Federal Reserve Bulletin, 1993-09

VOLUME 79 • NUMBER 9 • SEPTEMBER 1993 FEDERAL RESERVE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D.C. PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman • S. David Frost • Griffith L. Garwood • Donald L. Kohn • J. Virgil Mattingly, Jr. • Michael J. Prell • 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 827 MONETARY POLICY REPORT Erratum regarding data in table 1.27 in the TO THE CONGRESS August issue of the Bulletin. The Federal Reserve expects economic activ- Availability of revised Lists of OTC Margin ity to strengthen in the second half of 1993 Stocks and of Foreign Margin Stocks. and continue to expand moderately in 1994. Increases in employment are projected to be 859 MINUTES OF THE FEDERAL OPEN large enough to keep the unemployment rate MARKET COMMITTEE MEETING moving down, and inflation is not expected to change materially over this period. At its meeting on May 18,1993, the Committee adopted a directive that called for maintaining the existing degree of pressure on 846 INDUSTRIAL PRODUCTION AND reserve positions and that included a bias CAPACITY UTILIZATION FOR JUNE 1993 toward possible firming of reserve conditions Industrial production, which was unchanged during the intermeeting period. The directive in May, declined 0.2 percent. Utilization of indicated that in the context of the Committotal industrial capacity eased again, to tee's long-run objectives for price stability 81.2 percent. and sustainable economic growth, and giving careful consideration to economic, financial, and monetary developments, slightly greater 849 STATEMENT TO THE CONGRESS reserve restraint would be acceptable or Alan Greenspan, Chairman, Board of Gov- slightly lesser reserve restraint might be ernors, discusses the Federal Reserve's semi- acceptable during the intermeeting period. annual Monetary Policy Report to the Con- The reserve conditions contemplated at this gress and says that a monetary policy that meeting were expected to be consistent with aims at price stability permits low long-term appreciable growth in the broader monetary interest rates and helps provide a stable setting aggregates over the second quarter. to foster the investment and innovation by the private sector that are key to long-run eco- 867 LEGAL DEVELOPMENTS nomic growth, before the Subcommittee on Various bank holding company, bank service Economic Growth and Credit Formation of corporation, and bank merger orders; and the House Committee on Banking, Finance and Urban Affairs, July 20, 1993. (Chairman pending cases. Greenspan presented identical testimony before the Senate Committee on Banking, A1 FINANCIAL AND BUSINESS STATISTICS Housing, and Urban Affairs, July 22, 1993.) These tables reflect data available as of July 27, 1993. 856 ANNOUNCEMENTS Appointment of the new president of the Fed- A3 GUIDE TO TABULAR PRESENTATION eral Reserve Bank of New York. A4 Domestic Financial Statistics Actions to ease financial stress in areas of the A44 Domestic Nonfinancial Statistics Midwest affected by flooding. A53 International Statistics Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A69 GUIDE TO STATISTICAL RELEASES AND A76 FEDERAL RESERVE BOARD SPECIAL TABLES PUBLICATIONS A70 INDEX TO STATISTICAL TABLES A78 MAPS OF THE FEDERAL RESERVE SYSTEM A72 BOARD OF GOVERNORS AND STAFF A80 FEDERAL RESERVE BANKS, BRANCHES, A74 FEDERAL OPEN MARKET COMMITTEE AND OFFICES AND STAFF; ADVISORY COUNCILS Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress Report submitted to the Congress on July 20, 1993, Nonetheless, a broad array of indicators points to a pursuant to the Full Employment and Balanced leveling out of the underlying inflation trend. Growth Act of 1978l In this circumstance, and with short-term interest rates unusually low, especially when compared with inflation, the Federal Reserve recognized a MONETARY POUCY AND THE ECONOMIC need to be alert to the possibility that the balance of OUTLOOK FOR 1993 AND 1994 risks in the economy could shift soon in a direction dictating some firming of policy; failure to act in a In February, when the Federal Reserve prepared its timely manner could lead to a buildup of inflationmonetary policy plans for 1993, the broad trends in ary pressures, to adverse reactions in financial marthe economy appeared favorable. After a hesitant kets, and ultimately to the disruption of the growth beginning, the economic expansion had picked up process. To this point, however, the moderate thrust steam in the latter part of 1992, while inflation of aggregate demand and considerable slack in the seemed still to be headed downward. Most mem- economy, taken together with the more subdued bers of the Federal Open Market Committee and price data of late, do not suggest that a sustained nonvoting presidents anticipated that 1993 would upswing in inflation is at hand. Accordingly, the be a good year for growth and would also see Federal Reserve has not adjusted its monetary polfurther progress toward price stability. icy instruments. As the year has unfolded, however, the econ- The pace of economic growth in the final quarter omy's performance has fallen short of these expec- of 1992 was not expected to be sustained, but the tations. Economic growth has slowed appreciably slowing in the first quarter of 1993 was surprisfrom the pace late last year; in part, this has ingly sharp. With the exception of business fixed reflected a retreat in business and consumer confi- investment, the slowdown cut across the major dence and the effects on our trade balance of weak- categories of final demand. After stepping up their ness in a number of other industrial countries. Like spending in late 1992, consumers became more most private forecasters, the Board members and pessimistic about their economic prospects and Bank presidents generally have trimmed their pro- more cautious in their spending decisions; the jections of growth in real gross domestic product uncertainty surrounding the efforts to reduce the for the year as a whole, although they continue to federal deficit may have been a factor in the weakforesee increases in output large enough to extend ening of household sentiment. Housing activity, the reduction in the unemployment rate that began which also had been exceptionally strong late last last summer. Events on the price side also have year, hit a lull—even before the March blizzard on been disappointing. The inflation rate in the first the East Coast—and real defense purchases part of this year was higher than in late 1992. There plunged. Moreover, net exports deteriorated is evidence that some of the pickup in the con- sharply, as exports declined and imports surged; sumer price index may have reflected difficulties in the drop in exports was attributable in part to seasonal adjustment, and price data for the past continued weak growth in some other industrial couple of months have been much more favorable. countries and in part was an adjustment to the big increase in late 1992. The more recent statistical indicators, taken together, point to a resumption of moderate growth 1. The charts for the report are available on request from Publiin real GDP in the second quarter. Most notably, on cations Services, Board of Governors of the Federal Reserve System, Washington, DC 20551. the positive side, the increase in aggregate hours Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

828 Federal Reserve Bulletin • September 1993 worked for the quarter as a whole—a useful indica- Credit demands on depositories remained quite tor of movements in overall output—was the larg- subdued relative to spending, considerable deposiest of the current expansion. Sales of motor vehi- tory credit was funded from nonmonetary sources, cles also exhibited considerable vigor. But other and savers continued to demonstrate a marked prefkey indicators were less robust. In particular, after erence for capital market instruments over money allowing for the effects of the blizzard, consumer stock assets. spending on items other than motor vehicles was In part because of the drop in bond and stock lackluster, and housing activity improved only yields, as well as the desire to strengthen balance modestly. In the manufacturing sector, orders gen- sheets, corporate borrowers have continued to conerally remained soft, and factory output, after hav- centrate credit demands on long-term securities ing posted solid gains over the preceding seven markets, using the proceeds in part to repay bank months, is estimated to have declined somewhat loans; business loans at banks have not grown this over May and June. year, although there were tentative signs of a Broad measures of inflation picked up in early pickup over May and June. Total lending and credit 1993, with monthly increases through April in the growth at banks has risen only slightly from the upper part of the range of the past couple of years. depressed pace of 1992, and these institutions have Although readings on consumer and producer therefore not needed to pursue deposits. Thrifts prices were much more favorable in May and June, have continued to contract but at a much slower the cumulative price and wage data for the year to pace than in recent years. date suggest that underlying inflation has flattened Banks have eased lending standards for smaller out, after having trended down over the preceding firms for several quarters, and they recently relaxed two years. Excluding the especially volatile food standards for medium- and large-sized firms as and energy components, the twelve-month change well. An increased willingness to lend on the part in the CPI has held in the range of 3 lA to 3l/z per- of banks has been associated with considerably cent since the summer of 1992. more comfortable capital positions. Banks have In financial markets, short-term interest rates continued to strengthen their balance sheets by have changed little so far in 1993, while issuing large volumes of equity and subordinated intermediate- and long-term interest rates have debt while retaining a substantial amount of earnfallen 3A to 1 percentage point, reaching their low- ings. As a result, the portion of the industry that is est levels in more than twenty years. The decline in well-capitalized (taking account of supervisory ratlonger-term rates seems largely to have been a ings as well as capital ratios) increased from about response to the enhanced prospects for credible one-third at the end of 1991 to more than twofiscal restraint, though the slower pace of economic thirds by March 1993. expansion may also have played a role. Falling In turning to equity and other nondeposit funds, interest rates have helped stock market indexes set banks have reduced the share of depository credit new records. Despite a decline in the dollar versus that is financed by monetary liabilities. Depositors, the yen, the average value of the dollar on a trade- for their part, have continued to shift funds into weighted basis relative to G-10 currencies has capital markets, attracted by still-high returns in risen, on balance, since the end of 1992. Although these markets relative to earnings on deposits. foreign intermediate-term interest rates have been Inflows into bond and equity mutual funds have down, on average, about as much as U.S. interest run at record levels this year, and banks have rates, short-term rates abroad have decreased facilitated investing in mutual fund products by substantially relative to U.S. rates, as foreign increasingly offering them in their lobbies. As a conmonetary authorities have taken steps to bolster sequence of these various forces, M2 increased at weak economies. only a 3A percent annual rate from its fourth-quarter 1992 average through June, while M3 fell slightly. Declining U.S. market interest rates contributed The sum of M2 and estimated household holdings to robust growth in narrow measures of money and of long-term mutual funds grew at about a 43A perin reserves over the first half of the year, but broad cent rate from the fourth quarter through June, a monetary aggregates were very weak and their pace little changed from that of recent years. velocities continued to show exceptional increases. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 829 Debt growth has edged up this year, despite a increases of 6V4 percent and 8 percent, respecdeceleration in nominal spending, perhaps buoyed tively, and appear to have recorded additional, but by improvements in financial positions achieved smaller, gains in the second quarter. As a conseover the past few years by both borrowers and quence, at its meeting this month, the Committee lenders. Investment outlays are estimated to have reduced the 1993 range for M2 by an additional exceeded the internal funds of corporations for the percentage point and the range for M3 by another first time in two years, while household borrowing V2 percentage point, leaving them at 1 to 5 percent has picked up relative to spending. In addition, for M2 and 0 to 4 percent for M3. Treasury financing needs have remained heavy. The reductions of these growth ranges repre- Nevertheless, nonfinancial debt has grown at only sented further technical adjustments in response to a 5 percent rate this year. actual and anticipated increases in velocity and not a shift in monetary policy, which remains focused on fostering sustainable economic expansion while Monetary Objectives for 1993 and 1994 making continued progress toward price stability. With further substantial increases in velocities, In reviewing the annual ranges for the monetary continued sluggish expansion of M2 and M3, aggregates in 1993, the Federal Open Market Com- which are now at the lower ends of their revised mittee (FOMC) noted that the relationship of ranges, would be consistent with an acceptable broadly defined money to income has continued to track for the economy. Also at the July meeting, the depart from historical patterns. The annual veloci- annual monitoring range for the domestic nonfinanties of these aggregates last fell in 1986, and their cial debt aggregate was reduced by V2 percentage prolonged upward movements since then strongly point, to 4 to 8 percent; growth in this aggregate is suggest breaks from previous long-run trends of likely to continue to be roughly in line with that of flat velocity for M2 and slowly decreasing velocity nominal GDP. for M3. The rise in the velocity measures has been Although the future behavior of the velocities particularly surprising in the last four years, a of broad money aggregates was recognized to be period of declining interest rates, normally associ- difficult to predict with precision at a time of ongoated with a reduction in velocity. ing structural changes in the financial sector, it In February, anticipating that further balance appeared likely that the forces contributing to the sheet restructuring and portfolio shifts from depos- unusual strength in velocities would continue for its to mutual funds would result in further increases some time, and the FOMC carried forward the in velocity, the FOMC lowered the 1993 growth revised 1993 ranges for the monetary and debt ranges for M2 and M3 by Vi percentage point from aggregates to 1994 as well. With considerable the provisional ranges set in July 1992. In fact, uncertainty persisting about the relationship of the velocities of the broad monetary aggregates have monetary aggregates to spending, the behavior of been especially strong; in the first quarter of 1993, the aggregates relative to their annual ranges will the velocities of M2 and M3 posted substantial likely be of limited use in guiding policy over the next eighteen months, and the Federal Reserve will continue to utilize a broad range of financial and economic indicators in assessing its policy stance. 1. Ranges for growth of monetary and debt aggregates1 Percent 1993 Economic Projections for 1993 and 1994 AAggggrreeggaattee 11999922 11999944 As of As of February July The members of the Board of Governors and the Reserve Bank presidents, all of whom participate M2 2V2-6V2 2-6 1-5 1-5 M3 1-5 V2-AV2 0-4 0-4 in the deliberations of the FOMC, generally antici- Debt2 4'/2-81/2 4>/2-8>A 4-8 4-8 pate that economic activity will strengthen in the 1. Change from average for fourth quarter of preceding year to average second half of 1993 and continue to expand moderfor fourth quarter of year indicated. ately in 1994. The growth of output is likely to be 2. Domestic nonfinancial sector. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

830 Federal Reserve Bulletin • September 1993 accompanied by further gains in productivity, but countries, the external sector should be exerting a increases in employment are projected to be large less negative influence on economic activity in the enough to keep the unemployment rate moving United States. down. Inflation is not expected to change materi- Despite the improvement in financial conditions, ally over this period. there are reasons to be cautious about the near-term The economic growth forecasted by the Board outlook. Efforts this year to bring the federal budmembers and Reserve Bank presidents for 1993 is get deficit under control already have helped to somewhat weaker than that forecasted in February, ease pressures on long-term interest rates, and a mainly because of the shortfall in reed growth in the successful agreement to reduce deficits signififirst quarter. Most expect output gains over the cantly will produce substantial benefits over the balance of the year to be large enough to result in a longer run. But such actions also are expected to four-quarter change in real gross domestic product exert some restraint on aggregate demand this year in the range of 2lA percent to 23A percent; for 1994, and next. Government outlays for defense will the central tendency of the forecasts spans a range continue to contract, extending the dislocations and of 2Vi to 3 lA percent. The civilian unemployment disruptions that have been evident for some time in rate, which averaged 7 percent in the second quar- industries and regions that depend heavily on militer of 1993, is projected to fall to the area of tary spending. Prospects for higher taxes may al- 63A percent by the fourth quarter of this year and to ready be influencing the behavior of some housedrop slightly further over the course of 1994. holds and businesses, and the constraint is likely to Recent developments in the financial sphere intensify in 1994. In addition, uncertainties about should be conducive to the sustained increases in prospective federal policies reportedly are weighspending projected for the quarters ahead. The ing on businesses and consumers; although the financial positions of many households and busi- outcome of the congressional budget deliberations nesses have continued to improve, and banks are will be known shortly, uncertainties about health showing signs of greater willingness to make loans. care reform are not anticipated to be resolved fully Short-term interest rates are relatively low, and the for some time. appreciable declines in long-term interest rates over Most Board members and Bank presidents the past several months should further the process expect the rise in the consumer price index over the of balance sheet adjustment and are anticipated to four quarters of 1993 to be in the range of 3 percent provide considerable impetus to business invest- to 3Va percent, about the same as the increase over ment and residential construction. It is likely that the four quarters of 1992. At this stage, the food business investment also will continue to be bol- and energy sectors are not expected to have much stered by the ongoing push to improve products effect, on balance, on the broad price measures in and boost efficiency through the use of state-of-the- 1993, but the flooding in the Midwest raises the art equipment. Moreover, with at least a moderate risk of higher food prices in the quarters ahead. For pickup in average growth in foreign industrial 1994, the central tendency forecast is for CPI infla- 2. Economic projections of FOMC members and other FRB presidents for 1993 and 1994 Percent 1993 1994 IItteemm Range Central tendency Range Central tendency Change, fourth quarter to fourth quarter1 Nominal GDP 43A-6'A 5-53A 4'/2-63/4 5-6V4 Real GDP 2-31/2 2'/4-23/4 2-31/4 2'/2-3'/4 Consumer price index 2 3-3 Vi 3-3'/4 2-4>/4 2-3 Vi Average level, fourth quarter Unemployment rate3 6'/2-7 63/4 614-7 6V4-6V4 1. Change from average for fourth quarter of preceding year to average 2. All urban consumers, for fourth quarter of year indicated. 3. Civilian labor force. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 831 tion in the range of 3 to 3V2 percent, not much ond half of 1992 had outpaced income growth by a different than in 1992 and 1993. substantial margin. In addition, there was a sharp The fundamentals remain consistent with addi- contraction in defense spending; although real tional disinflation; businesses continue to focus on defense purchases clearly will remain on a downcontrolling costs, and slack in labor and product trend for some time, the first-quarter plunge folmarkets is anticipated to decrease only gradually in lowed a spurt in the second half of 1992 and is not the period ahead. However, the disappointing price likely to be repeated in coming quarters. In the performance in the first half of the year suggests external sector, exports declined in the first quarter that further progress will not come easily—in part after a big increase late last year, while imports perhaps because inflation expectations remain high. rose markedly. Activity was also depressed, espe- Lowering inflation and inflation expectations over cially in the housing sector, by unusually bad time, and achieving sustained reductions in long- weather last winter. term interest rates, will depend importantly on a Moderate growth in real GDP appears to have monetary policy that remains committed to foster- resumed in the second quarter. Nonetheless, experiing further progress toward price stability. The ence thus far in 1993 has underscored that the performance of prices and the economy also will impediments to a more rapid pace of economic depend on government policies in other areas. expansion over the near term remain sizable. Namely, a sound fiscal policy, a judicious approach Besides defense cutbacks, the process of balance to foreign trade issues, and regulatory policies that sheet adjustment goes on, as do the restructuring preserve flexibility and minimize the costs they efforts under way at many large firms. Moreover, impose are crucial to reestablishing the disinflation the continued disappointing economic performance trend of the past couple of years and allowing the of some major foreign industrial countries is taking economy to perform at its full potential. a toll on U.S exports. Finally, uncertainties about The Administration has not yet released the mid- prospective federal policies on a variety of fronts, year update to its economic and budgetary projec- although difficult to measure, are reportedly maktions. However, statements by Administration offi- ing some businesses and consumers reluctant to cials suggest that the revised forecasts for real make major hiring and spending commitments. growth and inflation in 1993 and 1994 are not News on the price side was also worrisome in likely to differ significantly from those of the Fed- the first half of the year. Month-to-month moveeral Reserve. ments in prices were on the high side through April, but they moderated in May and June. The more favorable recent data helped to ease concerns THE PERFORMANCE that a significant pickup in inflation was under way. OF THE ECONOMY IN 1993 Nonetheless, the disinflation process seemingly has stalled, with underlying inflation, as measured by Economic activity has continued to advance in fits the twelve-month change in the CPI excluding food and starts. After posting robust gains in the second and energy, holding in a narrow band between half of 1992, real GDP rose at an annual rate of less 3V4 percent and 3Vi percent since last summer. than 1 percent in the first quarter of 1993. The slowing in activity was evident in a broad range of production and spending indicators. The more The Household Sector recent data suggest that the economy expanded at a firmer pace in the second quarter, although growth Growth of consumer spending on goods and serprobably was not as rapid as in the second half of vices continued in a stop-and-go pattern in early last year. 1993: It hit a lull in the first quarter after surging in To some extent, the slackening in economic the second half of 1992. Averaging through the activity in the first quarter of 1993 can be inter- quarterly data, consumption grew at about a 3 perpreted as a payback after two quarters of strong cent annual rate over those three quarters, and growth. In particular, much of the slowing was in available data point to a moderate increase in the consumer spending, where large gains in the sec- second quarter. Housing activity appears to have Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

832 Federal Reserve Bulletin • September 1993 revived in recent months, after sagging earlier in ceding couple of years, the personal saving rate the year. dropped from 5 XA percent in the second quarter of Consumer spending increased only about 1 per- 1992 to 4V2 percent in the fourth quarter, in the cent at an annual rate in real terms in the first lower part of the range of recent years. The saving quarter. Outlays for goods were especially weak, rate retraced some of that decline in the first quardown at about a 2 percent annual rate; although a ter, but it appears to have fallen back in the spring. part of the drop was probably attributable to the Real disposable income has remained on the severe blizzard on the East Coast in March, signs moderate uptrend that has been evident for the past of some retreat in spending had already appeared in several quarters: In May, it stood about 2XA percent January and February. Meanwhile, spending on above the level of a year earlier. Growth in wages services remained on the moderate uptrend that had and salaries has stayed relatively sluggish despite been evident for the past few years. the firmer pace of employment growth this year. Spending rose appreciably in April, spurred by a Meanwhile, transfer payments have continued to post-blizzard bounce-back in outlays for motor expand, although recent increases have been diminvehicles and other goods. Demand for motor vehi- ished by a drop in unemployment insurance benecles remained strong through June, resulting in an fits as the number of unemployed has declined. average sales pace for the quarter of almost Interest income, which fell appreciably over 1992, 14V2 million units (annual rate)—the highest since has only edged down thus far this year. early 1990. Sales were boosted by the replacement Household financial positions have continued to needs of households that put off buying vehicles show signs of improvement. The value of houseduring the 1990-91 recession and the early recov- hold assets has been buoyed by the rising stock ery period. In addition, price increases—at least for market, while debt growth has remained moderate. models with domestic nameplates, which have Moreover, reductions in interest rates have continaccounted for almost all of the rise in sales this ued to lower debt-servicing burdens; when meayear—have been relatively small, and financing sured in relation to disposable income, the repayterms favorable. Meanwhile, real spending on ment burden has fallen back to the levels of the goods other than motor vehicles appears to have mid-1980s. The incidence of financial stress among posted a moderate gain for the quarter as a whole, households also appears to have eased further. and outlays for services rose slowly through May. Delinquency rates on consumer loans generally The downshift in overall spending growth this dropped again in the first quarter and are down year does not appear to be attributable to any significantly from their recent peaks, and delinworsening of the current trends in household in- quencies on home mortgages are at the low end of comes and financial positions, but it has coincided the range of the past decade. with a deterioration in consumer confidence. In Housing activity turned surprisingly soft in the contrast to the ebullience evident last fall, surveys first quarter, after a burst at the end of 1992. Howconducted by the University of Michigan and the ever, the most recent monthly indicators suggest Conference Board this year have found respon- that the sector remains on a path of gradual expandents more pessimistic about their job and income sion. In the single-family area, both starts and sales prospects. Spending may also have been crimped of new homes fell back at the beginning of the year by smaller-than-usual tax refunds—or larger tax and remained below trend through March. Singlebills—this year. Although the change in withhold- family starts rebounded in April and edged up ing schedules in March 1992 raised workers' take- further in May, lifting the average level for the two home pay, and thus provided the wherewithal to months about 5 percent above the first-quarter fund additional purchases last year, many house- pace; new home sales gyrated in the spring but also holds may well have found themselves less liquid were higher, on average, than in the first quarter. than usual in early 1993. More fundamentally, the Undoubtedly, some of the recent improvement slowing in spending appears to reflect a return to reflects a reversal of transitory factors that damped trend after a surge that outstripped the rise in real homebuilding in the first quarter. The East Coast disposable income in the second half of last year. blizzard delayed both builders and their customers Indeed, after having risen somewhat over the pre- in March; in addition, the weather for the nation as Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 833 a whole was slightly worse than usual in January for nearly one-fourth of total residential construcand February. Lumber prices ran up sharply tion expenditures. between October and March: As measured by the producer price index, prices rose about one-third over that period, and spot market quotes for some The Business Sector lumber products more than doubled. The jump in lumber costs, which has since been reversed, seems Developments in the business sector generally were not to have left much of a mark on the prices favorable in the first half of 1993. Business fixed recorded in sales transactions; indeed, the inability investment, which continued to grow briskly, was of builders to pass along the cost increases may boosted by ample profits and cash flow, the relahave accounted for some of the disruption in con- tively low cost of capital, and ongoing efforts to struction activity. improve productivity. Meanwhile, business balance In any event, low mortgage rates clearly are sheets strengthened further as growth of business helping to stimulate housing demand. Interest rates debt remained relatively slow and many firms conon fixed-rate home mortgages, like most other tinued to take advantage of lower bond yields and long-term interest rates, fell to near their twenty- high stock prices to enhance liquidity by funding year lows last winter and have since declined fur- out short-term liabilities. ther; initial rates on adjustable-rate mortgages have Real business fixed investment increased at a been the lowest since these loans first became 13 percent annual rate in the first quarter of 1993. widely available at the beginning of the 1980s. Real outlays for equipment posted another healthy Given the trends in house prices, these interest gain, and investment in structures, which had been rates have pushed the cost of home purchase—as on a protracted decline for some time, was about measured by the share of household income needed unchanged for a second quarter. The indicators in to make the mortgage payments on an average hand suggest that real business fixed investment home—to the lowest levels since the mid-1970s. remained strong in the second quarter. Nonetheless, the trends in house prices this Equipment spending has continued to be a mainyear—small rises in some markets, declines in stay of economic growth. It rose at an annual rate others—have not been a uniform positive for of about 18 percent in real terms in the first quarter, demand, mainly because they have muted the after a \2Vi percent rise over the course of 1992. investment motive for owning a home. Moreover, Real outlays for computers and related devices although most respondents to the Michigan survey have continued to soar; since early 1991, they have in recent months reported that it was a good time to roughly doubled, boosted by product innovations, buy a house, only about one-third of those who extensive price-cutting by computer manufacturers, already owned homes thought it was a good time to and the ongoing efforts of businesses to achieve sell. In fact, industry reports suggest that first-time efficiencies through the utilization of new homebuyers have accounted for an unusually large information-processing technologies. However, share of all home purchases in the past two years, demand for other, more traditional types of equipand that sales and prices in many localities have ment also began to grow around the middle of 1992 been strongest at the lower end of the market. and continued to expand in early 1993. Domestic Construction of multifamily housing this year purchases of aircraft spurted in the first quarter; has been at its lowest level since the 1950s. These but, given the financial problems besetting the airstructures—most of which are intended for rental lines, this increase will likely be reversed in comuse—now account for less than 5 percent of total ing quarters. residential investment expenditures, compared with Investment in nonresidential structures appears a figure of about 15 percent in the mid-1980s. to be stabilizing after several years of steep Despite the reduced production in the past several declines. Construction outlays were essentially flat years, vacancy rates and rents have not yet shown in real terms over the fourth and first quarters, and clear signs of tightening for the nation overall. By the advance indicators suggest that the bottom has contrast, improvements to all existing housing units been reached or is close at hand. Trends within the have trended up over the past year and now account construction sector have been divergent. In the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

834 Federal Reserve Bulletin • September 1993 office sector, the excess of unoccupied space The farm economy has been beset by numerous remains huge, and spending continues to contract. weather disruptions so far this year. In the first However, spending for commercial structures other quarter, severe weather in some regions retarded than office buildings, which also had fallen sharply livestock production and damaged fruit and vegeover the past several years, has apparently turned table crops. In many regions, spring planting was the corner because of both the stronger pace of hampered by wet weather, and, in parts of the retail sales over the past year and the ongoing shift Midwest, continued heavy rains around mid-year of retailing activity to large suburban stores. Out- caused major flooding. Because of the planting lays for industrial construction have not exhibited delays and the floods, uncertainties about acreage the normal cyclical rebound—mainly because utili- and yields are considerably greater than usual for zation of existing capacity has tightened only this time of year, and farmers in the flooded regions gradually—but they seem, at least, to be leveling obviously have suffered financial losses. out. Meanwhile, activity in the public utilities sec- Despite the weather-related supply disruptions, tor has continued to trend up, mainly because of farm income and farm financial conditions for the capacity expansion at electric utilities but also nation as a whole seem to have held up reasonably because of the installation of pollution abatement well in the first half of 1993. On average, farm technology, which the Clean Air Act requires be in prices in the first half were slightly above those of a place by 1995. In contrast, drilling activity remains year earlier, with declines for farm crops being depressed. offset by higher prices for livestock. Farm subsi- Nonfarm business inventories, which had shown dies, which have been running well above their only small changes, on net, since the middle of 1992 pace, have been lifting farm income and cash 1991, rose considerably last winter and spring. flow, and farm investment in new machinery has Although the buildup early in the year was likely picked up. The recent jump in crop prices—a conmotivated in part by the need to replenish stocks sequence of the flooding—will boost the incomes drawn down by surprisingly strong sales in late of the many farm producers whose crops are still in 1992, some of the recent increase may be attri- good condition. butable to softer-than-expected sales. Notably, the inventory-sales ratio for non-auto retail stores remained in May around the high end of The Government Sector the range of recent years. By contrast, inventories at factories and at wholesale trade establishments Governments at all levels continue to struggle with generally seem to be reasonably well aligned with budgetary difficulties. At the federal level, the unisales. fied budget deficit over the first eight months of After advancing markedly over the course of fiscal year 1993—the period from October to 1992, economic profits of U.S. corporations were May—totaled $212 billion, somewhat less than little changed overall in the first quarter of 1993. during the comparable period of fiscal 1992. How- The pretax profits earned by nonfinancial corpora- ever, excluding deposit insurance and adjusting for tions on their domestic operations weakened after a the inflow of contributions to the Defense Cooperafourth-quarter surge, but they still stood nearly tion Account in fiscal 1992, the eight-month deficit 35 percent above the cyclical low reached in 1991; was about $230 billion in both fiscal years. In the the upswing in these profits over the past two years main, the underlying deficit has failed to drop has reflected primarily a combination of modera- because the restraint in discretionary spending that tion in labor costs and reductions in net interest was legislated in 1990 and the deficit-closing expenses. Domestic profits of financial corpora- effects of stronger economic activity have been tions have been buffeted in recent quarters by the offset by continued large increases in spending for losses that insurance companies sustained from entitlement programs. major natural disasters; without such losses, domes- In total, federal outlays in the first eight months tic financial profits in the first quarter would have of fiscal 1993 were only about 2 percent higher surpassed the high reached in the first quarter of than during the same eight months of fiscal 1992. 1992. Outlay growth was damped significantly by a sharp Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 835 swing in net outlays for deposit insurance that (in nominal terms) were nearly 20 percent above was attributable largely to the improved health those of a year earlier. of depository institutions. In fact, so far this year, The deficit-reduction efforts of state and local receipts from insurance premiums and proceeds governments in recent quarters have been concenfrom sales of assets taken over by the government trated on the spending side. Their purchases of have exceeded by $ 18 V2 billion the gross outlays to goods and services were nearly flat in real terms in resolve troubled institutions. Defense spending was the first quarter of 1993 and have changed little, on also quite weak in the first eight months of fiscal net, since early 1992. Outlays for construction, 1993. Outlays for Medicare and Medicaid contin- which fell at an annual rate of 7 percent, on averued to rise rapidly; however, the increase so far this age, in the fourth and first quarters, have been year—about 10 percent—was only half as large as especially weak. For all major categories except the one in the preceding year. The deceleration in sewer and water, outlays in recent months have health care spending appears to stem, in part, from been running significantly below year-earlier levfederal regulations issued in 1992 that limit the els. State and local employment has continued to states' ability to shift Medicaid costs to the federal expand at the somewhat slower pace that has been government. evident since 1991, while these governments have Federal purchases of goods and services—the continued to hold the line on wages and benefits. part of federal spending included directly in gross The approximately 3Vz percent increase in state domestic product—declined at an annual rate of and local compensation rates over the year ended 18 percent in real terms in the first quarter of 1993. in March was similar to the rise for workers in A sharp decrease in defense spending more than private industry; by contrast, in the 1980s, state and accounted for the drop. Real defense purchases local workers received increases that, on average, have been falling noticeably since early 1991, but were more than 1 percentage point per year greater the decline has been erratic; at least part of the than those in private industry. first-quarter plunge can be interpreted as a correc- Receipts of state and local governments, tion after a few quarters of surprisingly strong restrained by the relatively tepid cyclical upswing spending. Meanwhile, real nondefense purchases in the sector's tax bases, have grown only moderhave been almost flat over the past couple of ately over the past year. Also, these governments quarters. have lately been reluctant to raise taxes, after the Federal receipts in the first eight months of fiscal sizable hikes they enacted in 1990 and 1991. All 1993 were about 5 percent greater than in the same told, the sector's own-source general receipts, period of a year earlier; the rise was roughly the which comprise income, corporate, and indirect same as that in nominal GDR Boosted by the business taxes, rose 5 percent over the four quarters upswing in business profits, corporate taxes rose ended in the first quarter of 1993, an increase about sharply. However, they account for less than one- the same as that in nominal GDP. tenth of total receipts, and growth in other categories was only moderate in the aggregate. States and localities continue to face sizable bud- The External Sector get deficits: As measured in the national income and product accounts (NIPA), the combined deficit Since December 1992, the trade-weighted foreign (net of social insurance funds) in the sector's oper- exchange value of the dollar has risen about 5 perating and capital accounts has been stuck around cent, on balance, in terms of the currencies of the $40 billion since late 1990. These outsized deficits other Group of Ten (G-10) countries. This net have persisted despite ongoing efforts by many increase has reflected much larger movements in governments to adjust spending and taxes. As at the dollar's value against individual currencies: In the federal level, deficit reduction has been compli- particular, a sharp decline against the Japanese yen cated by the upsurge in payments to individuals for was more than offset by substantial increases health and income support; in the first quarter of against major European currencies. 1993, state and local transfer payments for Medi- Relative to the monthly average for December caid and Aid to Families with Dependent Children 1992, the dollar has declined nearly 15 percent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

836 Federal Reserve Bulletin • September 1993 against the yen to record lows, prompting heavy After expanding rapidly at the end of 1992, real Japanese official purchases of dollars and moderate merchandise exports declined during the first quardollar purchases by U.S. authorities. The strength- ter of 1993, but they bounced back to their fourthening of the yen has occurred despite the weak quarter 1992 high in April and May. Shipments to performance of the Japanese economy and market developing countries, which had risen sharply over expectations that Japanese short-term interest rates 1992, dropped back during the January-to-May will remain near historically low levels over the period. In the aggregate, exports to industrial counnext year; it seems to be based largely on the tries rose somewhat in the first five months of perception that Japan's external surplus, which has 1993, but Canada and the United Kingdom grown rapidly over this period, is not sustainable. accounted for most of the increase. Against the German mark, the dollar has risen Real merchandise imports, extending the rapid almost 10 percent since December, reflecting a pace of growth recorded over the four quarters of substantial easing of German interest rates and the 1992, rose sharply over the first five months of expectation of further declines in light of the sharp 1993. Trade in computers continued to soar and contraction in German economic activity. The dol- was responsible for about one-third of the increase lar has also appreciated against other European in merchandise imports. More broadly, imports currencies, and it has remained little changed were boosted by the rapid growth of U.S. domestic against the Canadian dollar. final demand in the second half of 1992 and inven- Economic activity in the major foreign industrial tory restocking this year. In addition, the prices of countries generally has been sluggish so far this non-oil imports, reflecting the lagged effects of the year. The recovery in Canada now seems to be appreciation of the dollar during the last quarter of reasonably well established, and real GDP in the 1992, fell somewhat in the first quarter; much of United Kingdom has been growing slowly. How- that decline appears to have been reversed in the ever, continental Europe remained in recession in second quarter. The price of oil imports fluctuated the first quarter, with a sizable reduction in real in a relatively narrow range over the first half of GDP in western Germany; recent indicators point 1993. Mild weather and strong OPEC production to continued weakness in the second quarter. After pushed oil prices down early in the year, but prices falling for much of 1992, Japanese real GDP subsequently retraced the decline on signs that advanced in the first quarter, a rise in large part OPEC would effectively curb production. Recently, reflecting the effects of earlier fiscal measures; oil prices have dropped on Kuwait's decision not to however, indicators for the second quarter are participate in OPEC's quota allocations for the mixed, and the appreciation of the yen will likely third quarter and speculation that Iraq may be result over time in a drag on net exports. allowed to resume exporting sooner than had been Unemployment rates have continued to rise (into expected. the double-digit range in many instances) in the The merchandise trade deficit widened to countries still in recession; even in the countries $116 billion (at an annual rate) in the first quarter showing signs of recovery, unemployment has of 1993, nearly $10 billion greater than in the remained high. Partly as a consequence, wage pres- second half of 1992; it increased somewhat further sures have ebbed, and underlying inflation has con- in April and May, on average. With moderate tinued to decelerate, on average. A notable excep- increases in net income from direct investments tion is western Germany, where the CPI rose more and a slight further widening of the surplus on net than 4 percent over the twelve months ended in service transactions, the deficit in the current June, partly because of an increase in the value- account deficit rose somewhat less than the trade added tax early this year and large increases in the deficit, to $89 billion (annual rate) in the first prices of housing services. quarter, compared with $83 billion in the second half of 1992. In contrast to the overall weakness of activity in foreign industrial countries, real growth so far this Net capital inflows recorded in the first quarter year in major developing countries, especially in of 1993 were largely attributable to substantial Asia, appears to have remained at around the strong increases in foreign official assets held in the pace of 1992. United States, particularly in those of some newly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 837 industrializing Asian economies and of certain tions in demand for their products. Indeed, employ- Latin American countries. Net private capital ment at personnel supply firms, which consist inflows were relatively small. Private foreigners largely of temporary-help agencies, rose more than added significantly to their holdings of U.S. securi- 150,000 between December and June. Over the ties, particularly Treasury bonds. However, U.S. past two years, the increase has been about net purchases of foreign bonds reached record lev- 500,000; thus, although these firms currently els, and net purchases of foreign stocks, although account for less than 2 percent of total payroll down from peak levels reached in the last half of employment, they are responsible for one-quarter 1992, remained heavy. New bond issues by for- of the increase in total employment over this eigners in the United States also were very strong. period. Capital inflows associated with foreign direct Job gains in the first half of 1993 also reflected a investment in the United States recovered substan- continuation of the steady uptrend in employment tially in the first quarter but remained far below the in health services. In addition, gains occurred peaks reached in 1989. Foreign direct investment at trade establishments, construction payrolls in the United States apparently has been deterred improved with the recent stronger housing activity, by unfavorable returns realized on earlier invest- and there were scattered increases in services other ments and by financial market conditions less than health and personnel supply. favorable to acquisitions. In contrast, capital out- Meanwhile, manufacturing employment declined flows associated with U.S. direct investment abroad further, on balance, over the first six months of the remained strong. year. Although factory output increased steadily through April, firms relied mainly on a combination of productivity improvements and longer Labor Market Developments workweeks to meet their output objectives; in May and June, output decreased somewhat. Job losses in The labor market showed signs of improvement in the first half were concentrated in the durable goods the first half of 1993. According to the payroll sector, with particular weakness at producers of survey, employment increased about 1 million; this aircraft and motor vehicles. Since its last peak in number compares with a rise of about 600,000 over January 1989, manufacturing employment has the second half of last year and brings the total fallen about 13A million; layoffs in defense-related increase since the cyclical low in 1991 to about industries (those industries that depend on defense 2 million. expenditures for at least 50 percent of their output) Nonetheless, job gains have continued to fall far have accounted for about one-fifth of the decrease short of the norms set by earlier business cycle in total factory payrolls. expansions. For example, only in May did payroll Employment as measured by the monthly survey employment return to its pre-recession peak, two of households rose about 900,000 over the first six years after the cyclical trough; by contrast, reces- months of the year—essentially the same as in the sionary job losses typically have been reversed payroll series. The number of unemployed fell within the first year of the expansion. Job growth appreciably at the beginning of the year, and the has continued to be restrained by the temperate civilian unemployment rate dropped from 7.3 perpace of economic activity and employers' ongoing cent in December to 7.0 percent in February; it has efforts to improve productivity. In addition, firms shown little change since that time. are confronting cost pressures associated with siz- The civilian labor force expanded only moderable increases in health insurance premiums and in ately over the first six months of 1993—less than other fringe benefits; uncertainties about the future 1 percent at an annual rate. Labor force growth course of government policies may also be contrib- continued to be damped by the relatively small uting to the reluctance of some firms to expand increase in the working-age population. In additheir permanent full-time work forces. tion, perceptions of meager employment opportuni- Moreover, firms are relying increasingly on tem- ties evidently continued to deter many potential job poraiy workers, in part because doing so affords seekers. The labor force participation rate, which them greater flexibility in responding to fluctua- measures the percentage of the working age popu- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

838 Federal Reserve Bulletin • September 1993 lation that is either employed or looking for work, the twelve-month change in the CPI excluding food spurted in late spring; however, this spurt followed and energy, holding in the range of 3 XA percent to a sharp decline earlier in the year, and the level at 31/2 percent that has prevailed since last summer. mid-year was about the same as that in late 1992. The total CPI, held down by essentially flat energy Output-per-hour in the nonfarm business sector prices, has risen 3 percent over the past twelve declined at an annual rate of IV2 percent in the first months. quarter, echoing the sharp deceleration in output. The CPI for food increased at an annual rate of Nonetheless, the first-quarter drop followed a string 2 percent in the first half of 1993, a shade above the of sizable increases; all told, the rise in productivity rate of increase during 1992. Meat prices jumped over the year ended in the first quarter of 1993 was sharply during the first few months of the year as IV2 percent—smaller than the gains recorded ear- production fell short of year-earlier levels. In addilier in the economic expansion but still noticeably tion, the prices of fresh vegetables were boosted larger than the norms for the past decade. Produc- during the spring by weather-related production tivity growth in the manufacturing sector, where setbacks in several regions of the country. By late downsizing and restructuring efforts have been spring, these supply problems had abated, and the under way for some time, has continued to be June CPI brought price declines in food categories especially impressive, totaling more than 5 percent where the sharpest upward pressures previously over the past year. had been evident. Since the end of June, however, Labor compensation has tilted up of late. The farm crop prices have moved up in response to the employment cost index for private industry—a severe flooding in the Midwest. The increases in measure that includes wages and benefits—rose at crop prices have already been reflected in the an annual rate of 4lA percent over the first three form of large advances in some commodity price months of the year. Even so, the data are volatile, indexes and have raised the possibility that and the total increase since March 1992 amounted renewed upward pressures on consumer food prices to only 3V2 percent; by contrast, this index had could soon emerge. risen 4XA percent over the preceding twelve Consumer energy prices changed little, on net, months, and, as recently as early 1990, the twelve- over the first half of the year. With world oil month change had exceeded 5 percent. The markets remaining relatively quiescent, the price of increase in wages over the past year was less than West Texas intermediate generally fluctuated 3 percent, whereas the cost of fringe benefits, between $18 and $20 per barrel but has weakened pushed up by the steep rise in the cost of medical recently. Retail prices for refined petroleum prodinsurance and by higher payments for workers' ucts changed fairly little on the whole through compensation, rose more rapidly. Primarily because April and dropped, on balance, in May and June. of the drop in productivity, unit labor costs deterio- Residential natural gas prices rose considerably rated markedly in the first quarter, but they still over the first half, in part because of inventory were up less than 2 percent over the past year. adjustments associated with last winter's colderthan-usual weather; although recent declines in wellhead prices suggest that some of the increase at Price Developments the retail level may be retraced in coming months, over the longer haul, natural gas prices are being Inflation exhibited considerable month-to-month supported by an ongoing shift toward the use of volatility in the first half of the year. Broad mea- cleaner-burning fuels. sures of inflation picked up somewhat in early All told, the CPI excluding food and energy 1993, with monthly readings through April in the increased at an annual rate of 3XA percent over the upper part of the range of the past couple of years. first half of the year, after rising 3 percent over the However, price changes at the consumer and the second half of 1992. The CPI for goods soared in producer levels were small in May and June. Cut- January and February, with large increases reported ting through the monthly data, the disinflation for several items. Apparel prices jumped early in process evident in 1991 and 1992 seems to have the year, in part because strong sales in late 1992 stalled, with underlying inflation, as measured by limited the need for post-Christmas markdowns. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 839 Some retailers may also have seen opportunities to the pattern was exaggerated by the spike in lumber widen profit margins on other merchandise; the prices, it was evident for some other materials as recent decrease in prices of home furnishings, for well. In commodity markets, prices of precious example, suggests that not all of these increases metals have moved up sharply over the past couple stuck. of months, and some scattered increases have been Increases in prices of non-energy services were evident elsewhere. More broadly, however, indussteadier but also somewhat larger than in 1992. trial commodity prices were down slightly, on net, Part of the step-up was in shelter costs, which over the first half of the year. account for about half of non-energy services and had posted some unsustainably small increases last summer. However, the substantial deceleration in MONETARY AND FINANCIAL DEVELOPMENTS medical care prices (for both goods and services) IN 1993 that has been in train over the past few years extended into 1993. In fact, the CPI for medical Monetary policy in 1993 has been directed toward care rose only about 6 percent over the twelve the goal of sustaining the economic expansion months ended in June; this increase was among the while preserving and extending the progress made smallest of the past decade. toward price stability in recent years. In the first To some extent, the higher underlying CPI infla- half of the year, economic activity slowed marktion rates in the first half of 1993 may be a statisti- edly from the very rapid pace of the fourth quarter, cal phenomenon that will be reversed in the second while inflation indicators fluctuated widely. half: Indeed, over the past several years, price Although inflation readings were a source of conincreases early in the year have tended to exceed cern for the Federal Open Market Committee, the those for the year as a whole, even after seasonal intensification of price pressures did not seem adjustment by the Bureau of Labor Statistics. But, likely to be sustained over an extended period, and even allowing for this phenomenon, inflation seems reserve conditions were kept unchanged. With to have leveled out. The lack of further decelera- short-term rates steady, prices of fixed-income tion is puzzling in light of the considerable slack in securities were buoyed by prospects for significant labor and product markets. One possible explana- fiscal restraint and by a slowing of the economic tion is that the pickup in economic activity late last expansion, although fears of a pickup in inflation at year may have triggered a round of price increases; times prompted partial reversals in bond rates. if so, some deceleration in prices is likely in the Yield spreads on private securities relative to Treawake of the subdued performance of the economy sury rates remained historically narrow, and stock in the first half. Another may be the apparent price indexes set new records. failure of inflation expectations, as measured by The monetary aggregates have been sluggish this various surveys of consumers and businessmen, to year, as both the share of depository institutions in reflect fully the reduction in actual inflation over overall debt finance and the proportion of deposithe past few years; although the survey measures tory credit funded with monetary liabilities have vary considerably, respondents seem to share a fallen further. The reduced role for depositories sense that inflation has bottomed out. largely reflects weak demands for loans and depos- Prices received by domestic producers have its by the public. Corporate borrowers have continslowed in recent months, after undergoing a pickup ued to issue heavy volumes of stocks and bonds in earlier in the year. All told, the twelve-month part to pay down bank debt, while households have change in the producer price index for finished withdrawn deposits to invest in bond and equity goods other than food and energy was less than funds that finance, among others, corporate issuers. 2 percent in June, down somewhat from a year After two years of no growth, bank loans weakened earlier. At earlier stages of processing, where price further early this year, but increased fairly vigormovements tend to track cyclical fluctuations in ously in May and June, posting a small net gain demand, prices of intermediate materials (exclud- for the first six months of the year. The growth of ing food and energy) firmed a little early in the nonfinancial sector debt so far this year has edged year, but they subsequently moderated; although up from the subdued pace of 1992, despite a decel- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

