a single statement describing the Chicago Mercantile Exchange ("CME") and the Chi- customer's overall futures position. Company would be financially cago Board of Trade ("CBOT"). Company also pro- responsible to the clearing member with which it establishes an omnibus account with respect to all trades properly made by the poses to conduct FCM activities through omnibus clearing member through the account, but would not hold an ownercustomer trading accounts established in its own name ship interest in the traded contracts. Company would not become a with clearing members of the exchanges on which member of any exchange of which it is not currently a member without Company would not itself be a clearing member.4 prior notice to, and, if required, approval of the Federal Reserve System. 5. In general, Company would accept orders from customers and act as agent in the purchase and sale of contracts. With respect to its omnibus account customers, Company would employ the same credit 1. Asset and ranking data are as of December 31, 1992. In Illinois, approval and risk management procedures developed for its own Applicant controls four financial institutions: Northern Trust Com- executing and clearing activities. In particular, Company's omnibus pany, Chicago, Illinois; Northern Trust Bank/DuPage, Oak Brook account activities would be conducted only pursuant to agreements Terrace, Illinois; Northern Trust Bank/Lake Forest, N.A., Lake that impose duties on clearing firms to comply with Company's Forest, Illinois; and Northern Trust Bank/O'Hare, N.A., Chicago, instructions as to customer trading and other parameters. In addition, Illinois. Company would open omnibus accounts only with clearing firms that 2. These banks are Northern Trust Bank of Arizona, N.A., Phoe- satisfied Company's financial, managerial, and operational standards. nix, Arizona; Northern Trust of California, N.A., Santa Barbara, 6. Under a give-up agreement, the executing floor broker (or give-in California; Northern Trust Bank of Florida, N.A., Miami, Florida; broker), pursuant to a customer's instructions, gives up an executed Northern Trust Bank of Florida/Sarasota, N.A., Sarasota, Florida; order for clearance to a clearing member other than the executing and Northern Trust Bank of Texas, N.A., Dallas, Texas. broker's primary clearing member (or qualifying clearing member). 3. Company currently engages in FCM execution and clearing 7. See generally CBOT Rules 333.00(a) and 350.06; CME Rules 511 activities, and investment advisory activities permissible for bank and 524. holding companies under sections 225.25(b)(18) and (b)(19) of Regu- 8. In such cases, Company, which serves as its own primary lation Y (12 C.F.R. 225.25(b)(18) and (b)(19)), and in the execution clearing firm, would be obligated to clear any trade that it executes and and clearance on major commodities exchanges of futures contracts that has been rejected by the designated clearing firm pursuant to a and options on futures contracts on certain broad-based stock and give-up agreement. Because Company is ultimately liable to clear all bond indices. See Northern Trust Corporation, 74 Federal Reserve trades that it executes but gives-up to another FCM, Company will, in Bulletin 333 (1988). Applicant proposes to provide these services to conducting the proposed execution-only activities, observe all the major financial institutions and large institutional investors such as same risk-management procedures used when Company both exepension plans. Company will not execute, clear, or broker contracts cutes and clears trades. In particular, Company may refuse to execute for individuals. Applicant has committed that it will provide the any trade that is outside the credit parameters established by Com- Federal Reserve System with prior notice of any significant change in pany for each customer. Moreover, Company will comply with all the characteristics of Company's customer base. customer trading limits conveyed to Company by a customer's 4. An omnibus account is an arrangement between a member clearing FCM pursuant to a give-up agreement. On the basis of these clearing firm of an exchange and a nonmember FCM that seeks to procedures, the Board has determined that Company has adequately conduct business on that exchange. Under such an arrangement, the addressed the possible adverse effects of executing without clearing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 725 The Board previously has determined, by regulation quently, that the proposal did not meet the requireand order, that, with two exceptions, acting as an ment of section 4(c)(8) of the BHC Act that the activity FCM in executing and clearing all of the proposed be a "proper incident to banking."11 financial futures contracts and options on futures In particular, the Board was concerned that, by not contracts, and providing investment advisory services engaging in both the execution and clearance of a with respect to such contracts, are activities closely trade, a bank-affiliated FCM would not be able to related to banking under section 4(c)(8) of the BHC decline transactions that presented unacceptable risk. Act.9 In order to approve this application, the Board In this regard, the clearing FCM would have been must determine that the performance of the proposed obligated to settle each trade entered into by its activities by Applicant can reasonably be expected to customers, even if the customer did not have the produce public benefits that would outweigh possible financial resources to honor its obligations. Moreover, adverse effects under the proper incident to banking the Board noted that no mechanism existed by which standard of section 4(c)(8) of the BHC Act. In this the clearing FCM could monitor, on a contemporaneregard, in every case under section 4 of the BHC Act, ous basis, the intra-day trading activities of the floor the Board considers the financial condition and re- traders who were to be its primary customers.12 On the sources of the applicant and its subsidiaries, and the basis of this inability of the FCM to control the risks it effect of the proposed transaction on these resourc- would undertake, together with the fact that clearing es.10 Based on the facts of this case, the Board agents must guarantee the financial performance of concludes that the financial considerations are consis- their customers to the clearing houses of the extent with approval of this application. The managerial changes on which they operate, the Board concluded resources of Applicant also are consistent with ap- that the proposed activity in Amro presented substanproval. tial credit risk exposure to the parent bank holding company, and that public benefit considerations pre- The Board previously has denied a proposal in cluded approval of the application under section 4 of which a nonbank subsidiary of a bank holding comthe BHC Act.13 pany would have primarily cleared, but not executed, trades for professional floor traders (primarily locals, Applicant's proposal differs from the situation premarket makers, and specialists) trading for their own sented in Amro in a number of respects. For example, accounts on major securities and commodities ex- in Amro, the bank-affiliated FCM would have been the changes. See Stichting Prioriteit ABN AMRO Hold- primary clearing firm for customers (locals, market ing, et al., 11 Federal Reserve Bulletin 189 (1991) makers, and other professional floor traders trading for ("Amro"). The Board determined in Amro that the their own accounts) who executed their own trades. potential adverse effects of the clearing only proposal, As a primary clearing firm, the FCM would have been including the attendant financial risks, outweighed the obligated to clear all trades executed by these custompotential public benefits of the activity, and, conse- ers regardless of the risk to the FCM or the ability of the customer to meet its financial obligations. In this case, by contrast, Company would not serve as the trades, and that approval of this activity is consistent with the BHC primary or qualifying clearing firm for any unaffiliated Act. customers. Company would clear only those trades 9. See 12 C.F.R. 225.25(b)(18) and (b)(19); National Westminster Bank PLC, 78 Federal Reserve Bulletin 953 (1992); The Sanwa Bank, that Company itself executes, or that other executing Limited, 77 Federal Reserve Bulletin 64 (1991); Morgan Guaranty brokers execute and Company accepts for clearance International Finance Corporation, 76 Federal Reserve Bulletin 881 pursuant to a customer give-up agreement. The exe- (1990); The Long-Term Credit Bank of Japan, 76 Federal Reserve Bulletin 554 (1990). The two exceptions are the Deutsche Aktienindex cuting brokers would be independent from the custom- 30 Stock Index (DAX) futures, and German Government Bond Index ers, and would have the opportunity to evaluate the futures contracts traded on the Deutsche Terminborse GmbH trade before it is executed.14 ("DTB"). The Board has approved FCM activities with respect to these two contracts on the DTB pursuant to the Board's Regulation K (12 C.F.R. Part 211). See Morgan Guaranty International Finance Corporation, 76 Federal Reserve Bulletin 881 (1990). These contracts have essentially the same terms and serve the same functions as the futures contracts for which FCM services previously have been 11. See Amro, 77 Federal Reserve Bulletin at 191. approved under section 4(c)(8) of the BHC Act. In addition, the Board 12. See id. believes that the skills necessary to engage in providing FCM services 13. Id. with respect to these contracts are virtually indistinguishable from 14. An executing FCM has an incentive to review ail trades that it those employed in providing such services with respect to contracts gives up for clearance by an unaffiliated FCM because the designated that have been approved previously. Hence, the Board has concluded clearing FCM, pursuant to the give-up agreement, may refuse to that FCM activities with respect to such contracts on the DTB are accept the trade for clearance if the trade exceeds the customer's closely related to banking under section 4(cX8) of the BHC Act. trading limits or otherwise poses unacceptable risk to the clearing 10. See 12 C.F.R. 225.24; The Fuji Bank, Limited, 75 Federal FCM. In such a case, the executing FCM or its primary or qualifying Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 Federal clearing firm would have to clear the trade. Thus, the executing FCM Reserve Bulletin 155 (1987). has an interest in determining whether a customer's trade poses any Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

726 Federal Reserve Bulletin • July 1993 In this regard, all of Company's clearing-only specialists, or other professional floor traders that activities would be conducted pursuant to give-up are trading for their own accounts. agreements. Applicant has represented to the Board Company has in place procedures to monitor the that, under these give-up agreements and its other intra-day trading activities and risk exposure of its customer agreements, Company has the right to customers. Company compares client positions with refuse to accept for clearance any customer trade margin limits each morning, maintains watch lists for that Company reasonably deems unsuitable in light all accounts that have positions approaching the of market conditions or a customer's financial situa- margin limit, and employs client activity tally sheets tion or objectives. Company also may restrict the to monitor customer trading on a real-time basis. number and types of positions held by a customer as In the event a trade would cause a customer's Company deems reasonable. Accordingly, Company trading position to exceed the margin limit, Company could decline to accept those trades that Company states that it has several options. Company may has determined present unacceptable risks.15 Under decline to accept the trade, may accept the trade but the rules of the CBOT and the CME, Company has a notify the client and executing brokers that it will not specified period of time in which to examine an accept any additional trades except liquidating executed trade. During this period, Company is able trades, may ask the client to liquidate or transfer to determine whether the trade is within Company's other contracts to reduce the customer's trading established risk parameters and otherwise properly position below the margin limit, may liquidate a authorized, and, if the trade is not within such customer's position, or may consider a request by parameters and properly authorized, to decide the customer to increase the margin limit.19 Appliwhether to reject the trade for clearance.16 cant has stated that Company will employ these Moreover, Company would review the creditwor- procedures when Company clears trades pursuant to thiness and other characteristics of each potential a give-up agreement. Company also will use these customer, and, based on such review, would approve procedures when it both executes and clears trades, or reject the customer and establish appropriate and when it executes trades as a give-in broker. trading, credit, margin, and exposure limits for the On the basis of this framework for limiting customer.17 The Board notes that Company's cus- risk from the clearing-only activities, as well as all of tomer base consists solely of institutional inves- the commitments made by Applicant, and other tors.18 As noted above, Company will not conduct facts of record, the Board has determined that credit clearing-only activities for locals, market makers, and other risk considerations associated with the proposed clearing-only activities on the CME and the CBOT are consistent with approval of this application. risk to the executing FCM even if the trade is to be given up to another There is no evidence in the record to indicate that FCM for clearance. 15. In such an event, the executing broker's primary or qualifying consummation of this proposal, subject to the comclearing firm would be obligated to clear the trade. mitments and conditions noted in the application or 16. Under the rules of the CBOT, the pertinent executing brokers in this Order, would result in any significant adverse are required to deliver trading cards to Company within 15 minutes after the half-hour interval during which an order is executed or effects, such as undue concentration of resources, 15 minutes after the close of the relevant market; because CBOT rules decreased or unfair competition, conflicts of interrequire that trades be submitted to the CBOT Clearing Corporation for ests, or unsound banking practices that are not matching within one hour after the end of any such half-hour interval or market close, Company has at least 45 minutes to review a trade outweighed by the public benefits that the Board before it is required to submit the trade to the CBOT Clearing expects to result from the consummation of this Corporation for matching. See Memorandum of CBOT dated May 3, proposal. Moreover, Applicant has committed to 1990; CBOT Clearing Corporation Submission Deadlines dated November 1991. Under the comparable rules of the CME, Company has conduct its proposed FCM activities in accordance at least one hour to review a trade before submitting it to the with the conditions and restrictions on FCM activiexchange's clearing house. See CME Clearing Member Transfer Agreement Procedures Guide dated May 1989; Memorandum of CME ties set forth in Regulation Y.20 Clearing House Division dated February 26, 1990. 17. Client margin limits are initially approved by Company's credit committee, and are administered by Company's compliance officer. Customer margin limits are periodically reviewed and adjusted by Company's credit committee to ensure that the limits are appropriate 19. Company consults regularly with its clients as to the anticipated to each client's trading activity, the overall risk parameters estab- positions which client expects to carry with Company, and whether lished for each customer, and the specific margin requirements set by such positions are consistent with the margin limits established for each exchange. that customer. Company has indicated that this consultation proce- 18. Company's institutional customers include major financial insti- dure is effective in avoiding unexpected trading activity which would tutions and large institutional investors such as pension plans. Com- cause customers to exceed their margin limits. pany's customers do not, and will not, include individuals. 20. See 12 C.F.R.225.25(b)(18) and (b)(19). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 727 The Board has taken into account and has relied Appendix A upon these commitments, the limitations in Regulation Y, and the regulatory framework established Contracts to be Executed and Cleared by pursuant to law by the CFTC for the trading of Company futures and options on futures contracts. In addition, the Board expects that the de novo entry of Applicant Chicago Mercantile Exchange into the market for the proposed FCM services in the United States would provide added convenience to Standard & Poor's 100 Stock Price Index futures Applicant's customers, and would increase the level Standard & Poor's Over-the-Counter 250 Stock Index of competition among existing providers of these futures services. Accordingly, the Board has determined that the performance of the proposed activities by Chicago Board of Trade Applicant could reasonably be expected to produce public benefits that would outweigh possible adverse The Bond Buyer Long-Term Municipal Bond Index effects under the proper incident to banking standard futures of section 4(c)(8) of the BHC Act. Options on The Bond Buyer Long-Term Municipal Based on the foregoing and all the facts of record, Bond Index futures the Board has determined to, and hereby does, ap- The Major Market Index futures prove the application subject to all the commitments made by Applicant in connection with this application, and the terms and conditions set forth in this Order, Appendix B and in the above-noted Board Orders that relate to these activities. The Board's determination is also Contracts to Be Executed and Cleared Through subject to all the terms and conditions set forth in Omnibus Trading Accounts with Unaffiliated Regulation Y, including those in sections 225.4(d) and FCMs 225.23(b), and to the Board's authority to require modification or termination of the activities of a bank Deutsche Terminborse GmbH holding company or any of its subsidiaries as the Board finds necessary to assure compliance with, and Deutsche Aktienindex 30 Stock Index (DAX) futures to prevent evasion of, the provisions of the BHC Act, German Government Bond Index futures and the Board's regulations and orders issued thereunder. The Board's decision is specifically conditioned Financiele Termijnmarkt Amsterdam NV on compliance with all the commitments made in connection with this application, including the com- Dutch Government Bond Index futures mitments discussed in this Order and the conditions set forth in the above-noted Board regulations and Hong Kong Futures Exchange Limited orders. These commitments and conditions shall be deemed to be conditions imposed in writing by the Hang Seng Stock Index futures Board in connection with its findings and decision, and may be enforced in proceedings under applicable law. Kansas City Board of Trade This transaction shall not be consummated later than three months after the effective date of this Order unless such period is extended for good cause by the Value Line Index futures Board, or by the Federal Reserve Bank of Chicago Mini Value Line futures acting pursuant to delegated authority. By order of the Board of Governors, effective London International Financial Futures Exchange May 6, 1993. The Financial Times-Stock Exchange 100 Equity Index futures Voting for this action: Chairman Greenspan and Governors Mullins, Angell, La Ware, Lindsey, and Phillips. Absent and Options on The Financial Times-Stock Exchange 100 not voting: Governor Kelley. Equity Index futures Options on Eurodollar futures JENNIFER J. JOHNSON U.K. Bond futures Associate Secretary of the Board Options on U.S. Treasury Bond futures Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

728 Federal Reserve Bulletin • July 1993 Marche a Terme d'Instruments Financiers through omnibus trading accounts with unaffiliated FCMs, the futures contracts and options on futures French Government Bond Index futures contracts set forth in Appendix B; and (3) Providing related investment advisory services. New York Futures Exchange Applicant proposes to conduct the foregoing activities throughout the United States. New York Stock Exchange Composite Index futures Options on New York Stock Exchange Composite Notice of the application, affording interested per- Index futures sons an opportunity to submit comments, has been duly published (58 Federal Register 3283 (1993)). The Philadelphia Board of Trade time for filing comments has expired, and the Board has considered the application and all comments re- National Over-the-Counter Index futures ceived in light of the public interest factors set forth in section 4(c)(8) of the BHC Act. Singapore International Monetary Exchange Applicant, with total consolidated assets equivalent to approximately U.S. $464 billion, is the third largest Nikkei 225 Stock Average futures bank in the world, and provides a full range of retail and wholesale banking services worldwide.2 Applicant Sydney Futures Exchange is a registered bank holding company by virtue of its ownership of Manufacturers Bank, Los Angeles, Cal- All Ordinaries Share Index futures ifornia, a state-chartered bank, the deposits of which Australian Government Bond futures are insured by the Federal Deposit Insurance Corporation. In addition, Applicant operates branches in Tokyo Stock Exchange Chicago, Illinois; New York, New York; and Seattle, Washington; agencies in Los Angeles and San Fran- Tokyo Stock Price Index (TOPIX) futures cisco, California; Atlanta, Georgia; and Houston, Japanese Government Bond futures Texas; and representative offices in Lexington, Kentucky; and Detroit, Michigan. Applicant also has received prior approval by the Federal Reserve System Sakura Bank, Limited to operate a variety of nonbanking subsidiaries under Tokyo,Japan section 4(c)(8) of the BHC Act. Company is a privately held corporation, and is Order Approving an Application to Engage in registered with the Commodity Futures Trading Com- Futures Commission Merchant Activities mission ("CFTC") as an FCM and a commodity trading advisor ("CTA"). Company therefore is sub- The Sakura Bank, Limited, Tokyo, Japan ("Appli- ject to the recordkeeping, reporting, fiduciary, and cant"), a foreign bank subject to the provisions of the other requirements of the Commodity Exchange Act Bank Holding Company Act ("BHC Act"), has ap- (7 U.S.C. § 1 et seq.) and the CFTC. plied under section 4(c)(8) of the BHC Act (12 U.S.C. Applicant seeks authority to conduct, through Com- § 1843(c)(8)), and section 225.23(a)(3) of the Board's pany, both execution and clearing activities on the Regulation Y (12 C.F.R. 225.23(a)(3)), to acquire Chicago Board of Trade ("CBOT") and the Chicago 60 percent of the outstanding shares of Dellsher In- Mercantile Exchange ("CME").3 Company also provestment Company, Inc., Chicago, Illinois ("Company"),1 and, through Company, to engage in the following futures commission merchant ("FCM") activities: 2. Asset data are as of September 30, 1992. (1) Executing and clearing, executing without clear- 3. Company currently engages in FCM execution and clearing activities and investment advisory activities permissible for bank ing, and clearing without executing, as agent for holding companies under section 225.25(b)(18) and (19) of Regulainstitutional investors and other sophisticated cus- tion Y (12 C.F.R. 225.25(b)(18) and (19)), and prior Board orders. Company also engages in certain FCM activities that have not been tomers, the futures contracts and options on futures approved for bank holding companies, including executing and clearcontracts set forth in Appendix A; ing futures contracts and options on futures contracts on non-financial (2) Executing and clearing, as agent for institutional commodities, providing investment advisory services with respect to such contracts, clearing (without executing) trades for professional investors and other sophisticated customers, floor traders, and certain other activities. Applicant has committed that, upon consummation of this proposal, Company will terminate all of its activities with respect to non-financial commodity futures 1. All of the remaining shares of the Company would be owned by contracts and options thereon. Applicant also has committed that, a single individual, who would serve as an officer of the Company. upon consummation of this proposal, Company will terminate its Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 729 poses to conduct FCM activities through omnibus non-clearing member on the CME.7 Company also customer trading accounts established in its own name proposes to execute trades that would be given up, at with clearing members of exchanges on which Com- a customer's request, to an unaffiliated FCM for pany would not itself be a clearing member.4 Using clearance.8 these omnibus accounts, Company, as agent for its The Board previously has determined, by regulation customers, could purchase and sell any of the con- and order, that, with four exceptions, acting as an tracts described in section 225.25(b)(18) of Regula- FCM in executing and clearing all the futures contracts tion Y or listed in Appendix B through a clearing and options on futures contracts proposed in this case member of the relevant exchange. Alternatively, Com- on the indicated exchanges, and providing investment pany's customers could place orders directly with the advisory services with respect to such contracts, are clearing firms with which Company maintains omnibus activities closely related to banking under section accounts.5 4(c)(8) of the BHC Act.9 In order to approve this In addition, Applicant seeks authority for Company application, the Board must determine that the perforto clear trades on the CBOT and the CME that have mance of the proposed activities by Applicant "can been executed by unaffiliated brokers pursuant to reasonably be expected to produce benefits to the so-called "give-up agreements."6 Company would not public . . . that outweigh possible adverse effects, such be the primary clearing member for any non-clearing as undue concentration of resources, decreased or member on the CBOT, and would not qualify any 7. See generally CBOT Rules 333.00(a) and 350.06; CME Rules 511 and 524. clearing (without executing) activities for professional floor traders, 8. In such cases, Company, which serves as its own primary locals, market makers, or specialists that trade for their own accounts. clearing firm, would be obligated to clear any trade that it executes and Applicant also has committed that Company will not engage in any that has been rejected by the designated clearing firm pursuant to a proprietary trading. Company has stated that its customers will give-up agreement. Because Company is ultimately liable to clear all consist solely of banks and other financial institutions, companies, trades that it executes but gives up to another FCM, Company would, other clearing and brokerage firms, professionally managed funds in conducting the proposed execution-only activities, observe all the such as pension funds and commodity pools, and high-net-worth same risk-management procedures it uses when both executing and individuals with sophisticated business experience and extensive prior clearing trades. On the basis of these procedures, the Board has professional experience with financial futures instruments. Applicant determined that Company has adequately addressed the possible will provide the Federal Reserve System with prior notice of any adverse effects of executing without clearing trades, and that approval significant change in the characteristics of Company's customer base. of this activity is consistent with the BHC Act. 4. An omnibus account is an arrangement between a member 9. See, e.g., 12 C.F.R. 225.25(b)(18) and (19); The Long-Term clearing firm of an exchange and a nonmember FCM that seeks to Credit Bank of Japan, Limited, 79 Federal Reserve Bulletin 347 (1993) conduct business on that exchange. Under such an arrangement, the ("Long-Term Credit Bank //"); National Westminster Bank PLC, 78 member clearing firm executes and clears transactions for the non- Federal Reserve Bulletin 953 (1992); Swiss Bank Corporation, 77 member FCM and its customers. The omnibus account reflects all Federal Reserve Bulletin 759 (1991); Morgan Guaranty International positions of the FCM's customers, but is divided into separate Finance Corporation, 77 Federal Reserve Bulletin 499 (1991); The segments for each customer for purposes of calculating margin re- Sanwa Bank, Limited, 77 Federal Reserve Bulletin 64 (1991); Morgan quirements, reporting current holdings, and other matters. Applicant Guaranty International Finance Corporation, 76 Federal Reserve has stated that this service would be provided as an accommodation to Bulletin 881 (1990); The HongKong and Shanghai Banking Corporaits customers: The customer would not need to open its own account tion, 76 Federal Reserve Bulletin 770 (1990); Citicorp, 76 Federal with a clearing member (an undertaking that might not be economi- Reserve Bulletin 664 (1990); The Long-Term Credit Bank of Japan, 76 cally justified by the customer's anticipated trading activity on that Federal Reserve Bulletin 554 (1990). Two of the exceptions are the exchange), and Company would be able to provide each customer Deutsche Aktienindex 30 Stock Index (DAX) futures and German with a single statement describing the customer's overall futures Government Bond Index futures contracts traded on the Deutsche position. Company would be financially responsible to the clearing Terminborse GmbH ("DTB"). The Board has approved FCM activmember with which it establishes an omnibus account for all trades ities with respect to these contracts on the DTB pursuant to Regulaproperly made by the clearing member through the account, but would tion K (12 C.F.R. Part 211). See Morgan Guaranty International not hold an ownership interest in the traded contracts. Company Finance Corporation, 76 Federal Reserve Bulletin 881 (1990). The would not become a member of any exchange of which it is not other two exceptions are the trading on the CBOT of Tokyo Stock currently a member without prior notice to, and, if required, approval Price Index (TOPIX) futures contracts and options on TOPIX futures of the Federal Reserve System. contracts. Each of these contracts has previously been approved for 5. In general, Company would accept orders from customers and trading on another exchange, and the execution and clearance of these act as agent in the purchase and sale of contracts. With respect to its contracts would be governed by the same operations and procedures omnibus account customers, Company would employ the same credit applicable to other contracts previously approved on the CBOT. See approval and risk management procedures developed for its own Long-Term Credit Bank II. Each of these four instruments are related executing and clearing activities. In particular, Company's omnibus to financial instruments that are broad based, widely traded, and account activities would be conducted only pursuant to agreements comparable to the contracts previously approved by the Board. These that impose duties on clearing firms to comply with Company's contracts have essentially the same terms and serve the same funcinstructions as to customer trading and other parameters. In addition, tions as the futures contracts for which FCM services previously have Company would open omnibus accounts only with clearing firms that been approved under section 4(c)(8) of the BHC Act. In addition, the satisfied Company's financial, managerial, and operational standards. Board believes that the skills necessary to engage in providing FCM 6. Under a give-up agreement, the executing floor broker (or services with respect to these contracts are virtually indistinguishable "give-in broker"), pursuant to a customer's instructions, gives up an from those employed in providing such services with respect to executed order for clearance to a clearing member other than the contracts previously approved. Hence, the Board has concluded that executing broker's primary clearing member (or qualifying clearing FCM activities with respect to such contracts on the DTB are closely member). related to banking under section 4(c)(8) of the BHC Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

730 Federal Reserve Bulletin • July 1993 unfair competition, conflicts of interests, or unsound would have been the primary clearing firm for profesbanking practices." 12 U.S.C. § 1843(c)(8). In this sional floor traders, who traded for their own accounts regard, the Board must consider the financial condi- and executed their own trades. As a primary clearing tion and resources of the applicant and its subsidiaries firm, the FCM would have been obligated to clear all and the effect of the proposal on these resources.10 trades executed by these customers regardless of the Based on the facts of this case, the Board concludes risk to the FCM or the ability of the customer to meet that the financial considerations are consistent with its financial obligations. In this case, by contrast, approval of this application. The managerial resources Company would not serve as the primary or qualifying of Applicant also are consistent with approval. clearing firm for any unaffiliated customers, and Ap- The Board previously has denied a proposal in plicant has committed that, upon consummation of which a nonbank subsidiary of a bank holding com- this proposal, Company will terminate all existing pany would have primarily cleared, but not executed, clearing-only activities for professional floor traders. trades for professional floor traders (primarily locals, Company would clear only those trades that Company market makers, and specialists) trading for their own itself executes, or that another executing broker exeaccounts on major securities and commodities ex- cutes and Company accepts for clearance pursuant to changes.11 The Board determined in that case that the a customer give-up agreement. The executing brokers potential adverse effects of the clearing-only proposal, would be independent from the customers, and would have the opportunity to evaluate the trades before they including the attendant financial risks, outweighed the were executed.15 potential public benefits of the activity, and, consequently, that the proposal did not meet the require- In this regard, all of Company's clearing-only activment of section 4(c)(8) of the BHC Act that the activity ities would be conducted pursuant to give-up agreebe a "proper incident to banking."12 ments. Applicant has represented to the Board that, In particular, the Board was concerned that, by not under these give-up agreements and its other customer engaging in both the execution and clearance of a agreements, Company could decline to accept those trade, a bank-affiliated FCM would not be able to trades that Company determines present unacceptable decline transactions that presented unacceptable risk. risks.16 Under its agreements, Company also has the In this regard, the clearing FCM would have been right to cancel or liquidate any of its customers' obligated to settle each trade entered into by its outstanding trades whenever Company deems it neccustomers, even if the customer did not have the essary for its own protection. In addition, under the financial resources to honor its obligations. Moreover, rules of the CBOT and the CME, Company has a the Board noted that no mechanism existed by which specified period of time in which to examine an exethe clearing FCM could monitor, on a contemporane- cuted trade. During this period, Company is able to ous basis, the intra-day trading activities of the pro- determine whether the trade is within Company's risk fessional floor traders who were to be its primary parameters for the customer and otherwise properly customers.13 On the basis of this inability of the FCM authorized17 and, if the trade is not within such paramto control the risks it would undertake, together with the fact that clearing agents must guarantee the finan- 15. An executing FCM has an incentive to review all trades that it cial performance of their customers to the clearing gives up for clearance by an unaffiliated FCM, because the designated houses of the exchanges on which they operate, the clearing FCM, pursuant to the give-up agreement, may refuse to Board concluded that the proposed activity presented accept the trade for clearance if the trade exceeds the customer's trading limits or otherwise poses unacceptable risk to the clearing substantial credit risk exposure to the parent bank FCM. In such a case, the executing FCM or its primary or qualifying holding company, and that public benefit consider- clearing firm would have to clear the trade. Thus, the executing FCM has an interest in determining whether a customer's trade poses any ations precluded approval of the application under risk to the executing FCM, even if the trade is to be given up to section 4 of the BHC Act.14 another FCM for clearance. Applicant's proposal differs from the situation pre- 16. In such an event, the executing broker's primary or qualifying clearing firm would be obligated to clear the trade. sented in the AMRO Order in a number of respects. 17. Under the rules of the CBOT, the pertinent executing brokers For example, in AMRO, the bank-affiliated FCM are required to deliver trading cards to Company within 15 minutes after the half-hour interval during which an order is executed or 15 minutes after the close of the relevant market; because the CBOT rules require that trades be submitted to the CBOT Clearing Corpo- 10. See 12 C.F.R. 225.24; The Fuji Bank, Limited, 75 Federal ration for matching within one hour after the end of any such half-hour Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 Federal interval or market close, Company has at least 45 minutes to review a Reserve Bulletin 155 (1987). trade before it is required to submit the trade to the CBOT Clearing 11. See Stichting Prioriteit ABN AMRO Holding, et al., 77 Federal Corporation for matching. See Memorandum of the CBOT dated May Reserve Bulletin 189 (1991) ("AMRO Order"). 3, 1990; CBOT Clearing Corporation Submission Deadlines dated 12. See AMRO Order at 191. November 1991. Under the comparable rules of the CME, Company 13. Id. has at least one hour to review a trade before submitting it to the 14. Id. exchange's clearing house. See CME Clearing Member Transfer Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 731 eters and properly authorized, to decide whether to position, or considering the customer's request to inreject the trade for clearance.18 crease the margin limit. Moreover, Company's compliance and operations On the basis of this framework for limiting risk from director and chief operating officer will review the clearing-only activities, as well as all the commitments creditworthiness and other characteristics of each po- made by Applicant, and other facts of record, the tential customer, and, based on such review, will ap- Board has determined that credit and other risk conprove or reject the potential customer and establish siderations associated with the proposed clearing-only appropriate trading, credit, margin, and exposure limits activities on the CBOT and the CME are consistent for each customer. The Board notes that Company's with approval of this application. customer base will consist solely of institutional inves- The record does not indicate that consummation of tors and high-net-worth individuals with sophisticated this proposal, subject to the commitments and condibusiness experience and extensive prior professional tions noted in the application or in this Order, would experience with financial futures instruments. As noted result in any significantly adverse effects, such as undue above, Company will not conduct clearing-only activi- concentration of resources, decreased or unfair competies for locals, market makers, specialists, or other tition, conflicts of interests, or unsound banking pracprofessional floor traders that are trading for their own tices, that are not outweighed by the public benefits that accounts. the Board expects to result from the consummation of Company also has in place procedures to monitor the this proposal. Moreover, Applicant has committed to intra-day trading activities and risk exposure of its conduct its proposed FCM and CTA activities in accorcustomers. First, each customer is assigned a margin dance with the conditions and restrictions on such limit at the time a trading account is opened. All activities set forth in Regulation Y and in this Order.19 managers of Company's various trading desks on the The Board has taken into account and has relied upon floor of the CBOT and the CME are advised of the these commitments, the limitations in Regulaanticipated trading volume for new customers, review tion Y, and the regulatory framework established purcustomers' outstanding trading positions with Com- suant to law by the CFTC for the trading of futures pany's compliance and operations director before the contracts and options on futures contracts, and the start of each trading day, and gain familiarity with rules of the CBOT and the CME governing the procustomers' trading patterns as a result of the daily posed activities of Applicant. In addition, the Board handling of customers' trades. Moreover, executing expects that the de novo entry of Applicant into the brokers are required by the rules of the CBOT and the market for the proposed FCM services in the United CME to deliver tickets for trades to be cleared by States would provide added convenience to Applicant's Company to Company's trading desks within 15 min- customers and would increase the level of competition utes of the execution of the trades. At the trading desks, among existing providers of these services. Accordall intra-day trades to be cleared by Company on behalf ingly, based on consideration of all of the facts of of a customer are recorded. record, including the commitments made by Applicant Company's senior officers make inquiries during the regarding the conduct of the proposed activities and trading day among the desk managers in order to other matters, the Board has determined that the peridentify potential problems that may not be apparent to formance of the proposed activities by Applicant can individual desk managers. Upon being notified of or reasonably be expected to produce public benefits that otherwise identifying a potential problem, Company's would outweigh possible adverse effects that the Board compliance and operations director may take a number is required to consider under section 4(c)(8) of the BHC of measures to resolve the situation, including contact- Act. ing the customer for clarification, making a margin call Based on the foregoing and all the facts of record, on the customer, requesting the customer to liquidate the Board has determined to, and hereby does, apcertain contracts or transfer certain contracts to other prove the application, subject to all the commitments clearing brokers to reduce the customer's trading posi- made by Applicant in connection with this application tion below the margin limit, liquidating the customer's and all the terms and conditions set forth in this Order 19. See 12 C.F.R. 225.25(b)(18) and (19). Company would not trade Agreement Procedures Guide dated May 1989; Memorandum of CME for its own account except for the purpose of hedging a cash position Clearing House Division dated February 26, 1990. in the related financial instrument as permitted by Regulation Y (see 18. Senior officers of Company have the authority to accept trades 12 C.F.R. 225.25(b)(18)(ii)) or to offset or liquidate a clearing error not properly authorized or outside the parameters agreed to by arising in the normal course of business. The Board considers such Company. Customers' risk parameters are reviewed and adjusted by trading for the purpose of correcting clearing errors to be incidental to Company's senior officers as required to ensure that the limits are the permissible FCM activities under Regulation Y and the Board's appropriate to the customer's trading activity and financial condition. previous orders, and to be consistent with approval of this application. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

732 Federal Reserve Bulletin • July 1993 and in the above noted Board Orders that relate to Tokyo Stock Price Index (TOPIX) Futures these activities. The Board's determination also is Options on Tokyo Stock Price Index (TOPIX) Futures subject to all the conditions set forth in Regulation Y, 5-Year Interest Rate Swap Futures including those in sections 225.4(d) and 225.23(b), and Options on 5-Year Interest Rate Swap Futures to the Board's authority to require modification or 3-Year Interest Rate Swap Futures termination of the activities of a bank holding com- Options on 3-Year Interest Rate Swap Futures pany or any of its subsidiaries as the Board finds necessary to assure compliance with, and to prevent Chicago Mercantile Exchange evasion of, the provisions of the BHC Act and the Board's regulations and orders issued thereunder. The Australian Dollar Futures Board's decision is specifically conditioned on compli- Options on Australian Dollar Futures ance with all the commitments made in connection British Pound Futures with this application, including the commitments dis- Options on British Pound Futures cussed in this Order and the conditions set forth in the Canadian Dollar Futures Board regulations and orders noted above. For pur- Options on Canadian Dollar Futures poses of this action, the commitments and conditions Deutsche Mark Futures relied on in reaching this decision shall be deemed to Options on Deutsche Mark Futures be conditions imposed in writing by the Board in Japanese Yen Futures connection with its findings and decision, and may be Options on Japanese Yen Futures enforced in proceedings under applicable law. Swiss Franc Futures This transaction shall not be consummated later Options on Swiss Franc Futures than three months after the effective date of this British Pound/Deutsche Mark Currency Cross-Rate Order, unless such period is extended for good cause Futures by the Board or by the Federal Reserve Bank of San Options on British Pound/Deutsche Mark Currency Francisco, acting pursuant to delegated authority. Cross-Rate Futures By order of the Board of Governors, effective Deutsche Mark/Japanese Yen Currency Cross-Rate May 10, 1993. Futures Options on Deutsche Mark/Japanese Yen Currency Voting for this action: Vice Chairman Mullins and Gover- Cross-Rate Futures nors Angell, Lindsey, and Phillips. Absent and not voting: Deutsche Mark/Swiss Franc Currency Cross-Rate Chairman Greenspan and Governors Kelley and LaWare. Futures Options on Deutsche Mark/Swiss Franc Currency WILLIAM W. WILES Secretary of the Board Cross-Rate Futures Eurodollar Futures Options on Eurodollar Futures Appendix A 13-Week U.S. Treasury Bill Futures Options on 13-Week U.S. Treasury Bill Futures Contracts to Be Executed and Cleared by 30-Day LIBOR Futures Company Options on 30-Day LIBOR Futures Standard & Poor's 500 Stock Price Index Futures Chicago Board of Trade Options on Standard & Poor's 500 Stock Price Index Futures U.S. Treasury Bond Futures Nikkei 225 Stock Average Futures Options on U.S. Treasury Bond Futures Options on Nikkei 225 Stock Average Futures 10-Year U.S. Treasury Note Futures Options on 10-Year U.S. Treasury Note Futures Appendix B 5-Year U.S. Treasury Note Futures Options on 5-Year U.S. Treasury Note Futures Contracts to Be Executed and Cleared by 2-Year U.S. Treasury Note Futures Company through Omnibus Trading Accounts 2-Year Cash-Settled U.S. Treasury Note Futures with Unaffiliated FCMs 30-Day Interest Rate Futures Major Market Index Maxi Stock Index Futures The Bond Buyer Long-Term Municipal Bond Index Deutsche Terminborse GmbH Futures Options on The Bond Buyer Long-Term Municipal Deutsche Aktienindex 30 Stock Index (DAX) Futures Bond Index Futures German Government Bond Index Futures Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 733 Hong Kong Futures Exchange Limited Osaka Securities Exchange Hang Seng Stock Index Futures Nikkei 225 Stock Average Futures Options on Nikkei 225 Stock Average Futures Kansas City Board of Trade Osaka 50 Stock Index Futures Singapore International Monetary Exchange Value Line Index Futures 3-Month Euro-Yen CD Futures London International Financial Futures Exchange Nikkei 225 Stock Average Futures The Financial Times-Stock Exchange 100 Equity Sydney Futures Exchange Index Futures Options on The Financial Times-Stock Exchange 100 10-Year Australian Government Bond Futures Equity Index Futures Options on 10-Year Australian Government Bond ECU-CD Interest Rate Futures Futures ECU Bond Futures 3-Year Australian Government Bond Futures Eurotrak 100 Stock Index Futures Options on 3-Year Australian Government Bond 3-Month Euro-Swiss Franc CD Futures Futures Options on 3-Month Euro-Swiss Franc CD Futures 3-Month Australian Government Bill Futures 3-Month Euro-Sterling CD Futures Options on 3-Month Australian Government Bill Options on 3-Month Euro-Sterling CD Futures Futures 3-Month Euro-Deutschemark CD Futures All Ordinaries Share Index Futures Options on 3-Month Euro-Deutschemark CD Futures Options on All Ordinaries Share Index Futures 10-Year Japanese Government Bond Index Futures Options on 10-Year Japanese Government Bond Index Tokyo International Financial Futures Exchange Futures 10-Year German Government Bond Index Futures Euroyen Futures Options on 10-Year German Government Bond Index Eurodollar Futures Futures Long UK Government Bond Futures Tokyo Stock Exchange Options on Long UK Government Bond Futures Tokyo Stock Price Index (TOPIX) Futures Marche a Terme d'Instruments Financiers 10-Year Japanese Government Bond Futures 20-Year Japanese Government Bond Futures French Government Bond Index Futures Options on 10-Year Japanese Government Bond French Franc PIBOR-CD Futures Futures ECU Bond Futures French Stock Index (CAC-40) Futures 3-Month Euro-Deutschemark CD Futures Orders Issued Under Sections 3 and 4 of the Options on 3-Month Euro-Deutschemark CD Futures Bank Holding Company Act 10-Year French Government Bond Futures Options on 10-Year French Government Bond Futures Huntington Bancshares, Incorporated Columbus, Ohio Montreal Stock Exchange Order Approving the Acquisition of a Bank Holding Canadian Government Bond Futures Company New York Financial Exchange Huntington Bancshares, Incorporated, and Huntington Bancshares West Virginia, Inc., both of Colum- New York Stock Exchange Composite Index Futures bus, Ohio (together, "Huntington"), and both bank Options on New York Stock Exchange Composite holding companies within the meaning of the Bank Index Futures Holding Company Act ("BHC Act"), have applied Commodity Research Bureau Index Futures under section 3 of the BHC Act (12 U.S.C. Options on Commodity Research Bureau Index § 1842(a)(3)) to acquire all the voting shares of CB&T Futures Financial Corp. and CB&T Clarksburg Corp., both of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

734 Federal Reserve Bulletin • July 1993 Fairmont, West Virginia (together, "CB&T"), and Competitive Considerations thereby indirectly acquire: Community Bank & Trust, N.A., Fairmont; Community Bank & Trust of Ritchie Huntington and CB&T compete directly in the Mor- County, Harris ville; Bank of Hundred, Inc., Hundred; gantown, West Virginia ("Morgantown"), banking CBT-Westover Bank, Inc., Westover; Community market.5 In this market, Huntington is the largest Bank & Trust of Harrison County, Clarksburg; and banking or thrift organization ("depository institu- Community Bank & Trust of Randolph County, El- tion"), controlling deposits of approximately $292 milkins, all in West Virginia.1 lion, representing 41.8 percent of total deposits in Huntington also has applied under section 4(c)(8) of depository institutions in the market ("market deposthe BHC Act (12 U.S.C. § 1843(c)(8)) to acquire its").6 CB&T is the third largest depository institution CB&T Capital Investment Company, Fairmont, West in the market, controlling deposits of approximately Virginia, and thereby engage in making and servicing $99.6 million, representing 14.3 percent of market loans pursuant to section 225.25(b)(1) of the Board's deposits. Upon consummation of this proposal, Hun- Regulation Y (12 C.F.R. 225.25(b)(1)). tington would remain the largest depository institution Notice of these applications, affording interested in the Morgantown banking market, controlling depospersons an opportunity to submit comments, has been its of approximately $391.6 million, representing published (58 Federal Register 18,098 (1993)). The 56.1 percent of market deposits. The Herfindahltime for filing comments has expired, and the Board Hirschman Index ("HHI") would increase by 1194 has considered the application and all comments re- points to 3917.7 ceived in light of the factors set forth in sections 3 and In order to mitigate the potential anti-competitive 4 of the BHC Act. effects that would result from consummation of this Huntington, with total consolidated assets of ap- proposal in the Morgantown banking market, Huntingproximately $14.0 billion, controls eight subsidiary ton has committed to divest four branches in this banks in Ohio, West Virginia, Indiana, Kentucky, market that hold, in the aggregate, $77.7 million in Michigan, and Pennsylvania, as well as one thrift deposits to out-of-market competitors.8 Accounting organization in Florida.2 Huntington is the tenth larg- for these divestitures, the share of the Morgantown est commercial banking organization in West Virginia, controlling deposits of approximately $406.2 million, representing 2.5 percent of total deposits in commer- 5. The Morgantown RMA banking market consists of Monongalia cial banking organizations in the state.3 CB&T is the County, West Virginia, and Springhill Township of Fayette County, Pennsylvania. sixth largest commercial banking organization in 6. Market data are as of June 30, 1992. Market share data are based West Virginia, controlling deposits of approximately on calculations in which the deposits of thrift institutions are included at 50 percent. The Board previously has indicated that thrift institu- $661.5 million, representing 4.1 percent of total depostions have become, or have the potential to become, major competiits in commercial banking organizations in the state. tors of commercial banks. See Midwest Financial Group, 75 Federal Upon consummation of this proposal, Huntington Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Thus, the Board has regularly included would become the third largest commercial banking thrift deposits in the calculation of market share on a 50 percent organization in West Virginia, controlling deposits of weighted basis. See, e.g., First Hawaiian Inc., 77 Federal Reserve Bulletin 52 (1991). approximately $1.07 billion, representing 6.6 percent 7. Under the revised Department of Justice Merger Guidelines, of total deposits in commercial banking organizations 49 Federal Register 26,823 (June 29, 1984), a market in which the in the state.4 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 Justice Department has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anti-competitive effects) unless the post-merger HHI is at least 1800 and the merger or acquisition increases the HHI by at least 200 points. The Justice Department has stated that the higher than normal threshold for an increase in the HHI when screening bank 1. In connection with Huntington's proposed acquisition of CB&T, mergers and acquisitions for anti-competitive effects implicitly recog- Huntington has requested Board approval under section 3 of the BHC nizes the competitive effect of limited-purpose lenders and other Act to acquire an option to purchase up to 24.9 percent of the voting non-depository financial entities. shares of CB&T. This option will become moot upon consummation 8. Huntington has executed final sales agreements with two out-ofof Huntington's proposal to acquire CB&T. market competitors that will effect these divestitures within 180 days 2. Asset data are as of March 31, 1993. of consummation of the acquisition of CB&T. Huntington also has 3. State deposit data are as of December 31, 1992. committed that, in the event it is unsuccessful in completing the 4. The Board previously has determined that the interstate banking divestitures within 180 days of consummation of this proposal, Hunstatute of West Virginia permits an Ohio bank holding company to tington will transfer the relevant office or offices to an independent acquire banking organizations in West Virginia. See Banc One Cor- trustee with instructions to sell the office or offices promptly. See e.g., poration, 79 Federal Reserve Bulletin 519 (1993). Thus, consumma- BankAmerica Corporation, 78 Federal Reserve Bulletin 338, 340 tion of this transaction is not barred by section 3(d) of the BHC Act (1992); United New Mexico Financial Corporation, 77 Federal Re- (12 U.S.C. § 1842(d)). serve Bulletin 484, 485 (1991). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 735 banking market controlled by Huntington would in- to the convenience and needs of the communities to be crease by three percentage points, and the HHI would served and the other supervisory factors that the increase 148 points to 2872.9 Board must consider under section 3 of the BHC Act Upon consummation of this proposal, and after are consistent with approval of this proposal.12 giving effect to the proposed divestitures, the number Huntington also has applied, pursuant to section 4 of of depository institutions remaining in the market the BHC Act, to engage in making and servicing loans. would increase from nine to ten. The Morgantown As noted above, these activities are permissible for banking market also has a number of features that bank holding companies under section 4(c)(8) of the make it attractive for entry.10 West Virginia law per- BHC Act, and the Board's Regulation Y, and Hunmits West Virginia banks to branch into this market tington proposes to conduct these activities in accorand permits interstate entry from Pennsylvania.11 dance with the Board's regulations. There are numer- The Board also sought comments from the United ous providers of these nonbanking services, and there States Attorney General, the Office of the Comptroller is no evidence in the record to indicate that consumof the Currency ("OCC"), and the Federal Deposit mation of this proposal is likely to result in any Insurance Corporation ("FDIC") on the competitive significantly adverse effects, such as undue concentraeffects of this proposal. The Attorney General has tion of resources, decreased or unfair competition, indicated that, subject to Huntington's divestitures in conflicts of interests, or unsound banking practices the Morgantown banking market, consummation of that are not likely to be outweighed by the public this proposal would not have a significantly adverse benefits of this proposal. Accordingly, the Board has effect on competition in any relevant banking market. determined that the balance of public interest factors it Neither the OCC nor the FDIC objected to consum- must consider under section 4(c)(8) of the BHC Act is mation of the proposal or indicated that the proposal favorable and consistent with approval of Huntingwould have any significantly adverse competitive ef- ton's application to acquire CB&T's nonbanking subfects. sidiary. In light of all the facts of record, including the proposed divestitures in the Morgantown banking Conclusion market, the number and size of competitors remaining in the market, the market's attractiveness for entry, Based on the foregoing, including the conditions and and the number of potential entrants into the market, commitments described in this order and those made the Board concludes that the proposal would not have in these applications, and all the facts of record, the a significantly adverse effect on competition or the Board has determined that these applications should concentration of banking resources in the Morgantown be, and hereby are, approved. The Board's approval is banking market or in any other relevant banking specifically conditioned upon compliance by Huntingmarket. ton with all the commitments made in connection with Other Considerations 12. The Board notes that Huntington Federal Savings Bank, Sebring, Florida ("HFSB"), a thrift subsidiary representing approxi- The Board concludes that the financial and managerial mately 2 percent of Huntington's consolidated assets, received a less resources and future prospects of Huntington, its than satisfactory rating in its most recent examination for performance subsidiaries, and CB&T, are consistent with approval. under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA"). HFSB has taken steps to address the deficiencies in its The Board also concludes that considerations relating CRA performance and to improve performance, and has adopted a comprehensive CRA program that contains the elements of an effective CRA policy as outlined in the Statement of the Federal Financial Supervisory Agencies Regarding the Community Reinvestment Act 9. Huntington would remain the largest depository institution in the (54 Federal Register 13,742 (1989)) ("Agency CRA Statement"). Morgantown banking market, controlling deposits of approximately These steps include the hiring of a CRA compliance officer to $314 million, representing 45 percent of market deposits. administer HFSB's overall CRA program, and the establishment of a 10. Compared to other areas in West Virginia, the Morgantown CRA committee to oversee the planning and implementation of this banking market features a relatively large population, a high rate of program. This program includes increased activities designed to population growth, and a higher than average amount of deposits. In ascertain and meet the credit needs of low- and moderate-income addition, the average per capita income exceeds that of other markets communities. in these areas. Four banking organizations have entered the market The record does not show that the problems identified at HFSB since 1988, including two de novo entries in 1989 and 1990. indicate chronic institutional deficiencies or a pattern of CRA defi- 11. West Virginia banking law permits intrastate branching. See W. ciencies at other Huntington bank subsidiaries. In this regard, all of Va. Code § 31A-8-12 (Supp. 1992). In addition, commercial banking Huntington's other banking subsidiaries have received "outstanding" organizations in 45 states, including Pennsylvania, are authorized to or "satisfactory" ratings during the most recent examinations of their acquire West Virginia banks that have been in operation for at least CRA performance. In light of these and the other facts of record, the two years. See id. § 31A-8A-7. Moreover, Pennsylvania banking law Board believes that it is appropriate in this case to give weight to the permits interstate banking on a reciprocal basis. See Pa. Cons. Stat. corrective measures undertaken by Huntington to improve the CRA Ann. § 116 (Supp. 1992). performance of HFSB. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

736 Federal Reserve Bulletin • July 1993 these applications, including Huntington's divestiture given in accordance with the Bank Merger Act and the commitments. Board's Rules of Procedure (12 C.F.R. 262.3(b)). As The determinations as to the nonbanking activities required by the Bank Merger Act, reports on the are subject to all of the conditions in the Board's competitive effects of the proposal were requested Regulation Y, including those in sections 225.4(d) and from the United States Attorney General, the Office of 225.23(b)(3) (12 C.F.R. 225.4(d) and 225.23(b)(3)), and the Comptroller of the Currency, and the Federal to the Board's authority to require such modification Deposit Insurance Corporation. The time for filing or termination of the activities of a holding company or comments has expired, and the Board has considered any of its subsidiaries as the Board finds necessary to the application and all comments received in light of assure compliance with, or to prevent evasions of, the the factors set forth in the Bank Merger Act. provisions and purposes of the BHC Act and the Board's regulations and orders issued thereunder. The Competitive, Financial, and Managerial commitments and conditions relied on by the Board in Considerations reaching its decision regarding these applications are both deemed to be conditions imposed in writing by This proposal represents a reorganization of existing the Board in connection with its findings and decision, offices of depository institutions already controlled by and as such may be enforced in proceedings under the same bank holding company. The merger of applicable law. TCB-DEL into Bank is the final step in the overall The banking acquisitions may not be consummated consolidation of the credit card operations of CBC before the thirtieth calendar day following the effective after the merger of CBC with Manufacturers Hanover date of this Order, and the banking and nonbanking Corporation, New York, New York ("MHC").2 On acquisitions shall not be consummated later than three the basis of all the facts of record, the Board concludes months after the effective date of this Order, unless that consummation of this proposal would not result in such period is extended for good cause by the Board or significantly adverse effects on competition in any the Federal Reserve Bank of Cleveland acting pursu- relevant banking market. The financial and managerial ant to delegated authority. factors and future prospects of Bank and TCB-DEL By order of the Board of Governors, effective also are consistent with approval of this application. May 24, 1993. Convenience and Needs Considerations Voting for this action: Chairman Greenspan and Governors Angell, Kelley, LaWare, and Lindsey. Absent and not vot- In considering an application under the Bank Merger ing: Governors Mullins and Phillips. Act, the Board is required to consider the convenience and needs of the communities to be served, and take JENNIFER J. JOHNSON into account the records of the relevant depository Associate Secretary of the Board institutions under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA"). The CRA re- Orders Issued Under Bank Merger Act quires the federal financial supervisory agencies to encourage financial institutions to help meet the credit Chemical Bank needs of the local communities in which they operate, New York, New York consistent with safe and sound operation of such institutions. To accomplish this end, the CRA requires Order Approving Merger of Banks the appropriate federal supervisory authority to "assess the institution's record of meeting the credit Chemical Bank, New York, New York ("Bank"), a needs of its entire community, including low- and state member bank, has applied pursuant to section moderate-income neighborhoods, consistent with the 18(c) of the Federal Deposit Insurance Act (12 U.S.C. safe and sound operation of such institutions," and to § 1828(c)) ("Bank Merger Act"), to merge with its take that record into account in its evaluation of bank affiliate, Texas Commerce Banks, Newark, Delaware merger applications.3 ("TCB-DEL"), a Federal Deposit Insurance Corporation insured, special-purpose credit card bank.1 Notice of this application, affording interested persons an opportunity to submit comments, has been 2. The Board notes that competitive considerations were reviewed when CBC merged with MHC, and the Board found that consolidation would have no significantly adverse effects. See Chemical Banking 1. Both Bank and TCB-DEL are subsidiaries of Chemical Banking Corporation, 78 Federal Reserve Bulletin 74 (1992). Corporation, New York, New York ("CBC"). 3. 12 U.S.C. § 2903. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 737 In this regard, the Board has received comments cants regardless of race. The Board recognizes, howfrom the United Paperworkers International Union ever, that HMDA data alone provide an incomplete ("Protestant") alleging that 1991 Home Mortgage Dis- measure of an institution's lending in its community. closure Act ("HMDA") data indicate that Bank ille- The Board also recognizes that HMDA data have gally discriminates against minorities in New York limitations that make the data an inadequate basis, state.4 The Board has carefully reviewed the CRA absent other information, for concluding that an instiperformance record of Bank, as well as all comments tution has engaged in illegal discrimination in making received, the responses to those comments, and all of lending decisions. the other relevant facts of record in light of the CRA, The Board notes that Bank's most recent CRA the Board's regulations, and the Statement of the examination found no evidence of illegal discrimina- Federal Financial Supervisory Agencies Regarding the tion or other illegal credit practices at Bank. In this Community Reinvestment Act ("Agency CRA State- regard, examiners randomly selected and reviewed ment").5 Bank's loan documentation, including files for rejected loans. Record of Performance Under the CRA The Board also notes that Bank has taken a number of steps to address the disparities in its HMDA data. A. CRA Performance Examinations For example, Bank has created two new targeted mortgage programs for lower-income and minority The Agency CRA Statement provides that a CRA borrowers in New York state. The Neighborhood examination is an important, and often controlling, Homebuyers Mortgage offers favorable terms and factor in the consideration of an institution's CRA competitive rates for creditworthy borrowers who record and that these reports will be given great weight might otherwise have trouble qualifying for a mortin the applications process.6 In this case, the Board gage.7 Bank made 341 mortgages totalling $33.8 milnotes that Bank received an overall "outstanding" lion through this program in 1992. Bank also created a rating in its most recent examination of CRA perfor- $10 million Affirmative Mortgage Pool to hold mortmance conducted by the Federal Reserve Bank of gages in portfolios that do not meet the underwriting New York as of July, 1991. In addition, TCB-DEL criteria required by the secondary market.8 Bank received a "satisfactory" rating in its most recent closed 42 loans totalling $4.6 million to minority borrowers through this program in 1992. Bank also inexamination of CRA performance as of October 1992. creased its mortgage originations to minorities in New B. Analysis of HMDA Data York in 1992 by more than $65 million, an 80 percent increase over 1991. The Board has carefully reviewed the 1991 HMDA data In 1992, Bank expanded its special review process in reported by Bank in light of the Protestant's comments. the Residential Mortgage Department to re-evaluate These data indicate that, as a general matter, Bank has internally declined applications for conventional mortextended a significant number and percentage of home gages from minority applicants. In addition, Bank mortgage loans in low- and moderate-income neighbor- established the Homeownership and Mortgage Counhoods. In certain neighborhoods, however, the data seling Program to assist potential homebuyers who are reflect disparities between the loan rejection rates for having difficulty clearing up poor credit histories or minority applicants when compared to white appli- finding solutions to their high debt-to-income ratios. In cants. 1992, Bank committed over $300,000 to provide funds The Board is concerned when the record of an for five not-for-profit organizations in the New York institution indicates disparities in lending to minority metropolitan area offering this counseling. Bank also applicants and believes that all banks are obligated to helped form the New York Mortgage Coalition, comensure that their lending practices are based on criteria prised of twelve major New York banks and savings that assure not only safe and sound lending, but also institutions, to help minorities and lower-income resiassure equal access to credit by creditworthy appli- dents become qualified mortgage applicants. The Coalition will pool resources to provide mortgage coun- 4. The HMDA requires banks to report certain information regarding loan applications, approvals, and denials to the various banking 7. The features of this program include a reduced application fee, a agencies and the public. This information includes data on the race, lower required downpayment, fewer points and higher permissible gender, and income of individual loan applicants, as well as the debt-to-income ratios. location of the property securing the potential loan, and a description 8. Chemical recently increased this pool to $20 million. This of the application. program was developed for minorities or other applicants with in- 5. 54 Federal Register 13,742 (1989). comes of $53,000 or less seeking to purchase property in a low- or 6. Id. at 13,745. moderate-income community. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

738 Federal Reserve Bulletin • July 1993 seling in communities served by its member Program, and the Federal National Mortgage Associainstitutions to increase the accessibility of mortgages tion's Home Buyer's Program.9 to first-time, low-income borrowers. This year Bank established two committees to en- D. Conclusion Regarding Convenience and sure that the retail bank's underwriting standards do Needs Factors not discriminate against minority applicants. These committees, comprised of senior management, com- The Board has carefully considered all of the facts of munity development, compliance, underwriting and record, including the comments filed in this case, in legal staff, will review underwriting decisions and reviewing the convenience and needs factor under the procedures to ensure that all applicants are receiving Bank Merger Act. Based on a review of the entire equal treatment. record of this application, including the most recent CRA performance examinations of the institutions C. Additional Elements of CRA Performance involved in this case, the Board believes that the efforts of Bank to help meet the credit needs of all The Board also has considered other elements of the segments of the communities served, including low- CRA performance of Bank. The record indicates that and moderate-income neighborhoods, and all other Bank has in place the types of policies outlined in the convenience and needs considerations, are consistent Agency CRA Statement that contribute to an effective with approval of this application.10 CRA program. For example, Chemical Bank has a Based on the foregoing and all of the facts of record, CRA Coordinating Committee, which includes repre- the Board has determined that these applications sentatives from all the consumer-related departments should be, and hereby are, approved. The Board's of Bank. The CRA Coordinating Committee collects approval is specifically conditioned upon compliance and analyzes data from Bank's various ascertainment by Bank with all the commitments made in its appliefforts and reports on these efforts to two committees cation. For purposes of this action, the commitments comprised of senior-level officials. are considered conditions imposed in writing by the Bank ascertains the credit needs of its community Board in connection with its findings and decisions, through officer call programs, demographic and mar- and, as such, may be enforced in proceedings under ket research, customer database profiles, and surveys. applicable law. Bank has full-time "Streetbanker" employees as- This transaction shall not be consummated before signed to ascertain the credit needs of the community the thirtieth calendar day after the effective date of this and provide advice and information about bank prod- Order, or later than three months after the effective ucts and services. Bank also has special programs that date of this Order, unless such period is extended for ascertain the credit needs of specific portions of the good cause by the Board or by the Federal Reserve population that Bank serves. For example, Chemical Bank of New York, acting pursuant to delegated Community Development, Inc. ("CCDI") is a bank authority. subsidiary that provides financing for affordable hous- By order of the Board of Governors, effective ing initiatives. May 17, 1993. Bank markets its CRA-related products through a wide variety of media. For example, Bank advertises its credit products through local newspapers, television and radio, as well as minority-oriented newspapers. Bank also uses telemarketing campaigns, direct 9. The Board recently reviewed Bank's CRA record in detail and mail, press releases, branch posters and product bro- concluded that its policies and lending programs assisted in meeting the credit needs of the communities served. See Chemical Banking chures in English and Spanish to promote its products. Corporation, 78 Federal Reserve Bulletin 74 (1992). Bank meets the credit needs of its communities 10. Protestant has requested the Board hold public hearings on this application. The Board is not required under the Bank Merger Act to through programs such as CCDI, which helps finance hold a public hearing in this case. Under the Board's rules, the Board and construct affordable housing in low- and moderate- may, in its discretion, hold a public hearing or meeting on an income communities. CCDI has expanded its focus to application to clarify factual issues related to the application and to provide an opportunity for testimony, if appropriate. 12 C.F.R. include special commercial loan programs, including 262.3(e) and 262.25(d). SBA-guaranteed loans and loans to community-based, The Board has carefully considered this request. In the Board's not-for-profit organizations. Bank also participates in view, interested parties have had a sufficient opportunity to present written submissions, and have submitted substantial written comvarious loan programs including the Small Business ments that have been considered by the Board. In light of this, the Administration loan program, the Guaranteed Student Board has determined that a public hearing or public meeting is not Loan program, the New York State Energy Investment necessary to clarify the factual record in this application, or otherwise warranted in this case. Accordingly, the request for a public hearing or loan program, the New York City Home Improvement public meeting on this application is hereby denied. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 739 Voting for this action: Chairman Greenspan and Governors FDIC. The time for filing comments has expired, and Mullins, Angell, Kelley, La Ware, Lindsey, and Phillips. the Board has considered the application and all comments received in light of the factors set forth in JENNIFER J. JOHNSON the Bank Merger Act and section 5(d)(3) of the FDI Associate Secretary of the Board Act. CBT is the 14th largest banking organization in Kentucky, controlling deposits of $404.7 million, rep- ACTIONS TAKEN UNDER THE FEDERAL DEPOSIT resenting 1.3 percent of total deposits in commercial INSURANCE CORPORATION IMPROVEMENT ACT banks in the state.3 Upon acquiring Branches, CBT would become the ninth largest banking organization By the Board in Kentucky, controlling deposits of $473.5 million, representing 1.5 percent of total deposits in commer- CBT Corporation cial banks in the state. Paducah, Kentucky CBT and Branches compete in the Paducah, Kentucky, banking market.4 CBT is the second largest Order Approving Application to Acquire Branches of depository institution5 in the banking market, controla Savings Bank ling deposits of $389.3 million, representing approximately 28.9 percent of total deposits in depository CBT Corporation, Paducah, Kentucky ("CBT"), a institutions in the market ("market deposits").6 The bank holding company within the meaning of the Bank Branches to be acquired would constitute the fifth Holding Company Act ("BHC Act"), and its wholly largest depository institution in the market, controlling owned subsidiary, Citizens Bank and Trust Company, deposits of $68.8 million, representing approximately Paducah, Kentucky ("Bank"), have applied for the 5.1 percent of market deposits.7 Upon consummation Board's approval under section 5(d)(3) of the Federal of the proposed transaction, CBT would become the Deposit Insurance Act (12 U.S.C. § 1815(d)(3) ("FDI largest depository institution in the market, controlling Act")), as amended by the Federal Deposit Insurance deposits of $458.1 million, representing approximately Corporation Improvement Act of 1991 (Pub. L. No. 34 percent of market deposits. The Herfindahl- 102-242, § 501, 105 Stat. 2236, 2388-92 (1991)), to Hirschman Index ("HHI") for the market would inpurchase certain assets and assume certain liabilities crease 295 points to 2427.8 of three branch offices ("Branches") of Security Trust Federal Savings & Loan Association, Knoxville, Tennessee ("Savings Bank").1 Section 5(d)(3) of the FDI 3. Data for state ranking of banking organizations are as of June 30, Act requires the Board to review any proposed merger 1991. between a bank owned by a bank holding company 4. The Paducah, Kentucky, banking market is approximated by McCracken County, the LaCenter census division of Ballard County, and a savings association, or branches of a savings Livingston County south of the Cumberland River, and the northern association, in which the resulting institution is in- one-third of Marshall County, all in Kentucky, and Massac County sured by the Bank Insurance Fund, and, in reviewing and the Jefferson Number Four Precinct of Pope County in Illinois. 5. In this context, depository institutions include commercial banks, these proposals, to follow the procedures and consider savings banks, and savings associations. Market share data before the factors set forth in the Bank Merger Act, consummation are based on calculations in which the deposits of thrift 12 U.S.C. § 1828(c). 2 institutions are included at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to Notice of the application, affording interested per- become, significant competitors of commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin 788 (1990); National City Corporasons an opportunity to submit comments, has been tion, 70 Federal Reserve Bulletin 743 (1984). Because the assumed given in accordance with the Bank Merger Act and the deposits would be controlled by a commercial banking organization Board's Rules of Procedure (12 C.F.R. 262.3(b)). As under CBT's proposal, those deposits are included at 100 percent in the calculation of pro forma market share. See Norwest Corporation, required by the Bank Merger Act, reports on the 78 Federal Reserve Bulletin 452 (1992); First Banks, Inc., 76 Federal competitive effects of the mergers were requested Reserve Bulletin 669, 670 n.9 (1990). from the United States Attorney General, the Office of 6. Market data are as of December 31, 1992. 7. The deposits of Branches are weighted at 100 percent because the the Comptroller of the Currency ("OCC"), and the branches are currently owned by a commercial banking organization. 8. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in which the post-merger HHI is above 1800 is considered to be highly concen- 1. This transaction also is subject to approval by the Federal trated. In such markets, the Justice Department is likely to challenge Deposit Insurance Corporation ("FDIC") under the FDI Act and the a merger that increases the HHI by more than 50 points. The Justice Bank Merger Act. 12 U.S.C. §§ 1815(d)(3)(A)(i), 1828(c). Department has informed the Board that a bank merger or acquisition 2. These factors include considerations relating to competition, generally will not be challenged (in the absence of other factors financial and managerial resources, future prospects of the existing indicating anticompetitive effects) unless the post-merger HHI is at and proposed institutions, and the convenience and needs of the least 1800 and the merger increases the HHI by more than 200 points. communities to be served. 12 U.S.C. § 1828(c). The Justice Department has stated that the higher than normal HHI Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

740 Federal Reserve Bulletin • July 1993 The Board believes that a number of factors indicate deposit insurance from one federal deposit insurthat the increased level of concentration in the Pad- ance fund to another; ucah banking market, as measured by the HHI, over- (2) CBT and Bank currently meet, and upon constates the competitive effects of this proposal. For summation of the proposed transaction will continue example, 12 other depository institutions, including to meet, all applicable capital standards; and 11 commercial banks and one thrift institution, with a (3) Since Bank is located in Kentucky and is acquirtotal of $888.7 million in deposits representing ing certain assets and assuming certain liabilities of 66 percent of the market deposits, would remain in the three Kentucky branch offices of a federal savings market. The Paducah banking market also has a num- bank, the proposed transaction would comply with ber of features that make it attractive to entry. For the Douglas Amendment if Savings Bank were a example, McCracken County, Kentucky, where the state bank that CBT was applying to acquire dicity of Paducah is located and which is the primary rectly. See 12 U.S.C. § 1815(d)(3). population center of the banking market, ranks second in population and first in total deposits among non- Based on the foregoing and all the facts of record, MSA counties in Kentucky.9 Kentucky and Illinois the Board has determined that the application should allow interstate banking on a reciprocal basis, thereby be, and hereby is, approved. This approval is subject providing a large number of potential entrants into the to CBT obtaining the required approval of the appromarket. In addition, credit unions actively compete in priate Federal banking agency for the proposed merger the market and control 7.7 percent of the deposits in under the Bank Merger Act. The Board's approval of commercial banks, savings associations, and credit this proposal is expressly conditioned on compliance unions, which is greater than the national average of with the commitments made by CBT in connection approximately 5 percent.10 with this application. For purposes of this action, In light of the number of competitors remaining in these commitments and conditions relied on in reachthe market, the number of potential entrants into the ing this decision are both conditions imposed in writmarket, and other facts of record in this case, the ing by the Board in connection with its findings and Board concludes that consummation of this proposal decision, and, as such, may be enforced in proceedwould not result in any significantly adverse effect on ings under applicable law. competition or the concentration of banking resources The acquisition shall not be consummated before in the Paducah banking market. the thirtieth calendar day following the effective date The Board also sought comments from the United of this Order, or later than three months after the States Attorney General, the OCC, the FDIC, and the effective date of this Order, unless such period is Office of Thrift Supervision ("OTS") on the competi- extended for good cause by the Board or by the tive effects of this proposal. Neither the Attorney Federal Reserve Bank of St. Louis, acting pursuant to General, the OCC, the FDIC, or the OTS has provided delegated authority. any objection to consummation of the proposal or By order of the Board of Governors, effective indicated that the proposal would have any signifi- May 21, 1993. cantly adverse competitive effects. The Board also concludes that the financial and Voting for this action: Chairman Greenspan and Governors managerial resources, future prospects of CBT and Mullins, Angell, and Kelley. Absent and not voting: Gover- Bank, and convenience and needs considerations are nors La Ware, Lindsey, and Phillips. consistent with approval. Moreover, the record in this WILLIAM W. WILES case shows that: Secretary of the Board (1) The transaction will not result in the transfer of any federally insured depository institution's federal First Tennessee National Corporation Memphis, Tennessee thresholds for screening bank mergers for anticompetitive effects Order Approving Merger of a Savings Association implicitly recognize the competitive effects of limited-purpose lenders With a Commercial Bank and other non-depository financial entities. 9. In addition, the total deposits per banking office and per capita income in McCracken County are much higher than other non-MSA First Tennessee National Corporation, Memphis, Tencounties in Kentucky. The population of McCracken County also has increased somewhat in recent years compared with an absolute nessee ("First Tennessee"), has applied for the decline for the average non-MSA county in Kentucky. Board's approval to merge its savings association 10. In the case of one credit union, employees of more than subsidiary, Home Federal Bank, FSB, Johnson City, 50 percent of all employers in the Paducah market are eligible for membership. Tennessee ("Home Federal"), with and into its bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 741 subsidiary, First Tennessee Bank National Associa- on competition or the concentration of banking retion, Memphis, Tennessee ("Bank"), pursuant to sec- sources in any relevant banking market. tion 5(d)(3) of the Federal Deposit Insurance Act (12 U.S.C. § 1815(d)(3) ("FDI Act")), as amended by Convenience and Needs Considerations the Federal Deposit Insurance Corporation Improvement Act of 1991 (Pub. L. No. 102-242, § 501, 105 In evaluating the convenience and needs of the com- Stat. 2236, 2388-92 (1991)).1 Section 5(d)(3) of the FDI munities to be served, the Board has carefully consid- Act requires the Board to review any proposed merger ered comments submitted to the Board by Mid-South between a Savings Association Insurance Fund mem- Peace and Justice Center, Memphis, Tennessee ber and any Bank Insurance Fund ("BIF") member if ("Protestant"). Protestant alleges that Bank is not the acquiring or resulting institution is a BIF member satisfactorily meeting the convenience and needs of subsidiary of a bank holding company, and, in review- the communities it serves because: ing these proposals, to follow the procedures and (1) Bank's lending practices illegally discriminate consider the factors set forth in the Bank Merger Act against African-Americans in the Memphis area;5 (12 U.S.C. § 1828(c)). 12 U.S.C. § 1815(d)(3)(E).2 The (2) Bank's efforts at marketing its loan products to proposed merger is also subject to the review of the minority communities are inadequate; Office of the Comptroller of the Currency (the (3) Bank's loan products are not flexible enough to "OCC") under the Bank Merger Act, and has been meet the credit needs of low- and moderate-income reviewed and approved by the Office of Thrift Super- individuals and minorities;6 and vision (the "OTS"). (4) Bank's Community Reinvestment Act ("CRA") Notice of the application, affording interested per- program does not fully comply with the letter and sons an opportunity to submit comments, has been spirit of that statute.7 given in accordance with the Bank Merger Act and the Board's Rules of Procedure (12 C.F.R. 262.3(b)). In In assessing the impact of this proposal on the addition, reports on the competitive effects of the convenience and needs of the community, the Board merger were requested from the United States Attor- has considered the programs that Bank has in place to ney General, the OCC, the Federal Deposit Insurance serve its communities and Bank's proposal to imple- Corporation, and the OTS. The time for filing com- ment these programs in the branches of Home Federal ments has expired, and the Board has considered the to be acquired by Bank. In addition, the Board has application and all comments received in light of the taken into account the past record of performance of factors set forth in the Bank Merger Act and section the First Tennessee organization under the CRA. 5(d)(3) of the FDI Act. First Tennessee is the largest bank or savings association ("depository institution") in Tennessee, con- 5. Protestant's allegations are based on data Bank is required to file trolling total deposits of $6.6 billion, representing under the Home Mortgage Disclosure Act ("HMDA"). 12 U.S.C. § 2801 et seq. In particular, Protestant asserts that there are significant approximately 11.8 percent of total deposits in depos- disparities between Bank's volume of lending and denial rates for itory institutions in the state.3 First Tennessee cur- white applicants and African-American applicants for home-purchase financing and refinancing, and home-improvement financing in the rently owns and controls both Bank and Home Fed- Memphis area. Protestant also notes that Bank makes significantly eral, and the proposed transaction represents a more loans, as measured by dollar volume of loans, to Bank's reorganization of First Tennessee's corporate struc- directors, officers and affiliated companies, as reported in Bank's annual report, than mortgage loans to African-Americans. ture. The Federal Reserve Bank of St. Louis reviewed 6. In particular, Protestant alleges that: the competitive effects of the affiliation of Home (1) Bank's reliance on poor credit histories and unsatisfactory Federal and Bank at the time that Home Federal was debt-to-income ratios as primary reasons for rejecting loan applications from African-Americans demonstrates the need for Bank to acquired by First Tennessee, and determined that the develop a loan product with more flexible underwriting criteria; competitive effects were not significantly adverse in (2) Bank's underwriting criteria for the financing of HUD forecloany relevant market.4 Consummation of the proposed sure property are too stringent, and Bank therefore fails to serve an essential part of the low-income housing market; and merger transaction also would have no adverse effect (3) Bank's failure to offer its low-interest Visa Gold card to applicants with incomes below $35,000 discriminates against lowand moderate-income customers whose income qualifies them only for Bank's higher interest rate credit card. 1. First Tennessee acquired Home Federal on December 14, 1992. 7. 12 U.S.C. § 2901 et seq. For example, Protestant alleges that See 79 Federal Reserve Bulletin 157 (1993) Bank's charitable donations to community organizations engaged in 2. These factors include considerations relating to competition, low-income housing and small business development are inadequate. financial and managerial resources, future prospects of the existing Protestant further believes that, in the spirit of compliance with the and proposed institutions, and the convenience and needs of the CRA, Bank should refuse to do business with mortgage companies communities to be served. 12 U.S.C. § 1828(c). that have not provided complete and accurate HMDA data or whose 3. State deposit data are as of June 30, 1992. HMDA data indicate a racial disparity in the denial rates for loan 4. 79 Federal Reserve Bulletin 157 (1993). applications. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

742 Federal Reserve Bulletin • July 1993 The Board notes that Bank received a "satisfacto- idential mortgages at below-market rates to homery" rating from its primary regulator, the OCC, in the owners in Chattanooga, Tennessee.10 November 1991 examination of its CRA performance. The record indicates that Bank has been responsive All of First Tennessee's other subsidiaries have re- to the credit needs of its communities. For example, in ceived at least a "satisfactory" rating from their 1988, Bank developed a 10-year Neighborhood Reviprimary regulators in the most recent examinations of talization Program to address housing and small busitheir CRA performance. ness loan needs. Under this program, Bank offers The record in this case indicates that Bank has in loans using more flexible underwriting criteria to proplace many of the elements of an effective CRA vide home-purchase, home-improvement and small program. Bank has a CRA Manager and a CRA business loans to low- and moderate-income people in Action Committee consisting of senior executive all of Bank's delineated communities.11 Through Deofficers of Bank. The CRA Action Committee meets cember 1992, Bank has loaned over $25 million under regularly to review and monitor the CRA program this program. Bank also participates in the Tennessee and to make adjustments when necessary, and re- Housing Development Agency's Homeownership Proports directly to the board of directors and its exec- gram, which is designed to provide mortgages at utive committee. Bank management develops, and below-market rates to certain low-income households. the board of directors approves, an annual CRA In addition, Bank makes mortgage loans under FHA Assessment and a CRA Marketing Plan containing Section 221 and 203 programs,12 and Bank is an specific goals and objectives for the coming year. As approved Small Business Administration ("SBA") part of Bank's CRA program, Bank's board of direc- lender, with $3.2 million of SBA loans outstanding as tors and senior management have developed written of December 31, 1992. policies, procedures and training programs to ensure The Board has carefully reviewed available 1990 and that Bank does not illegally discourage or pre-screen 1991 HMDA data of Bank in light of Protestant's loan applicants, and the board and senior manage- comments. While these data show denial rates that ment exercise active policy oversight of CRA activ- vary according to race, the CRA performance examiities and performance. nations of Bank found no evidence of illegal discrimi- Bank actively participates in projects that support nation or other illegal credit practices.13 In addition, community development activities. In this regard, in the Board notes that Bank has taken steps to address 1991, Bank took the lead in the formation of a Commu- the racial disparity in loan denial rates and improve its nity Development Corporation ("CDC") in Memphis, HMDA-related lending. In 1992, Bank management Tennessee, which was established to provide funding ordered the audit department to conduct a thorough for the renovation, improvement, and construction of review of Bank's loan approval process to ensure that housing for low- and moderate-income families.8 Bank Bank was not engaging in discriminatory practices. also co-sponsors and participates in the Dyer County The audit department review indicated that the pri- Housing Development Corporation ("DCHDC") mary reasons for rejection of loan applications were which was established to promote and advance safe and applicants' high debt-to-income ratios and poor credit sanitary housing for low- and moderate-income fami- histories. To address this, Bank has started offering lies.9 Bank participates in several other projects targeted at low- and moderate-income communities, including the Home Buyers Acquisition/Rehab Program 10. Under the Home Buyers Acquisition/Rehab Program, qualified borrowers can obtain loans with high loan-to-value ratios and with designed to provide affordable housing by offering loans interest rate discounts of up to 1 percent. Bank has agreed to provide with more flexible lending criteria, and Chattanooga $1 million of the $6.5 million needed to fund this program. Bank Neighborhood Enterprises, established to provide res- provided $250,000 of the $1 million line of credit that was extended to Chattanooga Neighborhood Enterprises by several financial institutions. 11. Bank has committed to lend $100 million at the rate of up to $10 million per year for ten years to eligible borrowers. 12. These loans offer up to 30-year terms, 97 percent loan-to-value financing and reduced closing costs. In certain of these cases, Bank 8. Bank provided $200,000 of the initial $400,000 equity to capitalize offers an interest rate discount of up to 1 percent to eligible borrowers CDC. In 1992, CDC provided $1.1 million in mortgages to 18 housing who would not otherwise qualify for the requested loan. projects in the Greenlaw District of Memphis, which is a downtown 13. While the Board is concerned when the record of an institution residential community in need of rehabilitation. Under this program, indicates disparities in lending to minority applicants, the Board qualified borrowers may receive down payment assistance in the form recognizes that HMDA data alone provide a limited measure of any of grants and/or a below-market rate of interest. given institution's lending in the communities that the institution 9. Bank provided $9,000 of the initial $64,750 equity to capitalize serves. The Board also recognizes that HMDA data have limitations DCHDC, which is based in Dyersburg, Tennessee. In 1992, DCHDC that make the data an inadequate basis, absent other information, for issued 19 grants totaling $51,250. Under this program, funds may be conclusively demonstrating whether an institution has engaged in used for down-payment and/or repair assistance, or rehabilitation or illegal discrimination on the basis of race or ethnicity in making construction of affordable housing. lending decisions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 743 budget and credit education and counseling programs with a savings institution located in Tennessee, the to rejected loan applicants, and has joined with minor- proposed transaction would comply with the interity realtors in sponsoring home-buying seminars. state banking provisions of the Bank Holding Com- The marketing activity directed by Bank to the pany Act (12 U.S.C. § 1842(d)) if Home Federal African-American community in Memphis shows that were a state bank that First Tennessee was applying Bank is actively seeking to offer its products and to acquire directly. See 12 U.S.C. § 1815(d)(3). services to this sector of the community. For example, Bank uses a minority advertising consultant to help Based on the foregoing and all other facts of record, promote its products, particularly those offered in its the Board has determined that this application should Neighborhood Revitalization Program, and advertises be, and hereby is, approved.14 This approval is subject its products in minority newspapers, on bus cards, and to Bank obtaining the OCC's approval for the proin publications that are free to the public. Bank also posed merger under the Bank Merger Act. The communicates the availability of its products to minor- Board's approval of this application also is condiity realtors in the Memphis area through advertising tioned upon First Tennessee's compliance with the and personal contacts. The record shows that Bank's commitments made in connection with this applicaefforts to market its products to the African-American tion. For purposes of this action, the commitments and community have been effective in the past. In 1991, for conditions relied on in reaching this decision are example, Bank made approximately $23 million in first conditions imposed in writing by the Board and, as mortgage loans to African-Americans, which repre- such, may be enforced in proceedings under applicable sented 37.7 percent of its first mortgage loans for that law. year. In addition, as of February 1, 1993, 41.4 percent This transaction may not be consummated before of Bank's outstanding consumer loans (totalling the thirtieth calendar day after the effective date of this $255 million) in Memphis had been made in predomi- Order, or later than three months after the effective nantly African-American, low- and moderate-income date of this Order, unless such period is extended by census tracts. Moreover, the OCC found that Bank the Board or the Federal Reserve Bank of St. Louis, affirmatively solicits credit applications from all segacting pursuant to delegated authority. ments of its local communities, with a strong focus on By order of the Board of Governors, effective low- and moderate-income neighborhoods. May 24, 1993. For the foregoing reasons, and based on all the facts of the record in this case, including Protestant's com- Voting for this action: Chairman Greenspan and Governors ments and First Tennessee's responses to these com- Angell, Kelley, La Ware, Lindsey, and Phillips. Absent and ments, the Board concludes that convenience and not voting: Governor Mullins. needs considerations, including the record of First JENNIFER J. JOHNSON Tennessee and Bank under the CRA, are consistent Associate Secretary of the Board with approval of this application. Other Considerations The Board also concludes that the financial and managerial resources and future prospects of First Tennessee, Bank and Home Federal are consistent with 14. Protestant has commented on the absence of African-Americans approval of this application. Moreover, the record in in upper level positions at Bank, and the failure of Bank to use African-American appraisers, closing attorneys and other professionthis case shows that: als to perform contract services for Bank. Bank states that Protes- (1) The transaction will not result in the transfer of tant's allegations that there are no African-American managers in any federally insured depository institution's federal Bank's Memphis area branches is incorrect, and further states that a number of African-Americans are employed in Bank's mortgage deposit insurance from one federal deposit insur- lending department, including the underwriting area, where credit ance fund to the other; decisions are made. Because Bank employs more than 50 people and acts as an agent to sell or redeem U.S. savings bonds and notes, it is (2) First Tennessee and Bank currently meet, and required by Treasury Department regulations to: upon consummation of the proposed transaction will (1) File annual reports with the Equal Employment Opportunity continue to meet, all applicable capital standards; Commission; and (2) Have in place a written affirmative action compliance program and which states its efforts and plans to achieve equal opportunity in the (3) Because Bank is in Tennessee and is merging employment, hiring, promotion and separation of personnel. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

744 Federal Reserve Bulletin • July 1993 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 BB&T Financial Corporation, 1st Home Federal Savings Branch Banking and May 18, 1993 Wilson, North Carolina and Loan Association Trust Company, of the Carolinas, F.A., Wilson, North Greensboro, North Carolina Carolina CCB Financial Corporation, 1st Home Federal Savings Central Carolina May 18, 1993 Durham, North Carolina and Loan Association Bank and Trust of the Carolinas, F.A., Company, Greensboro, North Raleigh, North Carolina Carolina FirsTier Financial, Inc., FirsTier Savings Bank, FirsTier Bank, N.A., April 26, 1993 Omaha, Nebraska F.S.B., Omaha, Nebraska Omaha, Nebraska Southern BancShares (N.C.), Citizens Savings Bank, Southern Bank and April 30, 1993 Inc., Inc., Trust Company, Mount Olive, North Carolina Rocky Mount, North Mount Olive, North Carolina Carolina APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Effective Applicant(s) Bank(s) ^ Mobile National Corporation, South Alabama Bancorporation, Inc. May 27, 1993 Mobile, Alabama Brewton, Alabama Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 745 Section 4 Effective Applicant(s) Bank(s) Date Chase Manhattan Corporation, Government Pricing Information May 5, 1993 New York, New York System, Inc., New York, New York 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 Associated Banc-Corp, Wausau Financial Chicago May 19, 1993 Green Bay, Wisconsin Corporation, Wausau, Wisconsin Bank Corporation of Georgia, Americorp, Inc., Atlanta May 14, 1993 Macon, Georgia Savannah, Georgia Cardinal Bancshares, Inc., F & P Bancshares, Inc., Cleveland May 14,1993 Lexington, Kentucky Somerset, Kentucky Central Bankshares, Inc., Central Bank and Trust, Atlanta May 7, 1993 Cordele, Georgia Cordele, Georgia Commerce Bancshares, Inc., Midwest Bancorporation, Kansas City April 30, 1993 Kansas City, Missouri Inc., CBI-Central Kansas, Inc., Hays, Kansas Kansas City, Missouri CTC Bancorp Inc., Commercial Trust Kansas City May 13, 1993 Fayette, Missouri Company of Fayette, Fayette, Missouri Farmers & Traders Bancshares, Farmers & Traders Bank, Chicago May 19, 1993 Inc., Shabbona, Illinois Shabbona, Illinois First Alabama Bancshares, Inc., Peoples Bank, Atlanta May 14, 1993 Birmingham, Alabama Vanleer, Tennessee First Alabama Bancshares, Inc., Republic Bancshares, Atlanta May 14, 1993 Birmingham, Alabama Inc., Nashville, Tennessee First Interstate BancSystem of Commerce BancShares of Minneapolis May 3, 1993 Montana, Inc., Wyoming, Inc., Billings, Montana Sheridan, Wyoming First National Bancorp, Villa Rica Bancorp, Inc., Atlanta April 30, 1993 Gainesville, Georgia Villa Rica, Georgia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

746 Federal Reserve Bulletin • July 1993 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank Date F & M Bancorporation, The Farmers and Atlanta April 28, 1993 Birmingham, Alabama Merchants Bank, Centre, Alabama Fourth Financial Corporation, Bancshares of Woodward, Kansas City April 26, 1993 Wichita, Kansas Inc., Woodward, Oklahoma Fourth Financial Corporation, F&M Bank Services, Kansas City April 27, 1993 Wichita, Kansas Inc., Derby, Kansas GFH Corp., Community Bank of Chicago May 14, 1993 Elmhurst, Illinois Elmhurst, Elmhurst, Illinois HNB Holding Company, Inc., Headland National Bank, Atlanta May 4, 1993 Headland, Alabama Headland, Alabama International Bancorporation, First National Agency of Minneapolis May 10, 1993 Bemidji, Minnesota Baudette, Inc., Baudette, Minnesota Lenawee Bancorp., Inc., Bank of Lenawee, Chicago May 7, 1993 Adrian, Michigan Adrian, Michigan The Merchants Holding Houston Investments, Minneapolis May 10, 1993 Company, Incorporated, Winona, Minnesota Minneapolis, Minnesota Minowa Bancshares, Inc., Minnesota Bank, National Chicago April 26, 1993 Decorah, Iowa Association, Caledonia, Minnesota Nashville Holding Company, Citizens Bank and Trust, Atlanta April 29, 1993 Nashville, Georgia Evans, Georgia NJIC, Inc., Westbank/Naperville, Chicago April 27, 1993 Naperville, Illinois Naperville, Illinois Westbank/Will County, Joliet, Illinois The Stuart Kansas City Limited Standard Bancorporation, Kansas City May 11, 1993 Partnership, Inc., Lincoln, Nebraska Independence, Missouri T R Financial Corp., Roosevelt Savings Bank, New York April 26, 1993 Garden City, New York Garden City, New York Valley Financial Corp., Community Bank, Chicago April 21, 1993 Caro, Michigan Caro, Michigan Section 4 . .. . Nonbanking Reserve Effective pp Activity/Company Bank Date Bankers Trust New York Government Pricing New York May 4, 1993 Corporation, Information System, New York, New York Inc., New York, New York Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 102 Section 4—Continued Nonbanking Reserve Effective Applicant(s) Activity/Company Bank Date Caisse Nationale de Credit LCA Holding Chicago April 22, 1993 Agricole, Corporation, Paris, France New York, New York Chemical Banking Corporation, Government Pricing New York May 4, 1993 New York, New York Information System, Inc., New York, New York Citizens Bancorp Investment, Town and Country Atlanta May 12, 1993 Inc., Finance Company, Lafayette, Tennessee Lafayette, Tennessee Citicorp, Government Pricing New York May 4, 1993 New York, New York Information System, Inc., New York, New York First Chicago Corporation, Government Pricing Chicago May 4, 1993 Chicago, Illinois Information System, Inc., New York, New York Gaylord Bancorporation, Ltd., Sterling Capital Advisors, Minneapolis May 3, 1993 Gaylord, Minnesota Inc., Gaylord, Minnesota The Industrial Bank of Japan, IBJ Capital Management New York May 3, 1993 Ltd., USA Ltd., Tokyo,Japan New York, New York J.P. Morgan & Co. Incorporated, Government Pricing New York May 4, 1993 New York, New York Information System, Inc., New York, New York Norwest Corporation, Personal Investments Minneapolis May 14, 1993 Minneapolis, Minnesota Unit of Citicorp Agency Services, Inc., Phoenix, Arizona Citicorp Agency Services, Inc., Phoenix, Arizona Blue Spirit Insurance, Inc., Phoenix, Arizona The Royal Bank of Scotland Standard Chartered Boston April 27, 1993 Group, pic, Equitor Asset Edinburgh, Scotland Management NA, Inc., The Royal Bank of Scotland, Boston, Massachusetts pic, Union Investors Asset Edinburgh, Scotland Management Company, Inc., Boston, Massachusetts Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

748 Federal Reserve Bulletin • July 1993 Sections 3 and 4 Nonbanking Reserve Effective Applicant(s) Activity/Company Bank Date CNB Bancshares, Inc., First Corporation, St. Louis April 27, 1993 Evansville, Indiana Henderson, Kentucky Peoples Security Finance Company, Inc., Madisonville, Kentucky Guaranty Financial, M.H.C., Guaranty Bank, S.S.B., Chicago April 26, 1993 Milwaukee, Wisconsin Milwaukee, Wisconsin Guaranty Bank, S.S.B., Milwaukee, Wisconsin KeyCorp, Key Bank of Colorado, New York May 19, 1993 Albany, New York Fort Collins, Colorado Home Federal Savings Bank, Fort Collins, Colorado 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 Banco Popular de Puerto Rico, Bank Leumi Trust New York April 30, 1993 Hato Rey, Puerto Rico Company of New York, New York, New York North Side Savings Bank, Bronx, New York California Center Bank, Wilshire Center Bank, San Francisco May 7, 1993 Los Angeles, California N.A., Los Angeles, California Union Colony Bank, Union Colony Bank of Kansas City April 30, 1993 Greeley, Colorado Loveland, N.A., Loveland, Colorado Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 749 PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits Governors, No. 92-70107 (9th Cir., filed February 24, against the Federal Reserve Banks in which the Board 1992). Petition for review of Board order returning of Governors is not named a party. without action a bank holding company application to relocate its subsidiary bank from Washington to Ezell v. Federal Reserve Board, No. 93-0361 Idaho. The Board's brief was filed on June 29, 1992. (D. D.C., filed February 19, 1993). Action seeking Oral argument was held October 6, 1992. damages for personal injuries arising from motor In re Subpoena Served on the Board of Governors, vehicle collision. Nos. 91-5427, 91-5428 (D.C. Cir., filed Decem- Amann v. Prudential Home Mortgage Co., et al., No. ber 27, 1991). Appeal of order of district court, 93-10320 WD (D. Massachusetts, filed February 12, dated December 3, 1991, requiring the Board and 1993). Action for fraud and breach of contract the Office of the Comptroller of the Currency to arising out of a home mortgage. On April 17, 1993, produce confidential examination material to a the Board filed a motion to dismiss. private litigant. On June 26, 1992, the court of Adams v. Greenspan, No. 93-0167 (D. D.C., filed appeals affirmed the district court order in part, but January 27,1993). Action by former employee under held that the bank examination privilege was not the Civil Rights Act of 1964 and the Rehabilitation waived by the agencies' provision of examination Act of 1973 concerning termination of employment. materials to the examined institution, and remanded for further consideration of the privilege Sisti v. Board of Governors, No. 93-0033 (D. D.C., issue. On August 6, 1992, the district court ordered filed January 6, 1993). Challenge to Board staff the matter held in abeyance pending settlement of interpretation with respect to margin accounts. The the underlying action. Board's motion to dismiss was granted on May 13, 1993. Board of Governors v. Kemal Shoaib, No. CV 91-5152 U.S. Check v. Board of Governors, No. 92-2892 (C.D. California, filed September 24, 1991). Action (D. D.C., filed December 30, 1992). Challenge to to freeze assets of individual pending administrative partial denial of request for information under the adjudication of civil money penalty assessment by Freedom of Information Act. the Board. On October 15, 1991, the court issued a CBC, Inc. v. Board of Governors, No. 92-9572 (10th preliminary injunction restraining the transfer or Cir., filed December 2, 1992). Petition for review of disposition of the individual's assets. civil money penalty assessment against a bank hold- Board of Governors v. Ghaith R. Pharaon, No. ing company and three of its officers and directors 91-CIV-6250 (S.D. New York, filed September 17, for failure to comply with reporting requirements. 1991). Action to freeze assets of individual pending The Board's brief was filed on March 19, 1993. administrative adjudication of civil money penalty DLG Financial Corporation v. Board of Governors, assessment by the Board. On September 17, 1991, No. 392 Civ. 2086-G (N.D. Texas, filed October 9, the court issued an order temporarily restraining 1992). Action to enjoin the Board and the Federal the transfer or disposition of the individual's assets. Reserve Bank of Dallas from taking certain enforcement actions, and seeking money damages on a variety of tort and contract theories. On October 9, 1992, the court denied plaintiffs' motion for a FINAL ENFORCEMENT ORDERS ISSUED BY THE BOARD OF GOVERNORS temporary restraining order. On March 30, 1993, the court granted the Board's motion to dismiss as Country Hill Bank to it, and also dismissed certain claims against the Lenexa, Kansas Reserve Bank. On April 29, the plaintiffs filed an amended complaint. The Board's motion to dismiss the amended complaint was filed on May 17. Zemel v. Board of Governors, No. 92-1056 (D. D.C., The Federal Reserve Board announced on May 19, filed May 4, 1992). Age Discrimination in Employ- 1993, the issuance of a Cease and Desist Order issued ment Act case. The parties' cross-motions for sum- jointly by the Board of Governors and the Office of the mary judgment are pending. State Bank Commissioner of the State of Kansas State of Idaho, Department of Finance v. Board of against Country Hill Bank, Lenexa, Kansas. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