840 Federal Reserve Bulletin • September 1993 eration of nominal spending, as investment spend- economic activity and improved prospects for fising is estimated to have exceeded the internal funds cal restraint, which would reduce the government's of corporations, household borrowing has picked demand for credit. Long-term rates fell to the lowup relative to spending, and Treasury financing est levels in almost twenty years in early March, needs have remained heavy. before backing up somewhat on reports of a second month of substantial increases in consumer and producer prices. The drop in interest rates buoyed The Implementation of Monetary Policy stock markets to record highs and contributed to a small decline in the weighted-average value of the Early in the year, incoming data suggested that the dollar. The dollar depreciated substantially against faster pace of economic activity that had emerged the yen, as market attention focused on Japan's in the third quarter of 1992 had been maintained growing trade surplus. through year-end. Indicators of industrial produc- Signs of price pressures were a concern for the tion, retail sales, business fixed investment, and FOMC, but the fundamentals of continued slack in residential construction activity all posted solid labor and capital utilization, subdued unit labor gains. Financial impediments to the expansion costs, and protracted weakness in credit and broad appeared to be diminishing as the balance sheets of money suggested that a higher trend inflation rate households, business firms, and financial institu- was not setting in. With the economy slowing, tions continued to improve, although money and reserve pressures were kept unchanged and a symcredit growth remained weak. Wage and price data metric policy directive was retained at the meeting suggested a continuing trend toward lower infla- in March. tion. Intermediate- and long-term interest rates had After pausing in March, producer and consumer declined somewhat, in part reflecting a view that prices leaped again in April. Long-term interest the new Administration's fiscal stimulus package rates backed up further in response; the price of was likely to be modest and that material reduc- gold surged, and the dollar fell more rapidly. With tions in future deficits were in prospect. The the Japanese authorities buying dollars in foreign economic outlook remained clouded, however, by exchange markets, the U.S. Treasury and the Feduncertainties regarding details of fiscal policy eral Reserve also purchased dollars for yen in late plans, continued restructuring and downsizing of April. After extended weakness, the monetary large businesses, and lingering restraints on credit aggregates jumped in early May by more than supplies. At its early February meeting, the FOMC could be explained by temporary factors. decided that its directive to the Federal Reserve At its May meeting, the FOMC was confronted Bank of New York regarding domestic open mar- with weak output growth and intensified inflaket operations should retain a symmetric stance tion readings. It was difficult to identify reasons regarding possible reactions over the intermeeting for this juxtaposition. Price increases by business period to incoming indicators; such a directive, firms in early 1993 could have reflected optimism which implied no presumption in how quickly engendered by strong demand conditions in the changes in operations should be made toward tight- second half of 1992 or an upward adjustment of ness or ease, had been instituted in December, inflation expectations. However, considerable slack following directives that had been biased toward remained in labor and product markets, and the easing over much of the previous two years. pace of economic activity had slowed markedly. Economic activity appeared to decelerate in the The Committee concluded that no policy adjustearly months of the year, however, in part because ment was needed at its meeting, but the risks of of adverse weather conditions, with softness in increased inflation and inflation expectations warretail sales, housing starts, and nonresidential con- ranted a directive that contemplated a relatively struction. Bank credit was failing to expand signif- prompt tightening of reserve pressures if signs of icantly, while broad money was declining because intensifying inflation continued to multiply. of temporary factors and a weak underlying trend. The subsequent readings on inflation for May Although short-term interest rates were little and June were subdued; moreover, evidence of changed, bond markets rallied further on weaker heightened inflation expectations did not emerge in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 841 markets for fixed-income securities. Consequently, expanded at a still-modest VA percent pace, after the stance of monetary policy was not changed two years of even weaker growth. following the May FOMC meeting. The dollar Taking advantage of low long-term interest rates rebounded on foreign exchange markets in June and the strong stock market, businesses have issued and early July in the wake of the fall of the Japa- an exceptionally large volume of bonds and equity; nese government and evidence that economic con- the proceeds have been used mainly to refund other ditions in Europe had deteriorated further. marketable debt and repay bank loans. Stresses On balance, since the beginning of the year, associated with the restructuring of the economy short-term interest rates are little changed, while and the earlier buildup of debt linger. However, intermediate- and long-term rates have fallen 3A to downgradings of corporate debt by rating agencies 1 percentage point, reaching the lowest levels in have dropped well below the peak levels of a few more than twenty years. In particular, the thirty- years ago, and a growing number of firms have year Treasury bond has reached a low of 6.54 per- received upgradings, as corporate cash flows have cent, while the ten-year Treasury note has touched strengthened substantially relative to interest 5.71 percent, its lowest level since 1971. The inter- expenses. est rate on fixed-rate thirty-year mortgages has Debt service burdens of households also have dropped to 7.16 percent, a record low in the continued to decline relative to disposable income, twenty-two year history of the series. The fall in as households have repaid high interest debt or intermediate-term interest rates in the United States taken advantage of lower rates to refinance. Indeed, was roughly matched on average abroad, and the the decline in long-term interest rates during the trade-weighted value of the dollar in terms of G-10 year has brought a new surge of refinancings of currencies has increased about 5 percent from its mortgages. With balance sheets improved, house- December average, as overseas economies weak- holds have become somewhat more willing to borened and foreign short-term rates declined row, and consumer credit has begun growing modsubstantially. erately after two years of weakness. Some of that growth, though, may reflect heavy promotion of credit cards carrying special incentives for use in Monetary and Credit Flows transactions, such as "frequent-flier miles" or merchandise discounts. Net mortgage debt is estimated Growth of the broad money measures was quite to have grown only a bit more than the low rate of slow over the first half of 1993, falling below the 1992. subdued pace of 1992, and leaving them near the Gross issuance of state and local government lower arms of the revised growth cones for 1993. debt has been particularly robust this year. How- This deceleration did not, however, reflect a moder- ever, refunding volume has accounted for nearly ation in overall credit flows or a tightening in 70 percent of the offerings, compared with about financial conditions. Rather, it resulted from a fur- 45 percent in 1992, a record year for refundings. ther diversion of credit flows from depository insti- Net debt of state and local governments has grown tutions as well as continued financing of depository only moderately again in 1993. The budgetary situcredit through capital accumulation rather than ations of some state and local governments have deposits. Indeed, growth of the debt of all nonfi- improved, as tax receipts have been stronger than nancial sectors is estimated to have edged up this expected, but severe financial problems remain in year—to 5 percent—despite an apparent slowing in other locales. nominal GDR Continued substantial demand for With corporate borrowers still relying heavily on credit by the federal government as well as more financing through capital markets, and depository comfortable financial positions and consequent lending spreads over market rates remaining high, signs of a greater willingness to borrow and lend the trend decline in the share of total credit flows by private sectors likely supported debt expansion. provided by depository institutions was extended Nevertheless, overall debt growth remains in the through the first half of 1993. From the fourth lower portion of its revised 4 to 8 percent annual quarter of 1992 to June, bank credit expanded at a range for 1993. Nonfederal debt growth has 4lA percent annual rate, only a slight pickup from Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

842 Federal Reserve Bulletin • September 1993 the sluggish pace of the previous two years. Securi- had capital ratios and supervisory ratings high ties acquisitions accounted for most of the expan- enough at the end of 1991 to be considered wellsion, as loans increased at only a PA percent rate. capitalized, but more than two-thirds was so posi- The growth of securities portfolios at banks in part tioned by early 1993. About $10 billion was added reflects additions to holdings of securitized mort- to bank equity and subordinated debt during the gage and consumer loans; bank financing of con- first quarter, a pace about the same as that in 1992; sumer spending and real estate transactions is thus data on new debt and equity issues indicate another stronger than indicated by bookings of loans in sizable gain over the second quarter. those sectors. Although commercial and industrial Depositories have also recently relied more loans have been about flat on balance so far this heavily on other nondeposit sources of funds. Weak year, a few signs of easing in bank lending terms economies and credit demand abroad have and conditions have recently emerged, and busi- prompted the U.S. offices of foreign banks to draw ness loans rebounded in May and June. Judging by more funding from overseas and the domestic business loan growth at smaller banks so far this offices of U.S. banks to reduce foreign lending this year, a pickup has occurred in lending to smaller year. Overall shifts from deposits to other sources nonfinancial firms. Thus, the continuing weakness of funding may be driven partly by regulatory in overall business loan growth does not appear to inducements—including higher insurance premibe driven primarily by restrictive supply conditions ums on deposits and incentives to bolster capital. but rather by the preference of larger firms to fund But changes in investor preferences from shortthrough capital markets. term deposits to longer-term debt and equity may Lower market interest rates over the past few also be playing a role in motivating the restructuryears have helped strengthen the financial positions ing of bank and thrift sources of funds. of banks and thrifts. The lower rates have resulted Greater reliance by borrowers on capital markets in capital gains on securities and improved interest has been facilitated by concurrent shifts in saving margins—as deposit rates have fallen more than preferences away from monetary assets and into lending rates. Lower rates also have helped bank capital market investments. Such portfolio realignborrowers by decreasing interest expenses and ments are evident in record inflows to bond and boosting economic activity, thereby reducing loan stock mutual funds, and money balances were also loss provisions for banks. Banks posted record likely invested directly in stocks and bonds. The earnings in 1992 and remained very profitable in incentives for what appears to be an extraordinary early 1993; prices of their shares on equity markets adjustment of household portfolios are varied. have risen substantially. Interest rates paid on retail time deposits, NOW Thrift institutions have continued to contract in accounts, and money market deposit accounts 1993, though at a much slower pace than over the (MMDAs) have fallen well below any rate offered past four years. A lack of funding for the Resolu- since the inception of deregulated deposits in the tion Trust Corporation caused a hiatus in the clo- early 1980s, and savings deposit rates are now the sure of institutions under its conservatorship. How- lowest in more than thirty years. The shock effect ever, privately operated thrifts have not expanded and the industry continues to consolidate. Slower growth in nominal GDP, moderate 3. Distribution of assets of domestic commercial banks, demand for credit relative to spending, and the by adjusted capital category1 reduced share of credit provided by depositories Percent have all contributed to the lack of significant End of year growth in the broad monetary aggregates this year. MMaarrcchh CCaappiittaall ccaatteeggoorryy 11999933 Another factor inhibiting money growth has been 1991 1992 continued substantial funding of bank and thrift Well capitalized 34 68 70 assets with subordinated debt and equity issues Adequately capitalized ... 45 22 20 Undercapitalized 21 10 10 as well as with retained earnings—all a byproduct of ongoing efforts to build capital positions. Only 1. Capital categories adjusted for overall supervisory rating according to the rule of thumb of downgrading a bank by one category for a low about one-third of the industry (by asset volume) examination rating by its supervisory agency (CAMEL 3,4, or 5). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 843 of historically low deposit interest rates caused funds. Partly as a consequence, the relationship of many depositors to investigate alternative invest- the total to aggregate spending is subject to considments. With the yield curve extraordinarily steep, erable uncertainty. Investments in bond and stock much higher returns have been available in recent funds are themselves subject to potentially volatile years on longer-term investments. A bond or stock capital gains and losses. More fundamentally, with mutual fund offers investors a chance to earn these the public's holdings of mutual funds now vastly higher yields and still enjoy liquidity features, expanded, its responses to a variety of interest rate including in some cases a check-writing facility. and stock price movements has yet to be tested. However, investment in such a mutual fund carries Because weakness in the demand for broad with it a higher risk of loss as well, because unlike money has resulted largely from shifts of portfolio monetary assets, its principal value fluctuates with preferences rather than changes in spending intenmarket prices. Indeed, the higher yield on bonds tions, it has not been reflected in comparable weakrelative to short-term instruments probably antici- ness in nominal GDP. Furthermore, the effects of a pates some capital losses. Whether all households declining share for depositories in overall credit accurately assess relative risks when comparing growth have been substantially offset by increased returns recently earned on mutual funds with those funding through capital markets, where households on money balances remains an open question. now invest a larger share of wealth. The velocity of Shifts into mutual funds have become much eas- M2 has been subject to extraordinary and unpreier and less costly for households, most notably dictable surges that have reduced the value of M2 because many banks have begun offering mutual as a guide to policy. Traditional models of velocity funds for sale in their lobbies. While many banks based on the difference between short-term market now offer discount brokerage services, a survey by interest rates and interest rates on deposits and the Federal Reserve found that larger banks have money market mutual funds, and even broader recently been making special efforts to promote models that take account of longer-term interest mutual fund investments among their depositors. rates and after-tax loan rates faced by households, An increasing number of banks have sponsored cannot explain the full 4 percent rise in M2 veloctheir own mutual funds or entered into exclusive ity in 1992, nor what may be a somewhat faster sales relationships with nonbank sponsors of funds. rate of increase in the first half of 1993. Some banks have promoted these products as a Money growth in the first quarter was depressed defensive measure to retain long-run relationships in part by the effects of several temporary factors, with valued depositors. In other cases, however, including distortions of seasonal factors and a lull banks have promoted funds as part of a strategy to in mortgage refinancing. A renewed surge of mortearn fee income without booking assets, thereby gage refinancing began to bolster demand deposits avoiding the need to raise additional capital. and MMDAs in April, as mortgage servicers Substitution between money and long-term increased balances temporarily before making mutual funds appears to have become evident in remittances to investors in mortgage-backed securithe aggregate data in recent years. There was little ties. The seasonal-factor distortions began to increase in such funds from 1987 through 1990, but reverse that month as well. However, substantial inflows have surged since then, at the same time shortfalls in individual nonwithheld tax payments that accretions to M2 balances have declined. A relative to recent years produced an offsetting comparison of the quarterly growth rates of M2 restraint to money growth in April, as the buildup and the sum of M2 and bond and stock funds of balances required to pay taxes was smaller than shows that growth of the sum has not weakened as that incorporated into seasonal factors. Even dramatically as that of M2 over the last two and excluding estimated effects of these special factors, half years; it has averaged nearly a 5 percent annual however, underlying growth of money through the rate, compared with less than 2 percent for M2. first four months of the year was far weaker than Although adding mutual funds and M2 together historical relationships would suggest. captures some substitution out of M2 in recent Despite continued heavy inflows to bond and years, the total remains quite volatile, indicating equity funds in May, the monetary aggregates that other forces have affected both M2 and mutual surged, boosted in part by a reversal of the tax Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

844 Federal Reserve Bulletin • September 1993 effects and an intensification of mortgage refinanc- shop for small rate advantages have been induced ing activity. However, the aggregates decelerated to make basic portfolio adjustments because of the substantially in June, and by more than might be historically low deposit interest rates and the suggested by a waning of tax and mortgage increased ease of making investments in capital refinancing effects. market instruments. In 1993, household portfolio adjustments dif- Partly as a result, narrow measures of money fered somewhat from their previous pattern. In the have decelerated this year, but their expansion has past, the realignment of household wealth toward remained rapid. Ml has grown at a 9Vi percent rate capital market investments had mainly involved from the fourth quarter of 1992 through June, comshifts from money market mutual funds and small pared with 141/* percent in 1992. Reserves, now time deposit accounts. At the same time, outflows held exclusively against transaction deposits, have from those accounts had also gone into NOW and grown at an 11 percent pace compared with 20 persavings deposits, the interest rates on which were cent in 1992. The monetary base has slowed by falling only slowly as market rates declined. This much less, because of continued strong foreign year, the sum of all these M2 balances has fallen at demand for currency this year. about the same rate as in 1992, but a slower runoff With reduced strength in its Ml component, and of small time deposits and money funds has been in savings and MMDAs, as well as continued runoffset by a sharp deceleration in the growth of offs of small time deposits and retail money funds, NOW and savings deposits. Catch up declines in M2 has grown at only a 3A percent annual rate from interest rates on liquid deposits may account for the fourth quarter of 1992 through June 1993, well part of their slower growth. Some nontransactions below the lower end of its growth cone set in balances held in NOW and MMDA deposits have February. The FOMC monitored the behavior of likely been shifted into bond and equity funds. It M2 carefully over the first half of the year, but in may be that some depositors who do not ordinarily light of actual and expected strength of velocity, 4. Growth of money and debt Percent Domestic nonfinancial debt PPeerriioodd MMll MM22 MM33 Total Nonfederal Annual, fourth quarter to fourth quarter1 1980 7.4 8.9 9.5 9.5 9.0 19812 5.4 (2.5) 9.3 12.3 10.0 9.7 1982 8.8 9.1 9.9 9.3 7.4 1983 10.4 12.2 9.9 11.4 8.8 1984 5.5 8.1 10.8 14.3 13.9 1985 12.0 8.7 7.6 13.8 13.3 1986 15.5 9.3 8.9 14.0 13.7 1987 6.3 4.3 5.8 10.1 10.4 1988 4.3 5.3 6.4 9.2 9.6 1989 .6 4.7 3.7 8.2 8.5 1990 4.3 4.0 1.8 6.8 5.9 1991 8.0 2.8 1.1 4.4 2.5 1992 14.3 1.8 .3 4.8 2.9 Semiannual (annual rate)3 1993:H1 8.7 .1 -.7 5.1 3.3 Quarter (annual rate)4 1993:Q1 6.6 -2.0 3.8 4.4 3.0 Q2 10.6 2.2 2.4 5.7 3.6 Fourth quarter 1992 average to June 1993 average (annual rate)5 9.5 .8 -.3 5.1 3.3 1. From average for fourth quarter of preceding year to average for fourth 4. From average for preceding quarter to average for quarter indicated (for quarter of year indicated. debt, estimated with data through May). 2. Ml adjusted for shift to NOW accounts in 1981. 5. For debt, to May 1993 average. 3. From average for 1992:Q4 to average for 1993:Q2 (for debt, estimated with data through May). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 845 the Committee determined that actions to boost M2 two years. Large time deposits have continued to growth were not needed to achieve its underlying fall, and the halt in reductions in short-term rates objectives for prices and the economy. The aggre- has ended the rapid growth of institutional money gate is near the lower arm of the revised annual funds, as their slower-adjusting yields have come growth cone established in July, and if velocity down to their usual relationship to market interest continues to increase substantially, M2 may well rates. From the fourth quarter of 1992 through come in toward the lower end of the revised growth June, M3 fell at about a LA percent annual rate; it range for the year. lies slightly below its revised annual growth The non-M2 portion of M3 has declined this cone. • year at nearly the same pace as that of the previous Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

846 Industrial Production and Capacity Utilization for June 1993 Released for publication July 16 ment, which posted significant advances earlier this year, edged up for a second month. At 110.1 per- Industrial production, which was unchanged in cent of its 1987 annual average, total industrial May, declined 0.2 percent in June. The output of production was the same in June as it had been in consumer goods, construction supplies, and materi- March but was 3.8 percent above its year-earlier als decreased; the production of business equip- level. For the second quarter as a whole, industrial Industrial production indexes Twelve-month percent change Twelve-month percent change 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 —— TToottaall iinndduussttrryy 140 —— MMaannuuffaaccttuurriinngg 140 CCaappaacciittyy CCaappaacciittyy -- - 120 - 120 100 100 Production 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 J L 1981 1983 1985 1987 1989 1991 1993 1981 1983 1985 1987 1989 1991 1993 All series are seasonally adjusted. Latest series, June. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

847 Industrial production and capacity utilization1 Industrial production, index, 1987=100 Percentage change Category 1993 1993: June 1992 to Mar.r Apr.r Mayr JuneP Mar.r Apr.r Mayr Junef June 1993 Tbtal 110.1 110.4 110.3 110.1 -.2 3.8 Previous estimate 110.1 110.2 110.4 Major market groups Products, total* 109.5 109.5 109.4 109.1 .3 -.1 -.3 4.0 Consumer goods ... 108.6 108.3 107.9 107.1 .0 -.4 -.7 2.9 Business equipment 133.4 134.4 134.7 134.9 1.3 .2 .1 10.6 Construction supplies 96.4 95.9 96.9 96.3 -1.1 1.1 -.7 2.9 Materials 110.9 111.6 111.6 111.6 .0 .0 -.1 3.5 Major industry groups Manufacturing 110.8 111.3 111.2 110.8 .3 .5 -.1 -.3 4.0 Durable 114.1 114.8 114.7 114.3 .3 .6 -.1 -.4 6.2 Nondurable 106.6 107.0 106.9 106.6 .2 .3 -.1 -.3 1.3 Mining 95.3 96.4 96.9 96.3 -.6 1.2 .6 -.7 -.8 Utilities 117.8 115.0 114.9 116.4 .2 -2.4 .0 1.3 5.8 Capacity utilization, percent MMMEEEMMMOOO CCCaaapppaaaccciiitttyyy,,, pppeeerrr--ccceeennntttaaagggeee 1992 1993 ccchhhaaannngggeee,,, AAvveerraaggee,, LLooww,, HHiigghh,, JJJuuunnneee 111999999222 11996677--9922 11998822 11998888--8899 June Mar.r Apr.r Mayr Junep tttooo JJJuuunnneee 111999999333 Total 81.9 71.8 84.8 79.5 81.6 81.7 81.5 81.2 1.6 Manufacturing 81.2 70.0 85.1 78.6 80.6 80.9 80.7 80.3 1.8 Advanced processing 80.7 71.4 83.3 77.0 79.3 79.5 79.2 78.8 2.2 Primary processing .. 82.2 66.8 89.1 82.2 83.8 84.2 84.1 83.8 .8 Mining 87.4 80.6 87.0 86.3 85.3 86.4 86.9 86.4 -.9 Utilities 86.7 76.2 92.6 83.9 89.0 86.8 86.7 87.8 1.2 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. production rose at a 1.9 percent annual rate, down output of information-processing equipment that from 5.5 percent in the first quarter. Utilization of offset another drop in transit equipment. The prototal industrial capacity eased again in June, to duction of defense and space equipment continued 81.2 percent. to contract and has fallen 9 percent in the past When analyzed by market group, the data show twelve months. Because of a sharp drop in lumber that the output of consumer goods fell 0.7 percent; production, the output of construction supplies the bulk of the decline was in the production of decreased 0.7 percent in June, after having risen consumer durables. Assemblies of both automo- more than 1 percent in May. Over the past two biles and light trucks were cut for a second month. months, the production of both durable and nondu- Moreover, sizable drops in the output of appliances rable materials has changed little, while the output and room air conditioners contributed to a 1.5 per- of energy materials has fallen because of the widcent decrease in the output of other durable con- ening coal strike. sumer goods. The production of nondurable con- When analyzed by industry group, the data show sumer goods declined for the third consecutive that within manufacturing, output decreased month. In June, reductions in the output of cloth- 0.3 percent; capacity utilization slipped 0.4 percenting, food, and automotive gasoline more than offset age point, to 80.3 percent, which was about the an increase in sales of residential electricity. same rate as in January and nearly 1 percentage The small gain in the production of business point below the 1967-92 average. Utilization in equipment reflected a continued increase in the advanced-processing industries declined to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

848 Federal Reserve Bulletin • September 1993 78.8 percent in June, about 2 percentage points well above its year-ago level. In contrast, aircraft below its longer-run average. Although the operat- output has fallen for nearly two years. Small ing rate for primary-processing industries also declines were widespread among nondurable mandeclined, it remained 1.6 percentage points above ufacturing industries in June, with only printing its longer-run average. and publishing and chemicals increasing. The output of both durable and nondurable goods The output at mines fell 0.7 percent, with the slackened in June. The weakness in durables was production cut in coal and other mining industries concentrated in motor vehicles, aircraft, and lum- far exceeding a gain in the drilling of oil and gas ber. Motor vehicle output, which fell off after hav- wells. The output at utilities rose 1.3 percent. • ing held steady in the first part of 1993, remained Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

849 Statement to the Congress Statement by Alan Greenspan, Chairman, Board effect on jobs and wages through much of the of Governors of the Federal Reserve System, expansion has also made households more caubefore the Subcommittee on Economic Growth tious spenders. and Credit Formation of the Committee on Bank- In the past several years, as these influences ing, Finance and Urban Affairs, U.S. House of have restrained the economy they have been Representatives, July 20, 1993 balanced, in part, by the accommodative stance of monetary policy and, more recently, by de- Thank you for this opportunity to discuss the clines in longer-term interest rates as the pros- Federal Reserve's semiannual monetary policy pects for credible federal deficit cuts improved. report to the Congress.1 My remarks this morn- From the time monetary policy began to move ing will cover current monetary policy and eco- toward ease in 1989 until now, short-term internomic settings as well as the Federal Reserve's est rates have dropped more than two-thirds and longer-term strategy for contributing, to the best long-term rates have also declined substantially. of its abilities, to the nation's economic well- All along the maturity spectrum, interest rates being. have come down to their lowest levels in twenty or thirty years, aiding the repair of balance As economic expansion has progressed somesheets, bolstering the cash flow of borrowers, what fitfully, our earlier characterization of the and providing support for interest-sensitive economy as facing stiff headwinds has appeared spending. increasingly appropriate. Doubtless the major headwind in this regard has been the combined The process of easing monetary policy, howefforts of households, businesses, and financial ever, had to be closely controlled, and generally institutions to repair and rebuild their balance gradual, because of the constraint imposed by sheets after the damage inflicted in recent years the marketplace's acute sensitivity to inflation. as weakening asset values exposed excessive As I pointed out in my February testimony to the debt burdens. Congress, this constraint did not exist in earlier But there have been other headwinds as well. years. Before the late 1970s, financial market The builddown of national defense has cast a participants and others apparently believed that shadow over particular industries and regions of although inflationary pressures might surface octhe nation. Spending on nonresidential real estate casionally, the institutional structure of the U.S. dropped dramatically in the face of overbuilding economy simply would not permit sustained inand high vacancy rates and has remained in the flation. But as inflation and, consequently, longdoldrums. At the same time, corporations across term interest rates soared into the double digits at a wide range of industries have been making the end of the 1970s, investors became painfully efforts to pare employment and expenses to aware that they had underestimated the econoimprove productivity and their competitive posi- my's potential for inflation. As a result, monetary tions. These efforts have been prompted, in part, policy in recent years has had to remain alert to by innovative technologies that have been ap- the possibility that an ill-timed easing could be plied to almost every area of economic endeavor undone by a flare-up of inflation expectations, and have boosted investment. However, their pushing long-term interest rates higher and shortcircuiting essential balance sheet repair. The cumulative monetary easing over the past four years has been very substantial. Since last 1. See "Monetary Policy Report to the Congress," in this issue. September, however, no further steps have been Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

850 Federal Reserve Bulletin • September 1993 taken, as the stance of policy has appeared the fourth quarter of last year to nearly 4Vi broadly appropriate to the evolving economic percent in the second quarter. Preliminary data circumstances. imply some easing of such expectations earlier That stance has been quite accommodative, this month, but the sample from which those data especially judging by the level of real short-term are derived is too small to be persuasive. Moreinterest rates in the context of moderate eco- over, the price of gold, which can broadly reflect nomic growth, on average. Short-term real inter- inflationary expectations, has risen sharply in est rates have been about zero over the past three recent months. And at times this spring, bond quarters. In maintaining this accommodative yields spiked higher when incoming news about stance, we have been persuaded by evidence of inflation was most discouraging. persistent slack in labor and product markets, The role of expectations in the inflation proincreasing international competitiveness, and a cess is crucial. Even expectations not validated decided absence of excessive credit and money by economic fundamentals can themselves add expansion. The forces that engendered past in- appreciably to wage and price pressures for a flationary episodes appear to have been lacking considerable period, potentially derailing the to date. economy from its growth track. Yet some of the readings on inflation earlier Why, for example, despite an above-normal this year were disturbing. It appeared that prices rate of unemployment and permanent layoffs, might be accelerating despite product market have uncertainties about job security not led to slack and an unemployment rate that was notice- further moderation in wage increases? The anably above estimates of the so-called "natural" swer appears to lie, at least in part, in the rate of unemployment—that is, the rate at which deep-seated anticipations understandably harprice pressures remain roughly constant. In the bored by workers that inflation is likely to reacpast, the existing degree of slack in the economy celerate in the near term and undercut their real had been consistent with continuing disinflation. wages. History tells us, however, the inflation out- The Federal Open Market Committee (FOMC) come depends not only on the amount of slack became concerned that inflation expectations remaining in labor and product markets but on and price pressures, unless contained, could other factors as well, including the rate at which raise long-term interest rates and stall economic that slack is changing. If the economy is growing expansion. Consequently, at its meeting in May, rapidly, inflation pressures can arise, even in the while affirming the more accommodative policy face of excess capacity, as temporary bottle- stance in place since last September, the FOMC necks emerge and as workers and producers also deemed it appropriate to initiate a so-called raise wages and prices in anticipation of contin- asymmetric directive. With its bias in the direcued strengthening in demand. Near the end of tion of a possible firming of policy over the last year, about the time many firms probably intermeeting period, this directive did not prewere finalizing their plans for 1993, sales and judge that action would be taken—and indeed capacity utilization were moving up markedly none was taken. But it did indicate that further and optimism about future economic activity signs of a potential deterioration of the inflation surged. This optimism may well have set in outlook would merit serious consideration as to motion a wave of price increases, which showed whether short-term rates needed to be raised through to broad measures of prices earlier this slightly from their relatively low levels to ensure year. that financial conditions remained conducive to Moreover, inflation expectations, at least by sustained growth. some measures, appear to have tilted upward this Certainly the May and June price figures have year, possibly contributing to price pressures. helped assuage concerns that new inflationary The University of Michigan survey of consumer pressures had taken hold. Nonetheless, on balattitudes, for example, reported an increase in ance, the news on inflation this year must be the inflation rate that is expected to prevail over characterized as disappointing. Despite disinflathe next twelve months from about 3VA percent in tionary forces and continued slack, the rate of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to the Congress 851 inflation has at best stabilized, rather than easing decline in the budget deficit have induced lower further as past relationships would have sug- long-term interest rates and favorably affected gested. the economy, the positive influence thus far is In assessing the stance of monetary policy and apparently being at least partly offset by some the likelihood of persistent inflationary pres- business spending reductions as a consequence sures, the FOMC took into account the down- of concerns about the effects of pending tax shift in the pace of economic expansion earlier increases. this year. This downshift left considerable re- It seems that the prospective cuts in the deficit maining slack in the economy and promised that are having a variety of substantial economic the adverse price movements prompted by the effects, well in advance of any actual change in acceleration in growth late last year would likely taxes or in projected outlays. Moreover, uncerdiminish. tainty about the final shape of the package may Although a slowdown from the unsustainably itself be injecting a note of caution into private rapid growth in the latter part of last year had spending plans. In addition, uncertainty about been anticipated, the deceleration was greater the outlook for health care reform may be affectthan expected. A surprisingly precipitous drop in ing spending at least in that industry. defense spending, a sharp deterioration in net To be sure, the conventional wisdom is that exports, a major blizzard, and some inevitable budget deficit reduction restrains economic retrenchment by consumers converged to yield growth for a time, and I suspect that is probably only meager gains in output in the first quarter. correct. However, over the long run, conven- But growth apparently picked up in the second tional wisdom points in the opposite direction. In quarter, and nearly one million net new jobs were fact, one can infer that recent declines in longcreated over the first half of the year. Smoothing term interest rates are bringing forward some of through the quarterly pattern, the economy ap- these anticipated long-term gains. As a consepears to have accelerated gradually over the past quence, the timing and magnitude of any net two years, to maintain a pace of growth that restraint from deficit reduction are uncertain. should yield further reductions in the unemploy- Patently, the overall economic effect of fiscal ment rate. Consequently, the evidence remains policy, especially when combined with the unconsistent with our diagnosis that the underlying certainties of the forthcoming health care reform forces at work are keeping the economy gener- package, has imparted several unconventional ally on a moderate upward track. However, as I unknowns to the economic outlook. have often emphasized, not all the old economic However, assuming that we constructively reand financial verities have held in the current solve over time the major questions about federal expansion, and changes in fiscal policy will have budget and health care policies, with further uncertain effects in the future. Thus, caution waning of earlier restraints on growth the U.S. remains appropriate in assessing the path for the economy should eventually emerge healthier and economy. more vibrant than in decades. The balance sheet Financial conditions have improved consider- restructuring of both financial and nonfinancial ably, lessening the need for balance sheet re- establishments in recent years should leave the structuring that has been damping economic ac- various sectors of the economy in much better tivity for several years. By no means is the shape and better able to weather untoward deprocess over, but good progress has been made. velopments. Similarly, the ongoing efforts by On the one hand, debt service burdens, eased by corporations to pare expenses are putting our lower interest rates and lower debt-equity ratios, firms and our industries in a better position to have fallen substantially in both the business and compete both within the U.S. market and glohousehold sectors. On the other hand, the econ- bally. And after a period of some dislocation the omies of several of our major trading partners contraction in the defense sector will ultimately have been quite weak, constraining the growth of mean a freeing-up of resources for more producdemand for our exports. tive uses. Finally, a credible and effective fiscal Although expectations of a significant, credible package would promise an improved outlook for Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

852 Federal Reserve Bulletin • September 1993 sustained lower long-term interest rates and a Inflows to bond and stock mutual funds have better environment for private sector invest- reached record levels, and, to the extent that ment. All told, the productive capacity of the these inflows have come at the expense of growth economy will doubtless be higher and its resil- in deposits or money market mutual funds, the ience greater. broad monetary aggregates have been depressed. Over the past two years, the forces of restraint In this context, the FOMC lowered the 1993 on the economy have changed, but real growth ranges for M2 and M3—to 1 percent to 5 percent has continued, with one sector of the economy and 0 percent to 4 percent respectively. This after another taking the lead. Against this back- lowering represents a reduction of 1 percentage ground, Federal Reserve Board governors and point in the M2 range and Vi percentage point for Reserve Bank presidents project that the U.S. M3. Even with these reductions, we would not economy will remain on the moderate growth be surprised to see the monetary aggregates path it has been following as the expansion has finish the year near the lower ends of their progressed. Their forecasts for real GDP average ranges. about 2Vi percent from the fourth quarter of 1992 As I emphasized in a similar context in Februto the fourth quarter of 1993 and cluster around ary, the lowering of the ranges is purely a tech- 21/2 percent to 3lA percent over the four quarters nical matter; it does not indicate, nor should it be of 1994. Reflecting this moderate rise and the perceived as, a shift of monetary policy toward outlook for labor productivity, unemployment is restraint. It is indicative merely of (1) the state of generally expected to edge lower, to about 63A our knowledge about the factors depressing the percent by the end of this year and to perhaps a growth of the aggregates relative to spending, (2) shade lower by the end of next year. For this the course of the aggregates to date, and (3) the year as a whole, FOMC participants see inflation likelihood of various outcomes through the end at or just above 3 percent, and most of them have of the year. Although the lowering of the range about the same forecast for next year. reflects our judgment that shifts out of M2 will Besides focusing on the outlook for the econ- persist, the upper end of the revised range allows omy at its July meeting, the FOMC, as required for a resumption of more normal behavior or by the Humphrey-Hawkins Act, set ranges for even some unwinding of M2 shortfalls. The the growth of money and debt for this year and, FOMC also lowered the 1993 range for debt of on a preliminary basis, for 1994. One premise of the domestic nonfinancial sectors Vi percentage the discussion of the ranges was that the unchar- point, to 4 percent to 8 percent. The debt aggreacteristically slow growth of the broad monetary gate is likely to come in comfortably within its aggregates in the past couple years—and the new range, as it continues growing about in line atypical increases in their velocities—would per- with nominal GDP. The new ranges for growth of sist for a while longer. M2 has been far weaker money and debt in 1993 were carried over on a than income and interest rates would have pre- preliminary basis into 1994. dicted. Indeed, if the historical relationships be- In reading the longer-run intentions of the tween M2 and nominal income had remained FOMC, one should interpret the specific ranges intact, the behavior of M2 in recent years would cautiously. The historical relationships between have been consistent with that of an economy in money and income and between money and the severe contraction. To an important degree, the price level have largely broken down, depriving behavior of M2 has reflected structural changes the aggregates of much of their usefulness as in the financial sector: The thrift industry has guides to policy. At least for the time being, M2 downsized by necessity, and commercial banks has been downgraded as a reliable indicator of have pulled back as well, largely reflecting the financial conditions in the economy, and no burgeoning loan losses that followed the lax single variable has yet been identified to take its lending of earlier years. With depository credit place. weak, there has been little bidding for deposits, At one time, M2 was useful both to guide and depositors in any case have been drawn to Federal Reserve policy and to communicate the the higher returns on capital market instruments. thrust of monetary policy to others. Even then, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to the Congress 853 however, a wide range of data was routinely economy, directing production toward its longevaluated to assure ourselves that M2 was cap- term potential. turing the important elements in the financial The level of the equilibrium real rate—or more system that would affect the economy. The appropriately the equilibrium term structure of FOMC never single-mindedly adhered to a nar- real rates—cannot be estimated with a great deal row path for M2, but persistent and sizable of confidence, though it can be estimated with deviations of that aggregate from expectations enough confidence to be useful for monetary were a warning sign that policy and the economy policy. Real rates, of course, are not directly might not be interacting in a way that would observable but must be inferred from nominal produce the desired results. The so-called interest rates and estimates of inflation expecta- "P-star" model, developed in the late 1980s, tions. The most important real rates for private embodied a long-run relationship between M2 spending decisions almost surely are the longer and prices that could anchor policy over ex- maturities. Moreover, the equilibrium rate structended periods of time. But that long-run rela- ture responds to the ebb and flow of underlying tionship also seems to have broken down with forces affecting spending. So, for example, in the persistent rise in M2 velocity. recent years the appropriate real rate structure M2 and P-star may reemerge as reliable indi- doubtless has been depressed by the headwinds cators of income and prices once (1) the yield of balance sheet restructuring and fiscal retrenchcurve has returned to a more normal configura- ment. Despite the uncertainties about the levels tion, (2) borrowers' balance sheets have been of equilibrium and actual real interest rates, restored and traditional credit demands resume, rough judgments about these variables can be (3) savers have adjusted to the enhanced avail- made and used in conjunction with other indicaability of alternative investments, and (4) depos- tors in the monetary policy process. Currently, itories finally have reached a comfortable size short-term real rates, most directly affected by relative to their capital and earnings. In the the Federal Reserve, are not far from zero; meantime, the process of probing a variety of long-term rates, set primarily by the market, are data to ascertain underlying economic and finan- appreciably higher, judging from the steep slope cial conditions has become even more essential of the yield curve and reasonable suppositions to formulating sound monetary policy. This gen- about inflation expectations. This configuration eral approach obviously has its weaknesses. indicates that market participants anticipate that When one examines many indicators, one can short-term real rates will have to rise as the always find some that counsel against actions headwinds diminish if substantial inflationary imthat later appear to have been necessary. balances are to be avoided. In these circumstances, it is especially prudent Although our guides for policy may have to focus on longer-term policy guides. One im- changed recently, our goals have not. As I have portant guidepost is real interest rates, which indicated many times to this committee, the have a key bearing on longer-run spending deci- Federal Reserve seeks to foster maximum sussions and inflation prospects. tainable economic growth and rising standards of In assessing real rates, the central issue is their living. And in that endeavor, the most productive relationship to an equilibrium interest rate, spe- function the central bank can perform is to cifically the real rate level that, if maintained, achieve and maintain price stability. would keep the economy at its production poten- Inflation is counterproductive in many ways. tial over time. Rates persisting above that level, Of particular importance, increased inflation has history tells us, tend to be associated with slack, been found to be associated with reduced growth disinflation, and economic stagnation, and rates of productivity, apparently in part because it below that level tend to be associated with even- confounds relative price movements and obtual resource bottlenecks and rising inflation, scures price signals. Compounding this negative which ultimately engender economic contrac- effect, under the current tax code, inflation raises tion. Maintaining the real rate around its equilib- the effective taxation of savings and investment, rium level should have a stabilizing effect on the discouraging the process of capital formation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

854 Federal Reserve Bulletin • September 1993 Because productivity growth is the only source firms in the most high tech areas must remain of lasting increases in real incomes and because constantly on the cutting edge, as products and even small changes in growth rates of productiv- knowledge rapidly become obsolete. Many prodity can accumulate over time to large differences ucts that were at technology's leading edge, say in living standards, productivity growth's associ- five years ago, are virtually unsalable in today's ation with inflation is of key importance to poli- markets. In high tech fields, leadership can shift cymakers. rapidly. In some markets in which American The link between the control of inflation and firms were losing share just a few years ago, we the growth of productivity underscores the im- have regained considerable dominance. In one portance of providing a stable backdrop for the case, U.S. firms have seized a commanding lead economy. Such an environment is especially in just two years in the new laptop computer important for an increasingly dynamic market market, and now these firms account for more economy, such as ours, in which technology and than 60 percent of U.S. sales last year, triple the telecommunications are advancing rapidly. New figure for Japanese firms. firms, new products, new jobs, new industries, More generally, it appears that the pace of and new markets are continually being created, dynamism has been accelerating. One indication and they are unceremoniously displacing the old is that the average economic life expectancy of ones. The U.S. economy is a dynamic system new capital equipment has been falling. The that is always renewing itself. It is extraordinary average life of equipment purchased in 1982, for that the system overall is as stable as it is, example, was I6V2 years. By 1992 that figure had considering the persistent process of change in declined to W/2 years, a decline more than twice the structure of our economy. For example, a as large as that over the preceding decade. In frequently cited figure is the two million new jobs addition, telecommunications technology is obthat have been created since the end of 1991. viously quickening the decisionmaking process This is a net change, however, which masks the in both financial and product markets. many millions of people who found, lost, and In such a rapidly changing marketplace, the changed jobs over the same period. Currently, agile survive by being flexible. One aspect of this people are being hired at a pace of approximately flexibility has been the spread of "just-in-time" 400,000 per week, while job losses are running inventory controls at manufacturing firms. Partly modestly below that figure. Such vast churning in as a result of innovations in inventory control the nation's labor markets is a normal and ulti- techniques, the variability of inventories relative mately a productive process. to total output appears to be on a downtrend. Central planning of the type that prevailed in The possibility of failure has productive side postwar Eastern Europe and the Soviet Union effects, encouraging economic agents to do their represented one attempt to fashion an economic best to succeed. But there are nonproductive and system that eliminated this competitive churning unnecessary risks as well. There is no way to and its presumed wastefulness. But when that avoid risk altogether, given the inherently uncersystem eliminated the risk of failure, it also tain outcomes of all business and household stifled the incentive to innovate and to prosper. decisions. But many uncertainties and risks do Central planning fostered stasis: In many re- not foster economic progress, and when feasible spects, the eastern bloc economies marched in should be suppressed. A crucial risk in this place for more than four decades. category is that induced by inflation. To allow a Risk-taking is crucial in the process that leads market economy to attain its potential, the unto a vital and progressive economy. Indeed, it is necessary instability engendered by inflation a necessary condition for wealth creation. In a must be quieted. market economy, competition and innovation A monetary policy that aims at price stability interact; those firms that are slow to innovate or permits low long-term interest rates and helps to anticipate the demands of the consumer are provide a stable setting to foster the investment soon left behind. The pace of churning differs by and innovation by the private sector that are key industry, but it is present in all. At one extreme, to long-run economic growth. In pursuing our Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to the Congress 855 objectives, we must remain acutely aware that dollar that is crucial to maximizing and fulfilling the structure of the economy has been changing the productive capacity of this nation. However, and growing ever more complex. The relation- the public clearly remains to be convinced. Surships between the key variables in the economy vey responses and financial market prices emare always shifting to a degree, and this evolu- body expectations that the current lower level of tion presents an ongoing challenge to the busi- inflation not only will not be bettered, but it will ness leader, to the econometric modeler, and to not even persist. But there are glimmers of hope those responsible for the conduct of economic that trust is reemerging. For example, issuers policy. have found receptive markets in recent months Clearly, the behavior of many of the forces for fifty-year bonds. This had not happened in acting on the economy over the course of the last decades. The reopening of that market may be business cycle has been different from what had read as one indication that some investors once gone before. The sensitivity of inflation expecta- again believe that inflationary pressures will retions has been heightened, and, as recent evi- main subdued. dence suggests, businesses and households may It is my firm belief that, with fiscal consolidabe becoming more forward-looking with respect tion and with the monetary policy path that we to fiscal policies as well. have charted, the United States is well posi- I believe we are on our way toward reestab- tioned to remain at the forefront of the world lishing the trust in the purchasing power of the economy well into the next century. • Chairman Greenspan presented identical testimony before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, July 22, 1993. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