750 Federal Reserve Bulletin • July 1993 Purdy Bancshares, Inc. affiliated parties of First Pacific Bancorp, Inc., Beverly Monett, Missouri Hills, California. The Federal Reserve Board announced on May 7, Kenneth G. Walker and Charles W. Hagan, Jr. 1993, the issuance of a Cease and Desist Order against Long Beach, California Purdy Bancshares, Inc., Monett, Missouri, and Glen Garrett, an institution-affiliated party of Purdy Banc- The Federal Reserve Board announced on May 3, shares, Inc. 1993, the issuance of a consent Order against Kenneth G. Walker and Charles W. Hagan, Jr., institutionaffiliated parties of the Farmers and Merchants Bank Frank P. LeMaster of Long Beach, Long Beach, California, in which West Chester, Pennsylvania Messrs. Walker and Hagan have agreed to pay a total of $30,000 in fines in settlement of contested claims. The Federal Reserve Board announced on May 7, 1993, the issuance of an Order of Assessment of a Civil Money Penalty against Frank P. LeMaster, an institu- WRITTEN AGREEMENTS APPROVED BY FEDERAL tion-affiliated party of the Freedom Valley Bank, West RESERVE BANKS Chester, Pennsylvania. Maryland Bankcorp, Inc. Leonard S. and Ada P. Sands Lexington Park, Maryland Beverly Hills, California The Federal Reserve Board announced on May 26, The Federal Reserve Board announced on May 27, 1993, the execution of a Written Agreement between 1993, the issuance of an Order of Asessment of a Civil the Federal Reserve Bank of Richmond, the Bank Money Penalty against Leonard S. Sands and a Cease Commissioner of the State of Maryland, and Maryland and Desist Order against Ada P. Sands, institution- Bankcorp, Inc., Lexington Park, Maryland. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 Financial and Business Statistics CONTENTS WEEKLY REPORTING COMMERCIAL BANKS Assets and liabilities A3 Guide to Tabular Presentation A22 Large reporting banks A24 Branches and agencies of foreign banks Domestic Financial Statistics FINANCIAL MARKETS MONEY STOCK AND BANK CREDIT A25 Commercial paper and bankers dollar A4 Reserves, money stock, liquid assets, and debt acceptances outstanding measures A25 Prime rate charged by banks on short-term A5 Reserves of depository institutions, Reserve Bank business loans credit A26 Interest rates—money and capital markets A6 Reserves and borrowings—Depository A27 Stock market—Selected statistics institutions A28 Selected financial institutions—Selected assets A7 Selected borrowings in immediately available and liabilities funds—Large member banks POLICY INSTRUMENTS FEDERAL FINANCE A8 Federal Reserve Bank interest rates A28 Federal fiscal and financing operations A9 Reserve requirements of depository institutions A29 U.S. budget receipts and outlays A10 Federal Reserve open market transactions A30 Federal debt subject to statutory limitation A30 Gross public debt of U.S. Treasury—Types and ownership FEDERAL RESERVE BANKS A31 U.S. government securities dealers—Transactions All Condition and Federal Reserve note statements A32 U.S. government securities dealers—Positions A12 Maturity distribution of loan and security and financing holdings A3 3 Federal and federally sponsored credit agencies—Debt outstanding MONETARY AND CREDIT AGGREGATES SECURITIES MARKETS AND A13 Aggregate reserves of depository institutions CORPORATE FINANCE and monetary base A14 Money stock, liquid assets, and debt measures A34 New security issues—Tax-exempt state and local A16 Deposit interest rates and amounts outstanding— governments and corporations commercial and BIF-insured banks A35 Open-end investment companies—Net sales A17 Bank debits and deposit turnover and assets A18 Loans and securities—All commercial banks A35 Corporate profits and their distribution A35 Nonfarm business expenditures on new COMMERCIAL BANKING INSTITUTIONS plant and equipment A36 Domestic finance companies—Assets and A19 Major nondeposit funds liabilities, and consumer, real estate, and business A20 Assets and liabilities, Wednesday figures credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • July 1993 Domestic Financial Statistics—Continued A54 Foreign official assets held at Federal Reserve Banks REAL ESTATE A55 Foreign branches of U.S. banks—Balance sheet data A37 Mortgage markets A57 Selected U.S. liabilities to foreign official A3 8 Mortgage debt outstanding institutions CONSUMER INSTALLMENT CREDIT REPORTED BY BANKS IN THE UNITED STATES A39 Total outstanding A39 Terms A57 Liabilities to and claims on foreigners A58 Liabilities to foreigners A60 Banks' own claims on foreigners FLOW OF FUNDS A61 Banks' own and domestic customers' claims on foreigners A40 Funds raised in U.S. credit markets A61 Banks' own claims on unaffiliated foreigners A42 Summary of financial transactions A62 Claims on foreign countries—Combined A43 Summary of credit market debt outstanding domestic offices and foreign branches A44 Summary of financial assets and liabilities Domestic Nonfinancial Statistics REPORTED BY NONBANKING BUSINESS ENTERPRISES IN THE UNITED STATES SELECTED MEASURES A63 Liabilities to unaffiliated foreigners A45 Nonfinancial business activity—Selected A64 Claims on unaffiliated foreigners measures A45 Labor force, employment, and unemployment A46 Output, capacity, and capacity utilization SECURITIES HOLDINGS AND TRANSACTIONS A47 Industrial production—Indexes and gross value A49 Housing and construction A65 Foreign transactions in securities A50 Consumer and producer prices A66 Marketable U.S. Treasury bonds and A51 Gross domestic product and income notes—Foreign transactions A52 Personal income and saving INTEREST AND EXCHANGE RATES International Statistics A67 Discount rates of foreign central banks SUMMARY STATISTICS A67 Foreign short-term interest rates A68 Foreign exchange rates A53 U.S. international transactions—Summary A54 U.S. foreign trade A69 Guide to Statistical Releases and A54 U.S. reserve assets Special Tables Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A3 Guide to Tabular Presentation SYMBOLS AND ABBREVIATIONS c Corrected G-10 Group of Ten e Estimated GNMA Government National Mortgage Association n.a. Not available GDP Gross domestic product n.e.c. Not elsewhere classified HUD Department of Housing and Urban P Preliminary Development r Revised (Notation appears on column heading IMF International Monetary Fund when about half of the figures in that column IO Interest only are changed.) IPCs Individuals, partnerships, and corporations * Amounts insignificant in terms of the last decimal IRA Individual retirement account place shown in the table (for example, less than MMDA Money market deposit account 500,000 when the smallest unit given is millions) NOW Negotiable order of withdrawal 0 Calculated to be zero OCD Other checkable deposit Cell not applicable OPEC Organization of Petroleum Exporting Countries ATS Automatic transfer service OTS Office of Thrift Supervision BIF Bank insurance fund 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 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 Treasuty. "State and local government" also in- Minus signs are used to indicate (1) a decrease, (2) a negative cludes municipalities, special districts, and other political figure, or (3) an outflow. subdivisions. "U.S. government securities" may include guaranteed issues of U.S. government agencies (the flow of funds figures also Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic Financial Statistics • July 1993 1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 1992 1993 1992 1993 MMoonneettaarryy aanndd ccrreeddiitt aaggggrreeggaattee Q2 Q3 Q4 Q1 Dec. Jan. Feb. Mar.r Apr. Reserves of depository institutions2 1 Total 14.8 9.3 25.8 9.3 12.0 6.9 5.6 5.3 .8 2 Required 15.3 9.9 25.3 8.7 9.6 4.7 9.3 3.0 3.3 3 Nonborrowed 14.6 8.4 27.1 9.5 11.6 6.0 8.3 4.3 1.2 4 Monetary base 7.8 10.5 12.6 9.1 10.2 8.3 8.5 8.9 7.6 Concepts of money, liquid assets, and debt4 5 Ml 10.6 11.7 16.8 6.6r 8.8 7.8r — ,2r 2.7 8.9 6 M2 .3 .8 2.7 -2.ff -.3 -3.4r -4.r -1.0 .1 7 M3 -.6 .1 -.2 -3.9 -3.4 -7.4r -I^ -1.7 1.9 8 L 1.3 1.1 2.01 -1.9 -.9 -5.2 -1.6r .2 n.a. 9 Debt 5.7 4.9 4.4 4.6 6.2 2.T 4.3r 6.6 n.a. Nonlransaction components 1 1 1 0 I I n n M M 3 2 on .. l . y f6 - -3 4 . . 4 9 - - 3 3 . .2 5 r -1 -2 4 . . 8 4 -1 -5 3 . . 5 6 r -1 -4 9 . . 1 2 — -8 28 .1 .0 r —— 9 55 . .. 5 66 r rr - - 5 2 . . 3 6 - 1 3 1 . . 7 3 Time and savings deposits Commercial banks 12 Savings, iqcluding MMDAs 12.6 10.9 12.9 1.6r 5.7 -3.2 2.5r -2.9 3.0 13 Small time -13.4 -17.4 -17.1 -7.6r -11.5 -10.2r 3.1 -2.9 -9.1 14 Large time8'9 -13.3 -18.6 -18.4 -M.SF -10.7 -26.9 -12.3r -20.9 8.7 Thrift institutions 15 Savings, iqcluding MMDAs 18.1 9.2 8.7 -,2r 5.6 .8r -10.0 -5.1 2.3 16 Small time -29.8 -18.6 -21.7 -19.2 -21.7 -16.5 -24.1 -12.6 -9.3 17 Large time -31.9 -14.9 -11.3 -17.3 -21.0 -3.6 -28.6 -18.3 13.0 Money market mutual funds 18 General purpose and broker-dealer -6.6 -7.4 -4.2 -10.1 -4.9 -9.5 -21.2 -1.8 -5.0 19 Institution-only 23.9 32.9 -19.4 -14.1r -39.6 -27.3 25.5 -5.9 -3.0 Debt components4 20 14.4 10.7 6.0 8.7 16.3 2.9 5.3 15.0 n.a. 21 Nonfederal 2.8 2.9 3.8 3.2 2.7 2.7r 1.9 3.7 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-contiact) repurchase agreements 5. Sum of (1) overnight RPs and Eurodollars, (2) money market fund balances (RPs) issued by all depository institutions and overnight Eurodollars issued to (general purpose and broker-dealer), (3) savings deposits (including MMDAs), U.S. residents by foreign branches of U.S. banks worldwide, (2) savings (includ- and (4) small time 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 ftind 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 Average of daily figures for week ending on date indicated daily figures Factor 1993 1993 Feb. Mar. Apr. Mar. 17 Mar. 24 Mar. 31 Apr. 7 Apr. 14 Apr. 21 Apr. 28 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 334,905r 337,743r 344,233 337,930r 336,716r 339,623" 341,046 344,936 347,060 344,087 U.S. government securities2 2 Bought outright—System account 297,289 298,823 303,316 298,672 300,087 299,897 301,502 300,124 305,346 305,711 3 Held under repurchase agreements ... 1,358 1,984 3,293 1,628 0 2,213 2,826 6,742 3,920 625 Federal agency obligations 4 Bought outright 5,271 5,173 5,106 5,165 5,165 5,123 5,123 5,111 5,095 5,095 5 Held under repurchase agreements ... 73 112 25 37 0 164 36 73 0 0 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 22 69 29 137 13 120 9 6 38 65 8 Seasonal credit 18 26 40 25 31 32 29 32 41 52 9 Extended credit 0 0 0 0 0 0 0 0 0 1 10 Float 732r l,153r 629 2,218r 731r 974" 504 1,322 246 436 11 Other Federal Reserve assets 30,142r 30,404r 31,795 30,049*^ 30,689" 31,100" 31,017 31,525 32,373 32,102 12 Gold stock 11,055 11,055 11,054 11,055 11,055 11,054 11,054 11,054 11,054 11,054 13 Special drawing rights certificate account . 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 14 Treasury currency outstanding 21,510 21,556r 21,615 21,553r 21,565r 21,578" 21,592 21,606 21,620 21,634 ABSORBING RESERVE FUNDS 15 Currency in circulation 329,470 331,646r 335,303 331,890" 332,039" 332,168" 333,788 335,975 336,097 335,155 16 Treasury cash holdings 467 509 514 512 512 512 515 515 517 512 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 6,018 5,472 6,062 5,563 5,026 5,243 5,723 5,348 8,135 4,770 18 Foreign 243 290 241 375 238 370 268 230 246 227 19 Service-related balances and adjustments 6,289 6,498r 6,391 6,304 6,290" 6,899" 6,443 6,532 6,213 6,473 20 Other 302 347 317 344 334 362 325 311 322 316 21 Other Federal Reserve liabilities and capital 9,006 9,091 9,148 9,093 9,064 9,069 8,967 9,161 9,172 9,195 22 Reserve balances with Federal Reserve Banks 23,692r 24,520r 26,944 24,476r 23,851" 25,649" 25,682 27,540 27,050 28,145 End-of-month figures Wednesday figures Feb. Mar. Apr. Mar. 17 Mar. 24 Mar. 31 Apr. 7 Apr. 14 Apr. 21 Apr. 28 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 337,481" 343,481r 343,760 333,959" 338,071" 343,481" 342,442 348,681 347,315 342,938 U.S. government securities2 Bought outright—System account ... 298,835 298,461 305,381 297,015 299,440 298,461 300,383 302,476 305,525 305,477 Held under repurchase agreements .. 2,655 6,756 0 50 0 6,756 5,299 8,526 3,920 0 Federal agency obligations Bought outright 5,225 5,123 5,095 5,165 5,165 5,123 5,123 5,095 5,095 5,095 Held under repurchase agreements .. 275 567 0 0 0 567 50 57 0 0 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions Adjustment credit 40 720 20 894 16 720 6 7 9 29 Seasonal credit 17 32 63 29 28 32 30 37 43 59 Extended credit 0 0 2 0 0 0 0 0 0 2 Float 596r 337r 683 752r 2,522" 337" 285 781 204 93 Other Federal Reserve assets 29,838" 31,484r 32,517 30,055r 30,900" 31,484" 31,266 31,702 32,519 32,183 12 Gold stock 11,055 11,054 11,054 11,055 11,055 11,054 11,054 11,054 11,054 11,054 13 Special drawing rights certificate account 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 14 Treasury currency outstanding 21,528 21,578r 21,648 21,553r 21,565" 21,578" 21,592 21,606 21,620 21,634 ABSORBING RESERVE FUNDS 15 Currency in circulation 329,621 332,822r 335,926 332,118r 332,027" 332,822" 334,983 336,544 335,623 335,572 16 Treasury cash holdings 463 515 505 512 512 515 515 517 513 505 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 5,350 6,752 7,273 6,930 5,216 6,752 6,128 4,793 13,052 5,291 18 Foreign 296 318 221 707 288 318 166 589 198 229 19 Service-related balances and adjustments 6,413 6,899r 6,049 6,304 6,290" 6,899" 6,443 6,532 6,213 6,473 20 Other 302 314 291 352 327 314 303 352 311 324 21 Other Federal Reserve liabilities and capital 9,180 8,844 9,847 8,922 8,953 8,844 8,897 9,099 9,052 9,032 22 Reserve balances with Federal Reserve Banks3 26,456r 27,668" 24,368 18,738r 25,096" 27,668" 25,670 30,932 23,045 26,219 1. For amounts of cash held as reserves, see table 1.12. 3. Excludes required clearing balances and adjustments to compensate for 2. Includes securities loaned—fully guaranteed by U.S. government securities float. pledged with Federal Reserve Banks—and excludes any securities sold and scheduled to be bought back under matched sale-purchase transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Financial Statistics • July 1993 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RRReeessseeerrrvvveee ccclllaaassssssiiifffiiicccaaatttiiiooonnn 1990 1991 1992 1992 1993 Dec. Dec. Dec. Oct. Nov. Dec. Jan. Feb. Mar.r Apr. 11111 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 30,237 26,659 25,368 23,626 25,462 25,368 23,636 23,515 24,383 26,978 22222 TTTTToooootttttaaaaalllll vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh33333 31,789 32,510 34,535 32,987 32,457 34,535 35,991 33,914 33,293 32,721 33333 AAAAAppppppppppllllliiiiieeeeeddddd vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh 28,884 28,872 31,172 29,510 29,205 31,172 32,368 30,368 29,912 29,567 44444 SSSSSuuuuurrrrrpppppllllluuuuusssss vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh 2,905 3,638 3,364 3,477 3,252 3,364 3,623 3,546 3,381 3,154 55555 TTTTToooootttttaaaaalllll rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss66666 59,120 55,532 56,540 53,136 54,666 56,540 56,004 53,882 54,296 56,545 66666 RRRRReeeeeqqqqquuuuuiiiiirrrrreeeeeddddd rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss 57,456 54,553 55,385 52,062 53,624 55,385 54,744 52,778 53,083 55,445 77777 EEEEExxxxxccccceeeeessssssssss rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaattttt RRRRReeeeessssseeeeeiiiiiyyyyyeeeee BBBBBaaaaannnnnkkkkksssss ............... 1,664 979 1,155 1,074 1,043 1,155 1,260 1,104 1,213 1,101 88888 TTTTToooootttttaaaaalllll bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss88888 326 192 124 143 104 124 165 45 91 73 99999 SSSSSeeeeeaaaaasssssooooonnnnnaaaaalllll bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss 76 38 18 114 40 18 11 18 26 41 1111100000 EEEEExxxxxttttteeeeennnnndddddeeeeeddddd cccccrrrrreeeeedddddiiiiittttt99999 23 1 1 0 0 1 1 0 0 0 Biweekly averages of daily figures for weeks ending 1993 Jan. 6 Jan. 20 Feb. 3 Feb. 17 Mar. 3 Mar. 17 Mar. 31r Apr. 14 Apr. 28 May 12 11111 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 26,569 24,057 21,500 23,301 24,335 24,029 24,747 26,612 27,584 25,296 22222 TTTTToooootttttaaaaalllll vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh33333............... 34,374 36,388 36,368 34,764 32,163 34,487 32,343 33,218 32,010 34,225 33333 AAAAAppppppppppllllliiiiieeeeeddddd vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh 31,105 32,829 32,470 31,069 28,902 30,944 29,098 29,995 28,961 30,817 44444 SSSSSuuuuurrrrrpppppllllluuuuusssss vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh55555 3,269 3,559 3,898 3,695 3,261 3,543 3,245 3,223 3,049 3,408 55555 TTTTToooootttttaaaaalllll rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss66666 57,674 56,886 53,970 54,370 53,237 54,973 53,845 56,607 56,545 56,113 6 7 6 7 6 7 6 7 6 7 RRRRR EEEEExxxxx eeeeeqqqqq ccccc uuuuu eeeeesssss iiiiirrrrr sssss eeeee ddddd rrrrreeeee sssss rrrrreeeee eeeee sssss rrrrrvvvvv eeeeerrrrr eeeee vvvvv bbbbb eeeee aaaa sssss a lllllaaaaannnnnccccceeeeesssss aaaaattttt RRRRReeeeessssseeeeeiiiiiyyyyyeeeee BBBBBaaaaannnnnkkkkksssss7777iiiii7 .... ..... ..... ..... ..... ..... . 56 1 , , 2 3 8 8 9 5 55 1 , , 6 2 5 2 7 9 52 1 , , 7 2 4 3 0 0 52 1 , , 8 4 7 9 5 5 52,6 5 6 7 6 1 53 1 , , 6 2 8 9 3 0 52 1 , , 5 2 7 7 2 3 55,7 8 6 4 3 4 55 1 , , 1 3 6 8 1 4 55,2 9 0 1 1 2 88888 TTTTToooootttttaaaaalllll bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 269 202 64 33 56 93 98 38 99 142 99999 SSSSSeeeeeaaaaasssssooooonnnnnaaaaalllll bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss 12 11 11 18 20 22 32 31 47 71 1111100000 EEEEExxxxxttttteeeeennnnndddddeeeeeddddd cccccrrrrreeeeedddddiiiiittttt99999 0 1 3 0 0 0 0 0 1 1 1. Data in this table also appear in the Board's H.3 (502) weekly statistical institutions (that is, those whose vault cash exceeds their required reserves) to release. For ordering address, see inside front cover. satisfy current reserve requirements. 2. Excludes required clearing balances and adjustments to compensate for float 5. Total vault cash (line 2) less applied vault cash (line 3). and includes other off-balance-sheet "as-of" adjustments. 6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash 3. Total "lagged" vault cash held by depository institutions subject to reserve (line 3). requirements. Dates refer to the maintenance periods during which the vault cash 7. Total reserves (line 5) less required reserves (line 6). can be used to satisfy reserve requirements. The maintenance period for weekly 8. Also includes adjustment credit. reporters ends sixteen days after the lagged computation period during which the 9. Consists of borrowing at the discount window under the terms and condivault cash is held. Before Nov. 25,1992, the maintenance period ended thirty days tions established for the extended credit program to help depository institutions after the lagged computation period. deal with sustained liquidity pressures. Because there is not the same need to 4. All vault cash held during the lagged computation period by "bound" repay such borrowing promptly as there is with traditional short-term adjustment institutions (that is, those whose required reserves exceed their vault cash) plus credit, the money market impact of extended credit is similar to that of the amount of vault cash applied during the maintenance period by "nonbound" nonborrowed reserves. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit A7 1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS Large Banks1 Millions of dollars, averages of daily figures 1993, week ending Monday SSoouurrccee aanndd mmaattuurriittyy Mar. 1 Mar. 8 Mar. 15 Mar. 22 Mar. 29 Apr. 5 Apr. 12 Apr. 19 Apr. 26 Federal funds purchased, repurchase agreements, and other selected borrowings From commercial banks in the United States 1 For one day or under continuing contract 73,756 76,546 74,820 68,674 67,004 73,835 76,974 72,059 66,142 2 For all other maturities 1133,,887788 1133,,008822 1122,,772244 1122,,662288 1122,,662222 1111,,779999 1144,,336644 1122,,226600 1122,,998811 From other depository institutions, foreign banks and official institutions, and U.S. government agencies 3 For one day or under continuing contract 20,773 20,274 19,845 18,756 19,490 19,121 17,641 18,236 19,437 4 For all other maturities 22,559 22,854 22,566 20,987 21,078 18,665 18,429 19,311 19,603 Repurchase agreements on U.S. government and federal agency securities Brokers and nonbank dealers in securities 5 For one day or under continuing contract 10,996 11,907 13,512 13,502 14,045 14,302 13,274 14,332 13,356 6 For all other maturities 23,039 23,866 24,484 25,667 26,253 26,122 27,696 27,039 26,549 All other customers 7 For one day or under continuing contract 24,422 23,907 24,127 23,280 23,705 23,168 22,301 23,085 23,077 8 For all other maturities 13,269 13,805 14,063 14,529 14,955 14,470 15,269 13,573 14,061 MEMO Federal funds loans and resale agreements in immediately available funds in maturities of one day or under continuing contract 9 To commercial banks in the United States 41,563 40,318 39,016 38,031 36,793 43,155 38,319 37,897 37,289 10 To all other specified customers 19,567 22,238 22,375 21,153 19,795 21,654 21,849 23,093 21,827 1. Banks with assets of $4 billion or more as of Dec. 31, 1988. 2. Brokers and nonbank dealers in securities, other depository institutions, Data in this table also appear in the Board's H.S (507) weekly statistical release. foreign banks and official institutions, and U.S. government agencies. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Financial Statistics • July 1993 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels Adjustment credit1 Seasonal credit2 Extended credit3 FFeeddeerraall RReesseerrvvee BBaannkk 6/ O 1/ n 9 3 Effective date Previous rate 6/ O 1/ n 9 3 Effective date Previous rate 6/ O 1/ n 9 3 Effective date Previous rate Boston 3 7/2/92 3.5 3.10 5/27/93 3.00 3.60 5/27/93 3.50 New York 7/2/92 5/27/93 5/27/93 Philadelphia 7/2/92 5/27/93 5/27/93 Cleveland 7/6/92 5/27/93 5/27/93 Richmond 7/2/92 5/27/93 5/27/93 Atlanta 7/2/92 5/27/93 5/27/93 Chicago 7/2/92 5/27/93 5/27/93 St. Louis 7/7/92 5/27/93 5/27/93 Minneapolis 7/2/92 5/27/93 5/27/93 Kansas City 7/2/92 5/27/93 5/27/93 Dallas 7/2/92 5/27/93 5/27/93 San Francisco ... 3 7/2/92 3.5 3.10 5/27/93 3.00 3.60 5/27/93 3.50 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 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 an f k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1977 6 6 1981-—May 5 13-14 14 1986—Aug. 21 5.5-6 5.5 14 14 22 5.5 5.5 1978—Jan. 9 6-6.5 6.5 Nov. 7 13-14 13 20 6.5 6.5 6 13 13 1987—Sept. 4 5.5-6 6 MMaayy 11 6.5-7 7 Dec. 4 12 12 11 6 6 12 7 7 JJuullyy 3 7-7.25 7.25 1982--July 70 11.5-12 11.5 1988—Aug. 9 6-6.5 6.5 10 7.25 7.25 ?3 11.5 11.5 11 Aug. 21 7.75 7.75 Aug. 7 11-11.5 11 Sept. 22 8 8 H 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 71 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. 17 9.5-10 9.5 n 9.5 9.5 1991—Feb. 1 6-6.5 6 1979—July 20 10 10 Nov. 77 9-9.5 9 4 6 6 AAuugg.. 17 10-10.5 10.5 76 9 9 Apr. 30 5.5-6 5.5 20 10.5 10.5 Dec. 14 8.5-9 9 May 2 5.5 5.5 SSeepptt.. 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 n 9 9 Dec. 20 3.5-4.5 3.5 1980—Feb. 15 12-13 13 Nov. 71 8.5-9 8.5 24 3.5 3.5 19 13 13 76 8.5 8.5 MMaayy 29 12-13 13 Dec. 74 8 8 1992—July 2 3-3.5 3 30 12 12 7 3 3 June 13 11-12 11 1985-—May 70 7.5-8 7.5 16 11 11 74 7.5 7.5 29 10 10 IInn eeffffeecctt JJuunnee 11,, 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. ?1 6.5-7 6.5 Dec. 5 12-13 13 July 11 6 6 1. Available on a short-term basis to help depository institutions meet tempo- ordinarily is charged on extended-credit loans outstanding less than thirty days; rary needs for funds that cannot be met through reasonable alternative sources. however, at the discretion of the Federal Reserve Bank, this time period may be The highest rate established for loans to depository institutions may be charged on shortened. Beyond this initial period, a flexible rate somewhat above rates on adjustment-credit loans of unusual size that result from a major operating problem market sources of funds is charged. The rate ordinarily is reestablished on the first at the borrower's facility. business day of each two-week reserve maintenance period, but it is never less 2. Available to help relatively small depository institutions meet regular than the discount rate applicable to adjustment credit plus SO 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 deposit2 Net transaction accounts3 1 $0 million-$46.8 million... 12/15/92 2 More than $46.8 million4.. 12/15/92 3 Nonpersonal time deposits1 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 1V2 years was reduced from 3 on an annual basis as of June 30. No corresponding adjustment is to be made in percent to IVi percent for the maintenance period that began Dec. 13, 1990, and the event of a decrease. On Dec. 15, 1992, the exemption was raised from $3.6 to zero for the maintenance period that began Dec. 27, 1990. The reserve million to $3.8 million. The exemption applies in the following order: (1) net requirement on nonpersonal time deposits with an original maturity of lVi years negotiable order of withdrawal (NOW) accounts (NOW accounts less allowable or more has been zero since Oct. 6, 1983. deductions); and (2) net other transaction accounts. The exemption applies only to For institutions that report quarterly, the reserve requirement on nonpersonal accounts that would be subject to a 3 percent reserve requirement. time deposits with an original maturity of less than 1 Vi years was reduced from 3 3. Include all deposits against which the account holder is permitted to make percent to zero on Jan. 17, 1991. withdrawals by negotiable or transferable instruments, payment orders of with- 6. The reserve requirement on Eurocurrency liabilities was reduced from 3 drawal, and telephone and preauthorized transfers in excess of three per month percent to zero in the same manner and on the same dates as were the reserve for the purpose of making payments to third persons or others. However, money requirement on nonpersonal time deposits with an original maturity of less than market deposit accounts (MMDAs) and similar accounts subject to the rules that 1 Vi years (see note 4). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Financial Statistics • July 1993 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 1992 1993 TTyyppee ooff ttrraannssaaccttiioonn 11999900 11999911 11999922 Sept. Oct. Nov. Dec. Jan. Feb. Mar. U.S. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 24,739 20,158 14,714 595 4,072 1,064 3,669 0 00 0 ? 7,291 120 1,628 0 0 0 0 0 0 0 3 Exchanges 241,086 277,314 308,699 22,277 28,907 25,468 29,562 24,542 19,832 23,7% 4 Redemptions 4,400 1,000 1,600 0 0 0 0 0 0 0 Others within one year a Gross purchases 425 3,043 1,096 350 0 461 0 0 0 227799 6 Gross sales 0 0 0 0 0 0 0 0 0 0 7 25,638 24,454 36,662 2,753 2,010 7,160 2,777 561 2,892 4,303 8 Exchanges -27,424 -28,090 -30,543 -1,905 -982 -4,615 -1,570 -1,202 -6,044 -2,602 9 Redemptions 0 1,000 0 0 0 0 0 0 0 0 One to five years 10 Gross purchases 250 6,583 13,118 3,500 200 4,172 200 0 0 1,441 11 200 0 0 0 0 0 0 0 0 0 1? -21,770 -21,211 -34,478 -2,753 -1,762 -6,800 -2,777 -64 -2,617 -4,303 13 Exchanges 25,410 24,594 25,811 1,905 884 3,415 1,570 882 4,564 2,602 Five to ten years 14 Gross purchases 0 1,280 2,818 750 0 1,176 100 0 00 771166 15 Gross sales 100 0 0 0 0 0 0 0 0 0 16 Maturity shifts -2,186 -2,037 -1,915 0 -248 -187 0 -497 -98 0 17 Exchanges 789 2,894 3,532 0 97 800 0 0 1,000 0 More than ten years 18 Gross purchases 0 375 2,333 731 0 947 0 0 00 770055 19 Gross sales 0 0 0 0 0 0 0 0 0 0 70 Maturity shifts -1,681 -1,209 -269 0 0 -173 0 0 -177 0 21 Exchanges 1,226 600 1,200 0 0 400 0 0 480 0 All maturities ?? Gross purchases 25,414 31,439 34,079 5,927 4,272 7,820 3,969 0 0 3,141 n Gross sales 7,591 120 1,628 0 0 0 0 0 0 0 24 Redemptions 4,400 1,000 1,600 0 0 0 0 0 0 0 Matched transactions ?5 1,369,052 1,570,456 1,482,467 116,331 116,024 115,020 144,232 114,543 111111,,449911 114466,,556633 26 Gross purchases 1,363,434 1,571,534 1,480,140 115,579 114,917 117,020 142,578 116,510 113,349 143,049 Repurchase agreements1 77 219,632 310,084 378,374 68,697 18,698 42,373 48,904 34,768 2288,,554444 37,815 28 Gross sales 202,551 311,752 386,257 59,628 35,383 39,117 44,697 42,231 25,889 33,714 29 Net change in U.S. government securities 24,886 29,729 20,642 14,244 -13,520 13,075 6,521 -5,497 4,513 3,728 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 00 00 00 00 00 00 00 00 00 00 31 0 5 0 0 0 0 0 0 0 0 32 Redemptions 183 292 632 37 0 0 121 103 85 101 Repurchase agreements2 V> 41,836 22,807 1144,,556655 3,222 1,778 2,760 1,601 2,237 11,,110077 1,811 34 Gross sales 40,461 23,595 14,486 1,800 3,253 2,506 1,224 2,868 832 1,519 35 Net change in federal agency obligations 1,192 -1,085 -554 1,385 -1,475 254 256 -734 190 191 36 Total net change in System Open Market Account 26,078 28,644 2200,,008899 15,629 --1144,,999955 13,329 6,777 -6,231 44,,770033 3,918 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 Account 1993 1993 Mar. 31 Apr. 7 Apr. 14 Apr. 21 Apr. 28 Feb. 28 Mar. 31 Apr. 30 Consolidated condition statement ASSETS 1 Gold certificate account 11,054 11,054 11,054 11,054 11,054 11,055 11,054 11,054 2 Special drawing rights certificate account 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 3 503 501 502 497 485 525 503 487 Loans 4 To depository institutions 753 36 45 52 89 57 775533 8844 5 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 5,123 5,123 5,095 5,095 55,,009955 55,,222255 55,,112233 55,,009955 8 Held under repurchase agreements 567 50 57 0 0 275 567 0 9 Total U.S. Treasury securities 305,217 305,682 311,002 309,445 305,477 301,490 305,217 305,381 10 Bought outright2 298,461 300,383 302,476 305,525 305,477 298,835 298,461 305,381 11 Bills 142,104 144,026 146,119 144,178 144,130 145,618 142,104 144,034 1? Notes 120,211 120,211 120,211 123,936 123,936 117,955 120,211 123,936 N Bonds 36,146 36,146 36,146 37,411 37,411 35,261 36,146 37,411 14 Held under repurchase agreements 6,756 5,299 8,526 3,920 0 2,655 6,756 0 15 Total loans and securities 311,660 310,891 316,199 314,592 310,661 307,046 311,660 310,560 16 Items in process of collection 5,338 5,841 6,174 5,646 5,298 4,937 5,338 5,359 17 Bank premises 1,031 1,031 1,033 1,035 1,035 1,026 1,031 1,034 Other assets 18 Denominated in foreign currencies 22,328 22,352 22,372 22,391 22,411 22,263 22,328 2233,,004433 19 All other4 8,092 7,910 8,478 9,064 8,718 6,577 8,092 8,550 20 Total assets 368,024 367,599 373,828 372,298 367,681 361,446 368,024 368,106 LIABILITIES 21 Federal Reserve notes 312,263 314,408 315,957 315,014 314,928 309,080 312,263 315,270 22 Total deposits 41,917 38,879 43,465 43,013 38,760 39,034 41,917 38,365 73 Depository institutions 34,533 32,281 37,731 29,442 32,919 33,085 34,533 30,579 24 U.S. Treasury—General account 6,752 6,128 4,793 13,052 5,291 5,350 6,752 7,273 25 Foreign—Official accounts 318 166 589 198 229 296 318 221 26 314 303 352 311 324 302 314 291 27 Deferred credit items ^ 5,001 5,415 5,306 5,219 4,961 4,152 5,001 4,624 28 Other liabilities and accrued dividends 2,251 2,215 2,302 2,214 2,189 2,323 2,251 2,220 29 Total liabilities 361,430 360,916 367,031 365,460 360,838 354,589 361,430 360,479 CAPITAL ACCOUNTS 30 Capital paid in 3,187 3,204 3,251 3,257 3,259 3,116 3,187 3,260 31 Surplus 3,054 3,054 3,054 3,054 3,054 3,054 3,054 3,054 32 Other capital accounts 353 425 493 527 529 687 353 1,313 33 Total liabilities and capital accounts 368,024 367,599 373,828 372,298 367,681 361,446 368,024 368,106 MEMO 34 Marketable U.S. Treasury securities held in custody for foreign and international accounts 304,825 312,114 311,432 312,480 304,784 306,378 304,825 310,903 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to Bank) — 373,886 375,482 376,725 377,987 378,128 370,756 373,886 378,585 36 LESS: Held by Federal Reserve Bank 61,624 61,074 60,768 62,973 63,200 61,676 61,624 63,315 37 Federal Reserve notes, net 312,263 314,408 315,957 315,014 314,928 309,080 312,263 315,270 Collateral held against notes, net: 38 Gold certificate account 11,054 11,054 11,054 11,054 11,054 11,055 11,054 1111,,005544 39 Special drawing rights certificate account 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. Treasury and agency securities 293,190 295,336 296,885 295,941 295,856 290,007 293,190 296,198 42 Total collateral 312,263 314,408 315,957 315,014 314,928 309,080 312,263 315,270 1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly 3. Valued monthly at market exchange rates. statistical release. For ordering address, see inside front cover. 4. Includes special investment account at the Federal Reserve Bank of Chicago 2. Includes securities loaned—fully guaranteed by U.S. Treasury securities in Treasury bills maturing within ninety days. pledged with Federal Reserve Banks—and excludes securities sold and scheduled 5. Includes exchange-translation account reflecting the monthly revaluation at to be bought back under matched sale-purchase transactions. market exchange rates of foreign exchange commitments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Financial Statistics • July 1993 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holding 1 Millions of dollars Wednesday End of month Type and maturity grouping 1993 1993 Mar. 31 Apr. 7 Apr. 14 Apr. 21 Apr. 28 Feb. 28 Mar. 31 1 Total loans 753 2 Within fifteen days 741 741 4 3 N Si i x n t e e t e y n - o d n a e y s d a to y s n t i o n e o t n y e d y ay ea s r . 1 0 2 1 0 2 5 Total acceptances 6 Within fifteen days 0 7 8 N Si i x n t e e t e y n - o d n a e y s d a to y s n t i o n e o ty n e d a y y e s a r . 0 0 9 Total U.S. Treasury securities.. 305,217 305,682 311,002 309,445 305,477 301,490 305,217 10 Within fifteen days2 17,889 19,853 21,048 19,287 15,052 13,331 17,889 11 Sixteen days to ninety days . 67,037 71,635 72,810 68,058 68,275 72,699 67,037 12 Ninety-one days to one year 99,880 93,783 96,733 97,082 97,132 97,433 99,880 13 One year to five years 71,255 71,255 71,255 73,624 73,624 70,291 71,255 14 Five years to ten years 20,344 20,344 20,344 21,471 21,471 19,628 20,344 15 More than ten years 28,813 28,813 28,813 29,922 29,922 28,108 28,813 16 Total federal agency obligations 5,690 5,173 5,152 5,095 5,095 5,500 5,690 17 Within fifteen days2 855 108 85 143 115 723 855 18 Sixteen days to ninety days. 507 722 709 594 643 513 507 19 Ninety-one days to one year 1,057 1,072 1,172 1,175 1,177 1,022 1,057 20 One year to five years 2,419 2,419 2,334 2,330 2,307 2,389 2,419 21 Five years to ten years 711 711 711 711 711 711 711 22 More than ten years 142 142 142 142 142 142 142 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 1993 IItteemm DD 1199 ee 88 cc 99 .. DD 1199 ee 99 cc 00 .. DD 1199 ee 99 cc 11 .. DD 1199 ee 99 cc 22 .. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Seasonally adjusted AADDJJUUSSTTEEDD FFOORR CCHHAANNGGEESS IINN RREESSEERRVVEE RREEQQUUIIRREEMMEENNTTSS22 11 TToottaall rreesseerrvveess33 40.49 41.77 45.53 54.35 51.27 52.84 53.82 54.35 54.67 54.92 55.17 55.20 22 NNoonnbboorrrroowweedd rreesseerrvveess44 ^^ 40.23 41.44 45.34 54.23 50.99 52.69 53.71 54.23 54.50 54.88 55.07r 55.13 33 NNoonnbboorrrroowweedd rreesseerrvveess pplluuss eexxtteennddeedd ccrreeddiitt55 40.25 41.46 45.34 54.23 50.99 52.69 53.71 54.23 54.50 54.88 55.07r 55.13 44 RReeqquuiirreedd rreesseerrvveess 39.57 40.10 44.56 53.20 50.28 51.76 52.77 53.20 53.41 53.82 53.95 54.10 55 MMoonneettaarryy bbaassee 267.73 293.19 317.17 350.80 341.59 344.85 347.83 350.80 353.22 355.73r 358.37r 360.65 Not seasonally adjusted 6 Total reserves 41.77 43.07 46.98 56.06 51.07 52.62 54.08 56.06 55.97 53.81 54.18 56.37 7 Nonborrowed reserves . 41.51 42.74 46.78 55.93 50.78 52.47 53.97 55.93 55.80 53.77 54.09 56.30 8 Nonborrowed reserves plus extended credit .. 41.53 42.77 46.78 55.93 50.78 52.47 53.97 55.93 55.80 53.77 54.09 56.30 9 Required reserves8 40.85 41.40 46.00 54.90 50.08 51.54 53.04 54.90 54.71 52.71 52.96r 55.27 10 Monetary base9 271.18 296.68 321.07 354.55 340.08 343.63 347.89 354.55 354.41 353.18 356.00 361.65 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS 11 Total reserves11 62.81 59.12 55.53 56.54 51.52 53.14 54.67 56.54 56.00 53.88 54.30 56.55 12 Nonborrowed reserves 62.54 58.80 55.34 56.42 51.23 52.99 54.56 56.42 55.84 53.84 54.20r 56.47 13 Nonborrowed reserves plus extended credit5.. 62.56 58.82 55.34 56.42 51.23 52.99 54.56 56.42 55.84 53.84 54.20r 56.47 14 Required reserves 61.89 57.46 54.55 55.39 50.53 52.06 53.62 55.39 54.74 52.78 53.08 55.45 15 Monetary base 292.55 313.70 333.61 360.90 346.21 349.81 354.25 360.90 360.88 359.56 362.59 368.19 16 Excess reserves .92 1.66 .98 1.16 .99 1.07 1.04 1.16 1.26 1.10 1.21 1.10 17 Borrowings from the Federal Reserve .27 .33 .19 .12 .29 .14 .10 .12 .17 .05 .09 .07 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 (l) 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 Oine 16). 8. To adjust required reserves for discontinuities that are due to regulatory changes in reserve requirements, a multiplicative procedure is used to estimate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Financial Statistics • July 1993 1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES1 Billions of dollars, averages of daily figures 1993 1989 1990 1991 1992 IItteemm Dec. Dec. Dec. Dec. Jan.r Feb/ Mar.r Apr. Seasonally adjusted Measures2 1 Ml 794.6 827.2 899.3 1,026.6 1,033.3 1,033.1 1,035.4 1,043.1 ?, M2 3,233.3 3,345.5 3,445.8 3,497.0 3,487.0 3,475.2 3,472.2 3,472.5 3 M3 4,056.1 4,116.7 4,168.1 4,166.5 4,140.9 4,134.4 4,128.5 4,135.0 4 L 4,886.1 4,965.2 4,982.2 5,052. lr 5,030.4 5,023.8 5,024.6 n.a. 5 Debt 10,076.7 10,751.3 11,192.7 11,768.2 11,795.1 11,837.1 11,902.6 n.a. Ml components 6 Currency3 222.7 246.7 267.2 292.3 294.7 296.8 299.0 301.4 7 Travelers checks4 6.9 7.8 7.8 8.1 8.0 8.0 8.0 8.1 8 Demand deposits5 279.8 278.2 290.5 340.9 341.9 341.9 342.0 347.3 9 Other checkable deposits6 285.3 294.5 333.8 385.2 388.6 386.4 386.4 386.3 Nontransaction components 10 In M2j 2,438.7 2,518.3 2,546.6 2,470.3r 2,453.6 2,442.1 2,436.9 2,429.4 11 In M3 822.8 771.2 722.3 669.6r 654.0 659.2 656.3 662.5 Commercial banks 12 Savings deposits, iiuluding MMDAs 541.4 582.2 666.2 756.1 754.1 755.7 753.9 755.8 13 Small time deposits®. 534.9 610.3 601.5 507.0 502.7 504.0 502.8 499.0 14 Large time deposits10, 11 387.7 368.7 341.3 290.2 283.7 280.8 275.9 277.9 Thrift institutions 15 Savings deposits, iircluding MMDAs 349.6 338.6 376.3 429.9 430.2 426.6 424.8 425.6 16 Small time deposits' 617.8 562.0 463.2 363.2 358.2 351.0 347.3 344.6 17 Large time deposits10 161.1 120.9 83.4 67.3 67.1 65.5 64.5 65.2 Money market mutual funds 18 General purpose and broker-dealer 317.4 350.5 363.9 342.3 339.6 333.6 333.1 331.7 19 Institution-only 108.8 135.9 182.1 202.3 197.7 201.9 200.9 200.4 Debt components 7,0 Federal debt 2,249.5 2,493.4 2,764.8 33,,006688..88 3,076.3 3,090.0 3,128.5 n.a. 21 Nonfederal debt 7,827.2 8,257.9 8,428.0 8,699.4 8,718.8 8,747.1 8,774.2 n.a. Not seasonally adjusted Measures2 72 Ml 811.5 843.7 916.4 l,045.8r 1,040.3 1,022.3 1,030.8 1,058.3 7.3 3,245.1 3,357.0 3,457.9 3,511.2 3,492.7 3,469.2 3,479.1 3,496.0 74 M3 4,066.4 4,126.3 4,178.1 4,178.6r 4,143.6 4,131.8 4,138.5 4,154.1 75 L 4,906.0 4,986.5 5,004.2 5,077.0r 5,047.3 5,024.1 5,038.3 n.a. 26 Debt 10,063.6 10,739.9 11,182.8 11,760.6 11,782.3 11,805.9 11,864.7 n.a. Ml components 7.7 Currency3 225.3 249.5 269.9 295.0 293.6 295.3 297.9 301.3 28 Travelers checks4 6.5 7.4 7.4 7.8 7.8 7.7 7.8 7.8 79 Demand deposits 291.5 289.9 302.9 355.3 346.2 334.3 336.3 350.7 30 Other checkable deposits6 288.1 296.9 336.3 387.7 392.7 384.9 388.9 398.6 Nontransaction components 31 In M2; 2,433.6 2,513.2 2,541.5 22,,446655..44 2,452.5 2,447.0 22,,444488..22 22,,443377..77 32 In M38 821.4 769.3 720.1 667.4r 650.8 662.5 659.4 658.1 Commercial banks 33 Savings deposits, iiuluding MMDAs 543.0 580.1 663.3 752.3 749.5 753.1 757.5 760.6 34 Small time deposits 533.8 610.5 602.0 507.8 504.5 504.6 502.1 497.8 35 Large time deposits ' 386.9 367.7 340.1 289.1 281.7 280.3 276.7 277.1 Thrift institutions 36 Savings deposits, including MMDAs 347.4 337.3 374.7 427.8 427.6 425.1 426.8 428.3 37 Small time deposits®. 616.2 562.1 463.6 363.8 359.5 351.4 346.8 343.8 38 Large time deposits10 162.0 120.6 83.1 67.1 66.6 65.4 64.7 65.0 Money market mutual funds 39 General purpose and broker-dealer 315.7 348.4 361.5 340.0 339.2 339.8 342.2 333377..99 40 Institution-only 109.1 136.2 182.4 202.4 202.3 210.3 203.6 199.5 Repurchase agreements and eurodollars 41 Overnight 77.5 74.7 76.3 7733..99 72.3 72.9 72.8 6699..22 42 178.4 158.3 130.1 126.3r 123.3 128.4 134.4 136.8 Debt components 43 Federal debt 2,247.5 2,491.3 2,765.0 3,069.8 3,076.2 3,087.3 3,121.4 n.a. 44 Nonfederal debt 7,816.2 8,248.5 8,417.9 8,690.8 8,706.2 8,718.6 8,743.3 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 U.S. Treasury, Federal Reserve Banks, and the market debt of the U.S. government, state and local governments, and private vaults of depository institutions; (2) travelers checks of nonbank issuers; (3) nonfinancial sectors. Private debt consists of corporate bonds, mortgages, condemand deposits at all commercial banks other than those due to depository sumer credit (including bank loans), other bank loans, commercial paper, bankers institutions, the U.S. government, and foreign banks and official institutions, less acceptances, and other debt instruments. Data are derived from the Federal cash items in the process of collection and Federal Reserve float; and (4), other Reserve Board's flow of funds accounts. Debt data are based on monthly checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW) averages. This sum is seasonally adjusted as a whole. and automatic transfer service (ATS) accounts at depository institutions, credit 3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of union 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 ail 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) savings deposits (including computed by adjusting its non-Mi component as a whole and then adding this MMDAs), and (4) 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, U.S. government, and foreign banks and official L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term institutions. Treasury securities, commercial paper, and bankers acceptances, net of money Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • July 1993 1.22 DEPOSIT INTEREST RATES AND AMOUNTS OUTSTANDING Commercial and BIF-insured saving banks1 1992 1993 IItteemm 11999900 11999911 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Interest rates (annual effective yields) INSURED COMMERCIAL BANKS 1 Negotiable order of withdrawal accounts ... 4.89 3.76 2.60 2.45 2.39 2.36 2.33 2.32 2.27 2.21 2.16 2 Savings deposits 5.84 4.30 3.14 3.00 2.94 2.90 2.88 2.85 2.80 2.73 2.68 Interest-bearing time deposits with balances of less than $100,000, by maturity 3 7 to 91 days 6.94 4.18 3.13 2.95 2.89 2.91 2.90 2.86 2.81 2.75 2.72 4 92 to 182 days 7.19 4.41 3.36 3.16 3.11 3.14 3.16 3.13 3.08 3.03 2.99 5 183 days to 1 year 7.33 4.59 3.58 3.37 3.30 3.34 3.37 3.34 3.29 3.22 3.19 6 More than 1 year to 2Vi years 7.42 4.95 4.09 3.86 3.78 3.83 3.88 3.88 3.83 3.74 3.67 7 More than 2n years 7.53 5.52 4.87 4.62 4.60 4.70 4.77 4.72 4.59 4.52 4.47 BIF-INSURED SAVINGS BANKS3 8 Negotiable order of withdrawal accounts ... 5.38 4.44 2.85 2.71 2.57 2.52 2.45 2.41 2.37 2.32 2.25 9 Savings deposits2 6.01 4.97 3.53 3.39 3.29 3.22 3.20 3.17 3.14 3.06 2.99 Interest-bearing time deposits with balances of less than $100,000, by maturity 10 7 to 91 days 7.64 4.68 3.31 3.17 3.08 3.10 3.13 3.06 3.01 2.98 2.94 11 92 to 182 days 7.69 4.92 3.62 3.47 3.41 3.42 3.44 3.38 3.35 3.31 3.27 12 183 days to 1 year 7.85 4.99 3.79 3.60 3.56 3.59 3.61 3.58 3.57 3.54 3.50 13 More tiian 1 year to 2Vi years 7.91 5.23 4.13 3.95 3.90 3.93 4.02 3.94 3.89 3.84 3.86 14 More than 2 n years 7.99 5.98 5.12 4.91 4.84 4.88 5.00 5.02 4.98 4.89 4.84 Amounts outstanding (millions of dollars) INSURED COMMERCIAL BANKS 15 Negotiable order of withdrawal accounts ... 209,855 244,637 257,362 261,946 267,709 275,465 286,541 277,226 279,904 288,426 281,213 16 Savings deposits2 570,270 652,058 718,560 725,256 736,057 740,841 738,253 733,833 742,966 748,427 745,519 17 Personal n.a. 508,191 559,566 565,385 570,532 575,399 578,757 579,715 585,309 591,879 587,239 18 Nonpersonal n.a. 143,867 158,994 159,871 165,525 165,442 159,496 154,118 157,657 156,547 158,281 Interest-bearing time deposits with balances of less than $100,000, by maturity 19 7 to 91 days 50,189 47,094 40,025 38,363 39,472 38,985 38,474 38,257 36,739 35,748 34,903 20 92 to 182 days 168,044 158,605 133,661 129,988 128,683 127,636 127,831 128,050 128,214 125,914 122,429 21 183 days to 1 year 221,007 209,672 181,527 177,387 171,263 166,995 163,098 160,786 159,569 158,388 157,121 22 More than 1 year to 2 Vi years 150,188 171,721 159,737 157,912 155,668 153,784 152,977 151,637 151,536 148,037 146,923 23 More than 2 Vi years 139,420 158,078 163,095 167,382 168,556 168,586 169,708 169,351 172,312 177,789 177,969 24 IRA/Keogh Plan deposits 131,006 147,266 147,291 148,391 147,664 147,319 147,350 147,039 146,859 146,686 145,472 BIF-INSURED SAVINGS BANKS3 25 Negotiable order of withdrawal accounts.... 8,404 9,624 10,200 10,388 10,126 10,642 10,871 9,981 9,919 10,412 10,090 26 Savings deposits 64,456 71,215 81,916 81,922 81,022 82,919 81,786 79,775 80,061 80,480 80,025 27 Personal n.a. 68,638 78,813 78,752 77,798 79,667 78,695 76,799 77,039 77,371 76,962 28 Nonpersonal n.a. 2,577 3,103 3,170 3,224 3,252 3,091 2,976 3,022 3,109 3,064 Interest-bearing time deposits with balances of less than $100,000, by maturity 29 7 to 91 days 5,724 4,146 3,829 3,819 3,695 3,895 3,867 3,562 3,479 3,551 3,513 30 92 to 182 days 25,864 21,686 18,219 17,928 17,298 17,632 17,345 16,248 15,959 15,468 15,306 31 183 days to 1 year 37,929 29,715 24,930 24,376 23,085 22,888 21,780 20,848 20,436 20,164 19,893 32 More than 1 year to 2Vi years 26,103 25,379 21,085 20,491 19,330 19,258 18,442 17,717 17,533 17,207 16,703 33 More than 2Vi years 20,243 18,665 19,773 19,929 19,128 19,543 18,845 18,633 18,902 19,261 19,363 34 IRA/Keogh Plan accounts 23,535 23,007 22,835 23,484 22,069 22,265 21,713 21,491 21,418 21,252 21,117 1. Data in this table also appear in the Board's H.6 (508) Special Supplementary IRA/Keogh deposits and foriegn currency denominated deposits. Data exclude Table monthly statistical release. For ordering address, see inside front cover. retail repurchase agreements and deposits held in U.S. branches and agencies of Estimates are based on data collected by the Federal Reserve System from a foreign banks. stratified random sample of about 460 commercial banks and 80 savings banks on 2. Includes personal and nonpersonal money market deposits. the last Wednesday of each period. Data are not seasonally adjusted and include 3. BIF-insured savings banks include both mutual and federal savings banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary and Credit Aggregates A17 1.23 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 1993 BBaannkk ggrroouupp,, oorr ttyyppee ooff ccuussttoommeerr 11999900 22 1199991122 1199992222 Sept. Oct.r Nov. Dec. Jan. Feb. DEBITS TO Seasonally adjusted Demand deposits 1 All insured banks 277,157.5 277,758.0 315,806.1 346,658.3 326,893.0 322,187.1 331,038.8 300,658.5 331,183.4 2 Major New York City banks 131,699.1 137,352.3 165,572.7 184,740.9 176,372.6 173,393.4 176,089.1 159,192.5 176,683.5 3 Other banks 145,458.4 140,405.7 150,233.5 161,917.4 150,520.4 148,793.7 154,949.8 141,466.0 154,499.9 4 Other checkable deposits4 ^ 3,349.0 3,645.5 3,788.1 3,942.1 3,700.5 3,610.0 3,683.9 3,292.2 3,601.1 5 Savings deposits including MMDAs 3,483.3 3,266.1 3,331.3 3,559.1 3,468.2 3,497.2 3,407.3 3,032.3 3,363.3 DEPOSIT TURNOVER Demand deposits3 6 All insured banks 797.8 803.5 832.4 892.4 818.9 796.1 830.5 746.7 817.5 7 Major New York City banks 3,819.8 4,270.8 4,797.9 5,254.5 4,855.5 4,624.0 4,693.3 4,154.7 4,525.8 8 Other banks 464.9 447.9 435.9 458.3 414.8 405.2 429.1 388.3 422.0 9 Other checkable deposits4 ^ 16.5 16.2 14.4 14.7 13.5 12.9 13.1 11.6 12.6 10 Savings deposits including MMDAs 6.2 5.3 4.7 4.9 4.7 4.7 4.6 4.1 4.5 DEBITS TO Not seasonally adjusted Demand deposits3 11 All insured banks 277,290.5 277,715.4 315,808.2 334,831.5 335,289.0 308,015.6 340,982.1 330044,,881177..22 303,672.2 12 Major New York City banks 131,784.7 137,307.2 165,595.0 178,998.2 182,584.2 167,578.4 179,987.6 159,198.8 161,174.1 13 Other banks 145,505.8 140,408.3 150,213.3 155,833.4 152,704.8 140,437.2 160,994.5 145,618.3 142,498.1 14 Other checkable deposits4 3,346.7 3,645.6 3,788.1 3,945.7 3,689.7 3,351.3 3,849.3 3,595.9 3,296.5 15 Savings deposits including MMDAs3 3,483.0 3,267.7 3,329.0 3,374.3 3,403.2 3,240.4 3,588.0 3,248.8 3,080.3 DEPOSIT TURNOVER Demand deposits3 16 All insured banks 798.2 803.4 832.5 864.2 839.2 754.3 815.2 738.3 771.9 17 Major New York City banks 3,825.9 4,274.3 4,803.5 5,180.1 5,025.6 4,494.4 4,418.1 3,936.3 4,213.4 18 Other banks 465.0 447.9 436.0 441.6 420.5 378.5 426.5 391.0 401.2 19 Other checkable deposits4 16.4 16.2 14.4 14.9 13.7 12.1 13.5 12.4 11.6 20 Savings deposits including MMDAs3 6.2 5.3 4.7 4.6 4.6 4.4 4.8 4.4 4.1 1. Historical tables containing revised data for earlier periods can be obtained 2. Annual averages of monthly figures. from the Banking and Money Market Statistics Section, Division of Monetary 3. Represents accounts of individuals, partnerships, and corporations and of Affairs, Board of Governors of the Federal Reserve System, Washington, DC states and political subdivisions. 20551. 4. Accounts authorized for negotiable orders of withdrawal (NOWs) and Data in this table also appear on the Board's G.6 (406) monthly statistical accounts authorized for automatic transfer to demand deposits (ATSs). release. For ordering address, see inside front cover. 5. Money market deposit accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Financial Statistics • July 1993 1.24 LOANS AND SECURITIES All Commercial Banks1 Billions of dollars, averages of Wednesday figures 1992 1993 May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Seasonally adjusted 1 Total loans and securities1 2,875.3 2,882.8 2,886.9 2,902.2 2,917.4 2,926.0 2,932.4 2,937.6 2,932.7 2,936.6 2,950.4 2,962.8 2 U.S. government securities 600.2 610.7 619.2 632.6 640.6 647.3 651.4 657.1 656.9 667.3 681.7r 691.6 3 Other securities 176.9 175.8 177.9 178.2 178.2 178.8 177.3 176.0 174.0 175.2 rn.o" 178.3 4 Total loans and leases1 2,098.2 2,096.2 2,089.8 2,091.4 2,098.6 2,099.8 2,103.8 2,104.5 2,101.7 2,094.1 2,091.8r 2,093.0 5 Commercial and industrial ..... 607.6 604.6 602.5 601.4 601.2 600.8 600.5 597.6 598.2 596. lr 592.5 589.7 6 Bankers acceptances held2... 6.7 6.3 6.5 6.5 6.3 7.5 7.9 7.8 7.7 8.9 9.1 9.2 7 Other commercial and industrial 600.9 598.4 596.0 594.9 594.9 593.3 592.6 589.9 590.5 587.2 583.4 580.5 8 U.S. addressees3 i 590.8 588.3 585.3 584.3 583.6 582.6 582.3 580.2 580.8 577.4 573.3 570.8 9 Non-U.S. addressees 10.1 10.1 10.7 10.6 11.3 10.7 10.3 9.7 9.7 9.8 10.1 9.7 10 Real estate 883.3 881.8 881.5 883.1 886.8 890.7 892.5 892.4 889.0" 886.9 887.5 887.2 11 Individual 359.2 359.0 358.6 357.4 357.0 355.8 355.4 355.5 358.2 360.3 360.9" 364.4 12 Security 60.9 63.3 60.5 61.6 64.0 64.7 64.2 64.8 63.0 61.7 62.5 60.8 13 Nonbank financial institutions 43.3 42.4 41.5 42.0 44.0 43.9 44.7 43.6 44.9 44.7 44.5 45.3 14 Agricultural 34.3 34.6 34.9 35.3 35.2 35.1 35.2 35.0 34.5 34.3 33.9 34.0 15 State and political subdivisions 27.3 26.8 26.2 25.9 25.8 25.4 25.1 24.8 24.2 23.6 23.4 23.1 16 Foreign banks 7.0 7.5 7.7 7.2 7.9 7.6 7.5 7.7 7.7 8.5 8.1 8.0 17 Foreign official institutions 2.0 2.0 2.2 2.3 2.5 2.4 2.8 2.8 2.8 3.0 2.9 2.9 18 Lease-financing receivables 30.9 31.0 30.8 30.8 31.0 30.8 30.9 30.9 30.3 30.3 30.3 30.3 19 All other loans 42.4 43.3 43.2 44.3 43.2 42.6 45.0 49.5 48.8 44.5 45.3 47.4 Not seasonally adjusted 20 Total loans and securities1 2,870.7 2,882.9 2,876.1 2,894.5 2,914.9 2,925.2 2,939.0 2,947.3 2,934.7 2,939.4 2,954.2r 2,964.4 21 U.S. government securities 599.4 608.9 615.3 631.3 638.7 645.1 654.1 655.8 657.3 670.9 687.4r 693.3 22 Other securities 176.5 175.4 176.8 178.1 177.9 179.2 178.3 176.2 174.6 175.4r 176.7" 177.7 23 Total loans and leases' 2,094.8 2,098.7 2,084.0 2,085.0 2,098.3 2,100.9 2,106.6 2,115.4 2,102.8 2,093.1 2,090.1" 2,093.4 24 Commercial and industrial..... 609.4 606.5 601.5 597.6 597.6 598.4 600.8 600.6 596.6 595.3 595.7 592.7 25 Bankers acceptances held ... 6.6 6.2 6.3 6.3 6.2 7.4 8.2 8.0 7.9 9.3 9.2 9.1 26 Other commercial and industrial 602.7 600.3 595.2 591.4 591.4 591.0 592.6 592.5 588.8 586.0 586.5 583.6 27 U.S. addressees3 592.7 589.5 584.2 580.5 580.3 580.7 582.8 583.0 579.1 576.2 576.5 573.9 28 Non-U.S. addressees 10.0 10.8 11.0 10.8 11.1 10.3 9.8 9.5 9.6 9.8 10.0 9.8 29 Real estate 883.4 882.0 881.6 883.7 887.6 891.5 893.9 893.6 888.8 885.1 884.9 886.1 30 Individual 357.4 357.2 356.4 356.9 358.6 356.2 356.3 360.0 362.3 360.4r 358.4 361.7 31 Security 58.4 63.5 58.0 59.4 62.5 64.2 63.5 65.5 64.5 64.6 64.6 64.1 32 Nonbank financial institutions 42.8 42.9 41.3 41.8 43.5 43.5 45.0 45.6 45.1 44.6 44.1 44.7 33 Agricultural 34.0 35.1 35.8 36.5 36.7 36.1 35.2 34.8 33.7 33.0 32.6 33.2 34 State and political subdivisions 27.3 26.8 26.1 25.9 25.9 25.5 25.2 24.8 24.0 23.5 23.4 23.1 35 Foreign banks 6.8 7.3 7.8 7.0 8.1 7.8 7.8 8.2 7.7 8.3 7.8 7.7 36 Foreign official institutions 2.0 2.0 2.2 2.3 2.5 2.4 2.8 2.8 2.8 3.0 2.9 2.9 37 Lease-financing receivables .... 30.9 31.0 30.6 30.6 30.8 30.8 30.8 30.9 30.7 30.6 30.5 30.4 38 All other loans 42.5 44.4 42.6 43.2 44.6 44.4 45.4 48.6 46.6 44.6 45.0 46.9 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

Commercial Banking Institutions A19 1.25 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1 Billions of dollars, monthly averages 1992 1993 SSoouurrccee ooff ffuunnddss May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Seasonally adjusted 11111 TTTTToooootttttaaaaalllll nnnnnooooonnnnndddddeeeeepppppooooosssssiiiiittttt fffffuuuuunnnnndddddsssss22222 292.4 295.9 297.0 302.5 309.5 304.6 308.4 312.0 310.7 309.7 319.7 328.2 22222 NNNNNeeeeettttt bbbbbaaaaalllllaaaaannnnnccccceeeeesssss ddddduuuuueeeee tttttooooo rrrrreeeeelllllaaaaattttteeeeeddddd fffffooooorrrrreeeeeiiiiigggggnnnnn oooooffffffffffiiiiiccccceeeeesssss ............... 53.7 61.2 61.7 61.4 64.0 63.8 68.1 71.8 74.1 73.3 79.2 88.3 33333 BBBBBooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss fffffrrrrrooooommmmm ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn cccccooooommmmmmmmmmeeeeerrrrrccccciiiiiaaaaalllll bbbbbaaaaannnnnkkkkksssss iiiiinnnnn UUUUUnnnnniiiiittttteeeeeddddd SSSSStttttaaaaattttteeeeesssss 238.7 234.7 235.3 241.1 245.6 240.9 240.2 240.2 236.6 236.4 240.5 239.9 44444 DDDDDooooommmmmeeeeessssstttttiiiiicccccaaaaallllllllllyyyyy ccccchhhhhaaaaarrrrrttttteeeeerrrrreeeeeddddd bbbbbaaaaannnnnkkkkksssss 151.8 147.6 147.2 151.6 153.5 154.7 153.9 154.7 155.1 155.6 159.8 164.3 55555 FFFFFooooorrrrreeeeeiiiiigggggnnnnn-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaannnnnkkkkksssss 86.9 87.2 88.1 89.6 92.1 86.2 86.3 85.5 81.5 80.8 80.7 75.6 Not seasonally adjusted 66666 TTTTToooootttttaaaaalllll nnnnnooooonnnnndddddeeeeepppppooooosssssiiiiittttt fffffuuuuunnnnndddddsssss22222 297.1 295.2 291.5 297.6 304.1 306.9 313.7 311.9 309.6 314.0 324.6 324.4 77777 NNNNNeeeeettttt bbbbbaaaaalllllaaaaannnnnccccceeeeesssss ddddduuuuueeeee tttttooooo rrrrreeeeelllllaaaaattttteeeeeddddd fffffooooorrrrreeeeeiiiiigggggnnnnn oooooffffffffffiiiiiccccceeeeesssss ............... 55.9 59.2 58.4 57.6 61.6 64.9 69.8 75.9 76.6 75.2 80.0 85.4 88888 DDDDDooooommmmmeeeeessssstttttiiiiicccccaaaaallllllllllyyyyy ccccchhhhhaaaaarrrrrttttteeeeerrrrreeeeeddddd bbbbbaaaaannnnnkkkkksssss -4.5 -6.3 -7.0 -9.3 -11.0 -13.4 -12.6 -15.1 -15.9 -10.6 -7.0 -9.5 99999 FFFFFooooorrrrreeeeeiiiiigggggnnnnn-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaannnnnkkkkksssss 60.4 65.6 65.4 66.9 72.6 78.3 82.4 91.0 92.6 85.8 87.0 94.9 1111100000 BBBBBooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss fffffrrrrrooooommmmm ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn cccccooooommmmmmmmmmeeeeerrrrrccccciiiiiaaaaalllll bbbbbaaaaannnnnkkkkksssss iiiiinnnnn UUUUUnnnnniiiiittttteeeeeddddd SSSSStttttaaaaattttteeeeesssss 241.2 236.0 233.1 239.9 242.5 242.0 243.8 236.0 232.9 238.8 244.6 239.0 1111111111 DDDDDooooommmmmeeeeessssstttttiiiiicccccaaaaallllllllllyyyyy ccccchhhhhaaaaarrrrrttttteeeeerrrrreeeeeddddd bbbbbaaaaannnnnkkkkksssss 153.3 147.4 144.1 150.5 152.3 155.8 158.4 153.7 152.1 157.3 162.7 162.3 1111122222 FFFFFeeeeedddddeeeeerrrrraaaaalllll fffffuuuuunnnnndddddsssss aaaaannnnnddddd ssssseeeeecccccuuuuurrrrriiiiitttttyyyyy RRRRRPPPPP bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss 149.4 143.3 140.0 146.6 148.5 152.3 154.3 149.7 148.5 154.1 159.3 158.9 1111133333 OOOOOttttthhhhheeeeerrrrr ,,,,, 3.9 4.1 4.2 3.9 3.8 3.6 4.1 4.0 3.6 3.2 3.3 3.5 1111144444 FFFFFooooorrrrreeeeeiiiiigggggnnnnn-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaannnnnkkkkksssss66666 87.9 88.6 89.0 89.5 90.1 86.1 85.5 82.3 80.8 81.5 81.9 76.7 MMMMMEEEEEMMMMMOOOOO GGGGGrrrrrooooossssssssss lllllaaaaarrrrrgggggeeeee tttttiiiiimmmmmeeeee dddddeeeeepppppooooosssssiiiiitttttsssss 1111155555 SSSSSeeeeeaaaaasssssooooonnnnnaaaaallllllllllyyyyy aaaaadddddjjjjjuuuuusssssttttteeeeeddddd 397.5 393.3 387.7 385.8 383.2 375.7 371.3 366.5 359.9 358.4 355.7 355.lr 1111166666 NNNNNooooottttt ssssseeeeeaaaaasssssooooonnnnnaaaaallllllllllyyyyy aaaaadddddjjjjjuuuuusssssttttteeeeeddddd 399.4 394.9 387.4 387.1 383.6 374.9 371.1 365.5 358.0 358.0 356.5 354.3r UUUUU.....SSSSS..... TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy dddddeeeeemmmmmaaaaannnnnddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaattttt cccccooooommmmmmmmmmeeeeerrrrrccccciiiiiaaaaalllll bbbbbaaaaannnnnkkkkksssss 1111177777 SSSSSeeeeeaaaaasssssooooonnnnnaaaaallllllllllyyyyy aaaaadddddjjjjjuuuuusssssttttteeeeeddddd 19.2 24.7 23.1 28.0 24.1 21.5 20.7 20.4 25.6 23.6 18.8 24.2r 1111188888 NNNNNooooottttt ssssseeeeeaaaaasssssooooonnnnnaaaaallllllllllyyyyy aaaaadddddjjjjjuuuuusssssttttteeeeeddddd 21.0 25.2 19.6 22.4 28.6 21.9 16.5 19.5 33.1 29.5 17.4 20.3r 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

A20 Domestic Nonfinancial Statistics • July 1993 1.26 ASSETS AND LIABILITIES OF COMMERCIAL BANKS1 Wednesday figures Millions of dollars 1993 AAccccoouunntt Mar. 3 Mar. 10 Mar. 17 Mar. 24 Mar. 31 Apr. 7 Apr. 14 Apr. 21 Apr. 28 ALL COMMERCIAL BANKING INSTITUTIONS2 Assets 1 3,122,606 3,111,087 3,121,803 3,093,303 3,116,755 3,118,893 3,121,616 3,105,428 3,106,323 ? Investment securities 816,876 821,117 825,205 828,284 833,190 832,672 832,503 832,234 827,827 U.S. government securities 654,509 657,829 663,204 665,548 669,%9 669,597 667,914 668,315 663,706 4 Other 162,366 163,288 162,001 162,735 163,221 163,075 164,589 163,919 164,121 5 Trading account assets 38,522 39,093 40,207 36,846 36,272 39,174 39,447 38,120 41,506 6 U.S. government securities 23,788 25,346 26,084 22,821 22,217 25,351 25,269 24,855 27,436 7 Other securities 1,958 2,041 2,093 2,249 2,460 2,369 2,248 2,334 2,573 8 Other trading account assets 12,775 11,707 12,030 11,776 11,595 11,454 11,930 10,930 11,498 9 2,267,209 2,250,878 2,256,391 2,228,173 2,247,294 2,247,047 2,249,665 2,235,075 2,236,989 10 Interbank loans 167,068 160,401 158,822 143,298 164,479 156,405 157,090 141,505 143,494 11 Loans excluding interbank 2,100,141 2,090,477 2,097,569 2,084,875 2,082,815 2,090,642 2,092,575 2,093,570 2,093,495 1? Commercial and industrial 597,563 595,279 598,018 594,734 593,960 592,576 590,299 593,724 593,660 N Real estate 886,175 886,628 884,024 883,388 885,045 884,493 886,498 884,637 886,956 14 Revolving home equity 73,703 73,647 73,641 73,620 73,724 73,580 73,855 74,255 74,423 15 Other 812,472 812,981 810,382 809,768 811,321 810,914 812,642 810,382 812,533 16 358,792 357,945 358,459 358,188 358,724 358,874 360,527 362,321 364,625 17 All other 257,612 250,625 257,069 248,565 245,086 254,699 255,252 252,887 248,255 18 Total cash assets 212,389 196,943 201,487 199,601 214,369 206,284 217,359 203,342 212,975 19 Balances with Federal Reserve Banks 28,508 23,865 21,660 27,820 30,284 28,418 32,641 25,756 29,083 70 Cash in vault 29,494 30,749 30,717 31,245 31,373 29,652 32,285 32,033 32,149 71 Demand balances at U.S. depository institutions.. 31,407 29,129 30,2% 29,464 29,092 29,546 30,917 29,391 31,345 7? Cash items 81,426 71,164 75,637 68,873 82,091 77,114 81,806 75,373 80,114 73 41,554 42,036 43,177 42,199 41,529 41,554 39,711 40,789 40,284 24 Other assets 282,128 278,338 272,406 274,759 277,892 275,986 274,236 270,067 262,458 25 Total assets 3,617,123 3,586,367 3,595,696 3,567,663 3,609,017 3,601,162 3,613,211 3,578,837 3,581,756 Liabilities 76 Total deposits 2,500,133 2,479,112 2,478,484 2,458,830 2,489,002 2,504,551 2,513,903 2,467,896 2,476,065 77 Transaction accounts 758,628 738,109 742,787 728,635 761,819 769,062 783,340 746,871 755,137 78 Demand, U.S. government 3,448 3,027 2,944 3,318 3,937 3,267 4,843 4,768 3,852 79 Demand, depository institutions 39,288 36,025 38,460 37,019 35,887 38,143 38,340 37,386 39,304 30 Other demand and all checkable deposits 715,892 699,057 701,384 688,298 721,9% 727,653 740,157 704,717 711,982 31 Savings deposits (excluding checkable) 750,950 754,210 752,251 749,951 751,715 762,153 759,168 748,214 748,817 37 633,339 632,197 630,485 628,855 627,%1 627,340 625,620 623,069 622,279 33 Time deposits over $100,000 357,217 354,596 352,961 351,389 347,507 345,995 345,775 349,743 349,832 34 501,256 491,330 502,973 489,740 492,238 483,387 479,341 494,388 491,589 35 Treasury tax and loan notes 5,636 8,032 21,068 15,814 14,852 3,880 6,057 32,990 24,743 36 Other 495,620 483,298 481,905 473,926 477,386 479,507 473,284 461,398 466,846 37 Other liabilities 339,517 338,986 337,348 340,712 346,159 333,077 338,415 334,715 334,854 38 Total liabilities 3,340,906 3,309,428 3,318,805 3,289,282 3,327,399 3,321,015 3,331,659 3,297,000 3,302,508 39 Residual (assets less liabilities)3 276,216 276,939 276,892 278,381 281,617 280,147 281,552 281,837 279,248 Footnotes appear on the following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions A21 1.26 ASSETS AND LIABILITIES OF COMMERCIAL BANKS1 Wednesday figures—Continued Millions of dollars 1993 Account Mar. 3 Mar. 10 Mar. 17 Mar. 24 Mar. 31 Apr. 7 Apr. 14 Apr. 21 Apr. 28 DOMESTICALLY CHARTERED COMMERCIAL BANKS4 Assets 4 4 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 6 6 6 6 5 5 0 1 2 3 7 4 5 6 8 9 1 2 3 5 6 7 8 9 0 1 2 3 0 4 L T O o o t T I T C D O C B h a t n a r o e n a a a e t v O l O U O a I U L r h t s s l s m n e d a a h h c e o t t t . . a t l s R A i a n I C h h a h S S r a e a n s t n n i i n c l e e s e . . m e l o r n s n g t c o d d R h l O e r r d r b e a e s m g g a a i s e m l o v a t e a v t t s s o o a s n s b n e m r h n v a c t h e w i e e v v s s s a t h x a d e u k c o c s c s e d e e l i c e r u a o l u t l s e u a t r r r i t r v l a l s h a e u r c t n n n n u r o t i s s l i c i i n g e m n m c d a t e F t a u i t i e g n i t l e e e e r e a n s s s a s i s d n a n c g h t s a n t i e t c o s e t i d r o e m s s s n a u U e t e t l i s e n e c c n . R t u r u S d e b r r e . u q a i a i s s s u t t d n i e i t s i e e e k r r t e s i s y p v t a s o e l s B it a o n ry k s i nstitutions 2 1 1 , . , 7 6 7 4 7 2 9 8 3 8 1 1 1 1 0 6 4 7 2 3 2 0 4 2 3 7 7 5 3 6 4 3 1 4 1 8 7 9 7 9 3 8 1 3 9 7 1 0 9 9 8 5 0 6 2 2 2 1 7 4 4 , , , , , , , , , , . , , , , , , , , , , , , , 2 8 7 5 5 7 4 7 7 2 1 1 0 2 7 7 8 7 9 9 0 4 8 0 5 3 8 4 2 8 9 7 0 6 1 0 4 9 7 5 1 9 9 5 8 9 5 % 8 1 3 8 0 2 9 4 2 3 3 5 5 5 5 8 4 2 9 8 8 1 1 2 1 1 , , , 7 7 6 4 7 9 8 3 8 1 1 1 1 1 5 1 5 2 3 2 6 3 7 3 2 6 6 3 5 4 3 1 7 3 1 9 6 8 1 1 9 3 5 2 2 9 0 8 3 7 7 6 7 0 2 1 1 4 8 8 9 , . , , , , , , , , , , , , , , , , , . , , , , 2 2 9 0 0 7 5 3 7 7 8 1 6 6 8 7 4 9 2 1 9 0 5 6 0 9 7 4 8 9 0 2 8 4 1 4 4 6 3 4 9 4 0 9 5 3 5 4 7 1 0 1 7 3 7 0 0 6 8 5 4 8 4 5 2 7 7 0 4 0 6 3 2 1 1 , , , 7 7 6 7 4 8 2 9 3 8 1 1 1 1 4 6 1 5 5 2 7 2 3 7 4 3 0 2 7 5 1 3 3 1 6 3 7 0 2 6 4 4 6 0 0 3 9 3 1 3 2 8 2 8 2 9 5 9 9 6 3 , , , , , , , , , , , , , , , , , , , , , , , , 2 9 9 0 7 0 8 6 4 9 6 2 9 5 0 0 0 7 4 4 0 2 7 0 0 7 4 0 8 9 9 8 7 1 4 3 7 2 3 4 5 3 0 5 4 4 4 9 7 7 7 6 4 2 3 7 7 5 1 0 5 9 4 4 7 7 3 9 1 0 0 5 2 1 1 , , , 7 7 6 4 8 7 9 3 8 1 1 1 1 1 4 1 5 3 2 7 2 3 6 3 5 3 2 4 5 2 4 1 1 7 7 2 9 8 4 2 2 8 1 7 3 6 6 3 9 9 8 8 8 5 0 1 8 0 1 3 4 , , , , , , , , , , , , , , , , , , , , , , , , 2 2 7 2 4 7 6 8 4 2 0 4 0 5 0 0 7 8 1 2 6 4 8 4 4 1 1 6 0 0 6 8 6 2 1 4 7 6 5 7 3 2 2 8 3 3 9 6 8 9 9 4 6 2 1 8 3 3 0 1 6 6 5 1 6 9 8 8 4 1 8 8 2 1 1 , , , 7 6 7 4 8 7 3 9 1 8 1 1 1 1 6 2 3 2 7 2 3 7 3 6 6 2 4 5 6 4 2 1 1 8 3 8 9 2 0 9 3 2 6 8 2 1 5 2 1 7 0 4 8 1 1 7 7 0 6 4 2 , , , , , , , , , , , , , , , , , , , , , , , , 0 2 7 4 2 8 2 6 9 3 2 3 3 6 5 9 7 5 9 7 7 9 9 7 5 2 2 6 7 7 5 0 1 4 3 9 4 9 6 1 6 2 7 2 8 9 7 4 0 1 4 0 4 2 0 9 7 7 4 7 3 5 6 6 6 4 4 3 6 6 0 9 2 1 1 , , , 7 7 6 4 7 8 3 2 9 1 8 1 1 1 7 2 6 3 2 7 2 2 7 3 6 2 5 7 0 3 4 3 1 7 7 3 1 1 7 1 9 5 9 8 2 4 3 8 2 8 8 6 4 6 0 1 7 7 9 8 8 , , , , , , , , , , , , , , , , , , , , , , , , 4 1 6 3 6 0 2 3 3 3 7 1 5 2 8 4 4 1 3 8 1 9 8 6 3 7 3 5 2 2 7 4 0 6 0 2 9 5 7 8 7 7 5 7 0 6 1 6 1 4 3 1 1 4 8 9 2 9 2 9 4 4 4 0 1 4 2 5 9 4 1 0 2 1 1 , , , 7 7 6 7 4 8 2 3 9 8 1 1 1 1 3 7 6 6 2 2 7 3 2 7 0 3 3 3 6 7 1 4 3 8 9 3 1 2 9 6 4 2 1 9 3 2 5 9 3 6 7 1 0 4 1 1 0 8 1 5 8 , , , , , , , , , , , , , , , , , , , , , , , , 4 2 0 6 4 4 2 8 2 2 4 9 9 5 9 1 5 9 3 6 8 4 6 1 4 6 4 8 9 9 5 5 5 5 6 9 4 5 2 2 3 1 4 2 6 5 3 2 7 7 8 3 0 4 5 5 1 6 9 2 4 7 3 7 0 0 5 4 6 9 7 7 2 1 1 , , , 7 7 6 4 7 8 3 9 8 1 1 1 1 1 6 2 3 6 6 3 2 7 2 3 7 3 6 2 6 3 4 7 1 1 9 2 7 2 8 1 9 1 2 5 2 2 4 4 2 5 7 2 1 7 0 2 0 8 9 4 6 , , , , , , , , , . , , , , , , , , , , . , , , 1 9 0 4 6 3 3 5 8 2 4 3 8 9 7 3 4 3 2 9 8 6 4 8 2 8 0 3 4 8 7 5 5 6 3 2 9 9 8 4 5 2 1 6 3 7 5 0 0 8 3 4 4 4 4 5 5 9 4 9 9 2 1 0 0 1 1 5 0 5 6 9 2 1 1 , , , 7 6 7 4 7 8 3 9 8 1 1 1 1 1 4 6 1 2 7 3 7 6 5 3 2 2 3 6 6 3 6 1 1 4 8 2 9 1 1 6 6 7 2 2 4 3 9 7 8 9 8 4 2 8 7 7 1 1 5 4 4 , , , , , , , , , , , , , , , , , , , , , , , , 5 9 7 5 4 1 6 4 5 8 4 9 8 9 0 6 2 4 2 1 2 9 7 6 0 1 7 7 3 1 7 7 8 2 5 1 9 6 0 1 0 2 8 2 8 8 2 8 6 8 1 3 6 9 4 4 7 3 9 1 8 8 0 6 0 9 5 9 4 7 5 3 64 Total assets 3.126.773 3,099,055 3,109,424 3,085,946 3,128,375 3,134,304 3,148,220 3,111,488 3,115,582 Liabilities 65 Total deposits 2,347,263 2,328,552 2,328,676 2,309,187 2,334,517 2,358,380 2,367,692 2,318,656 2,323,647 66 Transaction accounts 747,302 727,407 731,663 717,966 748,864 757,739 772,223 735,983 742,095 67 Demand, U.S. government 3,447 3,027 2,943 3,318 3,936 3,267 4,842 4,768 3,851 68 Demand, depository institutions 36,342 33,268 35,450 34,365 32,931 35,266 35,445 34,675 36,449 69 Other demand and all checkable deposits 707,513 691,112 693,270 680,283 711,997 719,207 731,936 6%,540 701,795 7 7 1 0 S S m av a i l n l g t s i m d e e p d o e s p it o s s i ( t e s x cluding checkable) 6 7 3 4 1 6 , , 0 7 8 0 0 7 6 7 2 4 9 9 , , 9 9 6 5 5 8 7 6 4 2 8 8 , , 1 2 7 8 8 5 7 62 4 6 5 , , 6 8 6 3 4 3 7 62 4 5 7 , , 7 5 6 1 9 5 7 6 5 2 7 5 , , 9 1 7 8 1 6 6 7 2 5 3 5 , , 4 0 7 3 5 9 6 7 2 4 0 4 , , 9 0 5 8 9 4 7 62 4 0 4 , , 1 7 6 5 9 6 7 7 7 7 7 3 4 5 6 2 Bo O O T T rr r i t t m o e h h w a e e e s r r i u n d l r i g e y a p s b o t i a l s i x i t t i s e a s n o d v e l r o a $ n 1 0 n 0 o ,0 te 0 s 0 2 3 3 1 6 2 6 3 5 4 2 9 6 , , , , , 1 6 1 7 7 1 7 3 5 6 4 4 6 0 1 3 3 2 1 5 5 2 3 8 0 8 1 7 , , , , , 8 0 8 8 2 5 8 3 9 2 7 9 2 3 3 3 2 3 1 2 5 7 2 3 1 0 1 0 5 , , , , , 1 2 8 5 0 5 5 1 6 4 1 8 5 9 9 3 2 3 1 5 6 1 3 1 1 6 8 4 5 , , , , , 1 9 7 6 8 0 2 2 7 1 9 3 4 2 4 3 2 3 1 5 1 7 4 1 5 2 0 4 4 , , , , , 9 3 8 6 8 8 2 7 3 5 7 0 0 9 2 3 2 3 1 6 1 6 3 0 3 7 4 4 , , , , , 2 8 4 1 8 3 8 8 1 7 8 0 3 8 6 2 3 3 1 1 6 6 3 6 6 7 0 5 , , , , , 0 9 0 9 1 5 5 0 4 8 7 5 6 9 8 2 3 3 1 8 4 1 3 3 1 8 2 7 2 , , , , , 7 7 9 6 4 5 6 9 3 6 2 2 0 0 0 2 3 3 1 2 1 5 8 3 6 4 6 1 4 , , , , , 7 6 3 5 6 4 5 0 4 28 3 5 6 9 77 Total liabilities 2,853,774 2,825,333 2,835,750 2,810,782 2,849,976 2,857,374 2,869,886 2,832,868 2,839,552 78 Residual (assets less liabilities)3 272,999 273,722 273,674 275,163 278,400 276,930 278,334 278,620 276,031 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

A22 Domestic Nonfinancial Statistics • July 1993 1.27 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS Millions of dollars, Wednesday figures 1993 Account Mar. 3 Mar. 10 Mar. 17 Mar. 24 Mar. 31 Apr. 7 Apr. 14 Apr. 21 Apr. 28 ASSETS 1 Cash and balances due from depository institutions 105,080 96,357 98,967 98,936 105,691 103,823 112,024 101,677 108,570 2 U.S. Treasury and government securities 281,716 282,633 286,014 284,788 283,598 288,392 288,955 289,093 288,364 3 Trading account 21,932 23,026 23,132 20,521 19,009 22,606 22,858 22,570 23,902 4 Investment account 259,784 259,607 262,881 264,266 264,588 265,786 266,097 266,524 264,462 5 Mortgage-backed securities 80,494 80,642 82,748 83,113 83,452 83,719 83,618 83,947 84,199 All others, by maturity 6 One year or less 37,827 37,240 38,213 38,894 41,195 41,062 40,838 41,560 40,625 7 One year through five years 77,536 76,333 76,841 77,235 74,358 74,397 74,691 74,542 73,801 8 More than five years 63,927 65,392 65,080 65,024 65,584 66,608 66,949 66,474 65,837 9 Other securities 56,148 56,595 55,892 56,523 57,073 55,847 55,899 55,726 56,033 10 Trading account 1,777 1,860 1,913 2,069 2,276 2,187 2,063 2,151 2,369 11 Investment account 54,371 54,736 53,980 54,455 54,797 53,660 53,837 53,575 53,663 12 State and political subdivisions, by maturity . 19,986 20,009 19,986 19,995 20,026 19,861 19,880 19,879 19,928 13 One year or less 3,381 3,378 3,361 3,363 3,392 3,375 3,402 3,394 3,426 14 More than one year 16,604 16,631 16,625 16,632 16,634 16,486 16,478 16,484 16,503 15 Other bonds, corporate stocks, and securities 34,385 34,726 33,993 34,459 34,771 33,799 33,957 33,696 33,735 16 Other trading account assets 12,655 11,586 11,910 11,656 11,471 11,331 11,805 10,808 11,376 17 Federal funds sold2 89,680 80,916 85,559 75,957 81,565 85,507 86,530 83,943 81,028 18 To commercial banks in the United States 60,491 52,051 56,247 47,358 58,381 54,169 54,724 52,351 54,691 19 To nonbank brokers and dealers 24,797 24,169 24,877 24,460 19,473 24,815 26,113 26,806 21,965 20 To others3 4,391 4,696 4,435 4,138 3,711 6,524 5,693 4,786 4,372 21 Other loans and leases, gross 980,701 976,701 979,405 970,180 975,601 974,222 974,080 971,651 975,216 22 Commercial and industrial 279,114 277,978 278,504 275,852 277,576 275,123 273,847 275,229 275,662 23 Bankers acceptances and commercial paper .. 2,924 2,952 3,141 2,670 2,705 2,730 2,587 2,626 3,079 24 All other 276,190 275,025 275,363 273,182 274,871 272,393 271,260 272,602 272,583 25 U.S. addressees 274,571 273,396 273,786 271,632 273,302 270,836 269,687 271,028 271,028 26 Non-U.S. addressees 1,619 1,630 1,577 1,550 1,569 1,557 1,574 1,574 1,555 27 Real estate loans 397,549 398,109 395,208 394,208 395,405 395,818 396,912 394,458 395,663 28 Revolving, home equity 43,465 43,410 43,437 43,400 43,472 43,415 43,549 43,816 43,887 29 All other 354,084 354,700 351,771 350,808 351,933 352,403 353,363 350,642 351,776 30 To individuals for personal expenditures 183,753 183,288 183,576 183,351 183,751 183,138 183,854 183,979 185,058 31 To financial institutions 34,826 33,269 34,054 33,325 33,743 35,028 33,832 33,272 34,761 32 Commercial banks in the United States 12,481 12,431 12,860 12,822 12,529 12,622 12,203 12,029 12,292 33 Banks in foreign countries 3,306 2,233 2,636 2,461 2,108 2,623 2,309 2,242 2,850 34 Nonbank financial institutions 19,040 18,606 18,557 18,041 19,106 19,783 19,320 19,001 19,619 35 For purchasing and carrying securities 16,066 15,784 18,135 15,741 15,587 15,382 17,349 16,511 15,627 36 To finance agricultural production 5,502 5,500 5,568 5,504 5,535 5,576 5,632 5,545 5,599 37 To states and political subdivisions 14,221 14,186 14,177 14,145 14,033 13,881 13,848 13,800 13,798 38 To foreign governments and official institutions 1,712 1,555 1,463 1,403 1,412 1,472 1,412 1,386 1,452 39 All other loans4 23,299 22,500 24,204 22,337 24,087 24,373 23,027 23,115 23,119 40 Lease-financing receivables 24,658 24,532 24,516 24,315 24,473 24,430 24,368 24,355 24,477 4 4 1 2 LESS: L U o n a e n a r a n n e d d l i e n a c s o e m r e e serve < 3 2 7 , , 2 1 0 1 3 9 3 2 7 , , 2 0 1 3 3 8 37 2 , , 0 2 1 0 2 1 3 2 6 , , 1 8 8 8 9 6 3 2 6 , , 1 3 5 0 3 8 3 2 6 , , 1 1 3 5 4 8 3 2 6 , , 1 1 4 9 2 9 3 2 5 , , 1 9 3 5 2 4 3 2 5 , , 0 9 7 4 4 6 43 Other loans and leases, net 941,379 937,450 940,193 931,105 937,140 935,930 935,740 933,565 937,196 44 Other assets 160,935 159,194 157,282 157,917 164,889 163,966 167,427 161,419 157,383 45 Total assets 1,647,593 1,624,732 1,635,817 1,616,882 1,641,428 1,644,796 1,658,381 1,636,232 1,639,949 Footnotes appear on the following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Commercial Banks A23 1.27 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued Millions of dollars, Wednesday figures 1993 Account Mar. 3 Mar. 10 Mar. 17 Mar. 24 Mar. 31 Apr. 7 Apr. 14 Apr. 21 Apr. 28 LIABILITIES 4 4 4 4 5 5 5 5 5 5 6 5 5 5 5 6 7 8 9 0 1 3 4 5 9 0 2 6 7 8 De D T N p r e o o O I O I a m s n n n n i t t d t d S B U C S F a t h D s h r s i i a n e t a o t e a e v v . e a a c d r r n S r r n i p i t t t e t d d s . e k e i h h i o d i a o u f u s s s g o g o s i e c n a a e i n l o l a a p i t t l l d d d n i o s v n n s b o o g e e , , d r d e a s a f n r o r y r p i p l o s n s v n t p a p a r d a s b i e n m o o e r n r a r c l i t l t o s l n e i g i n n e a t t t f n m n e i e i i s f n c c t t r r i u c e c a a c o s s t e n l l o h e h t i s h t r o u i i s s s p s p e n n u u ' r s s s a t b b c , , r n t d d h i i h a a d e n i i e v n v a n s c n d i t o i d k s h s f i i s e d f c c o o i e o o c n n U m r r i s s a p p n a l o o i n i t r r n e d a a d s t t t i i d i o o S t e u n n t p a s s t o i t o e s n i s t s s 4 1, 2 2 7 7 1 1 4 2 2 1 2 0 6 2 1 2 1 9 6 5 1 8 5 2 2 8 2 5 2 5 0 1 , , , , , , , , , , , , , , , 5 8 8 4 8 0 4 5 6 1 3 0 2 5 1 0 5 4 9 1 1 1 4 4 5 6 2 9 2 6 8 5 2 3 7 0 5 1 0 1 1 2 5 5 4 0 6 2 1, 2 2 7 7 1 1 4 2 5 2 0 0 2 2 0 1 5 5 8 4 8 2 4 9 9 3 1 0 2 8 1 , , , , , , , , , , , , , , , 6 3 8 7 2 0 4 5 0 7 5 1 5 1 8 8 4 9 1 4 6 2 6 2 7 7 4 7 6 1 5 3 8 2 2 2 7 9 3 7 6 0 6 2 2 1 8 5 1, 7 7 2 2 1 1 4 0 2 2 2 1 6 2 0 1 1 8 8 5 2 1 0 6 5 2 1 1 5 0 7 1 , , , , , , , , , , , , , , , 8 0 7 6 7 1 2 3 5 3 5 7 4 5 6 6 4 2 5 9 2 2 1 5 8 4 0 3 9 0 8 9 1 6 9 4 3 2 5 8 1 0 6 9 4 9 4 0 1, 2 2 7 6 0 1 4 5 0 2 9 2 2 2 9 1 1 8 8 2 3 5 0 1 5 5 0 2 6 1 0 6 , , , , , , , , , , , , , , , 7 8 0 8 4 1 0 9 0 5 0 1 1 8 4 2 5 5 0 7 8 0 3 4 9 5 4 1 2 2 1 3 1 4 5 5 2 3 1 0 1 4 5 4 9 9 0 8 1, 2 2 7 6 1 1 4 2 2 9 1 6 2 2 0 1 9 2 0 8 5 6 2 4 8 1 0 2 2 9 , , , , , , , , , , , , , , 4 5 1 8 8 2 0 8 6 8 3 7 2 3 7 4 5 3 6 5 4 0 9 1 7 3 1 0 4 8 8 4 5 5 3 3 0 8 0 6 6 6 2 0 4 3 7 8 1, 7 2 2 7 1 1 0 4 2 2 2 2 6 2 1 2 9 3 3 8 0 8 4 6 1 9 2 2 8 2 1 , , , , , , , , , , , , , , , 7 2 3 1 4 5 3 9 3 6 0 4 1 0 1 0 7 8 3 5 5 8 0 7 1 2 9 7 9 7 4 6 2 7 7 8 0 8 5 1 4 9 2 2 7 7 8 1 1, 7 7 2 2 1 1 4 2 0 2 2 2 7 3 2 2 1 4 3 9 0 0 3 8 1 9 0 3 6 2 0 , , , , , , , , , , , , , , 9 0 2 6 9 9 7 8 1 2 9 6 4 0 0 3 5 6 4 3 9 1 3 3 2 8 8 9 1 4 4 4 9 2 4 9 7 5 5 3 7 7 0 5 6 6 6 3 1, 7 6 2 2 0 1 4 2 2 1 9 1 6 2 9 1 8 2 8 4 4 0 6 8 1 1 0 3 1 5 8 , , , , , , , , , , , , , , , 6 1 8 3 9 3 8 2 4 6 7 0 9 3 5 5 2 9 8 4 9 7 4 9 7 8 4 3 0 3 9 3 2 9 2 2 7 8 6 6 4 4 5 5 9 2 0 6 6 6 1 2 D U e .S p . o s g i o to v r e y r n i m ns e t n it t u tions in the United States 2,1 3 0 3 3 2 2,2 3 1 3 8 2 2,1 3 9 4 8 0 2,1 3 9 4 2 2 1,5 3 9 3 7 6 1,9 3 5 3 9 2 1,9 3 8 3 4 6 2,0 3 0 3 8 3 63 Foreign governments, official institutions, and banks 6 6 6 6 4 5 6 7 Li T a B O b r o t i e h r l a i r e t o s r i u e w l s r i i y a n f b o g t i a r s l x i b t f i r o a e o s r n m r d o f o w F l r o e e a b d d n o e r m r n r a o o o l w t n e R e e s e y d s 5 e m rv o e n e B y a nks 2 2 8 7 4 3 9 , , , 4 4 9 6 7 7 3 7 6 9 5 2 2 6 7 6 6 3 , , , 7 4 1 2 8 6 5 6 0 1 2 2 8 6 1 2 4 7 , , , 7 1 7 8 7 8 2 6 4 9 6 0 2 2 7 6 1 8 6 2 , , , 8 1 6 4 5 9 0 9 8 1 2 2 8 6 1 1 8 1 , , , 3 9 6 7 1 2 8 0 9 4 8 7 2 2 7 7 2 7 4 , , , 4 6 8 9 6 3 2 2 0 0 2 2 8 7 4 1 7 , , , 9 3 5 6 7 9 2 0 0 3 2 2 2 9 6 8 2 3 , , , 8 3 5 7 8 0 7 6 0 8 68 Othe d r e l b ia e b n i t l u it r i e e s s ) (including subordinated notes and 105,653 106,525 104,691 103,273 112,270 103,767 103,842 101,553 69 Total liabilities 1,504,958 1,481,883 1,492,875 1,473,251 1,496,290 1,499,455 1,511,850 1,489,271 70 Residual (total assets less total liabilities)7 142,635 142,849 142,942 143,630 145,138 145,341 146,531 146,961 7 7 7 7 7 7 7 1 2 3 4 5 6 7 T T L N F M o i o o e E m O C r t a t M a e n o e t l d i h O s m g u d l e n o e s m r e a o p b t e n l o o r d r s a s c r i n o i a e t a c s u n l l h a d t i r a t n i e c n l g d e r d a h e a m t i d s i n e n i t o s t o s d u t , e i u n a t x g s u f ts t t r f t r e i o i i l o o n a s i f a n d s l t , s e $ e d a 1 s a d 0 b t j 0 o u r , o 0 s U a 0 te d . 0 S d , . o r p r e l m u s s i o d r s e e e n c t u s r '" i ties 8 .. 1,3 1 - 2 4 1 8 3 7 3 , , , , 8 4 9 8 4 4 7 7 2 0 9 2 5 4 0 7 7 8 9 3 6 1 - ,3 1 1 2 4 1 0 3 3 2 , , , , 5 9 8 5 8 4 4 6 5 4 9 9 4 5 0 0 6 8 7 5 2 1,3 1 - 2 4 1 8 3 9 1 , , , , 9 8 6 9 8 4 4 4 5 8 7 5 4 9 5 0 3 3 1 5 6 1 - ,3 1 1 2 3 1 0 3 8 0 , , , , 0 1 9 1 8 4 4 7 5 6 2 9 4 4 0 0 7 3 3 4 9 1 - ,3 1 1 2 3 0 2 3 8 4 , , , , 3 2 3 1 8 4 4 2 2 9 2 4 2 6 8 5 8 8 7 2 9 1 - ,3 1 1 2 4 0 3 3 8 8 , , , , 2 2 5 6 8 4 4 2 2 0 7 4 7 2 1 7 9 8 7 6 9 1 - ,3 1 1 2 5 0 6 3 0 8 , , , , 1 3 3 4 8 4 4 5 2 4 4 3 7 2 8 1 3 7 1 5 9 1 - ,3 1 1 2 4 0 2 3 6 9 , , , , 0 4 8 4 8 4 4 1 4 6 4 7 4 2 6 1 4 1 5 7 9 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

A24 Domestic Nonfinancial Statistics • July 1993 1.28 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS Assets and Liabilities1 Millions of dollars, Wednesday figures Account Mar. 3 Mar. 10 Mar. 17 Mar. 24 Mar. 31 Apr. 7 Apr. 14 Apr. 21 Apr. 28 1 Cash and balances due from depositoryinstitutions 18,488 17,941 18,588 18,277 19,477 17,756 16,838 17,317 18,063 2 U.S. Treasury and government agency securities 28,414 29,245 30,199 29,671 31,416 30,267 29,201 29,072 29,556 3 Other securities. 8,516 8,755 8,590 8,577 8,475 8,849 9,070 9,050 8,852 4 Federal funds sold 22,841 22,931 23,720 21,931 23,044 18,667 21,235 19,330 19,858 5 To commercial banks in the United States .. 5,960 7,213 5,316 4,678 8,710 4,110 5,984 3,445 4,293 6 Toothers2 16,881 15,718 18,404 17,252 14,334 14,556 15,251 15,884 15,565 7 Other loans and leases, gross 165,171 162,364 162,457 161,115 160,764 158,691 158,914 159,884 160,093 8 Commercial and industrial 97,198 96,988 97,357 96,736 95,792 96,121 95,698 95,901 95,601 9 Bankers acceptances and commercial paper 2,641 2,697 2,580 2,644 2,663 2,814 2,5% 2,574 2,622 10 All other 94,556 94,291 94,778 94,093 93,129 93,307 93,102 93,327 92,979 11 U.S. addressees 91,132 90,920 91,393 90,681 89,842 89,968 89,846 90,021 89,668 12 Non-U.S. addressees 3,424 3,371 3,385 3,412 3,287 3,339 3,256 3,306 3,311 13 Loans secured by real estate 33,277 33,287 33,336 33,252 32,574 31,931 32,245 32,264 32,399 14 To financial institutions 27,285 25,707 26,074 25,413 25,600 24,838 24,258 25,501 25,544 15 Commercial banks in the United States. 6,311 5,582 5,771 5,396 4,956 4,993 4,935 5,077 5,001 16 Banks in foreign countries 2,195 1,819 1,784 1,666 1,871 1,803 1,822 1,659 1,680 17 Nonbank financial institutions 18,780 18,306 18,520 18,351 18,773 18,041 17,502 18,765 18,863 18 For purchasing and carrying securities ... 4,906 3,903 3,299 2,610 3,794 2,702 3,504 3,008 3,264 19 To foreign governments and official institutions 398 396 386 370 368 364 406 388 382 20 All other 2,107 2,082 2,004 2,734 2,637 2,735 2,803 2,821 2,902 21 Other assets (claims on nonrelated parties) . 32,243 32,090 30,910 30,741 33,955 31,619 32,157 31,944 32,084 22 Total assets3 312,754 310,535 309,771 306,975 306,205 297,992 2%,718 298,302 297,017 23 Deposits or credit balances due to other than directly related institutions 101,333 99,966 99,680 99,825 102,824 97,042 97,250 99,311 101,357 24 Demand deposits 4,148 3,859 4,061 3,904 4,934 4,137 4,100 3,%3 5,008 25 Individuals, partnerships, and corporations 3,144 2,962 3,060 3,211 3,413 2,945 3,182 3,052 3,533 26 Other 1,004 897 1,001 693 1,521 1,193 918 911 1,476 27 Nontransaction accounts 97,185 96,107 95,619 95,921 97,890 92,905 93,150 95,348 %,349 28 Individuals, partnerships, and corporations 67,619 67,240 66,701 66,463 67,955 65,4% 65,214 67,038 67.174 29 Other 29,566 28,866 28,918 29,458 29,935 27,409 27,936 28,311 29.175 30 Borrowings from other than directly related institutions 94,763 94,459 94,217 88,359 86,619 86,080 81,911 82,183 79,866 31 Federal funds purchased 47,578 44,887 47,768 43,257 45,148 49,938 45,816 42,625 39,287 32 From commercial banks in the United States 14,652 14,994 16,264 11,999 18,600 17,405 13,751 12,841 12,057 33 From others 32,926 29,893 31,504 31,259 26,548 32,533 32,065 29,783 27,230 34 Other liabilities for borrowed money 47,185 49,573 46,450 45,101 41,471 36,142 36,0% 39,559 40,579 35 To commercial banks in the United States 9,154 9,981 10,194 9,619 9,166 8,107 7,261 7,202 7,784 36 To others 38,030 39,591 36,256 35,483 32,305 28,035 28,835 32,357 32,795 37 Other liabilities to nonrelated parties 31,245 32,486 30,136 30,320 32,447 30,276 30,068 30,345 30,424 38 Total liabilities6 312,754 310,535 309,771 306,975 306,205 297,992 2%,718 298,302 297,017 MEMO 39 Total loans (gross) and securities, adjusted . 212,671 210,498 213,879 211,219 210,033 207,370 207,501 208,813 209,065 40 Net due to related institutions abroad 48,332 46,414 50,431 51,807 55,241 52,450 58,186 54,757 56,859 1. Includes securities purchased under agreements to resell. 5. Includes securities sold under agreements to repurchase. 2. Includes transactions with nonbank brokers and dealers in securities. 6. Includes net to related institutions abroad for U.S. branches and agencies of 3. Includes net due from related institutions abroad for U.S. branches and foreign banks having a net "due to" position. agencies of foreign banks having a net "due from" position. 7. Excludes loans to and federal funds transactions with commercial banks in 4. Includes other transaction deposits. the United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A25 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period Year ending December 1992 1993 IItteemm 1988 1989 1990 1991 1992 Oct. Nov. Dec. Jan. Feb. Mar. Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers. 458,464 525,831 562,656 531,724 549,433 557,915 558,414 549,433 541,508r 528,817r 535,027 Financial companies1 Dealer-placed paper2 Total 159,777 183,622 214,706 213,823 228,260 231,751 230,966 228,260 214,196r 203,133r 219,732 Bank-related (not seasonally adjusted)3 1,248 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Directly placed paper4 Total 194,931 210,930 200,036 183,379 172,813 181,388 179,279 172,813 181,264 177,370 171,959 Bank-related (not seasonally adjusted) 43,155 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 6 Nonfinancial companies3 103,756 131,279 147,914 134,522 148,360 144,776 148,169 148,360 146,048 148,314 143,336 Bankers dollar acceptances (not seasonally adjusted)6 7 Total 66,631 62,972 54,771 43,770 38,194 37,599 37,651 38,194 35,995 35,212 34,929 Holder 8 Accepting banks 9,086 9,433 9,017 11,017 10,555 10,236 10,301 10,555 9,115 9,869 11,026 9 Own bills 8,022 8,510 7,930 9,347 9,097 8,764 9,156 9,097 7,922 8,352 9,153 10 Bills bought from other banks . 11,,006644 924 1,087 1,670 1,458 11,,447722 1,145 11,,445588 11,,119933 11,,551166 11,,887733 Federal Reserve Banks 11 Foreign correspondents 1,493 1,066 918 1,739 1,276 1,204 1,289 1,276 1,317 1,169 1,108 12 Others 56,052 52,473 44,836 31,014 26,364 26,159 26,061 26,364 25,563 24,175 22,795 Basis 13 Imports into United States 14,984 15,651 13,095 12,843 12,209 12,116 12,133 12,209 11,146 11,120 11,126 14 Exports from United States 14,410 13,683 12,703 10,351 8,096 7,849 7,673 8,096 7,740 7,547 7,304 15 All other 37,237 33,638 28,973 20,577 17,890 17,633 17,846 17,890 17,109 16,545 16,499 1. Institutions engaged primarily in commercial, savings, and mortgage bank- 5. Includes public utilities and firms engaged primarily in such activities as ing; sales, personal, and mortgage financing; factoring, finance leasing, and other communications, construction, manufacturing, mining, wholesale and retail trade, business lending; insurance underwriting; and other investment activities. transportation, and services. 2. Includes all financial-company paper sold by dealers in the open market. 6. Data on bankers acceptances are gathered from approximately 100 institu- 3. Bank-related series were discontinued in January 1989. tions. The reporting group is revised every January. 4. As reported by financial companies that place their paper directly with 7. In 1977 the Federal Reserve discontinued operations in bankers acceptances investors. for its own account. 1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans1 Percent per year Period Av r e a r te ag e Period Av r e a r te a ge Period 10.50 1990 10.01 1991— Jan. 9.52 1992—Jan. .. 10.00 1991 8.46 Feb. 9.05 Feb. . 1992 6.25 Mar. 9.00 Mar. . 9.50 Apr. 9.00 Apr. . 9.00 1990- 10.11 May 8.50 May .. 8.50 Feb. 10.00 June 8.50 June .. 8.00 Mar. 10.00 July 8.50 July ... 7.50 Apr. 10.00 Aug. 8.50 Aug. .. 6.50 May . 10.00 Sept. 8.20 Sept. .. June 10.00 Oct. 8.00 Oct. ... 6.00 July . 10.00 Nov. 7.58 Nov. .. Aug. 10.00 Dec. 7.21 Dec. Sept. 10.00 Oct. . 10.00 1993—Jan. . Nov. 10.00 Feb. Dec. 10.00 Mar. Apr. May . 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

A26 Domestic Nonfinancial Statistics • July 1993 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 1993 1993, week ending IItteemm 11999900 11999911 11999922 Jan. Feb. Mar. Apr. Apr. 2 Apr. 9 Apr. 16 Apr. 23 Apr. 30 MONEY MARKET INSTRUMENTS 1 Federal funds1,2,3 8.10 5.69 3.52 3.02 3.03 3.07 2.% 3.18 3.11 2.93 2.91 2.87 2 Discount window borrowing^ 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 paper5,5,6 3 1-month 8.15 5.89 3.71 3.21 3.14 3.15 3.13 3.19 3.16 3.14 3.10 3.10 4 3-month 8.06 5.87 3.75 3.25 3.18 3.17 3.14 3.19 3.17 3.16 3.12 3.11 5 6-month 7.95 5.85 3.80 3.35 3.27 3.24 3.19 3.24 3.23 3.20 3.16 3.16 Finance paper, directly placed*'5'1 6 1-month 8.00 5.73 3.62 3.25 3.18 3.15 3.06 3.10 3.08 3.07 3.05 33..0033 7 3-month 7.87 5.71 3.65 3.32 3.27 3.17 3.06 3.10 3.08 3.06 3.06 3.04 8 6-month 7.53 5.60 3.63 3.29 3.21 3.14 3.07 3.09 3.09 3.07 3.07 3.05 Bankers acceptances3,5,8 9 3-month 7.93 5.70 3.62 3.14 3.06 3.07 3.05 3.09 3.07 3.04 3.04 3.04 10 6-month 7.80 5.67 3.67 3.23 3.15 3.14 3.10 3.15 3.13 3.09 3.08 3.09 Certificates of deposit, secondary marker' 11 1-month 8.15 5.82 3.64 3.14 3.08 3.10 3.08 3.11 3.10 3.07 3.06 3.06 12 3-month 8.15 5.83 3.68 3.19 3.12 3.11 3.09 3.12 3.11 3.09 3.08 3.08 13 6-month 8.17 5.91 3.76 3.33 3.22 3.20 3.16 3.22 3.20 3.16 3.14 3.14 14 Eurodollar deposits, 3-month3,10 8.16 5.86 3.70 3.22 3.12 3.11 3.10 3.11 3.11 3.13 3.09 3.06 U.S. Treasury bills Secondary market3,5 15 3-month 7.50 5.38 3.43 3.00 2.93 2.95 2.87 2.91 2.91 2.85 2.81 22..9911 16 6-month 7.46 5.44 3.54 3.14 3.07 3.05 2.97 3.01 3.00 2.97 2.93 2.98 17 1-year 7.35 5.52 3.71 3.35 3.25 3.20 3.11 3.17 3.16 3.09 3.05 3.12 Auction average ' • 18 3-month 7.51 5.42 3.45 3.06 2.95 2.97 2.89 2.96 2.92 2.89 2.82 22..8888 19 6-month 7.47 5.49 3.57 3.17 3.08 3.08 3.00 3.04 3.04 3.00 2.96 2.95 20 1-year 7.36 5.54 3.75 3.52 3.32 3.09 3.24 n.a. 3.24 n.a. n.a. n.a. U.S. TREASURY NOTES AND BONDS Constant maturities12 21 1-year 7.89 5.86 3.89 3.50 3.39 3.33 3.24 3.32 3.31 3.21 3.18 3.25 22 2-year 8.16 6.49 4.77 4.39 4.10 3.95 3.84 3.95 3.92 3.80 3.77 3.83 23 3-year 8.26 6.82 5.30 4.93 4.58 4.40 4.30 4.43 4.38 4.26 4.23 4.30 7.4 5-year 8.37 7.37 6.19 5.83 5.43 5.19 5.13 5.25 5.21 5.08 5.06 5.14 25 7-year 8.52 7.68 6.63 6.26 5.87 5.66 5.59 5.75 5.72 5.53 5.48 5.60 26 10-year 8.55 7.86 7.01 6.60 6.26 5.98 5.97 6.07 6.06 5.90 5.87 6.01 27 30-year 8.61 8.14 7.67 7.34 7.09 6.82 6.85 6.95 6.% 6.77 6.76 6.89 Composite 28 More than 10 years (long-term) 8.74 8.16 7.52 7.17 6.89 6.65 6.64 6.77 6.76 6.56 6.53 6.66 STATE AND LOCAL NOTES AND BONDS Moody's series13 2.9 6.96 6.56 6.09 5.91 5.61 5.42 5.47 5.64 5.65 5.44 5.39 5.38 30 Baa 7.29 6.99 6.48 6.28 5.98 5.81 5.88 6.04 6.05 5.85 5.82 5.79 31 Bond Buyer series 7.27 6.92 6.44 6.15r 5.87 5.64 5.76 5.86 5.84 5.70 5.67 5.75 CORPORATE BONDS 32 Seasoned issues, all industries15 9.77 9.23 8.55 8.24 8.01 7.83 7.76 7.89 7.88 7.71 7.66 7.74 Rating group 33 9.32 8.77 8.14 7.91 7.71 77..5588 7.46 7.64 7.61 7.45 7.34 77..4400 34 Aa 9.56 9.05 8.46 8.11 7.90 7.72 7.62 7.75 7.75 7.59 7.50 7.59 35 A 9.82 9.30 8.62 8.26 8.03 7.86 7.80 7.92 7.90 7.74 7.72 7.80 36 10.36 9.80 8.98 8.67 8.39 8.15 8.14 8.23 8.25 8.07 8.05 8.15 37 A-rated, recently offered utility bonds16 10.01 9.32 8.52 8.13 7.80 7.61 7.66 7.86 7.64 7.55 7.59 7.76 MEMO Dividend-price ratio 38 Preferred stocks 8.% 8.17 7.46 7.25 7.37 6.70 6.69 6.64 6.74 6.72 6.62 6.67 39 Common stocks 3.61 3.25 2.99 2.88 2.81 2.76 2.82 2.76 2.82 2.78 2.82 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

Financial Markets All 1.36 STOCK MARKET Selected Statistics 1992 1993 IInnddiiccaattoorr 11999900 11999911 11999922 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Prices and trading volume (averages of daily figures) Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 183.66 206.35 229.00 230.07 230.13 226.97 232.84 239.47 239.75 243.41 248.12 244.72 2 Industrial 226.06 258.16 284.26 284.44 285.76 279.70 287.80 290.77 292.11 294.40 298.75 292.19 3 Transportation 158.80 173.97 201.02 191.31 191.61 192.30 204.63 212.35 221.00 226.96 229.42 237.97 4 Utility 90.72 92.64 99.48 103.41 102.26 101.62 101.13 103.85 105.52 109.45 112.53 113.78 5 Finance 133.21 150.84 179.29 180.47 178.27 181.36 189.27 196.87 203.38 209.93 217.01 216.02 6 Standard & Poor's Corporation (1941-43 = 10)' 335.01 376.20 415.75 417.93 418.48 412.50 422.84 435.64 435.40 441.76 450.15 443.08 7 American Stock Exchange (Aug. 31, 1973 = 50? 338.32 360.32 391.28 385.80 382.67 371.27 387.75 392.69 402.75 409.39 418.56 418.54 Volume of trading (thousands of shares) 8 New York Stock Exchange 156,359 179,411 202,558 174,003 191,774 204,787 208,221 222,736 266,011 288,540 251,170 279,778 9 American Stock Exchange 13,155 12,486 14,171 11,875 11,198 11,966 14,925 16,523 17,184 18,154 16,150 15,521 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers 28,210 36,660 43,990 39,940 41,250 41,590 43,630 43,990 44,020 44,290 45,160 47,420 Free credit balances at brokers4 11 Margin accounts5 8,050 8,290 8,970 8,060 8,060 8,355 8,500 8,970 8,980 9,790 9,650 9,805 12 Cash accounts 19,285 19,255 22,510 18,305 19,650 18,700 19,310 22,510 20,360 22,190 21,395 21,450 Margin requirements (percent of market value and effective date)6 Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 13 Margin stocks 70 80 65 55 65 50 14 Convertible bonds 50 60 50 50 50 50 15 Short sales 70 80 65 55 65 50 1. Effective July 1976, includes a new financial group, banks and insurance on securities other than options are the difference between the market value (100 companies. With this change the index includes 400 industrial stocks (formerly percent) and the maximum loan value of collateral as prescribed by the Board. 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 Regulation T was adopted effective Oct. 15, 1934; Regulation U, effective May 1, financial. 1936; Regulation G, effective Mar. 11, 1968; and Regulation X, effective Nov. 1, 2. On July 5,1983, the American Stock Exchange rebased its index, effectively 1971. cutting previous readings in half. On Jan. 1, 1977, the Board of Governors for the first time established in 3. Since July 1983, under the revised Regulation T, margin credit at broker- Regulation T the initial margin required for writing options on securities, setting dealers has included credit extended against stocks, convertible bonds, stocks it at 30 percent of the current market value of the stock underlying the option. On acquired through 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

A28 Domestic Nonfinancial Statistics • July 1993 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities1 Millions of dollars, end of period 1992 1993 AAccccoouunntt 11999900 11999911 May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. SAIF-insured institutions 1 Assets 1,084,821 919,979 870,334 861,517 856,390 856,165 847,235 846,730 840,605 832,039 2 Mortgages 633,385 551,322 521,911 516,654 512,264 512,077 508,815 502,863 496,974 490,558 3 Mortgage-backed securities 155,228 129,461 124,225 123,282 122,385 120,438 119,715 120,715 120,292 122,171 4 Contra-assets to mortgage assets . 16,897 12,307 11,120 11,282 11,044 11,164 11,073 11,207 10,509 12,742 5 Commercial loans 24,125 17,139 14,607 14,020 13,929 13,525 13,419 13,630 13,180 8,109 6 Consumer loans 48,753 41,775 37,868 37,403 37,230 37,123 36,732 35,938 36,019 36,362 7 Contra-assets to nonmortgage loans .. 1,939 1,239 949 944 910 932 982 931 845 1,083 n.a. n.a. 8 Cash and investment securities 146,644 120,077 120,763 119,539 120,220 124,140 120,684 126,719 127,893 132,210 9 Other 95,522 73,751 63,030 62,844 62,317 60,958 59,925 59,002 57,600 41,695 10 Liabilities and net worth . 1,084,821 919,979 870,334 861,517 856,390 856,165 847,235 846,730 840,605 832,039 11 Deposits 835,496 731,937 688,199 682,535 676,141 672,354 667,027 660,906 654,047 650,045 12 Borrowed money 197,353 121,923 110,126 108,943 109,036 110,109 110,022 114,123 114,354 115,107 13 FHLBB 100,391 65,842 61,439 62,760 62,359 62,225 64,105 63,065 64,742 64,742 14 Other 96,962 56,081 48,687 46,183 46,677 47,884 45,917 51,058 49,612 50,365 15 Other 21,332 17,560 19,626 17,740 18,570 20,523 18,017 19,853 20,406 16,078 16 Net worth 30,640 48,559 52,383 52,299 52,642 53,178 52,169 51,846 51,798 50,867 1. Beginning December 1992, data are available on a quarterly basis and are no 3. Includes holding of stock in Federal Home Loan Bank and finance leases longer available monthly. plus interest. 2. 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 loans in process, unearned discounts and deferred loan fees, valuation allowances the December 1991 issue, data for life insurance companies are shown in a special for mortgages "held for sale," and specific reserves and other valuation allow- table of quarterly data. ances. Contra-assets to nonmortgage loans include loans in process, unearned SOURCE. Office of Thrift Supevision (OTS), insured by the Savings Association discounts and deferred loan fees, and specific reserves and valuation allowances. Insurance Fund (SAIF) and regulated by the OTS. 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Fiscal year Calendar year TTTyyypppeee ooofff aaaccccccooouuunnnttt ooorrr ooopppeeerrraaatttiiiooonnn 1992 1993 11999900 11999911 11999922rr Nov. Dec. Jan. Feb. Mar. Apr. U.S. budget1 1 Receipts, total 1,031,308 1,054,265 l,090,513r 74,633 113,690 112,718 66,138r 83,453 132,122 2 On-budget 749,654 760,382 788,087r 51,219 89,594 90,129 41,038r 57,259 96,413 3 Off-budget 281,654 293,883 302,426 23,414 24,096 22,589 25,100 26,194 35,709 4 Outlays, total 1,251,766 1,323,757 l,380,657r 107,361 152,637r 82,903 113,732r 128,030" 124,034 5 On-budget 1,026,701 1,082,072 l,128,318r 83,442 116,575 84,928 89,276r 103,793 101,861 6 Off-budget 225,064 241,685 252,339 23,919 36,061 -2,025 24,456 24,237 22,174 7 Surplus or deficit (-), total -220,458 -269,492 -290,144r -32,728 -38,946 29,815 -47,594 -46,577 8,088 8 On-budget -277,047 -321,690 -340,231r -32,223 -26,981 5,201 -48,238 -46,534 -5,448 9 Off-budget 56,590 52,198 50,087 -505 -11,965 24,614 644 1,957 13,535 Source of financing (total) 10 Borrowing from the public 220,101 276,802 310,918 61,969 21,078 -8,355 30,689 37,727 5,464 11 Operating cash (decrease, or increase (-)) ... 818 -1,329 -17,305 -7,346 -3,175 -16,436 27,227 -2,452 -18,945 12 Other2 -461 -5,981 -3,469r -21,895 21,043 -5,024 -10,322 9,302 5,393 MEMO 13 Treasury operating balance (level, end of period) 40,155 41,484 58,789 26,715 29,890 46,326 19,099 21,551 40,4% 14 Federal Reserve Banks 7,638 7,928 24,586 6,985 7,492 9,572 5,350 6,752 7,273 15 Tax and loan accounts 32,517 33,556 34,203 19,729 22,399 36,754 13,749 14,799 33,233 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

Federal Finance A29 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS1 Millions of dollars Fiscal year Calendar year Source or type 1991 1992 1993 1991 1992 HI H2 Hlr H2 Feb. Mar. RECEIPTS 1 All sources 1,054,265 l,«90,513r 540,504 519,181r 560,350 540,506r 66,138r 83,453 2 Individual income taxes, net 467,827 476,122 232,389 234,939 236,646 246,%1 23,947 27,935 4 5 6 3 P R N W r e o e i f n t s u h w i h n d i e e d t l n h s d t h i e a l l d E lection Campaign Fund . 4 1 7 0 4 9 4 2 , , , 0 1 6 5 5 9 3 0 2 3 2 4 1 8 0 4 1 8 9 , , , 6 3 3 9 5 4 3 1 2 2 0 1 1 7 0 9 0 9 3 , , , 4 4 4 8 0 4 3 7 5 0 1 2 3 1 8 3 0 , , , 9 5 2 1 5 % 0 2 1 1 1 7 1 9 3 0 8 , , , 2 9 8 3 9 6 2 7 7 8 0 2 3 1 8 9 5 , , , 3 5 0 7 9 1 1 1 1 1 0 3 1 3 0 , , 6 6 9 5 7 6 4 2 7 7 4 1 5 0 7 , , , 2 0 3 5 3 0 6 3 0 6 Corporation income taxes 7 Gross receipts 113,599 117,951 58,903 54,016 61,681 58,022 2,510 14,644 8 Refunds 15,513 17,680 7,904 8,649 9,402 7,219 1,719 1,920 9 Social insurance taxes and contributions, net 396,011 413,689 214,303 186,839 224,569 192,599 34,251 33,652 10 Employment taxes and contributions 370,526 385,491 199,727 175,802 208,110 180,758 31,623 32,980 11 Self-employment taxes and contributions 25,457 24,421 22,150 3,306 20,433 3,988 1,487 873 12 Unemployment insurance 20,922 23,410 12,2% 8,721 14,070 9,397 2,259 240 13 Other net receipts4 4,563 4,788 2,279 2,317 2,389 2,445 369 432 14 Excise taxes 42,430 45,570 20,703 24,429 22,389 23,456 3,342 4,514 15 Customs deposits 15,921 17,359 7,488 8,694 8,146 9,497 1,347 1,598 1 1 6 7 E M s i t s a c t e e l l a a n n d e o g u i s f t r t e a c x e e i s p ts 2 1 2 1 , , 8 1 5 3 2 8 2 1 6 1 , , 5 1 2 4 2 3 r 5 8 , , 6 9 3 9 1 1 1 5 3 , , 5 4 0 0 7 6 r 1 5 0 , , 7 6 0 9 1 5 ll 5 , , 4 7 7 3 2 3 r 1.6 8 3 2 9 2 1 " 2,0 9 5 7 1 7 OUTLAYS 18 All types 1,323,757 1,380,657* 632,153 694,364r 704,288 723,367r 113,732r 128,030r 19 National defense 272,514 298,361 122,089 147,669 147,076 155,501 22,903 25,511 2 2 2 2 2 1 4 0 2 3 G A N E In n e g a t e e n t r u i r r e c g n r r u a y a a l l t l t i u r o s e r c n e s i a o e l n u a c rc f e f e , a s s i r p a s a n c d e , e n a v n i d r o t n e m ch e n n o t l ogy . 1 1 1 1 2 6 4 5 8 , , , , , 5 1 8 9 7 6 6 4 1 0 7 4 6 1 8 2 1 1 1 4 0 6 6 4 , , , , , 5 0 4 1 9 0 0 1 0 9 9 9 7 6 7 7 7 8 7 1 , , , , , 5 6 3 4 2 9 8 2 3 % 2 4 4 5 1 7 8 7 1 1 , , , , , 6 4 4 6 1 9 7 1 9 3 1 2 8 8 0 7 7 8 8 1 , , , , , 9 5 5 6 4 4 5 2 0 4 2 1 6 6 2 1 9 8 8 3 1 , , , , , 9 5 1 8 6 1 2 0 8 1 1 1 1 9 7 1 1 1 1 , , , , 3 2 1 3 2 2 5 4 9 82 5 3 5 9 4 1 1 1 , , , , 2 1 1 5 5 4 0 8 4 6 4 3 1 9 0 25 Commerce and housing credit 75,639 9,753 17,992 36,534 15,620 -7,843 -3,532 -1,368 26 Transportation 31,531 33,759 14,748 17,093 15,676 18,477 2,093 3,383 27 Community and regional development .. 7,432 7,923 3,552 3,783 3,903 4,540 690 760 28 Education, training, employment, and social services 41,479 45,248 21,234 21,114 23,635 20,922 4,068 4,607 29 Health 71,183 89,570 35,608 41,459 44,107 47,223 8,053 8,379 30 Social security and medicare 373,495 406,569 190,247 193,098 205,500 232,109 35,005 37,235 31 Income security 171,618 197,867 88,778 87,693 104,457 98,693 21,259 21,056 32 Veterans benefits and services 31,344 34,133 14,326 17,425 15,597 18,561 2,649 4,090 33 Administration of justice 12,295 14,450 6,187 6,574 7,435 7,283 1,060 1,270 34 General government 11,358 12,939 5,212 6,794 5,050 8,138 994 1,040 35 Net interest6 , 195,012 199,429 98,556 99,149 100,394 98,549 15,893 16,415 36 Undistributed offsetting receipts' -39,356 -39,280 -18,702 -20,436 -18,229 -20,914 -2,809 -2,987 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 1994. disability fund. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic NonfinancialS tatistics • July 1993 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1991 1992 1993 IItteemm Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 1 Federal debt outstanding 3,492 3,563 3,683 3,820 3,897 4,001 4,083 4,196 n.a. ? Public debt securities 3,465 3,538 3,665 3,802 3,881 3,985 4,065 4,177 4,231 3 Held by public 2,598 2,643 2,746 2,833 2,918 2,977 3,048 3,129 n.a. 4 Held by agencies 867 895 920 969 964 1,008 1,016 1,048 n.a. 5 Agency securities 27 25 18 19 16 16 18 19 n.a. 6 Held by public 26 25 18 19 16 16 18 19 n.a. 7 Held by agencies 0 0 0 0 0 0 0 0 n.a. 8 Debt subject to statutory limit 3,377 3,450 3,569 3,707 3,784 3,891 3,973 4,086 4,140 9 Public debt securities 3,377 3,450 3,569 3,706 3,783 3,890 3,972 4,085 4,139 10 Other debt' 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 1993 Type and holder 11998899 11999900 11999911 11999922 Q2 Q3 Q4 Q1 1 Total gross public debt 2,953.0 3,364.8 3,801.7 4,177.0 3,984.7 4,064.6 4,177.0 4,230.6 By type 2 Interest-bearing 2,931.8 3,362.0 3,798.9 4,173.9 3,981.8 4,061.8 4,173.9 4,227.6 3 Marketable 1,945.4 2,195.8 2,471.6 2,754.1 2,605.1 2,677.5 2,754.1 2,807.1 4 Bills 430.6 527.4 590.4 657.7 618.2 634.3 657.7 659.9 5 Notes 1,151.5 1,265.2 1,430.8 1,608.9 1,517.6 1,566.4 1,608.9 1,652.1 6 Bonds 348.2 388.2 435.5 472.5 454.3 461.8 472.5 480.2 7 Nonmarketable 986.4 1,166.2 1,327.2 1,419.8 1,376.7 1,384.3 1,419.8 1,420.5 8 State and local government series 163.3 160.8 159.7 153.5 161.9 157.6 153.5 151.6 9 Foreign issues 6.8 43.5 41.9 37.4 38.7 37.0 37.4 37.0 10 Government 6.8 43.5 41.9 37.4 38.7 37.0 37.4 37.0 11 Public .0 .0 .0 .0 .0 .0 .0 .0 12 Savings bonds and notes. 115.7 124.1 135.9 155.0 143.2 148.3 155.0 161.4 13 Government account series3 695.6 813.8 959.2 1,043.5 1,002.5 1,011.0 1,043.5 1,040.0 14 Non-interest-bearing 21.2 2.8 2.8 3.1 2.9 2.8 3.1 3.0 By holder 4 15 U.S. Treasury and other federal agencies and trust funds 707.8 828.3 968.7 1,047.8 1,007.9 1,016.3 1,047.8 16 Federal Reserve Banks 228.4 259.8 281.8 302.5 276.9 296.4 302.5 17 Private investors 2,015.8 2,288.3 2,563.2 2,839.9 2,712.4 2,765.5 2,839.9 18 Commercial banks 164.9 171.5 233.4 292.0 267.3 286.7 292.0 19 Money market funds 14.9 45.4 80.0 80.6 79.4 79.8 80.6 20 Insurance companies 125.1 142.0 168.7 183.0 180.8 181.6 183.0 n a. 21 Other companies 93.4 108.9 150.8 192.5 175.0 180.8 192.5 22 State and local treasuries 487.5 490.4 520.3 532.0 528.5 530.0 532.0 Individuals 23 Savings bonds 117.7 126.2 138.1 157.3 145.4 150.3 157.3 24 Other securities 98.7 107.6 125.8 131.9 129.7 130.9 131.9 25 Foreign and international5 392.9 421.7 455.0 512.5 492.9 499.0 512.5 26 Other miscellaneous investors 520.7 674.5 691.1 758.1 713.5 726.3 758.1 1. Includes (not shown separately) securities issued to the Rural Electrification 5. Consists of investments of foreign balances and international accounts in the Administration, depository bonds, retirement plan bonds, and individual retire- United States. ment bonds. 6. Includes savings and loan associations, nonprofit institutions, credit unions, 2. Nonmarketable series denominated in dollars, and series denominated in mutual savings banks, corporate pension trust funds, dealers and brokers, certain foreign currency held by foreigners. U.S. Treasury deposit accounts, and federally sponsored agencies. 3. Held almost entirely by U.S. Treasury and other federal agencies and trust SOURCES. U.S. Treasury Department, data by type of security, Monthly funds. Statement of the Public Debt of the United States; data by holder, the Treasury 4. Data for Federal Reserve Banks and U.S. government agencies and trust Bulletin. funds are actual holdings; data for other groups are Treasury estimates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A31 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions1 Millions of dollars, daily averages 1993 1993, week ending Jan. Feb. Mar Mar. 10 Mar. 17 Mar. 24 Mar. 31 Apr. 7 Apr. 14 Apr. 21 Apr. 28 IMMEDIATE TRANSACTIONS2 By type of security U.S. Treasury securities 1 Bills 48,045r 44,487" 43,300" 42,349" 60,387" 37,539 39,583 36,263 46,812 42,055 36,580 Coupon securities, by maturity 2 Less than 3.5 years 47,717 56,575 47,300" 45,826 55,489" 43,753 47,550 43,291 34,141 35,705 30,816 3 3.5 to 7.5 years 46,216 48,296" 45,252" 46,107" 53,711 43,393 40,783 42,606 37,288 49,562 37,940 4 7.5 to 15 years 19,149 28,512" 23,269 25,537 30,411 24,281 19,568 17,455 18,214 17,864 20,333 5 15 years or more 16,239 21,502" 17,592" 15,485 23,961 19,087 14,606 13,979 18,751 17,133 16,422 Federal agency securities Debt, by maturity 6 Less than 3.5 years 6,176r 6,719 5,790 6,151 4,902 5,281 6,042 6,718 4,704 5,447 6,188 7 3.5 to 7.5 years 824 881 788 1,123 854 706 887 503 520 729 706 8 7.5 years or more 1,169 1,194 1,125 1,138 1,070 1,022 1,171 1,228 1,162 375 339 Mortgage-backed 9 Pass-throughs 20,000 22,571" 14,705 18,247 22,852 14,743 9,641 9,461 15,789 25,851 16,051 10 All others3: 3,751 4,509" 4,059" 6,206 3,641 3,391 3,517 4,401 2,553 3,685 2,830 By type of counterparty Primary dealers and brokers 11 U.S. Treasury securities 109,23lr 123,545" 110,173" 107,517" 137,881" 106,943 99,558 97,905 92,876 100,757 88,099 Federal agency securities 12 Debt 1,779 1,970 1,771 2,133 1,711 1,550 1,776 1,832 1,530 1,120 907 13 Mortgage-backed 10,454 11,756" 7,388 9,153 10,936 7,283 5,164 5,108 7,994 12,470 8,735 Customers 14 U.S. Treasury securities 68,136" 75,826" 66,539 67,787 86,077 61,111 62,531 55,689 62,330 61,561 53,992 Federal agency securities 15 Debt 6,390" 6,825 5,931 6,278 5,116 5,458 6,324 6,616 4,856 5,431 6,325 16 Mortgage-backed 13,296 15,324" 11,378" 15,299 15,558 10,851 7,995 8,754 10,349 17,066 10,146 FUTURES AND FORWARD TRANSACTIONS By type of deliverable security U.S. Treasury securities 17 Bills 2,586r 2,679" 2,205 4,271 3,630 1,192 1,693 1,067 1,267 2,150 2,325 Coupon securities, by maturity 18 Less than 3.5 years 2,155 2,622 2,348 2,542 3,156 2,058 2,269 1,791 1,719 2,280 1,734 19 3.5 to 7.5 years 1,486 1,890" 2,287 2,382 3,240 1,913 1,841 2,096 1,250 1,241 1,265 20 7.5 to 15 years 2,668 3,847" 3,542" 4,577" 5,315 2,719 2,578 2,937 2,238 3,126 1,663 21 15 years or more 9,140 11,748 11,335 11,121 17,788 11,479 8,436 7,764 9,300 9,611 8,061 Federal agency securities Debt, by maturity 22 Less than 3.5 years 44r 72 92 28 79 21 243 63 28 25 23 3.5 to 7.5 years 114 130" 103" 258" 40 73 100 105 242 72 24 7.5 years or more 78 44 32 25 17 39 38 39 11 41 Mortgage-backed 25 Pass-throughs 16,662r 17,514" 22,141" 20,604 27,008 26,049 18,238 18,189 19,263 25,251 20,743 26 Others3 1,274 1,478 1,471 1,480 1,095 1,802 1,893 1,089 1,887 716 1,847 OPTIONS TRANSACTIONS5 By type of underlying security U.S. Treasury, coupon securities, by maturity 27 Less than 3.5 years 1,537 1,692 1,662 1,450 2,564 1,538 1,271 1,400 1,593 1,849 1,680 28 3.5 to 7.5 years 782 443 431 197 418 408 534 503 755 626 446 29 7.5 to 15 years 573 679 687 1,118 710 620 745 413 427 557 509 30 15 years or more 1,233 1,286 972 865 1,231 1,150 835 737 1,059 940 755 Federal agency, mortgagebacked securities 31 Pass-throughs 563 563 586 371 709 610 479 675 704 683 749 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. Treasuiy 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 (IOs), 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

A32 Domestic Nonfinancial Statistics • July 1993 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 1993 1993, week ending item Jan. Feb. Mar. Mar. 3 Mar. 10 Mar. 17 Mar. 24 Mar. 31 Apr. 7 Apr. 14 Apr. 21 Positions2 NET IMMEDIATE POSITIONS3 By type of security U.S. Treasury securities 1 Bills 8,042 7,553 13,550 10,442 8,890 9,576 16,585 20,480 21,070 21,266 17,886 Coupon securities, by maturity 2 Less than 3.5 years -4,518 800 1,628 5,028 1,793 -3,334 2,800 3,798 2,930 2,429 -478 3 3.5 to 7.5 years -7,905 -10,824 -14,104 -8,561 -12,575 -15,080 -15,846 -15,290 -18,071 -15,721 -17,141 4 7.5 to 15 years -13,562 -9,682 -10,240 -11,245 -8,861 -9,285 -11,208 -11,174 -11,541 -13,929 -13,214 5 15 years or more 7,040 7,126 9,342 6,988 9,114 9,691 10,149 9,424 9,466 9,908 9,653 Federal agency securities Debt, by maturity 6 Less than 3.5 years 5,267 6,674 6,451 6,943 6,310 8,741 5,604 4,937 7,305 8,193 5,345 7 3.5 to 7.5 years 2,617 2,708 3,332 3,397 3,303 3,411 3,372 3,216 3,136 3,198 3,203 8 7.5 years or more 3,802 3,811 4,896 4,524 4,772 4,801 5,240 4,931 4,194 4,254 3,899 Mortgage-backed 9 Pass-throughs 35,214 34,699 33,009 27,607 42,168 37,448 32,746 21,988 35,026 39,434 36,431 10 All others 24,531 24,540 25,734 27,871 23,639 24,782 24,828 28,773 26,683 25,931 25,317 Other money market instruments 11 Certificates of deposit 2,907 3,571 3,212 4,063 3,127 2,652 2,987 3,719 2,438 3,506 3,310 12 Commercial paper 6,947 6,911 6,237 7,097 6,426 6,261 5,883 6,008 4,725 5,948 4,879 13 Bankers acceptances 672 990 1,139 1,151 1,002 1,096 1,247 1,208 1,197 1,130 941 FUTURES AND FORWARD POSITIONS5 By type of deliverable security U.S. Treasury securities 14 Bills -4,355 -5,805 -5,103 -6,392 -4,055 -4,647 -5,860 -5,297 -6,419 -7,161 -7,785 Coupon securities, by maturity 15 Less than 3.5 years 1,488 839 -568 -757 -181 166 -394 -1,781 -1,958 -1,624 --11,,559922 16 3.5 to 7.5 years 2,352 2,513 4,333 2,075 4,703 3,729 4,474 5,392 5,070 3,982 5,100 17 7.5 to 15 years 3,002 1,851 2,954 1,645 1,056 2,453 3,616 5,250 4,761 3,744 4,208 18 15 years or more -6,174 -3,781 -5,119 -2,849 -4,024 -7,131 -4,895 -5,399 -4,601 -6,405 -5,231 Federal agency securities Debt, by maturity 19 Less than 3.5 years -37 -50 -194 29 0 -295 -303 -275 -43 -6 -35 20 3.5 to 7.5 years -11 -12 -39 1 -23 -77 -24 -50 89 -17 -259 21 7.5 years or more 20 22 33 -3 64 170 -43 -44 -73 -70 -64 Mortgage-backed 22 Pass-throughs -12,104 -14,374 -13,086 -9,299 -20,252 -17,652 -12,455 -3,609 -16,638 -17,114 -14,919 23 All others^ 1,450 3,326 3,371 832 1,094 4,034 5,787 3,655 4,130 3,693 4,364 24 Certificates of deposit -66,597 -117,589 -156,612 -148,110 -141,247 -155,743 -167,837 -165,264 -171,999 -163,417 -150,788 Financing6 Reverse repurchase agreements 25 Overnight and continuing 230,130 230,919 233,038 233,287 246,770 238,647 226,850 219,779 237,057 222255,,001166 221177,,991133 26 Term 345,749 364,102 360,955 341,048 371,688 391,491 384,258 304,913 386,911 388,465 392,306 Repurchase agreements 27 Overnight and continuing 387,080 404,809 403,942 416,133 419,689 422,128 395,822 372,903 395,432 417,640 441166,,445511 28 Term 328,425 351,505 349,516 322,617 355,986 380,850 382,400 290,358 371,382 361,406 368,604 Securities borrowed 29 Overnight and continuing 102,138 113,700 115,244 119,119 117,135 117,945 116,661 107,573 113,794 118,011 120,540 30 Term 52,406 52,467 40,753 43,779 42,739 40,464 40,793 37,719 41,060 42,219 44,619 Securities loaned 31 Overnight and continuing 3,724 3,898 3,504 4,450 3,473 3,810 3,123 3,206 3,771 5,409 4,569 32 Term 351 467 482 1,053 277 358 871 179 148 288 1,064 Collateralized loans 33 Overnight and continuing 16,872 16,403 14,209 14,782 16,056 13,539 14,038 12,959 12,738 13,696 14,159 MEMO: Matched book7 Reverse repurchase agreements 34 Overnight and continuing 166,917 162,596 158,182 164,638 167,598 164,012 154,575 143,775 153,699 156,740 148,784 35 Term 304,402 318,706 313,409 299,829 324,918 337,456 335,227 261,854 337,525 334,948 341,050 Repurchase agreements 36 Overnight and continuing 218,405 222,893 217,635 224,383 226,875 221,903 210,643 208,228 202,557 208,439 208,893 37 Term 254,159 271,090 268,224 244,311 275,087 295,198 294,732 218,127 292,270 281,982 280,277 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

Federal Finance A33 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1992 1993 AAggeennccyy 11998888 11998899 11999900 11999911 Oct. Nov. Dec. Jan. Feb. 1 Federal and federally sponsored agencies 381,498 411,805 434,668 442,772 479,978 481,050 483,970 487,331 0 2 Federal agencies 35,668 35,664 42,159 41,035 41,470 42,081 41,829 41,641 42,115 3 Defense Department1 8 7 7 7 7 7 7 7 7 4 Export-Import Bank2'3 11,033 10,985 11,376 9,809 7,698 7,698 7,208 7,208 7,208 5 Federal Housing Administration4 150 328 393 397 309 344 374 231 237 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 10,660 10,660 10,660 10,660 8 Tennessee Valley Authority 18,335 17,899 23,435 22,401 23,333 23,372 23,580 23,535 24,003 9 United States Railway Association 0 0 0 0 0 0 0 0 0 10 Federally sponsored agencies7 345,832 375,428 392,509 401,737 438,508 438,969 442,141 445,690 0 11 Federal Home Loan Banks 135,836 136,108 117,895 107,543 112,436 114,364 114,733 113,253 113,347 12 Federal Home Loan Mortgage Corporation 22,797 26,148 30,941 30,262 34,108 30,914 29,631 34,479 44,490 13 Federal National Mortgage Association 105,459 116,064 123,403 133,937 159,764 161,308 166,300 165,958 163,538 14 Farm Credit Banks8 53,127 54,864 53,590 52,199 52,510 52,728 51,910 52,264 51,502 15 Student Loan Marketing Association 22,073 28,705 34,194 38,319 39,766 39,737 39,650 39,812 39,822 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 Corporation1 690 847 1,261 1,261 1,261 1,261 1,261 1,261 1,261 18 Resolution Funding Corporation 0 4,522 23,055 29,996 29,996 29,996 29,996 29,996 29,9% MEMO 19 Federal Financing Bank debt13 142,850 134,873 179,083 185,576 159,899 156,579 154,994 151,059 147,464 Lending to federal and federally sponsored agencies 20 Export-Import Bank3 11,027 10,979 11,370 9,803 7,692 7,692 7,202 7,202 7,202 21 Postal Service6 5,892 6,195 6,698 8,201 9,903 10,440 10,440 10,440 10,440 22 Student Loan Marketing Association 4,910 4,880 4,850 4,820 4,790 4,790 4,790 4,790 4,790 23 Tennessee Valley Authority 16,955 16,519 14,055 10,725 7,175 6,975 6,975 6,825 6,825 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 42,979 42,979 42,979 42,979 42,979 26 Rural Electrification Administration 19,246 19,265 18,890 18,562 18,172 18,172 18,172 18,037 18,036 27 Other 26,324 23,724 70,896 84,931 69,188 65,531 64,436 60,786 57,192 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 fiscaly ear 1969 by the Government tions Reform, Recovery, and Enforcement Act of 1989, undertook its first National Mortgage Association acting as trustee for the Farmers Home Admin- borrowing in October 1989. istration, the Department of Health, Education, and Welfare, the Department of 13. The FFB, which began operations in 1974, is authorized to purchase or sell Housing and Urban Development, the Small Business Administration, and the obligations issued, sold, or guaranteed by other federal agencies. Because FFB Veterans' Administration. incurs debt solely for the purpose of lending to other agencies, its debt is not 6. Off-budget. included in the main portion of the table in order to avoid double counting. 7. Includes outstanding noncontingent liabilities: notes, bonds, and deben- 14. Includes FFB purchases of agency assets and guaranteed loans; the latter tures. Some data are estimated. are loans guaranteed by numerous agencies, with the amounts guaranteed by any 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