856 Announcements APPOINTMENT OF NEW PRESIDENT OF THE The statement says that banks may find it appro- FEDERAL RESERVE BANK OF NEW YORK priate to ease credit terms to help new borrowers restore their financial strength, consistent with pru- The Federal Reserve Bank of New York announced dent banking practices, and to restructure debt or on July 16, 1993, that William J. McDonough, who extend repayment terms for existing borrowers. had been Executive Vice President at that Bank, The Board also waived appraisal regulations for had been appointed President, effective July 19, real estate related transactions affected by the 1993. Mr. McDonough will succeed E. Gerald flooding, and temporarily amended its Regula- Corrigan, who retired. tion Z (Truth in Lending) to provide relief under Mr. McDonough, fifty-nine, had been Executive waiver rules so that borrowers may gain ready Vice President of the New York Reserve Bank's access to loan funds when they use their primary financial markets group and the manager of open dwelling as collateral for a loan. market operations for the Federal Reserve Sys- Under the right of rescission, a borrower nortem's Federal Open Market Committee. He was mally has three business days to cancel a loan chosen as the New York Federal Reserve Bank's contract when it is secured by the borrowers's eighth chief executive by the Bank's board of principal dwelling. directors, and his appointment was confirmed on July 16, 1993, by the Federal Reserve's Board of ERRATUM: BULLETIN TABLE 1.27 Governors. He joined the Bank in January 1992, after a The second part of table 1.27, "Assets and Liabilitwenty-two-year career at First Chicago Corp. ties of Large Weekly Reporting Commercial and its bank, First National Bank of Chicago. He Banks," on page A23 of the August issue of the retired from First Chicago in 1989 as vice chair- Bulletin was printed incorrectly. The previous man of the board and a director of the bank holding month's data, for the period March 3, 1993, company. through April 28, 1993, were printed instead of the Mr. Corrigan announced his retirement plans in current data for that issue. The correct data, for the January. He had been president of the Federal period March 31, 1993, through May 26, 1993, are Reserve Bank of New York since January 1985. shown opposite, on page 857. AVAILABILITY OF REVISED LISTS OF OTC ACTIONS TO EASE FINANCIAL STRESS IN MARGIN STOCKS AND OF FOREIGN MARGIN AREAS IN THE MIDWEST AFFECTED BY STOCKS FLOODING The Federal Reserve Board published on July 23, The Federal Reserve Board announced on July 23, 1993, a revised list of over-the-counter (OTC) 1993, a series of steps designed to help ease finan- stocks that are subject to its margin regulations. It cial stress in areas affected by flooding in the also published the List of Foreign Margin Stocks Midwest. for foreign equity securities that met the criteria in A supervisory statement adopted by the Board Regulation T (Credit by Brokers and Dealers). encourages financial institutions to work construc- The lists are effective August 9,1993, and supertively with borrowers who are experiencing diffi- sede the previous lists that were effective May 10, culty because of the flooding. 1993. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

857 1.27 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued Millions of dollars, Wednesday figures 1993 Account Mar. 31R Apr. 7 Apr. 14 Apr. 21 Apr. 28F May 5 May 12 May 19 May 26 LIABILITIES 46 Deposits 1,102,691 1,118,220' 1,126,069' 1,095,355' 1,101,564 1,121,688 1,113,730 1,099,404 1,102,585 47 Demand deposits 268,659 269,695' 279,838' 260,032' 272,144 276,890 271,034 263,571 269,154 48 Individuals, partnerships, and corporations 221,814 221,337' 230,158' 211,797R 220,729 225,521 222,326 215,697 218,244 49 Other holders 46,845 48,358 49,680 48,234' 51,416 51,370 48,708 47,874 50,910 50 States and political subdivisions 8.891 8,371 8,727 8,997 9,214 10,049 8,652 9,093 8,925 51 U.S. government 2,347 2,048 3,343 3,590 2,737 2,130 1,795 1,879 2,162 52 Depository institutions in the United States ... 20,348 22,061 21,916 21,496' 23,068 23,008 21,980 21,115 22,006 53 Banks in foreign countries 5,083 4,929 4,962 4,884 4,821 5,639 5,163 5,191 5,591 54 Foreign governments and official institutions .. 712 1,177 687 646 613 652 615 749 631 55 Certified and officers' cheeks 9,463 9,772 10,046 8,622 10,963 9,891 10,502 9,847 11,596 56 Transaction balances other than demand deposits4 . 119,220 122,088 122,233 118,945 114,964 119,701 117,197 116,916 116,411 57 Nontransaction balances 714,812 726,437 723,997 716,378 714,456 725,097 725,499 718,918 717,021 58 Individuals, partnerships, and corporations 692,241 702,918' 700,707' 691,264' 689,728 699,585 699,430 692,816 690,682 59 Other holders 22,571 23,519' 23,290' 25,114' 24,728 25,512 26,070 26,101 26,339 60 States and political subdivisions 20,151 20,513' 20,251' 20,349' 20,474 20,750 21,364 21,399 21,539 61 U.S. government 487 492 495 2,199 1,603 2,200 2,206 2,211 2,270 62 Depository institutions in the United States ... 1,597 2,183' 2,208' 2,232' 2,318 2,229 2,159 2,152 2,191 63 Foreign governments, official institutions, and banks . 336 332 336 333 332 333 341 339 339 64 Liabilities for borrowed money5 282,295 278,080' 282,550' 292,849' 287,695 280,649 287,083 288,744 292,143 65 Borrowings from Federal Reserve Banks 707 0 0 0 0 0 0 0 0 66 Treasury tax and loan notes , 11,625 2,830 1,312' 28,877 22,358 16,196 12,268 14,392 12,777 67 Other liabilities for borrowed money 269,963 275,249' 278,178' 263,972' 265,337 264,453 274,815 274,353 279,366 68 Other liabilities (including subordinated notes and debentures) 112,144 103,572' 103,633' 101,848' 105,371 106,865 109,332 104,660 109,029 69 Total liabilities 1,497,130 1,499,871' 1,512,252' l,490,053r 1,494,630 1,509,202 1,510,146 1,492,808 1,503,757 70 Residual (total assets less total liabilities)7 145,015 145,298' 146,488' 146,918' 146,173 146,512 147,236 147,289 146,831 MEMO 71 Total loans and leases, gross, adjusted, plus securities1 1,338,668 1,348,529' 1,350,364' 1,347,422' 1,345,002 1,357,422 1,355,028 1,352,960 1,346,336 72 Time deposits in amounts of $100,000 or more 103,994 108,547' 108,300' 109,310' 107,956 109,578 109,150 107,904 107,577 73 Loans sold outright to affiliates 869 876 875 875 872 871 867 866 864 74 Commercial and industrial 447 447 447 447 443 442 438 437 437 75 Other 422 429 429 429 428 428 428 428 426 76 Foreign branch credit extended to U.S. residents ... 23,225 23,227 23,321 23,464 23,333 23,298 23,479 23,182 23,051 77 Net due to related institutions abroad -12,368 -13,190' -16,201R -12,016 -8,995 -11,242 -8,661 -13,626 -9,699 1. Includes ccrtificatcs of participation, issued or guaranteed by agendas of the 9. Affiliates includc a bank's own foreign branches, nonconsolidatcd 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. solidatcd 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-adcquacy analysis. front covcr. S. Excludes loans to and federal funds transactions with commercial banks in the United States. The Foreign List specifies those foreign equity • Thirty-two stocks have been removed for reasecurities that are eligible for margin treatment at sons such as listing on a national securities broker-dealers. One security was deleted from the exchange or involvement in an acquisition. Foreign List, which now contains 300 foreign equity securities, and no additions were made. The Board publishes the OTC List for the The changes that have been made to the revised information of lenders and the general public. It OTC List, which now contains 3,388 OTC stocks, includes all over-the-counter securities designated are as follows: by the Board pursuant to its established criteria as well as all OTC stocks designated as NMS • One hundred ninety-one stocks have been securities for which transaction reports are required included for the first time, 150 under National to be made pursuant to an effective transaction Market System (NMS) designation reporting plan. Additional OTC securities may be • Thirty stocks previously on the list have been designated as NMS securities in the interim removed for substantially failing to meet the between the Board's quarterly publications and requirements for continued listing will be immediately marginable. The next publica- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

858 Federal Reserve Bulletin • September 1993 tion of the Board's list is scheduled for Octo- other OTC stocks to determine which stocks meet ber 1993. the requirements for inclusion and continued inclu- Besides NMS-designated securities, the Board sion on the OTC List. • will continue to monitor the market activity of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

859 Minutes of the Federal Open Market Committee Meeting of May 18,1993 A meeting of the Federal Open Market Committee Mr. Madigan, Associate Director, Division of was held in the offices of the Board of Governors Monetary Affairs, Board of Governors Mr. Stockton, Associate Director, Division of of the Federal Reserve System in Washington, Research and Statistics, Board of Governors D.C., on Tuesday, May 18, 1993, at 9:00 a.m. Mr. Hooper, Assistant Director, Division of Present: International Finance, Board of Governors Mr. Small,1 Section Chief, Division of Monetary Mr. Greenspan, Chairman Affairs, 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 Mr. LaWare Messrs. T. Davis, Dewald, and Goodfriend, Senior Vice Presidents, Federal Reserve Banks of Mr. Lindsey Kansas City, St. Louis, and Richmond Mr. McTeer respectively Mr. Mullins Ms. Phillips Mr. Stern Ms. Browne, Mr. Judd, and Mses. Rosenbaum and White, Vice Presidents, Federal Reserve Banks of Boston, San Francisco, Atlanta, and Messrs. Broaddus, Jordan, Forrestal, and Parry, New York respectively Alternate Members of the Federal Open Market Committee Mr. Eberts, Assistant Vice President, Federal Reserve Bank of Cleveland Messrs. Hoenig, Melzer, and Syron, Presidents of the Federal Reserve Banks of Kansas City, By unanimous vote, the minutes for the meeting St. Louis, and Boston respectively of the Federal Open Market Committee held on March 23, 1993, were approved. Mr. Bernard, Deputy Secretary Mr. Coyne, Assistant Secretary The Deputy Manager for Foreign Operations Mr. Gillum, Assistant Secretary reported on developments in foreign exchange mar- Mr. Mattingly, General Counsel kets and on System transactions in foreign curren- Mr. Prell, Economist cies during the period March 23, 1993, through May 17, 1993. By unanimous vote, the Committee Messrs. R. Davis, Lang, Lindsey, Promisel, ratified these transactions. Rolnick, Rosenblum, Scheld, Siegman, The Manager of the System Open Market and Slifman, Associate Economists Account reported on developments in domestic Mr. McDonough, Manager of the System Open Market Account Ms. Greene, Deputy Manager for Foreign 1. Attended portion of meeting relating to a report on a study Operations entitled "Operating Procedures and the Conduct of Monetary Pol- Ms. Lovett, Deputy Manager for Domestic icy: Conference Proceedings," edited by Marvin Goodfriend and Operations David Small. This two-volume study has been designated Working Mr. Ettin, Deputy Director, Division of Research Studies 1, Parts 1 and 2, of the Federal Reserve Board's Finance and Statistics, Board of Governors and Economic Discussion Series. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

860 Federal Reserve Bulletin • September 1993 financial markets and on System open market trans- tion industry, motor vehicle assemblies edged down actions in government securities and federal agency and production of civilian aircraft remained weak obligations during the period March 23, 1993, over March and April. Elsewhere, the output of through May 17, 1993. By unanimous vote, the consumer goods other than motor vehicles was Committee ratified these transactions. about unchanged, and the continuing strength in The Committee then turned to a discussion of the the computer industry contrasted with sluggish proeconomic outlook and the implementation of mon- duction of other types of business equipment. Total etary policy over the intermeeting period ahead. A utilization of industrial capacity changed little over summary of the economic and financial informa- the two months. tion available at the time of the meeting and of the Retail sales increased substantially in April, Committee's discussion is provided below, fol- reversing the weather-related decline in March; lowed by the domestic policy directive that was automotive dealers reported large sales gains in approved by the Committee and issued to the Fed- April, and expenditures at other retail outlets eral Reserve Bank of New York. retraced part of the March decrease. For the year to The information reviewed at this meeting sug- date, however, retail sales had been lackluster after gested that the pace of the economic expansion had the strong increases of the latter part of 1992. slowed in recent months. Business outlays for dura- Housing starts picked up in April; both singleble equipment had remained strong, but consumer family and multifamily starts rebounded from spending had been quite sluggish, reflecting limited weather-depressed March levels. gains in employment and real labor income and Business fixed investment advanced further durdiminished optimism about near-term economic ing the first quarter of 1993, with another sizable prospects. Additionally, U.S. exports continued to rise in outlays for equipment outweighing continbe constrained by the disappointing performance of ued weakness in nonresidential construction. Shipthe major foreign industrial economies. Available ments of nondefense capital goods during the first data indicated relatively modest growth in payroll quarter were paced by another sharp increase in employment and industrial production over recent shipments of office and computing equipment. By months. Despite the considerable slack in the econ- contrast, business spending for transportation omy, increases in wages and prices had been appre- equipment generally exhibited little strength; ciably larger thus far in 1993 than in the second although sales of heavy trucks continued to trend half of last year. up, outlays for complete aircraft apparently edged Total nonfarm payroll employment rose only down further. Recent data on orders for nondefense slightly on balance over March and April after capital goods other than aircraft suggested further registering sizable increases in the first two months expansion in business spending for equipment in of the year. Strong job gains in the services indus- the near term. Nonresidential construction activity try, notably in business and health services, were was mixed in the first quarter. Office construction offset in considerable measure by job losses in declined considerably further in response to the manufacturing and construction in March and depressing effects of a continuing overhang of April. In manufacturing, reductions in payrolls unoccupied space. On the other hand, building were widespread, with particularly large declines at activity in the public utilities sector continued to manufacturers of transportation equipment. Con- trend up, and the construction of commercial strucstruction employment recovered only partially in tures other than office buildings increased for a April from the weather-related decline in March. second consecutive quarter. The civilian unemployment rate remained at Business inventories appeared to have risen in 7.0 percent. the first quarter. Manufacturing inventories Industrial production, after having posted solid expanded in both February and March after a series gains in previous months, was little changed in of declines that began early in the fall; much of the March and April. Part of the recent sluggishness recent advance occurred in the durable goods secreflected a decline in utility output following a tor, where shipments were strong, and the ratio of weather-related runup in February, but manufactur- inventories to shipments fell for manufacturing as a ing output also grew more slowly. In the transporta- whole. Wholesale inventories increased apprecia- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee Meeting 861 bly in March. However, the inventory-to-sales ratio that did not include a presumption about the likely for the sector moved up only slightly, and it direction of any adjustments to policy during the remained near the low end of its range over the past intermeeting period. Accordingly, the directive two years. In the retail sector, available data indi- indicated that in the context of the Committee's cated that inventories rose appreciably over Janu- long-run objectives for price stability and sustainary and February but that the inventory-to-sales able economic growth, and giving careful considerratio remained in the narrow range that had pre- ation to economic, financial, and monetary develvailed over the preceding year. opments, slightly greater reserve restraint or The nominal U.S. merchandise trade deficit in slightly lesser reserve restraint would be acceptable February was unchanged from its January level, during the intermeeting period. The reserve condireflecting little change in total exports and total tions associated with this directive were expected imports. For January-February combined, however, to be consistent with a resumption of moderate the trade deficit was slightly below its average growth in M2 and M3 over the second quarter. level for the fourth quarter, with both exports and Open market operations during the intermeeting imports down considerably from their fourth- period were directed toward maintaining the existquarter levels. Much of the drop in exports reflected ing degree of pressure on reserve positions. a reversal of an earlier, largely transitory runup in Expected levels of adjustment plus seasonal boraircraft and automotive products. The decline in rowing were raised during the period in anticipaimports was spread across all major trade catego- tion of some increase in seasonal borrowing. ries; imports of aircraft and miscellaneous indus- Adjustment plus seasonal borrowing was near or a trial supplies dropped appreciably, and imports of little above expected levels, except for a surge at consumer goods fell further. Recent indicators the end of the first quarter, and the federal funds pointed to further weakness in economic activity in rate remained close to the 3 percent level that had continental Europe and Japan through the first prevailed for an extended period. quarter. Elsewhere, the recovery in the United Short-term interest rates changed little over the Kingdom appeared to be firming, and growth con- period since the March meeting. Long-term rates tinued at a modest pace in Canada. rose considerably early in the period when a sharp Producer prices of finished goods rose more rap- increase in average hourly earnings and some idly in March and April, partly as a result of sharp upward pressure on commodity prices sparked increases in the prices of finished energy goods in fears among market participants of a buildup in March and in the prices of finished foods in April. inflation pressures. Subsequently, despite growing Excluding the food and energy components, pro- doubts about the fate of the deficit reduction producer prices advanced over the first four months of gram, bond yields declined in response to a series 1993 at a faster pace than in 1992. At the consumer of more favorable readings on price behavior and level, the increase in prices of nonfood, non-energy to indications of a slowing of the economic expanitems over the March-April period was smaller sion. Adverse news about consumer and producer than the outsized change over the first two months prices rekindled inflation concerns late in the of the year; nevertheless, averaging over the first period, and bond rates once again moved higher. four months of the year, the rate of increase in On balance, most long-term market rates rose consumer prices was higher than in 1992. The somewhat over the period. Despite unexpectedly deceleration of labor costs also appeared to have favorable earnings reports for many firms, major stalled in 1993. Average hourly earnings of produc- indexes of stock prices were narrowly mixed over tion or nonsupervisory workers had grown more the period. rapidly thus far this year than in 1992, and total In foreign exchange markets, the trade-weighted hourly compensation of private industry workers value of the dollar in terms of the other G-10 rose at a faster pace in the first quarter of 1993 than currencies declined somewhat on balance over the in any quarter of last year. intermeeting period. The dollar depreciated consid- At its meeting on March 23, the Committee erably more against the Japanese yen than against adopted a directive that called for maintaining the the German mark. A variety of factors contributed existing degree of pressure on reserve positions and to the dollar's weakness, including indications of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

862 Federal Reserve Bulletin • September 1993 renewed sluggishness in U.S. economic activity, continuing weakness in the economies of the major diminished prospects for a fiscal stimulus package, industrialized countries. The persisting slack in and market perceptions over much of the inter- resource utilization was expected to be associated meeting period of limited official support for con- with a return to more subdued price increases after certed actions to support the dollar against the yen. a spurt earlier in the year. After falling to a historical low against the yen in In the Committee's discussion of current and late April, the dollar tended to stabilize following prospective economic conditions, the members Treasury Secretary Bentsen's clarification of the focused with some concern on the evidence of a Administration's exchange rate policy and inter- slower economic expansion and a higher rate of vention purchases of dollars against yen in a coor- inflation since late 1992. While recent indicators of dinated operation. Later in the period, the dollar economic activity were disappointing, the expanrose somewhat against European currencies as the sion nonetheless appeared to have sustainable outlook for economic activity in Europe became momentum and the members generally viewed more pessimistic. moderate growth in line with, or perhaps a bit M2 contracted slightly on balance over March below, their February forecasts as a reasonable and April, while M3 was unchanged over the two expectation. At the same time, several emphasized months; both monetary aggregates increased sub- that the outlook was subject to substantial uncerstantially in early May. Much of the weakness in tainty stemming to an important extent from the M2 over the March-April period owed to a smaller unsettled course of legislation aimed at reducing volume of nonwithheld tax payments in April of the federal deficit. Members expressed particular this year that reduced the need for a buildup in concern about the rise in various measures of infladeposits to fund these payments. Abstracting from tion over the past several months. The increase this temporary depressant, weak underlying growth seemed to reflect temporary factors and a worsenin M2 continued to reflect the relatively attractive ing in inflationary expectations rather than any returns available on capital market instruments significant change in economic fundamentals. such as bond and stock mutual funds, which expe- Accordingly, it was premature in the view of many rienced heavy inflows during the two-month members to conclude that the inflationary trend period. Total domestic nonfinancial debt expanded had tilted upward. Even so, higher inflation expecsomewhat further through March. tations, if sustained, would be detrimental to eco- The staff projection prepared for this meeting nomic performance, and the risks of an uptrend in suggested that economic activity would grow at a inflation clearly had increased. moderate pace and that such growth would foster a In their review of business developments across gradual reduction in margins of unemployed labor the nation, members continued to report uneven and capital. The projection continued to incorpo- conditions ranging from apparently moderate gains rate the essential elements of the Administration's in some parts of the country to mixed or marginally fiscal package, excluding that portion of the short- declining activity in others. Business confidence run stimulus initiative that seemed unlikely to be had deteriorated in many areas and firms were enacted by the Congress. Although the outlook for trimming or putting on hold new or expanded fiscal policy now seemed somewhat more contrac- spending programs pending a resolution of federal tionary than earlier, the sizable declines in long- tax and spending proposals, including prospective term interest rates that had occurred in recent health care reform, and the outcome of proposed months were expected to support substantial addi- tax legislation in some states as well. Cautious tional gains in business and residential investment. business attitudes were reflected in continuing Moreover, the increasingly favorable financial efforts to constrain costs and to hold down or environment associated with expected further eas- reduce employment levels, notably of permanent ing of credit supply constraints and the ongoing workers in light of the large nonwage costs associstrengthening of balance sheets would tend to but- ated with full-time workers. Accordingly, while tress private spending on housing, consumer dura- some job growth was occurring, especially outside bles, and business equipment. Increases in export major firms and the defense sector, business firms demand would be damped in the near term by the generally appeared disposed to continue to meet Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee Meeting 863 increases in demand through overtime work and parts of the world, imports probably would grow at temporary workers, and members anticipated that a somewhat faster pace, given moderate expansion such attitudes were likely to persist in the absence in domestic demand in line with the members' of a major improvement in business confidence. expectations. At the same time, members expressed As reflected in the available data for the national concern about the potential impact of growing proeconomy, anecdotal reports from around the coun- tectionist sentiment on current trade negotiations try suggested generally lackluster retail sales over and on the longer-run outlook for domestic industhe first four months of the year. To an extent, this tries and parts of the country that relied on foreign development probably involved some retrenchment trade. in consumer spending following an unsustainable With regard to the inflation situation, members surge during the latter part of 1992. In some parts commented that it remained difficult to find a satisof the country, unusually severe weather conditions factory explanation for the faster-than-projected also had served to hold down retail sales earlier this increases in price measures thus far this year. year, and recovery from that slowdown had tended Although temporary anomalies seemed to be to be limited thus far, especially outside the auto- involved, including measurement problems and motive sector. Looking ahead, the members contin- special factors boosting some prices, higher inflaued to anticipate that consumer spending would tion expectations also might have been playing a provide moderate support for a sustained economic key role. The latter seemed to have intensified in expansion. the last month or two, perhaps as a result of grow- Despite the cautious business attitudes about the ing concerns that significant deficit-reduction legiseconomic outlook, spending for business equip- lation might not be enacted. Strong competitive ment had continued to help maintain the expansion. pressures in many markets, including competition Encouraged in part by relatively low interest rates, from foreign producers, still appeared to be receptive financial markets, and the more aggres- restraining or precluding price increases by many sive lending policies of some depository institu- business firms, but efforts to raise prices seemed to tions, many firms were upgrading equipment to be encountering somewhat less resistance recently reduce costs and improve their product offerings. than earlier in the economic expansion. Some price Concurrently, however, numerous firms reported increases appeared to be associated with the earlier that they were holding off on making major new surge in demand, and in the case of one key indusinvestment commitments and in some cases were try higher prices had been facilitated by the implerevising down earlier expansion plans in light of mentation of import restrictions. The downtrend in prevailing economic uncertainties, notably those labor compensation inflation also seemed to have generated by the current legislative debate about stalled in recent months. Against this background, federal taxes and spending. Nonresidential con- a considerable degree of uncertainty surrounded struction remained uneven and on the whole rela- the outlook for inflation and the members differed tively subdued across the nation. The construction to some extent with regard to the most likely outof new office structures was likely to stay depressed come. A number of members, while they did not in much of the country as overcapacity continued rule out the possibility of a more favorable result, to be worked down, but members saw indications stressed the risk that a faster rate of inflation might of some strengthening in industrial and commercial well tend to be sustained. Others gave more emphabuilding activity and in public works projects in sis to the still considerable slack in labor and some areas. product markets and to the restrained growth in Turning to the outlook for the nation's trade broad measures of money and credit. In this view, balance, some members referred to quite gloomy an inflation rate in the quarters ahead more in line assessments from business contacts and other with their earlier forecasts was still a reasonable sources regarding current economic conditions in a expectation even though the average rate for the number of major industrial nations and the associ- year as a whole was likely to be higher than they ated prospect of little or no growth in U.S. exports had forecast at the start of the year. to such countries. While total U.S. exports might In the Committee's discussion of policy for the continue to expand, reflecting sizable gains in some intermeeting period ahead, many of the members Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

864 Federal Reserve Bulletin • September 1993 commented that recent price and wage develop- tion to new information on prices and costs, such ments were troubling but did not point persuasively signs could include developments in markets at this juncture toward an extended period of higher affected by inflation psychology, such as those for inflation. In light of underlying economic and bonds, foreign exchange, and sensitive commodifinancial conditions, the upturn in inflation expecta- ties, all of which would need to be monitored tions and the somewhat quickened pace of inflation carefully. These members supported a directive might well prove to be temporary. The economy that incorporated a greater predilection to tighten was expanding, but the pace had slowed in recent than to ease over the intermeeting period. Given months. On the other hand, the potential for a the special nature of current inflation concerns and sustained increase in the rate of inflation could not attendant uncertainties, however, the Committee be dismissed. Waiting too long to counter any agreed with a proposal by the Chairman that an emerging uptrend in inflation or further worsening intermeeting consultation would be appropriate in in inflationary expectations would exacerbate infla- the event that a tightening move were to be contemtionary pressures and require more substantial and plated during this period. If a policy tightening more disruptive policy moves later. Indeed, in one action were not needed, an asymmetric directive view sensitive commodity prices and other key would nonetheless underscore the Committee's measures of inflation already indicated the need for concern about recent inflation readings and its a prompt move toward restraint, especially in the judgment that a policy to encourage progress context of the Committee's objective of fostering toward price stability would promote sustained progress toward price stability. However, the other economic growth. In the event that a tightening members all supported a proposal to maintain an action became necessary, such action could help to unchanged degree of pressure on reserve positions moderate inflationary expectations, with positive at this time. implications over time for long-term interest rates In the course of the Committee's discussion, the and the performance of the economy. Monetary members took account of a staff analysis that policy would still be stimulative after a modest pointed to a considerable pickup in the growth of tightening move in that such a move would leave M2 and M3 over the months of May and June. short-term interest rates close to or even below Such strengthening, which appeared to have their year-ago levels in real terms, given the interim emerged in early May, was associated in part with rise in inflation. the reversal of earlier tax-related distortions and Some members preferred to retain a directive with a surge in prepayments of mortgage-backed that did not incorporate a presumption about the securities. Monetary growth was expected to revert likely direction of a change in policy, if any, during to a more modest pace over subsequent months, the intermeeting period. They were concerned that and the members recognized that in any event the adopting a biased directive might prove to be an interpretion of monetary growth rates needed to be overreaction to temporary factors and to a shortapproached with considerable caution in a period lived upturn in inflationary sentiment that was not when traditional relationships of such growth to warranted by underlying economic conditions. aggregate measures of economic performance were They noted that, if called for by intermeeting develnot reliable. In present circumstances, M2 and M3 opments, a move toward restraint could be impleno longer seemed to be good barometers of under- mented from a symmetric directive. More fundalying liquidity, which appeared to be ample. One mentally, they believed that the circumstances member expressed the view that the relatively surrounding the recent performance of the econrobust growth of Ml and reserves served as a better omy and the uncertainties about price developindicator of the thrust of monetary policy than did ments suggested the need for considerable caution the broader monetary aggregates. before any policy tightening was implemented and In the view of a majority of the members, wage that such a policy move should be carried out only and price developments over recent months were in the light of information that pointed clearly to sufficiently worrisome to warrant positioning pol- the emergence of higher inflation. Nonetheless, all icy for a move toward restraint should signs of but one of these members could accept an asymintensifying inflation continue to multiply. In addi- metric directive on the understanding that the Com- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee Meeting 865 mittee would have a chance to discuss any possible nonfinancial debt expanded somewhat further through policy action. March. The Federal Open Market Committee seeks monetary At the conclusion of the Committee's discussion, and financial conditions that will foster price stability all but two of the members indicated that they and promote sustainable growth in output. In furtherance preferred or could accept a directive that called for of these objectives, the Committee at its meeting in maintaining the existing degree of pressure on February established ranges for growth of M2 and M3 of reserve positions and that included a bias toward 2 to 6 percent and xh to 4'/2 percent respectively, measured from the fourth quarter of 1992 to the fourth possible firming of reserve conditions during the quarter of 1993. The Committee expects that developintermeeting period. Accordingly, in the context of ments contributing to unusual velocity increases are the Committee's long-run objectives for price sta- likely to persist during the year. The monitoring range bility and sustainable economic growth, and giving for growth of total domestic nonfinancial debt was set at careful consideration to economic, financial, and 4'/2 to 8Y2 percent for the year. The behavior of the monetary aggregates will continue to be evaluated in the monetary developments, the Committee decided light of progress toward price level stability, movements that slightly greater reserve restraint would be in their velocities, and developments in the economy and acceptable or slightly lesser reserve restraint might financial markets. be acceptable during the intermeeting period. The In the implementation of policy for the immediate reserve conditions contemplated at this meeting future, the Committee seeks to maintain the existing degree of pressure on reserve positions. In the context of were expected to be consistent with appreciable the Committee's long-run objectives for price stability growth in the broader monetary aggregates over the and sustainable economic growth, and giving careful second quarter. consideration to economic, financial, and monetary At the conclusion of the meeting, the Federal developments, slightly greater reserve restraint would or Reserve Bank of New York was authorized and slightly lesser reserve restraint might be acceptable in the intermeeting period. The contemplated reserve condirected, until instructed otherwise by the Commitditions are expected to be consistent with appreciable tee, to execute transactions in the System account growth in the broader monetary aggregates over the in accordance with the following domestic policy second quarter. directive: Votes for this action: Messrs. Greenspan, Corrigan, The information reviewed at this meeting suggests Keehn, Kelley, LaWare, Lindsey, McTeer, Mullins, that the economic expansion has slowed in recent Ms. Phillips, and Mr. Stern. Votes against this action: months. Total nonfarm payroll employment rose only Messrs. Angell and Boehne. slightly over March and April after registering sizable increases earlier in the year, and the civilian unemploy- Mr. Angell dissented because he believed that ment rate remained at 7.0 percent. Industrial production the persisting indications of rising inflation and the was little changed in March and April after posting solid gains in previous months. Retail sales increased substan- related deterioration in inflationary psychology tially in April but were about unchanged on balance for called for a prompt move to tighten monetary polthe year to date. Housing starts picked up in April. icy. In his view, low real interest rates, a very steep Incoming data on orders and shipments of nondefense yield curve, a surprisingly weak exchange value of capital goods suggest a further brisk advance in outlays the dollar along with the confirming price behavior for business equipment, while nonresidential construcof inflation-sensitive commodities such as gold tion has remained soft. The nominal U.S. merchandise trade deficit in January-February was slightly below its underscored the need for Committee action to sigaverage level in the fourth quarter. Increases in wages nal the System's continuing commitment to the and prices have been appreciably larger this year than in eventual achievement of price stability. In his opinthe second half of 1992. ion, progress toward lower inflation was not likely Short-term interest rates have changed little since the in 1993 and 1994 in the absence of a monetary Committee meeting on March 23 while bond yields have risen somewhat. In foreign exchange markets, the trade- policy that was sufficiently restrictive to check weighted value of the dollar in terms of the other G-10 inflationary expectations. He added that history currencies declined somewhat on balance over the inter- demonstrated that a monetary policy focused primeeting period. marily on developments in the real economy ran After contracting during the first quarter, M2 was the risk of waiting too long to counter a worsening unchanged in April while M3 turned up; both aggregates in inflationary expectations and thus requiring more increased substantially in early May. Total domestic Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

866 Federal Reserve Bulletin • September 1993 substantial and possibly more disruptive policy as likely that the tempo of business and consumer changes later. spending could diminish in the face of uncertainty Mr. Boehne supported a steady policy course, about the stance of fiscal policy, particularly with but he dissented because he objected to a directive regard to potential tax increases. Given these uncerthat was biased toward tightening. Although recent tainties, he had a strong preference for keeping an developments suggested that inflation would be open mind about possible Committee action during somewhat higher and real growth somewhat lower the intermeeting period and, accordingly, favored a during the year than had been expected earlier, he balanced policy directive. did not believe recent data indicated a fundamental It was agreed that the next meeting of the Comshift in the outlook for inflation or the economy. He mittee would be held on Tuesday-Wednesday, was concerned that adopting a biased directive July 6-7, 1993. might prove to be an overreaction to temporary The meeting adjourned at 1:50 p.m. factors affecting the inflation rate and inflationary sentiment. In his view, underlying economic conditions did not point toward an extended period of higher inflation. While the pace of economic Normand Bernard growth conceivably could quicken, it seemed just Deputy Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

867 Legal Developments FINAL RULE—AMENDMENTS TO REGULATIONS Cardinal Distribution, Inc.: 1-Va% convertible subor- G, T, U AND X dinated debentures Community Financial Corp.: $.01 par common The Board of Governors is amending 12 C.F.R. Parts 207, 220, 221 and 224, its Regulations G, T, U and X Erly Industries, Inc.: $1.00 par common (Securities Credit Transactions; List of Marginable OTC Stocks; List of Foreign Margin Stocks). The List F & C International, Inc.: No par common of Marginable OTC Stocks (OTC List) is composed of stocks traded over-the-counter (OTC) in the United Fonic Inc.: Warrants (expire 05-20-93) States that have been determined by the Board of Governors of the Federal Reserve System to be sub- GHA Group, Inc.: Class B, $.01 par common ject to the margin requirements under certain Federal Great American Communications Company: $.01 par Reserve regulations. The List of Foreign Margin common Stocks (Foreign List) is composed of foreign equity securities that have met the Board's eligibility criteria Horizon Resources Corporation: $.01 par common under Regulation T. The OTC List and the Foreign List are published four times a year by the Board. This In-Store Advertising, Inc.: $.01 par common document sets forth additions to or deletions from the Independent BankGroup, Inc.: $1.00 par common previous Foreign List. Both Lists were published on April 27, 1993 and effective on May 10, 1993. Intellicorp, Inc.: $.001 par common Effective August 9, 1993, accordingly, pursuant to the authority of sections 7 and 23 of the Securities Kentucky Central Life Insurance Company: Class A, Exchange Act of 1934, as amended (15 U.S.C. 78g and non-voting, $1.00 par common 78w), and in accordance with 12 C.F.R. 207.2(k) and 207.6 (Regulation G), 12 C.F.R. 220.2(u) and 220.17 Masstor Systems Corporation: $.001 par common (Regulation T), and 12 C.F.R. 221.20) and 221.7 (Reg- Metallurgical Industries, Inc.: Class A, $.10 par comulation U), there is set forth below a listing of deletions mon from and additions to the OTC List, and one deletion from the Foreign List. National Medical Waste, Inc.: $.01 par common Nationwide Cellular Service, Inc.: Warrants (expire Deletions from the List of Marginable OTC Stocks 06-01-93) Norsk Data A.S.: American Depositary Receipts for Stocks Removed for Failing Continued Listing Class B, non-voting shares Requirements Optek Technology, Inc.: $.01 par common American Integrity Corporation: $.01 par common American Rice, Inc.: $1.00 par common Scios Nova Inc.: Class C, Warrants (expire 06-30-93) Aspen Imaging International, Inc.: No par common Spectrum Information Technologies, Inc.: Class A, Warrants (expire 06-11-93) Auto-Trol Technology: $.01 par common Sungard Data Systems Inc.: 8-!/4% convertible subordinated debentures Bioplasty, Inc.: $.01 par common Blue Ridge Real Estate Company/Big Boulder TSL Holdings, Inc.: $.01 par common Corporation: Paired certificates Boston Digital Corporation: $.10 par common Vest, H.D., Inc.: Warrants (expire 05-21-93) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

868 Federal Reserve Bulletin • September 1993 Stocks Removed for Listing on a National Additions to the List of Marginable OTC Securities Exchange or Being Involved in an Stocks Acquisition 3DO Company, The: $.01 par common Bank of East Tennessee: $2.00 par common Brand Companies, Inc., The: $.10 par common Abraxas Petroleum Corporation: $.01 par common Absolute Entertainment, Inc.: No par common ABT Building Products Corporation: $.01 par common Cardinal Financial Group, Inc.: $.10 par common ACS Enterprises, Inc.: $.05 par common CB&T Financial Corporation: $1.00 par common Action Performance Companies, Inc.: $.01 par com- CFS Financial Corporation: $1.00 par common mon; Warrants (expire 04-27-98) Colorado National Bankshares, Inc.: No par common AER Energy Resources, Inc.: No par common AGCO Corporation: Depositary Shares Financial Federal Corporation: $.50 par common Alcide Corporation: $.01 par common First Community Bancorp Inc.: $1.00 par common Aldila, Inc.: $.01 par common Alpha 1 Biomedicals, Inc.: Warrants (expire 02-28-97) Goldtex, Inc.: $.10 par common American National Petroleum Company: $.01 par Grancare Inc.: No par common common Gull Laboratories, Inc.: $.001 par common American Safety Razor Company: $.01 par common American Savings Bank of Florida: $.01 par common Amerihost Properties, Inc.: $.005 par common Hall-Mark Electronics Corporation: $.01 par common Amtran, Inc.: No par common Home Federal Savings Bank (Colorado): $1.00 par Auspex Systems, Inc.: $.001 par common common Horizon Financial Services, Inc.: $1.00 par common Bancfirst Ohio Corp.: $10.00 par common Banco de Galicia y Buenos Aires S.A.: American Jimbo's Jumbos, Incorporation: $.001 par common Depositary Shares Bankunited Financial Corporation (Florida): Series Key Centurion Bancshares, Inc.: $3.00 par common 1993, $.01 par non-cumulative convertible preferred Barrett Business Services, Inc.: $.01 par common Manitowoc Company, Inc.: $.01 par common Base Ten Systems, Inc.: Class B, $1.00 par common Midsouth Corporation: $.20 par common Bell Microproducts Inc.: $.01 par common Black Hawk Gaming & Development Co., Inc.: $.001 Multibank Financial Corporation: $6.25 par common par common; Class A, Warrants (expire 12-31-94); Class B, Warrants (expire 06-30-96) Northeast Bancorp, Inc.: $5.00 par common Blyth Holdings, Inc.: $.01 par common Nucorp, Inc.: $.05 par common Broadband Technologies, Inc.: $.01 par common Pulitzer Publishing Company: $.01 par common California Culinary Academy, Inc.: No par common Cambridge Technology Partners (Massachusetts), Qual-Med, Inc.: $.01 par common Inc.: $.01 par common Care Enterprises, Inc.: $.01 par common Ranch Industries, Inc.: $1.00 par common Catalyst Semiconductor, Inc.: No par common Regency Cruises Inc.: $.001 par common CDW Computer Centers, Inc.: $.01 par common Celestial Seasonings, Inc.: $.01 par common Republic Capital Group, Inc.: $.10 par common Charter Bancshares, Inc. (Texas): $1.00 par common Chattahoochee Bancorp, Inc. (Georgia): $1.00 par Security Tag Systems, Inc.: $.001 par common common Society for Savings Bancorp, Inc.: $1.00 par common Citizens Bancshares, Inc. (Ohio): No par common Southern California Water Company: $5.00 par com- Citizens Federal Bank, A Federal Savings Bank mon (Florida): 8-3/t Series A, non-cumulative preferred Southwestern Electric Service Co.: $1.00 par common Clayton Williams Energy, Inc.: $.10 par common Sundowner Offshore Services, Inc.: $.01 par common Coastal Financial Corporation (South Carolina): $.01 par common Western Financial Corporation: $1.00 par common Commercial Bank of New York: $5.00 par common Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 869 Communication Intelligence Corporation: $.01 par Hallmark Healthcare Corporation: Class A, $.01 par common common Concurrent Computer Corporation: $.01 par common Hamilton Financial Services Corporation: $.01 par CPI Aerostructures, Inc.: $.001 par common; common Warrants (expire 09-16-95) Harmony Holdings, Inc.: $.01 par common CTL Credit, Inc.: $.01 par common Harry's Farmers Market, Inc.: Class A, $.01 par Cypros Pharmaceutical Corporation: No par common common Cyrk, Inc.: $.01 par common Healthdyne Technologies, Inc.: $.01 par common HEI Inc.: $.05 par common D.I.Y. Home Warehouse, Inc.: No par common Hollywood Casino Corporation: $.01 par common Daig Corporation: $.01 par common Horizon Bancorp, Inc. (West Virginia): $1.00 par Delta and Pine Land Company: $.10 par common common Discovery Zone, Inc.: $.01 par common Huntco Inc.: Class A, $.01 par common Donnkenny, Inc.: $.01 par common Hyde Athletic Industries, Inc.: Class B, $.33-1/3 par Dovatron International, Inc.: $.01 par common common Drug Emporium, Inc.: 7.75% convertible debentures (due 2014) Image Business Systems Corporation: $.01 par common Eagle Holdings, Inc.: No par common Independence Bancorp, Inc. (New Jersey): $1,667 par ECCS, Inc.: $.01 par common common Edunetics Ltd.: Ordinary Shares, NIS .06 par value Industrial Scientific Corporation: $.10 par common Electroglas, Inc.: $.01 par common Information Resource Engineering, Inc.: $.01 par Electronic Retailing Systems International, Inc.: $.01 common par common Interlinq Software Corporation: $.01 par common Equinox Systems, Inc.: $.01 par common International Imaging Materials, Inc.: $.01 par com- Erox Corporation: No par common mon Evergreen Media Corporation: Class A, No par com- International Tourist Entertainment Corp.: $.001 par mon common Excalibur Holding Corporation: $.00001 par common IRG Technologies, Inc.: $.01 par common IVF America, Inc.: $.01 par common; Series A, $1.00 F & M Bancorporation, Inc. (Wisconsin): $.01 par par cumulative convertible preferred common Far East National Bank (California): $1.25 par com- Jabil Circuit, Inc.: $.01 par common mon Jackson County Federal Bank, A Federal Savings FFBS Bancorp, Inc. (Mississippi): $.01 par common Bank (Oregon): $1.00 par common FFY Financial Corp. (Ohio): $.01 par common Fidelity New York F.S.B.: $.01 par common Kent Financial Services, Inc.: $.10 par common Flir Systems, Inc.: $.01 par common Fourth Shift Corporation: $.01 par common Laser Vision Centers, Inc.: $.01 par common Frozen Food Express Industries, Inc.: $1.50 par com- Laurel Savings Association (Pennsylvania): $1.00 par mon common Future Healthcare, Inc.: No par common LCI International, Inc.: $.01 par common LF Bancorp, Inc. (Mississippi): $.01 par common GAB Bancorp (Indiana): $10.00 par common Lottery Enterprises, Inc.: $.01 par common General Communication, Inc.: Class A, No par Lunn Industries, Inc.: $.01 par common common Genzyme Transgenics Corporation: $.01 par common Magnetic Technologies Corporation: $. 15 par common George Mason Bankshares, Inc. (Virginia): $1.66 par Mariner Health Group, Inc.: $.01 par common common Martin Color-Fi, Inc.: No par common Geotek Industries: $.01 par common MBLA Financial Corporation (Missouri): $.01 par Gold Reserve Corporation: No par common common Gotham Apparel Corporation: $.001 par common Medical Care America, Inc.: 7% convertible deben- Ground Round Restaurants, Inc.: $.1667 par common tures (due 2015) Growth Financial Corp. (New Jersey); $1.00 par com- Megahertz Corporation: $.004 par common mon Megatest Corporation: $.001 par common Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