A34 Domestic Nonfinancial Statistics • July 1993 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1992 1993 TTyyppee ooff iissssuuee oorr iissssuueerr,, 11999900 11999911 11999922 oorr uussee Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 All issues, new and refunding1 120,339 154,402 215,191 18,698 21,092 14,133 19,577 17,981 17,793 27,471 18,661 By type of issue 2 General obligation 39,610 55,100 78,611 7,461 7,733 5,203 6,024 4,840 6,963 88,,225544 88,,227722 3 Revenue 81,295 99,302 136,580 11,237 13,359 8,930 13,553 13,141 10,830 19,217 10,581 By type of issuer 4 State 15,149 24,939 25,295 1,710 2,742 1,688 2,339 1,339 3,485 2,139 11,,446633 5 Special district or statutory authority2 72,661 80,614 127,618 11,054 13,113 8,197 11,159 12,556 9,654 18,355 7,628 6 Municipality, county, or township 32,510 48,849 60,210 5,934 5,237 4,248 6,079 3,994 4,654 6,977 9,570 7 Issues for new capital 103,235 116,953 120,272 10,496 13,760 8,028 8,010 5,875 4,636 9,716 5,385 By use of proceeds 8 Education 17,042 21,121 22,071 1,237 2,083 1,800 1,658 1,033 11,,226644 11,,448822 883333 9 Transportation 11,650 13,395 17,334 1,977 1,364 531 831 829 131 2,111 699 10 Utilities and conservation 11,739 21,039 20,058 2,265 3,340 960 1,258 894 423 538 806 11 Social welfare 23,099 25,648 21,7% 1,869 2,365 1,070 1,121 777 618 1,556 942 12 Industrial aid 6,117 8,376 5,424 1,176 367 581 339 337 69 765 134 13 Other purposes 34,607 30,275 33,589 1,972 4,241 3,086 2,803 2,005 2,131 3,264 1,971 1. Par amounts of long-term issues based on date of sale. SOURCES. Securities Data Company beginning January 1993. Investment 2. Includes school districts. Dealer's Digest for earlier data. 1.46 NEW SECURITY ISSUES U.S. Corporations Millions of dollars 1992 1993 TTyyppee ooff iissssuuee,, ooffffeerriinngg,, 11999900 11999911 11999922 oorr iissssuueerr Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. 1 All issues' 340,049 465,483 n.a. 37,091 42,849 39,280 35,525 39,424 50,793 59,623r 55,272 2 Bonds2 299,884 390,018 404,992 31,815 37,539 32,314 31,026 33,375 45,559 49,563" 46,434 By type of offering 3 Public, domestic 188,848 287,125 377,453 28,561 36,185 30,249 28,774 31,835 41,675 4477,,116655 41,699 4 Private placement, domestic 86,982 74,930 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5 Sold abroad 23,054 27,962 27,539 3,254 1,355 2,066 2,252 1,540 3,884 2,397" 4,735 By industry group 6 Manufacturing 51,779 86,628 69,538 4,720 5,974 7,975 33,,446677 4,232 99,,339933 88,,226699"" 88,,006677 7 Commercial and miscellaneous 40,733 36,666 30,049 2,159 2,374 2,813 2,396 2,176 3,074 2,268 2,695 8 Transportation 12,776 13,598 6,497 393 677 290 0 611 316 248 1,067 9 Public utility 17,621 23,945 44,643 4,509 5,230 3,700 1,289 2,867 4,282 5,624 7,058 10 Communication 6,687 9,431 13,073 1,053 1,191 427 374 516 3,019 2,890 3,270 11 Real estate and financial 170,288 219,750 241,192 18,982 22,093 17,110 23,499 22,973 25,475 30,264" 24,278 12 Stocks2 40,165 75,467 n.a. 5,276 5,310 6,966 4,499 6,049 5,234 10,060 8,838 By type of offering 13 Public preferred n.a. 17,408 21,332 1,148 1,233 22,,990011 11,,554400 1,608 11,,111122 11,,889988 11,,664477 14 Common n.a. 47,860 57,099 4,129 4,077 4,065 2,958 4,441 4,122 8,161 7,191 15 Private placement 16,736 10,109 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. By industry group 16 Manufacturing 5,649 24,154 n.a. 713 307 1,779 228888 1,468 722 22,,661166 1,741 17 Commercial and miscellaneous 10,171 19,418 n.a. 1,315 602 940 1,366 2,226 1,688 2,021 2,488 18 Transportation 369 2,439 n.a. n.a. 59 53 304 118 65 64 336 19 Public utility 416 3,474 n.a. 921 595 359 150 92 310 350 743 20 Communication 3,822 475 n.a. n.a. 1,051 99 22 126 0 0 7 21 Real estate and financial 19,738 25,507 n.a. 2,327 2,695 3,735 2,369 2,019 2,438 5,009 3,522 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, intracoiporate transactions, equi- Federal Reserve System, and, before 1989, the U.S. Securities and Exchange ties sold abroad, and Yankee bonds. Stock data include ownership securities Commission. issued by limited partnerships. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Market and Corporate Finance A35 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets Millions of dollars 1992 1993 IItteemm11 11999911 11999922 Aug. Sept. Oct. Nov. Dec. Jan. Feb.r Mar. 1 Sales of own shares2 463,645 647,055 50,627 50,039 52,214 52,019 70,618 71,607 60,676 69,080 2 Redemptions of own shares 342,547 447,140 35,223 37,862 37,134 34,126 51,993 46,545 39,684 47,414 3 Net sales 121,098 199,915 15,404 12,177 15,080 17,893 18,625 25,062 20,992 21,666 4 Assets4 808,582 1,056,310 957,145 978,507 983,151 1,019,618 1,056,310 1,082,653 1,116,784 1,154,445 5 Cash5 60,292 73,999 77,245 76,498 75,808 80,247 73,999 76,764 79,763 81,536 6 Other 748,290 982,311 879,900 902,009 907,343 939,371 982,311 1,005,889 1,037,021 1,072,910 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 1991 1992 1993 AAccccoouunntt 11999900 11999911 11999922rr Q2 Q3 Q4 Q1 Q2 Q3 Q4r Q1 1 Profits with inventory valuation and capital consumption adjustment 361.7 346.3 393.8 347.3 341.2 347.1 384.0 388.4 374.1 428.5 432.2 2 Profits before taxes 355.4 334.7 371.6 332.3 336.7 332.3 366.1 376.8 354.1 389.4 400.6 3 Profits tax liability 136.7 124.0 140.2 122.9 127.0 125.0 136.4 144.1 131.8 148.5 146.8 4 Profits after taxes 218.7 210.7 231.4 209.4 209.6 207.4 229.7 232.7 222.2 241.0 253.8 5 Dividends 149.3 146.5 149.3 146.2 145.1 143.9 143.6 146.6 151.1 155.9 160.2 6 Undistributed profits 69.4 64.2 82.1 63.2 64.5 63.4 86.2 86.1 71.1 85.0 93.6 7 Inventory valuation -14.2 3.1 -7.4 9.9 -4.8 .7 -5.4 -15.5 -9.7 1.0 -9.3 8 Capital consumption adjustment 20.5 8.4 29.5 5.1 9.3 14.1 23.3 27.0 29.7 38.1 40.8 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 19931 IInndduussttrryy 11999911 11999922 1199993311 Q3 Q4 Q1 Q2 Q3 Q4 Qi Q2 1 Total nonfarm business 528.39 546.08 582.31 526.59 529.87 535.72 540.91 547.53 560.16 571.41 578.15 Manufacturing 2 Durable goods industries 77.64 73.41 77.11 74.94 76.40 74.19 74.26 71.84 73.34 80.68 77.62 3 Nondurable goods industries 105.17 100.50 106.24 102.55 102.66 99.79 97.52 100.39 104.28 103.01 103.48 Nonmanufacturing 4 Mining 10.02 8.90 9.32 1100..0099 99..9999 8.87 99..1188 99..0099 8.44 99..5522 9.49 Transportation 5 Railroad 5.95 6.77 7.36 6.32 5.44 6.65 6.50 6.87 7.08 6.26 7.71 6 Air 10.17 8.97 7.10 9.61 10.41 8.86 9.75 10.13 7.13 7.36 9.10 7 Other 6.54 7.04 8.60 6.63 6.45 6.37 7.27 7.69 6.84 8.07 7.51 Public utilities 8 Electric 43.76 48.05 53.32 43.27 44.75 46.06 48.45 47.73 49.95 52.61 53.05 9 Gas and other 22.82 23.91 24.08 23.25 22.67 22.75 24.19 23.92 24.78 23.46 24.22 10 Commercial and other2 246.32 268.54 289.18 249.94 251.11 262.17 263.80 269.86 278.32 280.44 285.98 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

A36 DomesticN onfinancialS tatistics • July 1993 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1 Billions of dollars, end of period; not seasonally adjusted 1991 1992 AAccccoouunntt 11999900 11999911 11999922 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ASSETS 1 Accounts receivable, gross2 492.3" 480.6" 482.1 488.9" 485.2" 480.6" 475.6" 476.7" 473.9" 482.1 2 Consumer 133.3" 121.9" 117.1 127.5" 125.3" 121.9" 118.4" 116.7" 116.7" 117.1 3 Business 293.6" 292.9" 296.5 295.7" 293.7" 292.9" 290.8" 293.2" 288.5" 296.5 4 Real estate 65.5" 65.8" 68.4 65.7" 66.2" 65.8" 66.4" 66.8" 68.8" 68.4 5 LESS: Reserves for unearned income 57.6 55.1 50.8 58.0 57.6 55.1 53.6 51.2 50.8 50.8 6 Reserves for losses 9.6 12.9 15.8 11.1 13.1 12.9 13.0 12.3 12.0 15.8 7 Accounts receivable, net 425.1" 412.6" 415.5 419.8" 414.6" 412.6" 409.0" 413.2" 411.1" 415.5 8 All other 113.9 149.0 150.6 122.8 136.4 149.0 145.5 139.4 146.5 150.6 9 Total assets 539.0" 561.6" 566.1 542.6" 551.1" 561.6" 554.5" 552.6" 557.6" 566.1 LIABILITIES AND CAPITAL 10 Bank loans 31.0 42.3 37.6 36.9 39.6 42.3 38.0 37.8 38.1 37.6 11 Commercial paper 165.3 159.5 156.4 156.1 156.8 159.5 154.4 147.7 153.2 156.4 Debt 12 Other short-term n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 13 Long-term n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 14 Owed to parent 37.5 34.5 37.8 34.2 36.5 34.5 34.5 34.8 34.9 37.8 15 Not elsewhere classified 178.2 191.3 195.3 184.5 185.0 191.3 189.8 191.9 191.4 195.3 16 All other liabilities 63.9 69.0 71.2 67.1 68.8 69.0 72.0 73.4 73.7 71.2 17 Capital, surplus, and undivided profits 63.7 64.8 67.8 63.3 63.8 64.8 66.0 67.1 68.1 67.8 18 Total liabilities and capital 539.6 561.2 566.1 542.1 550.5 561.2 554.6 552.7 559.4 566.1 1. Includes finance company subsidiaries of bank holding companies but not of 2. Before deduction for unearned income and losses, retailers and banks. Data are amounts carried on the balance sheets of finance companies; securitized pools are not shown since they are not on the books. 1.52 DOMESTIC FINANCE COMPANIES Consumer, Real Estate, and Business Credit1 Millions of dollars, amounts outstanding, end of period 1992 1993 TTyyppee ooff ccrreeddiitt 11999900 11999911"" 11999922 Oct." Nov." Dec. Jan. Feb. Mar. Seasonally adjusted 11 TToottaall 522,474" 519,910 534,845" 528,590 530,702 534,845" 529,256" 531,398" 532,144 22 CCoonnssuummeerr 160,468" 154,822 157,707 154,557 156,736 157,707 156,551 157,733 156,277 33 RReeaall eessttaattee22 65,147 65,383 68,011 68,759 68,581 68,011 68,942 70,016 68,726 44 BBuussiinneessss 2%,858" 299,705 309,127" 305,274 305,385 309,127" 303,763" 303,649" 307,141 Not seasonally adjusted 5 Total 525,888r 523,192 538,158" 528,143 530,367 538,158" 528,847" 528,490" 6 Consumer ,360" 155,713 158,631 155,561 157,149 158,631 156,430 155,929 7 Motor vehicles ,045 63,415 57,605 59,290 58,386 57,605 57,165 54,036 8 Other consumer ,213r 58,522 59,522 57,068 58,172 59,522 58,844 58,651 9 Securitized motor vehicles4 ,837 23,166 29,775 27,823 28,964 29,775 28,894 32,860 10 Securitized other consumer4 ,265 10,610 11,729 11,379 11,626 11,729 11,527 10,383 11 Real estate2 ,509 65,760 68,410 69,206 68,761 68,410 68,889 69,216 12 Business ,019" 301,719 311,118" 303,376 304,457 311,118" 303,527" 303,345" 13 Motor vehicles ,125" 90,613 87,456 86,747 85,621 87,456 86,491 86,412 14 Retail5.... ,454" 22,957 19,303 20,763 19,708 19,303 19,124 17,881 15 Wholesale6 ,573 31,216 27,158 n.a. n.a. n.a. n.a. n.a. 16 Leasing ,098 36,440 38,191 39,536 39,020 38,191 38,640 38,472 17 Equipment ,654 141,399 151,607 147,033 148,127 151,607 146,820 145,886 18 Retail..... ,968 30,962 32,212 31,475 31,427 32,212 32,458 32,430 19 Wholesale6 ,101 9,671 8,669 8,928 8,824 8,669 8,582 8,318 20 Leasing ^ ,585 100,766 110,726 106,630 107,877 110,726 105,780 105,138 21 Other business ,773" 60,900 57,464 56,495 56,926 57,464 55,760 55,962 22 Securitized business assets ,467 8,807 14,590" 13,101 13,782 14,590" 14,457" 15,085" 2 2 2 5 3 4 L R W e e h a ta o s i i l l n e s g a le 6 2 51 6 8 9 7 1 5 2 , , 2 9 5 8 4 7 5 6 6 4 8 1 , , , 7 7 1 5 1 1 6 6 8 " 8 3, , 8 5 6 7 3 9 4 4 3 8 4, , 3 8 6 6 1 0 2 3 7 4 8 1 , , , 7 7 1 5 1 1 6 6 8 " 8 4 1 , , , 5 8 0 8 3 3 2 9 6 " 9 4 , , 4 7 9 0 0 7 8 4 3 " 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 bFaRlaAncSesE aRre no longer carried on the balance sheets of the loan originator. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate A37 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 1992 1993 IItteemm 11999900 Oct. Nov. Dec. Jan. Feb. Mar. Apr. Terms and yields in primary and secondary markets PRIMARY MARKETS Terms1 1 Purchase price (thousands of dollars) 153.2 155.0 158.1 159.2 165.4 154.0 158.6 159.7 156.2 150.9 2 Amount of loan (thousands of dollars) 112.4 114.0 118.1 119.7 117.3 117.7 119.5 114.5 121.5 115.0 3 Loan-price ratio (percent) 74.8 75.0 76.6 77.3 75.3 77.7 76.8 75.4 79.3 78.5 4 Maturity (years) 27.3 26.8 25.6 25.2 24.9 26.1 25.7 23.8 26.9 24.9 5 Fees and charges (percent of loan amount) 1.93 1.71 1.60 1.42 1.54 1.31 1.49 1.43 1.50 1.23 Yield (percent per year) 6 Contract rate 9.68 9.02 7.98 7.65 7.81 7.65 7.57 7.52 7.22 77..2266 7 Effective rate1'3 10.01 9.30 8.25 7.90 8.07 7.88 7.82 7.77 7.46 7.46 8 Contract rate (HUD series)4 10.08 9.20 8.43 8.29 8.38 8.19 7.93 7.63 7.59 7.51 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (Section 203)5 10.17 9.25 8.46 8.29 8.54 8.12 8.04 7.55 7.57 7.56 10 GNMA securities6 9.51 8.59 7.77 7.53 7.90 7.57 7.39 7.02 6.79 6.77 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 113,329 122,837 142,833 149,133 153,306 158,119 159,204 159,766 161,147 116633,,771199 12 FHA/VA 21,028 21,702 22,168 22,399 22,372 22,593 22,640 22,573 22,700 22,682 13 Conventional 92,302 101,135 120,664 126,734 130,934 135,526 136,564 137,193 138,447 141,037 Mortgage transactions (during period) 14 Purchases 23,959 37,202 75,905 8,380 7,980 8,832 4,993 4,118 4,730 6,761 Mortgage commitments (during period) 15 Issued _ 23,689 40,010 74,970 8,195 6,084 6,185 4,189 4,177 6,644 7,764 16 To sell8 5,270 7,608 10,493 0 237 1,811 1,159 221 0 112 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)* 17 Total 20,419 24,131 29,959 32,995 32,703 33,665 32,370 32,454 35,421 n.a. 18 FHA/VA 547 484 408 365 359 352 347 343 337 n.a. 19 Conventional 19,871 23,283 29,552 32,630 32,343 33,313 32,023 32,112 35,084 n.a. Mortgage transactions (during period) 20 Purchases 75,517 97,727 191,125 20,199 19,607 20,792 15,512 12,063 12,587 n.a. 21 Sales 73,817 92,478 179,208 18,771 19,154 19,602 16,536 12,105 10,286 14,427 Mortgage commitments (during period)9 22 Contracted 102,401 114,031 261,637 27,380 29,717 32,453 17,591 23,366 21,103 n.a. 1. Weighted averages based on sample surveys of mortgages originated by 6. Average net yields to investors on fully modified pass-through securities major institutional lender groups for purchase of newly built homes; compiled by backed by mortgages and guaranteed by the Government National Mortgage the Federal Housing Finance Board in cooperation with the Federal Deposit Association (GNMA), assuming prepayment in twelve years on pools of thirty- Insurance Corporation. year mortgages insured by the Federal Housing Administration or guaranteed by 2. Includes all fees, commissions, discounts, and "points" paid (by the the Department of Veterans Affairs. borrower or the seller) to obtain a loan. 7. Does not include standby commitments issued, but includes standby com- 3. Average effective interest rate on loans closed for purchase of newly built mitments converted. homes, assuming prepayment at the end of ten years. 8. Includes participation loans as well as whole loans. 4. Average contract rates on new commitments for conventional first mort- 9. Includes conventional and government-underwritten loans. The Federal gages; from U.S. Department of Housing and Urban Development (HUD). Home Loan Mortgage Corporation's mortgage commitments and mortgage trans- 5. Average gross yields on thirty-year, minimum-downpayment, first mort- actions include activity under mortgage securities swap programs, while the gages insured by the Federal Housing Administration (FHA) for immediate corresponding data for FNMA exclude swap activity. delivery in the private secondary market. Based on transactions on first day of subsequent month. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Nonfinancial Statistics • July 1993 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1991 1992 Type of holder and property 11998899 11999900 11999911 Q4 Q1 Q2 Q3 Q4P 1 All holders 3,570,906 3,795,210 3,915,871 3,915,871 3,938,198 3,976,483 4,012,983 4,057,012 By type of property 2 One- to four-family residences 2,424,258 2,635,428 2,764,447 2,764,447 2,790,734 2,838,732 2,890,842 2,942,958 3 Multifamily residences 307,672 311,113 310,427 310,427 310,499 306,038 305,379 302,211 4 Commercial 754,952 764,953 758,063 758,063 754,290 748,4% 733,083 728,404 5 Farm 84,025 83,716 82,934 82,934 82,674 83,218 83,679 83,439 By type of holder 6 Major financial institutions 1,931,537 1,914,315 1,846,910 1,846,910 1,825,983 1,803,488 1,793,505 1,771,502 7 Commercial banks 767,069 844,826 876,284 876,284 880,377 884,598 891,484 893,793 8 One- to four-family 389,632 455,931 486,572 486,572 492,910 4%,518 506,658 511,306 9 Multifamily 38,876 37,015 37,424 37,424 37,710 38,314 38,985 38,013 10 Commercial 321,906 334,648 333,852 333,852 330,837 330,229 325,934 324,5% 11 Farm . 16,656 17,231 18,436 18,436 18,919 19,538 19,906 19,878 12 Savings institutions 910,254 801,628 705,367 705,367 682,338 659,624 648,178 627,531 13 One- to four-family 669,220 600,154 538,358 538,358 524,536 508,545 501,604 489,217 14 Multifamily 106,014 91,806 79,881 79,881 77,166 74,788 73,723 69,788 15 Commercial 134,370 109,168 86,741 86,741 80,278 75,947 72,517 68,202 16 Farm 650 500 388 388 358 345 334 324 17 Life insurance companies 254,214 267,861 265,258 265,258 263,269 259,266 253,843 250,178 18 One- to four-family 12,231 13,005 11,547 11,547 11,214 10,676 10,451 10,110 19 Multifamily 26,907 28,979 29,562 29,562 29,693 29,425 28,804 28,558 20 Commercial 205,472 215,121 214,105 214,105 212,865 210,139 205,709 202,989 21 Farm 9,604 10,756 10,044 10,044 9,497 9,026 8,878 8,522 22 Federal and related agencies 197,778 239,003 266,156 266,156 278,3% 278,131 277,485 286,428 23 Government National Mortgage Association 23 20 19 19 19 23 27 31 24 One- to four-family 23 20 19 19 19 23 27 31 25 Multifamily 0 0 0 0 0 0 0 0 26 Farmers Home Administration4 41,176 41,439 41,713 41,713 41,791 41,628 41,671 41,695 27 One- to four-family 18,422 18,527 18,496 18,4% 18,488 17,718 17,292 16,912 28 Multifamily 9,054 9,640 10,141 10,141 10,270 10,356 10,468 10,575 29 Commercial 4,443 4,690 4,905 4,905 4,%1 4,998 5,072 5,158 30 Farm 9,257 8,582 8,171 8,171 8,072 8,557 8,839 9,050 31 Federal Housing and Veterans' Administrations 6,087 8,801 10,733 10,733 11,332 11,480 11,768 12,581 32 One- to four-family 2,875 3,593 4,036 4,036 4,254 4,403 4,531 5,153 33 Multifamily 3,212 5,208 6,697 6,697 7,078 7,077 7,236 7,428 34 Resolution Trust Corporation 0 32,600 45,822 45,822 49,345 44,624 37,099 32,045 35 One- to four-family 0 15,800 14,535 14,535 15,458 15,032 12,614 9,658 36 Multifamily 0 8,064 15,018 15,018 16,266 13,316 11,130 11,038 37 Commercial 0 8,736 16,269 16,269 17,621 16,276 13,356 11,350 38 Farm 0 0 0 0 0 0 0 0 39 Federal National Mortgage Association 99,001 104,870 112,283 112,283 118,238 122,979 126,476 137,584 40 One- to four-family 90,575 94,323 100,387 100,387 105,869 110,223 113,407 124,016 41 Multifamily 8,426 10,547 11,896 11,896 12,369 12,756 13,069 13,568 42 Federal Land Banks 29,640 29,416 28,777 28,777 28,776 28,775 28,815 28,827 43 One- to four-family 1,210 1,838 1,693 1,693 1,693 1,693 1,695 1,696 44 Farm 28,430 27,577 27,084 27,084 27,083 27,082 27,119 27,131 45 Federal Home Loan Mortgage Corporation 21,851 21,857 26,809 26,809 28,895 28,621 31,629 33,665 46 One- to four-family 18,248 19,185 24,125 24,125 26,182 26,001 29,039 31,032 47 Multifamily 3,603 2,672 2,684 2,684 2,713 2,620 2,591 2,633 48 Mortgage pools or trusts5 951,740 1,116,452 1,270,862 1,270,862 1,288,823 1,341,338 1,385,460 1,425,546 49 Government National Mortgage Association 368,367 403,613 425,295 425,295 421,977 422,922 422,255 419,516 50 One- to four-family 358,142 391,505 415,767 415,767 412,574 413,828 413,063 410,675 51 Multifamily 10,225 12,108 9,528 9,528 9,404 9,094 9,192 8,841 52 Federal Home Loan Mortgage Corporation 272,870 316,359 359,163 359,163 367,878 382,797 391,762 407,514 53 One- to four-family 266,060 308,369 351,906 351,906 360,887 376,177 385,400 401,525 54 Multifamily 6,810 7,990 7,257 7,257 6,991 6,620 6,362 5,989 55 Federal National Mortgage Association 228,232 299,833 371,984 371,984 389,853 413,226 429,935 444,979 56 One- to four-family 219,577 291,194 362,667 362,667 380,617 403,940 420,835 435,979 57 Multifamily , 8,655 8,639 9,317 9,317 9,236 9,286 9,100 9,000 58 Farmers Home Administration 80 66 47 47 43 43 41 38 59 One- to four-family 21 17 11 11 10 9 9 8 60 Multifamily 0 0 0 0 0 0 0 0 61 Commercial 26 24 19 19 18 18 18 17 62 Farm 33 26 17 17 16 15 14 13 63 Private mortgage conduits 82,191 96,581 114,373 114,373 109,071 122,350 141,468 153,499 64 One- to four-family 77,217 90,684 104,1% 104,1% 95,600 105,700 123,000 132,000 65 Multifamily 462 731 3,698 3,698 4,686 5,7% 5,7% 6,305 66 Commercial 4,512 5,166 6,479 6,479 8,784 10,855 12,673 15,194 67 Farm 0 0 0 0 0 0 0 0 68 Individuals and others6 489,851 525,440 531,943 531,943 544,9% 553,526 556,532 573,535 69 One- to four-family 300,805 331,282 330,131 330,131 340,424 348,245 351,217 363,641 70 Multifamily 85,427 87,713 87,324 87,324 86,917 86,591 88,922 90,475 71 Commercial 84,224 87,400 95,693 95,693 98,925 100,035 97,805 100,898 72 Farm 19,395 19,045 18,795 18,795 18,730 18,656 18,588 18,522 1. Based on data from various institutional and governmental sources; figures 5. Outstanding principal balances of mortgage-backed securities insured or for some quarters estimated in part by the Federal Reserve. Multifamily debt guaranteed by the agency indicated. refers to loans on structures of five or more units. 6. Other holders include mortgage companies, real estate investment trusts, 2. Includes loans held by nondeposit trust companies but not loans held by state and local credit agencies, state and local retirement funds, noninsured bank trust departments. pension funds, credit unions, and finance companies. 3. Includes savings banks and savings and loan associations. 4. FmHA-guaranteed securities sold to the Federal Financing Bank were reallocated from FmHA mortgage pools to FmHA mortgage holdings in 1986:4 because of accounting changes by the Farmers Home Administration. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Consumer Installment Credit A39 1.55 CONSUMER INSTALLMENT CREDIT1 Millions of dollars, amounts outstanding, end of period 1992r 1993 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11999900rr 11999911rr 11999922rr Oct. Nov. Dec. Jan.r Feb.r Mar. Seasonally adjusted 1 Total 738,765 733,510 741,093 734,195 736,023 741,093 744,196 748,765 752,205 2 Automobile 284,739 260,898 259,627 258,208 258,860 259,627 258,463 260,945 261,255 3 Revolving.. 222,552 243,564 254,299 251,806 252,086 254,299 256,435 259,378 261,329 4 Other 231,474 229,048 227,167 224,181 225,077 227,167 229,299 228,443 229,621 Not seasonally adjusted 5 Total 752,883 749,052 756,944 734,766 737,651 756,944 749,153 746,914 745,187 By major holder 6 Commercial banks 347,087 340,713 331,869 326,472 325,149 331,869 330,355 330,060 330,198 7 Finance companies 133,258 121,937 117,127 116,359 116,558 117,127 116,009 112,686 111,854 8 Credit unions 93,057 92,681 97,641 95,517 96,092 97,641 98,261 98,785 99,856 9 Retailers 43,464 39,832 42,079 36,441 36,678 42,079 40,057 38,462 38,111 10 Savings institutions 52,164 45,965 43,461 42,031 42,746 43,461 43,428 43,516 43,255 11 Gasoline companies 4,822 4,362 4,365 4,452 4,365 4,365 4,366 4,148 4,080 12 Pools of securitized assets2 .. 79,030 103,562 120,402 113,494 116,063 120,402 116,677 119,257 117,833 By major type of credit* 13 Automobile 284,903 261,219 259,964 260,201 259,148 259,964 257,744 259,344 258,8% 14 Commercial banks 124,913 112,666 109,743 110,447 109,459 109,743 109,671 111,005 111,173 15 Finance companies 75,045 63,415 57,605 59,290 58,386 57,605 57,165 54,036 53,508 16 Pools of securitized assets2 24,620 28,915 33,878 32,065 32,979 33,878 32,388 36,031 35,977 17 Revolving 234,801 256,876 267,949 249,983 252,877 267,949 261,217 258,430 257,879 18 Commercial banks 133,385 138,005 132,582 126,992 127,481 132,582 129,567 127,877 128,406 19 Retailers 38,448 34,712 36,629 31,254 31,444 36,629 34,666 33,110 32,681 20 Gasoline companies 4,822 4,362 4,365 4,452 4,365 4,365 4,366 4,148 4,080 21 Pools of securitized assets2 45,637 63,595 74,243 69,285 70,889 74,243 71,927 72,024 70,890 22 Other 233,178 230,957 229,031 224,581 225,626 229,031 230,192 229,141 228,412 23 Commercial banks 88,789 90,042 89,544 89,033 88,209 89,544 91,117 91,178 90,619 24 Finance companies 58,213 58,522 59,522 57,068 58,172 59,522 58,844 58,651 58,346 25 Retailers 5,016 5,120 5,450 5,187 5,234 5,450 5,391 5,352 5,430 26 Pools of securitized assets 8,773 11,052 12,281 12,144 12,195 12,281 12,362 11,202 10,966 1. The Board's series on amounts of credit covers most short- and 2. Outstanding balances of pools upon which securities have been issued; these intermediate-term credit extended to individuals that is scheduled to be repaid (or balances are no longer carried on the balance sheets of the loan originator. has the 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 1993 IItteemm 11999900 11999911 11999922 Sept. Oct. Nov. Dec. Jan. Feb. Mar. INTEREST RATES Commercial banks2 11.78 11.14 9.29 n.a. n.a. 8.60 n.a. n.a. 8.57 n.a. 15.46 15.18 14.04 n.a. n.a. 13.55 n.a. n.a. 13.57 n.a. 14.02 13.70 12.67 n.a. n.a. 12.36 n.a. n.a. 12.38 n.a. 18.17 18.23 17.78 n.a. n.a. 17.38 n.a. n.a. 17.26 n.a. Auto finance companies 12.54 12.41 9.93 8.65 9.51 9.65 9.65 10.08 10.32 9.95 15.99 15.60 13.80 13.44 13.37 13.37 13.66 13.72 13.90 13.21 OTHER TERMS3 Maturity (months) 54.6 55.1 54.0 53.3 54.1 54.1 53.6 53.9 54.3 54.6 46.0 47.2 47.9 47.7 47.9 47.8 47.7 49.2 49.0 49.0 Loan-to-value ratio 87 88 89 90 89 89 90 90 91 90 95 % 97 97 97 97 97 97 98 98 Amount financed (dollars) 12,071 1122,,449944 13,584 13,889 13,885 14,043 14,315 13,975 13,849 14,013 88,,228899 88,,888844 99,,111199 88,,440022 99,,337733 9,475 9,464 9,472 9,457 9,641 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

A40 Domestic NonfinancialS tatistics • July 1993 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 1991 1992 11998888 11998899 11999900 11999911 11999922 Q2 Q3 04 Ql Q2 Q3 04 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .. 775.8 740.8 665.0 442.7 587.4 534.4 401.4 371.1 687.5 583.0 476.0 603.2 By sector and instrument 2 U.S. government 155.1 146.4 246.9 278.2 304.0 276.7 288.4 320.4 368.9 351.9 193.4 301.7 3 Treasury securities 137.7 144.7 238.7 292.0 303.8 282.9 317.2 316.6 380.1 351.5 184.4 299.1 4 Agency issues and mortgages 17.4 1.6 8.2 -13.8 .2 -6.2 -28.8 3.8 -11.2 .4 9.0 2.7 5 Private 620.7 594.4 418.2 164.4 283.5 257.7 113.0 50.7 318.6 231.1 282.6 301.5 By instrument 6 Tax-exempt obligations 53.7 65.0 51.2 45.8 53.3 48.5 53.5 45.5 52.0 73.0 52.3 35.9 7 Corporate bonds 103.1 73.8 47.1 78.8 66.3 96.5 81.6 60.2 76.3 77.5 61.3 50.3 8 Mortgages 317.3 303.0 244.0 120.1 160.8 175.9 42.6 69.7 204.8 116.6 140.1 181.7 9 Home mortgages 241.8 245.3 219.4 129.0 198.5 147.3 118.6 93.0 221.5 155.5 202.8 214.2 10 Multifamily residential 16.7 16.4 3.7 -.9 -8.3 12.7 -31.0 8.0 .0 -17.9 -2.7 -12.7 11 Commercial 60.8 42.7 21.0 -7.3 -29.9 16.6 -42.6 -31.4 -15.7 -23.2 -61.8 -18.8 12 Farm -2.1 -1.5 -.1 -.8 .5 -.6 -2.4 .0 -1.0 2.2 1.8 -1.0 13 Consumer credit 50.1 41.7 17.5 -12.5 2.4 -7.8 -24.0 -8.0 3.1 -12.4 .4 18.8 14 Bank loans n.e.c 41.0 40.2 4.4 -33.4 -16.8 -34.5 -18.2 -66.1 -26.9 -21.5 -3.2 -15.4 15 Open market paper 11.9 21.4 9.7 -18.4 9.8 -15.9 -36.3 -7.0 12.6 -3.4 1.7 28.4 16 Other 43.6 49.3 44.2 -15.8 7.5 -5.2 13.7 -43.6 -3.2 1.3 30.0 1.9 By borrowing sector 17 State and local government 48.9 63.2 48.3 38.5 48.1 38.6 37.6 41.9 46.1 63.4 50.0 32.9 18 Household 318.6 305.6 254.2 144.9 215.1 178.0 132.3 104.2 229.0 177.2 220.7 233.7 19 Nonfinancial business 253.1 225.6 115.6 -18.9 20.2 41.1 -56.9 -95.4 43.6 -9.4 11.9 34.9 20 Farm -7.5 1.6 2.5 .9 .9 2.2 -.2 -2.2 -1.6 6.6 1.0 -2.3 21 Nonfarm noncorporate 61.8 50.4 26.7 -23.6 -34.2 9.8 -65.9 -51.5 -20.7 -50.6 -40.3 -25.2 22 Corporate 198.8 173.6 86.4 3.7 53.5 29.1 9.2 -41.7 65.9 34.7 51.1 62.4 23 Foreign net borrowing in United States 6.4 10.2 23.9 14.1 24.1 -63.2 15.6 41.0 9.9 55.2 30.6 .8 7.4 Bonds 6.9 4.9 21.4 14.9 18.5 10.6 15.5 22.3 4.9 21.9 22.3 25.1 7.5 Bank loans n.e.c -1.8 -.1 -2.9 3.1 1.6 -3.5 1.4 6.5 1.5 14.1 3.9 -13.2 26 Open market paper 8.7 13.1 12.3 6.4 5.2 -51.9 16.0 14.9 -7.8 27.7 12.8 -11.9 27 U.S. government loans -7.5 -7.6 -6.9 -10.2 -1.2 -18.3 -17.2 -2.7 11.4 -8.5 -8.4 .7 28 Total domestic plus foreign 782.2 750.9 688.9 456.8 611.6 471.2 417.0 412.1 697.4 638.2 506.6 604.0 Financial sectors 29 Total net borrowing by financial sectors 211.4 220.1 187.1 131.5 223.3 106.0 143.8 165.6 159.5 241.6 265.2 227.0 By instrument 30 U.S. government-related 119.8 151.0 167.4 150.0 167.1 129.4 156.0 158.5 137.4 222.8 165.6 142.7 31 Sponsored-credit-agency securities 44.9 25.2 17.1 9.2 40.2 -29.7 20.6 32.6 11.5 48.3 67.7 33.5 32 Mortgage pool securities 74.9 125.8 150.3 140.9 126.9 159.0 135.5 125.9 125.9 174.4 97.9 109.2 33 Loans from U.S. government .0 .0 -.1 .0 .0 .0 .0 -.1 .0 .0 .0 .0 34 Private 91.7 69.1 19.7 -18.6 56.2 -23.4 -12.3 7.1 22.1 18.9 99.6 84.3 35 Corporate bonds 16.2 46.8 34.4 47.7 50.0 72.4 29.5 47.5 14.9 25.5 59.8 99.9 36 Mortgages .3 .0 .3 .6 .3 .9 .4 .8 .9 .1 .3 .1 37 Bank loans n.e.c .6 1.9 1.2 3.2 7.2 -2.9 10.2 4.5 8.2 3.9 5.4 11.1 38 Open market paper 54.8 31.3 8.6 -32.0 -2.1 -46.0 -16.7 -12.7 7.6 -16.3 12.8 -12.6 39 Loans from Federal Home Loan Banks 19.7 -11.0 -24.7 -38.0 .8 -47.7 -35.7 -33.0 -9.5 5.7 21.3 -14.2 By borrowing sector 40 Sponsored credit agencies 44.9 25.2 17.0 9.1 40.2 -29.7 20.6 32.5 11.5 48.3 67.7 33.5 41 Mortgage pools 74.9 125.8 150.3 140.9 126.9 159.0 135.5 125.9 125.9 174.4 97.9 109.2 42 Private 91.7 69.1 19.7 -18.6 56.2 -23.4 -12.3 7.1 22.1 18.9 99.6 84.3 43 Commercial banks -3.0 -1.4 -1.1 -13.3 4.5 -11.7 -9.2 -14.1 7.2 .8 1.6 8.2 44 Bank affiliates 5.2 6.2 -27.7 -2.5 1.1 -3.5 -6.8 9.6 2.7 -8.2 10.5 -.4 45 Savings and loan associations 19.9 -14.1 -29.9 -39.5 -4.6 -48.7 -41.1 -25.1 -20.3 2.7 10.0 -10.6 46 Mutual savings banks 1.9 -1.4 -.5 -3.5 1.7 -1.7 -5.5 -8.7 4.3 .3 8.3 -6.2 47 Finance companies 31.5 59.7 35.6 4.5 14.3 3.4 12.2 12.9 1.0 -20.9 28.9 48.0 48 Real estate investment trusts (REITs) 3.6 -1.9 -1.9 .0 1.8 .1 -.3 .1 4.6 .9 1.3 .5 49 Securitized credit obligation (SCO) issuers 32.5 22.0 45.2 35.6 37.4 38.7 38.5 32.3 22.5 43.2 39.1 44.8 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A41 1.57—Continued 1991 1992 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11998888 11998899 11999900 11999911 11999922 Q2 Q3 Q4 Ql Q2 Q3 04 All sectors 50 Total net borrowing, all sectors 993.6 971.0 876.0 588.3 834.9 577.2 560.8 577.7 856.9 879.8 771.8 831.0 51 U.S. government securities 274.9 297.3 414.4 428.3 471.1 406.1 444.4 479.0 506.3 574.7 359.0 444.4 52 State and local obligations 53.7 65.0 51.2 45.8 53.3 48.5 53.5 45.5 52.0 73.0 52.3 35.9 53 Corporate and foreign bonds 126.3 125.5 102.9 141.3 134.9 179.5 126.7 130.0 96.0 124.9 143.4 175.3 54 Mortgages 317.5 303.0 244.3 120.7 161.1 176.9 43.0 70.5 205.7 116.7 140.3 181.8 55 Consumer credit 50.1 41.7 17.5 -12.5 2.4 -7.8 -24.0 -8.0 3.1 -12.4 .4 18.8 56 Bank loans n.e.c 39.9 41.9 2.8 -27.1 -8.0 -40.9 -6.7 -55.1 -17.2 -3.5 6.1 -17.5 57 Open market paper 75.4 65.9 30.7 -44.0 12.9 -113.8 -37.0 -4.9 12.4 8.1 27.3 3.9 58 Other loans 55.8 30.6 12.4 -64.2 7.1 -71.2 -39.1 -79.3 -1.3 -1.6 43.0 -11.6 External corporate equity funds raised in United States 59 Total net share issues -118.4 -65.7 22.1 198.8 272.1 182.3 232.5 268.2 230.3 291.7 288.6 277.7 60 Mutual funds 6.1 38.5 67.9 150.5 206.4 125.6 182.5 195.9 148.4 236.3 233.3 207.5 61 Mother -124.5 -104.2 -45.8 48.3 65.7 56.7 50.0 72.3 81.9 55.4 55.3 70.2 62 Nonfinancial corporations -129.5 -124.2 -63.0 18.3 26.8 12.0 19.0 48.0 46.0 36.0 11.0 14.0 63 Financial corporations 4.1 2.7 9.8 -.1 7.4 8.1 -3.2 1.4 6.0 8.4 8.1 7.3 64 Foreign shares purchased in United States .9 17.2 7.4 30.2 31.5 36.6 34.1 22.9 29.9 11.0 36.2 48.9 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

A42 Domestic Financial Statistics • July 1993 1.58 SUMMARY OF FINANCIAL TRANSACTIONS1 Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates 1991 1992 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11998888 11998899 11999900 11999911 11999922 Q2 Q3 Q4 QL Q2 Q3 Q4 NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets 993.6 971.0 876.0 588.3 834.9 577.2 560.8 577.7 856.9 879.8 771.8 831.0 2 Private domestic nonfinancial sectors 226.2 209.6 203.8 10.5 60.6 187.7 -143.2 -59.7 206.5 120.6 -162.8 78.0 3 Households 198.9 179.5 172.3 -24.8 65.8 171.3 -185.8 -105.9 227.2 111.3 -160.3 84.9 4 Nonfarm noncorporate business 3.1 -.8 -1.4 -1.9 -2.1 -2.0 -1.6 -2.1 -1.9 -2.5 -1.9 -1.9 5 Nonfinancial corporate business 5.7 12.9 6.6 20.9 8.4 29.0 32.2 30.1 -2.7 8.4 15.4 12.5 6 State and local governments 18.6 17.9 26.2 16.3 -11.5 -10.6 12.1 18.2 -16.1 3.4 -15.9 -17.6 7 U.S. government -10.6 -3.1 33.7 10.0 -12.4 24.8 -2.1 -17.9 13.9 -24.9 -26.8 -12.0 8 Foreign 96.3 74.1 58.4 42.6 97.6 51.4 37.3 71.0 88.4 138.4 64.2 99.6 9 Financial sectors 681.8 690.4 580.2 525.1 689.1 313.3 668.7 584.3 548.0 645.6 897.2 665.5 10 Sponsored credit agencies 37.1 -.5 16.4 14.2 62.7 -25.2 35.8 18.6 93.0 40.0 76.4 41.6 11 Mortgage pools 74.9 125.8 150.3 140.9 126.9 159.0 135.5 125.9 125.9 174.4 97.9 109.2 12 Monetary authority 10.5 -7.3 8.1 31.1 27.9 -4.0 48.1 22.3 33.2 9.8 10.8 57.8 N Commercial banking 157.1 176.8 125.4 84.0 90.7 34.7 82.4 104.3 98.9 58.4 157.4 48.1 14 U.S. commercial banks 127.1 145.7 95.2 38.9 69.2 6.4 26.5 45.6 91.9 .5 132.0 52.4 15 Foreign banking offices 29.4 26.7 28.4 48.5 14.5 33.7 56.7 61.3 .6 58.6 6.5 -7.6 16 Bank affiliates -.1 2.8 -2.8 -1.5 6.7 -2.6 2.4 -1.1 6.4 -.6 18.5 2.5 17 Banks in U.S. possession .7 1.6 4.5 -1.9 .3 -2.8 -3.3 -1.5 .0 -.1 .4 ..88 18 Private nonbank finance 402.2 395.7 279.9 255.0 380.9 148.8 367.0 313.1 197.0 362.9 554.7 440088..88 19 Thrift institutions 119.0 -91.0 -151.9 -144.9 -63.8 -164.8 -176.8 -49.7 -113.3 -81.6 -41.9 -18.5 70 Savings and loan associations 87.4 -93.9 -143.9 -140.9 -77.0 -144.0 -156.3 -83.3 -137.9 -92.4 -38.5 -39.1 71 Mutual savings banks 15.3 -4.8 -16.5 -15.5 -2.8 -31.1 -30.8 11.5 7.6 -7.4 -13.0 1.5 V: Credit unions 16.3 7.7 8.5 11.5 16.0 10.2 10.3 22.2 17.0 18.3 9.6 19.0 73 Insurance 186.2 207.7 188.5 218.7 184.9 216.3 257.1 156.5 114.2 183.6 227.8 213.9 24 Life insurance companies 103.8 93.1 94.4 83.2 94.9 132.8 73.8 13.2 80.6 81.9 96.5 120.4 25 Other insurance companies 29.2 29.7 26.5 34.7 17.3 37.0 36.8 32.1 33.1 22.2 2.5 11.2 76 Private pension funds 18.1 36.2 16.6 63.9 37.8 -2.5 113.1 94.2 -28.7 49.5 90.5 39.7 27 State and local government retirement funds. 35.1 48.7 51.0 37.0 35.0 49.0 33.4 17.0 29.2 30.0 38.2 42.6 78 Finance n.e.c 96.9 278.9 243.3 181.3 259.8 97.4 286.7 206.3 196.1 260.9 368.9 213.4 79 Finance companies 49.2 69.3 41.6 -23.1 20.8 -14.5 -5.2 -54.1 40.8 -23.0 14.2 51.2 30 Mutual funds 11.9 23.8 41.4 90.3 123.6 75.3 117.1 124.8 64.0 169.1 150.7 110.4 31 Money market funds 10.7 67.1 80.9 30.1 2.5 -68.9 1.1 53.8 61.9 -20.9 -16.3 -14.7 37, Real estate investment trusts (REITs) .9 .5 -.7 -.7 1.5 -.1 -.6 -.9 -.7 2.6 -2.8 7.0 33 Brokers and dealers -8.2 96.3 34.9 49.0 74.0 66.8 135.8 50.5 7.5 89.8 184.0 14.7 34 Securitized credit obligation (SCOs) issuers . 32.5 22.0 45.2 35.6 37.4 38.7 38.5 32.3 22.5 43.2 39.1 44.8 RELATION OF LIABILITIES TO FINANCIAL ASSETS 35 Net flows through credit markets 993.6 971.0 876.0 588.3 834.9 577.2 560.8 577.7 856.9 879.8 771.8 831.0 Other financial sources 36 Official foreign exchange 4.0 24.8 2.0 -5.9 -3.5 -4.8 -15.5 -5.0 3.5 -6.5 -8.5 --22..44 37 Treasury currency and special drawing rights .5 4.1 2.5 .0 -1.8 .4 .4 .5 ..11 .3 .2 -7.7 38 Life insurance reserves 25.3 28.8 25.7 24.5 32.0 31.4 19.4 19.2 3300..55 28.7 32.5 36.4 39 Pension fund reserves 193.6 221.4 186.8 267.7 227.3 194.7 342.2 241.5 129.0 178.6 305.3 296.2 40 Interbank claims 2.9 -16.5 34.2 -3.7 46.4 -79.6 99.9 -32.5 56.1 20.8 119.4 -10.7 41 Deposits at financial institutions 259.9 290.0 96.8 61.1 50.8 -75.4 27.3 47.8 74.7 -55.2 223.9 -40.3 42 Checkable deposits and currency 43.2 6.1 44.2 75.8 122.1 7.9 104.5 114.4 88.6 92.8 202.7 104.1 43 Small time and savings deposits 120.8 96.7 59.9 16.7 -62.8 -1.1 -42.4 13.0 -29.9 -89.3 -79.0 -52.9 44 Large time deposits 53.6 17.6 -66.7 -60.9 -79.1 -63.0 -78.1 -117.4 -78.8 -104.9 -54.8 -77.8 45 Money market fund shares 21.9 90.1 70.3 41.2 8.3 -58.7 4.0 26.8 106.2 -38.3 -13.0 -21.7 46 Security repurchase agreements 23.5 78.3 -23.5 -16.4 71.8 43.1 36.3 16.0 15.5 136.9 128.7 6.1 47 Foreign deposits -3.1 1.1 12.6 4.6 -9.5 -3.6 3.0 -5.0 -26.9 -52.5 39.3 2.0 48 Mutual fund shares 6.1 38.5 67.9 150.5 206.4 125.6 182.5 195.9 148.4 236.3 233.3 207.5 49 Corporate equities -124.5 -104.2 -45.8 48.3 65.7 56.7 50.0 72.3 81.9 55.4 55.3 70.2 50 Security credit 3.0 15.6 3.5 51.4 11.1 20.1 82.4 120.7 -70.0 -4.3 76.4 42.5 51 Trade debt 89.2 60.0 44.1 10.4 51.2 41.2 47.6 -7.3 75.2 36.0 51.8 41.8 57 Taxes payable 5.3 2.0 -.5 -9.0 4.7 -11.4 13.1 -3.2 -2.3 10.7 7.1 3.4 53 Noncorporate proprietors' equity -31.2 -32.5 -39.3 -.8 -10.6 -33.6 45.6 5.2 -19.0 11.6 -16.2 -18.9 54 Miscellaneous 222.3 269.9 120.5 140.1 201.8 89.0 38.7 205.1 194.7 275.8 214.8 121.9 55 Total financial sources 1,650.2 1,772.7 1,374.3 1,323.0 1,716.4 931.6 1,494.5 1,438.0 1,559.8 1,668.1 2,066.9 1,571.0 Floats not included in assets (-) 56 U.S. government checking deposits 1.6 8.4 3.3 -13.1 .1 15.6 23.9 -73.1 4.4 -11.7 -5.3 13.0 57 Other checkable deposits .8 -3.2 2.5 2.0 1.6 3.0 -2.1 -6.1 16.7 2.5 -13.9 1.1 58 Trade credit -.9 .6 21.5 18.4 -4.5 40.7 27.2 -3.7 6.7 -29.1 24.3 -19.8 Liabilities not identified as assets (-) 59 Treasury currency -.1 -.2 ..22 -.6 --..22 --..33 --..22 --..11 -.4 -.1 --..33 -.1 60 Interbank claims -3.0 -4.4 1.6 26.2 -6.3 20.8 28.4 .2 13.4 -15.1 -2.6 -20.8 61 Security repurchase agreements -29.8 23.9 -34.8 10.4 41.5 76.2 36.9 44.0 -41.1 104.2 76.4 26.6 67 Taxes payable 6.3 2.3 6.5 5.6 9.8 2.0 23.4 11.4 -11.3 25.7 23.0 1.8 63 Miscellaneous 4.4 -95.6 -13.8 -30.6 -19.2 6.4 -191.8 182.3 -71.0 -76.1 3.6 66.8 64 Totals identified to sectors as assets 1,670.7 1,841.0 1,387.5 1,304.7 1,693.6 767.1 1,548.9 1,283.1 1,642.4 1,667.8 1,961.6 1,502.5 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

Flow of Funds A43 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billions of dollars, end of period 1991 1992 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11998899 11999900 11999911 11999922 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 10,087.1 10,760.8 11,200.9 11,788.3 10,960.1 11,081.3 11,200.9 11,331.8 11,471.8 11,615.3 11,788.3 By lending sector and instrument 2 U.S. government 2,251.2 2,498.1 2,776.4 3,080.3 2,591.9 2,687.2 2,776.4 2,859.7 2.923.3 2,998.9 3,080.3 3 Treasury securities 2,227.0 2,465.8 2,757.8 3,061.6 2,567.1 2,669.6 2,757.8 2,844.0 2.907.4 2,980.7 3,061.6 4 Agency issues and mortgages 24.2 32.4 18.6 18.8 24.8 17.6 18.6 15.8 15.9 18.1 18.8 5 Private 7,835.9 8,262.6 8,424.5 8,708.0 8,368.2 8,394.1 8,424.5 8,472.0 8,548.5 8,616.4 8,708.0 By instrument 6 Tax-exempt obligations 1.004.4 1,055.6 1,101.4 1,154.7 1,072.5 1,089.3 1,101.4 1,111.5 1,128.6 1.145.6 1,154.7 7 Corporate bonds 926.1 973.2 1,051.9 1,118.3 1,016.5 1,036.9 1,051.9 1,071.0 1,090.4 1.105.7 1,118.3 1 1 1 9 8 0 1 2 M H o M C F r a o o t u r g m m l m a ti m e g f e a e m s m r c o i i l r a y tg l r a e g s e id s ential 2 3 , . 5 6 3 7 1 4 0 4 8 5 4 7 2 5 . . . . . 4 1 5 6 3 3 2, , 7 9 3 7 6 0 0 5 8 0 5 7 7 4 . . . . . 8 0 3 6 0 2 4 , , 8 0 7 3 8 2 5 0 8 9 7 0 4 3 . . . . . 9 0 3 3 2 4 3 , , 1 0 2 7 8 8 9 2 8 8 6 7 0 3 . . . . . 6 1 5 4 7 3 2 , , 9 8 7 3 9 3 6 1 8 8 5 0 8 3 . . . . . 5 6 3 8 8 4 2 , , 0 8 3 7 1 6 0 5 8 2 6 1 8 3 . . . . . 9 9 1 1 2 4 2 , , 0 7 8 3 2 5 8 0 8 7 0 4 9 3 . . . . . 9 3 3 0 2 4 2 , , 0 9 7 3 6 4 3 0 8 9 6 5 4 2 . . . . . 4 4 9 3 9 4 2 , , 1 9 7 3 0 8 4 0 8 7 3 0 0 3 . . . . . 4 7 3 6 5 4 3 , , 1 0 2 7 4 3 9 2 8 5 4 9 5 3 . . . . . 4 7 1 1 9 4 3 , , 1 0 2 7 8 2 9 8 8 8 0 6 7 3 . . . . . 4 6 1 5 7 1 1 3 4 C B o an n k su l m oa e n r s c n re .e d . i c t 7 76 9 0 1 . . 7 8 8 7 0 5 9 8 . . 3 0 7 72 9 4 6 . . 6 7 7 7 0 9 7 9 . . 8 2 7 74 8 2 6 . . 0 7 7 7 3 8 4 5 . . 1 9 7 7 2 9 4 6 . . 6 7 7 7 1 7 2 5 . . 5 7 7 7 0 7 9 5 . . 4 8 7 7 0 8 5 1 . . 2 1 7 7 0 9 7 9 . . 8 2 15 Open market paper 107.1 116.9 98.5 108.3 119.4 107.0 98.5 110.3 111.7 108.3 108.3 16 Other 598.4 642.6 624.1 631.6 632.6 629.8 624.1 621.6 624.9 626.4 631.6 By borrowing sector 17 State and local government 815.7 864.0 902.5 950.6 878.5 891.4 902.5 911.3 925.9 942.3 950.6 18 Household 3.508.2 3,780.6 3,925.5 4.140.6 3.846.7 3,886.0 3,925.5 3,950.6 4,008.1 4,068.6 4.140.6 19 Nonfinancial business 3,512.0 3,618.0 3.596.5 3.616.7 3,643.0 3,616.7 3.596.5 3,610.1 3,614.5 3.605.5 3.616.7 20 Farm 139.2 140.5 138.8 139.7 139.6 140.4 138.8 136.4 140.1 141.2 139.7 21 Nonfarm noncorporate 1,177.5 1,204.2 1.180.6 1,146.4 1.210.8 1,191.0 1.180.6 1,174.9 1,163.7 1.150.6 1,146.4 22 Corporate 2.195.3 2,273.4 2,277.1 2,330.6 2,292.7 2,285.3 2,277.1 2,298.9 2,310.7 2.313.7 2,330.6 23 Foreign credit market debt held in United States 254.8 278.6 292.7 307.6 277.6 282.2 292.7 282.4 298.4 306.9 307.6 24 Bonds 88.0 109.4 124.2 142.7 114.8 118.6 124.2 125.4 130.9 136.5 142.7 2 2 2 5 6 7 B O U a p .S n e k . n g l m o o v a a n e rk r s n e n m t . p e e . a n c p t e l r o ans 2 6 8 1 2 3 . . . 4 4 0 7 7 1 5 5 8 . . . 3 4 5 6 2 8 5 1 1 . . . 2 8 6 7 2 6 7 3 4 . . . 7 2 0 7 6 1 4 9 9 . . . 0 1 7 2 7 6 8 5 0 . . . 0 6 0 8 6 2 5 1 1 . . . 2 8 6 7 6 2 4 0 2 . . . 4 5 0 7 6 2 7 4 5 . . . 5 5 5 6 8 2 3 0 6 . . . 4 7 5 7 6 2 4 7 3 . . . 0 7 2 28 Tota s l e c c r t e o d r i s t , m do a m rk e e s t t i d c e a b n t d o w fo e r d ei g b n y nonfinancial 10,341.9 11,039.4 11,493.6 12,095.9 11,237.7 11,363.5 11,493.6 11,614.1 11,770.2 11,922.2 12,095.9 Financial sectors 29 Total credit market debt owed by financial sectors 2,333.0 2,524.2 2,665.9 2,890.1 2,578.2 2,615.1 2,665.9 2,697.7 2,756.6 2,824.0 2,890.1 By instrument 30 U.S. government-related 1,249.3 1,418.4 1,574.3 1,741.5 1,489.6 1,531.1 1,574.3 1,603.8 1,658.3 1,702.0 1,741.5 31 Sponsored credit-agency securities 373.3 393.7 402.9 443.1 389.6 394.7 402.9 405.7 417.8 434.7 443.1 32 Mortgage pool securities 871.0 1,019.9 1,166.7 1,293.5 1,095.2 1,131.5 1,166.7 1,193.2 1,235.6 1,262.5 1,293.5 3 3 3 4 Pri L v o a a te n s from U.S. government 1,08 5 3 . . 0 7 1,10 4 5 . . 9 8 1,09 4 1 . . 8 6 1,14 4 8 . . 8 6 1,08 4 8 . . 9 6 1,08 4 4 . . 9 0 1,09 4 1 . . 8 6 1,09 4 4 . . 8 0 1,09 4 8 . . 8 3 1,12 4 2 . . 8 0 1,14 4 8 . . 8 6 35 Corporate bonds 491.9 528.2 580.2 621.8 562.2 569.5 580.2 578.2 583.2 598.4 621.8 36 Mortgages 3.4 4.2 4.8 5.1 4.5 4.6 4.8 5.0 5.0 5.1 5.1 37 Bank loans n.e.c 37.5 38.6 41.8 49.0 37.0 39.0 41.8 41.6 43.7 44.5 49.0 38 Open market paper 409.1 417.7 385.7 392.8 390.1 387.0 385.7 392.9 389.5 393.9 392.8 39 Loans from Federal Home Loan Banks.. 141.8 117.1 79.1 79.9 94.7 83.9 79.1 76.3 76.9 80.2 79.9 By borrowing sector 40 Sponsored credit agencies 378.3 398.5 407.7 447.9 394.4 399.5 407.7 410.5 422.6 439.5 447.9 41 Mortgage pools 871.0 1,019.9 1,166.7 1,293.5 1,095.2 1,131.5 1,166.7 1,193.2 1,235.6 1,262.5 1,293.5 42 Private financial sectors 1,083.7 1,105.8 1,091.6 1,148.6 1,088.6 1,084.0 1,091.6 1,094.0 1,098.3 1,122.0 1,148.6 43 Commercial banks 77.4 76.3 63.0 67.4 65.9 64.6 63.0 60.8 61.7 63.3 67.4 44 Bank affiliates 142.5 114.8 112.3 113.4 113.3 110.6 112.3 115.0 112.7 114.4 113.4 45 Savings and loan associations 145.2 115.3 75.9 71.3 91.0 79.0 75.9 71.2 70.3 70.9 71.3 46 Mutual savings banks 17.2 16.7 13.2 14.9 16.6 15.2 13.2 13.5 14.3 16.2 14.9 47 Finance companies 504.2 539.8 547.9 562.2 540.4 543.7 547.9 547.1 541.8 549.4 562.2 48 Real estate investment trusts (REITs)— 10.1 10.6 11.4 14.0 11.0 11.2 11.4 12.7 13.2 13.7 14.0 49 Securitized credit obligation (SCO) issuers 187.1 232.3 268.0 305.4 250.3 259.9 268.0 273.6 284.4 294.2 305.4 All sectors 50 Total credit market debt, domestic and foreign.. 12,674.9 13,563.6 14,159.6 14,985.9 13,815.9 13,978.7 14,159.6 14,311.9 14,526.8 14,746.2 14,985.9 51 U.S. government securities 3,495.6 3,911.7 4,345.9 4,817.0 4,076.6 4,213.5 4,345.9 4,458.7 4,576.8 4,696.0 4,817.0 52 State and local obligations 1,004.4 1,055.6 1,101.4 1,154.7 1,072.5 1,089.3 1,101.4 1,111.5 1,128.6 1,145.6 1,154.7 53 Corporate and foreign bonds 1,506.0 1,610.7 1,756.4 1,882.8 1,693.5 1,725.0 1,756.4 1,774.6 1,804.5 1,840.5 1,882.8 54 Mortgages 3,650.9 3,911.5 4,032.1 4,193.3 4,003.0 4,015.6 4,032.1 4,074.5 4,112.7 4,149.2 4,193.3 55 Consumer credit 791.8 809.3 796.7 799.2 786.7 785.9 796.7 775.7 775.8 781.1 799.2 56 Bank loans n.e.c 819.6 815.1 788.0 780.0 798.7 793.2 788.0 776.1 778.7 776.1 780.0 57 Open market paper 579.2 609.9 565.9 578.8 583.6 572.0 565.9 573.7 578.7 582.9 578.8 58 Other loans 827.5 839.9 773.2 780.3 801.4 784.2 773.2 767.1 771.1 774.8 780.3 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

A44 Domestic NonfinancialS tatistics • July 1993 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 1991 1992 Transaction category or sector 11998899 11999900 11999911 11999922 Q2 Q3 Q4 Q1 Q2 Q3 Q4 CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 12,674.9 13,563.6 14,159.6 14,985.9 13,815.9 13,978.7 14,159.6 14,311.9 14,526.8 14,746.2 14,985.9 2 Private domestic nonfinancial sectors 2,440.5 2,644.2 2,531.9 2,584.0 2,661.3 2,653.8 2,531.9 2,546.1 2,548.9 2,539.7 2,584.0 3 Households 1,710.1 1,882.3 1,734.7 1,791.9 1,889.5 1,881.0 1,734.7 1,766.5 1,756.8 1,759.2 1,791.9 4 Nonfarm noncorporate business 56.4 55.0 53.1 51.1 53.3 52.9 53.1 51.9 51.3 50.8 51.1 5 Nonfinancial corporate business 180.3 186.9 207.9 216.3 189.7 189.9 207.9 196.2 207.5 202.1 216.3 6 State and local governments 493.7 519.9 536.2 524.7 528.8 530.0 536.2 531.4 533.3 527.6 524.7 7 U.S. government 205.1 238.7 246.2 233.7 252.9 252.0 246.2 250.2 245.3 238.1 233.7 8 Foreign 734.2 792.4 835.1 932.8 807.9 817.2 835.1 857.2 891.8 907.9 932.8 9 Financial sectors 9,295.1 9,888.3 10,546.4 11,235.5 10,093.8 10,255.6 10,546.4 10,658.4 10,840.9 11,060.5 11,235.5 10 Sponsored credit agencies 367.2 383.6 397.7 460.5 382.0 389.3 397.7 419.9 429.0 446.3 460.5 11 Mortgage pools 871.0 1,019.9 1,166.7 1,293.5 1,095.2 1,131.5 1,166.7 1,193.2 1,235.6 1,262.5 1,293.5 12 Monetary authority 233.3 241.4 272.5 300.4 253.7 264.7 272.5 271.8 282.6 285.2 300.4 13 Commercial banking 2,643.9 2,769.3 2,853.3 2,944.0 2,796.6 2,817.8 2,853.3 2,860.6 2,882.9 2,922.9 2,944.0 14 U.S. commercial banks 2,368.4 2,463.6 2,502.5 2,571.7 2,480.0 2,488.7 2,502.5 2,514.0 2,521.9 2,556.7 2,571.7 15 Foreign banking offices 242.3 270.8 319.2 333.8 284.4 297.5 319.2 313.3 328.2 328.9 333.8 16 Bank affiliates 16.2 13.4 11.9 18.6 11.3 11.6 11.9 13.6 13.1 17.5 18.6 17 Banks in U.S. possession 17.1 21.6 19.7 20.0 20.9 20.0 19.7 19.7 19.7 19.8 20.0 18 Private nonbank finance 5,179.7 5,474.1 5,856.2 6,237.1 5,566.4 5,652.2 5,856.2 5,913.0 6,010.7 6,143.6 6,237.1 19 Thrift institutions 1,484.9 1,335.5 1,190.6 1,126.8 1,248.4 1,205.1 1,190.6 1,161.8 1,143.0 1,133.2 1,126.8 20 Savings and loan associations 1,088.9 945.1 804.2 727.2 866.3 826.1 804.2 771.1 748.8 737.9 727.2 21 Mutual savings banks 241.1 227.1 211.5 208.7 216.4 208.7 211.5 213.4 211.6 208.3 208.7 22 Credit unions 154.9 163.4 174.9 190.9 165.7 170.2 174.9 177.2 182.6 187.0 190.9 23 Insurance 2,140.3 2,329.1 2,674.9 2,859.8 2,443.9 2,507.4 2,674.9 2,708.0 2,756.2 2,812.2 2,859.8 24 Life insurance companies 1,013.1 1,116.5 1,199.6 1,294.5 1,183.7 1,201.4 1,199.6 1,224.3 1,247.1 1,270.3 1,294.5 25 Other insurance companies 317.5 344.0 378.7 396.0 361.4 370.7 378.7 387.0 392.5 393.1 396.0 26 Private pension funds 394.7 431.3 622.2 660.0 437.1 465.4 622.2 615.1 627.4 650.1 660.0 27 State and local government retirement funds. 414.9 437.4 474.3 509.3 461.7 470.1 474.3 481.6 489.1 498.7 509.3 28 Finance n.e.c 1,554.5 1,809.4 1,990.7 2,250.5 1,874.1 1,939.7 1,990.7 2,043.3 2,111.5 2,198.2 2,250.5 29 Finance companies 617.1 658.7 635.6 656.4 651.7 647.4 635.6 641.0 641.6 642.5 656.4 30 Mutual funds 307.2 360.2 450.5 574.0 394.4 421.4 450.5 470.0 513.3 548.7 574.0 31 Money market funds 291.8 372.7 402.7 405.2 389.9 389.5 402.7 423.1 413.5 408.8 405.2 32 Real estate investment trusts (REITs) 8.4 7.7 7.0 8.5 7.4 7.2 7.0 6.8 7.5 6.8 8.5 33 Brokers and dealers 142.9 177.9 226.9 300.9 180.4 214.3 226.9 228.8 251.2 297.3 300.9 34 Securitized credit obligation (SCOs) issuers . 187.1 232.3 268.0 305.4 250.3 259.9 268.0 273.6 284.4 294.2 305.4 RELATION OF LIABILITIES TO FINANCIAL ASSETS 35 Total credit market debt 12,674.9 13,563.6 14,159.6 14,985.9 13,815.9 13,978.7 14,159.6 14,311.9 14,526.8 14,746.2 14,985.9 Other liabilities 36 Official foreign exchange 53.6 61.3 55.4 51.8 53.6 52.9 55.4 52.7 54.4 55.4 51.8 37 Treasury currency and special drawing rights certificates 23.8 26.3 26.3 24.5 26.1 26.2 26.3 26.3 26.4 26.5 24.5 38 Life insurance reserves 354.3 380.0 402.0 434.0 392.3 397.2 402.0 409.6 416.8 424.9 434.0 39 Pension fund reserves 3,210.5 3,303.0 4,223.4 4,585.8 3,550.9 3,716.5 4,223.4 4,242.1 4,294.2 4,429.1 4,585.8 40 Interbank claims 32.4 64.0 65.2 111.4 35.9 60.9 65.2 67.4 70.7 101.8 111.4 41 Deposits at financial institutions 4,644.6 4,741.4 4,802.5 4,853.3 4,765.7 4,769.5 4,802.5 4,796.7 4,790.9 4,843.1 4,853.3 42 Checkable deposits and currency 888.6 932.8 1,008.5 1,130.3 933.1 948.3 1,008.5 984.3 1,032.3 1,071.6 1,130.3 43 Small time and savings deposits 2,265.4 2,325.3 2,342.0 2,279.3 2,351.5 2,339.7 2,342.0 2,340.9 2,314.7 2,294.3 2,279.3 44 Large time deposits 615.4 548.7 487.9 409.0 532.6 517.1 487.9 469.7 438.7 428.8 409.0 45 Money market fund shares 428.1 498.4 539.6 547.9 532.8 533.1 539.6 571.0 557.2 553.2 547.9 46 Security repurchase agreements 403.2 379.7 363.4 435.2 354.0 368.9 363.4 376.4 406.8 444.1 435.2 47 Foreign deposits 43.9 56.6 61.2 51.6 61.7 62.4 61.2 54.4 41.3 51.1 51.6 48 Mutual fund shares 566.2 602.1 813.9 1,056.5 683.7 744.2 813.9 857.7 935.5 977.4 1,056.5 49 Security credit 133.9 137.4 188.9 224.3 137.5 158.1 188.9 195.1 194.1 213.1 224.3 50 Trade debt 903.9 938.0 940.9 992.1 909.4 935.3 940.9 940.9 945.3 974.6 992.1 51 Taxes payable 81.8 81.4 72.3 77.1 65.8 71.9 72.3 74.2 69.8 74.8 77.1 52 Miscellaneous 2,508.3 2,678.8 2,811.7 2,921.0 2,699.2 2,733.4 2,811.7 2,828.8 2,875.3 2,915.2 2,921.0 53 Total liabilities 25,188.3 26,577.2 28,562.1 30,317.6 27,136.1 27,644.8 28,562.1 28,803.3 29,200.2 29,782.1 30,317.6 Financial assets not included in liabilities (+) 54 Gold and special drawing rights 21.0 22.0 22.3 19.6 21.4 21.8 22.3 22.0 22.1 23.2 19.6 55 Corporate equities 3,819.7 3,506.6 4,630.0 5,127.7 4,104.7 4,338.5 4,630.0 4,739.7 4,678.1 4,860.5 5,127.7 56 Household equity in noncorporate business 2,524.9 2,449.4 2,367.8 2,263.6 2,511.8 2,495.2 2,367.8 2,373.5 2,354.7 2,330.9 2,263.6 Floats not included in assets (-) 57 U.S. government checking deposits 6.1 15.0 3.8 6.8 8.3 19.8 3.8 .9 1.4 4.0 6.8 58 Other checkable deposits 26.5 28.9 30.9 32.5 29.9 23.6 30.9 29.5 32.6 23.3 32.5 59 Trade credit -159.7 -148.0 -134.0 -138.5 -157.7 -154.2 -134.0 -135.2 -154.7 -152.7 -138.5 Liabilities not identified as assets (-) 60 Treasury currency -4.3 -4.1 -4.8 -5.0 -4.7 -4.7 -4.8 -4.9 -4.9 -5.0 -5.0 61 Interbank claims -31.0 -32.0 -4.2 -10.7 -9.9 -4.7 -4.2 -1.8 -4.0 -5.9 -10.7 62 Security repurchase agreements 11.5 -23.3 -12.9 27.1 -25.8 -10.6 -12.9 -10.1 11.6 36.5 27.1 63 Taxes payable 20.6 21.8 18.9 28.9 11.8 17.6 18.9 11.5 18.0 24.4 28.9 64 Miscellaneous -251.1 -247.3 -452.3 -549.3 -242.3 -300.8 -452.3 -443.0 -455.7 -510.1 -549.3 65 Totals identified to sectors as assets 31,935.2 32,944.3 36,136.8 38,336.6 34,164.3 34,914.2 36,136.8 36,491.8 36,810.8 37,582.0 38,336.6 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