870 Federal Reserve Bulletin • September 1993 Metatec Corporation: Class A, $.01 par common Rochester Community Savings Bank, The: Series B, Metro Financial Corporation (Georgia): $1.00 par $1.00 par non-cumulative convertible preferred common MFS Communications Company, Inc.: $.01 par com- Safety 1st, Inc.: $.01 par common mon Sanmina Corp.: $.01 par common Microcarb Inc.: $.01 par common Santa Cruz Operation, Inc., The: No par common Mississippi Valley Bancshares, Inc. (Missouri): $1.00 Satcon Technology Corporation: $.01 par common par common Seaman Furniture Company, Inc.: $.01 par common Shiloh Industries, Inc.: $.01 par common National Convenience Stores, Inc.: Warrants (expire Signal Technology Corporation: $.01 par common 03-09-98) Silver King Communications, Inc.: $.01 par common National Home Centers, Inc.: $.01 par common Sodak Gaming, Inc.: $.01 par common Northern Springs Co., Inc.: Class A, $.01 par common Spectrum Signal Processing Inc.: No par common Northstar Health Services, Inc.: $.01 par common St. Francis Capital Corporation: $.01 par common Northwestern Steel and Wire Company: $.01 par Stanley Furniture Company, Inc.: $.02 par common common State Financial Services Corporation: Class A, $.10 Norwood Promotional Products, Inc.: No par com- par common mon Station Casinos, Inc.: $.01 par common Stolt Comex Seaway S.A.: $2.00 par common O'Reilly Automotive, Inc.: $.01 par common Summit Bancshares, Inc. (Texas): $2.50 par common Old America Stores, Inc.: $.01 par common Suncoast Savings & Loan Assoc. FSA: Series A, OPTI, Inc.: No par common $5.00 par non-cumulative convertible preferred Sundance Homes, Inc.: $.01 par common Pacific International Services Corporation: No par Sunglass Hut International, Inc.: $.01 par common common Supreme International Corporation: $.01 par common Papa John's International, Inc.: $.01 par common Swisher International, Inc.: $.01 par common; War- Paul Harris Stores, Inc.: $.01 par common rants (expire 04-21-96) People's Bank (Connecticut): 8.5% Series A, No par convertible preferred T R Financial Corp.: $.01 par common People's Choice TV Corp.: $.01 par common Telor Ophthalmic Pharmaceuticals, Inc.: $.001 par Petroleum Geo-Services A/S: American Depositary common Receipts Therapeutic Discovery Corporation/ALZA Corpora- Phycor, Inc.: 6.5% convertible subordinated debention: Units (expire 12-31-99) tures (due 2003) Titan Holdings, Inc.: $.01 par common Pinnacle Micro, Inc.: $.001 par common Tital Wheel International, Inc.: No par common Pittencrieif Communications, Inc.: $.01 par common Touchstone Applied Science Associates, Inc.: $.0001 Primadonna Resorts, Inc.: $.01 par common par common Projectavision, Inc.: $.0001 par common Trico Bancshares (California): No par common Quad Systems Corporation: $.03 par common Quality Projects, Inc.: $.00001 par common United Mobile Homes, Inc.: $.10 par common Random Access, Inc.: $.0001 par common Valley Bancorp, Inc. (Pennsylvania): $5.00 par com- Re Capital Corporation: $.10 par common mon Regal Cinemas, Inc.: No par common Regional Acceptance Corporation: No par common West Coast Bancorp, Inc. (Florida): $1.00 par com- Reliable Life Insurance Company, The: Class A, $1.00 mon par common Wind River Systems, Inc.: $.01 par common Reno Air, Inc.: $.01 par common Resource Mortgage Group, Inc. (South Carolina): $.01 Zaring Homes, Inc.: No par common par common Rexall Sundown, Inc.: $.01 par common Deletion from the List of Foreign Margin Rhodes, Inc.: $.01 par common Stocks Robert Mondavi Corporation, The: Class A, No par common Joshin Denki Company, Ltd.: ¥ 50 par common Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 871 FINAL RULE—AMENDENT TO REGULATION Z (2) The need of the consumer to obtain funds immediately shall be regarded as a bona fide personal The Board of Governors is amending 12 C.F.R. Part financial emergency provided that the dwelling se- 226, its Regulation Z (Truth in Lending), to provide a curing the extension of credit is located in an area temporary exception to Regulation Z provisions that declared during June through September 1993, purprohibit the use of a preprinted form by a creditor to suant to 42 U.S.C. 5170, to be a major disaster area obtain a consumer's waiver of the right to rescind because of severe storms and flooding in the certain home-secured loans when loan proceeds are Midwest.363 In this instance, creditors may use needed immediately to meet a consumer's bona fide printed forms for the consumer to waive the right to personal financial emergency. Generally, Regulation Z rescind. This exemption to paragraph (e)(1) of this requires a mandatory three-day waiting period on section shall expire one year from the date an area rescindable transactions before funds can be dis- was declared a major disaster. bursed. In addition, a consumer's need to obtain funds immediately shall be regarded as a bona fide personal 3. Section 226.16 is amended by redesignating existing financial emergency for purposes of Regulation Z for footnotes 36a and 36b as footnotes 36b and 36c, transactions secured by consumers' principal dwell- respectively. ings located in areas of the Midwest recently declared to be major disaster areas because of extensive flood- Subpart C—Closed-End Credit ing. The exception expires one year from the date the area was declared a major disaster. 4. Section 226.23 paragraph (e) is revised to read as follows: Effective July 29, 1993, 12 C.F.R. Part 226 is amended as follows (the Board is publishing only those Section 226.23—Right of Rescission. sections of the regulation that are affected by the changes): Part 226—Truth in Lending (e) Consumer's waiver of right to rescind. (1) The consumer may modify or waive the right to 1. The authority citation for Part 226 continues to read: rescind if the consumer determines that the extension of credit is needed to meet a bona fide personal Authority: Truth in Lending Act, 15 U.S.C. 1604 and financial emergency. To modify or waive the right, 1637(c)(5); sec. 1204 (c), Competitive Equality Bankthe consumer shall give the creditor a dated written ing Act, 12 U.S.C. 3806. statement that describes the emergency, specifically modifies or waives the right to rescind, and bears the Subpart B—Open-End Credit signature of all the consumers entitled to rescind. Printed forms for this purpose are prohibited, except as provided in paragraph (2) of this section. 2. Section 226.15 paragraph (e) is revised to read as (2) The need of the consumer to obtain funds immefollows: diately shall be regarded as a bona fide personal financial emergency provided that the dwelling se- Section 226.15—Right of Rescission. curing the extension of credit is located in an area declared during June through September 1993, pursuant to 42 U.S.C. 5170, to be a major disaster area because of severe storms and flooding in the Midwest.483 In this instance, creditors may use (e) Consumer's waiver of right to rescind. printed forms for the consumer to waive the right to (1) The consumer may modify or waive the right to rescind. This exemption to paragraph (e)(1) of this rescind if the consumer determines that the extensection shall expire one year from the date an area sion of credit is needed to meet a bona fide personal was declared a major disaster. financial emergency. To modify or waive the right, the consumer shall give the creditor a dated written statement that describes the emergency, specifically 36a. A list of the affected areas will be maintained by the Board. modifies or waives the right to rescind, and bears the Such areas now include parts of Iowa, Illinois, Minnesota, Missouri, signature of all the consumers entitled to rescind. Nebraska, South Dakota, and Wisconsin. Printed forms for this purpose are prohibited, except 48a. A list of the affected areas will be maintained by the Board. Such areas now include parts of Illinois, Iowa, Minnesota, Missouri, as provided in paragraph (2) of this section. Nebraska, South Dakota, and Wisconsin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

872 Federal Reserve Bulletin • September 1993 ORDERS ISSUED UNDER BANK HOLDING $73.3 million in total assets, is the 52d largest commer- COMPANY ACT cial banking organization in Colorado, controlling $65.9 million in deposits, representing less than 1 per- Orders Issued Under Section 3 of the Bank cent of total deposits in commercial banks in the state.3 Holding Company Act Competitive Considerations Banc One Corporation Columbus, Ohio Banc One and Colorado Western compete in the Montrose County, Colorado, banking market ("Mon- Banc One Colorado Corporation trose banking market").4 Bank One Western is the Denver, Colorado sixth largest depository institution5 in this market, controlling deposits of $18.1 million, representing ap- Order Approving Merger of Bank Holding proximately 5.3 percent of total deposits in depository Companies and Acquisition of Bank institutions in the market ("market deposits").6 Montrose Bank is the second largest depository institution Banc One Corporation, Columbus, Ohio ("Banc in the market, controlling deposits of $61.4 million, One"), and its wholly owned subsidiary, Banc One representing approximately 18.1 percent of market Colorado Corporation, Denver, Colorado ("Banc One deposits. Upon consummation of this proposal, Banc Colorado", and, together with Banc One, "Appli- One would become the second largest banking organicants"), bank holding companies within the meaning zation in the Montrose banking market, controlling of the Bank Holding Company Act ("BHC Act"), deposits of $79.5 million, representing approximately have applied for the Board's approval under section 3 23.4 percent of market deposits. The Herfindahlof the BHC Act (12 U.S.C. § 1842) to acquire Colo- Hirschman Index ("HHI") for the market would inrado Western Bancorp, Inc., Montrose, Colorado crease by 192 points to 2221.7 ("Colorado Western"), and thereby indirectly acquire Colorado Western's sole subsidiary, The First National Bank of Montrose, Montrose, Colorado ("Mon- 3. Section 3(d) of the BHC Act, the Douglas Amendment, prohibits trose Bank").1 the Board from approving an application by a bank holding company to acquire control of any bank located outside the bank holding Notice of the applications, affording interested per- company's home state, unless such acquisition is "specifically authorized by the statute laws of the State in which such bank is located, by sons an opportunity to submit comments, has been language to that effect and not merely by implication." published (58 Federal Register 26,785 (1993)). The 12 U.S.C. § 1842(d). Colorado's interstate banking statute permits time for filing comments has expired, and the Board out-of-state bank holding companies nationwide to acquire banking organizations located in Colorado, subject to specified statutory has considered the applications and all comments requirements and a certification by state banking officials that the received in light of the factors set forth in section 3(c) acquisition satisfies such requirements. See Colo. Rev. Stat. § 11of the BHC Act. 6.4-103 (1992). The record in this case indicates that Banc One's proposal satisfies all relevant statutory criteria, and the Colorado Banc One, with $73.7 billion in total consolidated banking authorities have issued a certification confirming this fact. For assets, is the eighth largest commercial banking organi- these reasons, the Board has concluded that Banc One is authorized under the laws of Colorado to acquire Colorado Western and Monzation in the United States, controlling $59.6 billion in trose Bank. Accordingly, Board approval of this proposal is not deposits.2 Banc One operates 78 subsidiary banks in prohibited by the Douglas Amendment. Ohio, Indiana, Michigan, Wisconsin, Illinois, Texas, 4. The Montrose banking market is approximated by Montrose County, Ouray County, and San Miguel County, all in Colorado. Colorado, Kentucky, Arizona, California, Utah, and 5. In this context, depository institutions include commercial banks, West Virginia. Banc One Colorado, with $2.8 billion in savings banks and savings associations. Market share data are based on calculations in which the deposits of thrift institutions are included total assets, is the fourth largest commercial banking at 50 percent. The Board previously has indicated that thrift instituorganization in Colorado, controlling six bank subsid- tions have become, or have the potential to become, major competiiaries with $2.4 billion in total deposits, representing tors of commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin 788 (1990); National City Corporation, 70 Federal Reserve approximately 8.8 percent of total deposits in com- Bulletin 743 (1984). mercial banks in the state. Colorado Western, with 6. Market share data are as of June 30, 1992. 7. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (1984), a market in which the post-merger HHI is above 1800 is considered to be highly concentrated. In such 1. The transaction is structured as a merger of Colorado Western markets, the Justice Department is likely to challenge a merger that with and into Banc One Colorado. Applicants also intend to merge increases the HHI by more than 50 points. The Justice Department Montrose Bank with and into Bank One, Western Colorado, N.A., has informed the Board that, as a general matter, a bank merger or Salida, Colorado ("Bank One Western"). This bank merger has been acquisition will not be challenged (in the absence of other factors approved by the Office of the Comptroller of the Currency ("OCC") indicating anticompetitive effects) unless the post-merger HHI is at pursuant to the Bank Merger Act (12 U.S.C. § 1828(c)). least 1800 and the transaction increases the HHI by more than 200 2. Asset and deposit data are as of March 31, 1993, and reflect points. The Justice Department has stated that the higher than normal acquisitions consummated since that date. HHI thresholds for screening bank mergers for anticompetitive effects Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 873 Ten depository institutions will remain in operation operation of such institution," and to take that record in the Montrose banking market upon consummation into account in its evaluation of applications.9 of this proposal. The largest such depository institu- In connection with these applications, the Board has tion is a subsidiary of a large, regional bank holding received comments from The Main Street Business company, and controls more than 35 percent of market Association ("Protestant") objecting to this proposal. deposits. The Board also has considered that Colorado Protestant criticizes generally the CRA performance permits interstate banking nationwide, and, therefore, record of the Banc One organization, and raises issues that there are a large number of potential entrants into regarding the record of Banc One's lead subsidiary this market. In this regard, the Montrose banking bank in Ohio, Bank One, Columbus, N.A., Columbus, market is relatively attractive to potential entrants, as Ohio ("Bank One Columbus"), including the bank's evidenced by the fact that several banking organiza- record of small business lending in minority neighbortions, including two de novo banks, have commenced hoods.10 operations in the market in the past several years. The Board has carefully reviewed the CRA perfor- Finally, the Board sought comments on the competi- mance records of Banc One and its subsidiary banks, tive effects of this proposal from both the Department the comments presented by Protestant and Banc One's of Justice and the OCC. The Department of Justice has responses to those comments, as well as all other indicated that it does not believe the acquisition of relevant facts of record, in light of the CRA, the Montrose Bank by Banc One would have a signifi- Board's regulations, and the Statement of the Federal cantly adverse effect on competition in any relevant Financial Supervisory Agencies Regarding the Commarket, and the OCC has not provided any objection munity Reinvestment Act ("Agency CRA Stateto consummation of the proposal or indicated that the ment").11 proposal would have any significant adverse competitive effects.8 On the basis of the foregoing consider- A. Evaluations of CRA Performance ations and all the other facts of record, the Board has concluded that consummation of Applicants' proposal The Agency CRA Statement provides that a CRA would not result in any significantly adverse effect on examination is an important and often controlling competition or the concentration of banking resources factor in the consideration of an institution's CRA in the Montrose banking market or any other relevant record and that these reports will be given great weight banking market. in the applications process.12 In this regard, Bank One Columbus received an "outstanding" rating in its most Convenience and Needs Considerations recent publicly available examination report for CRA performance conducted by the OCC as of May 1991 In acting upon an application to acquire a depository (the "1991 examination"). Bank One Western also institution under the BHC Act, the Board must con- received an "outstanding" rating from the OCC at its sider the convenience and needs of the communities to most recent examination conducted as of February be served, and take into account the records of the 1993. Overall, the most recent CRA performance relevant depository institutions under the Community examinations for Banc One's subsidiary banks show Reinvestment Act (12 U.S.C. § 2901 et seq.) 28 "outstanding" ratings, 48 "satisfactory" ratings, ("CRA"). The CRA requires the federal financial and 2 ratings of "needs to improve", one of which was supervisory agencies to encourage financial institu- assigned by the OCC to Bank One Cleveland at its tions to help meet the credit needs of the local com- most recent examination conducted as of April 1993.13 munities in which they operate consistently with the safe and sound operation of such institutions. To accomplish this end, the CRA requires the appropriate 9. See 12 U.S.C. § 2903. federal supervisory authority to "assess the institu- 10. In addition, Protestant believes that there may exist some tion's record of meeting the credit needs of its entire inconsistencies in the OCC's examination ratings for CRA performance by Banc One's subsidiary banks, and has encouraged the community, including low- and moderate-income Board to examine factors in addition to these ratings. In this regard, neighborhoods, consistent with the safe and sound Protestant cites data concerning denial rates of Bank One Columbus and Bank One Cleveland, N.A., Cleveland, Ohio ("Bank One Cleveland"), to African-American applicants for conventional home mortgages. 11. 54 Federal Register 13,742 (1989). 12. 54 Federal Register at 13,745 (1989). implicitly recognize the competitive effect of limited-purpose lenders 13. The second rating of "needs to improve" was assigned to and other non-depository financial entities. Nicholas County Bank, Summersville, West Virginia, at its most 8. In addition, the Board notes that the OCC has approved the recent examination conducted by the Federal Deposit Insurance merger Montrose Bank with and into Bank One Western pursuant to Corporation as of December 1991, before this institution was acquired the Bank Merger Act. by Banc One. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

874 Federal Reserve Bulletin • September 1993 The Board also has considered the CRA performance $1 million. For example, in 1992 Bank One Columbus record of Montrose Bank, including the most recent made 744 loans to such businesses for a total of CRA performance examination conducted by the $39.8 million. Of these loans, 151 were to businesses in OCC. low- and moderate-income areas, in the aggregate amount of $9.1 million. The record also indicates that B. Recent Review of Banc One's CRA Record a substantial portion of these loans were to businesses in predominantly minority areas. Through the first In addition to considering the record of CRA perfor- three quarters of 1992, 9 percent of such loans were mance examinations of Montrose Bank and Banc made in minority areas. Minority areas represent One's subsidiary banks, the Board has carefully con- approximately 10 percent of the census tracts in the sidered the actual CRA-related policies, procedures, Columbus MSA. The Board also notes that the bank's and programs instituted and in place at these organi- approval and denial rates for such small business loans zations. In this regard, the Board notes that in con- in minority areas is approximately the same as that for nection with Banc One's recent application to acquire small business credit applicants located in areas where Valley National Corporation, Phoenix, Arizona ("Val- minorities represent less than 10 percent of the populey National"), and certain of Valley National's bank- lation. ing and nonbanking subsidiaries, the Board conducted As noted previously, Bank One Columbus received a thorough review of the CRA performance record of an "outstanding" rating for CRA performance at the the Banc One organization.14 The Board's review most recent publicly available examination concluded included consideration of numerous comments re- by the OCC. The record of these applications demonceived with respect to that proposal from various strates that Banc One and Bank One Columbus have in community organizations and other members of the place the types of policies and procedures that the public, including Protestant. In the Valley National Board and the other federal bank supervisory agencies Order, the Board concluded that the overall CRA have indicated contribute to an effective CRA properformance record of the Banc One organization, gram. Many of these policies and procedures, particincluding its CRA programs and policies, efforts to ularly those instituted at the Banc One corporate level, ascertain community credit needs, marketing prowere discussed in the Valley National Order. The grams, HMDA data and lending practices, and record Board has specifically reviewed the policies and proof lending, community development, and other CRAcedures instituted at the Columbus bank in its considrelated activities, was consistent with approval of eration of these applications. In this regard, the OCC Banc One's proposal to acquire the Valley National concluded at the 1991 examination that the bank's organization. board of directors is actively involved in the CRA program, and has adopted appropriate CRA policies, C. Record of Bank One Columbus including policies regarding the allocation of resources and the establishment of an effective program struc- In the area of small business lending, Bank One ture. In addition, a committee of the board of directors Columbus maintains credit relationships with over meets quarterly to review and discuss matters relating 2,700 small businesses in the Columbus MSA with to CRA performance. The bank's internal CRA comannual revenues of $10 million or less. At the 1991 mittee, comprised of the CRA Officer, senior manageexamination, the OCC concluded that the bank is an ment, and officers representing various divisions of the active small business lender, and originated a reason- bank, meets monthly to provide guidance for the CRA able volume of small business loans. The OCC noted program. These and other policies and procedures that Bank One Columbus is a very active participant in employed by Bank One Columbus are designed to small business lending programs sponsored by the ensure an effective CRA program that includes in- Small Business Administration and state and local volvement by senior management and the board of government agencies. In 1990, the bank closed 45 directors. loans under these programs, totalling more than Bank One Columbus has instituted an ascertainment $4.7 million. program to identify and respond to community credit The Board also has noted that a substantial portion needs. At the 1991 examination, the OCC concluded of the bank's small business loans are made to emerg- that this ascertainment program included all areas of ing businesses with annual revenues of less than the bank's delineated community. Bank One Columbus has established a comprehensive officer calling program to establish and maintain contacts with individuals and organizations throughout the community. 14. See Banc One Corporation, 79 Federal Reserve Bulletin 524 (1993) ("Valley National Order"). The calling program is overseen by the bank's CRA Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 875 Officer and by the internal CRA committee. Other The OCC also concluded that the bank had an significant ascertainment efforts include meetings of excellent record of participation in community develthe bank's Community Advisory Council, various opment and redevelopment activities within its service types of marketing surveys and analyses, and commu- areas. In addition to investing in state and local bond nity outreach activities by various levels of bank issues for housing projects, economic development, personnel. The OCC also concluded that the bank has and other purposes, Bank One Columbus has funded shown flexibility in developing credit products to meet development projects within its community, and, ascertained credit needs. through Banc One Community Development Corpora- Bank One Columbus also has instituted a marketing tion, has invested or committed funds to various program designed to inform all segments of its com- community organizations engaged in activities related munity of the bank's services and credit products. The to affordable housing, including the Columbus Hous- OCC's 1991 examination found that the bank's mar- ing Partnership and the Ohio Equity Fund. keting program was comprehensive and covered all The Board also has reviewed data reported by areas of the bank's delineated community, including Bank One Columbus, as well as Banc One's other low- and moderate-income neighborhoods. The bank subsidiary banks, under the Home Mortgage Disclouses general circulation and special media to target sure Act ("HMDA"). These data indicate some particular segments of the community. Other market- disparities in approvals and denials of loan applicaing efforts include seminars for potential customers for tions according to racial and ethnic group and income consumer and small business credit. status in the areas served by these banks. Because all As indicated in the Valley National Order, Bank banks are obligated to adopt and implement lend- One Columbus offers a wide range of credit products ing practices that ensure not only safe and sound for homeowners, consumers, and small businesses, lending but also equal access to credit by creditworincluding products offered through governmental loan thy applicants regardless of race, the Board is conprograms such as those sponsored by the Federal cerned when the record of an institution indicates Housing Administration, the Veterans Administration, disparities in lending to minority credit applicants. the Small Business Administration, and the Ohio The Board recognizes, however, that HMDA data Housing Finance Agency.15 At the 1991 examination, alone provide only a limited measure of any given the OCC concluded that the bank's lending record institution's lending in its community. The Board demonstrated reasonable market penetration in all also recognizes that HMDA data have limitations segments of its service communities, including low- that make the data an inadequate basis, absent other and moderate-income areas. information, for conclusively determining whether With respect to housing-related lending, Bank One an institution has engaged in illegal discrimination on Columbus made 1,479 mortgage loans in 1991, for a the basis of race or ethnicity in making lending total of $117 million.16 Of these loans, 345 were to low- decisions. and moderate-income borrowers, in the aggregate In this regard, the Board notes that the OCC amount of $10.7 million. The bank also is an active determined at the 1991 examination that the commuhome-improvement lender, having made 2,767 such nity delineation of Bank One Columbus was reasonloans in 1991 for a total of $31 million within the able, and did not arbitrarily exclude any low- and Columbus MSA. Low- and moderate-income borrow- moderate-income neighborhoods. The OCC also coners received 1,227 of these home improvement loans, cluded that the bank's geographic distribution of for a total of approximately $8.4 million. Bank One credit applications, extensions, and denials demon- Columbus also makes a substantial number of other strated reasonable penetration of all segments of its types of consumer loans. For example, the OCC local community, including low- and moderate-inconcluded at the 1991 examination that the bank was a come and minority areas, with no evidence of excluvery active lender under guaranteed student loan sionary practices. In this regard, 13.4 percent of the programs, having made over 13,000 student loans for bank's 1991 housing-related loans were made to approximately $23 million from September 1, 1990, minorities, a proportion that is higher than the 12.6 through March 31, 1991. percent of the Columbus MSA population that is minority. The Board also has noted that at the 1991 examination, the OCC found no evidence that the 15. The Board has noted that in 1990, the bank made 85 housing bank engages in illegal discrimination or other illegal loans through programs sponsored by the FHA, VA, and OHFA, for credit practices. The record also indicates that a total of $4.5 million. Bank One Columbus supports its antidiscrimination 16. These figures are for conventional purchase money mortgages, FHA and VA loans, and refinancings, and include loans originated by policies and procedures with employee compliance Banc One Mortgage Corporation in Bank One Columbus service training. areas. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

876 Federal Reserve Bulletin • September 1993 D. Initiatives by Bank One Cleveland tee. The bank also has established an additional Community Advisory Council, which will focus exclusively In the Valley National Order, the Board stated that it on credit needs in the City of Cleveland. The Board expected Banc One to take steps that would address will continue to monitor implementation of these and the areas of weakness identified in the OCC's most other steps developed by Banc One and Bank One recent examination of Bank One Cleveland. The Cleveland, and continues to expect Banc One and Board also required Banc One to submit to the Board, Bank One Cleveland to implement these steps fully.17 when delivered to the OCC, a copy of its plan to address these deficiencies in the CRA record of Bank E. Conclusion Regarding Convenience and One Cleveland, and further required Banc One to Needs Factor submit quarterly progress reports with respect to this improvement plan. The Board has carefully considered all the facts of The Board has reviewed the CRA corrective action record, including the comments received, in reviewing plan for Bank One Cleveland, as well as the first the convenience and needs factor under the BHC Act. quarterly progress report on the plan, in its consider- Based on a review of the entire record, including ation of these applications. The corrective action plan information provided by Protestant and the results of calls for the bank to evaluate existing CRA-related the most recent CRA performance examinations conprograms with a view toward achieving a more equi- ducted by the relevant primary regulators, as well as table distribution of credit throughout its service com- the information that was also relevant to and considmunities. To this end, the bank will conduct a thor- ered in the Valley National Order, the Board believes ough geographic analysis of its consumer and that the efforts of Banc One and Colorado Western to residential real estate lending patterns, and has estab- help meet the credit needs of all segments of the lished provisional quantitative indicators to measure communities served by their subsidiary banks, includcredit distribution throughout its market. The bank ing low- and moderate-income neighborhoods, as well also will conduct an evaluation of existing credit as all other convenience and needs considerations, are products and lending programs. This evaluation will consistent with approval of this proposal. include assessments of marketing and advertising programs, as well as the ability of existing loan products Other Considerations to meet identified community credit needs. The bank also will establish lending targets for each underserved On the basis of all the facts of record, including the area that has been identified as an area of market representations and commitments furnished by Appliopportunity, and will develop specific strategies to cants, the Board has concluded that the financial and achieve these objectives. managerial resources and future prospects of Banc Since the Valley National Order was issued, Bank One, Colorado Western, and their respective subsid- One Cleveland has introduced several new loan prod- iaries, and all other supervisory factors the Board ucts designed to meet the credit needs of low- and must consider under section 3 of the BHC Act, are moderate-income communities, including: consistent with approval of this proposal. (1) A home mortgage product with low down pay- Based on the foregoing and other facts of record, the ment requirements and flexible underwriting crite- Board has determined that the applications should be, ria; and hereby are, approved. This approval is expressly (2) A mortgage loan product that will cover both conditioned upon compliance by Applicants with all acquisition costs and rehabilitation costs; the commitments made in connection with these ap- (3) A secured home improvement loan product; and plications and with the conditions referenced in this (4) A mortgage loan for one-to-eight unit rental Order. The commitments and conditions relied on by properties. The Board also notes that Bank One Cleveland has 17. The Board also notes that Banc One and Mayor White of recruited a new CRA Officer, who reports directly to Cleveland have announced a joint initiative between Bank One Cleveland and the city designed to enhance an expansion of financial the chief executive officer and board of directors of the services in targeted areas. Under this initiative, Bank One Cleveland bank. This CRA Officer will coordinate the efforts of committed to introduce a variety of credit products, and to seek to an expanded staff, including regional CRA coordina- employ the services of a homebuyer counseling provider to assist lowand moderate-income residents of Cleveland in applying for residentors, a community lending officer, and a low- and tial loans at the bank. In addition, the initiative provides that the bank moderate-income market analyst. In addition, mem- will undertake a cooperative effort with the city to finance new bers of the bank's senior management have been housing development in targeted areas. Moreover, Bank One Cleveland will conduct feasibility studies of sites identified by the city for assigned to a reorganized CRA Management Commit- possible new branch locations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 877 the Board in reaching this decision are deemed to be of total deposits in commercial banking organizations conditions imposed in writing by the Board in connec- in the state. tion with its findings and decision, and, as such, may First Financial and Bank compete directly in the be enforced in proceedings under applicable law. Terre Haute, Indiana, banking market.2 First Finan- This transaction shall not be consummated before cial is the largest depository institution in the market, the thirtieth calendar day following the effective date controlling deposits of $708.3 million, representing of this Order, or later than three months after the 46.3 percent of total deposits in depository institutions effective date of this Order, unless such period is in the market ("market deposits").3 Bank is the smallextended for good cause by the Board or by the est depository institution in the market, with market Federal Reserve Bank of Cleveland, acting pursuant to deposits of $9.4 million, representing less than 1 perdelegated authority. cent of total deposits in depository institutions in the By order of the Board of Governors, effective market. The Herfindahl-Hirschman Index ("HHI") July 12, 1993. for the market would increase by 56 points to 2781.4 Although consummation of this proposal would re- Voting for this action : Vice Chairman Mullins and Gover- sult in some increase in market concentration as nors Angell, Kelley, LaWare, Lindsey, and Phillips. Absent measured by the HHI, nine depository institutions, and not voting: Chairman Greenspan. including seven commercial banking organizations, would remain in the market. These commercial bank JENNIFER J. JOHNSON competitors include two of the largest commercial Associate Secretary of the Board banking organizations in the state. In addition, several aspects of the Terre Haute banking market make it an First Financial Corporation attractive banking market for potential banking com- Terre Haute, Indiana petitors to enter.5 Indiana has nationwide reciprocal interstate banking and permits de novo branch entry Order Approving the Merger of Bank Holding by commercial banks in contiguous counties and by Companies thrifts from anywhere in the state, thus facilitating entry into the market by potential competitors. In this First Financial Corporation, Terre Haute, Indiana regard, several out-of-market banking firms have en- ("First Financial"), a bank holding company within tered the Terre Haute banking market since 1985. the meaning of the Bank Holding Company Act In light of the relatively small increase in market ("BHC Act"), has applied under section 3(a)(5) of the concentration and First Financial's market share, the BHC Act (12 U.S.C. § 1842(a)(5)) to merge with Parke number of competitors remaining in the market, the Bancorp, Rockville, Indiana, and thereby to acquire the Parke State Bank, Rockville, Indiana ("Bank"). Notice of the application, affording interested per- 2. The Terre Haute banking market is approximated by Clay and sons an opportunity to submit comments, has been Vigo Counties; Clinton and Helt townships in Vermillion County; Florida, Jackson, and Raccoon townships in Parke County; and published (58 Federal Register 13,266 (1993)). The Curry, Fairbanks, and Jackson townships in Sullivan County, all in time for filing comments has expired, and the Board Indiana. has considered the application and all comments re- 3. Market data are as of June 30, 1992. In this context, depository institutions include commercial banks and savings banks. The Board ceived in light of the factors set forth in section 3(c) of previously has indicated that thrift institutions have become, or have the BHC Act. the potential to become, major competitors of commercial banks. See First Financial is the 11th largest commercial bank- Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). In ing organization in Indiana, controlling deposits of considering the competition offered by thrifts in the Terre Haute approximately $826.5 million, representing 1.7 percent banking market, market share data are based on calculations in which of total deposits in commercial banks in the state.1 the deposits of two thrift institutions in the market are included at 50 percent. Parke Bancorp is the 88th largest commercial banking 4. Under the revised Department of Justice Merger Guidelines, 49 organization in the state, controlling deposits of $66.9 Federal Register 26,823 (June 29, 1984), a market in which the post-merger HHI is over 1800 is considered highly concentrated. The million, representing less than 1 percent of total de- Department of Justice has informed the Board that a bank merger or posits in commercial banking organizations in the acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI state. Upon consummation of this proposal, First is at least 1800 and the merger increases the HHI by at least 200 Financial would remain the 11th largest commercial points. The Justice Department has stated that the higher than normal banking organization in the state with deposits of HHI thresholds for screening bank mergers and acquisitions for anticompetitive effects implicitly recognizes the competitive effect of $893.4 million, representing approximately 1.9 percent limited-purpose lenders and other non-depository financial entities. 5. For example, the Terre Haute banking market is one of the state's 11 Metropolitan Statistical Areas and ranks third in deposits per 1. Deposit data are as of June 30, 1992. banking office and third in recent growth of market deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

878 Federal Reserve Bulletin • September 1993 attractiveness of the market to potential entrants, and Bank of Spring Lake Park ("Bank"), both of Spring other facts of record in this case, the Board concludes Lake Park, Minnesota.1 that consummation of the proposal would not have a Notice of the application, affording interested persignificantly adverse effect on competition or the con- sons an opportunity to submit comments, has been centration of banking resources in the Terre Haute published (58 Federal Register 26,785 (1993)). The banking market, or in any other relevant banking time for filing comments has expired, and the Board market. has considered the application and all comments re- Considerations relating to the financial and manage- ceived in light of the factors set forth in section 3(c) of rial resources and future prospects of First Financial, the BHC Act. Parke, and their subsidiary banks, and other supervi- Norwest, with total consolidated assets of sory factors that the Board is required to consider $45.5 billion, operates 85 banking subsidiaries located under section 3 of the BHC Act, also are consistent in 13 states.2 Norwest is the second largest commercial with approval of this application. The Board also finds banking organization in Minnesota, controlling deposits that considerations relating to the convenience and of approximately $10.1 billion, representing 23.1 perneeds of the communities to be served are consistent cent of the deposits in commercial banks in the state.3 with approval. M & D is the 113th largest commercial banking organi- Based on the foregoing and other facts of record, the zation in Minnesota, controlling $48.2 million in depos- Board has determined that the application should be, its, representing less than 1 percent of the deposits in and hereby is, approved. The Board's approval of this commercial banks in the state. Upon consummation of transaction is specifically conditioned upon compli- the proposal, Norwest would remain the second largest ance with the commitments given in connection with commercial banking organization in Minnesota, conthis application. For the purposes of this action, the trolling deposits of $10.2 billion, representing 23.2 percommitments and conditions relied on in reaching this cent of the total deposits in commercial banks in the decision are both considered to be conditions imposed state. in writing by the Board and, as such, may be enforced in proceedings under applicable laws. The transaction Competitive Considerations approved in this order shall not be consummated before the thirtieth calendar day following the effective Norwest and M & D compete directly in the Minnedate of this Order, or later than three months after the apolis-St. Paul banking market.4 Norwest is the seceffective date of this Order, unless such period is ond largest commercial bank or thrift institution ("deextended for good cause by the Board or by the pository institution") in the market, controlling Federal Reserve Bank of Chicago, pursuant to dele- deposits of $7.4 billion, representing 27.8 percent of gated authority. total deposits in depository institutions in the market By order of the Board of Governors, effective ("market deposits").5 M & D is the 46th largest July 12, 1993. depository institution in the market, controlling approximately $48.2 million in deposits, representing Voting for this action: Vice Chairman Mullins and Governors Angell, Kelley, La Ware, Lindsey, and Phillips. Absent and not voting: Chairman Greenspan. 1. Norwest proposes to acquire Bank by merging M & D into JENNIFER J. JOHNSON Norwest and subsequently merging Bank into a newly chartered Associate Secretary of the Board national bank, to operate under the name of Bank of Spring Lake Park, N.A. The proposed Bank merger is subject to approval by the Office of the Comptroller of the Currency ("OCC") under the Bank Merger Act (12 U.S.C. § 1828(c)). Norwest Corporation 2. Asset data are as of March 31, 1993. Minneapolis, Minnesota 3. State and market share data are as of June 30, 1992. 4. The Minneapolis-St. Paul banking market is comprised of Anoka, Hennepin, Ramsey, Washington, Carver, Scott, and Dakota Counties, and portions of Chisago, Le Sueur, Sherburne, and Wright Order Approving the Acquisition of a Bank Counties in Minnesota, and the town of Hudson in St. Croix County in Wisconsin. 5. Market share data are based on calculations in which the deposits Norwest Corporation, Minneapolis, Minnesota ("Nor- of thrift institutions are included at 50 percent. The Board previously west"), a bank holding company within the meaning of has indicated that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. See the Bank Holding Company Act ("BHC Act"), has Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); applied under section 3 of the BHC Act (12 U.S.C. National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Thus, the Board has regularly included thrift deposits in the calcula- § 1842) to acquire M & D Holding Company tion of market share on a 50 percent weighted basis. See, e.g., First ("M & D") and thereby indirectly acquire First State Hawaiian Inc., 77 Federal Reserve Bulletin 52 (1991). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 879 0.18 percent of market deposits.6 Upon consummation through mergers elsewhere within these seven counof this proposal, Norwest would remain the second ties without being subject to the five-branch limitation largest depository institution in the market, controlling otherwise imposed under Minnesota law.10 deposits of $7.5 billion, representing 28 percent of In light of all the facts in this case, including the market deposits. The Herfindahl-Hirschman Index number of competitors remaining in the market, the ("HHI") would increase by 10 points to 2026.7 size of M & D, and other facts of record, the Board The Board previously has indicated that merger concludes that consummation of this proposal would transactions in the Minneapolis-St. Paul banking mar- not have a significantly adverse effect on competition ket involving one of the two largest depository insti- or the concentration of resources in the Minneapolistutions in the market warrant close review because of St. Paul banking market or any other relevant banking the size of these institutions relative to other market market. competitors.8 In this case, M & D is one of the smaller depository organizations in the Minneapolis-St. Paul Other Considerations banking market, controlling 0.18 percent of market deposits. Even considering the effect on market con- The Board concludes that the financial and managerial centration in light of previous acquisitions by the two resources and future prospects of Norwest, its subsidlargest depository institutions, this proposal would not iaries, and M & D are consistent with approval. The have a significantly adverse competitive effect in the Board also concludes that considerations relating to market. In addition, 103 competitors will remain in the the convenience and needs of the communities to be market, including 93 commercial banks and 10 thrifts. served and the other supervisory factors that the The Minneapolis-St. Paul banking market is a major Board must consider under section 3 of the BHC Act urban area and is attractive for entry. Seven commer- are consistent with approval of this proposal.11 cial banking institutions, including two banks char- Based on all the facts of record, including the tered de novo in 1990, and one thrift institution have commitments made by Norwest in connection with entered the market since early 1988. Moreover, one of this application, the Board has determined that the the commercial banking institutions that has entered application should be, and hereby is, approved. The the market during this period has become the fourth Board's approval of this proposal is expressly condilargest depository institution in the market. Minnesota tioned on compliance with the commitments made in has relaxed its restrictions on interstate banking acqui- connection with this application. The commitments sitions, which has increased the number of potential and conditions relied on by the Board in reaching its entrants into the market.9 In addition, banks with their decision are both deemed to be conditions imposed in principal office within the seven-county area that com- writing by the Board in connection with its findings prises most of the Minneapolis-St. Paul banking mar- and decision, and, as such, may be enforced in proket may establish detached facilities (branches) ceedings under applicable law. 6. In addition to Bank, the owners of M & D also control First Bank Coon Rapids, Coon Rapids, Minnesota ("Coon Rapids Bank"), with 10. See Minn. Stat. Ann. § 49.34, subd. 2(b). deposits of $62 million in the Minneapolis-St. Paul banking market. 11. The Board has received a comment from a former customer of The owners have reached a separate agreement to sell their interest in Norwest Bank Mesabi, N.A., Virginia, Minnesota ("Norwest Mes- Coon Rapids Bank to another bank holding company that already is in abi"), alleging improper acts by bank personnel in connection with a the market. foreclosure proceeding initiated by Norwest Mesabi on real estate 7. Under the revised Department of Justice Merger Guidelines, 49 collateral securing several of the commenter's loans. Norwest denies Federal Register 26,823 (June 29, 1984), a market in which the these allegations and notes that Norwest Mesabi's right to take title to post-merger HHI is above 1800 is considered highly concentrated. In the real estate collateral has been litigated by the commenter in such markets, the Justice Department is likely to challenge a merger Minnesota state court. The Board also notes that the commenter's that increases the HHI by more than 50 points. The Justice Depart- allegations are currently under investigation by Norwest Mesabi's ment has informed the Board that a bank merger or acquisition primary federal banking regulator, the OCC, which has the statutory generally will not be challenged (in the absence of other factors authority to take appropriate actions if the commenter's allegations indicating anti-competitive effects) unless the post-merger HHI is at can be verified. This commenter also generally asserts that Norwest least 1800 and the merger increases the HHI by 200 points. The Justice Mesabi's lending practices do not meet the requirements of the Department has stated that the higher than normal HHI thresholds for Community Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA"). screening bank mergers for anti-competitive effects implicitly recog- The Board notes that Norwest Mesabi received a "satisfactory" nize the competitive effects of limited-purpose lenders and other rating from the OCC at its most recent examination for CRA perfornon-depository financial entities. mance, and 84 of the 85 subsidiary banks of Norwest received a 8. See First Bank System, Inc., 79 Federal Reserve Bulletin 50 "satisfactory" or "outstanding" rating from their primary federal (1993). In this regard, acquisitions by either of these two banking banking regulator at their most recent examination for CRA perfororganizations of a series of depository organizations with relatively mance. The remaining bank, which represents less than 1 percent of small market shares could, on a cumulative basis, lead to significant Norwest's total consolidated assets, has taken appropriate steps to anti-competitive effects. address the weaknesses in its CRA program. In light of all the facts of record, including relevant examination reports, the Board does not 9. See Reciprocal Interstate Banking Act, Minn. Stat. Ann. § 48.90 believe that these comments warrant denial of this application. et seq. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

880 Federal Reserve Bulletin • September 1993 This transaction shall not be consummated before by 714 points. This proposal is the fourth acquisition for the thirtieth calendar day following the effective date Norwest in the last five and one-half years and represents of this Order, or later than three months after the through a series of acquisitions an increase of 8 percenteffective date of this Order, unless such period is age points in market share and of 291 points in market extended for good cause by the Board or by the concentration as measured by the HHI. Federal Reserve Bank of Minneapolis, acting pursuant Under these circumstances, we believe that any to delegated authority. additional acquisition in this market by these compa- By order of the Board of Governors, effective nies would result in a substantial lessening of compe- July 15, 1993. tition and we would not approve any further acquisitions by them in this market in the absence of a Voting for this action: Chairman Greenspan and Governors significant change in the market's structure. Mullins, Lindsey, and Phillips. Voting against this action: Governors Angell, Kelley, and LaWare. July 15, 1993 JENNIFER J. JOHNSON Pinnacle Bancorp, Inc. Associate Secretary of the Board Central City, Nebraska Dissenting Statement of Governors Angell, Kelley, Order Approving the Acquisition of a Bank Holding and LaWare Company and the Merger of Banks We disagree with the Board's action in this case. In Pinnacle Bancorp, Inc., Central City, Nebraska ("Pinlight of previous acquisitions by this company and the nacle"), a bank holding company within the meaning other large depository institution in the Minneapolis- of the Bank Holding Company Act ("BHC Act"), has St. Paul banking market, we believe that this proposal applied under section 3 of the BHC Act (12 U.S.C. would continue the trend towards a substantial con- § 1842) to acquire all the voting shares of Windsor centration of banking resources in this market. Bancorporation, Inc. ("Windsor"), and thereby indi- In previous cases we have noted that the Minneap- rectly acquire Bank of Windsor ("Bank"), both of olis-St. Paul market is unusual among major banking Windsor, Colorado. Pinnacle also has applied under markets in that the two largest depository institutions section 18(c) of the Federal Deposit Insurance Act control over 60 percent of market deposits. These (12 U.S.C. § 1828(c)) (the "Bank Merger Act") to institutions have over the years increased their domi- merge Bank with The First Security Bank of Windsor, nant position in the market through acquisitions of Windsor, Colorado ("First Security Bank"), a subsidcompetitors rather than through de novo expansion. iary bank of Pinnacle.1 For example, the third largest competitor in the mar- Notice of the applications, affording interested perket was recently acquired by one of the two market sons an opportunity to submit comments, has been leaders with the result that the largest remaining published (58 Federal Register 26,785 (1993)). As depository institution competing with the two market required by the Bank Merger Act, reports on the leaders is a thrift controlling market deposits of less competitive effects of the merger were requested from than 5 percent. the United States Attorney General, the Office of the The two market leaders have been permitted to Comptroller of the Currency ("OCC"), and the Feddiminish competition in the Minneapolis-St. Paul mar- eral Deposit Insurance Corporation ("FDIC"). The ket through absorption of competitors because the time for filing comments has expired, and the Board traditional analysis applied by the Board does not give has considered the applications and all comments sufficient weight to the competitive effects of a series received in light of the factors set forth in the BHC Act of acquisitions by these institutions. In this regard, the and the Bank Merger Act.2 two largest institutions in this market could acquire Pinnacle, with consolidated assets of $893.9 million, virtually every remaining competitor without reaching controls 15 banks in Nebraska, Colorado, Wyoming, the threshold level for challenge under the Board's and Kansas.3 Pinnacle is the 19th largest commercial methodology. banking organization in Colorado, controlling deposits This proposal is the ninth acquisition of a competitor made by the two dominant companies in the market in the last five and one-half years. These companies have in- 1. Following consummation of this proposal, Bank will be merged creased through a series of acquisitions their market share into First Security Bank. The surviving bank will be renamed Bank of Colorado, Windsor, Colorado. by 16 percentage points and market concentration as 2. See 12 U.S.C. § 1842(c), 1828(c)(5). measured by the Herfindahl-Hirschman Index ("HHI") 3. Asset data are as of December 31, 1992. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 881 of $157.8 million, representing less than 1 percent of petitive effects of the proposed transaction are clearly the total deposits in commercial banking organizations outweighed in the public interest by the probable effect in the state.4 Windsor is the 147th largest commercial of the transaction in meeting the convenience and banking organization in Colorado, controlling deposits needs of the community to be served."8 In evaluating of $20.5 million, representing less than 1 percent of the the competitive factors in this case, the Board has total deposits in commercial banking organizations in carefully considered comments from a number of the state. Upon consummation of this proposal, Pin- individuals ("Protestants") who maintain that the pronacle would become the 15th largest commercial bank- posal would result in significantly adverse competitive ing organization in Colorado, controlling deposits of effects in the market for banking services in the town $178.3 million, representing less than 1 percent of the of Windsor, Colorado ("Windsor"). Bank and First total deposits in commercial banking organizations in Security Bank are the only two banking organizations the state. located in Windsor. The Board and the courts have found that the Douglas Amendment relevant banking market for analyzing the competitive effects of a proposal must reflect commercial and Section 3(d) of the BHC Act, the Douglas Amend- banking realities and must consist of the local area ment, prohibits the Board from approving an applica- where local customers can practicably turn for altertion by a bank holding company to acquire any bank natives.9 The Board has considered all the facts in this located outside the bank holding company's home case, including comments from the Protestants, and state, unless such acquisition is "specifically autho- concludes that the relevant geographic market to evalrized by the statute laws of the State in which such uate the competitive effects of this proposal is the area bank is located, by language to that effect and not that includes all of Weld County, Colorado, except the merely by implication."5 For the purposes of the towns of Erie, Fort Lupton, Frederick, and Keenes- Douglas Amendment, the home state of Pinnacle is burg (hereinafter referred to as the "Greeley banking Nebraska.6 market"). Colorado law permits a bank holding company lo- Windsor, a town of approximately 5,000 in Weld cated outside of Colorado to acquire a bank in Colo- County, is 12 miles northwest of Greeley. Greeley has rado, subject to certain conditions.7 After reviewing a population of more than 60,000 and is the business this proposal, the Colorado State Banking Board has center of Weld County. Travel time to Greeley from determined that Pinnacle's proposed acquisition of Windsor is relatively short, and data on traffic patterns Windsor is permissible under Colorado law, and has collected by the Colorado Highway Department indiapproved this acquisition. Accordingly, Board ap- cate that there is substantial commuting between proval of this proposal is not prohibited by the Douglas Greeley and the western portions of Weld County, Amendment. including Windsor. Greeley also has been designated as a Rand Mc- Definition of the Relevant Banking Market Nally Basic Trading Center for the area that includes Windsor, because Greeley serves as a center for The BHC Act and the Bank Merger Act provide that shopping by residents of that area. This Trading Centhe Board may not approve a proposal submitted ter designation is based on a determination that conunder these statutes if the proposal would result in a sumers in this area ordinarily travel to Greeley to monopoly or the effect of the proposal may be sub- purchase retail goods.10 stantially to lessen competition in any relevant bank- Residents of Windsor are informed of available ing market, unless the Board finds "that the anticom- practicable alternatives for banking services in the Greeley banking market through commercial advertising. For example, the daily newspaper in Greeley, The Greeley Tribune, has a paid circulation in Windsor of 4. State deposit data are as of December 31, 1992. approximately 1,200, reaching more than half of the 5. 12 U.S.C. § 1842(d). 6. A bank holding company's home state is that state in which the operations of the bank holding company's banking subsidiaries were principally conducted on July 1, 1966, or the date on which the company became a bank holding company, whichever is later. The 8. 12 U.S.C. §§ 1842(c), 1828(c)(5). operations of a bank holding company are considered principally 9. See St. Joseph Valley Bank, 68 Federal Reserve Bulletin 673, 674 conducted in that state in which the total deposits of all such banking (1982). subsidiaries are largest. 10. In this regard, Windsor has no supermarkets and only one small 7. See Colo. Rev. Stat. § 11-6.4-103 (Supp. 1992). See also First grocery store. Trading Centers such as Greeley also are viewed Western Corporation, 79 Federal Reserve Bulletin 69, 72 (1993) as serving their surrounding areas with various specialized services, (approval of the acquisition of a Colorado bank by a Nebraska bank such as medical care, entertainment, higher education and a daily holding company). newspaper. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