Selected Measures A45 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures Monthly data seasonally adjusted, 1987=100 except as noted 1992 1993 Measure 1990" 1992 Aug.1 Sept.' Oct.r Nov.' Dec. Feb. 1 Industrial production1 106.0 104.1 106.5 106.2 107.5 108.4 108.9 109.3 109.9 Market groupings 2 Products, total 105.5 103.1 105.6 105.9 105.3 107.1 107.8 108.2 108.5 109.1 3 Final, total 107.0 105.3 108.2 108.9 108.1 110.1 111.0 111.5 111.9 112.3 4 Consumer goods 103.4 102.8 105.2 105.1 104.4 106.4 107.1 107.5 107.6 108.2 5 Equipment 112.1 108.9 112.7 114.3 113.5 115.4 116.7 117.2 118.1 118.1 6 Intermediate 101.2 96.5 97.6 97.0 96.9 97.8 98.1 98.3 98.2 99.3 7 Materials 106.8 105.5 107.9 107.6 107.4 108.1 109.3 110.0 110.4 111.0 Industry groupings 8 Manufacturing 106.1 106.9 107.0 106.8 108.0 108.9 109.2 109.9 110.5 9 Capacity utilization, manufacturing 81.1 77.8 78.8 78.7 78.4 79.2 79.7 79.8 80.3 (percent) 95.3 89.7 93.6 90.0 89.0 104.0 92.0 90.0 100.0 95.0 10 Construction contracts3 107.4 106.0 106.1 106.2 106.2 106.2 106.3 106.4 106.5 106.9 11 Nonagricultural employment, total4 101.0 96.4 94.8 94.6 94.3 94.2 94.2 94.2 94.2 94.6 12 Goods-producing, total 100.5 97.0 95.6 95.4 95.2 94.9 95.0 94.9 95.1 95.2 13 Manufacturing, total 100.1 96.1 95.2 94.9 94.6 94.3 94.6 94.7 95.2 95.2 14 Manufacturing, production worker 109.5 109.0 109.7 109.9 110.0 110.1 110.2 110.3 110.5 110.8 15 Service-producing 122.7 127.0 133.0 133.0 133.6 135.3 135.3 136.6 137.4 137.5 16 Personal income, total 121.3 124.4 129.0 129.6 129.5 130.5 131.2 132.3 133.1 132.9 17 Wages and salary disbursements 113.5 113.6 115.4 115.3 115.3 116.5 116.0 118.0 117.2 117.8 18 Manufacturing 122.9 128.0 134.7 134.6 135.2 137.0 136.8 138.2 138.8 139.0 19 Disposable personal income3 120.2 121.3 127.2 127.3 128.1 130.7 130.5 131.9 132.0 131.9 20 Retail sales6 Prices7 21 Consumer (1982-84= 100) 130.7 136.2 140.3 140.9 141.3 141.8 142.0 141.9 142.6 143.1 22 Producer finished goods (1982=100) 119.2 121.7 123.2 123.6 123.3 124.4 124.0 123.8 124.0 124.3 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. 2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data seasonally adjusted except as noted 1992 1993 CCaatteeggoorryy 11999900 11999911 11999922 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 189,686 191,329 193,142 193,513 193,683 193,847 194,026 194,159 194,298 194,456 194,618 126,424 126,867 128,548 128,840 128,618 128,896 129,108 128,598 128,839 128,926 128,833 3 Civilian labor force 124,787 125,303 126,982 127,274 127,066 127,365 127,591 127,083 127,327 127,429 127,341 Employment 4 Nonagricultural industries2 114,728 114,644 114,391 114,503 114,518 114,855 115,049 114,879 115,335 115,483 115,356 5 Agriculture 3,186 3,233 3,207 3,221 3,169 3,209 3,262 3,191 3,116 3,082 3,060 Unemployment 6 Number 6,874 8,426 9,384 9,550 9,379 9,301 9,280 99,,001133 88,,887766 88,,886644 88,,992255 7 Rate (percent of civilian labor force) — 5.5 6.7 7.4 7.5 7.4 7.3 7.3 7.1 7.0 7.0 7.0 8 Not in labor force 63,262 64,462 64,594 64,673 65,065 64,951 64,918 65,561 65,459 65,530 65,785 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 109,782 108,310 108,434 108,497 108,571 108,646 108,752 108,865 109,203 109,194 109,313 19,117 18,455 18,192 18,102 18,046 18,068 18,062 18,092 18,112 18,088 18,023 710 691 635 620 623 622 619 616 605 607 603 12 Contract construction 5,133 4,685 4,594 4,574 4,601 4,590 4,582 4,559 4,657 4,598 4,588 13 Transportation and public utilities 5,808 5,772 5,741 5,738 5,731 5,732 5,742 5,763 5,771 5,770 5,768 14 Trade 25,877 25,328 25,120 25,079 25,115 25,092 25,132 25,222 25,363 25,351 25,371 6,729 6,678 6,672 6,669 6,680 6,669 6,677 6,682 6,681 6,680 6,697 28,130 28,323 28,903 29,065 29,152 29,188 29,253 29,267 29,322 29,400 29,551 17 Government 18,304 18,380 18,578 18,650 18,623 18,685 18,685 18,664 18,692 18,700 18,712 1. Persons sixteen years of age and older, including Resident Armed Forces. pay for, the pay period that includes the twelfth day of the month; excludes Monthly figures are based on sample data collected during the calendar week that proprietors, self-employed persons, household and unpaid family workers, and contains the twelfth day; annual data are averages of monthly figures. By members of the armed forces. Data are adjusted to the March 1984 benchmark, definition, seasonality does not exist in 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 • July 1993 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1992 1993 1992 1993 1992 1993 c Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Ql Output (1987=100) Capacity (percent of 1987 output) Capacity utilization rate (percent) 1 Total industry 106.3 106.5 108.3 109.7 133.2 133.7 134.2 134.8 79.8 79.7 80.7 81.4 2 Manufacturing 106.7 107.0 108.7 110.4 135.4 136.0 136.6 137.2 78.8 78.7 79.6 80.4 3 Primary processing 103.9 103.7 104.7 106.5 126.1 126.4 126.6 126.8 82.4 82.1 82.7 83.9 4 Advanced processing 108.0 108.5 110.6 112.2 139.8 140.6 141.3 142.1 77.3 77.2 78.3 79.0 5 Durable goods 107.8 108.3 110.8 113.6 141.2 141.9 142.6 143.4 76.3 76.3 77.7 79.2 6 Lumber and products 95.1 96.0 98.5 100.2 112.3 112.4 112.5 112.6 84.7 85.4 87.6 89.0 7 Primary metals 101.3 99.7 101.5 105.1 125.6 125.3 125.0 124.9 80.7 79.6 81.2 84.2 8 Iron and steel 104.7 103.5 105.0 109.6 130.8 130.4 129.9 129.8 80.1 79.4 80.8 84.5 9 Nonferrous 96.7 94.5 96.7 99.0 118.5 118.3 118.2 118.1 81.6 79.8 81.8 83.8 10 Nonelectrical machinery 122.6 126.8 132.4 137.2 159.0 160.6 162.1 163.7 77.1 79.0 81.7 83.8 11 Electrical machinery 119.0 120.9 124.0 126.9 149.9 151.3 152.6 154.1 79.4 80.0 81.2 82.3 12 Motor vehicles and parts 105.7 103.6 111.4 120.8 151.2 152.9 154.5 155.8 69.9 67.7 72.1 77.5 13 Aerospace and miscellaneous transportation equipment 101.3 99.5 97.7 95.7 135.7 135.7 135.8 135.7 74.7 73.3 72.0 70.5 14 Nondurable goods 105.4 105.4 106.1 106.4 128.3 128.7 129.1 129.6 82.2 81.9 82.1 82.1 15 Textile mill products 104.6 105.2 105.2 106.4 116.4 116.6 116.7 116.9 89.8 90.3 90.1 91.0 16 Paper and products 108.7 108.6 107.9 109.7 121.3 121.7 122.1 122.5 89.6 89.2 88.4 89.6 17 Chemicals and products 114.8 114.7 116.9 116.5 141.7 142.6 143.5 144.4 81.0 80.4 81.4 80.7 18 Plastics materials 109.8 110.5 106.6 127.8 128.3 128.8 85.9 86.2 82.8 19 Petroleum products 102.7 100.2 104.2 103.9 116.9 116.6 116.2 115.9 87.8 85.9 89.7 89.7 20 Mining 97.8 97.5 97.9 96.4 112.6 112.3 112.0 111.7 86.9 86.9 87.4 86.3 21 Utilities 111.1 110.9 114.7 115.8 130.9 131.4 131.8 132.2 84.8 84.5 87.1 87.6 22 Electric 110.7 110.6 114.3 115.8 127.4 127.9 128.5 129.0 86.9 86.4 89.0 89.8 Previous cycle2 Latest cycle3 1992 1992 1993 High Low High Low Apr. Sept. Oct. Nov. Dec. Jan.r Feb.r Mar/ Apr." Capacity utilization rate (percent) 1 Total industry 89.2 72.6 87.3 71.8 79.9 79.3 80.2 80.8 81.0 81.2 81.5 81.4 81.4 2 Manufacturing 88.9 70.8 87.3 70.0 78.8 78.4 79.2 79.7 79.8 80.3 80.5 80.5 80.7 3 Primary processing 92.2 68.9 89.7 66.8 82.3 81.7 82.3 83.0 82.9 83.5 84.4 83.9 84.1 4 Advanced processing 87.5 72.0 86.3 71.4 77.3 77.0 77.9 78.4 78.6 78.9 78.9 79.1 79.2 5 Durable goods 88.8 68.5 86.9 65.0 76.1 76.1 77.1 77.8 78.2 78.9 79.4 79.4 79.5 6 Lumber and products 90.1 62.2 87.6 60.9 84.9 84.3 87.0 88.7 87.1 88.2 90.0 88.7 87.5 7 Primary metals 100.6 66.2 102.4 46.8 81.0 78.2 80.4 81.2 82.0 82.3 86.4 83.9 84.1 8 Iron and steel 105.8 66.6 110.4 38.3 80.6 78.3 80.0 79.7 82.7 82.4 86.9 84.0 84.3 9 Nonferrous 92.9 61.3 90.5 62.2 81.5 78.1 80.8 83.5 80.9 82.2 85.7 83.7 83.9 10 Nonelectrical machinery 96.4 74.5 92.1 64.9 76.2 79.4 80.8 82.0 82.3 82.8 83.7 85.0 86.1 11 Electrical machinery 87.8 63.8 89.4 71.1 79.1 80.1 80.6 81.5 81.6 82.0 82.4 82.6 82.4 12 Motor vehicles and parts 93.4 51.1 93.0 44.5 69.4 66.8 70.1 71.1 74.9 77.7 77.9 76.9 76.8 13 Aerospace and miscellaneous transportation equipment. 77.0 66.6 81.1 66.9 75.1 72.7 72.4 72.0 71.5 71.2 70.6 69.8 68.9 14 Nondurable goods 87.9 71.8 87.0 76.9 82.4 81.7 82.0 82.4 82.0 82.2 82.1 82.0 82.2 15 Textile mill products 92.0 60.4 91.7 73.8 90.2 90.1 88.7 90.8 90.8 91.5 91.1 90.4 91.4 16 Paper and products 96.9 69.0 94.2 82.0 90.1 89.9 88.0 88.6 88.6 88.8 90.1 89.8 90.5 17 Chemicals and products 87.9 69.9 85.1 70.1 81.0 80.6 81.1 82.1 81.2 81.1 80.2 80.7 80.9 18 Plastics materials 102.0 50.6 90.9 63.4 85.2 85.4 84.1 83.6 80.5 86.0 85.3 19 Petroleum products 96.7 81.1 89.5 68.2 88.6 86.8 90.5 89.4 89.1 89.0 90.3 89.7 89.6 20 Mining 94.4 88.4 96.6 80.6 86.5 86.5 87.1 87.4 87.8 87.9 85.5 85.4 86.1 21 Utilities 95.6 82.5 88.3 76.2 85.7 84.5 85.6 87.1 88.5 85.4 88.8 88.6 85.4 22 Electric 99.0 82.7 88.3 78.7 87.9 86.6 87.7 88.8 90.4 87.7 90.8 90.9 87.5 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. See also "Industrial Production Capacity and Capacity Utilization since 1987," Federal Reserve Bulletin, vol. 79, (June 1993), pp. 590-605. 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 1992 1993 pro- 1992 Group por- avg. tion Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan.r Feb.r Mar.r Apr.p Index (1987 = 100) MAJOR MARKETS 1 Total index 100.0 106.5 106.3 106.7 106.0 106.8 106.6 106.2 107.5 108.4 108.9 109.3 109.9 109.9 110.0 2 Products 60.8 105.6 105.3 105.7 104.8 105.7 105.9 105.3 107.1 107.8 108.2 108.5 109.1 109.1 109.1 1 1 1 1 1 1 1 1 1 6 7 9 4 5 8 3 1 2 0 3 4 5 6 7 8 Fin C a o l D N n p u s o A F O C C r u r n o o a h u l m t d A A A C M o d h b o e t u t o e u e l m d a u u p h T e A i r r r m c r s s t t p a i i p o o r t n c g u c c b l s o u a e s i e g o o a t l a p n t c t o l e l i n o i a n l d a k v n s a s d n p c r c s , e g n u t d s t e r , o s c o e m , o s p n a c o o t b , d a t r n s r o e u n o a o u n u u A d r n s s c t d d c c m a s u / c g u t f k C h l u m s o u o e a c s o m , l r r o t e m l n s i a d e r g e i n e s r o t d d u o g r g d o e T s o o V o ds d . s .. . . . . . 4 2 2 2 5 3 9 2 6 3 0 6 1 1 1 . . . . . . . . . . . . . . . . 5 6 1 1 6 4 0 5 5 0 9 6 8 9 0 4 1 1 1 1 1 1 1 1 1 1 1 9 9 9 7 9 0 0 0 1 0 2 0 0 0 1 0 9 6 9 9 5 2 5 3 0 5 7 4 8 5 8 5 . . . . . . . . . . . . . . . . 4 9 0 9 0 2 7 5 4 2 9 7 2 9 7 6 1 1 1 1 1 1 1 1 1 1 1 1 9 9 7 9 0 1 0 2 0 0 0 0 0 0 0 1 7 9 9 5 5 1 1 9 2 5 7 5 4 1 6 8 . . . . . . . . . . . . . . . . 4 2 0 0 8 4 5 1 6 4 7 8 8 0 1 9 1 1 1 1 1 1 1 1 1 1 1 1 1 1 9 8 0 0 0 3 0 0 1 0 0 0 0 0 0 1 5 5 2 4 5 1 2 7 6 4 5 5 2 6 8 8 . . . . . . . . . . . . . . . . 7 3 1 4 6 2 9 9 7 8 8 9 7 3 3 1 1 1 1 1 1 1 1 1 1 1 1 9 9 9 8 9 0 0 1 0 0 0 0 0 0 0 1 6 9 3 8 4 2 4 9 3 3 4 4 9 6 7 7 . . . . . . . . . . . . . . . . 5 0 5 0 5 0 6 2 2 3 0 6 6 0 1 6 1 1 1 1 1 1 1 1 1 1 1 1 9 9 9 8 0 0 1 0 0 0 0 0 0 0 0 1 8 5 1 5 9 6 9 2 7 4 1 5 5 4 8 7 . . . . . . . . . . . . . . . . 8 3 2 1 7 3 8 8 4 6 7 0 5 9 1 3 1 1 1 1 1 1 1 1 1 1 1 9 9 9 9 7 0 0 1 0 2 0 0 0 0 0 1 6 9 7 7 4 4 1 1 5 8 6 7 4 5 8 6 . . . . . . . . . . . . . . . . 0 5 7 0 0 0 9 0 3 8 0 0 1 1 9 5 1 1 1 1 1 1 1 1 1 1 1 9 9 9 7 9 2 0 1 0 0 0 0 1 0 0 0 7 3 7 4 8 0 4 2 3 0 5 4 8 8 2 4 . . . . . . . . . . . . . . . . 3 5 9 2 3 4 1 9 7 9 3 4 5 1 9 9 1 1 1 1 1 1 1 1 1 1 1 1 1 7 9 9 0 0 0 0 0 4 1 0 0 0 0 2 1 8 4 8 1 4 3 5 4 1 0 5 5 6 7 1 0 . . . . . . . . . . . . . . . . 5 5 5 5 1 1 9 9 3 8 9 8 4 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 7 9 0 0 0 0 0 0 0 0 0 4 1 0 2 1 9 5 2 4 6 7 7 7 5 5 3 3 0 7 3 1 . . . . . . . . . . . . . . . . 6 9 9 1 0 5 1 1 2 7 7 3 8 1 3 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 9 8 1 0 0 0 1 0 0 0 5 0 0 2 0 1 6 6 1 7 8 7 0 3 4 5 4 6 7 1 7 1 . . . . . . . . . . . . . . . . 0 9 7 2 7 4 5 8 8 4 6 6 9 7 5 5 1 1 1 1 1 1 1 1 1 1 1 1 1 1 9 8 1 0 0 1 0 1 6 1 2 0 0 0 0 1 5 6 2 6 9 6 5 6 9 0 2 8 5 4 7 1 . . . . . . . . . . . . . . . . 7 6 7 7 3 8 8 0 1 9 4 0 5 6 6 9 1 1 1 1 1 1 1 1 1 1 1 1 1 1 9 9 1 1 0 1 1 0 0 0 5 1 0 2 0 1 1 5 5 2 4 1 7 7 9 7 6 0 7 0 8 2 . . . . . . . . . . . . . . . . 9 4 7 6 9 7 4 4 5 9 9 6 3 2 4 3 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 9 9 1 2 1 5 0 1 0 0 11 0 00 0 2 1 0 5 1 0 3 3 7 0 4 7 11 8 88 5 2 2 . . . . . . . . . . .. . .. . . . 6 2 4 4 5 1 9 7 3 3 00 8 11 2 7 3 1 1 1 1 1 1 1 1 1 1 1 1 1 1 8 9 1 1 1 0 1 5 0 2 0 0 0 1 2 0 4 8 2 1 1 4 1 5 7 0 7 9 7 2 3 7 . . . . . . . . . . . . . . . . 9 0 8 2 4 4 0 9 9 2 2 1 0 5 2 9 2 1 0 9 P E a n p e e rg r y p roducts 2 2 . . 5 7 1 10 0 8 0 . . 3 8 1 1 0 0 1 9 . . 2 0 1 10 0 7 1 . . 8 0 1 10 0 5 0 . . 2 6 1 10 0 6 0 . . 3 1 1 1 0 0 5 0 . . 6 2 1 1 0 0 0 4 . . 4 6 1 1 0 1 0 1 . . 1 1 1 11 0 2 0 . . 0 9 1 1 1 0 4 0 . . 4 9 1 1 0 0 0 9 . . 2 5 1 1 0 1 1 4 . . 8 0 1 1 0 1 1 3 . . 8 6 1 1 0 1 2 0 . . 2 2 2 2 1 2 F R u e e si l d s ential utilities 2. . 0 7 1 1 0 0 4 9 . . 7 6 1 1 1 0 0 5. . 2 5 1 1 0 0 4 8 . . 8 9 1 1 0 0 3 5 . . 8 8 1 1 0 0 4 7 . . 1 2 1 9 0 8 8 . . 9 2 1 1 0 0 3 5 . . 5 1 1 1 0 1 9 1 . . 8 6 1 1 0 1 7 3 . . 7 6 1 1 0 1 6 7 . . 1 5 1 11 0 0 6 . . 7 5 1 1 1 0 5 8 . . 9 9 1 10 1 7 6 . . 4 0 1 1 0 1 6 1 . . 0 8 2 2 2 3 4 5 Eq B u u i I p s n m i f n o e e r n s m s t a e ti q o u n i p p m ro e c n e t s sing and related . 2 1 5 0 3 . . . 6 0 9 1 1 1 3 2 1 4 3 2 . . . 7 2 7 1 1 1 2 1 2 0 1 9 . . . 6 1 6 1 1 1 3 1 2 1 2 2 . . . 4 0 1 1 1 1 3 2 1 4 1 1 . . . 3 9 6 1 1 12 3 1 3 7 2 . . . 7 4 7 1 1 1 3 2 1 8 6 4 . . . 5 1 3 1 1 1 3 2 1 8 5 3 . . . 2 0 5 1 1 1 1 2 4 5 7 2 . . . 4 5 2 1 1 12 4 1 9 2 6 . . . 0 9 7 1 1 1 4 1 2 3 7 9 . . . 2 2 6 1 1 1 4 1 3 4 8 1 . . . 4 1 2 1 1 13 4 1 1 6 8 . . . 8 1 1 1 1 1 4 3 1 9 2 8 . . . 2 9 4 1 1 1 5 3 1 1 4 9 . . . 9 0 1 2 2 6 7 Ind O u f s f t i r c i e a l a nd computing 4 1 . . 0 9 1 1 0 7 8 6 . . 5 8 1 1 6 0 8 6 . . 2 8 1 1 7 0 0 8 . . 5 4 1 1 0 7 8 4 . . 7 0 1 17 0 8 9 . . 0 1 1 1 0 8 9 2 . . 2 0 1 18 0 4 9 . . 0 6 1 1 1 8 0 7 . . 1 0 1 1 1 8 2 9 . . 0 0 1 1 1 9 2 8 . . 3 5 2 1 0 1 5 3 . . 0 1 2 1 1 1 4 2 . . 1 5 11RR66 llii22::66 2 2 8 9 Tra A n u s t i o t s and trucks 2 1 . . 5 2 1 13 1 7 7 . . 1 9 1 1 1 3 9 7 . . 5 5 1 13 2 6 3 . . 9 3 1 1 1 3 7 3 . . 2 9 1 1 1 3 4 5 . . 2 3 1 1 1 4 7 3 . . 3 3 1 1 1 3 4 4 . . 7 5 1 1 2 3 1 7 . . 7 4 1 14 2 0 3 . . 4 9 1 1 3 4 1 4 . . 4 1 1 1 3 4 6 6 . . 7 7 1 1 3 4 8 7 . . 1 1 1 1 3 4 5 5 . . 9 0 1 14 3 3 4 . . 5 6 30 Other 1.9 104.7 104.2 106.5 99.2 100.2 105.6 107.3 108.8 110.7 109.2 112.6 113.0 113.8 114.6 3 3 3 3 1 2 O D M i e a l f n e a u n n f d s a e c g t a a u n s r d e w d s e p h l a l o c d m e r i e e l s l q i n u g ip ment 5. . . 4 2 6 9 8 7 9 8 5 . . . 7 3 9 9 8 7 7 3 5 . . . 7 0 5 9 8 75 2 7 . . . 4 5 2 8 9 7 6 0 3 . . . 5 1 1 1 8 7 0 3 5 1 . . . 8 1 3 9 8 7 4 5 6 . . . 5 6 9 1 8 7 0 4 6 0 . . . 4 3 9 1 8 8 1 3 2 0 . . . 5 7 4 1 8 8 1 3 6 8 . . . 2 4 5 1 8 9 2 2 1 8 . . . 5 2 6 1 8 8 2 2 9 9 . . . 0 0 4 1 8 7 2 1 7 7 . . . 4 9 1 1 8 7 1 1 0 6 . . . 1 9 2 1 8 7 1 0 2 6 . . . 5 4 7 34 Intermediate products, total 14.7 97.6 97.9 97.9 97.7 98.6 97.0 96.9 97.8 98.1 98.3 98.2 99.3 99.4 98.6 35 Construction supplies 6.0 93.8 93.6 95.3 93.6 94.3 94.1 93.0 94.7 95.1 94.5 94.8 97.3 97.2 96.3 36 Business supplies 8.7 100.1 100.7 99.6 100.6 101.4 99.0 99.5 99.9 100.0 100.8 100.5 100.6 100.8 100.2 37 Materials 39.2 107.9 107.9 108.0 107.8 108.5 107.6 107.4 108.1 109.3 110.0 110.4 111.0 111.0 111.4 3 4 3 8 0 9 Du D E ra q u b u r l a i e p b m l g e o e c o n o d t n s p s a m u r m t a s t e e r r i p al a s r ts 1 4 7 9 . . . 2 3 4 1 1 1 0 0 1 8 1 6 . . . 9 5 5 1 1 10 1 0 8 5 2 . . . 8 2 0 1 1 1 0 1 0 9 6 1 . . . 0 1 5 1 1 1 0 0 1 8 1 6 . . . 7 5 6 1 1 1 0 1 0 9 7 0 . . . 3 7 6 1 1 10 0 1 1 8 7 . . . 4 9 1 1 1 9 0 1 8 7 6 . . . 5 6 2 1 1 1 0 1 0 9 8 1 . . . 7 3 8 1 1 1 1 0 1 1 4 9 . . . 1 3 3 1 1 1 1 1 0 1 9 7 . . . 9 7 5 1 1 1 1 1 2 3 0 0 . . . 3 4 8 1 1 1 1 1 2 4 1 0 . . . 4 8 9 1 1 1 1 1 2 4 1 1 . . . 3 2 9 1 1 1 1 1 2 5 2 2 . . . 0 4 3 4 4 4 4 4 4 4 4 4 5 1 2 3 6 8 4 5 7 9 0 E N n o O C T O P C P e n r u e r h o t t d i B g h h x l e m n u p y e e t m a v r i r a r s l a a e m i r e i n b c r c y t a a d l m e e m l t e d e p a n m g e r t a e f i o t e a a p u r a r o g l t l e e i s e d a y r l m r s l i m s m a a m l a t a s e t a t e r e t i r e r a i i r a l a i s l a l s s l s 1 9 7 2 3 3 2 7 0 1 1 . . . . . . . . . . 0 8 8 1 2 9 7 9 2 9 1 1 1 1 1 1 1 1 1 9 1 0 1 1 0 0 1 0 0 9 0 3 4 0 8 6 0 9 2 . . . . . . . . . . 7 2 4 4 9 3 0 6 9 8 1 1 1 1 1 1 1 1 1 9 1 0 0 1 1 0 1 0 1 9 0 3 9 1 4 6 2 2 1 . . . . . . . . . . 2 4 5 2 2 3 5 1 9 0 1 1 1 1 1 1 1 1 1 9 0 0 0 1 1 1 1 0 0 9 9 3 6 1 5 0 0 2 9 . . . . . . . . . . 5 2 3 5 5 5 6 9 4 6 1 1 1 1 1 1 1 1 1 9 0 1 0 1 0 1 0 1 0 9 3 1 7 4 5 1 9 0 1 . . . . . . . . . . 6 1 6 8 8 4 5 9 8 8 1 1 1 1 1 1 1 1 1 1 0 1 1 1 0 0 0 1 0 1 4 0 1 4 8 6 0 2 7 0 . . . . . . . . . . 4 0 5 1 7 4 3 3 7 3 1 1 1 1 1 1 1 1 1 9 1 0 0 1 0 0 1 0 0 9 0 2 7 0 8 5 4 8 1 . . . . . . . . . . 4 5 5 7 7 7 7 5 5 6 1 1 1 1 1 1 1 1 1 9 1 0 1 0 1 0 1 0 1 9 0 3 1 5 1 3 4 4 2 . . . . . . . . . . 6 5 6 7 4 8 3 5 6 3 1 1 1 1 1 1 1 1 1 9 0 1 0 0 1 0 1 0 0 9 9 4 3 6 0 8 0 9 2 . . . . . . . . . . 4 7 4 0 2 7 3 0 1 7 1 1 1 1 1 1 1 1 1 1 0 1 1 1 0 0 1 0 0 1 7 2 2 5 3 9 0 0 3 1 . . . . . . . . . . 4 0 0 6 9 8 2 2 4 1 1 1 1 1 1 1 1 1 1 1 0 1 0 1 0 1 1 1 0 0 5 1 8 2 7 1 4 0 1 2 . . . . . . . . . . 1 3 8 4 5 5 6 7 3 9 1 1 1 1 1 1 1 1 1 1 0 1 1 1 0 0 0 0 1 1 3 4 2 0 0 8 9 4 4 0 . . . . . . . . . . 4 1 4 4 4 6 1 2 9 7 1 1 1 1 1 1 1 1 1 9 0 1 1 1 1 1 1 0 1 8 3 2 4 5 3 2 0 3 1 . . . . . . . . . . 0 9 8 6 4 1 1 2 0 9 1 1 1 1 1 1 1 11 1 99 0 1 1 1 0 1 11 0 1 88 3 5 3 2 9 0 55 3 1 .. . . . . . . .. . . 11 8 4 0 4 7 7 11 8 1 1 1 1 1 1 1 1 1 1 9 1 1 1 1 0 0 1 1 1 8 2 3 6 1 2 4 0 3 1 . . . . . . . . . . 4 7 5 6 9 9 8 1 2 7 SPECIAL AGGREGATES 5 5 1 2 T T o o t t a a l l e e x x c c l l u u d d i i n n g g m a o u t t o o r s v a e n h d ic t l r e u s c a k n s d parts.. 9 9 5 7 . . 3 3 1 1 0 0 6 6 . . 6 6 1 1 0 0 6 6 . . 4 3 1 1 0 0 6 6 . . 6 6 1 1 0 0 6 6 . . 1 1 1 1 0 0 7 7 . . 0 0 1 1 0 0 6 6 . . 7 7 1 1 0 0 6 6 . . 4 3 1 10 0 7 7 . . 4 5 1 1 0 0 8 8 . . 4 4 1 1 0 0 8 8 . . 6 6 1 1 0 0 8 8 . . 7 9 1 1 0 0 9 9 . . 3 5 1 1 0 0 9 9 . . 4 6 1 1 0 0 9 9 . . 7 5 53 Total excluding office and computing machines 97.5 105.0 105.1 105.3 104.6 105.3 105.0 104.5 105.7 106.6 107.1 107.3 107.8 107.6 107.5 54 Consumer goods excluding autos and trucks 24.5 105.7 105.9 106.1 104.6 105.5 105.7 105.1 106.8 107.4 107.3 107.0 107.7 107.8 107.6 55 Consumer goods excluding energy 23.3 104.8 104.9 105.6 103.9 104.7 105.0 104.3 105.9 106.6 106.8 107.4 107.6 107.5 107.6 56 Business equipment excluding autos and trucks 12.7 123.7 120.7 122.0 122.3 124.5 126.9 125.9 128.0 129.5 129.5 130.7 131.3 132.7 133.9 57 Business equipment excluding office and computing equipment 12.0 115.7 114.2 115.3 114.3 115.6 118.1 116.1 118.1 119.7 120.1 121.0 120.7 120.7 120.7 58 Materials excluding energy 28.4 109.5 109.5 109.8 109.5 110.0 109.4 108.8 110.0 111.4 111.8 113.0 113.7 113.7 114.5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • July 1993 2.13—Continued 1987 1992 1993 SIC pro- 1992 GGrroouupp code por- avg. tion Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan.r Feb.r Mar.r Apr." Index (1987 = 100) MAJOR INDUSTRIES 1 Total index 100.0 106.5 106.3 106.7 106.0 106.8 106.6 106.2 107.5 108.4 108.9 109.3 109.9 109.9 110.0 2 Manufacturing 84.3 106.9 106.5 107.1 106.5 107.1 107.0 106.8 108.0 108.9 109.2 109.9 110.5 110.6 111.0 3 Primary processing 27.1 103.8 103.8 104.2 103.7 104.3 103.5 103.3 104.1 105.1 105.0 105.8 107.1 106.5 106.9 4 Advanced processing 57.1 108.3 107.8 108.4 107.9 108.4 108.7 108.4 109.9 110.7 111.3 111.9 112.2 112.6 113.0 5 Durable goods 46.5 108.1 107.2 108.4 107.6 108.2 108.5 108.1 109.8 110.9 111.8 112.9 113.9 114.0 114.4 6 Lumber and products ... "'24 2.1 96.4 95.3 96.1 93.8 96.6 96.6 94.7 97.8 99.8 98.0 99.3 101.3 99.9 98.6 7 Furniture and fixtures ... 25 1.5 99.0 99.4 101.0 94.2 97.5 99.2 100.5 100.4 102.3 103.9 105.2 105.2 107.0 107.3 8 Clay, glass, and stone products 32 2.4 96.0 94.5 97.4 95.6 96.8 95.7 96.5 96.8 97.6 98.0 97.0 99.1 98.0 98.3 9 Primary metals 33 3.3 101.1 101.8 101.1 101.2 100.6 100.5 98.0 100.5 101.6 102.4 102.8 107.9 104.8 105.1 10 Iron and steel 333311,,22 1.9 104.7 105.6 104.8 103.8 104.7 103.8 102.0 104.1 103.6 107.4 107.0 112.8 109.1 109.5 11 Raw steel .1 101.2 103.5 101.9 101.6 101.7 99.1 98.9 99.8 102.8 104.6 103.4 105.9 102.0 103.2 12 Nonferrous 333-6,9 1.4 96.1 96.6 95.9 97.5 95.0 96.1 92.4 95.6 98.7 95.7 97.1 101.1 98.8 99.0 13 Fabricated metal products 34 5.4 96.7 96.8 97.2 97.1 97.0 97.0 96.5 97.5 97.6 97.8 99.8 99.8 100.1 100.4 14 Industrial and commercial machinery and computer equipment. 35 8.5 124.8 120.9 123.2 123.8 125.7 126.9 127.9 130.6 132.8 133.8 135.0 137.1 139.6 142.0 15 Office and computing machines 357 2.3 168.3 158.5 162.1 167.3 171.8 173.7 178.3 183.1 184.5 186.4 192.0 198.0 205.7 212.8 16 Electrical machinery 36 6.9 119.8 118.2 119.5 119.3 120.7 120.6 121.5 122.6 124.4 124.8 125.8 127.0 127.8 127.9 17 Transportation equipment 37 9.9 102.6 103.2 104.5 102.7 101.4 102.4 100.5 103.0 103.6 106.3 108.4 108.1 107.0 106.4 18 Motor vehicles and parts 371 4.8 104.8 104.5 107.9 104.8 103.1 105.0 102.6 108.0 109.9 116.2 120.9 121.3 120.0 120.2 19 Autos and light trucks 2.2 101.4 102.4 107.9 102.7 100.8 99.7 97.9 104.1 105.4 114.4 118.2 119.2 117.0 115.6 20 Aerospace and miscellaneous transportation equipment.. 372-6,9 5.1 100.6 102.0 101.3 100.8 99.8 100.0 98.6 98.3 97.7 97.1 96.7 95.7 94.7 93.4 21 Instruments 38 5.1 104.2 104.9 105.1 104.4 104.9 104.3 103.7 103.7 103.6 103.3 103.0 102.1 102.9 103.3 22 Miscellaneous 39 1.3 109.7 108.5 110.2 109.7 111.6 109.1 108.7 110.5 111.4 111.8 110.9 111.9 112.1 112.9 23 Nondurable goods 37.8 105.4 105.5 105.4 105.2 105.7 105.2 105.2 105.8 106.4 106.0 106.4 106.4 106.4 106.8 24 Foods "20 8.8 106.0 106.0 106.1 105.4 105.9 106.3 105.6 106.8 106.4 106.2 105.9 106.3 106.1 106.2 25 Tobacco products 21 1.0 99.2 97.3 97.9 96.4 101.5 115.5 101.7 102.4 101.9 96.1 100.5 99.5 97.5 98.6 26 Textile mill products 22 1.8 104.7 105.0 105.0 103.8 107.0 103.5 105.1 103.5 106.0 106.0 106.9 106.6 105.7 107.0 27 Apparel products 23 2.3 92.3 93.4 93.5 91.7 92.7 91.3 91.5 91.7 92.9 92.7 93.1 92.9 92.5 92.1 28 Paper and products 26 3.6 108.2 109.2 108.2 108.7 109.1 107.1 109.5 107.3 108.2 108.3 108.6 110.4 110.1 111.1 29 Printing and publishing .. 27 6.5 95.0 95.8 94.5 95.6 95.7 93.5 94.1 94.5 94.2 94.7 94.7 94.3 94.4 94.8 30 Chemicals and products . 28 8.8 115.0 114.6 114.8 114.9 114.6 114.4 115.2 116.2 117.7 116.7 116.8 115.8 116.9 117.4 31 Petroleum products 29 1.3 102.0 103.7 102.5 101.8 101.5 98.0 101.1 105.3 103.9 103.4 103.2 104.7 103.9 103.7 32 Rubber and plastic products 30 3.2 109.7 109.1 110.3 109.7 110.7 110.7 108.5 109.9 111.3 111.3 113.6 114.0 114.3 114.3 33 Leather and products ... 31 .3 92.6 91.1 91.8 92.3 93.6 92.0 93.8 95.1 96.6 96.7 97.1 97.3 97.8 97.7 34 Mining 8.0 97.6 97.4 98.8 97.1 98.5 97.0 97.1 97.6 97.8 98.2 98.3 95.6 95.4 96.1 35 Metal "lO .3 161.7 156.0 172.2 157.8 156.5 165.5 159.8 168.1 171.6 158.1 167.7 163.0 163.5 161.9 36 Coal 12 1.2 105.5 106.5 109.5 101.9 108.0 103.9 103.6 103.8 103.5 107.9 108.2 101.7 102.3 108.0 37 Oil and gas extraction 13 5.8 92.6 92.4 92.5 93.1 93.6 91.9 92.7 92.7 92.8 93.4 92.7 90.4 90.0 89.9 38 Stone and earth minerals .. 14 .7 93.8 94.8 96.9 92.7 94.1 93.8 91.9 93.6 94.4 92.6 93.8 95.1 95.3 95.2 39 Utilities 7.7 112.0 112.0 111.2 110.0 111.2 110.4 111.2 112.7 114.7 116.8 112.8 117.4 117.3 113.1 40 Electric 49UPT 6.1 111.6 111.8 110.8 109.5 110.8 110.0 110.9 112.6 114.1 116.4 112.9 117.2 117.4 113.2 41 Gas 492,3PT 1.6 113.2 113.0 112.6 112.0 112.8 112.1 112.0 113.2 117.3 118.2 112.4 118.2 116.9 112.7 SPECIAL AGGREGATES 42 Manufacturing excluding motor vehicles and parts 79.5 107.0 106.6 107.0 106.6 107.4 107.2 107.1 108.0 108.8 108.8 109.3 109.8 110.0 110.4 43 Manufacturing excluding office and computing machines 81.9 105.1 105.0 105.5 104.8 105.3 105.1 104.8 105.9 106.7 107.0 107.6 108.0 107.9 108.1 Gross value (billions of 1987 dollars, annual rates) MAJOR MARKETS 44 Products, total 1,707.0 1,806.4 1,804.4 1,814.8 1,794.6 1,806.8 1,802.7 1,799.9 1,835.6 1,846.7 1,857.5 1,864.9 1,878.4 1,874.1 1,870.1 45 Final 1,314.6 1,420.1 1,416.2 1,426.9 1,408.8 1,416.7 1,417.8 1,415.7 1,448.1 1,457.1 1,466.8 1,476.4 1,484.1 1,479.7 1,478.6 46 Consumer goods 866.6 913.0 914.7 920.1 906.6 912.6 908.1 905.1 928.4 931.6 936.3 940.0 947.1 942.1 939.2 47 Equipment 448.0 507.1 501.5 506.8 502.2 504.1 509.7 510.6 519.7 525.5 530.5 536.5 537.1 537.6 539.4 48 Intermediate 392.5 386.4 388.2 387.9 385.9 390.1 385.0 384.2 387.4 389.6 390.7 388.4 394.3 394.4 391.5 1. Data in this table also appear in the Board's G.17 (419) monthly statistical was released in May 1993. See "Industrial Production, Capacity, and Capacity release. For ordering address, see inside front cover. Utilization since 1987," Federal Reserve Bulletin, vol. 79 (June 1993), pp. 590-605. A revision of the industrial production index and the capacity utilization rates 2. Standard industrial classification. 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 1993 IItteemm 11999900 11999911 11999922 June July Aug. Sept. Oct. Nov. Dec. Jan.r Feb.r Mar. Private residential real estate activity (thousands of units except as noted) NEW UNITS 2 3 1 Pe O T rm w ne i o t - - s f o a a r m - u m i t l h y o o r r e i - z f e a d m ily 1, 7 3 11 9 1 1 4 7 9 7 1 5 4 9 4 9 5 l,0 9 1 9 1 8 5 1 4 r r l,0 8 m 4 7 8 8 r r l,0 8 2 8 0 8 3 2 1 r r l,0 8 1 8 8 9 1 5 6 r r r l,1 9 2 2 0 1 0 2 8 r r r l,1 9 1 4 5 8 1 4 7 r r r l,1 9 1 3 6 7 6 3 3 r r r l l , , 1 0 1 9 3 5 6 7 9 r r 1 1, 9 1 1 5 7 8 7 2 5 1,1 9 1 5 4 8 7 1 4 1,0 8 1 3 7 6 4 1 3 4 Started 1,193 1,014 1,200 1,141 1,106 1,229 1,218 1,226 1,226 1,286 1,171 1,180 1,137 5 One-family 895 840 1,030 994 961 1,038 1,045 1,079 1,089 1,133 1,051 1,036 1,000 6 Two-or-more-family . 298 174 169 147 145 191 173 147 137 153 120 144 137 7 Under construction at end of period1 711 606 612 641 628 633 637 645 641 644 641 641 638 8 One-family 449 434 473 481 474 479 485 493 498 501 506 508 506 9 Two-or-more-family 262 173 140 160 154 154 152 152 143 143 135 133 132 1 1 1 1 0 1 2 3 C M o o T O m b w n i p l e o e l - e - f o t h a e r m o d - m m il e y o s r e s - h fa ip m p i e ly d 1,3 9 3 1 0 6 4 8 8 6 2 8 1,0 8 2 1 9 3 5 7 1 8 3 1 1, 9 2 1 1 1 6 5 9 0 4 8 4 1, 9 2 1 1 0 7 8 9 2 1 9 4 1 1 , , 2 0 2 2 3 0 2 1 4 8 6 0 1,1 9 2 1 3 0 4 8 3 8 2 5 1, 9 2 1 1 1 4 2 8 8 7 2 6 1,1 9 2 1 3 2 6 7 8 7 4 3 1 1 , , 2 2 2 0 2 4 2 0 9 4 7 2 1 1 , , 2 0 2 2 2 6 1 1 7 6 1 6 1, 9 2 1 1 6 8 3 5 7 0 6 6 1 1 , , 2 2 0 1 3 6 5 8 2 7 3 4 1,0 9 2 1 4 9 9 0 7 1 6 5 Merchant builder activity in 14 Num o b n e e r - f s a o m ld il y units 535 507 584 622 625 672 637 615 662r 597 608 637 15 Number for sale at end of period . 321 284 265 273 271 270 267 264 262 265 266 268 269 Price of units sold (thousands of dollars)2 1 1 6 7 M Av e e d r i a a g n e 1 1 2 4 2 9 . . 3 0 1 1 2 4 0 7 . . 0 0 1 1 2 4 1. 4 3r . ? 1 1 2 4 4 6 . . 5 6 1 1 1 3 8 7 . . 0 7 1 1 2 4 3 5 . . 5 3 1 1 1 4 9 2 . . 5 2 1 1 2 4 5 8 . . 0 4 1 1 2 4 8 7 . . 9 2 1 1 2 4 6 6 . . 0 2 r r 1 1 1 3 8 7 . . 0 9 1 1 2 4 8 7 . . 4 9 1 1 2 4 5 6 . . 0 0 EXISTING UNITS (one-family) 18 Number sold 3,211 3,219 3,520 3,320 3,380 3,340 3,380 3,710 3,860 4,040 3,780 3,460 3,370 Price of units sold (thousands of dollars) 19 Median 95.2 99.7 103.6 105.5 102.8 105.0 103.5 103.4 102.7 104.2 103.1 103.6 105.1 20 Average 118.3 127.4 130.8 133.9 132.2 132.4 131.0 129.3 128.8 131.0 129.4 129.6 131.5 Value of new construction (millions of dollars) CONSTRUCTION 21 Total put in place 442,066 400,955 426,657 426,730 425,700 419,598 429,291 432,250 436,140 439,948 441,344 446,365 442,677 22 Private 334,153 290,707 308,246 312,182 305,848 301,984 308,813 315,855 317,451 320,720 327,790 331,473 327,686 2 2 2 2 2 2 3 4 5 6 7 8 R N e o C P O I s n n u i o t r d d h b m e e u e l s n i s m r i c t t d r i b e e a u i u r a n l t c l i i t l i l i d a i b a t l i u i l n e , i b g s l t u d s o a i i t l n n d a g d l i s n o g t s h er 1 1 6 2 4 2 5 8 2 1 2 3 1 2 , , , , , , 8 5 9 8 2 8 6 9 9 4 9 5 6 1 1 9 7 6 1 1 4 2 4 2 3 5 8 0 1 2 2 7 , , , , , , 4 7 3 2 8 8 8 9 8 1 7 3 2 7 1 0 0 7 1 1 4 2 4 2 2 8 1 0 2 0 4 4 , , , , , , 5 4 0 1 1 1 1 1 1 7 1 2 4 7 5 3 9 7 1 1 4 2 4 2 2 8 1 3 1 0 7 4 , , , , , , 9 3 9 2 5 6 9 1 6 8 5 3 1 0 6 5 2 0 1 1 3 2 4 2 2 8 9 2 1 0 4 1 , , , , , , 9 2 5 8 6 1 8 2 9 7 8 6 8 8 4 6 6 2 1 1 2 4 3 1 1 8 1 1 7 7 7 4 , , , , , , 5 3 0 8 7 2 1 1 9 6 8 0 8 0 3 2 3 1 1 1 3 2 4 1 2 8 9 2 2 9 2 6 , , , , , , 3 0 0 0 4 3 3 6 5 7 1 4 3 8 0 0 9 3 1 1 4 2 4 1 2 9 0 1 2 8 3 2 , , , , , , 1 5 9 3 6 5 9 4 1 0 4 5 5 5 6 2 6 3 1 1 4 2 4 1 2 9 1 1 0 9 2 4 , , , , , , 5 6 3 6 8 0 4 4 7 5 0 8 2 6 9 0 1 3 1 1 3 2 4 2 1 9 1 8 3 2 8 8 , , , , , , 3 3 7 1 7 5 7 2 6 8 2 3 0 6 5 2 1 8 2 1 2 4 3 0 1 2 0 4 9 4 8 3 , , , , , , 7 1 3 7 7 0 9 5 1 5 6 3 5 6 4 7 8 3 2 1 4 2 4 0 1 2 1 1 3 5 9 6 , , , , , , 9 1 9 0 4 4 4 5 4 0 7 3 1 2 0 1 2 9 2 1 3 2 4 0 2 1 7 2 3 4 3 9 , , , , , , 9 0 5 5 1 5 7 7 9 1 7 3 4 5 6 1 5 0 29 Public 107,909 110,247 118,408 114,548 119,853 117,614 120,478 116,395 118,689 119,229 113,554 114,892 114,991 30 Military 2,664 1,837 2,484 2,503 2,372 2,438 3,172 2,438 2,612 2,483 2,459 2,419 2,376 31 Highway 31,154 29,918 32,759 31,496 32,682 33,451 34,651 32,056 34,636 31,237 29,811 31,306 31,995 32 Conservation and development... 4,607 4,958 5,978 5,889 5,772 5,382 6,364 5,630 6,210 8,237 5,708 6,752 7,136 33 Other 69,484 73,534 77,187 74,660 79,027 76,343 76,291 76,271 75,231 77,272 75,576 74,415 73,484 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 • July 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 Change from 1 month earlier months earlier (annual rate) IIInnndddeeexxx llleeevvveeelll,,, IIIttteeemmm 1992 1993 1992 19931 AAAppprrr... 11999922 11999933 111999999333111 AApprr.. AApprr.. Juner Sept.r Dec.r Mar.r Dec. Jan. Feb. Mar. Apr. CONSUMER PRICES2 (1982-84=100) 1 All items 3.2 3.2 2.6 2.6 3.2 4.0 .1 .5 .3 .1 .4 144.0 ? Food 1.0 1.8 -1.2 3.2 1.4 2.6 .3 .4 .1 .1 .4 140.6 3 Energy items .0 3.6 8.6 1.2 1.9 3.1 -.2 .5 -.4 .7 .2 103.1 4 All items less food and energy 3.9 3.5 2.8 2.5 3.8 4.3 .2 .5 .5 .1 .4 151.7 5 Commodities 3.0 2.7 2.5 1.8 1.5 4.6 -.1 .5 .5 ..11 .3 136.0 6 Services 4.3 3.8 3.1 2.9 4.7 4.4 .3 .4 .4 ..22 .4 160.7 PRODUCER PRICES (1982=100) 7 Finished goods 1.1 2.4 3.3 1.3 -.3 3.9 .0 .2 .4 .4 .6 125.3 8 Consumer foods -2.0 2.9 -.6 4.3 3.3 -2.2 1.3r -l.O' -.1 .5 1.4 126.3 9 Consumer energy -.4 3.7 16.6 -3.5 -10.2 17.2 -2.4r l.Of 1.7 1.3 ..11 78.2 10 Other consumer goods 2.9 2.0 2.4 1.5 1.2 2.9 ..11 .4 .3 ..11 ..44 139.8 11 Capital equipment 2.3 1.4 .9 1.2 .6 3.4 ,,22rr .2" .5 ..22 .2 130.9 Intermediate materials 12 Excluding foods and feeds -.1 2.2 5.0 .7 -2.1 55..33 -.R ,4r ..55 ..33 ..11 111166..55 13 Excluding energy .2 1.8 1.7 1.3 -.3 4.3 .2 .3 .5 .2 ..22 124.0 Crude materials 14 Foods -3.2 4.4 2.7 -4.8 5.1 1.1 I.R .R .1 .1 2.5 110.1 1 IS 6 O En th e e rg r y - - 2 2 . . 7 2 9 3 . . 7 1 5 4 1 . . 8 5 1 2 9 . . 2 8 -17 1 . . 8 9 - 2 9 5 . . 7 0 -4 2 . . 8 2 r r - 3 , . 8 0 r 1 -2 2 . . 5 2 . . 4 8 - 1 .6 .8 1 7 4 7 1 . . 3 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 1992 1993 Account 11999900 11999911 11999922 Q1 Q2 Q3 Q4 Ql GROSS DOMESTIC PRODUCT 1 Total 5,522.2 5,677.5 5,950.7 5,840.2 5,902.2 5,978.5 6,081.8 6,148.0 By source 2 Personal consumption expenditures 3.7 4 4 64 8 . . 3 4 3,8 4 8 4 7 6 . . 7 1 4,0 4 9 8 5 0 . . 8 4 4,0 4 2 6 2 9 . . 8 4 4,0 4 5 7 7 0 . . 1 6 4.1 4 0 8 8 2 . . 7 5 4,1 4 9 9 4 9. . 1 8 4,2 5 3 0 8 0 . . 6 6 3 Durable goods 1.224.5 1,251.5 1,290.7 1,274.1 1,277.5 1.292.8 1,318.6 1,321.8 4 Nondurable goods 2,059.7 2,190.1 2,324.7 2,279.3 2,309.0 2,333.3 2,377.1 2,416.3 5 Services 6 Gross private domestic investment 799.5 721.1 770.4 722.4 773.2 781.6 804.3 844.1 7 Fixed investment 793.2 731.3 766.0 738.2 765.1 766.6 794.0 805.1 8 Nonresidential 577.6 541.1 548.2 531.0 550.3 549.6 562.1 571.0 9 Structures 201.1 180.1 168.4 170.1 170.3 166.1 167.0 167.1 10 Producers' durable equipment 376.5 360.9 379.9 360.8 380.0 383.5 395.1 403.9 11 Residential structures 215.6 190.3 217.7 207.2 214.8 217.0 231.9 234.1 12 Change in business inventories 6.3 -10.2 4.4 -15.8 8.1 15.0 10.3 39.0 13 Nonfarm 3.3 -10.3 2.2 -13.3 6.4 9.7 6.2 36.7 14 Net exports of goods and services -68.9 -21.8 -30.4 -8.1 -37.1 -36.0 -40.5 -50.9 15 Exports 557.0 598.2 636.3 628.1 625.4 639.0 652.7 649.7 16 Imports 625.9 620.0 666.7 636.2 662.5 675.0 693.2 700.5 17 Government purchases of goods and services .. 1,043.2 1,090.5 1,114.9 1,103.1 1,109.1 1,124.2 1,123.3 1,116.1 18 Federal 426.4 447.3 449.1 445.0 444.8 455.2 451.6 441.2 19 State and local 616.8 643.2 665.8 658.0 664.3 669.0 671.7 674.9 By major type of product 20 Final sales, total 5,515.9 5.687.7 5,946.3 5,855.9 5.894.1 5.963.5 6,071.5 6,109.0 21 Goods 2,160.1 2.192.8 2.260.3 2,233.6 2.233.2 2,258.4 2,316.1 2,310.4 22 Durable 920.6 907.6 943.9 923.6 932.3 943.8 975.8 968.5 23 Nondurable 1,239.5 1,285.1 1.316.4 1,310.0 1,300.8 1.314.6 1,340.3 1,341.9 24 Services 2,846.4 3,030.3 3,197.1 3,142.2 3,173.4 3,217.8 3,255.1 3,298.6 25 Structures 509.4 464.7 488.8 480.1 487.6 487.3 500.3 500.0 26 Change in business inventories 6.3 -10.2 4.4 -15.8 8.1 15.0 10.3 39.0 27 Durable goods -.9 -19.3 -3.5 -19.3 9.5 2.7 -6.9 18.8 28 Nondurable goods 7.2 9.0 7.9 3.5 -1.4 12.3 17.2 20.2 MEMO 29 Total GDP in 1987 dollars 4,877.5 4,821.0 4,922.6 4,873.7 4,892.4 4,933.7 4,990.8 5,002.5 NATIONAL INCOME 30 Total 4,468.3 4,544.2 4,743.4R 4,679.4 4,716.5 4,719.6 4,858.0R 4,923.5 31 Compensation of employees 3,291.2 3,390.8 3,525.2 3,476.3 3,506.3 3,534.3 3,583.7 3,628.9 2,742.9 2,812.2 2,916.6 2,877.6 2,901.3 2,923.5 2,963.9 3,000.3 32 Wages and salaries 514.8 543.5 562.5 554.6 561.4 564.3 569.6 578.1 33 Government and government enterprises .. 2,228.0 2,268.7 2,354.1 2,323.0 2,339.9 2,359.1 2,394.3 2,422.2 3 3 3 3 4 5 6 7 Su E O O p m p t t h h le p e e m l r r o e l y a n e b t r o t c r o o i n w n t c a r o i g b m e u s e t i a o n n d s s f a o l r a r s i o e c s i al insurance 5 2 2 4 7 7 8 1 7 . . . 4 0 4 5 2 2 7 8 9 8 8 0 . . . 7 3 4 6 3 3 0 0 0 8 5 2 . . . 6 7 9 5 2 2 9 9 9 8 9 9 . . . 7 2 4 6 3 3 0 0 0 5 1 3 . . . 5 0 6 6 3 3 1 0 0 0 7 2 . . . 8 9 9 6 3 3 1 1 0 9 2 7 . . . 8 2 6 6 3 3 2 1 1 8 6 2 . . . 5 6 0 38 Proprietors'income1 366.9 368.0 404.5 393.6 398.4 397.4 428.4 442.0 39 Business and professional1 325.2 332.2 364.9 353.6 359.9 365.9 380.4 389.1 40 Farm1 41.7 35.8 39.5 40.1 38.5 31.5 48.1 52.9 41 Rental income of persons2 -12.3 -10.4 4.7 -4.5 3.3 6.4 13.6 17.5 4 4 3 2 Co P r r p o o f r i a ts t e b e p f r o o r f e it s ta 1 x . 3 . 3 3 6 5 1 5 . . 7 4 3 33 4 4 6 . . 7 3 3 3 7 9 1 3 . . 6 8 r r 3 36 8 6 4 . . 1 0 3 3 7 8 6 8 . . 8 4 3 3 5 7 4 4 . . 1 1 4 38 2 9 8 . . 4 5 r r 4 4 0 3 0 2 . . 6 2 44 inventory valuation adjustment -14.2 3.1 -7.4 -5.4 -15.5 -9.7 1.0 -9.3 45 Capital consumption adjustment 20.5 8.4 29.5 23.3 27.0 29.7 38.1 40.8 46 Net interest 460.7 449.5 415.2 430.0 420.0 407.3 403.6 402.9 1. With inventory valuation and capital consumption adjustments. 3. For after-tax profits, dividends, and the like, see table 1.48. 2. With capital consumption adjustment. SOURCE. 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 • July 1993 2.17 PERSONAL INCOME AND SAVING Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1992 1993 Account 11999900 11999911 11999922 Ql Q2 Q3 04 Ql PERSONAL INCOME AND SAVING 1 Total personal income 4,664.2 4,828.3 5,058.1 4,980.5 5,028.9 5,062.0 5,160.9 5,237.6 2 Wage and salary disbursements 2,742.8 2,812.2 2,918.1 2,877.6 2,901.3 2,923.5 2,969.9 3,006.3 6 3 4 5 7 D G C Se o i o M s r m v v tr e a i m i c r n b n e o u u m d f t i i a n i e v t c d n y e t u - t u p s i r a n t r i r n n o d i d g d e u s u s g t c r o i i n v e g e s rn in m d e u n st t r i e e n s t erprises 7 6 8 5 5 4 4 3 5 1 7 5 4 6 4 . . . . . 8 1 8 6 6 7 5 6 8 5 3 5 8 4 4 7 6 3 3 7 . . . . . 4 9 9 6 4 7 6 9 5 5 6 4 4 6 6 6 5 3 2 5 . . . . . 5 8 5 7 2 9 5 6 5 7 2 5 5 6 3 5 4 9 0 6 . . . . . 3 8 6 9 9 6 9 7 5 5 6 3 4 6 6 3 4 2 3 1 . . . . . 1 7 9 9 4 6 9 7 5 5 4 6 6 6 4 9 7 5 4 2 . . . . . 1 7 5 3 4 9 7 5 6 5 7 5 7 7 6 3 0 2 5 9 . . . . . 6 8 8 9 6 9 7 5 6 5 8 7 5 7 8 8 8 4 6 5 . . . . . 1 4 2 4 6 8 Other labor income 271.0 288.3 305.7 299.2 303.6 307.9 312.2 316.5 9 Proprietors' income1 366.9 368.0 404.5 393.6 398.4 397.4 428.4 442.0 10 Business and professional 325.2 332.2 364.9 353.6 359.9 365.9 380.4 389.1 11 Farm1 . 41.7 35.8 39.5 40.1 38.5 31.5 48.1 52.9 12 Rental income of persons2 -12.3 -10.4 4.7 -4.5 3.3 6.4 13.6 17.5 13 Dividends 140.3 137.0 139.3 133.9 136.6 141.0 145.8 149.9 14 Personal interest income 694.5 700.6 670.2 684.8 675.2 663.2 657.8 656.4 15 Transfer payments 685.8 771.1 866.1 842.7 859.7 874.1 888.0 909.4 16 Old-age survivors, disability, and health insurance benefits .. 352.0 382.0 414.1 405.7 412.1 417.1 421.6 434.2 17 LESS: Personal contributions for social insurance 224.8 238.4 250.6 246.8 249.3 251.5 254.8 260.4 18 EQUALS: Personal income 4,664.2 4,828.3 5,058.1 4,980.5 5,028.9 5,062.0 5,160.9 5,237.6 19 LESS: Personal tax and nontax payments 621.3 618.7 627.3 619.6 617.1 628.8 643.6 656.3 20 EQUALS: Disposable personal income 4,042.9 4,209.6 4,430.8 4,360.9 4,411.8 4,433.2 4,517.3 4,581.4 21 LESS: Personal outlays 3,867.3 4,009.9 4,218.1 4,146.3 4,179.5 4,229.9 4,316.9 4,362.3 22 EQUALS: Personal saving 175.6 199.6 212.6 214.6 232.3 203.3 200.4 219.0 MEMO 2 2 2 3 5 4 P G D P e e r is r r o s p s c o o s a n s p d a a i o b l t m l a c e o e ( n p 1 s s e t 9 i u r c 8 s m 7 o p p n r d t a o i o l d o l u n l i a n c r c e t s o x ) m p e e n ditures 1 1 1 3 9 4 , , , 0 5 0 4 1 6 3 3 8 . . . 6 0 0 1 1 1 9 2 3 , , , 0 8 8 7 2 8 7 4 6 . . . 1 1 0 1 1 1 9 2 4 , , , 2 9 0 7 7 3 1 3 5 . . . 4 9 0 1 1 1 9 4 2 , , , 1 0 9 5 1 3 8 7 0 . . . 5 2 0 1 1 1 2 9 4 , , , 8 1 0 9 8 2 3 1 1 . . . 3 8 0 1 1 1 2 9 3 , , , 9 2 9 7 8 9 3 8 8 . . . 3 4 0 1 1 1 9 4 3 . , . 4 1 0 5 0 9 6 5 8 . . . 3 0 4 1 1 1 4 9 3 , , , 1 4 1 6 5 0 4 5 5 . . . 4 0 3 26 Saving rate (percent) 4.3 4.7 4.8 4.9 5.3 4.6 4.4 4.8 GROSS SAVING 718.0 708.2 686.3r 677.5 682.9 696.9 687.9r 736.5 27 Gross saving 854.1 901.5 968.8r 950.1 968.1 992.1 965.0"^ 999.0 28 Gross private saving 175.6 199.6 212.6 214.6 232.3 203.3 200.4 219.0 2390 PUenrdsoisntrailb usatevdin gc orporate profits 75.7 75.8 104.3r 104.0 97.7 91.2 124. lr 125.2 31 Corporate inventory valuation adjustment -14.2 3.1 -7.4 -5.4 -15.5 -9.7 1.0 -9.3 Capital consumption allowances 32 Corporate 368.3 383.0 394.8 386.1 391.2 407.2 394.7 399.8 33 Noncorporate 234.6 243.1 258.6 245.3 247.0 290.4 251.8 261.1 3 3 3 5 6 4 Go S F v t e e p a d r t r e n e o r m d a a u l n e c d n t t l a o s c u c c a r o p l u lu n s t , s or deficit (-), national income and - - 1 1 3 6 3 6 6 0 . . . 1 2 1 - - 1 2 9 1 1 3 0 7 . . . 3 4 1 - -2 2 9 8 1 8 2 5 . . . 0 5 5 r r - -2 2 8 7 1 9 2 6 . . . 2 6 6 - - 2 3 8 0 1 5 2 7 . . . 2 9 7 - - 2 3 9 0 5 4 9 . . . 2 4 2 - — 27 2 1 7 9 8 5 .2 . . 3 5 1 1 r - - 2 2 6 7 1 2 3 1 . . . 5 5 0 37 Gross investment 723.4 730.1 720.4 706.5 713.8 732.0 729.5 783.3 38 Gross private domestic 799.5 721.1 770.4 722.4 773.2 781.6 804.3 844.1 39 Net foreign -76.1 9.0 -49.9 -16.0 -59.4 -49.6 -74.7 -60.8 40 Statistical discrepancy 5.4 21.9 34. lr 29.0 30.9 35.1 4i .r 46.8 1. With inventory valuation and capital consumption adjustments SOURCE. U.S. Department of Commerce, Survey of Current Business. 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A53 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data seasonally adjusted except as noted1 1991 1992 Item 1990 1991 Q4 Ql Q2 Q3 Q4P 1 Balance on current account.. -90,428 -3,682 -62,448 -7,218 -6,374 -18,279 -15,771 -22,020 2 Merchandise trade balance -108,853 -73,436 -96,275 -18,539 -17,663 -25,004 -27,634 -25,974 3 Merchandise exports 388,705 415,962 439,272 107,851 107,634 107,148 110,119 114,371 4 Merchandise imports -497,558 -489,398 -535,547 -126,390 -125,297 -132,152 -137,753 -140,345 5 Military transactions, net -7,818 -5,524 -2,503 -540 -624 -623 -579 -677 6 Other service transactions, net 39,873 50,821 57,628 13,676 14,450 13,242 16,315 13,625 7 Investment income, net 19,287 16,429 10,062 2,458 4,394 1,851 2,977 839 8 U.S. government grants -17,597 24,487 -13,832 78 -2,620 -3,085 -2,521 -5,605 9 U.S. government pensions and other transfers -2,945 -3,462 -3,736 -1,080 -830 -1,119 -941 -846 10 Private remittances and other transfers -12,374 -12,996 -13,793 -3,271 -3,481 -3,541 -3,388 -3,382 11 Change in U.S. government assets other than official reserve assets, net (increase, -) 2,304 3,397 -959 -437 -38 -277 -301 -344 12 Change in U.S. official reserve assets (increase, -) -2,158 5,763 3,901 1,225 -1,057 1,464 1,952 1,542 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -192 -177 2,316 -23 -172 -168 -173 2,829 15 Reserve position in International Monetary Fund 731 -367 -2,692 17 111 1 -118 -2,685 16 Foreign currencies -2,697 6,307 4,277 1,232 -9% 1,631 2,243 1,398 17 Change in U.S. private assets abroad (increase, -) -56,467 -71,379 -47,843 -44,947 -3,614 -1,610 -22,892 -19,726 18 Bank-reported claims3 7,469 -4,753 32,372 -23,219 15,859 10,943 -1,274 6,844 19 Nonbank-reported claims -2,477 5,526 3,742 1,269 4,764 3,137 -4,159 20 U.S. purchases of foreign securities, net -28,765 -45,017 -48,646 -11,305 -8,703 -8,221 -13,934 -17,788 21 U.S. direct investments abroad, net -32,694 -27,135 -35,311 -11,692 -15,534 -7,469 -3,525 -8,782 22 Change in foreign official assets in United States (increase, +).. 33,908 18,407 40,307 12,819 21,192 20,895 -7,269 5,489 23 U.S. Treasury securities 29,576 15,815 18,333 12,619 14,909 11,126 -323 -7,379 2 2 4 5 O O t t h h e e r r U U . . S S . . g g o o v v e e r r n n m m e e n n t t o li b a l b i i g li a t t i i e o s n s 1, 6 8 6 6 7 6 1 1 , , 6 3 0 0 0 1 4 2 , , 0 4 2 6 5 9 1 -3 ,0 4 7 4 5 5 % 40 1, 5 6 9 9 8 9 9 9 1 2 2 9 8 8 7 4 4 6 2 2 6 7 O O t t h h e e r r f U o . r S e . i g l n ia o b f il f i i t c i i e a s l a re s p se o t r s t 5 e d by U.S. banks3 -1 3 , , 5 3 8 8 6 5 -1 1 ,6 ,3 6 5 8 9 16 - , 6 1 8 6 8 8 -9 3 1 8 4 3 5,5 1 3 1 4 3 7, - 5 7 4 5 7 - -1 7, ,0 7 0 87 0 10,8 2 7 7 4 4 28 Change in foreign private assets in United States (increase, +).. 65,471 48,573 80,093 36,110 -2,577 26,571 29,246 26,854 29 U.S. bank-reported liabilities3 16,370 -13,678 14,667 23,465 -4,474 -551 22,905 -3,213 30 U.S. nonbank-reported liabilities 4,906 -405 4,413 725 1,942 1,141 1,330 31 Foreign private purchases of U.S. Treasury securities, net -2,534 16,241 35,077 1,408 -828 10,286 4,870 20,749 32 Foreign purchases of other U.S. securities, net 1,592 34,918 29,884 4,832 4,551 10,333 2,693 12,307 33 Foreign direct investments in United States, net 45,137 11,498 -3,948 5,680 -3,768 5,362 -2,552 -2,989 34 Allocation of special drawing rights 0 0 0 0 0 0 0 0 3 3 6 5 Di D sc u r e e p t a o n s c e y a sonal adjustment 47,370 -1,078 -13,051 2,4 6 4 1 7 3 -7 4 , , 5 9 3 0 2 1 -28 1 , , 7 2 6 9 4 6 - 1 6 5 , , 6 0 4 3 0 5 8,2 4 0 3 5 9 37 Before seasonal adjustment 47,370 -1,078 -13,052 1,835 -12,433 -30,060 21,675 7,767 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) -2,158 5,763 3,901 1,225 -1,057 1,464 1,952 1,542 39 Foreign official assets in United States, excluding line 25 (increase, +) 32,042 16,807 37,838 13,163 21,096 20,297 -8,198 4,643 40 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) 1,707 -5,604 5,402 2,459 -2,125 3,062 2,006 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 • July 1993 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data seasonally adjusted 1992r 1993 IItteemm 11999900 11999911 11999922 Sept. Oct. Nov. Dec. Jan.r Feb.r Mar.p 1 Exports of domestic and foreign merchandise, excluding grant-aid shipments 393,592 421,730 448,164 37,661 38,885 37,796 39,178 37,505 36,928 38,9% 2 General imports including merchandise for immediate consumption plus entries into bonded warehouses 495,311 488,453 532,665 45,968 46,119 45,633 46,143 45,176 44,832 49,203 3 Trade balance -101,718 -66,723 -84,501 -8,307 -7,233 -7,837 -6,965 -7,672 -7,904 -10,207 1. Government and nongovernment shipments of merchandise between foreign the United States. Since Jan. 1,1987, merchandise trade data have been released countries and the fifty states, including the District of Columbia, Puerto Rico, the forty-five days after the end of the month; the previous month is revised to reflect U.S. Virgin Islands, and U.S. Foreign Trade Zones. Data exclude (1) shipments late documents. among the United States, Puerto Rico, the U.S. Virgin Islands, and other U.S. Data in this table differ from figures for merchandise trade shown in the U.S. affiliated insular areas, (2) shipments to U.S. Armed Forces and diplomatic balance of payments accounts (table 3.10, lines 2 to 4) primarily for reasons of missions abroad for their own use, (3) U.S. goods returned to the United States by coverage. For both exports and imports a large part of the difference is the its Armed Forces, (4) personal and household effects of travelers, and (5) treatment of military sales and purchases. The military sales to foreigners in-transit shipments. Data reflect the total arrival of merchandise from foreign (exports) and purchases from foreigners (imports) that are included in this table as countries that immediately entered consumption channels, warehouses, or U.S. merchandise trade are shifted, in the balance of payments accounts, from Foreign Trade Zones (general imports). Import data are Customs value; export "merchandise trade" into the broader category "military transactions." data are F.A.S. value. Beginning in 1990, data for U.S. exports to Canada are SOURCE. FT900, U.S. Merchandise Trade, (U.S. Department of Commerce, derived from import data compiled by Canada; similarly, in Canadian statistics, Bureau of the Census). Canadian exports to the United States are derived from import data compiled by 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1992 Asset 1989 1990 1991 Oct. Dec. Jan. Feb. Mar. 1 Total 74,609 83,316 77,719 74,207 72,231 71,323 71,962 72,847 74,378 2 Gold stock, including Exchange Stabilization Fund 11,059 11,058 11,057 11,060 11,059 11,056 11,055 11,055 11,054 3 Special drawing rights2, 9,951 10,989 11,240 11,561 11,495 8,503 8,546 8,651 8,787 4 Reserve position in International Monetary Fund 9,048 9,076 9,488 9,261 8,781 11,759 12,079 12,021 12,184 5 Foreign currencies 44,551 52,193 45,934 42,325 40,896 40,005 40,282 41,120 42,353 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 1993 AAsssseett 11998899 11999900 11999911 Oct. Nov. Dec. Jan. Feb. Mar. Apr.p 1 Deposits 589 369 968 415 229 205 325 2% 317 221 Held in custody 2 U.S. Treasury securities 224,911 278,499 281,107 311,538 308,959 314,481 324,356 329,183 326,486 339,3% 3 Earmarked gold 13,456 13,387 13,303 13,201 13,192 13,686 13,077 13,074 12,989 12,924 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 1993 AAccccoouunntt 11998899 11999900 11999911 Sept. Oct. Nov. Dec. Jan. Feb. Mar. ASSETS All foreign countries 1 Total payable in any currency .. 545,366 556,925 548,901 544,908' 553,977' 566,721 542,545' 543,624' 554,280 2 Claims on United States 198,835 188,4% 176,301 167,419 174,986 177,443 166,798 169,278 172,304' 3 Parent bank 157,092 148,837 137,509 134,119 138,940 141,542 132,275 134,218' 139,170' 4 Other banks in United States 17,042 13,2% 12,884 8,083 10,683 10,019 9,703 9,570' 9,249 5 Nonbanks 24,701 26,363 25,908 25,217 25,363 25,882 24,820 25,490 23,885' 6 Claims on foreigners 300,575 312,449 303,934 320,111 319,139 328,592 318,071 314,736' 317,868' 7 Other branches of parent bank 113,810 135,003 111,729 118,952 115,521 125,143 123,256 116,325 115,323' 8 Banks 90,703 72,602 81,970 83,756 86,560 86,086 82,190 81,812' 84,439 9 Public borrowers 16,456 17,555 18,652 20,511 20,809 20,378 20,756 19,984 19,822 10 Nonbank foreigners 79,606 87,289 91,583 %,892 %,249 %,985 91,869 %,615' 98,284 11 Other assets 45,956 55,980 68,666 57,378r 59,852r 60,686 57,676' 59,610' 64,108 12 Total payable in U.S. dollars ... 382,498 379,479 363,941 347,036r 364,000' 374,420' 365,824' 353,643' 361,251 13 Claims on United States 191,184 180,174 169,662 161,463 169,290 171,938 162,125 164,681 167,773' 14 Parent bank 152,294 142, %2 133,476 130,446 136,156 138,424 129,329 131,554' 136,650' 15 Other banks in United States 16,386 12,513 12,025 7,476 9,360 9,291 9,266 9,213' 8,704 16 Nonbanks 22,504 24,699 24,161 23,541 23,774 24,223 23,530 23,914 22,4^ 17 Claims on foreigners 169,690 174,451 167,010 166,6%r 173,427' 182,360' 183,527' 171,120' 174,726' 18 Other branches of parent bank 82,949 95,298 78,114 72,348 76,098 83,902 83,117 77,606 77,681' 19 Banks 48,396 36,440 41,635 42,276r 45,436 45,931 47,250 41,616' 43,067 20 Public borrowers 10,961 12,298 13,685 13,990 13,966 13,995 14,313 13,883 13,710 21 Nonbank foreigners 27,384 30,415 33,576 38,082r 37,927r 38,532' 38,847' 38,015' 40,268 22 Other assets 21,624 24,854 27,269 18,877r 21,283' 20,122' 20,172' 17,842 18,752 United Kingdom 23 Total payable in any currency .. 161,947 184,818 175,599 161,486' 167,786' 168,333 165,850' 164,360 165,132 2 2 4 5 Cl P ai a m re s n o t n b a U n n k i ted States 3 3 9 5 , , 2 8 1 4 2 7 4 4 5 2 , , 5 4 6 1 0 3 3 3 5 1 , , 2 9 5 3 7 1 3 3 5 2 , , 8 9 9 2 1 9 3 3 9 6 , , 5 4 5 1 8 3 3 3 8 5 , , 3 0 5 2 8 7 3 3 6 3 , , 4 4 0 6 3 0 3 3 7 4 , , 6 2 0 9 9 0 3 32 4 , , 7 9 7 1 9 9 r ' 26 Other banks in United States 1,058 792 1,267 1,067 1,400 925 1,298 886 783 2 2 7 8 Cla N im on s b o a n n k f s o reigners 10 2 7 , , 3 6 0 5 7 7 11 2 5 , , 3 5 5 3 5 6 10 2 9 , , 0 6 5 9 9 2 107 1 , ,8 6 9 7 5 5 109 1 , , 9 7 1 4 9 5 11 2 3 , , 4 1 0 9 6 3 111 1, , 6 6 4 2 5 3 10 2 8 , , 4 3 3 6 3 2 11 1 0 , , 3 4 5 2 7 0 r 29 Other branches of parent bank 37,728 46,367 35,735 38,894 40,594 45,092 46,165 42,894 41,317' 30 Banks 36,159 31,604 36,394 36,039 36,701 34,559 33,399 33,513 36,601 31 Public borrowers 3,293 3,860 3,306 3,371 3,692 3,370 3,329 3,059 2,542 3 3 2 3 Ot N he o r n a b s a s n e k t s f oreigners 3 1 0 5 , , 4 0 7 7 7 8 3 2 3 3 , , 7 7 0 2 5 2 3 3 4 0 , , 2 6 5 5 7 0 2 1 9 7 , . 3 9 7 2 1 0 1 2 1 8 8 , , 9 3 3 0 2 9 r 3 1 0 6 , , 1 7 7 8 2 2 2 1 8 7 , , 7 8 3 2 0 4 ' 2 1 8 8 , , 8 3 % 89 2 1 9 9 , , 9 7 6 9 0 3 34 Total payable in U.S. dollars ... 103,208 116,762 105,974 100,568' 107,290' 109,479 109,493' 101,375' 99,755 35 Claims on United States 36,404 41,259 32,418 33,618 37,359 35,956 34,508 35,481 32,929' 36 Parent bank 34,329 39,609 30,370 31,578 35,299 33,765 32,186 33,070 31,559' 37 Other banks in United States 843 334 822 711 769 438 1,022 684 428 38 Nonbanks 1,232 1,316 1,226 1,329 1,291 1,753 1,300 1,727 942 39 Claims on foreigners 59,062 63,701 58,791 59,338 61,658 65,164 66,335 59,505' 60,695' 40 Other branches of parent bank 29,872 37,142 28,667 28,225 30,217 34,434 34,124 30,823 28,856' 41 Banks 16,579 13,135 15,219 16,800 17,269 16,848 17,089 14,316' 16,800 42 Public borrowers 2,371 3,143 2,853 2,604 2,515 2,501 2,349 2,154 1,883 43 Nonbank foreigners 10,240 10,281 12,052 11,709 11,657 11,381 12,773 12,212 13,156 44 Other assets 7,742 11,802 14,765 7,612' 8,273' 8,359 s.eso' 6,389 6,131 Bahamas and Cayman Islands 45 Total payable in any currency .. 176,006 162,316 168,326 145,786 154,293 156,176 147,422 144,894 151,175 46 Claims on United States 124,205 112,989 115,244 96,911 102,726 104,245 %,280 %,976 102,836 47 Parent bank 87,882 77,873 81,520 68,309 72,207 73,856 66,608 67,219 73,825 48 Other banks in United States 15,071 11,869 10,907 6,562 8,199 8,282 7,828 7,%2 7,892 49 Nonbanks 21,252 23,247 22,817 22,040 22,320 22,107 21,844 21,795 21,119 50 Claims on foreigners 44,168 41,356 45,229 41,884 42,844 44,156 44,509 41,185 40,821 51 Other branches of parent bank 11,309 13,416 11,098 7,753 7,287 8,238 7,293 7,041 7,311 52 Banks 22,611 16,310 20,174 18,412 19,840 20,122 21,212 18,464 17,440 53 Public borrowers 5,217 5,807 7,161 7,128 7,146 7,209 7,786 7,564 7,422 54 Nonbank foreigners 5,031 5,823 6,7% 8,591 8,571 8,587 8,218 8,116 8,648 55 Other assets 7,633 7,971 7,853 6,991 8,723 7,775 6,633 6,733 7,518 56 Total payable in U.S. dollars 170,780 158,390 163,771 140,104 149,304 151,436 142,861 140,332 146,809 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 • July 1993 3.14 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data1—Continued 1992 1993 Sept. Oct. Nov. Dec. Jan. Feb. Mar. LIABILITIES All foreign countries 57 Total payable in any currency 545,366 556,925 548,901 544,908r 553,977r 566,721 542,545' 543,624' 554,280 547,297 58 Negotiable certificates of deposit (CDs) .. 23,500 18,060 16,284 12,389 12,056 12,342 10,032 12,320 11,872 11,598 59 To United States 197,239 189,412 198,121 185,492R 189,090* 188,116R 189,444* 175,978* 184,155* 186,741 60 Parent bank 138,412 138,748 136,431 127,685R 133,1101" 131,918R 134,339* 122,627* 124,123* 124,549 61 Other banks in United States 11,704 7,463 13,260 12,408 12,281 13,392 12,182 12,829 12,373 13,306 62 Nonbanks 47,123 43,201 48,430 45,399 43,699 42,806 42,923 40,522* 47,659 48,886 63 To foreigners 296,850 311,668 288,254 312,390 315,401R 330,315R 309,704 321,297* 319,638 312,705 64 Other branches of parent bank 119,591 139,113 112,033 120,714 118,001 126,018 125,160 120,179* 119,601 115,456 65 Banks : 76,452 58,986 63,097 68,493 70,439 74,536 62,189 67,843 70,056 68,407 66 Official institutions 16,750 14,791 15,5% 16,720 20,572 20,645 19,731 23,654* 21,469 18,689 67 Nonbank foreigners 84,057 98,778 97,528 106,463 106,389R 109,116R 102,624 109,621* 108,512 110,153 68 Other liabilities 27,777 37,785 46,242 34,637R 37,430R 35,948R 33,365* 34,029* 38,615* 36,253 69 Total payable in U.S. dollars 396,613 383,522 370,561 346,946r 365,399' 372,819* 368,773' 353,725' 363,285 353,351 70 Negotiable CDs 19,619 14,094 11,909 7,628 6,710 7,503 6,238 7,102 6,640 6,519 71 To United States 187,286 175,654 185,286 171,198R 176,124* 175,%9R 178,674* 164,634* 172,223* 175,269 72 Parent bank 132,563 130,510 129,669 U9,826R 125,602R 124,770* 127,948* 116,008* 117,228* 118,201 73 Other banks in United States 10,519 6,052 11,707 11,117 11,409 12,246 11,512 11,710 11,418 12,467 74 Nonbanks 44,204 39,092 43,910 40,255 39,113 38,953 39,214 36,916* 43,577 44,601 75 To foreigners 176,460 179,002 158,993 155,740R 166,443R 175,791* 172,189* 169,595* 170,756 160,741 76 Other branches of parent bank 87,636 98,128 76,601 73,208 77,197 82,957 83,700 79,144 79,594 77,656 77 Banks 30,537 20,251 24,156 22,822 25,210 28,404 26,118 23,281 25,571 21,226 78 Official institutions 9,873 7,921 10,304 9,939 12,097 12,342 12,430 14,067* 14,034 10,762 79 Nonbank foreigners 48,414 52,702 47,932 49,77 LR 51,939" 52,088* 49,941* 53,103* 51,557 51,097 80 Other liabilities 13,248 14,772 14,373 12,38V 16,122R 13,556* 11,672* 12,394* 13,666* 10,822 United Kingdom 81 Total payable in any currency 161,947 184,818 175,599 161,486r 167,786r 168,333 165,850' 164,360 165,132 162,122 82 Negotiable CDs 20,056 14,256 11,333 7,266 6,064 5,636 4,517 5,774 5,597 4,753 83 To United States 36,036 39,928 37,720 35,885 35,399 34,532 39,174 32,780* 33,092 38,011 84 Parent bank 29,726 31,806 29,834 27,528 27,427 26,471 31,100 25,099* 24,250 29,421 85 Other banks in United States 1,256 1,505 1,438 1,670 1,341 1,689 1,065 1,742 1,633 1,192 86 Nonbanks 5,054 6,617 6,448 6,687 6,631 6,372 7,009 5,939* 7,209 7,398 87 To foreigners 92,307 108,531 98,167 101,999 109,358 113,395 107,176 111,351* 110,514 104,356 88 Other branches of parent bank 27,397 36,709 30,054 30,756 33,6% 35,560 35,983 35,376 35,143 33,424 89 Banks 29,780 25,126 25,541 25,823 28,792 30,609 25,231 25, %5 27,227 23,985 90 Official institutions 8,551 8,361 9,670 9,131 11,687 11,438 12,090 14,188 12,938 10,531 91 Nonbank foreigners 26,579 38,335 32,902 36,289 35,183 35,788 33,872 35,822* 35,206 36,416 92 Other liabilities 13,548 22,103 28,379 16,336R 16,%5R 14,770 14,983* 14,455 15,929 15,002 93 Total payable in U.S. dollars 108,178 116,094 108,755 95,556r 104,469r 105,699 108,214' 100,731 101,342 95,892 94 Negotiable CDs 18,143 12,710 10,076 5,689 4,213 4,494 3,894 4,770 4,444 3,765 95 To United States 33,056 34,697 33,003 30,330 31,266 30,204 35,417 28,545* 28,874 33,552 % Parent bank 28,812 29,955 28,260 25,700 26,021 25,160 29,957 23,767* 23,097 28,067 97 Other banks in United States 1,065 1,156 1,177 992 866 906 709 1,063 1,097 707 98 Nonbanks 3,179 3,586 3,566 3,638 4,379 4,138 4,751 3,715* 4,680 4,778 99 To foreigners 50,517 60,014 56,626 51,916 59,938 62,899 62,048 60,107* 59,643 51,850 100 Other branches of parent bank 18,384 25,957 20,800 17,986 22,080 22,8% 22,026 20,807 20,516 19,516 101 Banks 12,244 9,488 11,069 9,112 10,956 13,050 12,540 9,740 10,359 6,702 102 Official institutions 5,454 4,692 7,156 6,156 8,142 8,459 8,847 10,114 9,%7 7,008 103 Nonbank foreigners 14,435 19,877 17,601 18,662 18,760 18,494 18,635 19,446* 18,801 18,624 104 Other liabilities 6,462 8,673 9,050 7,621R 9,052R 8,102 6,855* 7,309 8,381 6,725 Bahamas and Cayman Islands 105 Total payable in any currency 176,006 162,316 168,326 145,786 154,293 156,176 147,422 144,894 151,175 148,867 106 Negotiable CDs 678 646 1,173 872 1,394 1,939 1,350 1,355 1,142 1,713 107 To United States 124,859 114,738 129,872 109,408R 114,439* 116,699* 111,861* 108,150* 110,729* 110,391 108 Parent bank 75,188 74,941 79,394 63,169R 69,649* 71,381* 67,347* 65,122* 62,336* 59,252 109 Other banks in United States 8,883 4,526 10,231 9,801 10,303 10,944 10,445 10,265 10,059 11,492 110 Nonbanks 40,788 35,271 40,247 36,438 34,487 34,374 34,069 32,763 38,334 39,647 111 To foreigners 47,382 44,444 35,200 34,060 34,8% 35,411 32,556 33,766 37,690 35,369 112 Other branches of parent bank 23,414 24,715 17,388 16,071 15,441 16,287 15,169 15,411 18,056 18,015 113 Banks 8,823 5,588 5,662 6,788 6,988 7,574 6,422 6,350 7,%7 6,476 114 Official institutions 1,097 622 572 984 1,058 932 805 932 1,036 858 115 Nonbank foreigners 14,048 13,519 11,578 10,217 11,409 10,618 10,160 11,073 10,631 10,020 116 Other liabilities 3,087 2,488 2,081 L,446R 3,564R 2,127* 1,655* 1,623* 1,614* 1,394 117 Total payable in U.S. dollars 171,250 157,132 163,603 140,298 149,320 151,527 143,150 140,734 146,875 144,291 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 1993 IItteemm 11999900 11999911 Sept. Oct. Nov. Dec. Jan. Feb. Mar.p 1 344,529 360,530 393,687 405,465 394,845 398,672 411,817' 413,235r 409,872 By type 7 Liabilities reported by banks in the.United States 39,880 38,396 43,604 60,933 54,007 54,823 63,792r 66,454r 62,869 3 U.S. Treasury bills and certificates3 79,424 92,692 113,634 104,286 100,702 104,5% 111,540 113,594 113,547 U.S. Treasury bonds and notes 4 202,487 203,677 208,924 211,875 211,272 210,553 207,588 220033,,222244 220022,,555522 5 Nonmarketable 4,491 4,858 4,505 4,473 4,503 4,532 4,563 4,592 4,622 6 U.S. securities other than U.S. Treasury securities3 18,247 20,907 23,020 23,898 24,361 24,168 24,334 25,371 26,282 By area 7 Western Europe 167,191 168,365 186,364 194,551 184,207 188,693 ll%%,,224400rr 119999,,665599rr 187,302 8 8,671 7,460 7,027 8,111 6,381 7,920 8,411 7,886 9,326 9 Latin America and Caribbean 21,184 33,554 37,736 38,678 38,945 40,015 41,388 42,502 44,509 10 138,096 139,465 151,667 153,555 154,493 152,148 156,211 154,015 157,898 11 1,434 2,092 3,360 3,481 3,779 3,565 3,705 3,866 3,919 12 Other countries 7,955 9,592 7,531 7,087 7,038 6,329 5,860 5,305 6,916 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 1992 IItteemm 11998899 11999900 11999911 Mar. June Sept. Dec.r 1 Banks' liabilities 67,835 70,477 75,129 68,434 71,240 84,487 73,227 2 Banks' claims 65,127 66,7% 73,195 60,424 58,262 72,003 62,772 3 Deposits 20,491 29,672 26,192 23,270 23,466 28,074 24,186 4 Other claims 44,636 37,124 47,003 37,154 34,7% 43,929 38,586 5 Claims of banks' domestic customers2 3,507 6,309 3,398 2,%2 4,375 3,987 4,432 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 • July 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 1993 IItteemm 11999900 11999911 11999922 Sept. Oct. Nov. Dec. Jan. Feb.r Mar." HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 759,634 756,066 809,919r 795,856 793,298 799,590 809,919r 801,57Ir 814,328 797,916 7 Banks' own liabilities 577,229 575,374 606,168r 587,139 590,791 601,073 606,168r 592,187r 605,617 586,066 3 Demand deposits 21,723 20,321 21,822r 22,479 21,302 21,935 21,822r 21,106r 22,310 21,580 4 Time deposits 168,017 159,649 160,327r 143,336 157,488 156,814 160,327r 150,095r 147,053 141,526 S Other. 65,822 66,305 93,854r 84,107 92,315 %,294 93,854r 103,828r 106,280 99,624 6 Own foreign offices4 321,667 329,099 330,165 337,217 319,686 326,030 330,165 317,158r 329,974 323,336 7 Banks' custodial liabilities5 182,405 180,692 203,751 208,717 202,507 198,517 203,751 209,384 208,711 211,850 8 U.S. Treasury bills and certificates 96,796 110,734 127,649 134,894 127,993 122,480 127,649 133,799 135,389 137,062 9 Other negotiable and readily transferable instruments 17,578 18,664 21,982 19,349 20,043 21,755 21,982 22,%9 20,735 22,309 10 Other 68,031 51,294 54,120 54,474 54,471 54,282 54,120 52,616 52,587 52,479 11 Nonmonetary international and regional organizations 5,918 8,981 9,350 11,285 10,727 9,915 9,350 1111,,009999rr 11,338 9,425 12 Banks' own liabilities 4,540 6,827 6,951 8,648 7,001 6,982 6,951 7,837r 8,684 6,167 N 14 T D i e m m e a n d d ep d o e s p it o s s its 1,05 3 0 6 2,71 4 4 3 3,21 4 4 6 2,57 2 7 4 1,8 7 9 3 9 2,56 5 1 8 3,21 4 4 6 2,80 3 9 9 r 2,37 4 6 7 2,6 1 7 % 0 15 Other. 3,455 4,070 3,691 6,047 5,029 4,363 3,691 4,989 6,261 3,301 16 Banks' custodial liabilities5 1,378 2,154 2,399 2,637 3,726 2,933 2,399 3,262 2,654 3,258 17 U.S. Treasury bills and certificates 364 1,730 1,908 1,991 3,085 2,371 1,908 2,774 2,348 2,876 18 Other negotiable and readily transferable instruments 1,014 424 486 646 641 561 486 488 306 382 19 Other 0 0 5 0 0 1 5 0 0 0 7.0 Official institutions9 119,303 131,088 159,419 157,238 165,219 154,709 159,419 175,332r 180,048 176,416 21 Banks' own liabilities 34,910 34,411 51,058 40,453 57,225 50,027 51,058 59,577r 62,687 59,366 22 Demand deposits 1,924 2,626 1,274 1,761 1,723 1,492 1,274 l,397r 1,764 1,457 23 Time deposits2 14,359 16,504 17,828 16,125 19,741 17,834 17,828 18,685 18,9% 18,707 24 Other. 18,628 15,281 31,956 22,567 35,761 30,701 31,956 39,495 41,927 39,202 7,5 Banks' custodial liabilities5 84,393 96,677 108,361 116,785 107,994 104,682 108,361 115,755 117,361 117,050 26 U.S. Treasury bills and certificates 79,424 92,692 104,5% 113,634 104,286 100,702 104,5% 111,540 113,594 113,547 27 Other negotiable and readily transferable instruments 4,766 3,879 3,726 2,922 3,595 3,784 3,726 4,054 3,648 3,411 28 Other 203 106 39 229 113 1% 39 161 119 92 79 Banks10 540,805 522,265 546,412r 537,936 525,221 543,980 546,412r 522,015r 530,028 520,209 30 Banks' own liabilities 458,470 459,335 475,260" 466,617 454,183 472,949 475,260r 453,242r 462,530 451,215 31 Unaffiliated foreign banks 136,802 130,236 145,095r 129,400 134,497 146,919 145,095r 136,084r 132,556 127,879 37. Demand deposits 10,053 8,648 10,168r 10,443 9,741 10,088 10,168r 9,903r 10,974 10,493 33 Time deposits 88,541 82,857 90,193r 74,075 85,729 87,690 90,193r 80,35 lr 77,690 72,228 34 Other. 38,208 38,731 44,734r 44,882 39,027 49,141 44,734r 45,830r 43,892 45,158 35 Own foreign offices 321,667 329,099 330,165 337,217 319,686 326,030 330,165 317,158r 329,974 323,336 36 Banks' custodial liabilities5 82,335 62,930 71,152 71,319 71,038 71,031 71,152 68,773 67,498 68,994 37 U.S. Treasury bills and certificates 10,669 7,471 11,087 10,905 10,481 10,444 11,087 9,685 9,2% 9,976 38 Other negotiable and readily transferable instruments 5,341 5,694 7,568 7,373 7,325 7,572 7,568 7,708 6,692 7,%5 39 Other 66,325 49,765 52,497 53,041 53,232 53,015 52,497 51,380 51,510 51,053 40 Other foreigners 93,608 93,732 94,738r 89,397 92,131 90,986 94,738r 93,125r 92,914 91,866 41 Banks' own liabilities 79,309 74,801 72,899r 71,421 72,382 71,115 72,899r 71,531r 71,716 69,318 47 Demand deposits 9,711 9,004 10,334r 10,251 9,765 10,297 10,334r 9,767r 9,525 9,434 43 Time deposits2 64,067 57,574 49,092r 50,559 50,119 48,729 49,092r 48,250r 47,991 47,921 44 Other. 5,530 8,223 13,473 10,611 12,498 12,089 13,473 13,514 14,200 11,963 45 Banks' custodial liabilities5 14,299 18,931 21,839 17,976 19,749 19,871 21,839 21,594 21,198 22,548 46 U.S. Treasury bills and certificates 6,339 8,841 10,058 8,364 10,141 8,%3 10,058 9,800 10,151 10,663 47 Other negotiable and readily transferable instruments 6,457 8,667 10,202 8,408 8,482 9,838 10,202 10,719 10,089 10,551 48 Other 1,503 1,423 1,579 1,204 1,126 1,070 1,579 1,075 958 1,334 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 7,073 7,456 9,114 7,452 7,672 7,716 9,114 9,724 9,499 9,548 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 1993 Item 1991 1992 Sept. Oct. Nov. Dec. Jan. Feb.' AREA 1 Total, all foreigners 759,634 756,066 809,919' 795,856 793,298 799,590 809,919' 801,571' 814,328 2 Foreign countries .. 753,716 747,085 800,569' 784,571 782,571 789,675 800,569' 790,472' 802,990 3 Europe 254,452 249,097 308,398r 290,435 306,547 311,875 308,398r 303,721' 304,841 4 Austria 1,229 1,193 l,611r 1,456 1,584 1,358 1,61 lr 1,158 1,942 5 Belgium and Luxembourg . 12,382 13,337 20,572 17,948 21,183 19,662 20,572 21,255 19,729 6 Denmark 1,399 937 3,060 1,760 1,788 1,481 3,060 1,885 2,835 7 Finland 602 1,341 1,299 685 949 1,144 1,299 1,862 2,049 8 France 30,946 31,808 41,459 32,158 34,881 39,968 41,459 34,285 32,457 9 Germany 7,485 8,619 18,631 14,739 13,810 15,401 18,631 20,685 18,934 10 Greece 934 765 910 1,069 872 749 910 815 758 11 Italy 17,735 13,541 10,041 12,236 11,104 12,494 10,041 8,759' 10,701 12 Netherlands 5,350 7,161 7,372 10,407 8,%2 8,411 7,372 8,731 11,711 13 Norway 2,357 1,866 3,319 1,851 1,577 2,014 3,319 3,550 2,521 1 1 4 5 P S o p r a t i u n g al 2 7. , 5 9 4 5 4 8 1 2 1 , , 1 3 8 9 4 1 2 9 , , 4 7 6 9 5 6 r 1 2 5 , , 2 5 4 8 5 9 1 2 4 , , 2 6 5 0 8 2 1 2 0 , , 2 3 5 8 5 3 2 9 , , 4 7 6 % 5 r 1 2 4 , , 5 9 1 0 8 4 ' 1 2 7 , , 5 2 0 3 8 3 16 Sweden 1,837 2,222 2,986 3,194 5,312 4,485 2,986 2,%2 1,991 17 Switzerland 36,690 37,238 39,440 39,314 38,240 40,791 39,440 41,533' 40,227 2 2 2 2 1 1 0 2 1 3 8 9 Y R T O O U u u u t t n h h r g s i k e e s t o e r i e r s a s d y l E a i v a n K s i a i W t n e " g r e n d s o t E e m r u n r o E p u e i r 1 n o p e1 1 1 0 1 1 9 1 , . , , 9 6 5 5 1 1 2 8 4 5 6 1 8 9 5 5 9 9 10 9 3 0 1 , , , , 2 4 2 6 2 5 7 6 9 4 2 9 4 7 2 1 2 8 1 2 1 3 5 2 2 , , , , 4 8 6 4 5 5 2 3 0 6 7 3 2 4 4 6 7 4 r 1 1 1 2 3 2 5 . , , , 0 9 4 8 8 5 8 4 6 9 1 6 7 7 7 9 7 7 1 2 1 7 2 3 4 , , , , 2 5 9 5 4 7 2 2 4 7 0 5 8 4 1 7 5 0 1 2 1 6 2 3 7 , , , , 6 6 3 5 6 3 9 9 6 0 7 5 1 9 0 1 5 3 1 2 1 3 5 2 2 , , , , 4 8 6 4 5 5 2 3 0 6 7 3 2 4 4 6 7 4 r 1 2 0 5 2 2 6 , , , , 9 5 7 4 5 7 2 3 1 3 0 0 6 3 8 6 6 0 1 2 0 7 2 2 5 , , , , 4 3 8 4 5 4 9 8 6 1 9 9 5 2 2 2 7 7 24 Canada. 20,349 21,605 22,746 22,668 21,378 22,052 22,746 21,467 22,898 25 Latin America and Caribbean. 332,997 345,529 316,008r 316,995 310,015 309,750 316,008r 313,248' 320,497 26 Areentina 7,365 7,753 9,477r 9,065 9,387 8,715 9,477r 10,792' 10,608 27 Bahamas 107,386 100,622 82,212r 77,633 85,878 86,310 82,212r 84,767' 87,793 28 Bermuda 2,822 3,178 7,079 4,275 5,889 6,355 7,079 6,319 6,508 29 Brazil 5,834 5,704 5,584 5,393 5,828 5,235 5,584 5,321 5,304 30 British West Indies 147,321 163,620 151,886r 159,838 143,311 143,084 151,886' 146,879' 149,506 4 3 4 4 4 3 3 3 3 3 3 3 3 1 5 0 2 3 2 4 6 8 9 1 3 7 U G N O P P J V C E C C M a e a c r o u h e t u e m e h r u n u t i l n a b u x l h o e g a a a t a e e i r e m e m u d i z c c m r a o u o b a l a y e a r a i a l n l a a d s Antilles 1 1 4 4 7 2 6 3 1 1 1 2 6 , , , , , , , , , , , 5 4 7 3 5 1 2 2 5 2 3 6 7 9 7 5 4 2 5 9 4 7 7 5 1 4 2 9 7 5 0 7 4 1 1 9 0 1 1 1 5 4 2 6 4 3 1 1 3 1 9 , , , , , , , , , , , 6 5 6 0 8 2 5 2 2 1 2 9 9 9 6 9 7 9 4 8 3 8 3 5 5 2 1 6 9 4 9 3 1 1 2 2 7 1 ll 4 4 5 6 3 l 1 1 9 , , , , , , , , , 3 , 3 1 5 1 2 0 9 3 9 0 4 8 7 7 8 5 0 3 5 7 9 8 5 7 7 7 0 1 0 5 5 5 1 3 3 6 r r r r r r r r " r 1 1 4 4 4 6 3 2 1 1 1 1 9 , , , , , , , , , , , 7 7 4 0 4 4 1 1 3 5 6 0 5 9 5 1 0 1 4 5 0 5 3 7 % 1 2 9 9 1 6 0 2 9 0 3 3 1 1 4 4 4 2 6 3 1 1 1 9 1 , , , , , , , , , , , 7 1 7 0 2 2 2 1 3 5 0 2 0 6 8 1 4 5 7 4 0 7 2 1 1 8 7 7 6 4 3 4 1 4 6 6 6 0 1 1 4 6 6 2 3 2 1 1 1 1 9 , , , , , , , , , , , 1 6 0 0 9 9 3 0 2 0 5 0 0 7 6 9 2 7 2 0 4 7 4 1 1 1 7 6 2 5 6 3 3 7 1 3 6 1 1 1 4 5 4 3 6 1 1 1 1 9 , , , , , , , , , , 1 2 0 9 3 5 1 9 3 3 4 0 7 5 7 0 3 9 5 7 5 8 8 8 1 5 3 7 5 3 5 1 7 6 c 7 ' ' ' ' ' ' c ' ' 2 1 4 4 4 3 6 0 1 1 1 1 , , , , , , , , , , 3 4 0 0 6 2 3 9 0 0 8 1 5 3 1 9 1 2 3 4 5 9 0 9 2 8 3 4 1 3 8 2 5 2 8 6 8 ' 2 1 4 4 4 3 2 6 1 1 0 1 , , , , , , , , , , 4 2 8 0 2 0 4 2 3 9 8 0 1 1 6 0 7 1 8 6 2 8 8 4 7 4 1 7 9 1 2 9 0 4 6 5 3 44 Asia 136,844 120,462 143,362r 144,793 134,385 136,111 143,362' 141,524 143,915 China 45 People's Republic of China 2,421 2,626 3,202r 2,480 2,582 2,559 3,202' 3,114' 3,007 46 Republic of China (Taiwan) 11,246 11,491 8,379r 9,431 8,616 8,750 8,379' 8,929' 9,102 47 Hong Kong 12,754 14,269 18.445 18,682 17,542 16,322 18.445 17,510 19,445 48 India 1,233 2,418 1,396 1,372 1,234 1,210 1,3% 1,323 1,377 49 Indonesia 1,238 1.463 1,480 1,507 1,260 1,217 1,480 1,392 1,460 50 Israel 2,767 2,015 3,775 2,613 2,208 3,691 3,775 3,389 3,371 51 Japan 67,076 47,069 58,332 64,606 56,101 55,356 58,332 56,007 58,390 52 Korea (South) 2,287 2,587 3,336 3,673 3,529 3,698 3,336 3,415 3,468 53 Philippines 1,585 2,449 2,275 2,028 2,275 2,223 2,275 2,350 2,746 54 Thailand ... 1.443 2,252 5,582 4,517 5,082 5,797 5,582 5,722 5,375 55 Middle Eastern oil-exporting countries" 15,829 15,752 21.446 19,977 19,040 20,266 21.446 19,877 19,897 56 Other 16,965 16,071 15,714r 13,907 14,916 15,022 15,714' 18,4% 16,277 57 Africa 4,630 4,825 5,884r 5,592 5,843 6,062 5,884' 5,913 6,364 58 Egypt 1,425 1,621 2,472 2,243 2,598 2,601 2,472 2,756 3,077 59 Morocco 104 79 76 100 98 93 76 88 92 60 South Africa 228 228 190 190 240 214 190 158 319 61 Zaire 53 31 19 14 24 23 19 25 17 62 Oil-exporting countries13 1,110 1,082 1,346 1,339 1,201 1,402 1,346 1,125 1,135 63 Other 1,710 1,784 1,781' 1,706 1,682 1,729 1,781' 1,761 1,724 64 Other 4.444 5,567 4,171r 4.088 4,403 3,825 4,171' 4,599 4,475 65 Australia 3,807 4.464 3,047 2,927 2,987 2,654 3,047 3,502 3,388 66 Other ... 637 1,103 l,124r 1,161 1,416 1,171 1,124' 1,097 1,087 67 Nonmonetary international and regional organizations 5,918 8,981 9,350 11,285 10,727 9,915 9,350 11,099* 11,338 68 International16 4,390 6,485 7,434 8,204 7,689 6,764 7,434 7,864' 8,657 69 Latin American regional1 1,048 1,181 1,415 2,274 2,130 2,248 1,415 2,327 1,738 70 Other regional18 479 1,315 501 807 908 903 501 908 943 11. Beginning December 1992, excludes Bosnia, Croatia, and Slovenia. 15. Comprises Algeria, Gabon, Libya, and Nigeria. 12. Includes the Bank for International Settlements and Eastern European 16. Principally the International Bank for Reconstruction and Development. countries not listed in line 23. Beginning December 1992, includes, in addition, all Excludes "holdings of dollars" of the International Monetary Fund. former parts of the U.S.S.R. (except Russia), and Bosnia, Hercegovina, Croatia, 17. Principally the Inter-American Development Bank. and Slovenia. 18. Asian, African, Middle Eastern, and European regional organizations, 13. Comprises Bulgaria, Czechoslovakia, Hungary, Poland, and Romania. except the Bank for International Settlements, which is included in "Other 14. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and Western Europe." United Arab Emirates (Trucial States). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics • July 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 1993 AArreeaa aanndd ccoouunnttrryy 11999900 11999911 11999922 Sept. Oct. Nov. Dec. Jan. Feb.' Mar.p 1 Total, all foreigners 511,543 514,339 495,713' 486,071 493,689 490,721 495,713' 483,903' 493,522 473,045 2 Foreign countries 506,750 508,056 490,631' 481,900 491,217 487,840 490,631' 480,803' 489,414 469,602 3 Europe 113,093 114,310 124,13c 117,349 126,170 122,143 124,13C 117,308' 124,724 122,636 4 Austria 362 327 341 367 414 463 341 366 530 1,101 5 Belgium and Luxembourg 5,473 6,158 6,404 7,533 6,980 6,423 6,404 6,473 5,886 6,066 6 Denmark 497 686 707 1,012 830 1,056 707 705 785 682 7 Finland 1,047 1,907 1,419 1,299 817 1,230 1,419 1,275 1,226 1,010 8 France 14,468 15,112 14,847 15,084 16,111 15,718 14,847 14,012 14,670 13,240 9 Germany 3,343 3,371 4,229 4,075 5,629 5,328 4,229 5,544' 5,370 5,900 10 Greece 727 553 718 589 583 598 718 669 668 583 11 Italy 6,052 8,242 9,048 9,485 9,752 9,443 9,048 8,716 8,466 8,493 1? Netherlands 1,761 2,546 2,497 1,980 2,334 3,006 2,497 2,927 3,279 2,676 13 Norway 782 669 356 639 666 435 356 649 750 645 14 Portugal 292 344 325 383 327 330 325 390 494 454 Spain 2,668 1,881 2,772 3,304 4,642 3,481 2,772 2,593' 4,158 3,889 16 Sweden 2,094 2,335 4,929 5,494 6,678 5,786 4,929 5,340 5,155 4,809 17 Switzerland 4,202 4,540 4,722 3,102 3,688 3,591 4,722 4,493 4,971 4,410 18 Turkey 1,405 1,063 962 986 1,177 950 962 1,071 1,041 943 19 United Kingdom 65,151 60,395 63,98c 56,483 60,209 58,991 63.98C 56,262' 61,394 62,026 20 Yugoslavia2 1,142 825 569 674 668 661 569 571 567 553 21 Others in Western Europe 597 789 1,706 1,211 959 1,019 1,706 1,607 1,607 1,780 22 Russia 530 1,970 3,147' 3,199 3,190 3,174 3,147' 3,154 3,154 2,906 23 Other Eastern Europe 499 597 452 450 516 460 452 491 553 470 24 Canada 16,091 15,113 14,185 15,862 16,830 15,834 14,185 16,481' 14,972 18,375 25 Latin America and Caribbean 231,506 246,137 213,772' 210,580 213,423 217,040 213,772' 218,391' 210,770 201,920 76 Argentina 6,967 5,869 4,882 4,553 4,564 4,605 4,882 4,804' 4,859 4,835 7,7 Bahamas 76,525 87,138 59,532 58,588 64,853 65,139 59,532 62,831 63,898 56,978 78 Bermuda 4,056 2,270 5,934 3,567 2,798 6,035 5,934 6,797 2,851 3,910 79 Brazil 17,995 11,894 10,733' 11,308 11,558 11,583 10,733' 10,924' 10,507 10,863 30 British West Indies 88,565 107,846 98,738 99,580 96,906 96,325 98,738 100,926 94,885 92,200 31 Chile 3,271 2,805 3,397 3,300 3,323 3,309 3,397 3,690 3,795 3,639 37, Colombia 2,587 2,425 2,750 2,475 2,595 2,698 2,750 2,752' 2,819 2,807 33 Cuba 0 0 0 0 5 0 0 0 0 0 34 Ecuador 1,387 1,053 884 924 936 926 884 853 835 808 35 Guatemala 191 228 262 235 275 255 262 240 257 274 36 Jamaica 238 158 167 160 147 162 167 170 164 151 37 Mexico 14,851 16,567 15,049 17,234 16,621 16,495 15,049 15,216' 15,988 15,107 38 Netherlands Antilles 7,998 1,207 1,379 1,045 1,080 1,529 1,379 1,735' 1,938 2,107 39 Panama 1,471 1,560 4,474 1,937 1,979 2,080 4,474 2,024' 2,307 2,550 40 Peru 663 739 730 724 713 723 730 735 708 650 41 Uruguay 786 599 936 921 882 877 936 895 844 846 4? Venezuela 2,571 2,516 2,525 2,653 2,700 2,880 2,525 2,409' 2,485 2,557 43 Other 1,384 1,263 1,40C 1,376 1,488 1,419 1,40C 1,39C 1,630 1,638 44 138,722 125,262 131,248 131,011 127,358 126,143 131,248 121,729 131,456 119,047 China 45 People's Republic of China 620 747 906 636 978 624 906 774 892 939 46 Republic of China (Taiwan) 1,952 2,087 2,046 2,054 1,848 1,653 2,046 1,683 1,585 1,634 47 Hong Kong 10,648 9,617 9,673 10,057 9,095 9,287 9,673 9,145 10,298 10,549 48 India 655 441 529 499 500 539 529 532 549 443 49 Indonesia 933 952 1,189 1,089 1,112 1,135 1,189 1,323 1,292 1,469 50 774 860 820 800 826 937 820 877 809 895 51 Japan 90,699 84,807 78,609 83,527 80,253 77,676 78,609 74,593 79,753 66,767 5? Korea (South) 5,766 6,048 6,170 6,247 6,113 6,288 6,170 6,063' 6,753 6,944 53 Philippines 1,247 1,910 2,145 2,144 2,181 2,034 2,145 1,871 1,842 1,713 54 Thailand , 1,573 1,713 1,867 1,795 1,764 1,873 1,867 1,7% 1,737 1,659 55 Middle Eastern oil-exporting countries 10,749 8,284 18,559 14,613 15,488 16,858 18,559 17,083 17,775 19,048 56 Other 13,106 7,796 8,735 7,550 7,200 7,239 8,735 5,989' 8,171 6,987 57 Africa 5,445 4,928 4,289 4,333 4,303 4,233 4,289 4,262 4,147 3,871 58 Egypt 380 294 194 256 229 214 194 171 291 192 59 Morocco 513 575 441 467 452 443 441 421 403 3% 60 South Africa 1,525 1,235 1,041 1,055 1,036 1,063 1,041 1,069 1,030 1,021 61 Zaire 16 4 4 4 4 4 4 3 3 3 62 Oil-exporting countries 1,486 1,298 1,004 1,067 1,056 1,029 1,004 1,067 1,108 1,130 63 Other 1,525 1,522 1,605 1,484 1,526 1,480 1,605 1,531 1,312 1,129 64 Other 1,892 2,306 3,007' 2,765 3,133 2,447 3,007' 2,632 3,345 3,753 65 Australia 1,413 1,665 2,263 1,765 1,951 1,601 2,263 1,8% 2,552 3,117 66 Other 479 641 744' 1,000 1,182 846 744' 736 793 636 67 Nonmonetary international and regional organizations 44,,779933 66,,228833 55,,008822 4,171 2,472 2,881 5,082 3,100 4,108 3,443 1. Reporting banks include all types of depository institutions, as well as some 4. Comprises Bulgaria, Czechoslovakia, Hungary, Poland, and Romania. brokers and dealers. 5. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and 2. Beginning December 1992, excludes Bosnia, Croatia, and Slovenia. United Arab Emirates (Trucial States). 3. Includes the Bank for International Settlements and Eastern European 6. Comprises Algeria, Gabon, Libya, and Nigeria. countries not listed in line 23. Beginning December 1992, includes, in addition, all 7. Excludes the Bank for International Settlements, which is included in former parts of the U.S.S.R. (except Russia), and Bosnia, Hercegovina, Croatia, "Other Western Europe." and Slovenia. 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 Claim 1990 1991 1992r Sept. Oct. Nov. Dec/ Jan.' Feb/ 1 Total 579,044 579,683 555,697 548.286 555,697 2 Banks' claims 511,543 514,339 495,713 486,071 493,689 490,721 495,713 483,903 493,522 3 Foreign public borrowers 41,900 37,126 31,370 31,504 32,056 30,955 31,370 33,163 30,500 4 Own foreign offices2 304,315 318,800 299,770 298.287 298,056 290,974 299,770 290,938 303,819 5 Unaffiliated foreign banks 117,272 116,602 109,909 105,768 112,224 112,512 109,909 101,949 102,840 6 Deposits 65,253 69,018 61,125 54,315 60,856 61,999 61,125 53,612 51,690 7 Other 52,019 47,584 48,784 51,453 51,368 50,513 48,784 48,337 51,150 8 All other foreigners 48,056 41,811 54,664 50,512 51,353 56,280 54,664 57,853 56,363 9 Claims of banks' domestic customers3 67,501 65,344 59,984 62,215 59,984 10 Deposits 14,375 15,280 15,452 15,348 15,452 11 Negotiable and readily transferable instruments 41,333 37,125 31,400 33,687 31,400 12 Outstanding collections and other claims 11,792 12,939 13,132 13,180 13,132 MEMO 13 Customer liability on acceptances 13,628 8,974 8,701 8,540 8,701 14 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States .. 44,638 40,146 33,605 34,692 34,522 33,708 33,605 36,151 36,922 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 1992 MMaattuurriittyy,, bbyy bboorrrroowweerr aanndd aarreeaa 11998899 11999900 11999911 Mar. June Sept. Dec. 1 Total 238,123 206,903 195,302 194,450 196,768 187,398 195,626 By borrower 2 Maturity of one year or less2 178,346 165,985 162,573 161,566 162,433 155,254 164,059 3 Foreign public borrowers 23,916 19,305 21,050 20,253 20,528 17,863 17,867 4 All other foreigners 154,430 146,680 141,523 141,313 141,905 137,391 146,192 5 Maturity of more than one year 59,776 40,918 32,729 32,884 34,335 32,144 31,567 6 Foreign public borrowers 36,014 22,269 15,859 16,182 15,145 13,295 13,223 7 All other foreigners 23,762 18,649 16,870 16,702 19,190 18,849 18,344 By area Maturity of one year or less 8 Europe 53,913 49,184 51,835 52,911 54,997 55,986 53,885 9 Canada 5,910 5,450 6,444 6,958 7,986 5,949 6,118 10 Latin America and Caribbean 53,003 49,782 43,597 48,536 49,094 45,241 50,320 11 57,755 53,258 51,059 43,645 41,409 40,824 45,862 1? Africa 3,225 3,040 2,549 2,470 2,127 2,183 1,810 13 All other3 4,541 5,272 7,089 7,046 6,820 5,071 6,064 Maturity of more than one year 14 Europe 4,121 3,859 3,878 4,315 6,752 6,625 5,360 15 Canada 2,353 3,290 3,595 3,289 3,158 3,227 3,290 16 Latin America and Caribbean 45,816 25,774 18,277 18,120 16,827 15,092 15,166 17 4,172 5,165 4,459 4,714 4,979 4,815 4,977 18 Africa 2,630 2,374 2,335 2,207 2,356 2,107 2,364 19 All other3 684 456 185 239 263 278 410 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 • July 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 Dec. Mar. June Sept. Dec. Mar. June Sept. Dec. 1 Total 346.3 338.8 317.8 325.3 320.4 335.7 341.5 347.91 357.4r 343.9r 345.8r 152.7 152.9 132.1 129.9 129.8 134.0 137.2 131.r 136.3r 137.5r 134.0r 9.0 6.3 5.9 6.2 6.1 5.8 6.0 5.3 6.2 6.2 5.6 10.5 11.7 10.4 9.7 10.5 11.1 11.0 10.0 12.0 15.5 15.4r 10.3 10.5 10.6 8.8 8.3 9.7 8.3 8.4 8.8 10.9 9.3 6 Italy 6.8 7.4 5.0 4.0 3.6 4.5 5.6 5.4 8.0 6.4 6.5 2.7 3.1 3.0 3.3 3.3 3.0 4.7 4.3 3.3 3.7 2.8 1.8 2.0 2.2 2.0 2.5 2.1 1.9 2.0* 1.9 2.2 2.3 5.4 7.1 4.4 3.7 3.3 3.9 3.4 3.2 4.6 5.2 4.8r 66.2 67.2 60.8 62.3 59.5 64.9 68.5 64.8 65.9* 61.8r 61.4r 5.0 5.4 5.9 6.8 8.2 5.8 5.8 6.6 6.7 6.7 6.6r 34.9 32.2 23.9 23.2 24.6 23.2 22.2 21.lr 18.7r 18.91 19.2r 21.3 21.0 22.9 23.5 21.3 22.1 22.8 21.5 25.5 25.1 24.1 1.5 1.5 1.4 1.4 1.1 1.0 .6 .8 .8 .8 1.2 1.1 1.1 1.1 .9 1.2 .9 .9 .8 1.3 1.5 .9 16 Finland 1.1 1.0 .7 1.0 .8 .6 .7 .8 .8 1.0 .7 1.8 2.5 2.7 2.5 2.4 2.3 2.6 2.3 2.8 3.<y 3.0 1.8 1.4 1.6 1.5 1.5 1.4 1.4 1.5 1.7 1.6 1.2 19 Portugal .4 .4 .6 .6 .6 .5 .6 .5 .5 .5 .4 6.2 7.1 8.3 9.0 7.1 8.3 8.3 7.7 10.1 9.8 9.0 21 Turkey 1.5 1.2 1.7 1.7 1.9 1.6 1.4 1.2 1.5 1.5 1.3 1.7 1.0 1.2 1.2 1.1 1.3 1.8 1.5 2.0 1.5 1.7 23 South Africa 2.4 2.0 1.8 1.8 1.8 1.6 1.9 1.8 1.7 1.7 1.7 1.8 1.6 1.8 1.9 2.0 2.4 2.7 2.3 2.3 2.3 2.9 25 OPEC2 16.6 17.1 12.8 17.1 14.0 15.6 14.6 15.8 16.2 15.9 16.1 1.7 1.3 1.0 .9 .9 .8 .7 .7 .7 .7 .6 7.9 7.0 5.0 5.1 5.3 5.6 5.4 5.4 5.3 5.4 5.2 1.7 2.0 2.7 2.8 2.6 2.8 2.8 3.0 3.0 3.0 3.0 3.4 5.0 2.5 6.6 3.7 5.0 4.2 5.3 5.9 5.4 6.2 1.9 1.7 1.7 1.6 1.5 1.5 1.5 1.4 1.4 1.4 1.1 85.3 77.5 65.4 66.4 65.0 65.0 64.3 70.2r 68. lr 12.9 12.2' Latin America 9.0 6.3 5.0 4.7 4.6 4.5 4.8 5.0 5.1 6.2 6.6 33 Brazil 22.4 19.0 14.4 13.9 11.6 10.5 9.6 10.8 10.6 10.8 10.8 34 Chile 5.6 4.6 3.5 3.6 3.6 3.7 3.6 3.9 4.0 4.2 4.4 2.1 1.8 1.8 1.7 1.6 1.6 1.7 1.6 1.6 1.7 1.8 18.8 17.7 13.0 13.7 14.3 16.2 15.5 18.2 16.3 17.1 16.0 37 Peru .8 .6 .5 .5 .5 .4 .4 .4 .4 .5r .5 38 Other 2.6 2.8 2.3 2.2 2.0 1.9 2.1 2.2 2.2 2.5 2.6 Asia China .3 .3 .2 .4 .6 .4 .3 .3 .3 .3 .7 3.7 4.5 3.5 3.6 4.1 4.1 4.1 4.8 4.6 5.0 5.2 2.1 3.1 3.3 3.5 3.0 2.8 3.0 3.6 3.8 3.6 3.2 42 Israel 1.2 .7 .5 .5 .5 .5 .5 .4 .4 .4 .4 43 Korea (South) 6.1 5.9 6.2 6.8 6.9 6.5 6.8 6.9 6.9 7.4 6.6 1.6 1.7 1.9 2.0 2.1 2.3 2.3 2.5 2.7 3.0 3.0 4.5 4.1 3.8 3.7 3.7 3.6 3.7 3.6 3.1 3.6 3.6 46 Thailand 1.1 1.3 1.5 1.6 1.7 1.9 1.7 1.7 1.9 2.2 2.2 .9 1.0 1.7 2.1 2.3 2.3 2.4 2.3r 2.5r 2.7r 2.7r Africa 48 Egypt .4 .4 .4 .4 .4 .4 .4 .3 .5 .3 .2 .9 .9 .8 .8 .7 .7 .7 .7 .7 .6 .6 50 Zaire .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 51 Other Africa5 1.1 1.0 1.0 .8 .8 .8 .7 .7 .6 .9 1.0 3.6 3.5 2.3 2.1 2.1 1.8 2.4 2.9 3.0 3.1 3.1 .7 .7 .2 .3 .4 .4 .9 1.4 1.7 1.8 1.9 1.8 1.6 1.2 1.0 1.0 .8 .9 .8 .7 .7 .6 55 Other 1.1 1.3 .9 .8 .7 .7 .7 .6 .6 .7 .6 44.2 36.6 42.5 50.0 48.3 52.7 52.0 58.4r 59.4 52.3 55.2r 11.0 5.5 2.8 8.3 6.8 6.7 11.9 14 .(F 12.2r 8.r 5.6r .9 1.7 4.4 4.4 4.2 7.1 2.3 3.9 5.1 3.8 6.2 12.9 9.0 11.5 14.1 14.9 13.8 15.8 17.4 18.1 15.7 2o.r 1.0 2.3 7.9 1.1 1.4 3.9 1.2 1.0 .8 .7 I.I 2.5 1.4 1.4 1.5 1.3 1.3 1.3 1.3 1.7 1.8 1.7 .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 9.6 9.7 7.7 11.6 12.4 12.1 12.2 12.2r 15.0* 15.2 13.8 6.1 7.0 6.6 8.9 7.2 7.7 7.1 8.5 6.4 6.8 6.5 65 Other .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 22.6 30.3 39.8 36.4 39.9 44.6 48.2 48.0 48.6r 36.8r 41 .(F 1. The banking offices covered by these data are the U.S. offices and foreign $150 million equivalent in total assets, the threshold now applicable to all branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks. reporting branches. Offices not covered include (1) U.S. agencies and branches of foreign banks, and 2. Organization of Petroleum Exporting Countries, shown individually; other (2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are members of OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, adjusted to exclude the claims on foreign branches held by a U.S. office or another Saudi Arabia, and United Arab Emirates); and Bahrain and Oman (not formally foreign branch of the same banking institution. The data in this table combine members of OPEC). foreign branch claims in table 3.14 (the sum of lines 7 through 10) with the claims 3. Excludes Liberia. of U.S. offices in table 3.18 (excluding those held by agencies and branches of 4. Includes Canal Zone beginning December 1979. foreign banks and those constituting claims on own foreign branches). 5. Foreign branch claims only. Since June 1984, reported claims held by foreign branches have been reduced 6. Includes New Zealand, Liberia, and international and regional by an increase in the reporting threshold for "shell" branches from $50 million to organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A63 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1991 1992 Type and area or country 11998899 11999900 11999911 Sept. Dec. Mar. June Sept. Dec. 1 Total 38,764 46,043 43,156 43,218 43,156 44,098 44,176 45,166 42,899 2 Payable in dollars 33,973 40,786 37,764 38,482 37,764 38,640 37,481 36,574 35,4% 3 Payable in foreign currencies 4,791 5,257 5,392 4,736 5,392 5,458 6,695 8,592 7,403 By type 4 Financial liabilities 17,879 21,066 21,893 21,652 21,893 22,255 21,988 23,406 22,013 5 Payable in dollars 14,035 16,979 17,781 17,947 17,781 18,027 16,744 16,468 15,668 6 Payable in foreign currencies 3,844 4,087 4,112 3,705 4,112 4,228 5,244 6,938 6,345 7 Commercial liabilities 20,885 24,977 21,263 21,566 21,263 21,843 22,188 21,760 20,886 8 Trade payables 8,070 10,683 8,310 8,313 8,310 8,926 9,516 9,409 8,849 9 Advance receipts and other liabilities 12,815 14,294 12,953 13,253 12,953 12,917 12,672 12,351 12,037 10 Payable in dollars 19,938 23,807 19,983 20,535 19,983 20,613 20,737 20,106 19,828 11 Payable in foreign currencies 947 1,170 1,280 1,031 1,280 1,230 1,451 1,654 1,058 By area or country Financial liabilities 12 Europe 11,660 10,978 11,905 12,311 11,905 12,449 13,030 14,070 12,600 13 Belgium and Luxembourg 340 394 217 397 217 174 194 256 427 14 France 258 975 2,106 2,164 2,106 1,997 2,324 2,785 1,608 15 Germany 464 621 682 682 682 666 836 941 740 16 Netherlands 941 1,081 1,056 1,050 1,056 1,025 979 980 606 17 Switzerland 541 545 408 497 408 355 490 627 569 18 United Kingdom 8,818 6,357 6,429 6,589 6,429 7,338 7,344 7,680 7,987 19 Canada 610 229 267 305 267 283 337 320 491 20 Latin America and Caribbean 1,357 4,153 4,325 3,883 4,325 4,062 3,323 3,345 3,480 21 Bahamas 157 371 537 314 537 396 343 220 349 22 Bermuda 17 0 114 0 114 114 114 115 114 23 Brazil 0 0 6 6 6 8 10 18 19 24 British West Indies 724 3,160 3,065 2,961 3,065 2,930 2,182 2,291 2,307 25 Mexico 6 5 7 6 7 7 8 12 12 26 Venezuela 0 4 4 4 4 4 4 5 6 27 Asia 4,151 5,295 5,338 5,149 5,338 5,366 5,209 5,581 5,408 28 Japan 3,299 4,065 4,102 4,000 4,102 4,107 4,116 4,548 4,375 29 Middle East oil-exporting countries' — 2 5 13 19 13 13 10 17 19 30 Africa . 2 2 6 3 6 7 0 5 6 0 0 4 2 4 6 0 0 0 31 Oil-exporting countries3 100 409 52 1 52 88 89 85 28 32 All other4 Commercial liabilities 9,071 10,310 7,808 8,084 7,808 7,501 7,144 6,714 6,624 33 Europe 175 275 248 225 248 256 240 173 285 34 Belgium and Luxembourg 877 1,218 830 992 830 678 659 688 660 35 France 1,392 1,270 944 911 944 880 702 744 592 36 Germany 710 844 709 751 709 574 605 601 555 37 Netherlands 693 775 488 492 488 482 400 369 398 38 Switzerland 2,620 2,792 2,310 2,217 2,310 2,445 2,404 2,262 2,225 39 United Kingdom 40 Canada 1,124 1,261 990 1,011 990 1,095 1,077 1,085 998 41 Latin America and Caribbean 1,224 1,672 1,352 1,512 1,352 1,701 1,803 1,518 1,520 42 Bahamas 41 12 3 14 3 13 8 3 6 43 Bermuda 308 538 310 450 310 493 409 338 292 44 Brazil 100 145 219 211 219 230 212 115 197 45 British West Indies 27 30 107 46 107 108 73 85 55 46 Mexico 323 475 304 291 304 375 475 322 444 47 Venezuela 164 130 94 102 94 168 279 147 127 48 Asia 7,550 9,483 9,330 8,855 9,330 9,890 10,439 11,006 10,643 4 5 9 0 J M ap id a d n l e Eastern oil-exporting countrie Y s <0 2 1 , , 9 6 1 3 4 2 3 2 , , 6 0 5 1 1 6 3 1 , , 7 4 2 9 0 8 3 1 , , 3 7 6 8 3 0 3 1 , , 7 4 2 9 0 8 3 1 , , 5 5 4 9 9 1 3 1 , , 5 7 3 7 7 8 3 1 , , 9 8 0 1 9 3 3 1 , , 9 9 9 4 0 6 51 Africa . 886 844 713 836 713 644 775 675 535 52 Oil-exporting countries3 339 422 327 357 327 253 389 337 291 53 Other4 1,030 1,406 1,070 1,268 1,070 1,012 950 762 566 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 • July 1993 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1991 1992 Type, and area or country 11998899 11999900 11999911 Sept. Dec. Mar. June Sept. Dec. 1 Total 33,173 35,348 42,667 38,315 42,667 42,199 41,869 38,659 38,086r 2 Payable in dollars 30,773 32,760 40,098 35,952 40,098 39,558 38,899 35,738 35,598r 3 Payable in foreign currencies 2,400 2,589 2,569 2,363 2,569 2,641 2,970 2,921 2,488r By type 4 Financial claims 19,297 19,874 25,463 22,536 25,463 25,328 24,612 21,367 20,922r 5 Deposits 12,353 13,577 17,218 16,188 17,218 16,964 15,116 12,547 12,734r 6 Payable in dollars 11,364 12,552 16,343 15,182 16,343 15,803 13,829 11,489 ll,988r 7 Payable in foreign currencies 989 1,025 875 1,006 875 1,161 1,287 1,058 746 8 Other financial claims 6,944 6,297 8,245 6,348 8,245 8,364 9,4% 8,820 8,188r 9 Payable in dollars 6,190 5,280 7,365 5,611 7,365 7,617 8,771 7,788 7,425r 10 Payable in foreign currencies 754 1,017 880 737 880 747 725 1,032 763r 11 Commercial claims 13,876 15,475 17,204 15,779 17,204 16,871 17,257 17,292 17,164r 12 Trade receivables 12,253 13,657 14,479 13,429 14,479 14,266 14,756 14,552 14,886r 13 Advance payments and other claims 1,624 1,817 2,725 2,350 2,725 2,605 2,501 2,740 2,278r 14 Payable in dollars 13,219 14,927 16,390 15,159 16,390 16,138 16,299 16,461 16,185r 15 Payable in foreign currencies 657 548 814 620 814 733 958 831 979r By area or country Financial claims 16 Europe 8,463 9,645 13,546 13,129 13,546 14,205 13,200 11,249 9,346r 17 Belgium and Luxembourg 28 76 13 76 13 12 25 16 8 18 France 153 371 312 255 312 277 786 809 774r 19 Germany 152 367 342 434 342 290 381 321 401 20 Netherlands 238 265 385 420 385 727 732 766 536 21 Switzerland 153 357 591 580 591 682 779 602 507r 22 United Kingdom 7,496 7,971 11,251 10,997 11,251 11,631 8,768 7,727 5,947r 23 Canada 1,904 2,934 2,679 2,163 2,679 2,750 2,529 2,256 l,701r 24 Latin America and Caribbean 8,020 6,201 7,932 6,289 7,932 7,070 7,260 6,523 8,505r 25 Bahamas 1,890 1,090 758 652 758 415 523 1,099 625 26 Bermuda 7 3 8 19 8 12 12 65 40 27 Brazil 224 68 192 137 192 191 181 135 4%r 28 British West Indies 5,486 4,635 6,384 5,106 6,384 5,912 6,018 4,792 6,712r 29 Mexico 94 177 321 176 321 318 343 222 270 30 Venezuela 20 25 40 32 40 34 32 26 29 31 Asia 590 860 957 614 957 961 1,275 995 839r 32 Japan 213 523 385 277 385 380 712 481 683r 33 Middle East oil-exporting countries2 .. 8 8 5 3 5 3 4 4 3 34 Africa . 140 37 57 61 57 60 57 66 79r 12 0 1 1 1 0 0 1 9 35 Oil-exporting countries 36 All other4 180 195 292 280 292 282 291 278 452 Commercial claims 6,209 7,044 7,950 6,884 7,950 7,894 8,138 7,792 7,448r 37 Europe 242 212 192 190 192 181 255 170 183 38 Belgium and Luxembourg 964 1,240 1,544 1,330 1,544 1,562 1,563 1,741 1,394 39 France 696 807 943 858 943 936 908 885 883 40 Germany 479 555 643 641 643 646 666 588 541 41 Netherlands 313 301 295 258 295 328 399 294 260r 42 Switzerland 1,575 1,775 2,088 1,807 2,088 2,086 2,173 1,977 1,776 43 United Kingdom 44 Canada 1,091 1,074 1,174 1,232 1,174 1,176 1,131 1,172 1,251^ 45 Latin America and Caribbean 2,184 2,375 2,591 2,494 2,591 2,572 2,672 3,141 2,842r 46 Bahamas 58 14 11 8 11 11 9 7 18 47 Bermuda 323 246 263 255 263 272 291 245 237 48 Brazil 297 326 418 385 418 364 438 395 336 49 British West Indies 36 40 41 37 41 45 32 43 39r 50 Mexico 508 661 829 741 829 892 847 968 85 lr 51 Venezuela 147 192 202 196 202 206 251 302 316 52 Asia 3,570 4,127 4,573 4,282 4,573 4,354 4,463 4,308 4,638r 53 Japan 1,199 1,460 1,878 1,808 1,878 1,782 1,786 1,793 1,848 54 Middle Eastern oil-exporting countries' 518 460 621 496 621 635 609 512 653 55 Africa . 429 488 418 431 418 418 422 430 536 56 Oil-exporting countries 108 67 95 80 95 75 73 66 77 57 Other4 393 367 498 456 498 457 431 449 450r 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 1993 1992 1993 Transaction and area or country 1991 1992 Jan.- Sept. Oct. Nov. Dec. Jan. Feb.r Mar." Mar. U.S. corporate securities STOCKS 1 Foreign purchases 211,207 221,350 74,950 13,884 18,820 17,885 22,725 19,170 28,772 27,008 2 Foreign sales 200,116 226,490 69,879 17,034 18,170 16,598 20,382 19,353 25,980 24,546 3 Net purchases or sales (-) 11,091 -5,140 5,071 -3,150 650 1,287 2,343 -183 2,792 2,462 4 Foreign countries 10,522 -5,173 4,829 -3,059 653 1,284 2,319 -178 2,702 2,305 53 -4,934 3,314 -1,683 75 371 1,505 52 2,290 972 9 -1,331 15 -234 -92 -50 -154 -25 223 -183 7 Germany -63 -64 290 -112 -52 47 162 91 97 102 8 Netherlands -227 -280 121 -107 -24 -4 190 64 -11 68 9 Switzerland -131 143 1,062 -189 -124 -40 221 205 501 356 10 United Kingdom -352 -3,294 1,280 -869 362 361 705 -350 1,154 476 3,845 1,405 -108 -278 -227 43 176 -341 57 176 12 Latin America and Caribbean 2,177 2,209 480 -90 235 649 422 305 -235 410 13 Middle East1 -134 -88 -170 136 -57 -219 70 -92 -65 -13 14 Other Asia 4,255 -3,944 1,233 -1,064 767 373 122 -123 593 763 1,179 -3,598 -346 -97 184 220 215 28 -624 250 153 10 33 14 -21 -18 -7 4 27 2 17 Other countries 174 169 47 -94 -119 85 31 17 35 -5 18 Nonmonetary international and regional organizations 568 33 242 --9911 -3 3 2244 -5 9900 115577 BONDS2 19 Foreign purchases 153,096 214,801 64,629 17,160 19,315 18,082 19,264 17,417 21,754 2255,,445588 20 Foreign sales 125,637 175,310 56,653 14,452 15,224 16,317 15,513 15,439 18,671 22,543 21 Net purchases or sales (-) 27,459 39,491 7,976 2,708 4,091 1,765 3,751 1,978 3,083 2,915 22 Foreign countries 27,590 38,375 8,334 2,573 4,045 1,600 3,206 2,074 3,209 3,051 23 Europe 13,112 18,314 4,503 1,818 1,993 -492 1,996 1,302 2,188 1,013 24 France 847 1,221 487 155 -4 -7 217 101 311 75 25 Germany 1,577 2,503 86 387 -34 -113 857 91 52 -57 26 Netherlands 482 531 -430 58 133 144 48 -119 -133 -178 27 Switzerland 656 -513 95 -51 -23 -260 105 122 -38 11 28 United Kingdom 8,931 13,229 3,525 1,319 1,568 -312 962 349 2,421 755 29 Canada 1,623 236 -173 48 198 281 -38 -437 145 119 30 Latin America and Caribbean 2,672 8,833 1,391 548 842 540 513 419 482 490 31 Middle East1 1,787 3,166 811 -5 273 515 360 300 248 263 32 Other Asia 8,459 7,545 1,670 171 790 692 119 305 149 1,216 5,767 -450 846 -590 467 266 9 190 61 595 52 354 185 -7 -50 -4 302 168 27 -10 35 Other countries -116 -73 -53 0 -1 68 -46 17 -30 -40 36 Nonmonetary international and regional organizations -131 1,116 -358 135 46 165 554455 --9966 --112266 --113366 Foreign securities 3 3 8 7 Sto F c o k re s, i g n n e t p u p r u c r h c a h s a e s s e s or sales (-)3 - 1 1 3 2 5 1 0 2 , , , 9 5 5 6 9 6 7 8 5 - 1 1 3 8 4 2 2 9 , , , 1 9 1 8 8 7 6 7 3 - 4 5 8 5 3 , , , 4 2 6 0 1 1 8 0 8 - 1 1 2 6 3 ,8 , , 5 6 9 2 3 2 4 2 - 1 1 4 6 2 , , , 2 7 4 6 3 7 0 7 7 - 1 1 3 1 5 , , , 6 6 3 3 7 0 6 2 8 - 1 1 4 2 7 ,3 , , 7 1 6 8 4 8 1 9 — 1 1 5 2 2 , , , 0 7 3 6 2 3 6 3 7 r r r - 1 1 1 6 5 ,5 , , 6 0 6 0 4 0 6 6 - 2 1 4 1 7 , , 5 , 9 4 1 4 3 1 9 8 40 Bonds, net purchases or sales (-) -14,828 -18,470 -19,057 -1,420 -2,205 -791 -2,874 -s.ioo' -9,589 -4,368 330,311 485,659 163,940 46,140 49,670 52,066 39,607 38,411 55,717 69,812 42 Foreign sales 345,139 504,129 182,997 47,560 51,875 52,857 42,481 43,51r 65,306 74,180 43 Net purchases or sales (-), of stocks and bonds -46,795 -50,656 -27,465 -4,312 -6,465 -4,427 -7,242 —7,437r -11,149 -8,879 44 Foreign countries -46,711 -53,992 -26,506 -4,333 -6,492 -4,500 -7,196 —6,430r -11,287 -8,789 -34,452 -38,109 -16,157 -3,196 -6,851 -5,001 -4,516 -6,478r -6,702 -2,977 -7,004 -6,653 -8,222 -222 -1,008 571 -1,167 -161 -5,028 -3,033 47 Latin America and Caribbean 759 -1,830 223 308 1,091 -1,671 512 195 -20 48 48 Asia -7,350 -6,583 -2,259 -1,667 681 1,567 -1,670 -381 567 -2,445 49 Africa -9 -57 -22 -14 -2 42 -11 -7 3 -18 50 Other countries 1,345 -760 -69 458 -403 -8 -344 402 -107 -364 51 Nonmonetary international and regional organizations -84 3,336 -959 21 27 73 --4466 --11,,000077 113388 --9900 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 • July 1993 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1993 1992 1993 Country or area 1991 1992 J M an a . r - . Sept. Oct. Nov. Dec. Jan. Feb. Mar." Transactions, net purchases or sales (-) during period1 1 Estimated total 19,865 39,319 5,876 -5,995 3,546 17,648 8 454 -l,273r 6,695 2 Foreign countries 19,687 37,966 3,848 -6,204 4,351 17,661 -194 -129 -2,166r 6,143 3 Europe 8,663 19,647 -4,931 -4,655 4,671 7,284 3,163 -585 -382r -3,964 4 Belgium and Luxembourg 523 1,985 504 -25 232 370 -28 -59 45 518 5 Germany -4,725 2,076 -3,692 900 -8 -1,584 898 697 -1,632 -2,757 6 Netherlands -3,735 -2,923 -885 -239 -40 1,827 -804 -1,238 206 147 7 Sweden -663 -804 -336 -843 202 668 -344 -54 258 -540 8 Switzerland 1,007 481 -2,223 292 769 1,334 213 -199 -455 -1,569 9 United Kingdom 6,218 24,184 2,880 16 4,068 7,209 2,833 2,025 183r 672 10 Other Western Europe 10,024 -6,002 -1,408 -4,761 -551 -2,758 395 -1,759 975 -624 11 Eastern Europe 13 650 229 5 -1 218 0 2 38 189 12 Canada -3,019 562 5,874 -4,281 458 -1,087 -99 3,302 82 2,490 13 Latin America and Caribbean 10,285 -3,223 -1,668 -1,479 -1,915 7,270 -4,519 -1,495 445 -618 14 Venezuela 10 539 158 31 155 27 11 -175 179 154 15 Other Latin America and Caribbean 4,179 -1,957 -5,436 -2,537 -3,233 2,385 415 -3,309 -1,656 -471 16 Netherlands Antilles 6,097 -1,805 3,610 1,027 1,163 4,858 -4,945 1,989 1,922 -301 17 3,367 23,526 5,047 4,004 1,416 4,000 1,188 -1,136 -1,032 7,215 18 Japan -4,081 9,817 3,518 2,448 -339 3,383 2,201 -743 804 3,457 19 689 1,103 -238 59 -37 119 0 -33 -139 -66 20 Other -298 -3,649 -236 148 -242 75 73 -182 -1,140 1,086 21 Nonmonetary international and regional organizations 178 1,353 2,028 209 -805 -13 202 583 893 552 22 International -358 1,018 865 -31 -903 -38 76 228 581 56 23 Latin American regional -72 533 506 201 219 -31 97 270 235 1 24 M Fo E r M ei O g n countries 19,687 37,966 3,848 -6,204 4,351 17,661 -194 -129 —2,166r 6,143 25 Official institutions 1,190 6,876 -8,001 -4,483 2,951 -603 -719 -2,%5 -4,364 -672 26 Other foreign2 18,4% 31,090 11,849 -1,721 1,400 18,264 525 2,836 2,198r 6,815 Oil-exporting countries 27 Middle East2 -6,822 4,323 -1,282 750 -271 407 511 -238 -1,855 811 28 Africa 239 11 8 4 0 0 0 8 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 May 28, 1993 Rate on May 28, 1993 Rate on May 28, 1993 Country Country CCoouunnttrryy Percent 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 Percent e M ffe o c n t t i h v e A B C e a u l n s g t a iu r d i m a a . . . . . 6 6 5 . . . 2 7 1 5 5 0 A M M p a a r y y . 1 1 1 9 9 9 9 9 9 3 3 3 G I J t a a e p l r y a m n any... 1 7 2 0 . . . 2 5 5 5 0 A M Ju p l a y r y . 1 1 1 9 9 9 9 9 9 2 3 3 United Kingdom 1 5 7 2 . . . 0 7 0 5 A M Se p a p r r t . . . 1 1 1 9 9 9 9 9 9 3 3 2 Denmark 10.5 Mar. 1993 Netherlands 6.25 May 1993 France2.. 7.50 May 1993 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 Type or country 1990 1991 1992 Nov. Dec. Jan. Feb. Mar. Apr. May 1 4 6 7 9 2 3 8 5 1 0 G C U B F N I S J E t a r w e a a e u n e p a l l n r t r i g i y n a m h t o t a i e n z c e u d d d a e e r o a m n r l l a l K y l a n a n i d r n d s s g dom. 1 1 1 1 9 8 8 8 7 8 2 0 4 3 . . . . . . . . . . 7 7 4 5 1 7 7 0 2 1 6 0 5 1 7 1 1 3 0 0 1 1 9 9 9 9 5 9 7 8 2 1 . . . . . . . . . . 1 4 0 3 8 1 3 0 4 0 5 9 7 0 6 9 3 4 7 1 1 1 9 6 9 9 3 9 4 7 0 3 . . . . . . . . . . 3 5 7 4 3 7 2 6 1 9 1 6 6 2 9 0 5 7 4 1 1 7 7 8 8 9 8 3 6 3 4 . . . . . . . . . . 6 5 6 8 1 6 6 7 4 3 4 8 6 4 6 3 7 7 4 8 1 1 7 7 8 8 8 3 6 3 0 3 . . . . . . . . . . 6 9 9 5 1 5 7 1 7 6 5 3 3 5 1 0 6 3 5 0 1 1 6 7 8 3 8 8 5 3 1 2 . . . . . . . . . . 8 1 0 2 5 7 0 5 6 5 8 9 3 2 0 0 0 2 9 6 1 1 6 3 6 8 5 7 8 3 1 1 . . . . . . . . . . 3 7 1 2 9 3 2 1 4 7 8 5 2 9 8 4 7 0 3 0 1 1 7 3 5 5 7 8 3 5 1 0 . . . . . . . . . . 8 2 1 9 5 4 0 2 2 8 5 7 1 1 9 7 5 6 6 9 1 5 5 7 8 7 3 4 7 3 1 . . . . . . . . . . 9 9 8 4 7 1 2 9 4 4 4 0 1 3 3 0 2 7 3 1 1 5 7 6 7 7 3 5 4 3 0 . . . . . . . . . . 2 4 4 1 9 1 9 9 2 7 9 8 1 6 1 2 7 8 3 4 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 • July 1993 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar except as noted 1992 1993 CCoouunnttrryy//ccuurrrreennccyy uunniitt 11999900 11999911 11999922 Dec. Jan. Feb. Mar. Apr. May 1 Australia/dollar2 78.069 77.872 73.521 68.974 67.297 68.294 70.775 71.155 69.859 2 Austria/schilling 11.331 11.686 10.992 11.130 11.368 11.556 11.586 11.234 11.305 3 Belgium/franc 33.424 34.195 32.148 32.545 33.239 33.841 33.919 32.857 33.044 4 Canada/dollar 1.1668 1.1460 1.2085 1.2725 1.2779 1.2602 1.2471 1.2621 1.2698 5 China, P.R./yuan 4.7921 5.3337 5.5206 5.8106 5.77% 5.7874 5.7455 5.7202 5.7392 6 Denmark/krone 6.1899 6.4038 6.0372 6.1206 6.2319 6.3019 6.3242 6.1339 6.1751 7 Finland/markka 3.8300 4.0521 4.4865 5.1444 5.4242 5.8534 5.9767 5.6190 5.4847 8 France/franc 5.4467 5.6468 5.2935 5.3974 5.4751 5.5594 5.5944 5.3984 5.4180 9 Germany/deutsche mark 1.6166 1.6610 1.5618 1.5822 1.6144 1.6414 1.6466 1.5964 1.6071 10 Greece/drachma 158.59 182.63 190.81 209.48 215.97 220.60 223.57 217.90 218.12 11 Hong Kong/dollar 7.7899 7.7712 7.7402 7.7416 7.7376 7.7335 7.7332 7.7306 7.7290 12 India/rupee 17.492 22.712 28.156 28.979 29.043 30.042 31.939 31.610 31.613 13 Ireland/pound2 165.76 161.39 170.42 166.71 163.37 148.11 147.58 152.75 151.65 14 Italy/lira 1,198.27 1,241.28 1,232.17 1,412.38 1,491.07 1,550.43 1,591.35 1,536.14 1,475.66 15 Japan/yen 145.00 134.59 126.78 124.04 124.99 120.76 117.02 112.41 110.34 16 Malaysia/ringgit 2.7057 2.7503 2.5463 2.5710 2.5985 2.6295 2.6051 2.5777 2.5661 17 Netherlands/guilder 1.8215 1.8720 1.7587 1.7788 1.8155 1.8473 1.8507 1.7942 1.8026 18 New Zealand/dollar 59.619 57.832 53.792 51.570 51.270 51.603 53.026 53.904 54.290 19 Norway/krone 6.2541 6.4912 6.2142 6.6804 6.8721 6.9779 6.9989 6.7399 6.8027 20 Portugal/escudo 142.70 144.77 135.07 142.05 145.36 149.89 152.17 148.25 151.89 21 Singapore/dollar 1.8134 1.7283 1.6294 1.6397 1.6527 1.6463 1.6446 1.6228 1.6136 22 South Africa/rand 2.5885 2.7633 2.8524 3.0140 3.0713 3.1313 3.1790 3.1718 3.1787 23 South Korea/won 710.64 736.73 784.58 791.75 794.87 799.25 7%.42 798.61 803.19 24 Spain/peseta 101.96 104.01 102.38 112.95 114.62 117.51 117.71 115.64 121.30 25 Sri Lanka/rupee 40.078 41.200 44.013 45.046 46.307 46.351 47.069 47.712 47.%5 26 Sweden/krona 5.9231 6.0521 5.8258 6.8903 7.2536 7.5566 7.7362 7.4500 7.3271 27 Switzerland/franc 1.3901 1.4356 1.4064 1.4219 1.4774 1.5178 1.5206 1.4599 1.4504 28 Taiwan/dollar 26.918 26.759 25.160 25.452 25.452 25.837 26.026 25.987 25.978 29 Thailand/baht 25.609 25.528 25.411 25.488 25.523 25.508 25.425 25.251 25.234 30 United Kingdom/pound 178.41 176.74 176.63 155.10 153.25 143.95 146.17 154.47 154.77 MEMO 31 United States/dollar3 89.09 89.84 86.61 90.50 92.36 93.82 93.65 90.62 90.24 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 June 1993 A78 SPECIAL TABLES—Quarterly Data Published Irregularly, with Latest BULLETIN Reference Title and Date Issue Page Assets and liabilities of commercial banks March 31, 1992 August 1992 A70 June 30, 1992 November 1992 A70 September 30, 1992 February 1993 A70 December 31, 1992 May 1993 A70 Terms of lending at commercial banks May 1992 September 1992 A78 August 1992 November 1992 A76 November 1992 February 1993 A76 February 1993 May 1993 A76 Assets and liabilities of U.S. branches and agencies of foreign banks March 31,1992 September 1992 A82 June 30, 1992 November 1992 A80 September 30, 1992 February 1993 A80 December 31, 1992 May 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 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Index to Statistical Tables References are to pages A3-A68 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Demand deposits—Continued Agricultural loans, commercial banks, 22, 23 Ownership by individuals, partnerships, and Assets and liabilities (See also Foreigners) corporations, 24 Banks, by classes, 20-23 Turnover, 17 Domestic finance companies, 36 Depository institutions Federal Reserve Banks, 11 Reserve requirements, 9 Financial institutions, 28 Reserves and related items, 4, 5, 6, 13 Foreign banks, U.S. branches and agencies, 24 Deposits (See also specific types) Automobiles Banks, by classes, 4, 20-23, 24 Consumer installment credit, 39 Federal Reserve Banks, 5,11 Production, 47, 48 Interest rates, 16 Turnover, 17 BANKERS acceptances, 10, 23, 26 Discount rates at Reserve Banks and at foreign central banks and Bankers balances, 20-23. (See also Foreigners) foreign countries (See Interest rates) Bonds (See also U.S. government securities) Discounts and advances by Reserve Banks (See Loans) New issues, 35 Dividends, corporate, 35 Rates, 26 Branch banks, 24, 55 EMPLOYMENT, 45 Business activity, nonfinancial, 45 Eurodollars, 26 Business expenditures on new plant and equipment, 35 Business loans (See Commercial and industrial loans) FARM mortgage loans, 38 Federal agency obligations, 5, 10, 11, 12, 31, 32 CAPACITY utilization, 46 Federal credit agencies, 33 Capital accounts Federal finance Banks, by classes, 20 Debt subject to statutory limitation, and types and ownership Federal Reserve Banks, 11 of gross debt, 30 Central banks, discount rates, 67 Receipts and outlays, 28, 29 Certificates of deposit, 26 Treasury financing of surplus, or deficit, 28 Commercial and industrial loans Treasury operating balance, 28 Commercial banks, 18, 22 Federal Financing Bank, 28, 33 Weekly reporting banks, 22-24 Federal funds, 7, 19, 22, 23, 24, 26, 28 Commercial banks Federal Home Loan Banks, 33 Assets and liabilities, 20-23 Federal Home Loan Mortgage Corporation, 33, 37, 38 Commercial and industrial loans, 18, 20, 21, 22, 23, 24 Federal Housing Administration, 33, 37, 38 Consumer loans held, by type and terms, 39 Federal Land Banks, 38 Deposit interest rates of insured, 16 Federal National Mortgage Association, 33, 37, 38 Loans sold outright, 22 Federal Reserve Banks Nondeposit funds, 19 Condition statement, 11 Real estate mortgages held, by holder and property, 38 Discount rates (See Interest rates) Time and savings deposits, 4 U.S. government securities held, 5, 11,12, 30 Commercial paper, 25, 26, 36 Federal Reserve credit, 5, 6, 11, 12 Condition statements (See Assets and liabilities) Federal Reserve notes, 11 Construction, 45, 49 Federally sponsored credit agencies, 33 Consumer installment credit, 39 Finance companies Consumer prices, 45, 46 Assets and liabilities, 36 Consumption expenditures, 52, 53 Business credit, 36 Corporations Loans, 39 Nonfinancial, assets and liabilities, 35 Paper, 25, 26 Profits and their distribution, 35 Financial institutions Security issues, 34, 65 Loans to, 22, 23, 24 Cost of living (See Consumer prices) Selected assets and liabilities, 28 Credit unions, 39 Float, 51 Currency in circulation, 5,14 Flow of funds, 40, 42, 43, 44 Customer credit, stock market, 27 Foreign banks, assets and liabilities of U.S. branches and agencies, 23, 24 DEBITS to deposit accounts, 17 Foreign currency operations, 11 Debt (See specific types of debt or securities) Foreign deposits in U.S. banks, 5, 11, 22, 23 Demand deposits Foreign exchange rates, 68 Banks, by classes, 20-24 Foreign trade, 54 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A71 Foreigners REAL estate loans Claims on, 55, 57, 60, 61, 62, 64 Banks, by classes, 18, 22, 23, 38 Liabilities to, 23, 54, 55, 57, 58, 63, 65, 66 Financial institutions, 28 Terms, yields, and activity, 37 GOLD Type of holder and property mortgaged, 38 Certificate account, 11 Repurchase agreements, 7, 19, 22, 23, 24 Stock, 5, 54 Reserve requirements, 9 Government National Mortgage Association, 33, 37, 38 Reserves Gross domestic product, 51 Commercial banks, 20 Depository institutions, 4, 5, 6, 13 HOUSING, new and existing units, 49 Federal Reserve Banks, 11 U.S. reserve assets, 54 INCOME, personal and national, 45, 51, 52 Residential mortgage loans, 37 Industrial production, 45, 47 Retail credit and retail sales, 39, 40,45 Installment loans, 39 Insurance companies, 30, 38 SAVING Interest rates Flow of funds, 40, 42,43, 44 Bonds, 26 National income accounts, 51 Consumer installment credit, 39 Savings and loan associations, 38, 39, 40. (See also SAIF-insured Deposits, 16 institutions) Federal Reserve Banks, 8 Savings Association Insurance Funds (SAIF) insured institutions, 28 Foreign central banks and foreign countries, 67 Savings banks, 28, 38, 39 Money and capital markets, 26 Savings deposits (See Time and savings deposits) Mortgages, 37 Securities (See also specific types) Prime rate, 25 Federal and federally sponsored credit agencies, 33 International capital transactions of United States, 53-67 Foreign transactions, 65 International organizations, 57, 58, 60, 63, 64 New issues, 34 Inventories, 51 Prices, 27 Investment companies, issues and assets, 35 Special drawing rights, 5, 11, 53, 54 Investments (See also specific types) State and local governments Banks, by classes, 20, 21, 22, 23, 24,28 Deposits, 22, 23 Commercial banks, 4, 18, 20-23 Holdings of U.S. government securities, 30 Federal Reserve Banks, 11,12 New security issues, 34 Financial institutions, 38 Ownership of securities issued by, 22, 23 Rates on securities, 26 LABOR force, 45 Stock market, selected statistics, 27 Life insurance companies (See Insurance companies) Stocks (See also Securities) Loans (See also specific types) New issues, 34 Banks, by classes, 20-23 Prices, 27 Commercial banks, 4, 18, 20-23 Federal Reserve Banks, 5, 6, 8, 11, 12 Student Loan Marketing Association, 33 Financial institutions, 28, 38 Insured or guaranteed by United States, 37, 38 TAX receipts, federal, 29 Thrift institutions, 4. (See also Credit unions and Savings and MANUFACTURING loan associations) Capacity utilization, 46 Time and savings deposits, 4, 14, 16, 19, 20, 21, 22, 23, 24 Production, 46,48 Trade, foreign, 54 Margin requirements, 27 Treasury cash, Treasury currency, 5 Member banks (See also Depository institutions) Treasury deposits, 5, 11, 28 Federal funds and repurchase agreements, 7 Treasury operating balance, 28 Reserve requirements, 9 Mining production, 48 UNEMPLOYMENT, 45 Mobile homes shipped, 49 U.S. government balances Monetary and credit aggregates, 4, 13 Commercial bank holdings, 20, 21, 22, 23 Money and capital market rates, 26 Treasury deposits at Reserve Banks, 5, 11, 28 Money stock measures and components, 4, 14 U.S. government securities Mortgages (See Real estate loans) Bank holdings, 20-23, 24, 30 Mutual funds, 35 Dealer transactions, positions, and financing,3 2 Mutual savings banks (See Thrift institutions) Federal Reserve Bank holdings, 5, 11, 12, 30 Foreign and international holdings and NATIONAL defense outlays, 29 transactions, 11, 30, 66 National income, 51 Open market transactions, 10 Outstanding, by type and holder, 28, 30 OPEN market transactions, 10 Rates, 25 U.S. international transactions, 53-67 PERSONAL income, 52 Utilities, production, 48 Prices Consumer and producer, 45, 50 VETERANS Administration, 37, 38 Stock market, 27 Prime rate, 25 WEEKLY reporting banks, 22-24 Producer prices, 45, 50 Wholesale (producer) prices, 45, 50 Production, 45,47 Profits, corporate, 35 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Federal Reserve Board of Governors and Official Staff ALAN GREENSPAN, Chairman WAYNE D. ANGELL DAVID W. MULLINS, JR., Vice Chairman EDWARD W. KELLEY, JR. OFFICE OF BOARD MEMBERS DIVISION OF INTERNATIONAL FINANCE JOSEPH R. COYNE, Assistant to the Board EDWIN M. TRUMAN, Staff Director DONALD J. WINN, Assistant to the Board LARRY J. PROMISEL, Senior Associate Director THEODORE E. ALLISON, Assistant to the Board for Federal CHARLES J. SIEGMAN, Senior Associate Director Reserve System Affairs DALE W. HENDERSON, Associate Director LYNN S. FOX, Special Assistant to the Board DAVID H. HOWARD, Senior Adviser WINTHROP P. HAMBLEY, Special Assistant to the Board DONALD B. ADAMS, Assistant Director BOB STAHLY MOORE, Special Assistant to the Board PETER HOOPER III, Assistant Director DIANE E. WERNEKE, Special Assistant to the Board KAREN H. JOHNSON, Assistant Director RALPH W. SMITH, JR., Assistant Director LEGAL DIVISION J. VIRGIL MATTINGLY, JR., General Counsel DIVISION OF RESEARCH AND STATISTICS SCOTT G. ALVAREZ, Associate General Counsel MICHAEL J. PRELL, Director RICHARD M. ASHTON, Associate General Counsel EDWARD C. ETTIN, Deputy Director OLIVER IRELAND, Associate General Counsel WILLIAM R. JONES, Associate Director KATHLEEN M. O'DAY, Associate General Counsel THOMAS D. SIMPSON, Associate Director MARYELLEN A. BROWN, Assistant to the General Counsel LAWRENCE SLIFMAN, Associate Director DAVID J. STOCKTON, Associate Director OFFICE OF THE SECRETARY MARTHA BETHEA, Deputy Associate Director WILLIAM W. WILES, Secretary PETER A. TINSLEY, Deputy Associate Director JENNIFER J. JOHNSON, Associate Secretary MYRON L. KWAST, Assistant Director BARBARA R. LOWREY, Associate Secretary PATRICK M. PARKINSON, Assistant Director MARTHA S. SCANLON, Assistant Director ELLEN MALAND, Assistant Secretary JOYCE K. ZICKLER, Assistant Director DIVISION OF BANKING JOHN J. MINGO, Adviser 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, Associate Director ROGER T. COLE, Deputy Associate Director RICHARD D. PORTER, Deputy Associate Director JAMES I. GARNER, Deputy Associate Director DEBORAH DANKER, Assistant Director HOWARD A. AMER, Assistant Director NORMAND R. V. BERNARD, Special Assistant to the Board GERALD A. EDWARDS, JR., Assistant Director JAMES D. GOETZINGER, Assistant Director DIVISION OF CONSUMER STEPHEN M. HOFFMAN, JR., 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