882 Federal Reserve Bulletin • September 1993 2,000 households in Windsor. In addition, bankers The Attorney General, the OCC, and the FDIC have interviewed by the Federal Reserve Bank of Kansas not objected to consummation of this proposal or City in Greeley confirm that their institutions are in indicated that the proposal would have any significompetition with banks in Windsor,11 and that the cantly adverse competitive effects. Accordingly, in residents of Windsor consider Greeley banks as their light of the small increase in concentration, the numprimary alternatives for banking services outside ber of competitors remaining in the market, and other Windsor. facts of record, the Board concludes that consumma- After review of this data and the other facts of tion of this proposal is not likely to result in any record, the Board believes that the record indicates significantly adverse effect on competition in the Greethat customers in Windsor reasonably can and do turn ley banking market or any other relevant banking to providers of banking services throughout the Gree- market. ley banking market. Based on all the facts of record, the Board finds that the relevant geographic market in Other Considerations this case is the Greeley banking market as defined above. The Board concludes that the financial and managerial resources, supervisory factors, and future pros- Competitive Effects in the Greeley Banking Market pects of Pinnacle and Windsor are consistent with approval of these applications. The Board also finds Pinnacle is the fifteenth largest commercial bank or that considerations relating to the convenience and thrift institution ("depository institution") in the mar- needs of the communities to be served are consistent ket, controlling deposits of $16.6 million, representing with approval.14 2 percent of total deposits in depository institutions in Based on the foregoing and other facts of record, the market ("market deposits").12 Windsor is the the Board has determined that the applications fourteenth largest depository institution in the market, should be, and hereby are, approved. The Board's controlling deposits of $17.5 million, representing 2.2 approval is specifically conditioned upon compliance percent of market deposits. Upon consummation of with all of the commitments made by Pinnacle in this proposal, Pinnacle would become the fifth largest connection with these applications. For the purpose depository institution in the Greeley banking market, of this action, these commitments and conditions will controlling deposits of $34.1 million, representing 4.2 both be considered conditions imposed in writing percent of market deposits. Sixteen competitors would and, as such, may be enforced in proceedings under remain in the Greeley banking market, including sub- applicable law. sidiary banks of two large interstate banking organiza- This transaction shall not be consummated before tions, each with market shares exceeding 20 percent. the thirtieth calendar day following the effective date The banking market would remain moderately concen- of this Order, or later than three months after the trated, and the Herfindahl-Hirschman Index ("HHI") effective date of this Order, unless such period is would increase by nine points to 1551.13 extended for good cause by the Board or by the 11. The Reserve Bank surveyed all the banks headquartered in Justice Department has stated that the higher than normal threshold Greeley. for an increase in the HHI when screening bank mergers and 12. Market data are as of June 30,1992. Market share data are based acquisitions for anti-competitive effects implicitly recognizes the on calculations in which the deposits of thrift institutions are included competitive effect of limited-purpose lenders and other non-deposat 50 percent. The Board previously has indicated that thrift institu- itory financial entities. tions have become, or have the potential to become, major competi- 14. Several Protestants have alleged in general terms that this tors of commercial banks. See Midwest Financial Group, 75 Federal proposal is not in the best interests of the community served by Bank Reserve Bulletin 386 (1989); National City Corporation, 70 Federal and First Security Bank and, in particular, the elderly residents of Reserve Bulletin 743 (1984). Thus, the Board has regularly included Windsor. The Board notes that both Bank and First Security Bank thrift deposits in the calculation of market share on a 50 percent received "satisfactory" ratings during their most recent examinations weighted basis. See, e.g., First Hawaiian Inc., 77 Federal Reserve for performance under the Community Reinvestment Act (12 U.S.C. Bulletin 52 (1991). § 2901 et seq.) from their primary regulators (Bank—Federal Reserve 13. Under the revised Department of Justice Merger Guidelines, Bank of Kansas City as of June 1992; First Security Bank—FDIC as 49 Federal Register 26,823 (June 29, 1984), a market in which the of July 1992). In this regard, examiners found that the lending record post-merger HHI is between 1000 and 1800 is considered moderately of both banks, including small business lending, satisfactorily assisted concentrated. A market in which the post-merger HHI is above 1800 in meeting the credit needs of the community, including low- and is considered to be highly concentrated. In such markets, the Justice moderate-income areas. Department is likely to challenge a merger that increases the HHI by The record also indicates that First Security Bank offers a variety of more than 50 points. The Justice Department has informed the banking services to customers, age 59 or over, including a no-fee Board that a bank merger or acquisition generally will not be checking account that features free money orders, travelers checks, challenged (in the absence of other factors indicating anti-competi- safety deposit boxes, and notary service. Based on all facts of record, tive effects) unless the post-merger HHI is at least 1800 and the including reports of examination, the Board does not believe that the merger or acquisition increases the HHI by at least 200 points. The comments warrant denial of these applications. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 883 Federal Reserve Bank of Kansas City, pursuant to Competitive Considerations delegated authority. By order of the Board of Governors, effective The BHC Act provides that the Board may not ap- July 12, 1993. prove a proposal submitted under section 3 of the BHC Act if: Voting for this action: Vice Chairman Mullins and Gover- (1) The proposal would result in a monopoly in any nors Angell, Kelley, LaWare, Lindsey, and Phillips. Absent relevant banking market, or and not voting: Chairman Greenspan. (2) The effect of the proposal may be substantially to lessen competition in any relevant banking market, JENNIFER J. JOHNSON unless the Board finds "that the anticompetitive Associate Secretary of the Board effects of the proposed transaction are clearly outweighed in the public interest by the probable effect Rice Insurance Agency, Inc. of the transaction in meeting the convenience and Strasburg, Colorado needs of the community to be served."3 Order Approving Acquisition of Bank The Board has received comments from several members of the Byers community ("Protestants") object- Rice Insurance Agency, Inc., Strasburg, Colorado ing to Rice's proposed acquisition of Byers Bank on ("Rice"), a bank holding company within the meaning competitive grounds. These objections are based upon of the Bank Holding Company Act ("BHC Act"), has Protestants' concerns that consummation of the proapplied for the Board's approval under section 3 of the posal would have anticompetitive effects in the market BHC Act (12 U.S.C. § 1842) to acquire 90.1 percent of for banking services in the area currently served by the voting shares of The Byers State Bank, Byers, Byers Bank. Protestants contend that the acquisition Colorado ("Byers Bank").1 would eliminate competition in this relatively rural Notice of the application, affording interested per- area.4 sons an opportunity to submit comments, has been published (58 Federal Register 27,573 (1993)). The Definition of the Relevant Banking Market time for filing comments has expired, and the Board has considered the application and all comments re- The Board and the courts have found that the relevant ceived in light of the factors set forth in section 3(c) of banking market for analyzing the competitive effects the BHC Act. of a proposal must reflect commercial and banking Rice operates one subsidiary bank in Colorado. The realities and must consist of the local area where the principal shareholders of Rice control other banks that banks involved offer their services and where local operate in Colorado and New Mexico (collectively, the customers can practicably turn for alternatives.5 In "Moore Chain"). The Moore Chain is the 16th largest determining the relevant geographic market in this commercial banking organization in Colorado, controlcase, the Board has carefully considered all the facts ling $169.3 million in deposits, representing less than of record, including Protestants' comments and data 1 percent of total deposits in commercial banks in the collected by the Federal Reserve Bank of Kansas City state.2 Byers Bank is the 158th largest commerand Board staff. cial banking organization in Colorado, controlling A number of factors in this case indicate that the $17.4 million in deposits, representing less than 1 percommunities served by Strasburg Bank and Byers cent of total deposits in commercial banks in the state. Bank are, as an economic matter, part of the Denver Upon consummation of the proposed acquisition, the metropolitan area. Bennett, Strasburg, and Byers are Moore Chain would become the 15th largest commerrelatively small communities, each having a populacial banking organization in Colorado, controlling tion of fewer than 2,000 persons.6 Few services or $186.7 million in deposits, representing less than employment opportunities are available locally. For 1 percent of total deposits in commercial banks in the example, among the three communities there are no state. 3. 12 U.S.C. § 1842(c)(1). 4. Protestants assert that the anticompetitive effects of the proposal 1. Rice intends to merge Byers Bank with and into Rice's sole could include a reduction of banking services in Byers, as well as subsidiary, The First National Bank of Strasburg, Strasburg, Colo- increased fees and less competitive interest rates, all to the detriment rado ("Strasburg Bank"). This bank merger is subject to the approval of the local economy. of the Office of the Comptroller of the Currency ("OCC") pursuant to 5. See St. Joseph Valley Bank, 68 Federal Reserve Bulletin 673,674 the Bank Merger Act (12 U.S.C. § 1828(c)). (1982). 2. State deposit data are as of December 31, 1992. 6. Population data are based on 1990 U.S. Census data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

884 Federal Reserve Bulletin • September 1993 supermarkets, automobile dealerships, or hospitals, Board has determined that the relevant geographic and only one physician, dentist, and pharmacist. The market within which to evaluate the competitive efmore developed portion of the Denver metropolitan fects of this proposal is the Denver, Colorado, banking area is the nearest location where these and other market ("Denver banking market").11 services and employment opportunities are readily available. In addition, each of these communities is a Competitive Effects in the Denver Banking Market part of the Denver, Colorado, Primary Metropolitan Statistical Area ("Denver PMSA")7 as defined by the The Moore Chain is the 13th largest commercial bank- United States government. A PMSA represents a core ing organization in the Denver banking market, congeographic area containing a large population nucleus, trolling deposits of $158.2 million, representing aptogether with adjacent communities having a high proximately 1.1 percent of total deposits in depository degree of economic and social integration with that institutions12 in the market ("market deposits").13 core.8 The Board also notes that these communities Byers Bank is the 62d largest depository institution in are a part of the television and other media markets of the market, controlling deposits of $16.2 million, repthe Denver area. resenting less than 1 percent of market deposits. Upon In addition, commuting data indicate that a substan- consummation of this proposal, the Moore Chain tial portion of the labor force of these communities would remain the 13th largest depository institution in travels to Denver or adjacent areas for employment.9 the Denver banking market, controlling deposits of For example, Byers, which is the furthest of these $174.4 million, representing approximately 1.2 percent communities from Denver, has a local labor force of of market deposits. The Herfindahl-Hirschman Index 403 persons. Of these persons, 282 were employed ("HHI") for the market would increase by 1 point to outside Byers, and 234 commuted for at least a half- 831.14 hour to work. The Board notes that, in view of the Numerous depository institutions would remain in presence of Interstate 70, Denver and adjacent areas operation in the Denver banking market upon consumare accessible to the Byers population within this time mation of this proposal. In addition, the Board sought frame. Highway vehicle counts confirm that much of comments on the competitive effects of this proposal the local labor force travels toward Denver for em- from both the Department of Justice and the OCC. ployment. Vehicle counts along Interstate 70 between Neither the Department of Justice nor the OCC obthese communities and Denver are substantially jected to consummation of the proposal or indicated greater than highway vehicle counts east of Byers.10 that the proposal would have any significant adverse After review of these data and the other facts of competitive effects. On the basis of the foregoing record, the Board believes that customers in Bennett, considerations and all the other facts of record, the Strasburg, and Byers, and other eastern portions of Board has concluded that consummation of the prothe Denver PMSA, practicably can turn to providers posed bank acquisition would not result in any signifof banking services in more urban portions of the icantly adverse effect on competition or the concenmetropolitan area. Based on all the facts of record, the 11. The Denver banking market is approximated by the Denver RMA; the Boulder RMA; the non-RMA portions of Adams County, 7. Strasburg Bank and Byers Bank operate in the eastern portion of Arapahoe County, and Boulder County; the southern portion of Weld the Denver PMSA. The Denver PMSA is comprised of Adams County, including the towns of Erie, Fort Lupton, Frederick, and County, Arapahoe County, Denver County, Douglas County, and Kennesburg; and the town of Parker in Douglas County. Jefferson County, all in Colorado. Strasburg Bank has offices in 12. In this context, depository institutions include commercial Bennett, Colorado, and Strasburg, Colorado, and the sole office of banks, savings banks and savings associations. Market share data are Byers Bank is located in Byers, Colorado. Each of these towns is based on calculations in which the deposits of thrift institutions are situated along a major highway, Interstate 70, between 15 and 30 miles included at 50 percent. The Board previously has indicated that thrift east of Aurora, Colorado, a Denver suburb. Interstate 70 connects institutions have become, or have the potential to become, major these towns to Aurora and Denver. competitors of commercial banks. See WM Bancorp, 76 Federal 8. Executive Office of the President, Office of Management and Reserve Bulletin 788 (1990); National City Corporation, 70 Federal Budget, Uses of Metropolitan Areas by Federal Agencies, p. 1 Reserve Bulletin 743 (1984). (June 30, 1993). The Board notes that a PMSA, such as the Denver 13. Market deposit data are as of June 30, 1992. PMSA, is a component part of a larger metropolitan area usually 14. Under the revised Department of Justice Merger Guidelines, 49 referred to as a Consolidated Metropolitan Statistical Area. Federal Register 26,823 (1984), a market in which the post-merger 9. Commuting data are derived from 1990 U.S. Census data, and HHI is below 1000 is considered to be unconcentrated. The Justice were obtained from the Denver Regional Council of Governments. Department has informed the Board that, as a general matter, a bank 10. In addition, the Board notes that the more developed portions of merger or acquisition will not be challenged (in the absence of other the Denver MSA are expanding eastward toward these communities. factors indicating anticompetitive effects) unless the post-merger HHI In this regard, the Board notes that a major international airport is is at least 1800 and the transaction increases the HHI by more than 200 being constructed less than 15 miles from Bennett. Both the construc- points. The Justice Department has stated that the higher than normal tion and operation of this facility are expected to result in expanded HHI thresholds for screening bank mergers for anticompetitive effects employment opportunities and greater economic integration of these implicitly recognize the competitive effect of limited-purpose lenders portions of the Denver PMSA. and other non-depository financial entities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 885 tration of banking resources in the Denver banking and decision, and, as such, may be enforced in promarket or any other relevant banking market. ceedings under applicable law. The acquisition shall not be consummated before Convenience and Needs Considerations the thirtieth calendar day following the effective date of this Order, or later than three months after the The Board also has evaluated considerations relating effective date of this Order, unless such period is to the convenience and needs of the communities to be extended for good cause by the Board or by the served. In this regard, the Board has carefully consid- Federal Reserve Bank of Kansas City, acting pursuant ered Protestants' comments praising the convenience, to delegated authority. services, and other aspects of Byers Bank, and ex- By order of the Board of Governors, effective pressing concern that these positive features of Byers July 14, 1993. Bank will be diminished if this proposal is consummated. Voting for this action: Chairman Greenspan and Governors In response to these comments, Rice has stated that Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips. it will retain many of the personnel currently employed by Byers Bank. Rice also has stated that it is commit- JENNIFER J. JOHNSON Associate Secretary of the Board ted to serve its entire customer base, and has noted that, as a branch of Strasburg Bank, the Byers opera- SouthTrust Corporation tion will be able to offer significantly larger lending Birmingham, Alabama limits to its consumer and business customers. The Board also has noted that Strasburg Bank Order Approving the Merger of Bank Holding received a "satisfactory" rating for performance un- Companies der the Community Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA") from the OCC at its most SouthTrust Corporation, Birmingham, Alabama, and recent examination conducted as of February 1993, SouthTrust of Covington County, Inc., Opp, Alabama and that Rice has committed to implement the CRA (together, "SouthTrust"), bank holding companies programs and policies of Strasburg Bank at the acwithin the meaning of the Bank Holding Company Act quired institution in Byers. ("BHC Act"), have applied under section 3 of the On the basis of the foregoing considerations and all BHC Act (12 U.S.C. § 1842) to acquire County Bancthe other facts of record, the Board has concluded that shares, Inc., Troy, Alabama ("CBI"), and thereby considerations relating to the convenience and needs acquire indirectly CBI's subsidiary bank, Pike County of the communities to be served, including matters Bank, Troy, Alabama.1 relating to CRA performance, are consistent with Notice of the application, affording interested perapproval of this proposal. sons an opportunity to submit comments, has been published (58 Federal Register 28,878 (1993)). The Other Considerations time for filing comments has expired, and the Board has considered the application and all comments re- On the basis of all the facts of record, including all the ceived in light of the factors set forth in section 3(c) of representations and commitments furnished in this the BHC Act. case, the Board also has concluded that the financial SouthTrust, with consolidated assets of approxiand managerial resources and future prospects of mately $13.4 billion, controls 41 subsidiary banks in Rice, Strasburg Bank, and Byers Bank, as well as Alabama, Florida, Georgia, North Carolina, South affiliated organizations in the Moore Chain, and all Carolina, and Tennessee.2 SouthTrust is the second other supervisory factors the Board must consider largest commercial banking organization in Alabama, under section 3 of the BHC Act, are consistent with controlling deposits of approximately $6.1 billion, repapproval of this proposal. resenting 18.1 percent of total deposits in commercial Based on the foregoing and other facts of record, the banking organizations in the state.3 CBI is the 40th Board has determined that the application should be, largest commercial banking organization in Alabama, and hereby is, approved. This approval is expressly conditioned upon compliance with all of the commitments made in connection with this proposal and with 1. SouthTrust proposes to acquire CBI by merging CBI into the conditions referenced in this Order. The commit- SouthTrust of Covington County, Inc., and subsequently merging ments and conditions relied on by the Board in reach- Pike County Bank with SouthTrust's subsidiary bank, SouthTrust ing this decision are deemed to be conditions imposed Bank, N.A., Montgomery, Alabama ("SouthTrust Bank"). 2. Asset data are as of March 31, 1993. in writing by the Board in connection with its findings 3. Deposit data are as of June 30, 1992. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

886 Federal Reserve Bulletin • September 1993 controlling deposits of $86.2 million, representing less for the market are low. Alabama permits statewide than 1 percent of the total deposits in commercial branching, and is part of the Southeast Regional Bankbanking organizations in the state. Upon consumma- ing Pact,7 which allows bank holding companies in tion of the proposed transaction, SouthTrust would other Southeast Regional Pact states to acquire banks remain the second largest commercial banking organi- in Alabama. zation in Alabama, controlling deposits of $6.2 billion, The Board has sought comments from the Attorney representing 18.4 percent of total deposits in commer- General on the competitive effects of this proposal. cial banking organizations in the state. The Attorney General reviewed the competitive ef- SouthTrust and CBI compete directly in the Pike fects of the proposal in the context of the merger of County banking market.4 SouthTrust is the smallest of Pike County Bank and SouthTrust Bank under the the six commercial banking organizations in the mar- Bank Merger Act and has indicated that the proposal is ket, controlling deposits of approximately $15.5 mil- not likely to result in any significantly adverse comlion, representing 4.6 percent of total deposits in petitive effects in any market. commercial banks in the market ("market deposits").5 Based on all the facts of record in this case, the CBI is the second largest commercial banking organi- Board concludes that consummation of this proposal is zation in the market, controlling deposits of approxi- not likely to have a significantly adverse effect on mately $86.2 million, representing 25.9 percent of competition or concentration of banking resources in market deposits. Upon consummation of this pro- the Pike County banking market or in any other posal, SouthTrust would become the second largest relevant banking market. commercial banking organization in the Pike County The Board also concludes that the financial and banking market, controlling deposits of approximately managerial resources and future prospects of South- $101.6 million, representing approximately 30.5 per- Trust, CBI and their subsidiary banks are consistent cent of the total deposits in commercial banks in the with approval of this proposal. Convenience and needs market. The Herfindahl-Hirschman Index ("HHI") considerations and the other supervisory factors that would increase by 240 points to 2608.6 the Board is required to consider under section 3 of the A number of factors indicate that the increase in BHC Act, also are consistent with approval. concentration levels in the Pike County banking mar- Based on the foregoing, and other facts of the ket as measured by the HHI tends to overstate the record, and subject to the commitments made by competitive effects of this proposal. For example, SouthTrust in this case, the Board has determined that upon consummation of this proposal, five commercial this application should be, and hereby is, approved. bank competitors, including the third largest bank The Board's approval of this proposal is specifically holding company in the state, would continue to serve conditioned on compliance with the commitments the market. The Pike County market also has experi- made by SouthTrust in connection with this applicaenced a decrease in concentration in recent years; tion and with the conditions referenced in this Order. between 1989 and 1992, the market HHI for commer- For purposes of this action, the commitments and cial banks decreased by 177 points. conditions relied on in reaching this decision are both The Board also notes that the Pike County banking conditions imposed in writing by the Board, and, as market is relatively attractive for entry. The economy such, may be enforced in proceedings under applicable of Pike County is relatively diverse for a predomi- law. nantly rural community. The deposit growth rate and This transaction shall not be consummated before the deposits per banking office exceed comparable the thirtieth calendar day following the effective date state averages. In addition, the legal barriers to entry of this Order, or later than three months after the effective date of the Order, unless such period is extended for good cause by the Board or by the 4. The Pike County banking market is approximated by Pike Federal Reserve Bank of Atlanta, acting pursuant to County, Alabama. delegated authority. 5. No thrift organizations operate in the Pike County banking market. By order of the Board of Governors, effective 6. Under the revised Department of Justice Merger Guidelines, 49 July 14, 1993. Federal Register 26,823 (June 29, 1984), a market in which the post-merger HHI is above 1800 is considered highly concentrated. 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 increases the HHI by 200 points. 7. The Alabama Regional Reciprocal Banking Act of 1986 defines The Justice Department has stated that the higher than normal HHI the "region" to include the states of Alabama, Arkansas, Florida, thresholds for screening bank mergers for anti-competitive effects Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Caroimplicitly recognize the competitive effect of limited purpose lenders lina, South Carolina, Tennessee, Virginia, West Virginia, and the and other non-depository financial entities. District of Columbia. Ala. Code § 5-13A-2(10) (Supp. 1987). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 887 Voting for this action: Chairman Greenspan and Governors the registration requirements of the Securities Act of Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips. 1933, and are offered only to financially sophisticated institutions and individuals and not the public. Appli- JENNIFER J. JOHNSON cant will not privately place registered securities and Associate Secretary of the Board will only place securities with customers who qualify as accredited investors. Orders Issued Under Section 4 of the Bank The Board previously has determined by Order that, Holding Company Act subject to prudential limitations that address the potential for conflicts of interests, unsound banking AMCORE Financial, Inc. practices, or other adverse effects, the proposed pri- Rockford, Illinois vate placement activities are so closely related to banking as to be a proper incident thereto within the Order Approving an Application to Act as Agent in meaning of section 4(c)(8) of the BHC Act.3 The Board the Private Placement of Securities also previously has determined that acting as agent in the private placement of securities does not constitute AMCORE Financial, Inc., Rockford, Illinois ("Appli- underwriting and dealing in securities for purposes of cant"), a bank holding company within the meaning of section 20 of the Glass-Steagall Act, and that revenue the Bank Holding Company Act ("BHC Act"), has derived from these activities is not subject to the applied, pursuant to section 4(c)(8) of the BHC Act 10 percent revenue limitation on bank-ineligible secu- (12 U.S.C. § 1843(c)(8)) and section 225.23 of the rities underwriting and dealing.4 In order to address Board's Regulation Y (12 C.F.R. 225.23), for its the potential for conflicts of interests, unsound bankwholly owned subsidiary, AMCORE Investment ing practices, and other adverse effects, Applicant has Banking, Inc., Rockford, Illinois ("Company"), to act committed that Company will conduct its private as agent for issuers in the private placement of all placement activities using the same methods and protypes of securities. cedures, and subject to the same prudential limitations Notice of the application, affording interested per- established by the Board in the Bankers Trust and J.P. sons an opportunity to submit comments, has been Morgan orders.5 published (58 Federal Register 13,493 (1993)). The Applicant has requested a modification of these time for filing comments has expired, and the Board limitations to allow Company to have one of three has considered the application and all comments redirectors in common with an AMCORE subsidiary ceived in light of the public interest factors set forth in bank.6 The prohibition against interlocks originally section 4(c)(8) of the BHC Act.1 was intended to preclude a member bank from engag- Applicant, with total consolidated assets of ing in impermissible securities activities, to prevent $1.2 billion, is the 18th largest commercial banking common control of the decision-making process within organization in Illinois.2 Applicant operates five bank- a bank and its securities affiliate, and to protect ing subsidiaries in Illinois, and engages in a variety of investors against potential conflicts of interest where permissible nonbanking activities. one individual is required to advance the differing objectives of a bank and its securities affiliate. Private Placement Activities These concerns do not appear to be significant in this application. The applicant is not seeking authority Private placement involves the placement of new to engage in securities underwriting or dealing activisecurities with a limited number of sophisticated purties. The Board has ruled that private placement chasers in a nonpublic offering. A financial intermediactivities conducted directly by a bank do not constiary in a private placement transaction acts solely as an tute "underwriting" or "dealing" in securities, beagent for the issuer in soliciting purchasers, and does not purchase the securities and attempt to resell them. Securities that are privately placed are not subject to 3. See Bankers Trust New York Corporation, 75 Federal Reserve Bulletin 829 (1989) ("Bankers Trust"); J.P. Morgan and Company, Inc., 76 Federal Reserve Bulletin 26 (1990) ("/.P. Morgan"). 1. The Board received a joint comment from two organizations 4. See Bankers Trust. maintaining that Applicant's record of lending to African-American- 5. See Bankers Trust; J.P. Morgan. Among the restrictions governowned businesses in southwest Rockford is deficient under the ing private placement activities are that Company will not privately Community Reinvestment Act ("CRA"). The Board previously has place registered investment company securities, and will not privately determined that the CRA by its terms generally does not apply to place any securities of investment companies that are advised by applications by bank holding companies to acquire nonbanking com- Applicant or any of its affiliates. panies under section 4(c)(8) of the BHC Act. See The Mitsui Bank, 6. The director who will serve on the boards of both the bank and Limited, 76 Federal Reserve Bulletin 381 (1990). Company also will serve as an officer of Applicant. In addition, 2. Data are as of December 31, 1992. another director of Company will serve as an officer of Applicant. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

888 Federal Reserve Bulletin • September 1993 cause these activities do not involve a "public offer- expected to produce public benefits that would outing" of the securities and are conducted solely as weigh possible adverse effects under the proper inciagent.7 All the proposed activities could be performed dent to banking standard of section (c)(8) of the BHC directly by Applicant's subsidiary banks. Conse- Act. quently, in this instance a management interlock is not Based on the foregoing and all the facts of record, prohibited by the Glass-Steagall Act. Because Com- the Board has determined to, and hereby does, appany has no salesman's stake in the securities it prove the application subject to all the commitments recommends, the potential for conflicts of interest is made by Applicant in connection with this application, substantially mitigated. Moreover, it is unlikely that and the terms and conditions set forth in this Order, investors would confuse Company with Applicant's and in the above-noted Board orders. The Board's subsidiary banks, because the customers of Company determination also is subject to all the terms and will be sophisticated "institutional customers." conditions set forth in Regulation Y, including those in Under these circumstances, the Board believes that sections 225.4(d) and 225.23(b), and to the Board's a prohibition against director interlocks is not required authority to require modification or termination of the by law, and the requested director interlock between activities of a bank holding company or any of its Company and Applicant's subsidiary bank would be subsidiaries as the Board finds necessary to assure appropriate.8 compliance with, and to prevent evasion of, the provisions of the BHC Act, and the Board's regulations Financial Factors, Managerial Resources, and Other and orders issued thereunder. The Board's decision Considerations specifically is conditioned on compliance with all the commitments made in connection with this applica- In every case involving a nonbanking acquisition by a tion, including the commitments discussed in this Order and the conditions set forth in the above-noted bank holding company under section 4 of the BHC Board regulations and orders. These commitments and Act, the Board considers the financial condition and conditions are deemed to be conditions imposed in resources of Applicant and its subsidiaries and the effect of the transaction on these resources.9 Based on writing by the Board in connection with its findings and decision, and may be enforced in proceedings the facts of this case, the Board concludes that finanunder applicable law. cial considerations are consistent with approval of this application. The managerial resources of Applicant This transaction shall not be consummated later also are consistent with approval. than three months after the effective date of this In order to approve this application, the Board is Order, unless such period is extended for good cause required to determine that the performance of the by the Board or by the Federal Reserve Bank of proposed activities by Applicant can reasonably be Chicago pursuant to delegated authority. expected to produce public benefits that outweigh By order of the Board of Governors, effective adverse effects under the proper incident to banking July 2, 1993. standard of section (4)(c)(8) of the BHC Act. Under the framework established in this Order and prior Voting for this action: Chairman Greenspan and Governors decisions, consummation of this proposal is not likely Angell, Kelley, Lindsey, and Phillips. Absent and not voting: Governors Mullins and LaWare. to result in any significant adverse effects, such as undue concentration of resources, decreased or unfair JENNIFER J. JOHNSON competition, conflicts of interests, or unsound banking Associate Secretary of the Board practices. In addition, the Board expects that the de novo entry of Company into the market for these Continental Bank Corporation services would increase the level of competition Chicago, Illinois among providers of these services. Accordingly, the Board has determined that the performance of the proposed activities by Company can reasonably be Order Approving Application to Engage De Novo in Asset Management, Servicing, and Collection Activities 7. Statement Concerning Applicability of the Glass-Steagall Act to the Commercial Paper Placement Activities of Bankers Trust Com- Continental Bank Corporation, Chicago, Illinois pany (June 4, 1985), affd sub nom. Securities Industry Association v. Board of Governors, 807 F.2d 1052 (D.C. Cir. 1986), cert, denied, 483 ("Continental"), a bank holding company within the U.S. 1005 (1987). meaning of the Bank Holding Company Act ("BHC 8. See First Eastern Corporation, 76 Federal Reserve Bulletin 764 Act"), has applied under section 4(c)(8) of the BHC (1990). 9. See 12 C.F.R. 225.24. Act (12 U.S.C. § 1843(c)(8)) and section 225.23(a)(3) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 889 of the Board's Regulation Y (12 C.F.R. 225.23(a)(3)), vices for assets originated by financial institutions4 and to engage de novo in asset management, servicing, and their bank holding company affiliates is an activity that collection activities through its wholly owned subsid- is closely related to banking for purposes of the BHC iary Repechage Partners Ltd., Chicago, Illinois ("Re- Act.5 Continental proposes to conduct all asset manpechage"). agement activities under the same terms, and subject Notice of the application, affording interested per- to the same conditions as in previous Board orders sons an opportunity to submit comments, has been regarding this activity.6 For example, Continental has published (58 Federal Register 34,436 (1993)). The committed that it will not own the stock of, or be time for filing comments has expired, and the Board represented on the board of directors of, any unaffilihas considered the application and all comments re- ated institution for which Repechage provides asset ceived in light of the factors set forth in section 4(c)(8) management services or own the assets under manageof the BHC Act. ment. In addition, Continental has committed that Continental, with total consolidated assets of ap- Repechage will not establish policies or procedures of proximately $22 billion, is the second largest banking general applicability for the institutions whose assets it organization in Illinois.1 Continental operates one sub- manages, and that the services of Repechage for sidiary bank and engages directly and through subsid- unaffiliated institutions would be limited to asset maniaries in a variety of nonbanking activities. agement, servicing, and collection activities.7 Repechage would provide asset management ser- Continental proposes to engage in asset managevices to the Resolution Trust Corporation ("RTC") ment activities for assets originated by non-financial and the Federal Deposit Insurance Corporation institutions as well as financial institutions.8 These ("FDIC").2 In addition, Repechage proposes to pro- assets, however, would be limited to the types of vide these services to unaffiliated third party investors assets that a financial institution would have the authat purchase pools of assets assembled by the RTC or thority to originate.9 Accordingly, the Board believes the FDIC from troubled financial institutions, and that Continental would have the expertise to engage in generally to unaffiliated financial and non-financial the management of these types of assets, regardless of institutions with troubled assets. Under the proposal, the originating entity, and that the proposal is within neither Continental nor Repechage would directly or the scope of the asset management approval in the indirectly acquire an ownership interest in the assets Board's prior orders.10 For these reasons, the Board that they manage or in the institutions for which they concludes that Continental's proposed activities are provide asset management services. In addition, Re- closely related to banking. pechage would not engage in providing real property management or real estate brokerage services as part of its proposed activities.3 The Board has previously determined that, within 4. Financial institutions include banks, savings associations, and certain parameters, providing asset management ser- credit unions. 5. See First Interstate Bancorp, 77 Federal Reserve Bulletin 334 (1991); Banc One Corporation, 77 Federal Reserve Bulletin 331 (1991); NCNB Corporation, 77 Federal Reserve Bulletin 124 (1991); First Florida Banks, Inc., 74 Federal Reserve Bulletin 111 (1988). 6. Id. 7. Continental also would provide these services for a limited period 1. Data are as of March 31, 1993. of time. The Board notes that, while Continental would manage the 2. Asset management encompasses the liquidation (or other dispo- assets on an ongoing basis, the owner of the assets would retain the sition) of loans and their underlying collateral, including real estate right to make all final decisions regarding asset dispositions and to and other assets acquired through foreclosure or in satisfaction of terminate Continental as asset manager. debts previously contracted ("DPC property"). Specific individual 8. These assets include: real estate; commercial, consumer and activities include: classifying and valuing loan portfolios; filing re- other loans; equipment leases; and extensions of credit. Non-financial views of loan documentation; developing collection strategies; nego- institutions include pension funds, leasing companies, finance compatiating renewals, extensions, and restructuring agreements; initiating nies, and investment companies formed to engage in asset manageforeclosure, bankruptcy, and other legal proceedings, where appro- ment activities. priate; and developing and implementing market strategies for the sale 9. These assets would include: equipment leases that conform to or refinancing of individual loans and for the packaging and sale of section 225.25(b)(5) of the Board's Regulation Y (12 C.F.R. whole or securitized loan portfolios. In addition, Continental would 225.25(b)(5)); loans secured by equipment and equipment acquired conduct and review (either directly or through independent contrac- through foreclosure or in satisfaction of such leases and loans; tors) appraisals and environmental inspections; provide asset valua- consumer loans financing manufactured housing, vessels, vehicles, tions; perform cash-flow and asset-review analyses; contract with and and residences; asset-based commercial loans; factored accounts supervise independent property managers; and lease (either directly receivables; and collateral for the aforementioned types of loans or through independent contractors) real estate and other DPC prop- acquired through foreclosure or in satisfaction of such loans. Prior erty. Continental also would dispose of DPC property by developing approval of the Board would be required before providing asset and implementing marketing strategies for the sale of DPC property, management services in connection with pools of assets of the type either individually or packaged for investors or developers. impermissible for a financial institution to originate. 3. Continental will contract with independent third parties to obtain 10. See, e.g., The Dai-Ichi Kangyo Bank, Ltd., 79 Federal Reserve these services for assets under the management of Repechage. Bulletin 131 (1993). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

890 Federal Reserve Bulletin • September 1993 The Board is also required to determine whether the The financial and managerial resources of Continental performance of the proposed activity by Continental is and its subsidiaries are also consistent with approval. a proper incident to banking—that is, whether the Accordingly, on the basis of all the facts of record and proposed activity "can reasonably be expected to commitments made by Continental, the Board conproduce benefits, such as greater convenience, in- cludes that the public benefits that would result from creased competition, or gains in efficiency, that out- approval of this application outweighs the potential weigh possible adverse effects, such as undue concen- adverse effects, and that the public interest factors it tration of resources, decreased or unfair competition must consider under section 4(c)(8) of the BHC Act conflicts of interests, or unsound banking practices." are consistent with approval. 12 U.S.C. § 1843(c)(8). Based upon the foregoing and all the other facts of Consummation of the proposal can reasonably be record, including commitments made by Continental expected to result in public benefits. Continental's and conditions in this order, the Board has determined proposal would facilitate the disposal of assets of that this application should be, and hereby is, apfinancial institutions in receivership as well as financial proved. The Board's approval is expressly condiand non-financial institutions with troubled financial tioned upon compliance with all the commitments assets. Moreover, the efficient disposition of such made by Continental in connection with this applicaassets can reasonably be expected to produce benefits tion and the conditions referred to in this order and the to the public. Repechage would own no equity in the orders mentioned above. For the purpose of this institutions for which it provides asset management action, these commitments and conditions will both be services or in the assets it manages. Continental's considered conditions imposed in writing and, as such, de novo entry into the market would increase compe- may be enforced in proceedings under applicable law. tition for these services. The Board's determination is also subject to all the Continental has indicated that it may, in certain conditions set forth in the Board's Regulation Y, instances, seek approval to acquire institutions whose including those in sections 225.4(d) and 225.23(b), and assets are being managed by Repechage. In previous to the Board's authority to require modification or cases, the Board has expressed concern that a bank termination of the activities of a bank holding comholding company might obtain confidential informa- pany or any of its subsidiaries as the Board finds tion in providing its asset management services that necessary to assure compliance with, and to prevent would give the bank holding company a competitive evasion of, the provisions of the BHC Act and the advantage over other institutions in the bidding pro- Board's regulations and orders issued thereunder. cess for the failed institution under management.11 The This transaction shall not be consummated later Board also noted that such information could give the than three months after the effective date of this managing bank holding company a competitive advan- Order, unless such period is extended for good cause tage over the ultimate acquiror of the failed institution by the Board or by the Federal Reserve Bank of in markets where they both compete. Chicago, acting pursuant to delegated authority. To address these concerns, Continental has commit- By order of the Board of Governors, effective ted to establish and implement procedures to preserve July 26, 1993. the confidentiality of information obtained in the course of providing asset management services.12 Voting for this action: Chairman Greenspan and Governors These procedures would prevent the use of informa- Mullins, Angell, Kelley, LaWare, and Lindsey. Absent and not voting: Governor Phillips. tion obtained by Repechage through its asset management activities in preparing any bid that Continental JENNIFER J. JOHNSON may prepare to acquire an institution managed by Associate Secretary of the Board Repechage, and would prevent Continental from competing unfairly against the winning bidder. National Commerce Bancorporation There is no evidence in the record to indicate that Memphis, Tennessee consummation of this proposal is likely to result in any significantly adverse effects, such as undue concentration of resources, decreased or unfair competition, Order Approving the Acquisition of a Savings conflicts of interests, or unsound banking practices. Association and the Sale of Credit-Related Insurance 11. See, e.g., NCNB Corporation, 77 Federal Reserve Bulletin 124 National Commerce Bancorporation, Memphis, Ten- (1991). nessee ("NCB"), a bank holding company within the 12. Continental's procedures will be subject to review by the Federal Reserve System. meaning of the Bank Holding Company Act ("BHC Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 891 Act"), has applied pursuant to section 4(c)(8) of the permit federally chartered savings associations to op- BHC Act (12 U.S.C. § 1843(c)(8)) and section 225.23 erate interstate branches, under certain circumof the Board's Regulation Y (12 C.F.R. 225.23) to stances, with the approval of the OTS.3 The Board's acquire First Federal Savings Bank, Belzoni, Missis- action in this matter is conditioned upon compliance sippi ("FFSB"). FFSB would be owned by NCB in by FFSB with all applicable laws governing its activaccordance with section 225.25(b)(9) of the Board's ities and branching, including all applicable OTS reg- Regulation Y (12 C.F.R. 225.25(b)(9)). NCB also has ulations. applied, pursuant to section 4(c)(8) of the BHC Act, to In considering an application under section 4(c)(8) of sell, indirectly through FFSB, credit insurance as the BHC Act, the Board is required to determine that principal, agent or broker (including home mortgage the applicant's ownership and operation of the acredemption insurance) that is: quired company "can reasonably be expected to pro- (A) Directly related to an extension of credit by duce benefits to the public, such as greater conve- NCB or any of its subsidiaries; and nience, increased competition, or gains in efficiency, (B) Limited to assuring the repayment of the that outweigh possible adverse effects, such as undue outstanding balance due on the extension of cred- concentration of resources, decreased or unfair comit1 in the event of the death, disability, or invol- petition, conflicts of interests, or unsound banking untary unemployment of the debtor. practices." 12 U.S.C. § 1843(c)(8). NCB, with total consolidated assets of approxi- This activity is permissible for bank holding compa- mately $2.3 billion, controls three banks in Tennesnies under the Board's Regulation Y, and NCB pro- see.4 NCB is the seventh largest banking organization poses to conduct these activities in accordance with in Tennessee, controlling deposits of $1.7 billion, the Board's regulations. 12 C.F.R. 225.25(b)(8)(i). representing 3.9 percent of total deposits in commer- Notice of the applications, affording interested per- cial banking organizations in the state.5 FFSB is the sons an opportunity to submit comments, has been 21st largest thrift organization in Mississippi, controlpublished (58 Federal Register 30,789 (1993)). The ling deposits of $4.3 million, representing less than time for filing comments has expired, and the Board 1 percent of total deposits in thrift institutions in the has considered the applications and all comments state.6 received in light of the public interest factors set forth The banking subsidiaries of NCB and FFSB do not in section 4(c)(8) of the BHC Act. compete in any of the same banking markets. Accord- The Board has determined that the operation of a ingly, the Board concludes that this proposal would savings association is closely related to banking and not have a significantly adverse effect on competition permissible for bank holding companies. 12 C.F.R. in any relevant banking market. The financial and 225.25(b)(9). In making this determination, the Board managerial resources of NCB, its subsidiaries, and required that savings associations acquired by bank FFSB also are consistent with approval. holding companies conform their direct and indirect In light of the facts of record, the Board concludes activities to those permissible for bank holding com- that NCB's proposal would not significantly affect panies under section 4 of the BHC Act.2 As noted competition in any relevant market. Furthermore, above, the proposed insurance activities are related to there is no evidence in the record to indicate that extensions of credit and are permissible activities consummation of this proposal is likely to result in any under the Board's regulations. significantly adverse effects, such as undue concentra- Following the acquisition of FFSB, NCB proposes tion of resources, decreased or unfair competition, to establish branches of FFSB in Roanoke, Virginia, conflicts of interests, or unsound banking practice. and in other states. Neither the BHC Act nor the Accordingly, the Board has determined that the bal- Board's regulations currently restrict the ability of a ance of public interest factors it must consider under savings association owned by a bank holding company section 4(c)(8) of the BHC Act is favorable and conto establish interstate branches. The regulations sistent with approval of NCB's application to engage adopted by the Office of Thrift Supervision ("OTS") in this activity. 1. "Extension of credit" includes direct loans to borrowers, loans purchased from other lenders, and leases of real or personal property so long as the leases are nonoperating and full payout leases that meet 3. Board approval also may be required in certain circumstances the requirements of section 225.25(b)(5) of the Board's Regulation Y under the provisions of section 225.23 of the Board's Regulation Y (12 C.F.R. 225.25(b)(5)). (12 C.F.R. 225.23). 2. In this regard, NCB has committed that FFSB will not engage in 4. Asset data are as of March 31, 1993. any activity not permitted for bank holding companies and their 5. State commercial bank deposit data are as of June 30, 1992. subsidiaries under section 4(c)(8) of the BHC Act. 6. State thrift deposit data are as of June 30, 1992. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