A74 Federal Reserve Bulletin • July 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, III, Eighth District ANTHONY P. TERRACCIANO, Third District JOHN F. GRUNDHOFER, Ninth District JOHN B. MCCOY, Fourth District DAVID A. RISMILLER, Tenth District EDWARD E. CRUTCHFIELD, JR., Fifth District 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

A75 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, Texa^, President BEATRICE D'AGOSTINO, Somerville, New Jersey, Vice President WILLIAM A. COOPER, Minneapolis, Minnesota CHARLES JOHN KOCH, Cleveland, Ohio PAUL L. ECKERT, Davenport, Iowa ROBERT MCCARTER, New Bedford, Massachusetts GEORGE R. GLIGOREA, Sheridan, Wyoming NICHOLAS W. MITCHELL, JR., Winston-Salem, North Carolina THOMAS J. HUGHES, Merrifield, Virginia STEPHEN W. PROUGH, Irvine, California KERRY KILLINGER, Seattle, Washington THOMAS R. RICKETTS, Troy, Michigan Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Federal Reserve Board Publications For ordering assistance, write PUBLICATIONS SERVICES, Federal Reserve Regulatory Service. Looseleaf; updated at MS-138, Board of Governors of the Federal Reserve System, least monthly. (Requests must be prepaid.) Washington, DC 20551 or telephone (202) 452-3244 or FAX Consumer and Community Affairs Handbook. $75.00 per (202) 728-5886. When a charge is indicated, payment should year. accompany request and be made payable to the Board of Monetary Policy and Reserve Requirements Handbook. Governors of the Federal Reserve System. Payment from for- $75.00 per year. eign residents should be drawn on a U.S. bank. Securities Credit Transactions Handbook. $75.00 per year. The Payment System Handbook. $75.00 per year. Federal Reserve Regulatory Service. 3 vols. (Contains all four Handbooks plus substantial additional material.) THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNCTIONS. $200.00 per year. 1984. 120 pp. Rates for subscribers outside the United States are as follows ANNUAL REPORT. and include additional air mail costs: ANNUAL REPORT: BUDGET REVIEW, 1991-92. Federal Reserve Regulatory Service, $250.00 per year. FEDERAL RESERVE BULLETIN. Monthly. $25.00 per year or Each Handbook, $90.00 per year. $2.50 each in the United States, its possessions, Canada, and Mexico. Elsewhere, $35.00 per year or $3.00 each. THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A MULTI- ANNUAL STATISTICAL DIGEST: period covered, release date, COUNTRY MODEL, May 1984. 590 pp. $14.50 each. number of pages, and price. WELCOME TO THE FEDERAL RESERVE. March 1989. 14 pp. 1981 October 1982 239 pp. $ 6.50 INDUSTRIAL PRODUCTION—1986 EDITION. December 1986. 440 pp. $9.00 each. 1982 December 1983 266 pp. $ 7.50 1983 October 1984 264 pp. $11.50 FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY. December 1986. 264 pp. $10.00 each. 1984 October 1985 254 pp. $12.50 1985 October 1986 231 pp. $15.00 FINANCIAL SECTORS IN OPEN ECONOMIES: EMPIRICAL ANALY- 1986 November 1987 288 pp. $15.00 SIS AND POLICY ISSUES. August 1990. 608 pp. $25.00 each. 1987 October 1988 272 pp. $15.00 1988 November 1989 256 pp. $25.00 CONSUMER EDUCATION PAMPHLETS 1980-89 March 1991 712 pp. $25.00 Short pamphlets suitable for classroom use. Multiple copies are 1990 November 1991 185 pp. $25.00 available without charge. 1991 November 1992 215 pp. $25.00 Consumer Handbook on Adjustable Rate Mortgages Consumer Handbook to Credit Protection Laws SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES 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 Series on the Structure of the Federal Reserve System THE FEDERAL RESERVE ACT and other statutory provisions The Board of Governors of the Federal Reserve System affecting the Federal Reserve System, as amended through The Federal Open Market Committee August 1990. 646 pp. $10.00. Federal Reserve Bank Board of Directors REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL Federal Reserve Banks RESERVE SYSTEM. Organization and Advisory Committees A Consumer's Guide to Mortgage Lock-Ins ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— A Consumer's Guide to Mortgage Settlement Costs Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. A Consumer's Guide to Mortgage Refinancings Vol. II (Irregular Transactions). 1969. 116 pp. Each vol- Home Mortgages: Understanding the Process and Your Right ume $2.25; 10 or more of same volume to one address, to Fair Lending $2.00 each. Making Deposits: When Will Your Money Be Available? Introduction to Flow of Funds. 1980. 68 pp. $1.50 each; 10 or When Your Home is on the Line: What You Should Know more to one address, $1.25 each. About Home Equity Lines of Credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All 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 ECONOMIC RECOVERY TAX ACT: SOME SIMULATION REPRINTS OF SELECTED Bulletin ARTICLES RESULTS, by Flint Brayton and Peter B. Clark. December Some Bulletin articles are reprinted. The articles listed below 1985. 17 pp. are those for which reprints are available. Most of the articles 149. THE OPERATING PERFORMANCE OF ACQUIRED FIRMS IN reprinted do not exceed twelve pages. Limit of ten copies BANKING BEFORE AND AFTER ACQUISITION, by Stephen A. Rhoades. April 1986. 32 pp. Recent Developments in the Bankers Acceptance Market. 1/86. 150. STATISTICAL COST ACCOUNTING MODELS IN BANKING: The Use of Cash and Transaction Accounts by American A REEXAMINATION AND AN APPLICATION, by John T. Families. 2/86. Rose and John D. Wolken. May 1986. 13 pp. Financial Characteristics of High-Income Families. 3/86. 151. RESPONSES TO DEREGULATION: RETAIL DEPOSIT PRICING Prices, Profit Margins, and Exchange Rates. 6/86. FROM 1983 THROUGH 1985, by Patrick I. Mahoney, Alice Agricultural Banks under Stress. 7/86. P. White, Paul F. O'Brien, and Mary M. McLaughlin. Foreign Lending by Banks: A Guide to International and U.S. January 1987. 30 pp. Statistics. 10/86. 152. DETERMINANTS OF CORPORATE MERGER ACTIVITY: A Recent Developments in Corporate Finance. 11/86. REVIEW OF THE LITERATURE, by Mark J. Warshawsky. Measuring the Foreign-Exchange Value of the Dollar. 6/87. April 1987. 18 pp. Changes in Consumer Installment Debt: Evidence from the 153. STOCK MARKET VOLATILITY, by Carolyn D. Davis and 1983 and 1986 Surveys of Consumer Finances. 10/87. Alice P. White. September 1987. 14 pp. Home Equity Lines of Credit. 6/88. 154. THE EFFECTS ON CONSUMERS AND CREDITORS OF Mutual Recognition: Integration of the Financial Sector in the PROPOSED CEILINGS ON CREDIT CARD INTEREST RATES, European Community. 9/89. by Glenn B. Canner and James T. Fergus. October 1987. The Activities of Japanese Banks in the United Kingdom and in 26 pp. the United States, 1980-88. 2/90. 155. THE FUNDING OF PRIVATE PENSION PLANS, by Mark J. Industrial Production: 1989 Developments and Historical Warshawsky. November 1987. 25 pp. Revision. 4/90. 156. INTERNATIONAL TRENDS FOR U.S. BANKS AND BANKING Recent Developments in Industrial Capacity and Utilization. MARKETS, by James V. Houpt. May 1988. 47 pp. 6/90. 157. M2 PER UNIT OF POTENTIAL GNP AS AN ANCHOR FOR Developments Affecting the Profitability of Commercial Banks. THE PRICE LEVEL, by Jeffrey J. Hallman, Richard D. 7/90. Porter, and David H. Small. April 1989. 28 pp. Recent Developments in Corporate Finance. 8/90. 158. THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIRE- U.S. Exchange Rate Policy: Bretton Woods to Present. 11/90. MENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE The Transmission Channels of Monetary Policy: How Have PRODUCTS, by Mark J. Warshawsky with the assistance of They Changed? 12/90. Dietrich Earnhart. September 1989. 23 pp. Changes in Family Finances from 1983 to 1989: Evidence from 159. NEW DATA ON THE PERFORMANCE OF NONBANK SUBSID- the Survey of Consumer Finances. 1/92. IARIES OF BANK HOLDING COMPANIES, by Nellie Liang U.S. International Transactions in 1991. 5/92. and Donald Savage. February 1990. 12 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 Maps of the Federal Reserve System 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

A79 1-A 2-B 3-C 4-D 5_E Baltimore Pittsburgh A- • MD / Charlotte • Cincinnati Buffalo • • \ KY CT NJ NY BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F 7-G 8-H • Nashville Birminghanu MO WI "I MS / GA 1A Detroit • Louisville LA M ^ Jacksonville .LB Spill AR p V ^ • ™ M emphis New Orleans „ Littl* ) MS J . Rock f Miami ATLANTA * CHICAGO ST. LOUIS 9-1 MT • Hel< MN MI I SD • MINNEAPOLIS 10-J 12-L WY illllSSl®/Ji - L Omaha • I MO ALASKA , Denver KS • Seattle / / ID NM r~ Portland Oklahoma City • OR ^ KANSAS CITY CA / NV 7 11-K S UT • ^ / Salt Lake City El Paso * AZ ~ Houston • Los Angeles • I • San Antonio! HAWAII DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 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 Warren B. Rudman Cathy E. Minehan NEW YORK* 10045 Ellen V. Futter E. Gerald Corrigan Maurice R. Greenberg James H. Oltman Buffalo 14240 Joseph J. Castiglia 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 G. Watts Humphrey, Jr. 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 Rebecca Hahn Windsor 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. Kirk Landon 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 Colleen K. Strand Helena 59601 James E. Jenks John D. Johnson KANSAS CITY 64198 Burton A. Dole, Jr. Thomas M. Hoenig Herman Cain Henry R. Czerwinski Denver 80217 Barbara B. Grogan Kent M. Scott Oklahoma City 73125 Ernest L. Holloway David J. France Omaha 68102 Sheila Griffin Harold L. Shewmaker DALLAS 75201 Leo E. Linbeck, Jr. Robert D. McTeer, Jr. Cece Smith Tony J. Salvaggio El Paso 79999 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. A guide to Business Credit tor Women, Minorities, and Small Businesses Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

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) 482-1986. 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