892 Federal Reserve Bulletin • September 1993 Based on the foregoing, the Board has determined securities issued by open-end investment compathat the application should be, and hereby is, ap- nies), including without limitation sovereign debt proved. The Board's approval is specifically condi- securities, corporate debt securities, debt securities tioned on compliance by NCB with all of the commit- convertible into equity securities, debt securities ments and conditions made in connection with this issued by a trust or other vehicle secured by or application. This determination also is subject to all of representing interests in debt obligations, preferred the conditions contained in the Board's Regulation Y, stock, common stock, American Depositary Reincluding those in sections 225.4(d) and 225.23(b)(3) ceipts, and other direct and indirect equity owner- (12 C.F.R. 225.4(d) and 225.23(b)(3)), and to the ship interests in corporations and other entities; and Board's authority to require such modification or (2) Providing foreign exchange advisory and transtermination of the activities of a bank holding com- actional services while also taking positions in forpany, or any of its subsidiaries, as it finds necessary to eign exchange, for hedging purposes only, for its assure compliance with, or prevent evasions of, the own account. provisions and purposes of the BHC Act and the Board's regulations and orders issued thereunder. All NationsBank proposes to conduct these activities the commitments and conditions relied on in reaching throughout the United States. this decision in this case are deemed to be conditions Notice of the application, affording interested perimposed in writing by the Board in connection with its sons an opportunity to submit comments on the profindings and decision, and as such may be enforced in posal, has been published (58 Federal Register 33,273 proceedings under applicable law. (1993)). The time for filing comments has expired, and The transaction shall not be consummated later than the Board has considered the application and all three months after the effective date of this Order, comments received in light of the factors set forth in unless such period is extended for good cause by the section 4(c)(8) of the BHC Act. Board or by the Federal Reserve Bank of St. Louis, NationsBank, with total consolidated assets of acting pursuant to delegated authority. $122 billion, is the fifth largest commercial banking By order of the Board of Governors, effective organization in the United States, and operates bank July 12, 1993. subsidiaries in North Carolina, Texas, Georgia, Virginia, Maryland, the District of Columbia, Tennessee, Voting for this action: Vice Chairman Mullins and Gover- Kentucky, Florida, South Carolina, and Delaware.1 nors Angell, Kelley, LaWare, Lindsey, and Phillips. Absent Company currently is engaged in limited bank-ineligible and not voting: Chairman Greenspan. securities underwriting and dealing activities that are permissible under section 20 of the Glass-Steagall Act JENNIFER J. JOHNSON (12 U.S.C. § 377).2 Company is, and will continue to Associate Secretary of the Board be, a broker-dealer registered with the Securities and Exchange Commission ("SEC") and a member of the NationsBank Corporation National Association of Securities Dealers, Inc. Charlotte, North Carolina ("NASD"). Accordingly, Company is subject to the record-keeping, reporting, fiduciary standards, and Order Approving Application to Engage De Novo in other requirements of the Securities Exchange Act of Underwriting and Dealing in All Types of Debt and 1934 (15 U.S.C. § 78a et seq.), the SEC, and the Equity Securities on a Limited Basis, and Certain NASD.3 Foreign Exchange-Related Activities 1. Asset data are as of March 31, 1993. NationsBank Corporation, Charlotte, North Carolina 2. In particular, Company has authority to underwrite and deal in, ("NationsBank"), a bank holding company within the to a limited extent, certain municipal revenue bonds, 1-4 family mortgage-backed securities, commercial paper, and consumer receivmeaning of the Bank Holding Company Act ("BHC able-related securities (together with the types of securities which Act"), has applied under section 4(c)(8) of the BHC Company now seeks authority to underwrite and deal in, collectively, Act (12 U.S.C. 1843(c)(8)) and section 225.23(a) of "bank-ineligible securities"). 3. Company currently has authority to conduct a variety of securithe Board's Regulation Y (12 C.F.R. 225.23(a)) to ties-related activities, including: engage de novo through its wholly owned subsidiary, (1) Underwriting and dealing in securities that state member banks NationsBanc Capital Markets, Inc., Charlotte, North are authorized to underwrite and deal in under sections 5(c) and 16 of the Glass-Steagall Act (12 U.S.C. §§ 335 and 24(7)), pursuant to Carolina ("Company"), in the following nonbanking section 225.25(b)(16) of Regulation Y (12 C.F.R. 225.25(b)(16)); activities: (2) Providing securities brokerage and investment advisory ser- (1) Underwriting and dealing in, to a limited extent, vices, on both a separate and combined basis, pursuant to sections 225.25(b)(4) and (b)(15) of Regulation Y (12 C.F.R. 225.25(b)(4) and all types of debt and equity securities (other than (b)(15)); Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 893 Underwriting and Dealing Activities The Board has reviewed the capitalization of NationsBank and Company in accordance with the stan- The Board has determined that, subject to the pruden- dards set forth in the Section 20 Orders, and finds the tial framework of limitations established in previous capitalization of each to be consistent with approval. decisions to address the potential for conflicts of With respect to the capitalization of Company, this interests, unsound banking practices, or other adverse determination is based upon all the facts of record, effects, the proposed underwriting and dealing activi- including NationsBank's projections with respect to ties involving bank-ineligible securities are so closely the volume of Company's underwriting and dealing related to banking as to be proper incidents thereto activities in bank-ineligible securities. The Federal within the meaning of section 4(c)(8) of the BHC Act.4 Reserve Bank of Richmond has reviewed the opera- NationsBank has committed that Company will con- tional and managerial infrastructure of Company, induct the proposed underwriting and dealing activities cluding its computer, audit, and accounting systems, using the same methods and procedures, and subject and internal risk management procedures and conto the same prudential limitations, as were established trols. The Reserve Bank has determined that Comby the Board in the Section 20 Orders. The Board also pany has established an operational and managerial has determined that the conduct of these securities infrastructure for underwriting and dealing in all types underwriting and dealing activities is consistent with of debt securities that is adequate to ensure complisection 20 of the Glass-Steagall Act (12 U.S.C. § 377), ance with the requirements of the Section 20 Orders. provided that the company engaged in the underwrit- On the basis of the Reserve Bank's review and all the ing and dealing activities derives no more than 10 facts of record, the Board has determined that Compercent of its total gross revenue from underwriting pany has in place, with respect to its proposal to and dealing in bank-ineligible securities over any two- underwrite and deal in all types of debt securities, the year period.5 NationsBank has committed that Com- managerial and operational infrastructure and other pany will conduct its underwriting and dealing activi- policies and procedures necessary to comply with the ties with respect to bank-ineligible securities subject to requirements of the Section 20 Orders and this order. this 10 percent revenue test.6 Accordingly, the Board concludes that financial and managerial considerations are consistent with approval of the proposal for Company to underwrite and deal in all types of debt securities on a limited basis. (3) Acting as agent in the private placement of all types of securities, and providing related advisory services; and With respect to the proposed underwriting and (4) Buying and selling all types of securities on customer order as a "riskless principal". dealing activities involving equity securities, Nations- See NCNB Corporation, 76 Federal Reserve Bulletin 864 (1990); Bank has informed the Board that it does not intend NCNB Corporation, 75 Federal Reserve Bulletin 520 (1989). See also that Company engage in these activities in the first NCNB Corporation, 78 Federal Reserve Bulletin 141,158 n. 86 (1991), and NCNB Corporation, 78 Federal Reserve Bulletin 92,93-94 (1991). year after approval of this proposal. Accordingly, and 4. See Canadian Imperial Bank of Commerce, et al., 76 Federal in light of all the facts of record, the Board's approval Reserve Bulletin 158 (1990); J.P. Morgan & Co. Incorporated, et al., of NationsBank's proposal that Company engage in 75 Federal Reserve Bulletin 192 (1989), affd sub nom. Securities Industries Ass'n v. Board of Governors of the Federal Reserve these activities is conditioned upon a satisfactory System, 900 F.2d 360 (D.C. Cir. 1990); Citicorp, et al., 73 Federal determination that Company's operational and mana- Reserve Bulletin 473 (1987), affd sub nom. Securities Industry Ass'n v. Board of Governors of the Federal Reserve System, 839 F.2d 47 (2d gerial infrastructure and policies and procedures relat- Cir. 1988), cert, den., 486 U.S. 1059 (1988) (collectively, "Section 20 ing to underwriting and dealing in equity securities are Orders"). adequate to ensure compliance with the requirements 5. See id. Compliance with the 10 percent revenue limitation shall be calculated in accordance with the method stated in the Section 20 of the Section 20 Orders following a second review by Orders, as modified by the Order Approving Modifications to the the Reserve Bank. Section 20 Orders, 75 Federal Reserve Bulletin 751 (1989), the Order Approving Modifications to the Section 20 Orders, 79 Federal Reserve In order to approve this proposal, the Board also Bulletin 226 (1993), and the Supplement to Order Approving Modifi- must determine that the performance of the proposed cations to Section 20 Orders, 79 Federal Reserve Bulletin 360 (1993) underwriting and dealing activities by Company can (collectively, "Modification Orders"). In this regard, the Board notes that NationsBank has not adopted the Board's alternative indexed reasonably be expected to produce public benefits that revenue test to measure compliance with the 10 percent limitation on bank-ineligible securities activities, and, absent such election, will continue to employ the Board's original 10 percent revenue standard. 6. NationsBank also has proposed that Company engage in certain other activities in connection with the proposed underwriting and sary incident to the bank-ineligible securities activities must be treated dealing activities, including certain securities clearing and investment as part of the bank-ineligible securities activities unless Company has advisory activities. NationsBank maintains that these additional ac- received specific approval under section 4(c)(8) of the BHC Act to tivities are incidental to the proposed underwriting and dealing activ- conduct the activities independently. Until such approval is obtained, ities. In this regard, the Board notes that Company may provide any revenues from the incidental activities must be counted as services that are necessary incidents to the proposed underwriting and ineligible revenues subject to the 10 percent revenue limitation set dealing activities, provided that any activities conducted as a neces- forth in the Section 20 Orders, as modified by the Modification Orders. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

894 Federal Reserve Bulletin • September 1993 would outweigh possible adverse effects under the conducting foreign exchange operations, commercial proper incident to banking standard of section 4(c)(8) banks do combine the functions of giving advice, of the BHC Act. Under the framework and condi- executing transactions, and taking positions in fortions established in this and prior decisions, consum- eign exchange.8 Accordingly, the Board concludes mation of this proposal is not likely to result in any that NationsBank's proposal to conduct foreign exsignificant adverse effects, such as undue concentra- change advisory and transactional activities in a tion of resources, decreased or unfair competition, nonbanking subsidiary which also takes positions in conflicts of interests, or unsound banking practices. foreign exchange for hedging purposes only is closely Moreover, the Board expects that the de novo entry related to banking within the meaning of the BHC of Company into the market for the proposed ser- Act. vices in the United States would provide added In regard to the proper incident to banking stanconvenience to NationsBank's customers, and would dard of section 4(c)(8) of the BHC Act, the limitation increase the level of competition among existing in Regulation Y on taking positions in foreign exproviders of these services. Accordingly, the Board change in combination with providing foreign exhas determined that the performance of the proposed change advisory and transactional services is based activities by NationsBank can reasonably be ex- upon the potential conflict of interest involved in pected to produce public benefits that will outweigh conducting these activities on a combined basis.9 In possible adverse effects under the proper incident to order to address the potential for conflicts of interest banking standard of section 4(c)(8) of the BHC Act. which could arise from the combined conduct of Accordingly, and for the reasons set forth in the these activities in one nonbanking subsidiary, Na- Section 20 Orders, the Board concludes that Nations- tionsBank has committed that Company's personnel Bank's proposal to engage through Company in the engaged in trading foreign exchange for hedging proposed underwriting and dealing activities is consis- purposes will not have access to information about tent with the Glass-Steagall Act, and is so closely the foreign exchange activities of customer represenrelated to banking as to be a proper incident thereto tatives. Similarly, Company's customer representawithin the meaning of section 4(c)(8) of the BHC Act, tives will not have access to information about the provided that NationsBank limits Company's activi- foreign exchange activities of its hedging traders. ties as specified in this order and the Section 20 The Board also notes that Company will only take Orders, as modified by the Modification Orders. foreign exchange positions for purposes of hedging its proposed underwriting and dealing activities. On Foreign Exchange-Related Activities the basis of these and other commitments furnished by NationsBank and all the other facts of record, the Board believes that Company's conduct of the pro- The Board previously has determined by regulation posed foreign exchange-related activities is not likely that the provision of foreign exchange advisory and to result in any significant adverse effects, such as transactional services is an activity so closely related undue concentration of resources, decreased or unto banking as to be a proper incident thereto within fair competition, conflicts of interests, or unsound the meaning of the BHC Act, provided that the banking practices.10 Moreover, the Board expects activity is conducted through a separately incorpothat the de novo entry of Company into the market rated subsidiary of the bank holding company which, for the proposed services in the United States would inter alia, does not take positions in foreign exchange provide added convenience to NationsBank's cusfor its own account. See 12 C.F.R. 225.25(b)(17). tomers, and would increase the level of competition Company will conduct the proposed foreign examong existing providers of these services. Accordchange advisory and transactional services in accoringly, the Board has determined that the performance dance with the limitations set forth in Regulation Y, except that Company will take positions in foreign exchange for its own account for purposes of hedging its proposed underwriting and dealing activities. 8. See Hongkong and Shanghai Banking Corporation, et al., 69 Federal Reserve Bulletin 221, 223 (1983). Bank holding companies have been authorized to 9. See The Nippon Credit Bank, Ltd., supra, at 310; Hongkong and take positions in foreign exchange for hedging pur- Shanghai Banking Corporation, et al., supra, at 223. poses,7 and the Board has previously noted that in 10. The Board notes that it previously has approved proposals for a nonbanking subsidiary to take positions in foreign exchange while also providing general information, statistical forecasting, and limited general advice regarding foreign exchange. See The Long-Term Credit Bank of Japan, Limited, 79 Federal Reserve Bulletin 347, 349 (1993); 7. See, e.g., The Nippon Credit Bank, Ltd., 75 Federal Reserve The Bank of Tokyo, Ltd., 76 Federal Reserve Bulletin 654, 656-657 Bulletin 308 (1989). See also 12 C.F.R. 225.142. (1990). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 895 of the proposed activities by NationsBank can rea- Orders Issued Under Sections 3 and 4 of the sonably be expected to produce public benefits that Bank Holding Company Act will outweigh possible adverse effects under the proper incident to banking standard of section 4(c)(8) Meridian Bancorp, Inc. of the BHC Act. Reading, Pennsylvania On the basis of the foregoing and all the facts of record, including the commitments furnished by Na- Order Approving Acquisition of a Bank Holding tionsBank, the Board has determined that the applica- Company tion should be, and hereby is, approved, subject to all the terms and conditions of this order and the Section Meridian Bancorp, Inc., Reading, Pennsylvania ("Me- 20 Orders, as modified by the Modification Orders. The ridian"), a bank holding company within the meaning Board's approval of this proposal extends only to of the Bank Holding Company Act ("BHC Act"), has activities conducted within the limitations of those applied for the Board's approval under section 3 of the Orders and this order, including the Board's reserva- BHC Act (12 U.S.C. § 1842) to acquire all of the tion of authority to establish additional limitations to voting shares of Commonwealth Bancshares Corporaensure that Company's activities are consistent with tion ("Commonwealth"), and thereby to acquire indisafety and soundness, conflicts of interests, and other rectly Commonwealth's subsidiary bank, Commonrelevant considerations under the BHC Act. Under- wealth Bank ("Commonwealth Bank"), both of writing and dealing in any manner other than as ap- Williamsport, Pennsylvania.1 Meridian's wholly proved in the Section 20 Orders is not within the scope owned subsidiary state member bank, Meridian Bank, of the Board's approval and is not authorized for Reading, Pennsylvania ("Meridian Bank"), also has Company. applied for the Board's approval under section 18(c) of The Board's determination also is subject to all the the Federal Deposit Insurance Act (the "Bank Merger terms and conditions set forth in Regulation Y, Act") to merge with Commonwealth Bank, and, under including those in sections 225.4(d) and 225.23(b) of sections 9 and 24A of the Federal Reserve Act, to Regulation Y, and to the Board's authority to require establish additional branches and invest in bank premsuch modification or termination of the activities of a ises.2 bank holding company or any of its subsidiaries as Meridian also has applied under section 4(c)(8) of the Board finds necessary to ensure compliance with, the BHC Act (12 U.S.C. § 1843(c)(8)) to acquire and to prevent evasion of, the provisions of the BHC Susquehanna Life Insurance Company, Phoenix, Ari- Act and the Board's regulations and orders issued zona ("Susquehanna Life"), and thereby engage in the thereunder. The Board's decision is specifically con- sale of credit-related insurance pursuant to 12 C.F.R. ditioned on compliance with all the commitments 225.25(b)(8)(i), and Commonwealth Bancshares Commade in connection with this application, including munity Development Corporation, Williamsport, the commitments discussed in this Order, and the Pennsylvania ("Commonwealth CDC"), and thereby conditions set forth in the above-noted Board regu- engage in community development activities pursuant lations and orders. These commitments and condi- to 12 C.F.R. 225.25(b)(6). tions are deemed to be conditions imposed in writing Notice of the applications, affording interested perby the Board in connection with its findings and sons an opportunity to submit comments, has been decision, and, as such, may be enforced in proceed- published (58 Federal Register 28,878 (1993)). The ings under applicable law. time for filing comments has expired, and the Board This transaction shall not be consummated later has considered these applications and all comments than three months after the effective date of this received in light of the factors set forth in section 3(c) Order, unless such period is extended for good cause of the BHC Act, the Bank Merger Act, and the Federal by the Board or by the Federal Reserve Bank of Reserve Act. As required by the Bank Merger Act, Richmond, acting pursuant to delegated authority. reports on the competitive effects of the merger were By order of the Board of Governors, effective requested from the United States Attorney General, July 26, 1993. Voting for this action: Chairman Greenspan and Governors 1. In connection with Meridian's proposed acquisition of Commonwealth, Meridian also has requested Board approval under section 3 of Mullins, Angell, Kelley, La Ware, and Lindsey. Absent and the BHC Act to acquire an option to purchase up to 19.9 percent of the not voting: Governor Phillips. voting shares of Commonwealth. This option will become moot upon consummation of Meridian's application to acquire Commonwealth. JENNIFER J. JOHNSON 2. Meridian will establish branches at each of the locations set forth Associate Secretary of the Board in the Appendix. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

896 Federal Reserve Bulletin • September 1993 the Office of the Comptroller of the Currency, and the corporations or projects designed primarily to promote Federal Deposit Insurance Corporation. community welfare in north central Pennsylvania. Meridian, with $12 billion in consolidated assets, These activities are permissible for bank holding comcontrols subsidiary banks located in Pennsylvania, panies under the Board's Regulation Y,6 and Meridian Delaware, and New Jersey.3 Meridian controls depos- proposes to conduct these activities in accordance its of $9 billion in Pennsylvania and is the fifth largest with the Board's regulations. commercial banking organization in that state. Com- In order to approve this application, the Board also monwealth, with deposits of $1.6 billion, is the four- must find that the performance of the proposed activteenth largest commercial banking organization in ities by Susquehanna Life and Commonwealth CDC Pennsylvania.4 Upon consummation of the transac- "can reasonably be expected to produce benefits to tion, Meridian would become the fourth largest com- the public . . . that outweigh possible adverse effects, mercial banking organization in Pennsylvania, control- such as undue concentration of resources, decreased ling deposits of approximately $10.6 billion in the or unfair competition, conflicts of interests, or unstate, representing 8.1 percent of deposits in commer- sound banking practices." 12 U.S.C. § 1843(c)(8). cial banks in Pennsylvania. Meridian and Common- The Board expects that the continuance of these wealth do not compete directly in any banking market. activities by these nonbanking subsidiaries would Based on all the facts of record, the Board has maintain the level of competition among providers of concluded that consummation of the proposal would these services. In addition, there is no evidence in the not have a significantly adverse effect on competition record that consummation of this proposal would in any relevant banking market. result in any significantly adverse effects, such as The Board also concludes that the financial and undue concentration of resources, decreased or unfair managerial resources and future prospects of Meridian competition, conflicts of interests, or unsound banking and Commonwealth, and their subsidiary banks, the practices. Accordingly, the Board concludes that the convenience and needs of the communities to be balance of the public interest factors that it is required served, and the other factors that the Board must to consider under section 4(c)(8) of the BHC Act is consider under section 3 of the BHC Act and the Bank favorable, and consistent with approval of Meridian's Merger Act, are consistent with approval.5 Meridian section 4 application. Bank also has applied under sections 9 and 24A of the Based on the foregoing and other facts of record, the Federal Reserve Act to establish branches and invest Board has determined that the applications should be, in branch premises. The Board has considered the and hereby are, approved. This approval is specifically factors it is required to consider when reviewing conditioned upon compliance by Meridian with all the applications pursuant to these sections of the Federal commitments made in connection with this applica- Reserve Act and finds those factors to be consistent tion. The Board's determination with respect to its with approval. nonbanking activities also is subject to all of the Meridian also has applied, pursuant to section conditions set forth in Regulation Y, including those in 4(c)(8) of the BHC Act, to acquire Susquehanna Life, sections 225.4(d) and 225.23(b), and to the Board's a company that provides credit-related life and disabil- authority to require such modification or termination ity insurance issued in connection with extensions of of the activities of a bank holding company or any of credit by Commonwealth, and Commonwealth CDC, a its subsidiaries as the Board finds necessary to assure company that makes equity and debt investments in compliance with, and to prevent evasion of, the provisions of the BHC Act and the Board's regulations and orders issued thereunder. For purposes of this action, the commitments and conditions relied on in 3. Asset and deposit data are as of June 30, 1992. 4. These data include deposits of Valley Community Bank, reaching this decision shall be deemed to be conditions Kingston, Pennsylvania, which Commonwealth has received approval imposed in writing by the Board and, as such, may be to acquire. enforced in proceedings under applicable law. 5. The Board has received a comment from a former customer of Commonwealth Bank alleging improper alterations of a mortgage that The banking acquisition approved in this Order shall is the subject of a foreclosure proceeding by the bank. The Board has not be consummated before the thirtieth calendar day carefully considered these comments in light of all facts of record, after the effective date of this Order, and the proposal including relevant reports of examination by Commonwealth Bank's primary federal regulator, the Federal Reserve Bank of Philadelphia, shall not be consummated later than three months and Commonwealth Bank's loan documentation policies, which Me- after the effective date of this Order, unless such ridian states are consistent with the policies to be established upon consummation of this proposal. The Board notes that these policies period is extended for good cause by the Board or by specifically address alterations of commercial loan documents and provide audit procedures to review for compliance. In light of all the facts of record, the Board does not believe that commenter's allegations warrant denial of these applications. 6. See 12 C.F.R. 225.25(b)(8)® and 225.25(b)(6). 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Legal Developments 897 the Federal Reserve Bank of Philadelphia, acting (26) 25 East Main Street, Lock Haven, Pennsylvania pursuant to delegated authority. (27) 50 South Main Street, Mansfield, Pennsylvania By order of the Board of Governors, effective (28) R.D. No. 2, Box 41D, Route 328, Millerton, July 26, 1993. Pennsylvania (29) 14 South Front Street, Milton, Pennsylvania Voting for this action: Chairman Greenspan and Governors (30) 537 Mahoning Street, Milton, Pennsylvania Mullins, Angell, Kelley, LaWare, and Lindsey. Absent and (31) 355 Broad Street, Montoursville, Pennsylvania not voting: Governor Phillips. (32) 780 Broad Street, Montoursville, Pennsylvania* (33) R.D. No. 1, Route 87 and Beltway, Montours- JENNIFER J. JOHNSON ville, Pennsylvania Associate Secretary of the Board (34) 10 Public Avenue, Montrose, Pennsylvania (35) Route 706, Montrose, Pennsylvania Appendix (36) 49 West Third Street, Mount Carmel, Pennsylvania Meridian Bank has applied pursuant to section 9 of the (37) 50 West Third Street, Mount Carmel, Pennsylva- Federal Reserve Act to establish branches at the nia following locations: (38) Box 80, Lycoming Mall, Muncy, Pennsylvania (39) Lycoming Mall, Muncy, Pennsylvania* (1) Turner Street, Austin, Pennsylvania (40) 20 South Main Street, Muncy, Pennsylvania (2) Main Street, Beech Creek, Pennsylvania (41) Rear 405, South Main Street, Old Forge, Penn- (3) 20 West Main Street, Canton, Pennsylvania sylvania (4) 302 North East Street, Coudersport, Pennsylvania (42) 1 South Main Street, Pittston, Pennsylvania (5) 100 North Academy Avenue, Geisinger Medical (43) Route 11, Pittston Plaza By-Pass, Pittston, Penn- Center, Danville, Pennsylvania* sylvania (6) 608 Continental Boulevard, Danville, Pennsylva- (44) 300 Highway 315, Pittston Township, Pennsylvania nia (7) 101 Mill Street, Danville, Pennsylvania (45) Route 54 and Mill Street, Riverside, Pennsylva- (8) 12 West Valley Avenue, Elysburg, Pennsylvania nia* (9) R.D. No. 1, Box 100A, Route 267, Friendsville, (46) 364 Erie Avenue, Renovo, Pennsylvania Pennsylvania (47) 102 Desmond Street, Sayre, Pennsylvania (10) 30 West Street, Galeton, Pennsylvania (48) 430 North Keystone Avenue, Sayre, Pennsylva- (11) Route 14 North, South Creek Township, Gillett, nia* Pennsylvania (49) 51 Academy Street, Shinglehouse, Pennsylvania (12) Route 11, Mountain View Plaza, Great Bend, (50) Route 29 South, South Montrose, Pennsylvania* Pennsylvania (51) 251 Market Street, South Williamsport, Pennsyl- (13) 32-42 North Main Street, Hughesville, Pennsyl- vania vania (52) Main Street, Springville, Pennsylvania (14) Main and Walnut Streets, Howard, Pennsylvania (53) 1300 North Atherton Street, State College, Penn- (15) 222 Allegheny Street, Jersey Shore, Pennsylvania sylvania (16) R.R. No. 1, Routes 92 and 106, Kingsley, Penn- (54) 2200 South Atherton Street, State College, Pennsylvania sylvania (17) 541 Pierce Street, Kingston, Pennsylvania (55) 121 South Pugh Street, State College, Pennsylva- (18) Lake Como Road and Route 370, Lakewood, nia Pennsylvania (56) 133 Main Street, Susquehanna, Pennsylvania (19) 53 Main Street, Lawrenceville, Pennsylvania (57) Jackson Street, Thompson, Pennsylvania (20) Box 150, Main Street, LeRaysville, Pennsylvania (58) 111-113 Main Street, Towanda, Pennsylvania (21) 239 Market Street, Lewisburg, Pennsylvania (59) Main and Exchange Streets, Troy, Pennsylvania (22) Route 15 and Loan Road, Lewisburg, Pennsylva- (60) 109 Main Street, Watsontown, Pennsylvania nia (61) 61 Main Street, Wellsboro, Pennsylvania (23) Route 45 and Fairground, Lewisburg, Pennsylva- (62) 16 Main Street, Wellsboro, Pennsylvania nia* (63) 801 Wyoming Avenue, West Pittston, Pennsylva- (24) Pennsylvania Avenue, Little Meadows, Pennsyl- nia vania (64) 100 Main Street, Westfield, Pennsylvania (25) 448 Bellfonte Avenue, Lock Haven, Pennsylva- (65) 12 South Main Street, Wilkes-Barre, Pennsylvania nia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

898 Federal Reserve Bulletin • September 1993 (66) 1100 Grampian Boulevard, Williamsport, Penn- Bank, which operate in the Oklahoma City banking sylvania* market.3 The Oklahoma City banking market would (67) 1916 Lycoming Creek Road, Williamsport, Penn- remain unconcentrated after consummation of this sylvania proposal,4 and numerous competitors would remain in (68) 301 Shiffler Avenue, Williamsport, Pennsylvania the market. Accordingly, the Board concludes that (69) 325 Washington Boulevard, Williamsport, Penn- consummation of the proposal would not have a sylvania* significantly adverse effect on competition in any (70) 101 West Third Street, Williamsport, Pennsylva- relevant banking market. nia The Board has carefully reviewed the financial and (71) 1005 West Third Street, Williamsport, Pennsylva- managerial resources and future prospects factors nia* under the BHC Act in light of comments submitted by an individual ("Protestant"). Protestant generally * Denotes automated teller machines owned or leased alleges that financial considerations associated with by Commonwealth Bank. the proposal are not consistent with approval and that a principal of R. Banking ("Principal") has R. Banking Limited Partnership engaged in unsafe and unsound banking practices at Oklahoma City, Oklahoma banking institutions currently or formerly controlled by Principal. Protestant also claims that this transac- Order Approving the Formation of a Bank Holding tion will adversely affect the value of other share- Company holders' stock. The Board initially notes that the proposal repre- R. Banking Limited Partnership, Oklahoma City, sents a reorganization of certain interests in several Oklahoma ("R. Banking"), has applied under section bank holding companies into a single holding company 3(a)(1) of the Bank Holding Company Act ("BHC structure and does not change the existing ownership Act") (12 U.S.C. § 1842(a)(1)) to become a bank hold- interests of other shareholders in the holding compaing company within the meaning of the BHC Act by nies. In this regard, the principal shareholders would acquiring from 21.8 percent to 100 percent of the ten continue to own their interest in the same proportion bank holding companies ("Holding Companies") and as they do now, and the proposal would simply permit their subsidiary banks ("Banks") listed in the Appen- ownership through a partnership rather than individudix of this Order.1 R. Banking also has applied under ally. Protestant presents no information on how this section 4(c)(8) of the BHC Act to acquire the nonbank- reorganization will affect other shareholders. In addiing subsidiaries of Holding Companies and thereby tion, the Board has considered Protestant's comments engage in credit insurance activities pursuant to sec- regarding the financial aspects of the proposal in light tion 225.25(b)(8)(i) of the Board's Regulation Y of all the facts of record and concludes that these (12 C.F.R. 225.25(b)(8)(i)). comments do not warrant denial of the applications. Notice of the applications, affording interested per- The Board has reviewed court documents regarding sons an opportunity to submit comments, has been transactions that serve as the basis of Protestant's published (57 Federal Register 29,874 (1992)). The allegations of unsafe and unsound practices, as well as time for filing comments has expired, and the Board relevant examination information regarding these has considered the applications and all comments transactions. The Board has also consulted with the received in light of the factors set forth in sections 3(c) and 4(c)(8) of the BHC Act. 3. The Oklahoma City banking market is defined as the Oklahoma R. Banking is a nonoperating limited partnership City Ranally Metro Area. formed for the purpose of acquiring Holding Compa- 4. Upon consummation of the proposal, the Herfindahl-Hirschman nies. Upon consummation of the proposal, R. Banking Index ("HHI") in the Oklahoma City banking market will increase less than 1 point to 531. Under the revised Department of Justice would become the third largest banking organization in Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a Oklahoma, controlling deposits of $783 million, repre- market in which the post-merger HHI is under 1000 is considered to be senting approximately 3.3 percent of total deposits in unconcentrated. A market in which the post-merger HHI is above commercial banking organizations in the state.2 1800 is considered to be highly concentrated, and the Justice Department is likely to challenge a merger that increases the HHI by more All of the banks to be acquired operate in different than 50 points. The Justice Department has informed the Board that a banking markets except for BancFirst and McLoud bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by more than 200 points. The Justice Department has stated that the 1. This transaction constitutes a reorganization of a chain banking higher than normal HHI thresholds for screening bank mergers for organization. anticompetitive effects implicitly recognize the competitive effect of 2. All deposit data are as of June 30, 1991. limited-purpose lenders and other non-depository financial entities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 899 Federal Deposit Insurance Corporation, the primary compliance with, or prevent evasion of, the provisions regulator of the banks involved, and law enforcement and purposes of the BHC Act and the Board's regulaagencies regarding these transactions. In addition, the tions and orders issued thereunder. For purposes of Board has considered the history of management by this action, all of these commitments and conditions Principal at other banks in the chain. In light of these are considered conditions imposed in writing and, as and all the facts of record, the Board does not believe such, may be enforced in proceedings under applicable considerations relating to the managerial factor war- law. rant denial of these applications. The acquisition of Holding Companies shall not be Based on all the facts of record, the Board con- consummated before the thirtieth calendar day after cludes that the financial and managerial resources and the effective date of this Order, and the acquisition of the future prospects of R. Banking, as well as other Holding Companies and nonbanking companies shall factors the Board must consider under section 3 of the not be consummated later than three months after the BHC Act, are consistent with approval. effective date of this Order, unless such period is R. Banking also has applied pursuant to section extended for good cause by the Board or by the 4(c)(8) of the BHC Act to acquire the nonbanking Federal Reserve Bank of Kansas City, acting pursuant subsidiaries of Holding Companies and thereby engage to delegated authority. in credit insurance activities. The Board has deter- By order of the Board of Governors, effective mined by regulation (12 C.F.R. 225.25(b)(8)(i)) that July 8, 1993. this activity is closely related to banking and permissible for bank holding companies under section 4(c)(8) Voting for this action: Chairman Greenspan and Governors Mullins, Angell, La Ware, Lindsey, and Phillips. Absent and of the BHC Act. not voting: Governor Kelley. In order to approve an application under section 4(c)(8) of the BHC Act, the Board also is required to JENNIFER J. JOHNSON determine that the performance of the proposed activ- Associate Secretary of the Board ities by R. Banking "can reasonably be expected to produce benefits to the public . . . that outweigh Appendix possible adverse effects, such as undue concentration of resources, decreased or unfair competition, con- Bank Holding Companies to be Acquired by R. Bankflicts of interests, or unsound banking practices." ing Limited Partnership: 12 U.S.C. § 1843(c)(8). The record does not indicate that consummation of this proposal is likely to result in (1) BancFirst Corporation (47.6 percent), and its any significantly adverse effects, such as undue con- subsidiary, BancFirst, both of Oklahoma City, centration of resources, decreased or unfair competi- Oklahoma; tion, conflicts of interests, or unsound banking prac- (2) Buffalo Bancshares, Inc. (42.7 percent), and its tices. Accordingly, the Board has determined that the subsidiary, Oklahoma State Bank, both of Bufbalance of public interest factors it must consider falo, Oklahoma; under section 4(c)(8) of the BHC Act is favorable and (3) Commerce Bancorporation, Inc. (45.9 percent), consistent with approval of R. Banking's application and its subsidiary, Bank of Commerce, both of to acquire the nonbanking subsidiaries of Holding McLoud, Oklahoma; Companies. (4) Coweta Bancshares, Inc. (100 percent), and its Based on the foregoing and other facts of record, subsidiary, Security Bank, both of Coweta, Oklaand subject to the commitments made by R. Banking homa; in this case, the Board has determined that the appli- (5) Dewey County Bancorporation, Inc. (33.7 percations should be, and hereby are, approved. This cent), and its subsidiary, Dewey County State approval is specifically conditioned on compliance by Bank, both of Taloga, Oklahoma; R. Banking with all of the commitments made in (6) Erick Bancorporation, Inc. (66 percent), and its connection with these applications and with the con- subsidiary, First American Bank, both of Erick, ditions referenced in this Order. The determinations as Oklahoma; to R. Banking's nonbanking activities are also subject (7) First Stratford Bancorporation, Inc. (88.2 perto all the conditions contained in the Board's Regula- cent), and its subsidiary, First American Bank, tion Y, including those in sections 225.4(d) and Stratford, Oklahoma; 225.23(b)(3) (12 C.F.R. 225.4(d) and 225.23(b)(3)), and (8) Johnston County Bancshares, Inc. (46.7 percent), to the Board's authority to require such modification and its subsidiary, Bank of Johnston County, or termination of the activities of a holding company or both of Tishomingo, Oklahoma; any of its subsidiaries as it finds necessary to assure (9) Weatherford Bancorporation, Inc. (34.3 percent), Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

900 Federal Reserve Bulletin • September 1993 and its subsidiary, United Community Bank, both bank engages directly in the business of banking of Weatherford, Oklahoma; and outside of the United States, has furnished to the (10) Wilburton Bancorporation, Inc. (21.8 percent), Board the information it needs to assess adequately and its subsidiary, Wilburton State Bank, both of the application, and is subject to comprehensive su- Wilburton, Oklahoma. pervision or regulation on a consolidated basis by its home country supervisor (12 U.S.C. § 3105(d)(2); Orders Issued Under International Banking Act 12 C.F.R. 211.24). The Board may also take into account additional standards as set forth in the IBA Banque Transatlantique (12 U.S.C. § 3105(d)(3)-(4)) and Regulation K Paris, France (12 C.F.R. 211.24(c)). The Board has previously stated that the standards Order Approving Establishment of a Representative that apply to the establishment of a branch or agency Office need not in every case apply to the establishment of a representative office because representative offices do Banque Transatlantique, Paris, France ("Bank"), a not engage in a banking business and cannot take foreign bank within the meaning of the International deposits or make loans (see 58 Federal Register 6348, Banking Act ("IBA"), has applied under section 10(a) 6351 (1993)). In evaluating an application to establish a of the IBA (12 U.S.C. § 3107(a)) to establish a repre- representative office under the IBA and Regulation K, sentative office in Washington, D.C. The Foreign the Board will take into account the standards that Bank Supervision Enhancement Act of 1991, which apply to establishment of branches and agencies, amended the IBA, provides that a foreign bank must subject to the following considerations. With respect obtain the approval of the Board to establish a repre- to supervision by home country authorities, a foreign sentative office in the United States. bank that proposes to establish a representative office Notice of the application affording interested per- must be subject to a significant degree of supervision sons an opportunity to submit comments has been by its home country supervisor. Among the factors the published in a newspaper of general circulation in Board may consider are the extent to which there is Washington, D.C. (The Washington Times, Septem- regular review of a substantial portion of the bank's ber 9, 1992). The time for filing comments has expired, operations by the home country supervisor through and the Board has considered the application and all examination, review of external audits, or a comparacomments received. ble method; submission of periodic reports relating to Bank, with $786.9 million in consolidated assets,1 is financial performance; and assurance that the bank a commercial bank chartered in France. Bank's only itself has a system of internal monitoring and control office outside France is a representative office in that enables bank management to administer properly London.2 Bank does not engage, directly or indirectly, the bank's operations. The home country supervisor in any nonbanking activities in the United States. The must also have indicated that it does not object to the proposed representative office would engage in tradi- establishment of the representative office in the United tional representational functions, including promoting States. Bank's name, products and services to potential cus- A foreign bank's financial and managerial resources tomers and serving as a liaison between customers and will be reviewed to determine whether its financial Bank's offices in France. Bank is a subsidiary of Credit condition and performance demonstrate that it is ca- Industriel et Commercial de Paris ("CIC Paris"), pable of complying with applicable laws and has an which owns 61 percent of Bank.3 operating record that would be consistent with the In acting on an application to establish a represen- establishment of a representative office in the United tative office, the IBA and Regulation K provide that States. If the financial condition of the foreign bank the Board shall take into account whether the foreign significantly differs from international norms, the foreign bank would be evaluated to determine whether such difference could be justified in the context of the 1. Data are as of December 31, 1992, unless otherwise noted. operations of the applicant and the proposed represen- 2. Bank has five subsidiaries that engage in real estate lending, tative office. All foreign banks, whether operating management and distribution of mutual funds, holding of bank premises, and provision of French goods and services overseas. None of through branches, agencies or representative offices, these subsidiaries operates in the United States. will be required to provide adequate assurances of 3. Credito Italiano, an Italian government-controlled commercial bank, owns 20 percent of Bank. All the shares of CIC Paris are owned access to information on the operations of bank and its by Union Europeene de CIC, ("CIC"), a commercial bank chartered affiliates necessary to determine compliance with U.S. in France. Societe Centrale de Groupment des Assurances Nationlaws. ales, a French government-controlled holding company, directly owns CIC. In this case, with respect to the issue of supervision Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 901 by home country authorities, the Board has consid- annual internal audits of its offices and subsidiaries. ered the following information. Bank, as well as its Based on all the facts of record, which include the parent banks, CIC Paris and CIC, are subject to the information described above, the Board concludes supervisory authority of the French Ministry of Fi- that factors relating to the supervision of Bank by its nance, the Bank of France, the National Credit Coun- home country supervisors are consistent with apsel, the Credit Establishment Committee, and the proval of the proposed representative office. Factors Banking Commission. The Bank of France, which has relating to the supervision of CIC and CIC Paris are authority regarding, inter alia, the proposed expansion also consistent with approval. of operations of credit institutions, has indicated that it The Board has also found that Bank engages directly does not object to Bank's establishment of the repre- in the business of banking outside of the United States sentative office. The Banking Commission, which has through its commercial banking operations in France. primary responsibility for supervising Bank, monitors Bank has provided the Board with the information its compliance with French law and regulatory stan- necessary to assess the application through submisdards as well as its financial condition. The Banking sions that address relevant issues. Commission reviews periodic financial reports submit- The Board has also taken into account the additional ted by Bank and annual reports prepared by indepen- standards set forth in section 7 of the IBA and Regudent auditors.4 Bank is required to file annual, semi- lation K (see 12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. annual and quarterly financial reports with the 211.24(c)(2)). As noted above, the Bank of France has Banking Commission. Audited consolidated financial indicated that it does not object to Bank's establishing statements of Bank are submitted to the Banking the proposed representative office. Commission annually. Bank's quarterly and semi- With respect to the financial and managerial reannual reports include unaudited balance sheets and sources of Bank, given Bank's record of operations in income statements, and basic financial statements and its home country, its overall financial resources, and key financial ratios covering such areas as risk-based its standing with its home country supervisors, the capital, liquidity, foreign exchange, and concentration Board has determined that financial and managerial of credit. In addition to reviewing these reports, the factors are consistent with approval of the proposed Banking Commission meets with Bank management representative office. Bank appears to have the expeon a regular basis. rience and capacity to support the proposed office and Examiners from the Bank of France perform on-site has also established controls and procedures for the examinations of Bank on behalf of the Banking Com- proposed representative office to ensure compliance mission. The examinations of Bank are performed with U.S. law. approximately once every five years and take approx- Bank has committed that it will make available to imately three months to complete. A written report is the Board such information on the operations of Bank provided to Bank, and Bank is requested to forward a and any affiliate of Bank that the Board deems necescopy of the report to its statutory auditors. Bank's sary to determine and enforce compliance with the board of directors is required to meet to discuss the IBA, the Bank Holding Company Act of 1956, as examination's findings. The examiners also meet with amended, and other applicable Federal law. If the Bank's statutory auditors during the examination. The disclosure of such information is prohibited by law, examination includes review of Bank's loan portfolio, Bank and its ultimate parent have committed to coopdeposit composition, banking services, securities and erate with the Board to obtain approvals or consents portfolio management activities, operations and prof- that may be required for the Board to gain access to itability. If any problems are detected, the Banking information that the Board may request. The Board Commission has the authority to conduct more fre- has reviewed the restrictions on disclosure of informaquent examinations and to require additional information in France, and has communicated with certain tion from Bank at any time. government authorities regarding access to informa- Bank is required to maintain records on all of its tion. In light of these commitments and other facts of subsidiaries and operations worldwide. Bank repre- record, and subject to the condition described below, sents that it has procedures and policies in place to the Board concludes that Bank has provided adequate monitor and control its worldwide activities in accor- assurances of access to any necessary information the dance with regulatory requirements. Bank conducts Board may request. On the basis of all the facts of record, and subject to the commitments made by Bank, as well as the terms 4. Bank's auditors are chosen from a list of firms approved by the and conditions set forth in this Order, the Board has Banking Commission. Representatives from these firms meet fre- determined that Bank's application to establish a repquently with the Banking Commission to discuss general banking issues. resentative office should be, and hereby is, approved. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

902 Federal Reserve Bulletin • September 1993 If any restrictions on access to information on the of a savings association, in which the resulting instituoperations or activities of Bank and any of its affiliates tion is insured by the Bank Insurance Fund, and, in subsequently interfere with the Board's ability to reviewing these proposals, to follow the procedures determine the compliance by Bank or its affiliates with and consider the factors set forth in section 18(c) of the applicable federal statutes, the Board may require FDI Act (12 U.S.C. § 1828(c) ("the Bank Merger termination of any of the Bank's direct or indirect Act")). 12 U.S.C. § 1815(d)(3)(E).1 This transaction is activities in the United States. Approval of this appli- also subject to review under the Bank Merger Act by cation is also specifically conditioned on compliance the Federal Deposit Insurance Corporation ("FDIC"), by Bank with the commitments made in connection which is the primary banking regulator for Eastbrook with this application, and with the conditions con- Bank. The FDIC has recently announced its approval tained in this Order. The commitments and conditions of the transaction. referred to above are conditions imposed in writing by Notice of the application, affording interested perthe Board in connection with its decision, and may be sons an opportunity to submit comments, has been enforced in proceedings under 12U.S.C. § 1818 or given in accordance with the Bank Merger Act and the 12 U.S.C. § 1847 against Bank, its offices, and its Board's Rules of Procedure (12 C.F.R. 262.3(b)). Reaffiliates. ports on the competitive effects of the merger were By order of the Board of Governors, effective requested from the United States Attorney General, July 26, 1993. the Office of the Comptroller of the Currency ("OCC"), and the FDIC. The time for filing comments Voting for this action: Chairman Greenspan and Governors has expired, and the Board has considered the appli- Mullins, Angell, Kelley, LaWare, and Lindsey. Absent and cation and all comments received in light of the factors not voting: Governor Phillips. set forth in the Bank Merger Act and section 5(d)(3) of the FDI Act. JENNIFER J. JOHNSON State Financial is the 21st largest commercial bank- Associate Secretary of the Board ing organization in Wisconsin, controlling deposits of $174.0 million, representing less than 1 percent of total deposits in commercial banking organizations in the ACTIONS TAKEN UNDER THE FEDERAL DEPOSIT state.2 The Waukesha branch office of North Shore INSURANCE CORPORATION IMPROVEMENT ACT Bank controls deposits of $17.9 million, representing less than 1 percent of total deposits in thrift institutions By the Board in the state. Upon consummation of the proposed transaction, State Financial would become the 20th State Financial Services Corporation largest commercial banking organization in Wisconsin, Hales Corners, Wisconsin controlling deposits of $191.8 million, representing less than 1 percent of total deposits in commercial Order Approving Application to Acquire a Branch of banking organizations in the state. a Savings Bank State Financial and North Shore Bank compete in the Milwaukee banking market.3 State Financial is the State Financial Services Corporation, Hales Corners, 15th largest depository institution in that market,4 Wisconsin ("State Financial"), proposes to purchase certain assets and assume certain liabilities of the Waukesha branch office of North Shore Savings Bank, FSB, Brookfield, Wisconsin ("North Shore Bank"), 1. These factors include considerations relating to competition, financial and managerial resources, and future prospects of the through State Financial's wholly owned, nonmember, existing and proposed institutions, and the convenience and needs of state-chartered bank subsidiary, Eastbrook State the communities to be served. 12 U.S.C. § 1828(c). Bank, Brookfield, Wisconsin ("Eastbrook Bank"). 2. Bank deposit and state data are as of June 30,1992. Thrift deposit data are as of June 30, 1991. State Financial has requested Board approval of this 3. The Milwaukee banking market is approximated by Milwaukee transaction pursuant to section 5(d)(3) of the Federal County, Waukesha County, Ozaukee County, and portions of Jefferson County, Racine County, Walworth County, and Washington Deposit Insurance Act (12 U.S.C. § 1815(d)(3) ("FDI County, all in Wisconsin. Act")), as amended by the Federal Deposit Insurance 4. In this context, depository institutions include commercial banks, Corporation Improvement Act of 1991 (Pub. L. No. savings banks, and savings associations. Market share data before consummation are based on calculations in which the deposits of thrift 102-242, § 501, 105 Stat. 2236, 2388 (1991)). Section institutions are included at 50 percent. The Board previously has 5(d)(3) of the FDI Act requires the Board to review indicated that thrift institutions have become, or have the potential to any proposed merger between a bank owned by a bank become, significant competitors of commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin 788 (1990); National City Corporaholding company and a savings association, or branch tion, 70 Federal Reserve Bulletin 743 (1984). Because the deposits of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 903 controlling deposits of $169.4 million, representing (2) Protestant believes that the 1990 and 1991 Home approximately 1 percent of total deposits in depository Mortgage Disclosure Act ("HMDA") data indicate institutions in the market ("market deposits").5 The that State Financial's subsidiary banks have failed Waukesha branch office of North Shore Bank controls to meet the credit needs of African-Americans, deposits of $8.9 million, representing less than 1 per- Hispanics, and the residents of the Target Area.8 cent of market deposits. Upon consummation of this proposal, State Financial would control $187.3 million In assessing the impact of this proposal on the in deposits, representing approximately 1 percent of convenience and needs of the communities to be market deposits. The Herfindahl-Hirschman Index served, the Board also has considered the programs ("HHI") for this market would remain unchanged at that State Financial has in place to serve community 1120 points.6 Based on all the facts of record in this needs, and the programs that State Financial proposes case, including the relatively small increase in market to implement in connection with this acquisition. The share and the de minimis effect on market concentra- Board also has taken into account the past record of tion as measured by the HHI, the Board concludes performance of the State Financial organization under that consummation of this proposal would not have a the Community Reinvestment Act ("CRA"). significantly adverse effect on competition or the con- In addition, the Board has considered that the FDIC centration of banking resources in the Milwaukee has also reviewed the CRA record of the banks inbanking market. The Board also concludes that con- volved in this transaction in light of the comments summation of this proposal would not have a signifi- submitted by Protestant, and has approved the merger cantly adverse effect on competition in any other of the bank with North Shore Bank under the Bank relevant banking market. Merger Act. Convenience and Needs Considerations A. CRA Examinations In analyzing the convenience and needs factor, the All of State Financial's subsidiary banks have received Board has considered the comments of the Fair Lend- "satisfactory" ratings from their primary regulators in ing Coalition, Milwaukee, Wisconsin ("Protestant"), their most recent examinations for CRA perforsubmitted in connection with this application. Protes- mance.9 In this regard, Eastbrook Bank, chartered in tant alleges that State Financial is not satisfactorily 1990 and acquired by State Financial in July 1992, meeting the convenience and needs of the communi- received a "satisfactory" rating in the examination of ties it serves because: its CRA performance by the FDIC as of February 16, (1) State Financial's subsidiary banks exclude from 1993 ("1993 examination"). North Shore Bank retheir service community delineations large portions ceived a "satisfactory" rating from its primary reguof Milwaukee's central city specifically defined by lator, the Office of Thrift Supervision, in December the City of Milwaukee Comptroller ("the City of 1991. Milwaukee") as a "Target Area";7 and the Waukesha branch office of North Shore Bank will be transferred to a commercial bank under this proposal, those deposits are included at 100 percent in the calculation of pro forma market share. See Norwest (2) Median family income of the area is less than or equal to 80 Corporation, 78 Federal Reserve Bulletin 452 (1992); First Banks, percent of the median family income of the City of Milwaukee; Inc., 76 Federal Reserve Bulletin 669, 670 n.9 (1990). (3) The proportion of owner-occupied dwellings in the area is less 5. Market data are as of June 30, 1991. than or equal to 80 percent of the proportion of owner-occupied 6. Under the revised Department of Justice Merger Guidelines, 49 dwellings in the City of Milwaukee; and Federal Register 26,823 (June 29, 1984), a market in which the (4) The vacancy rate of dwellings in the area is greater than or equal post-merger HHI is between 1000 and 1800 is considered moderately to 120 percent of the vacancy rate in the City of Milwaukee. concentrated. The Justice Department has informed the Board that a 8. In particular, Protestant notes that of the 152 residential loans bank merger or acquisition generally will not be challenged (in the made by State Financial's subsidiary banks in the Milwaukee Metroabsence of other factors indicating anticompetitive effects) unless the politan area in 1991, none of the loans was made in the Target Area or post-merger HHI is at least 1800 and the merger increases the HHI by to African-Americans or Hispanics. Protestant also alleges that North more than 200 points. The Justice Department has stated that the Shore Bank's record of residential lending in the Target Area and to higher than normal HHI thresholds for screening bank mergers for African-Americans and Hispanics is inadequate. anticompetitive effects implicitly recognize the competitive effect of 9. The following subsidiaries, all located in Wisconsin, received limited-purpose lenders and other non-depository financial institu- "satisfactory" CRA performance ratings as follows: tions. (1) Edgewood State Bank, Greenfield ("Edgewood Bank"), from 7. The City of Milwaukee has defined this area as having the the FDIC as of November 23, 1992; following four characteristics: (2) University National Bank, Milwaukee ("University Bank"), (1) Median assessed property value of one- and two-family dwell- from the OCC as of September 30, 1990; and ings is less than or equal to 80 percent of the median assessed (3) State Bank, Hales Corners ("State Bank"), from the FDIC as of property value of similar dwellings in the City of Milwaukee; February 17, 1993. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

904 Federal Reserve Bulletin • September 1993 B. Reasonableness of Delineated Communities performance examinations found any evidence of illegal discrimination or illegal credit practices.14 Protestant has raised questions regarding whether the In addition, the Board notes that State Financial has delineated service communities for State Financial's taken steps designed to increase its lending activities subsidiary banks improperly excludes the Milwaukee in low- and moderate-income and minority areas, Comptroller's Target Area for the central city. A including the Target Area. For example, State Finanbank's delineated community under the CRA is "that cial has committed that University Bank will originate local area or areas around each office or group of $1 million of residential loans in the Target Area within offices where [the bank! makes a substantial portion of the next five years. At least 60 percent of these loans its loans and all other areas equidistant from its offices will be to owner-occupants. State Financial has further or those areas."10 In the case of small banks like the committed that University Bank will participate in State Financial subsidiaries, the CRA permits the various initiatives in the Target Area with officials of banks to delineate communities that consist of por- the Eastside Housing Action Coalition ("ESHAC")15 tions of Standard Metropolitan Statistical Areas and the North Central Branch of the Metropolitan ("SMSA") or counties reasonably expected to be Milwaukee YMCA. served by the institution. State Financial has undertaken a number of steps to D. Other Aspects of CRA Performance ensure that its delineated communities encompass all appropriate low- and moderate-income neighbor- Eastbrook Bank employs a variety of methods to hoods, including census tracts located in the City of assist in ascertaining and marketing credit products to Milwaukee's Target Area. Eastbrook Bank's delin- its entire community. These efforts include a customer eated community is in the Western portion of the call program in which bank officers contact area cus- Milwaukee SMSA, which is five miles from the Target tomers regarding local credit needs. Reports of these Area. University Bank, which is a subsidiary of State contacts are reviewed by the president of Eastbrook Financial located near the Target Area, currently Bank regularly, as well as by its board of directors on serves 16 of the Target Area's census tracts.11 State a monthly basis. Eastbrook Bank also contacts local Financial has committed to expand the number of community organizations to ascertain community Target Area census tracts served in this area by credit needs,16 and intends to expand these contacts to University Bank to 41. Moreover, Eastbrook Bank include local government officials, churches, and other would add four low- and moderate-income or minority community organizations. Eastbrook Bank's marketcensus tracts to its delineated area as a result of this ing efforts include local newspapers and radio stations acquisition.12 The delineated service communities for and special advertising in various church bulletins. State Financial's remaining banks, Edgewood Bank Eastbrook Bank also offers a variety of consumer and State Bank, were found to be appropriate in their loans and mortgage loans for purchase or construction most recent examination for CRA performance by the of one- to four-family dwelling units. With respect to primary supervisor for these banks. small business lending, Eastbrook Bank participates in a number of government programs designed to help C. HMD A Data and Lending Practices meet the credit needs of small business owners. For The Board has carefully reviewed available 1990 and 1991 HMDA data of the State Financial subsidiary 14. Although the Board is concerned when the record of an banks and North Shore Bank in light of Protestant's institution indicates disparities in lending to minority applicants, the comments.13 While these data show denial rates that Board recognizes that HMDA data alone provide a limited measure of any given institution's lending in the communities that the institution vary according to race, none of the recent CRA serves. The Board also recognizes that HMDA data have limitations that make the data an inadequate basis, absent other information, for conclusively demonstrating whether an institution has engaged in illegal discrimination on the basis of race or ethnicity in making lending decisions. 10. 12 C.F.R. 228.4(b)(2). 15. ESHAC is an organization that provides rental housing, housing 11. The OCC has preliminarily indicated that this service area rehabilitation, youth activities, youth counseling, and commercial addresses concerns noted in University Bank's 1990 CRA examina- rehabilitation in Milwaukee's central city. University Bank's involvetion. ment with ESHAC began in 1980 when the bank's president served as 12. Applicant has also committed to amend Eastbrook Bank's CRA a director of ESHAC. During the 1980's, University Bank served as a statement to reflect Eastbrook's current delineated area and its focus lender to ESHAC for housing rehabilitation purposes. on consumer lending. The FDIC has preliminarily indicated that the 16. In this regard, Eastbrook Bank has met with First Heritage changes will adequately address its comments in the 1993 examina- Management Company, which operates Heritage Place, a local houstion. ing complex for the elderly. As a result of these meetings, the bank has 13. Since Eastbrook Bank was not required to file HMDA reports determined a need for personal banking services, and is in the process until 1992, 1990 and 1991 data were unavailable. of assessing the feasibility of such a service. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 905 example, the bank recently approved a Small Business that State Financial was applying to acquire di- Administration guaranteed loan and a Wisconsin Bus- rectly. See 12 U.S.C. § 1815(d)(3). iness Development Finance Corporation 504 program debenture for a total of $1.4 million. The bank also has Based on the foregoing and all the facts of record, invested $750,000 in mortgage-related federal agency the Board has determined that this application should bonds. be, and hereby is, approved. The Board's approval of Based on these and other facts of record, the Board this application is conditioned upon State Financial's concludes that convenience and needs considerations, compliance with the commitments made in connection including the CRA performance records of State with this application. For purposes of this action, the Financial, Eastbrook Bank, and North Shore Bank, commitments and conditions relied on in reaching this are consistent with approval of this application. decision are both conditions imposed in writing by the Board and, as such, may be enforced in proceedings Other Considerations under applicable law. This approval is limited to the proposal presented to the Board by State Financial, The Board also concludes that the financial and manand may not be construed as applying to any other agerial resources and future prospects of State Finantransaction. cial and North Shore Bank are consistent with ap- This transaction may not be consummated before proval of this application. Moreover, the record in this the thirtieth calendar day after the effective date of this case shows that: Order, or later than three months after the effective (1) The transaction will not result in the transfer of date of this Order, unless such period is extended by any federally insured depository institution's federal the Board or the Federal Reserve Bank of Chicago, deposit insurance from one federal deposit insuracting pursuant to delegated authority. ance fund to the other; By order of the Board of Governors, effective (2) State Financial and North Shore Bank currently July 8, 1993. meet, and upon consummation of the proposed transaction will continue to meet, all applicable capital standards; and Voting for this action: Chairman Greenspan and Governors (3) Since Eastbrook Bank is in Wisconsin and is Mullins, Angell, La Ware, Lindsey, and Phillips. Absent and not voting: Governor Kelley. acquiring certain assets and assuming certain liabilities of a Wisconsin federal savings bank, the proposed transaction would comply with the Douglas JENNIFER J. JOHNSON Amendment if North Shore Bank were a state bank Associate Secretary of the Board ACTIONS TAKEN UNDER THE FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991 By Federal Reserve Banks 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 Liberty Holding Company, Inc., Liberty Bank of Fort Liberty Bank, July 9, 1993 Pensacola, Florida Walton, Pensacola, Florida Fort Walton Beach, Florida Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

906 Federal Reserve Bulletin • September 1993 APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Effective Applicant(s) Bank(s) Date Firstbank Holding Company of FirstBank Holding Company of July 28, 1993 Colorado, California, Lakewood, Colorado Lakewood, Colorado FirstBank Holding Company of Colorado Employee Stock Ownership Plan, Lakewood, Colorado United Bankshares, Inc., Financial Future Corporation, July 8, 1993 Charleston, West Virginia Ceredo, West Virginia Sections 3 and 4 . . Nonbanking Activity/ Effective Appllcant(s) Company Date National City Corporation, Ohio Bancorp, July 22, 1993 Cleveland, Ohio Youngstown, Ohio Cortland Bancorp, Cortland, Ohio Florida Trust Services of Ohio Bancorp, Naples, Florida APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Section 3 . „ ,, . Reserve Effective Applicant(s) Bank(s) Bank Date American Bancorp of Oklahoma, Texas Guaranty National Kansas City July 6, 1993 Inc., Bank, Edmond, Oklahoma Houston, Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 907 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank Date CCB Corporation, Acquisition Corporation, Kansas City June 30, 1993 Kansas City, Missouri Leawood, Kansas Central Financial Corporation, Farmers First Savings Philadelphia June 24, 1993 Columbia, Pennsylvania Bank, Columbia, Pennsylvania Central Mortgage Bancshares, Blue Springs Bank, Kansas City July 26, 1993 Inc., Blue Springs, Missouri Kansas City, Missouri Centura Banks, Inc., Interim Bank, Richmond July 7, 1993 Rocky Mount, North Carolina Forest City, North Carolina Chemical Financial Corporation, Key State Bank, Chicago July 21, 1993 Midland, Michigan Owosso, Michigan Columbia Banking System, Inc., Columbia National San Francisco July 6, 1993 Bellevue, Washington Bankshares, Inc., Longview, Washington J.E. Coonley Company, Sheffield Savings Bank, Chicago July 21, 1993 Hampton, Iowa Sheffield, Iowa Firstar Corporation, Athens Bancorp, Inc., Chicago July 1, 1993 Milwaukee, Wisconsin Wausau, Wisconsin F.W.S.F. Corporation, Bank of Athens, Milwaukee, Wisconsin Wausau, Wisconsin First Community Financial First Community Bank, Chicago July 15, 1993 Corporation, Elgin, Illinois Elgin, Illinois First State Bancshares of DeKalb First State Bank of Atlanta July 16, 1993 County, Inc., DeKalb County, Fort Payne, Alabama Fort Payne, Alabama FMB Bancshares, Inc., United Bankshares, Inc., Atlanta July 1, 1993 Lakeland, Georgia Nashville, Georgia Huntington Bancshares, Commerce Banc Cleveland July 9, 1993 Incorporated, Corporation, Columbus, Ohio Charleston, West Huntington Bancshares West Virginia Virginia, Inc., Columbus, Ohio Independent Bankshares, Inc., The Winters State Bank, Dallas July 26, 1993 Abilene, Texas Winters, Texas Independent Financial Corp., Dover, Delaware Lansing Financial Corporation, The First State Bank of Kansas City July 16, 1993 Lansing, Kansas Lansing, Lansing, Kansas Mark Twain Bancshares, Inc., Parkway Financial, Inc., St. Louis June 23, 1993 St. Louis, Missouri Overland Park, Kansas Marquette Bancshares, Inc., First State Holding Minneapolis July 21, 1993 Minneapolis, Minnesota Company, Coon Rapids, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

908 Federal Reserve Bulletin • September 1993 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank Date Montgomery Bancshares, Inc., Bank of Montgomery, Chicago July 21, 1993 Montgomery, Illinois Montgomery, Illinois Northeast Bancorp, Inc., Wilmot State Bank, Minneapolis July 13, 1993 Brandon, South Dakota Wilmot, South Dakota Nowata Bancshares, Inc., The First National Bank Kansas City July 14, 1993 Nowata, Oklahoma of Nowata, Nowata, Oklahoma Paloma Bancshares, Inc., Western Illinois Bancorp, St. Louis June 25, 1993 Paloma, Illinois Inc., Blandinsville, Illinois Prestige Financial Corp., Prestige State Bank, New York June 25, 1993 Flemington, New Jersey Flemington, New Jersey Rolla Holding Company, Inc., First National Bank, Minneapolis July 19, 1993 Rolla, North Dakota Hettinger, North Dakota Southeast Capital Corporation Southeast Capital Kansas City July 2, 1993 ESOP, Corporation, Idabel, Oklahoma Idabel, Oklahoma South Plains Financial, Inc., South Plains Delaware Dallas July 19, 1993 Morton, Texas Financial Corporation, Dover, Delaware Morton Financial Corporation, Morton, Texas South Plains Financial Corporation, Dover, Delaware Hub Financial Corporation, Lubbock, Texas SouthTrust Corporation, SouthTrust Bank, F.S.B., Atlanta July 9, 1993 Birmingham, Alabama Concord, North Carolina Susquehanna Bancshares, Inc., Central Financial Philadelphia June 24, 1993 Lititz, Pennsylvania Corporation, Columbia, Pennsylvania Western Bancshares, Inc., First State Bank, Dallas July 13, 1993 Van Horn, Texas Loraine, Texas Wisconsin Bancshares, Inc., Security Bancorporation, Minneapolis July 16, 1993 Newport, Minnesota Inc., Newport, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 909 Section 4 Nonbanking Activity/ Reserve Effective Applicant(s) Company Bank Date BB&T Financial Corporation, Southeast Switch, Inc., Richmond July 15, 1993 Wilson, North Carolina Maitland, Florida Centura Banks, Inc., CFS Venture Richmond July 8, 1993 Rocky Mount, North Carolina Corporation, Rocky Mount, North Carolina CoreStates Financial Corp., CoreStates Community Philadelphia July 20, 1993 Philadelphia, Pennsylvania Development Corporation, Philadelphia, Pennsylvania Fifth Third Bancorp, Shelby County Bancorp, Cleveland July 20, 1993 Cincinnati, Ohio Shelbyville, Indiana Menomonie Financial Services, to engage de novo in the Minneapolis July 8, 1993 Inc., activities of data Menomonie, Wisconsin processing and providing management consulting to nonaffiliated depository institutions Mountain Parks Financial Mountain Parks Data Kansas City July 12, 1993 Corporation, Corp., Minneapolis, Minnesota Golden, Colorado U.S. Trust Corporation, CTMC Holding Company, New York July 7, 1993 New York, New York Portland, Oregon 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 Colorado National Bank—Grand Colorado National Kansas City June 30, 1993 Junction, Bank—Glen wood, Grand Junction, Colorado Glenwood Springs, Colorado F & M Bank—Winchester, The Farmers and Richmond June 30, 1993 Winchester, Virginia Merchants National Bank of Hamilton, Hamilton, Virginia Interim Bank, Centura Bank, Richmond July 7, 1993 Forest City, North Carolina Rocky Mount, North Carolina Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

910 Federal Reserve Bulletin • September 1993 Applications Approved Under Bank Merger Act—Continued Reserve Effective Applicant(s) Bank(s) Bank Date New Bank, United Southern Bank of Atlanta July 9, 1993 Morristown, Tennessee Morristown, Morristown, Tennessee Sun Bank of Tampa Bay , The Hillsboro Sun Bank, Atlanta June 30, 1993 Tampa, Florida Plant City, Florida Union Bank and Trust Company, Dominion Bank, N.A., Richmond July 7, 1993 Bowling Green, Virginia Roanoke, Virginia PENDING CASES INVOLVING THE BOARD OF civil money penalty assessment against a bank hold- GOVERNORS ing company and three of its officers and directors for failure to comply with reporting requirements. The Board's brief was filed on March 19, 1993. This list of pending cases does not include suits DLG Financial Corporation v. Board of Governors, against the Federal Reserve Banks in which the Board No. 392 Civ. 2086-G (N.D. Texas, filed October 9, of Governors is not named a party. 1992). Action to enjoin the Board and the Federal Reserve Bank of Dallas from taking certain enforce- Kubany v. Board of Governors, et al., No. 93-1428 ment actions, and seeking money damages on a (D. D.C., filed July 9, 1993). Action challenging variety of tort and contract theories. On October 9, Board determination under the Freedom of Informa- 1992, the court denied plaintiffs' motion for a temtion Act. porary restraining order. On March 30, 1993, the Bennett v. Greenspan, No. 93-1813 (D. D.C., filed court granted the Board's motion to dismiss as to it, April 20, 1993). Employment discrimination action. and also dismissed certain claims against the Re- Ezell v. Federal Reserve Board, No. 93-0361 serve Bank. On April 29, the plaintiffs filed an (D. D.C., filed February 19, 1993). Action seeking amended complaint. The Board's motion to dismiss damages for personal injuries arising from motor the amended complaint was filed on May 17. vehicle collision. The Board's motion to dismiss was Zemel v. Board of Governors, No. 92-1056 (D. D.C., filed July 2, 1993. filed May 4, 1992). Age Discrimination in Employ- Amann v. Prudential Home Mortgage Co., et al., No. ment Act case. The parties' cross-motions for sum- 93-10320 WD (D. Massachusetts, filed February 12, mary judgment are pending. 1993). Action for fraud and breach of contract State of Idaho, Department of Finance v. Board of arising out of a home mortgage. On April 17, 1993, Governors, No. 92-70107 (9th Cir., filed Februthe Board filed a motion to dismiss. ary 24, 1992). Petition for review of Board order Adams v. Greenspan, No. 93-0167 (D. D.C., filed returning without action a bank holding company January 27,1993). Action by former employee under application to relocate its subsidiary bank from the Civil Rights Act of 1964 and the Rehabilitation Washington to Idaho. On June 4, 1993, the Court of Act of 1973 concerning termination of employment. Appeals denied the petition for review. Sisti v. Board of Governors, No. 93-0033 (D. D.C., In re Subpoena Served on the Board of Governors, filed January 6, 1993). Challenge to Board staff Nos. 91-5427, 91-5428 (D.C. Cir., filed Deceminterpretation with respect to margin accounts. The ber 27,1991). Appeal of order of district court, dated Board's motion to dismiss was granted on May 13, December 3, 1991, requiring the Board and the 1993. On June 3,1993, the petitioner filed a notice of Office of the Comptroller of the Currency to produce appeal. confidential examination material to a private liti- U.S. Check v. Board of Governors, No. 92-2892 gant. On June 26,1992, the court of appeals affirmed (D. D.C., filed December 30, 1992). Challenge to the district court order in part, but held that the bank partial denial of request for information under the examination privilege was not waived by the agen- Freedom of Information Act. cies' provision of examination materials to the ex- CBC, Inc. v. Board of Governors, No. 92-9572 (10th amined institution, and remanded for further consid- Cir., filed December 2, 1992). Petition for review of eration of the privilege issue. On August 6, 1992, the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 911 district court ordered the matter held in abeyance International Bancshares, Inc. pending settlement of the underlying action. Gladstone, Missouri Board of Governors v. Kemal Shoaib, No. CV 91-5152 (C.D. California, filed September 24, 1991). Action The Federal Reserve Board announced on July 19, to freeze assets of individual pending administrative 1993, the issuance of a Cease and Desist Order against adjudication of civil money penalty assessment by International Bancshares, Inc., Gladstone, Missouri. the Board. On October 15, 1991, the court issued a preliminary injunction restraining the transfer or disposition of the individual's assets. WRITTEN AGREEMENTS APPROVED BY FEDERAL Board of Governors v. Ghaith R. Pharaon, No. 91- RESERVE BANKS CIV-6250 (S.D. New York, filed September 17, 1991). Action to freeze assets of individual pending American Pacific Bank administrative adjudication of civil money penalty Aumsville, Oregon assessment by the Board. On September 17, 1991, the court issued an order temporarily restraining the The Federal Reserve Board announced on July 13, transfer or disposition of the individual's assets. 1993, the execution of a Written Agreement among the Federal Reserve Bank of San Francisco, the Administrator of the Division of Finance and Corporate Securities of the State of Oregon, and the American FINAL ENFORCEMENT ORDERS ISSUED BY THE Pacific Bank, Aumsville, Oregon. BOARD OF GOVERNORS The Dollar Savings and Trust Company Colonial Bancshares, Inc. Youngstown, Ohio Des Peres, Missouri The Federal Reserve Board announced on July 23, The Federal Reserve Board announced on July 19, 1993, the execution of a Written Agreement among 1993, the issuance of a Cease and Desist Order against The Dollar Savings and Trust Company, Youngstown, Colonial Bancshares, Inc., Des Peres, Missouri, and Ohio, the Federal Reserve Bank of Cleveland, and the Kenneth Davis, Kenneth Tiemeyer, David Fairchild, Superintendent of Banks for the State of Ohio. and John Weber, institution-affiliated parties of Colonial Bancshares, Inc. Glendale Bancorporation Voorhees, New Jersey The Dollar Savings and Trust Company Youngstown, Ohio The Federal Reserve Board announced on July 13, 1993, the execution of a Written Agreement between The Federal Reserve Board announced on July 23, the Federal Reserve Bank of Philadelphia and Glen- 1993, the issuance of a Cease and Desist Order against dale Bancorporation, Voorhees, New Jersey. The Dollar Savings and Trust Company, Youngstown, Ohio. Ohio Bancorp Youngstown, Ohio Dan S. Geiger Beverly Hills, California The Federal Reserve Board announced on July 23, 1993, the execution of a Written Agreement among The Federal Reserve Board announced on July 19, Ohio Bancorp, Youngstown, Ohio, the parent bank 1993, the issuance of an Order of Assessment of a Civil holding company of The Dollar Savings and Trust Money Penalty against Dan S. Geiger, an institution- Company, Youngstown, Ohio, the Federal Reserve affiliated party of First Pacific Bancorp, Inc., Beverly Bank of Cleveland, and the Superintendent of Banks Hills, California. for the State of Ohio. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial and Business Statistics CONTENTS WEEKLY REPORTING COMMERCIAL BANKS Assets and liabilities A3 Guide to Tabular Presentation A22 Large reporting banks A24 Branches and agencies of foreign banks Domestic Financial Statistics MONEY STOCK AND BANK CREDIT FINANCIAL MARKETS A4 Reserves, money stock, liquid assets, and debt A25 Commercial paper and bankers dollar measures acceptances outstanding A5 Reserves of depository institutions, Reserve Bank A25 Prime rate charged by banks on short-term credit business loans A6 Reserves and borrowings—Depository A26 Interest rates—money and capital markets institutions A27 Stock market—Selected statistics A7 Selected borrowings in immediately available funds—Large member banks FEDERAL FINANCE POLICY INSTRUMENTS A28 Federal fiscal and financing operations A8 Federal Reserve Bank interest rates A29 U.S. budget receipts and outlays A9 Reserve requirements of depository institutions A30 Federal debt subject to statutory limitation A10 Federal Reserve open market transactions A30 Gross public debt of U.S. Treasury—Types and ownership A31 U.S. government securities FEDERAL RESERVE BANKS dealers—Transactions A32 U.S. government securities dealers—Positions All Condition and Federal Reserve note statements and financing A12 Maturity distribution of loan and security A3 3 Federal and federally sponsored credit holdings agencies—Debt outstanding MONETARY AND CREDIT AGGREGATES SECURITIES MARKETS AND A13 Aggregate reserves of depository institutions and monetary base CORPORATE FINANCE 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 A3 5 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 • September 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 A40 Funds raised in U.S. credit markets foreigners A42 Summary of financial transactions A61 Banks' own claims on unaffiliated foreigners A43 Summary of credit market debt outstanding A62 Claims on foreign countries—Combined A44 Summary of financial assets and liabilities domestic offices and foreign branches 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 Treasury. "State and local government" also in- Minus signs are used to indicate (1) a decrease, (2) a negative cludes municipalities, special districts, and other political figure, or (3) an outflow. subdivisions. "U.S. government securities" may include guaranteed issues of U.S. government agencies (the flow of funds figures also Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic Nonfinancial Statistics • September 1993 1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 1992 1993 1993 MMoonneettaarryy oorr ccrreeddiitt aaggggrreeggaattee Q3 Q4 Q1 Q2 Feb. Mar. Apr/ May June Reserves of depository institutions2 1 Total 9.3 25.8 9.3 10.8 5.6 5.3 .7 36.5 5.1 2 Required 9.9 25.3 8.7 12.4 9.3 3.0 3.3 39.5 7.0 3 Nonborrowed 8.4 27.1 9.5 10.6 8.3 4.3 1.1 35.5 3.8 4 Monetary base 10.5 12.6 9.1 9.8 8.5 8.9 7.6 13.8 10.9 Concepts of money, liquid assets, and debt4 5 Ml 11.7 16.8 6.6 10.6 -.2 2.6r 9.2 27.6 7.3 6 M2 .8 2.7 2.2 -4.0r -.9 .6 10.7r 2.2 7 M3 .1 -.2 -3.8 2.4 -1.6r -1.3 3.2 8.5r -1.3 8 L 1.1 1.6r -2.5r n.a. -1.2r -.6 4.0 10.0 n.a. 9 Debt 4.9 4.3 4.4 n.a. 3.9 5.5 5.8 6.1 n.a. Nontrgnsaction components 10 In M2y -3.2 -2.8 -5.4r -1.4 -5.5r -2.4 -3.0 3.5r -.1 11 In M3 only6 -3.5 -14.4 -B.O1 3.2 ll.O1 —3.3r 16.8 -1.9 -19.5 Time and savings deposits Commercial banks 12 Savings, including MMDAs 10.9 12.9 1.6 4.6 2.7r -2.9 3.2 13.8r 6.9 13 Small time -17.4 -17.2r -7.6 -6.7 3.3r -2.9 -9.1 -10.3 -10.2 14 Large time ' -18.6 -18.4 -17.9 .1 -12.3 -20.9 21.3 3.4r -14.5 Thrift institutions 15 Savings, including MMDAs 9.2 8.7 -.2 1.0 -10.0 -5.1 2.3 9.6 3.1 16 Small time -18.6 -21.7 -19.0r -11.2 -24.1 — 12.3r -9.3 —5.9 -13.3 17 Large time8' -14.9 -11.3 -17.3 -7.5 -28.6 -18.3 13.0 -14.7r -11.2 Money market mutual funds 18 General purpose and broker-dealer -7.4 -4.2 -10.1 -.8 -21.2 -1.8 -5.0 17.4 -1.4 19 Institution-only 32.9 -19.4 -14.1 .5 25.5 -5.9 -3.0 14.4 -27.8 Debt components4 20 10.7 6.0 8.6 n.a. 5.3 15.0 10.9 10.9 n.a. 21 Nonfederal 3.0 3.7 2.9 n.a. 3.4 2.2 4.0 4.3 n.a. 1. Unless otherwise noted, rates of change are calculated from average tax-exempt, institution-only money market funds. Excludes amounts held by amounts outstanding during preceding month or quarter. depository institutions, the U.S. government, money market funds, and foreign 2. Figures incorporate adjustments for discontinuities, or "breaks," associ- banks and official institutions. Also excluded is the estimated amount of overnight ated with regulatory changes in reserve requirements. (See also table 1.20.) RPs and Eurodollars held by institution-only money market funds. Seasonally 3. The seasonally adjusted, break-adjusted monetary base consists of (1) adjusted M3 is computed by adjusting its non-M2 component as a whole and then seasonally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adding this result to seasonally adjusted M2. adjusted currency component of the money stock, plus (3) (for all quarterly L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term reporters on the "Report of Transaction Accounts, Other Deposits, and Vault Treasury securities, commercial paper, and bankers acceptances, net of money Cash" and for all weekly reporters whose vault cash exceeds their required market fund holdings of these assets. Seasonally adjusted L is computed by reserves) the seasonally adjusted, break-adjusted difference between current vault summing U.S. savings bonds, short-term Treasury securities, commercial paper, cash and the amount applied to satisfy current reserve requirements. and bankers acceptances, each seasonally adjusted separately, and then adding 4. Composition of the money stock measures and debt is as follows: this result to M3. Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the Debt: Debt of domestic nonfinancial sectors consists of outstanding credit vaults of depository institutions, (2) travelers checks of nonbank issuers, (3) market debt of the U.S. government, state and local governments, and private demand deposits at all commercial banks other than those owed to depository nonfinancial sectors. Private debt consists of corporate bonds, mortgages, coninstitutions, the U.S. government, and foreign banks and official institutions, less sumer credit (including bank loans), other bank loans, commercial paper, bankers cash items in the process of collection and Federal Reserve float, and (4) other acceptances, and other debt instruments. Data are derived from the Federal checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW) Reserve Board's flow of funds accounts. Data on debt of domestic nonfinancial and automatic transfer service (ATS) accounts at depository institutions, credit sectors are monthly averages, derived by averaging adjacent month-end levels. union share draft accounts, and demand deposits at thrift institutions. Seasonally Growth rates for debt reflect adjustments for discontinuities over time in the levels adjusted Ml is computed by summing currency, travelers checks, demand of debt presented in other tables. deposits, and OCDs, each seasonally adjusted separately. 5. Sum of (1) overnight RPs and Eurodollars, (2) money market fund balances M2: Ml plus (1) overnight (and continuing-contract) repurchase agreements (general purpose and broker-dealer), (3) savings deposits (including MMDAs), (RPs) issued by all depository institutions and overnight Eurodollars issued to and (4) small time deposits. U.S. residents by foreign branches of U.S. banks worldwide, (2) savings (includ- 6. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S. ing MMDAs) and small time deposits (time deposits—including retail RPs—in residents, and (4) money market ftind balances (institution-only), less (5) a amounts of less than $100,000), and (3) balances in both taxable and tax-exempt consolidation adjustment that represents the estimated amount of overnight RPs general-purpose and broker-dealer money market funds. Excludes individual and Eurodollars held by institution-only money market funds. This sum is retirement accounts (IRAs) and Keogh balances at depository institutions and seasonally adjusted as a whole. money market funds. Also excludes all balances held by U.S. commercial banks, 7. Small time deposits—including retail RPs—are those issued in amounts of money market funds (general purpose and broker-dealer), foreign governments less than $100,000. All IRA and Keogh account balances at commercial banks and and commercial banks, and the U.S. government. Seasonally adjusted M2 is thrift institutions are subtracted from small time deposits. computed by adjusting its non-Mi component as a whole and then adding this 8. Large time deposits are those issued in amounts of $100,000 or more, result to seasonally adjusted Ml. excluding those booked at international banking facilities. M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of 9. Large time deposits at commercial banks less those held by money market $100,000 or more) issued by all depository institutions, (2) term Eurodollars held funds, depository institutions, U.S. government and foreign banks and official by U.S. residents at foreign branches of U.S. banks worldwide and at all banking institutions. offices in the United Kingdom and Canada, and (3) balances in both taxable and 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 1993 1993 Apr. May June May 19 May 26 June 2 June 9 June 16 June 23 June 30 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 344,222 346,081r 354,054 344,923 348,867 347,506 351,713 350,351 354,576 361,081 U.S. government securities 2 Bought outright—System account 303,316 305,421 312,928 305,724 305,947 305,007 311,167 313,630 314,888 314,052 3 Held under repurchase agreements ... 3,293 2,598 3,537 904 5,686 5,473 3,401 0 2,351 7,754 Federal agency obligations 4 Bought outright 5,106 5,086 5,050 5,095 5,084 5,054 5,054 5,054 5,054 5,035 5 Held under repurchase agreements ... 25 117 220 114 390 34 152 0 178 581 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 29 43 55 8 20 27 7 5 19 202 8 Seasonal credit 40 83 143 87 93 97 105 130 160 185 9 Extended credit 0 0 0 0 0 0 0 0 0 0 10 Float 618 435r 468 671 161 57 422 412 402 650 11 Other Federal Reserve assets 31,794 32,298 31,652 32,319 31,485 31,757 31,405 31,119 31,525 32,622 12 Gold stock 11,054 11,054 11,056 11,054 11,054 11,053 11,054 11,055 11,058 11,057 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 21,605 21,657 21,718 21,657 21,671 21,685 21,699 21,713 21,727 21,741 ABSORBING RESERVE FUNDS 15 Currency in circulation 335,293 338,480 342,797 338,604 338,602 341,189 342,816 342,988 342,701 342,877 16 Treasury cash holdings 514 497 469 498 488 488 481 481 461 448 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 6,062 5,851 8,781 5,937 6,110 5,984 4,468 5,364 9,667 16,256 18 Foreign 241 272 238 268 196 332 186 225 206 218 19 Service-related balances and adjustments 6,391 6,193 6,224 6,296 6,324 6,297 6,238 6,135 6,209 6,295 20 Other 317 310 284 322 312 305 278 284 274 291 21 Other Federal Reserve liabilities and capital 9,148 9,509 9,360 9,243 9,267 9,235 9,369 9,440 9,379 9,301 22 Reserve balances with Federal Reserve Banks3 26,933 25,699r 26,692 24,485 28,311 24,433 28,648 26,220 26,481 26,212 End-of-month figures Wednesday figures Apr. May June May 19 May 26 June 2 June 9 June 16 June 23 June 30 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 343,696 346,958r 368,869 342,687 356,734 349,642 349,213 351,462 362,036 368,869 U.S. government securities2 2 Bought outright—System account 305,381 304,494 313,143 305,540 306,148 305,878 311,994 314,658 313,453 313,143 3 Held under repurchase agreements ... 0 5,347 15,056 35 11,930 6,163 312 0 10,261 15,056 Federal agency obligations 4 Bought outright 5,095 5,054 5,032 5,095 5,054 5,054 5,054 5,054 5,054 5,032 5 Held under repurchase agreements ... 0 0 949 10 1,120 140 75 0 993 949 6 Acceptances. 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 20 37 1,357 5 19 8 3 12 22 1,357 8 Seasonal credit 63 92 177 94 93 110 116 144 181 177 9 Extended credit 2 0 0 0 0 0 0 0 0 0 10 Float 619 52r 232 895 351 594 455 414 -229 232 11 Other Federal Reserve assets 32,517 31,881 32,924 31,012 32,019 31,694 31,204 31,180 32,301 32,924 12 Gold stock 11,054 11,053 11,057 11,054 11,054 11,053 11,053 11,058 11,058 11,057 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 21,629 21,685 21,741 21,657 21,671 21,685 21,699 21,713 21,727 21,741 ABSORBING RESERVE FUNDS 15 Currency in circulation 335,907 340,867 344,154 338,568 339,528 342,437 343,054 342,993 342,643 344,154 16 Treasury cash holdings 505 489 432 489 483 481 481 481 451 432 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 7,273 5,787 28,386 6,080 5,369 6,751 5,238 8,605 13,673 28,386 18 Foreign 221 194 286 263 246 451 203 292 186 286 19 Service-related balances and adjustments 6,048 6,297r 6,295 6,296 6,324 6,297 6,238 6,135 6,209 6,295 20 Other 291 300 297 323 311 307 274 348 268 297 21 Other Federal Reserve liabilities and capital 9,847 9,263 8,705 9,094 9,139 9,045 9,294 9,238 9,240 8,705 22 Reserve balances with Federal Reserve Banks3 24,305 24,518r 21,131 22,302 36,077 24,630 25,202 24,158 30,169 21,131 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 securities sold and scheduled to be bought back under matched sale-purchase transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Nonfinancial Statistics • September 1993 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RReesseerrvvee ccllaassssiiffiiccaattiioonn 1990 1991 1992 1992 1993 Dec. Dec. Dec. Dec. Jan. Feb. Mar. Apr. May June 1 Reserve balances with Reserve Banks 30,237 26,659 25,368 25,368 23,636 23,515 24,383 26,975 25,968 26,462 2 Total vault cash3 31,789 32,510 34,535 34,535 35,991 33,914 33,293 32,721 33,462 34,106 3 Applied vault cash4, 28,884 28,872 31,172 31,172 32,368 30,368 29,912 29,567 30,133 30,776 4 Surplus vault cash 2,905 3,638 3,364 3,364 3,623 3,546 3,381 3,154 3,329 3,330 5 Total reserves6 59,120 55,532 56,540 56,540 56,004 53,882 54,296 56,541 56,101r 57,238 6 Required reserves 57,456 54,553 55,385 55,385 54,744 52,778 53,083 55,445 55,104 56,325 7 Excess reserve balances at Reserve Banks ... 1,664 979 1,155 1,155 1,260 1,104 1,213 1,096 996r 913 8 Total borrowings at Reserve Banks8 326 192 124 124 165 45 91 73 121 181 9 Seasonal borrowings 76 38 18 18 11 18 26 41 84 142 10 Extended credit9 23 1 1 1 1 0 0 0 0 0 Biweekly averages of daily figures for weeks ending on date indicated 1993 Mar. 3 Mar. 17 Mar. 31 Apr. 14 Apr. 28 May 12 May 26 June 9r June 23 July 7 1 Reserve balances with Reserve Banks 24,335 24,029 24,747 26,612 27,586 25,228 26,396 26,543 26,352 26,578 2 Total vault cash* 32,163 34,487 32,343 33,218 32,010 34,225 32,728 33,685 34,237 34,385 3 Applied vault cash 28,902 30,944 29,098 29,995 28,960 30,816 29,455 30,391 30,897 31,030 4 Surplus vault cash5 3,261 3,543 3,245 3,223 3,050 3,409 3,273 3,294 3,341 3,355 5 Total reserves 53,237 54,973 53,845 56,607 56,546 56,044 55,851 56,933 57,248 57,608 6 Required reserves 52,666 53,683 52,572 55,763 55,160 55,217 54,649 56,109 56,477 56,300 7 Excess reserve balances at Reserve Banks ... 571 1,290 1,273 844 1,387 828 1,202 824 772 1,308 8 Total borrowings at Reserve Banks8 56 93 98 38 99 142 105 118 158 311 9 Seasonal borrowings 20 22 32 31 47 71 90 101 145 190 10 Extended credit9 0 0 0 0 1 1 0 0 0 0 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 with traditional short-term adjustment credit, institutions (that is, those whose required reserves exceed their vault cash) plus the money market impact of extended credit is similar to that of nonborrowed the amount of vault cash applied during the maintenance period by "nonbound" 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 May 3 May 10 May 17 May 24 May 31 June 7 June 14 June 21 June 28 Federal funds purchased, repurchase agreements, and other selected borrowings From commercial banks in the United States 1 For one day or under continuing contract 68,032 68,197 69,117 65,952 70,624 74,804 76,818 72,102 67,613 2 For all other maturities 13,709 13,490 13,227 12,864 12,825 13,802 14,807 14,560 13,505 From other depository institutions, foreign banks and official institutions, and U.S. government agencies 3 For one day or under continuing contract 16,829 15,975 18,618 21,775 18,376 19,975 18,784 19,191 20,843 4 For all other maturities 19,943 19,771 21,278 20,739 20,968 21,003 21,028 18,699 19,745 Repurchase agreements on U.S. government and federal agency securities Brokers and nonbank dealers in securities 5 For one day or under continuing contract 12,017 12,028 12,650 13,386 13,028 15,690 15,708 13,790 11,380 6 For all other maturities 26,812 26,127 26,634 27,626 27,872 28,435 28,888 27,625 27,186 All other customers 7 For one day or under continuing contract 24,272 22,777 23,066 23,164 24,170 23,262 25,386 24,028 23,209 8 For all other maturities 14,152 13,650 13,877 13,886 14,364 14,441 14,530 14,457 15,108 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 42,605 41,271 40,746 39,174 43,503 44,107 43,067 44,117 41,742 10 To all other specified customers2 22,042 22,351 23,830 20,707 20,169r 23,201 24,632 25,825 21,259 1. Banks with assets of $4 billion or more as of Dec. 31, 1988. 2. Brokers and nonbank dealers in securities, other depository institutions, Data in this table also appear in the Board's H.5 (507) weekly statistical release. foreign banks and official institutions, and U.S. government agencies. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Nonfinancial Statistics • September 1993 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels Adjustment credit1 Seasonal credit2 Extended credit Federal Reserve Bank 7/3 O 0 n / 93 Effective date Previous rate 7/3 O 0 n / 93 Effective date Previous rate 7/3 O 0 n / 93 Effective date Previous rate Boston 7/2/92 3.5 3.10 7/22/93 7/22/93 3.65 New York ... 7/2/92 7/22/93 7/22/93 Philadelphia.. 7/2/92 7/22/93 7/22/93 Cleveland 7/6/92 7/22/93 7/22/93 Richmond.... 7/2/92 7/22/93 7/22/93 Atlanta 7/2/92 7/22/93 7/22/93 Chicago 7/2/92 7/22/93 7/22/93 St. Louis 7/7/92 7/22/93 7/22/93 Minneapolis.. 7/2/92 7/22/93 7/22/93 Kansas City.. 7/2/92 7/22/93 7/22/93 Dallas 7/2/92 7/22/93 7/22/93 San Francisco 7/2/92 3.5 3.10 7/22/93 3.15 3.60 7/22/93 3.65 Range of rates for adjustment credit in recent years4 Range (or F.R. Range (or F.R. Range (or F.R. Effective date A le l v l e F l) . — R. Ba of n k Effective A le l v l e F l) . — R. B o a f n k Effective date A le l v l e F l) . — R. Ba of n k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1977 6 6 1981-—May 5 13-14 14 1986—Aug. 21 5.5-6 5.5 14 14 22 5.5 5.5 1978—Jan. 9 6-6.5 6.5 Nov. 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---JJuullyy 70 11.5-12 11.5 1988—Aug. 9 6-6.5 6.5 10 7.25 7.25 7.3 11.5 11.5 11 6.5 6.5 Aug. 21 7.75 7.75 Aug. 7. 11-11.5 11 Sept. 22 8 8 3 11 11 1989—Feb. 24 6.5-7 7 Oct. 16 8-8.5 8.5 16 10.5 10.5 27 7 7 20 8.5 8.5 77 10-10.5 10 Nov. 1 8.5-9.5 9.5 30 10 10 1990—Dec. 19 6.5 6.5 3 9.5 9.5 Oct. 17 9.5-10 9.5 n 9.5 9.5 1991—Feb. 1 6-6.5 6 1979—July 20 10 10 Nov. 7? 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 17 5 5 Oct. 8 11-12 12 Nov. 6 4.5-5 4.5 10 12 12 1984-——AApprr.. 9 8.5-9 9 7 4.5 4.5 13 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-——MMaayy 70 7.5-8 7.5 16 11 11 74 7.5 7.5 29 10 10 IInn eeffffeecctt JJuullyy 3300,, 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. 71 6.5-7 6.5 Dec. 5 12-13 13 July 11 6 6 1. Available on a short-term basis to help depository institutions meet tempo- ordinarily is charged on extended-credit loans outstanding less than thirty days; rary needs for funds that cannot be met through reasonable alternative sources. however, at the discretion of the Federal Reserve Bank, this time period may be The highest rate established for loans to depository institutions may be charged on shortened. Beyond this initial period, a flexible rate somewhat above rates on adjustment-credit loans of unusual size that result from a major operating problem market sources of funds is charged. The rate ordinarily is reestablished on the first at the borrower's facility. business day of each two-week reserve maintenance period, but it is never less 2. Available to help relatively small depository institutions meet regular than the discount rate applicable to adjustment credit plus 50 basis points. seasonal needs for funds that arise from a clear pattern of intrayearly movements 4. For earlier data, see the following publications of the Board of Governors: in their deposits and loans and that cannot be met through special industry Banking and Monetary Statistics, 1914-1941, and 1941-1970; and the Annual lenders. The discount rate on seasonal credit takes into account rates on market Statistical Digest, 1970-1979. sources of funds and ordinarily is reestablished on the first business day of each In 1980 and 1981, the Federal Reserve applied a surcharge to short-term two-week reserve maintenance period; however, it is never less than the discount adjustment-credit borrowings by institutions with deposits of $500 million or more rate applicable to adjustment credit. that had borrowed in successive weeks or in more than four weeks in a calendar 3. May be made available to depository institutions when similar assistance is quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7, not reasonably available from other sources, including special industry lenders. 1980. A surcharge of 2 percent was reimposed on Nov. 17, 1980; the surcharge Such credit may be provided when exceptional circumstances (including sus- was subsequently raised to 3 percent on Dec. 5,1980, and to 4 percent on May 5, tained deposit drains, impaired access to money market funds, or sudden 1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981, and to 2 deterioration in loan repayment performance) or practices involve only a partic- percent effective Oct. 12, 1981. As of Oct. 1, 1981, the formula for applying the ular institution, or to meet the needs of institutions experiencing difficulties surcharge was changed from a calendar quarter to a moving thirteen-week period. adjusting to changing market conditions over a longer period (particularly at times The surcharge was eliminated on Nov. 17, 1981. of deposit disintermediation). The discount rate applicable to adjustment credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Type of deposit Net transaction accounts 1 $0 million-$46.8 million... 12/15/92 2 More than $46.8 million4.. 12/15/92 3 Nonpersonal time deposits5 12/27/90 4 Eurocurrency liabilities6. . 12/27/90 1. Required reserves must be held in the form of deposits with Federal Reserve permit no more than six preauthorized, automatic, or other transfers per month, Banks or vault cash. Nonmember institutions may maintain reserve balances with of which no more than three may be checks, are not transaction accounts (such a Federal Reserve Bank indirectly on a pass-through basis with certain approved accounts are savings deposits). institutions. For previous reserve requirements, see earlier editions of the Annual The Monetary Control Act of 1980 requires that the amount of transaction Report or the Federal Reserve Bulletin. Under provisions of the Monetary accounts against which the 3 percent reserve requirement applies be modified Control Act, depository institutions include commercial banks, mutual savings annually by 80 percent of the percentage change in transaction accounts held by banks, savings and loan associations, credit unions, agencies and branches of all depository institutions, determined as of June 30 each year. Effective Dec. 15, foreign banks, and Edge corporations. 1992, for institutions reporting quarterly, and Dec. 24, 1992, for institutions 2. The Garn-St Germain Depository Institutions Act of 1982 (Public Law reporting weekly, the amount was increased from $42.2 million to $46.8 million. 97-320) requires that $2 million of reservable liabilities of each depository 4. The reserve requirement was reduced from 12 percent to 10 percent on Apr. institution be subject to a zero percent reserve requirement. The Board is to adjust 2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for institutions the amount of reservable liabilities subject to this zero percent reserve require- that report quarterly. ment each year for the succeeding calendar year by 80 percent of the percentage 5. For institutions that report weekly, the reserve requirement on nonpersonal increase in the total reservable liabilities of all depository institutions, measured time deposits with an original maturity of less than IVi years was reduced from 3 on an annual basis as of June 30. No corresponding adjustment is to be made in percent to IV2 percent for the maintenance period that began Dec. 13, 1990, and the event of a decrease. On Dec. 15, 1992, the exemption was raised from $3.6 to zero for the maintenance period that began Dec. 27, 1990. The reserve million to $3.8 million. The exemption applies in the following order: (1) net requirement on nonpersonal time deposits with an original maturity of 1 Vi years negotiable order of withdrawal (NOW) accounts (NOW accounts less allowable or more has been zero since Oct. 6, 1983. deductions); and (2) net other transaction accounts. The exemption applies only to For institutions that report quarterly, the reserve requirement on nonpersonal accounts that would be subject to a 3 percent reserve requirement. time deposits with an original maturity of less than 1 Vi years was reduced from 3 3. Include all deposits against which the account holder is permitted to make percent to zero on Jan. 17, 1991. withdrawals by negotiable or transferable instruments, payment orders of with- 6. The reserve requirement on Eurocurrency liabilities was reduced from 3 drawal, and telephone and preauthorized transfers in excess of three per month percent to zero in the same manner and on the same dates as were the reserve for the purpose of making payments to third persons or others. However, money requirement on nonpersonal time deposits with an original maturity of less than market deposit accounts (MMDAs) and similar accounts subject to the rules that 1V2 years (see note 4). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 DomesticN onfinancialS tatistics • September 1993 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 1992 1993 TTyypp aa ee nn dd oo ff mm ttrr aa aa tt nn uu ss rr aa iitt cc yy tt iioonn 11999900 11999911 11999922 Nov. Dec. Jan. Feb. Mar. Apr. May U.S. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 24,739 20,158 14,714 1,064 3,669 0 0 0 121 349 2 Gross sales 7,291 120 1,628 0 0 0 0 0 0 0 3 Exchanges 241,086 277,314 308,699 25,468 29,562 24,542 19,832 23,796 30,124 26,610 4 Redemptions 4,400 1,000 1,600 0 0 0 0 0 0 0 Others within one year 5 Gross purchases 425 3,043 1,096 461 0 0 0 279 244 0 6 Gross sales 0 0 0 0 0 0 0 0 0 0 7 Maturity shifts 25,638 24,454 36,662 7,160 2,777 561 2,892 4,303 1,950 4,108 8 Exchanges -27,424 -28,090 -30,543 -4,615 -1,570 -1,202 -6,044 -2,602 -1,100 -4,013 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 4,172 200 0 0 1,441 2,490 0 11 Gross sales 200 0 0 0 0 0 0 0 0 0 12 Maturity shifts -21,770 -21,211 -34,478 -6,800 -2,777 -64 -2,617 -4,303 -1,630 -3,652 13 Exchanges 25,410 24,594 25,811 3,415 1,570 882 4,564 2,602 800 3,245 Five to ten years 14 Gross purchases 0 1,280 2,818 1,176 100 0 0 716 1,147 0 15 Gross sales 100 0 0 0 0 0 0 0 0 0 16 Maturity shifts -2,186 -2,037 -1,915 -187 0 -497 -98 0 -320 -333 17 Exchanges 789 2,894 3,532 800 0 0 1,000 0 300 468 More than ten years 18 Gross purchases 0 375 2,333 947 0 0 0 705 1,110 0 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shifts -1,681 -1,209 -269 -173 0 0 -177 0 0 -123 21 Exchanges 1,226 600 1,200 400 0 0 480 0 0 300 All maturities 22 Gross purchases 25,414 31,439 34,079 7,820 3,969 0 0 3,141 5,111 349 23 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 25 Gross sales 1,369,052 1,570,456 1,482,467 115,020 144,232 114,543 111,491 146,563 127,115 124,462 26 Gross purchases 1,363,434 1,571,534 1,480,140 117,020 142,578 116,510 113,349 143,049 128,924 123,227 Repurchase agreements 27 Gross purchases 219,632 310,084 378,374 42,373 48,904 34,768 28,544 37,815 30,197 33,987 28 Gross sales 202,551 311,752 386,257 39,117 44,697 42,231 25,889 33,714 36,953 28,640 29 Net change in U.S. Treasury securities 24,886 29,729 20,642 13,075 6,521 -5,497 4,513 3,728 163 4,461 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 0 0 0 0 0 0 0 0 0 0 31 Gross sales 0 5 0 0 0 0 0 0 0 0 32 Redemptions 183 292 632 0 121 103 85 101 28 41 Repurchase agreements 33 Gross purchases 41,836 22,807 14,565 2,760 1,601 2,237 1,107 1,811 197 2,105 34 Gross sales 40,461 23,595 14,486 2,506 1,224 2,868 832 1,519 764 2,105 35 Net change in federal agency obligations 1,192 -1,085 -554 254 256 -734 190 191 -595 -41 36 Total net change in System Open Market Account 26,078 28,644 20,089 13,329 6,777 -6,231 4,703 3,918 -431 4,420 1. Sales, redemptions, and negative figures reduce holdings of the System Open Market Account; all other figures increase such holdings. 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 June 2 June 9 June 16 June 23 June 30 Apr. 30 May 31 June 30 Consolidated condition statement ASSETS 1 Gold certificate account 11,053 11,053 11,058 11,058 11,057 11,054 11,053 11,057 2 Special drawing rights certificate account 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 3 Coin 424 421 425 427 408 487 441 408 Loans 4 To depository institutions 118 119 156 202 1,534 84 129 1,534 5 Other 0 0 0 0 0 0 0 0 6 Acceptances held under repurchase agreements . 0 0 0 0 0 0 0 0 Federal agency obligations 7 Bought outright 5,054 5,054 5,054 5,054 5,032 5,095 5,054 5,032 8 Held under repurchase agreements 140 75 0 993 949 0 0 949 9 Total U.S. Treasury securities. 312,041 312,306 314,658 323,714 328,199 305,381 309,841 328,199 10 Bought outright2 305,878 311,994 314,658 313,453 313,143 305,381 304,494 313,143 11 Bills 144,531 150,647 153,311 152,106 151,796 144,034 143,148 151,796 12 Notes 123,870 123,870 123,870 123,870 123,870 123,936 123,870 123,870 13 Bonds 37,477 37,477 37,477 37,477 37,477 37,411 37,477 37,477 14 Held under repurchase agreements 6,163 312 0 10,261 15,056 0 5,347 15,056 15 Total loans and securities..... 317,354 317,555 319,868 329,964 335,714 310,560 315,025 335,714 16 Items in process of collection 9,196 5,763 5,924 5,145 5,522 5,359 4,473 5,522 17 Bank premises 1,039 1,040 1,040 1,041 1,041 1,034 1,039 1,041 Other assets 18 Denominated in foreign currencies 22,811 22,846 22,668 22,726 22,334 23,043 23,143 22,334 19 All other4 7,892 7,482 7,551 8,652 9,614 8,550 7,820 9,614 20 Total assets 377,787 374,178 376,553 387,030 393,709 368,106 371,013 393,709 LIABILITIES 21 Federal Reserve notes 321,657 322,257 322,187 321,793 323,253 315,270 320,112 323,253 22 Total deposits 38,888 37,547 39,528 51,244 56,693 38,365 37,279 56,693 2233 DDeeppoossiittoorryy iinnssttiittuuttiioonnss 31,379 31,832 30,282 37,118 27,724 30,579 31,000 27,724 24 U.S. Treasury—General account 6,751 5,238 8,605 13,673 28,386 7,273 5,787 28,386 25 Foreign—Official accounts 451 203 292 186 286 221 194 286 26 Other 307 274 348 268 297 291 300 297 27 Deferred credit items ^ 8,197 5,080 5,600 4,753 5,059 4,624 4,358 5,059 28 Other liabilities and accrued dividends 2,216 2,366 2,336 2,340 2,229 2,220 2,217 2,229 29 Total liabilities. 370,958 367,250 369,651 380,131 387,233 360,479 363,966 387,233 CAPITAL ACCOUNTS 30 Capital paid in 3,300 3,289 3,291 3,287 3,288 3,260 3,300 3,288 31 Surplus 3,054 3,054 3,054 3,054 3,038 3,054 3,054 3,038 32 Other capital accounts. 475 584 557 559 150 1,313 693 150 33 Total liabilities and capital accounts 377,787 374,178 376,553 387,030 393,709 368,106 371,013 393,709 MEMO 34 Marketable U.S. Treasury securities held in custody for foreign and international accounts 319,112 323,213 324,459 324,112 314,236 310,903 313,505 314,236 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to Bank) ... 382,302 383,619 384,889 385,805 385,553 378,585 382,009 385,553 36 LESS: Held by Federal Reserve Bank 60,645 61,362 62,702 64,012 62,301 63,315 61,897 62,301 37 Federal Reserve notes, net 321,657 322,257 322,187 321,793 323,253 315,270 320,112 323,253 Collateral held against notes, net: 38 Gold certificate account 11,053 11,053 11,058 11,058 11,057 11,054 11,053 11,057 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 302,586 303,186 303,111 302,717 304,178 296,198 301,040 304,178 42 Total collateral. 321,657 322,257 322,187 321,793 323,253 315,270 320,112 323,253 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 NonfinancialS tatistics • September 1993 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holding Millions of dollars Wednesday End of month Type of holding and maturity 1993 1993 June 2 June 9 June 16 June 23 June 30 Apr. 30 May 31 June 30 1 Total loans 118 119 156 202 1,534 84 129 1,534 2 Within fifteen days1 33 33 145 183 1,447 54 82 1,447 3 Sixteen days to ninety days ... 85 86 11 19 87 30 47 87 4 Ninety-one days to one year .. 0 0 0 0 0 0 0 0 5 Total acceptances . 0 0 0 0 0 0 0 0 6 Within fifteen days1 0 0 0 0 0 0 0 0 7 Sixteen days to ninety days ... 0 0 0 0 0 0 0 0 8 Ninety-one days to one year .. 0 0 0 0 0 0 0 0 9 Total U.S. Treasury securities.. 312,041 312,306 314,658 323,714 328,199 305,381 304,494 328,199 10 Within fifteen day s1 19,630 10,327 18,248 27,122 29,971 11,295 8,196 29,971 11 Sixteen days to ninety days ... 74,732 77,360 71,674 71,631 74,113 74,524 79,097 74,113 12 Ninety-one days to one year .. 94,361 101,300 101,418 101,643 101,750 95,254 94,431 101,750 13 One year to five years 71,613 71,613 71,613 71,613 70,660 72,915 71,065 70,660 14 Five years to ten years 21,606 21,606 21,606 21,606 21,606 21,471 21,606 21,606 15 More than ten years 30,099 30,099 30,099 30,099 30,099 29,922 30,099 30,099 16 Total federal agency obligations 5,194 5,129 5,054 6,047 5,981 5,095 5,054 5,981 17 Within fifteen day s1 165 100 237 1,230 1,179 115 301 1,179 18 Sixteen days to ninety days ... 527 829 592 592 612 643 527 612 19 Ninety-one days to one year .. 1,412 1,110 1,135 1,135 1,132 1,177 1,136 1,132 20 One year to five years 2,237 2,237 2,213 2,213 2,181 2,307 2,237 2,181 21 Five years to ten years 711 711 736 736 736 711 711 736 22 More than ten years 142 142 142 142 142 142 142 142 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 11998899 11999900 11999911 11999922 DDeecc.. DDeecc.. DDeecc.. DDeecc.. Nov. Dec. Jan. Feb. Mar. Apr. May June Seasonally adjusted AADDJJUUSSTTEEDD FFOORR CCHHAANNGGEESS IINN RREESSEERRVVEE RREEQQUUIIRREEMMEENNTTSS22 11 TToottaall rreesseerrvveess33 40.49 41.77 45.53 54.35 53.82 54.35 54.67 54.92 55.17 55.20 56.88 57.12 22 NNoonnbboorrrroowweedd rreesseerrvveess 40.23 41.44 45.34 54.23 53.71 54.23 54.50 54.88 55.07 55.12 56.76 56.94 33 NNoonnbboorrrroowweedd rreesseerrvveess pplluuss eexxtteennddeedd ccrreeddiitt55 40.25 41.46 45.34 54.23 53.71 54.23 54.50 54.88 55.07 55.12 56.76 56.94 44 RReeqquuiirreedd rreesseerrvveess 39.57 40.10 44.56 53.20 52.77 53.20 53.41 53.82 53.95 54.10 55.88 56.21 55 MMoonneettaarryy bbaassee66 267.73 293.19 317.17 350.80 347.83 350.80 353.22 355.73 358.37 360.64 364.78 368.09 Not seasonally adjusted 6 Total reserves 41.77 43.07 46.98 56.06 54.08 56.06 55.97 53.81 54.18 56.37 55.88 56.% 7 Nonborrowed reserves 41.51 42.74 46.78 55.93 53.97 55.93 55.80 53.77 54.09 56.29 55.76r 56.78 8 Nonborrowed reserves plus extended credit5 41.53 42.77 46.78 55.93 53.97 55.93 55.80 53.77 54.09 56.29 55.76r 56.78 9 Required reserves8 40.85 41.40 46.00 54.90 53.04 54.90 54.71 52.71 52.96 55.27 54.88 56.05 10 Monetary base 271.18 296.68 321.07 354.55 347.89 354.55 354.41 353.18 356.00 361.64 364.09 368.75 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS19 11 Total reserves11 62.81 59.12 55.53 56.54 54.67 56.54 56.00 53.88 54.30 56.54 56.10 57.24 12 Nonborrowed reserves 62.54 58.80 55.34 56.42 54.56 56.42 55.84 53.84 54.20 56.47 55.98 57.06 13 Nonborrowed reserves plus extended credit5 62.56 58.82 55.34 56.42 54.56 56.42 55.84 53.84 54.20 56.47 55.98 57.06 14 Required reserves 61.89 57.46 54.55 55.39 53.62 55.39 54.74 52.78 53.08 55.45 55.10 56.33 15 Monetary base12 292.55 313.70 333.61 360.90 354.25 360.90 360.88 359.56 362.59 368.18 370.47 375.21 16 Excess reserves .92 1.66 .98 1.16 1.04 1.16 1.26 1.10 1.21 1.10 1.00 .91 17 Borrowings from the Federal Reserve .27 .33 .19 .12 .10 .12 .17 .05 .09 .07 .12 .18 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 those weekly reporters whose vault cash adjusted, break-adjusted required reserves (line 4) plus excess reserves (line 16). exceeds their required reserves) the break-adjusted difference between current 4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally vault cash 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 with traditional short- 12. The monetary base, not break-adjusted and not seasonally adjusted, term adjustment credit, the money market impact of extended credit is similar to consists of (l) total reserves (line 11), plus (2) required clearing balances and that of nonborrowed reserves. adjustments to compensate for float at Federal Reserve Banks, plus (3) the 6. The seasonally adjusted, break-adjusted monetary base consists of (1) currency component of the money stock, plus (4) (for all quarterly reporters on seasonally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all adjusted currency component of the money stock, plus (3) (for all quarterly those weekly reporters whose vault cash exceeds their required reserves) the reporters on the "Report of Transaction Accounts, Other Deposits and Vault difference between current vault cash and the amount applied to satisfy current Cash" and for all those weekly reporters whose vault cash exceeds their required reserve requirements. Since the introduction of changes in reserve requirements reserves) the seasonally adjusted, break-adjusted difference between current vault (CRR), currency and vault cash figures have been measured over the computation cash and the amount applied to satisfy current reserve requirements. periods ending on Mondays. 7. Break-adjusted total reserves equal break-adjusted required reserves (line 9) 13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14). plus excess reserves (line 16). 8. To adjust required reserves for discontinuities that are due to regulatory changes in reserve requirements, a multiplicative procedure is used to estimate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • September 1993 1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES1 Billions of dollars, averages of daily figures 1993 iJt em 1989 1990 1991 1992 Dec. Dec. Dec. Dec. Mar. Apr." May June Seasonally adjusted Measures2 1 Ml 794.6 827.2 899.3 1,026.6 l,035.3r 1,043.2 1,067.2 1,073.7 2 M2 3,233.3 3,345.5 3,445.8 3,4%.9r 3,472.9r 3,474.6 3,505.7" 3,512.1 3 M3 4,056.1 4,116.7 4,168.1 4,166.4r 4,131.0r 4,142.1 4,171.6" 4,167.1 4 L 4,886.1 4,966.6r 4,982.2 5,043.6r 5,010.6r 5,027.3 5,069.1 n.a. 5 Debt 10,086.5r 10,755.3r 11,219.3 11,779.7 11,903.2 11,960.9 12,021.3 n.a. Ml components 6 Currency 222.7 246.7 267.2 292.3 299.0 301.4 304.0 306.8 7 Travelers checks* 6.9 7.8 7.8 8.1 8.0 8.1 8.2 8.0 8 Demand deposits 279.8 278.2 290.5 340.9 342.0 347.3 359.2 360.7 9 Other checkable deposits 285.3 294.5 333.8 385.2 386.3" 386.3 395.7" 398.2 Nontrgnsaction components 10 In M2' 2,438.7 2,518.3 2,546.6 2,470.2r 2,437.5r 2,431.5 2,438.6" 2,438.4 11 In M3 822.8 771.2 722.3 669.6 658.2r 667.4 665.8" 655.0 Commercial banks 12 Savings deposits, including MMDAs 541.4 582.2 666.2 756.1 754.0" 756.0 764.7 769.1 13 Small time deposits .. 534.9 610.3 601.5 506.9" 502.8 499.0 494.7 490.5 14 Large time deposits10, 1 387.7 368.7 341.3 290.2 275.9 280.8 281.6" 278.2 Thrift institutions 15 Savings deposits, including MMDAs 349.6 338.6 376.3 429.9 424.8 425.6 429.0 430.1 16 Small time deposits 617.8 562.0 463.2 363.2 347.5r 344.8 343.1 339.3 17 Large time deposits10 161.1 120.9 83.4 67.3 64.5 65.2 64.4 63.8 Money market mutual funds 18 General purpose and broker-dealer 317.4 350.5 363.9 342.3 333.1 331.7 336.5 336.1 19 Institution-only 108.8 135.9 182.1 202.3 200.9 200.4 202.8 198.1 Debt components 20 Federal debt 2,249.5 2,493.4 2,764.8 3,069.0 3,128.5 3,156.8 3,185.5 n.a. 21 Nonfederal debt 7,837.0" 8,261.9" 8,454.5 8,710.7 8,774.7 8,804.1 8,835.8 n.a. Not seasonally adjusted Measures2 22 Ml 811.5 843.7 916.4 1,045.8 1,030.8 1,058.4 1,057.9" 1,073.1 23 M2 3,245.1 3,357.0 3,457.9 3,511.lr 3,479.7" 3,498.1 3,490.1" 3,507.7 24 M3 4,066.4 4,126.3 4,178.1 4,178.5r 4,141.0" 4,161.1 4,158.1" 4,162.3 25 L 4,906.0 4,988.0r 5,004.2 5,068.1r 5,024.2r 5,045.2 5,043.9 n.a. 26 Debt 10,073.4" 10,743.9r 11,209.4 11,771.3 11,863.5 11,919.1 11,974.3 n.a. Ml components 27 Currency3 225.3 249.5 269.9 295.0 297.9 301.4 304.4 307.5 28 Travelers checks4 6.5 7.4 7.4 7.8 7.8 7.8 7.9 8.2 29 Demand deposits5 291.5 289.9 302.9 355.3 336.4 350.7 352.1 359.6 30 Other checkable deposits6 288.1 296.9 336.3 387.7 388.8r 398.6 393.5 397.9 Nontrgnsaction components 31 In M2 2,433.6 2,513.2 2,541.5 2,465.3r 2,448.9" 2,439.7 2,432.2" 2,434.6 32 In M38 821.4 769.3 720.1 667.4 661.3r 663.0 668.0" 654.6 Commercial banks 33 Savings deposits, including MMDAs 543.0 580.1 663.3 752.3 757.5 760.8 765.8 772.4 34 Small time deposits'' .. 533.8 610.5 602.0 507,7r 502.1 497.8 492.4 488.6 35 Large time deposits • 11 386.9 367.7 340.1 289.1 276.8 280.0 283.3" 279.8 Thrift institutions 36 Savings deposits, including MMDAs 347.4 337.3 374.7 427.8 426.8 428.3 429.6 432.0 37 Small time deposits® 616.2 562.1 463.6 363.8 347.0" 343.9 341.6" 338.0 38 Large time deposits10 162.0 120.6 83.1 67.1 64.7 65.0 64.8" 64.2 Money market mutual funds 39 General purpose and broker-dealer 315.7 348.4 361.5 340.0 342.2 337.9 334.8 333.0 40 Institution-only 109.1 136.2 182.4 202.4 203.6 199.5 203.0 194.3 Repurchase agreements and Eurodollars 41 Overnight 77.5 74.7 76.3 73.9 73.2 71.0 68.0" 70.6 42 Term 178.4 158.3 130.1 126.3 136.3" 138.6 139.6" 139.8 Debt components 43 Federal debt 2,247.5 2,491.3 2,765.0 3,069.8 3,121.4 3,142.9 3,161.1 n.a. 44 Nonfederal debt 7,826.0" 8,252.5r 8,444.4 8,701.5 8,742.1 8,776.2 8,813.2 n.a. Footnotes appear on 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 owed 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 all balances held by U.S. commercial banks, tions. money market funds (general purpose and broker-deader), 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 (5) a $100,000 or more) issued by all depository institutions, (2) term Eurodollars held consolidation adjustment that represents the estimated amount of overnight RPs by U.S. residents at foreign branches of U.S. banks worldwide and at all banking and 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 Nonfinancial Statistics • September 1993 1.22 DEPOSIT INTEREST RATES AND AMOUNTS OUTSTANDING Commercial and BIF-insured saving banks1 1992 1993R It m Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Interest rates (annual effective yields) INSURED COMMERCIAL BANKS 1 Negotiable order of withdrawal accounts ... 4.89 3.76 2.39 2.36 2.33 2.32 2.27 2.21 2.16 2.12 2.09 2 Savings deposits2 5.84 4.30 2.94 2.90 2.88 2.85 2.80 2.73 2.68 2.65 2.61 Interest-bearing time deposits with balances of less than $100,000, by maturity 3 1 to 91 days 6.94 4.18 2.89 2.91 2.90 2.86 2.81 2.75 2.72 2.70 2.68 4 92 to 182 days 7.19 4.41 3.11 3.14 3.16 3.13 3.08 3.03 2.99 2.98 2.98 5 183 days to 1 year 7.33 4.59 3.30 3.34 3.37 3.35 3.29 3.22 3.19 3.18 3.18 6 More than 1 year to 2Vi years 7.42 4.95 3.78 3.83 3.88 3.88 3.83 3.74 3.67 3.64 3.64 7 More than 2 Vz years 7.53 5.52 4.60 4.70 4.77 4.72 4.59 4.52 4.47 4.47 4.44 BIF-INSURED SAVINGS BANKS3 8 Negotiable order of withdrawal accounts ... 5.38 4.44 2.57 2.52 2.45 2.40 2.37 2.32 2.25 2.21 2.14 Y Savings deposits 6.01 4.97 3.29 3.22 3.20 3.17 3.14 3.05 2.97 2.93 2.88 Interest-bearing time deposits with balances of less than $100,000, by maturity 10 7 to 91 days 7.64 4.68 3.08 3.10 3.13 3.06 3.01 2.95 2.91 2.87 2.85 n 92 to 182 days 7.69 4.92 3.41 3.42 3.44 3.38 3.35 3.28 3.23 3.19 3.17 12 183 days to 1 year 7.85 4.99 3.56 3.59 3.61 3.58 3.57 3.52 3.48 3.45 3.43 13 More than 1 year to iVi years 7.91 5.23 3.90 3.93 4.02 3.94 3.89 3.83 3.88 3.79 3.80 14 More than 2 Vl years 7.99 5.98 4.84 4.88 5.00 5.02 4.97 4.89 4.84 4.78 4.74 Amounts outstanding (millions of dollars) INSURED COMMERCIAL BANKS 15 Negotiable order of withdrawal accounts ... 209,855 244,637 267,709 275,465 286,541 277,271 279,944 288,410 281,208 284,404 288,425 16 Savings deposits2 570,270 652,058 736,057 740,841 738,253 733,836 742,952 748,311 745,627 754,043 755,131 17 Personal n.a. 508,191 570,532 575,399 578,757 579,701 585,189 591,784 587,301 591,694 592,890 18 Nonpersonal n.a. 143,867 165,525 165,442 159,496 154,135 157,764 156,527 158,327 162,348 162,241 Interest-bearing time deposits with balances of less than $100,000, by maturity 19 7 to 91 days 50,189 47,094 39,472 38,985 38,474 38,256 36,738 35,519 34,743 33,423 31,778 20 92 to 182 days 168,044 158,605 128,683 127,636 127,831 128,083 128,209 125,778 122,306 119,365 115,267 21 183 days to 1 year 221,007 209,672 171,263 166,995 163,098 160,630 159,631 158,337 157,143 156,938 155,398 22 More than 1 year to 2Vi years 150,188 171,721 155,668 153,784 152,977 151,905 151,798 147,958 147,030 144,944 144,752 23 More than 2 Vl years 139,420 158,078 168,556 168,586 169,708 169,371 172,362 177,735 179,006 180,077 178,738 24 IRA/Keogh Plan deposits 131,006 147,266 147,664 147,319 147,350 147,069 146,841 146,673 145,492 144,736 144,636 BIF-INSURED SAVINGS BANKS3 25 Negotiable order of withdrawal accounts.... 8,404 9,624 10,126 10,642 10,871 9,858 9,821 10,219 9,894 10,037 10,402 26 Savings deposits 64,456 71,215 81,022 82,919 81,786 79,271 79,649 77,340 76,910 77,489 77,544 2V Personal n.a. 68,638 77,798 79,667 78,695 76,337 76,634 74,382 74,020 74,505 74,623 28 Nonpersonal n.a. 2,577 3,224 3,252 3,091 2,934 3,016 2,957 2,889 2,984 2,921 Interest-bearing time deposits with balances of less than $100,000, by maturity 29 7 to 91 days 5,724 4,146 3,695 3,895 3,867 3,541 3,468 3,194 3,161 3,113 3,022 30 92 to 182 days 25,864 21,686 17,298 17,632 17,345 16,088 15,857 14,445 14,308 14,157 13,818 31 183 days to 1 year 37,929 29,715 23,085 22,888 21,780 20,627 20,301 19,048 18,753 18,549 18,434 32 More than 1 year to 2Vl years 26,103 25,379 19,330 19,258 18,442 17,524 17,387 16,835 16,426 16,275 16,088 33 More than 2Vl years 20,243 18,665 19,128 19,543 18,845 18,461 18,759 18,550 18,632 18,780 19,025 34 IRA/Keogh Plan accounts 23,535 23,007 22,069 22,265 21,713 21,320 21,260 20,096 19,975 19,902 19,845 1. BIF, Bank Insurance Fund. Data in this table also appear in the Board's H.6 seasonally adjusted and include IRA/Keogh deposits and foriegn currency denom- (508) Special Supplementary Table monthly statistical release. For ordering inated deposits. Data exclude retail repurchase agreements and deposits held in address, see inside front cover. Estimates are based on data collected by the U.S. branches and agencies of foreign banks. Federal Reserve System from a stratified random sample of about 460 commercial 2. Includes personal and nonpersonal money market deposits. banks and 80 savings banks on the last Wednesday of each period. Data are not 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 11999911 22 1199992222 Nov. Dec. Jan.r Feb/ Mar. Apr. Seasonally adjusted Demand deposits 1 All insured banks 277,157.5 277,758.0 315,806.1 322,187.1 331,038.8 300,602.9 331,126.3 331,026.3r 324,877.0 2 Major New York City banks 131,699.1 137,352.3 165,572.7 173,393.4 176,089.1 159,191.7 176,683.2 166,866.6 163,542.4 3 Other banks 145,458.4 140,405.7 150,233.5 148,793.7 154,949.8 141,411.3 154,443.1 164,159.7r 161,334.6 4 Other checkable deposits4 ^ 3,349.0 3,645.5 3,788.1 3,610.0 3,683.9 3,292.5 3,601.4 3,572.6r 3,579.3 5 Savings deposits including MMDAs 3,483.3 3,266.1 3,331.3 3,497.2 3,407.3 3,032.3 3,363.3 3,562.8r 3,510.2 DEPOSIT TURNOVER Demand deposits3 6 All insured banks 797.8 803.5 832.4 796.1 830.5 746.5 817.3 811.3r 792.0 7 Major New York City banks 3,819.8 4,270.8 4,797.9 4,624.0 4,693.3 4,154.7 4,525.8 4,129.1 4,120.9 8 Other banks 464.9 447.9 435.9 405.2 429.1 388.1 421.9 446.6 435.5 9 Other checkable deposits4 ^ 16.5 16.2 14.4 12.9 13.1 11.6 12.6 12.5 12.7 10 Savings deposits including MMDAs 6.2 5.3 4.7 4.7 4.6 4.1 4.5 4.8 4.7 DEBITS TO Not seasonally adjusted Demand deposits3 11 All insured banks 277,290.5 277,715.4 315,808.2 308,015.6 340,982.1 304,760.9 303,619.8 339,172.4r 324,768.4 12 Major New York City banks 131,784.7 137,307.2 165,595.0 167,578.4 179,987.6 159,198.8 161,174.1 170,855.0 161,923.2 13 Other banks 145,505.8 140,408.3 150,213.3 140,437.2 160,994.5 145,562.0 142,445.7 168,317.4r 162,845.2 14 Other checkable deposits4 3,346.7 3,645.6 3,788.1 3,351.3 3,849.3 3,596.2 3,296.7 3,630.2r 3,799.5 15 Savings deposits including MMDAs 3,483.0 3,267.7 3,329.0 3,240.4 3,588.0 3,248.8 3,080.3 3,529.2r 3,727.3 DEPOSIT TURNOVER Demand deposits3 16 All insured banks 798.2 803.4 832.5 754.3 815.2 738.2 771.7 854.5 786.7 17 Major New York City banks 3,825.9 4,274.3 4,803,5 4,494.4 4,418.1 3,936.3 4,213.4 4,385.4 4,108.4 18 Other banks 465.0 447.9 436.0 378.5 426.5 390.9 401.1 470.2 436.1 19 Other checkable deposits4 16.4 16.2 14.4 12.1 13.5 12.4 11.6 12.6 13.0 20 Savings deposits including MMDAs 6.2 5.3 4.7 4.4 4.8 4.4 4.1 4.7 4.9 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 Nonfinancial Statistics • September 1993 1.24 LOANS AND SECURITIES All Commercial Banks' Billions of dollars, averages of Wednesday figures 1992 1993 IItteemm July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.r Apr.r Mayr June Seasonally adjusted 1 Total loans and securities1 2,886.9 2,902.2 2,917.4 2,926.0 2,932.4 2,937.6 2,933.4 2,937.7 2,950.7r 2,960.8 2,982.9 3,006.8 2 U.S. government securities 619.2 632.6 640.6 647.3 651.4 657.1 656.9 667.3 681.5r 691.5 694.3 704.5 3 Other securities 177.9 178.2 178.2 178.8 177.3 176.0 174.0 175.3r 177.0 177.7 178.4 177.9 4 Total loans and leases' 2,089.8 2,091.4 2,098.6 2,099.8 2,103.8 2,104.6 2,102.5r 2,095.lr 2,092.2r 2,091.5 2,110.3 2,124.3 Commercial and industrial ..... 602.5 601.4 601.2 600.8 600.5 597.6 598.0r 596.1 592.4r 589.6 592.5 594.2 6 Bankers acceptances held ... 6.5 6.5 6.3 7.5 7.9 7.8 7.5 8.7 8.9 9.0 9.6 9.5 V Other commercial and industrial 596.0 594.9 594.9 593.3 592.6 589.9 590.5r 587.3r 583.4r 580.5 582.9 584.6 8 U.S. addressees3 585.3 584.3 583.6 582.6 582.3 580.2 580.9 577.5r 573.3r 570.8 573.2 575.6 9 Non-U.S. addressees3 10.7 10.6 11.3 10.7 10.3 9.7 9.7 9.8 10.1 9.7 9.6 9.0 10 Real estate 881.5 883.1 886.8 890.7 892.5 892.4 889.9 887.8 888. lr 887.6 893.8 900.0 11 Individual 358.6 357.4 357.0 355.8 355.4 355.5 358.2 360.4 360.8r 362.6 365.7 366.9 12 Security 60.5 61.6 64.0 64.7 64.2 64.8 63.0 61.7 6622..55 6600..88 6666..99 6699..44 13 Nonbank financial institutions 41.5 42.0 44.0 43.9 44.7 43.6 45,0r 44.8r 44.5 45.3 45.9 45.7 14 Agricultural 34.9 35.3 35.2 35.1 35.2 35.0 34.5 34.3 34.0 3333..77 3333..88 3333..77 15 State and political subdivisions 26.2 25.9 25.8 25.4 25.1 24.8 24.2 23.7 23.4 23.1 2233..33 23.3 16 Foreign banks 7.7 7.2 7.9 7.6 7.5 7.7 7.7 8.5 8.1 8.0 88..11 8.2 17 Foreign official institutions 2.2 2.3 2.5 2.4 2.8 2.8 2.8 3.0 2.9 2.9 2.8 2.9 18 Lease-financing receivables .... 30.8 30.8 31.0 30.8 30.9 30.9 30.3 30.4 30.3 30.3 30.7 30.9 19 All other loans 43.2 44.3 43.2 42.6 45.0 49.5 48.8 44.5 45.3 47.7 46.8 49.1 Not seasonally adjusted 20 Total loans and securities' 2,876.1 2,894.5 2,914.9 2,925.2 2,939.0 2,947.4 2,935.5 2,940.5 2,954.5r 2,962.3 2,977.9 3,006.5 21 U.S. government securities 615.3 631.3 638.7 645.1 654.1 655.8 657.3 670.8r 687.3r 693.3 693.2 702.3 22 Other securities 176.8 178.1 177.9 179.2 178.3 176.2 174.6 175.5r 176.7r 177.2 177.9 177.4 23 Total loans and leases' 2,084.0 2,085.0 2,098.3 2,100.9 2,106.6 2,115.4 2,103.6 2,094.lr 2,090.6r 2,091.8 2,106.8 2,126.8 24 Commercial and industrial 601.5 597.6 597.6 598.4 600.8 600.6 596.5 595.2r 595.6r 592.5 594.2 596.0 25 Bankers acceptances held2 ... 6.3 6.3 6.2 7.4 8.2 8.0 7.7 9.1 99..00 88..99 99..55 99..44 26 Other commercial and industrial 595.2 591.4 591.4 591.0 592.6 592.5 588.8r 586.lr 586.5r 583.6 584.7 586.6 27 U.S. addressees3 584.2 580.5 580.3 580.7 582.8 583.0 579.2 576.3 576.5r 573.9 575.1 576.8 28 Non-U.S. addressees3 11.0 10.8 11.1 10.3 9.8 9.5 9.6 9.8 10.0 9.8 9.6 9.8 29 Real estate 881.6 883.7 887.6 891.5 893.9 893.7 889.6 886.0 885.5r 886.5 893.9 900.3 30 Individual 356.4 356.9 358.6 356.2 356.3 360.0 362.3 360.4 358.4r 359.9 363.9 365.1 31 Security 58.0 59.4 62.5 64.2 63.5 65.5 64.5 64.6r 6644..66 6644..11 6633..99 6699..00 32 Nonbank financial institutions 41.3 41.8 43.5 43.5 45.0 45.6 45.2r 44.6 44.2 44.7 45.3 46.3 33 Agricultural 35.8 36.5 36.7 36.1 35.2 34.8 33.6 33.0 3322..66rr 3322..88 3333..55 3344..22 34 State and political subdivisions 26.1 25.9 25.9 25.5 25.2 24.8 24.0 23.6 23.5 23.1 23.3 23.3 35 Foreign banks 7.8 7.0 8.1 7.8 7.8 8.2 7.7 8.4 7.8 7.7 7.9 8.0 36 Foreign official institutions 2.2 2.3 2.5 2.4 2.8 2.8 2.8 3.0 2.9 2.9 2.8 2.9 37 Lease-financing receivables .... 30.6 30.6 30.8 30.8 30.8 30.9 30.7 30.6 30.5 30.4 30.7 30.9 38 All other loans 42.6 43.2 44.6 44.4 45.4 48.6 46.6 44.6r 45.0 47.2 47.4 50.9 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 1992r 1993 SSoouurrccee ooff ffuunnddss July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Seasonally adjusted 11111 TTTTToooootttttaaaaalllll nnnnnooooonnnnndddddeeeeepppppooooosssssiiiiittttt fffffuuuuunnnnndddddsssss22222 297.4 302.3 309.3 303.4 307.5 311.4 311.lr 309.7r 319.6r 328.3 324. lr 332.1 22222 NNNNNeeeeettttt bbbbbaaaaalllllaaaaannnnnccccceeeeesssss ooooowwwwweeeeeddddd tttttooooo rrrrreeeeelllllaaaaattttteeeeeddddd fffffooooorrrrreeeeeiiiiigggggnnnnn oooooffffffffffiiiiiccccceeeeesssss33333.......... 62.2 61.5 63.9 62.6 67.3 71.1 74.1 73.3 79.1 88.2r 83.1 84.4 33333 BBBBBooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss fffffrrrrrooooommmmm ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn cccccooooommmmmmmmmmeeeeerrrrrccccciiiiiaaaaalllll bbbbbaaaaannnnnkkkkksssss iiiiinnnnn UUUUUnnnnniiiiittttteeeeeddddd SSSSStttttaaaaattttteeeeesssss44444 235.2 240.8 245.4 240.8 240.2 240.4 236.9" 236.3r 240.6 240.lr 241.0r 247.8 44444 DDDDDooooommmmmeeeeessssstttttiiiiicccccaaaaallllllllllyyyyy ccccchhhhhaaaaarrrrrttttteeeeerrrrreeeeeddddd bbbbbaaaaannnnnkkkkksssss 147.4 151.7 153.4 154.6 153.9 154.8 155.4r 155.5r 159.8 164.4r 162.5 168.7 55555 FFFFFooooorrrrreeeeeiiiiigggggnnnnn-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaannnnnkkkkksssss 87.8 89.2 91.9 86.2 86.4 85.6 81.6 80.9 80.8 75.6 78.5 79.1 Not seasonally adjusted 66666 TTTTToooootttttaaaaalllll nnnnnooooonnnnndddddeeeeepppppooooosssssiiiiittttt fffffuuuuunnnnndddddsssss22222 291.9 297.3 303.8 305.7 312.8 311.4 3I3.9r 324.4r 324.5 328.8r 331.2 77777 NNNNNeeeeettttt bbbbbaaaaalllllaaaaannnnnccccceeeeesssss ooooowwwwweeeeeddddd tttttooooo rrrrreeeeelllllaaaaattttteeeeeddddd fffffooooorrrrreeeeeiiiiigggggnnnnn oooooffffffffffiiiiiccccceeeeesssss33333.......... 58.9 57.7 61.6 63.8 68.9 75.2 76.7 75.2r 79.8 85.3r 85.3 82.4 88888 DDDDDooooommmmmeeeeessssstttttiiiiicccccaaaaallllllllllyyyyy ccccchhhhhaaaaarrrrrttttteeeeerrrrreeeeeddddd bbbbbaaaaannnnnkkkkksssss -6.6 -9.2 -11.2 -13.4 -12.4 -15.0 -15.8 -10.6 -7.0 -9.5 -9.8 -15.4 99999 FFFFFooooorrrrreeeeeiiiiigggggnnnnn-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaannnnnkkkkksssss 65.5 66.9 72.7 77.2 81.4 90.2 92.5 85.7 86.8 94.8r 95.1 97.8 1111100000 BBBBBooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss fffffrrrrrooooommmmm ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn cccccooooommmmmmmmmmeeeeerrrrrccccciiiiiaaaaalllll bbbbbaaaaannnnnkkkkksssss iiiiinnnnn UUUUUnnnnniiiiittttteeeeeddddd SSSSStttttaaaaattttteeeeesssss 232.9 239.6 242.3 241.9 243.9 236.2 233.2r 238.8r 244.6r 239.2r 243.5r 248.8 1111111111 DDDDDooooommmmmeeeeessssstttttiiiiicccccaaaaallllllllllyyyyy ccccchhhhhaaaaarrrrrttttteeeeerrrrreeeeeddddd bbbbbaaaaannnnnkkkkksssss 144.3 150.5 152.3 155.8 158.3 153.8 152.3r 157.2r 162.6r 162.4r 164. R 168.5 1111122222 FFFFFeeeeedddddeeeeerrrrraaaaalllll fffffuuuuunnnnndddddsssss aaaaannnnnddddd ssssseeeeecccccuuuuurrrrriiiiitttttyyyyy RRRRRPPPPP bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss55555 140.1 146.7 148.4 152.2 154.2 149.9 148.7r 154.0r 159.3 159.01 160.3 164.7 1111133333 OOOOOttttthhhhheeeeerrrrr 4.2 3.9 3.8 3.6 4.1 4.0 3.6 3.2 3.3 3.5 3.8r 3.8 1111144444 FFFFFooooorrrrreeeeeiiiiigggggnnnnn-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaannnnnkkkkksssss66666 88.7 89.1 90.0 86.1 85.5 82.3 80.9 81.6 82.0 76.8 79.4 80.3 MMMMMEEEEEMMMMMOOOOO GGGGGrrrrrooooossssssssss lllllaaaaarrrrrgggggeeeee tttttiiiiimmmmmeeeee dddddeeeeepppppooooosssssiiiiitttttsssss 1111155555 SSSSSeeeeeaaaaasssssooooonnnnnaaaaallllllllllyyyyy aaaaadddddjjjjjuuuuusssssttttteeeeeddddd 387.7 385.8 383.2 375.7 371.3 366.5 359.9 358.4 355.7 355.0 356.2 352.4 1111166666 NNNNNooooottttt ssssseeeeeaaaaasssssooooonnnnnaaaaallllllllllyyyyy aaaaadddddjjjjjuuuuusssssttttteeeeeddddd 387.4 387.1 383.6 374.9 371.1 365.5 358.0 358.0 356.5 354.2 357.9 353.9 UUUUU.....SSSSS..... TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy dddddeeeeemmmmmaaaaannnnnddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaattttt cccccooooommmmmmmmmmeeeeerrrrrccccciiiiiaaaaalllll bbbbbaaaaannnnnkkkkksssss 1111177777 SSSSSeeeeeaaaaasssssooooonnnnnaaaaallllllllllyyyyy aaaaadddddjjjjjuuuuusssssttttteeeeeddddd 23.1 28.0 24.1 21.5 20.7 20.4 25.6 23.6 18.8 24.2 19.1 26.2 1111188888 NNNNNooooottttt ssssseeeeeaaaaasssssooooonnnnnaaaaallllllllllyyyyy aaaaadddddjjjjjuuuuusssssttttteeeeeddddd 19.6 22.4 28.6 21.9 16.5 19.5 33.1 29.5 17.4 20.3 20.3 26.6 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. State investment companies majority owned by foreign banks, and Edge Act and 5. Figures are based on averages of daily data reported weekly by approxiagreement corporations owned by domestically chartered and foreign banks. mately 120 large banks and on quarterly or annual data reported by other banks. Data in this table also appear in the Board's G.10 (411) monthly release. For 6. Figures are partly averages of daily data and partly averages of Wednesday ordering 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 • September 1993 1.26 ASSETS AND LIABILITIES OF COMMERCIAL BANKS1 Wednesday figures Millions of dollars 1993 AAccccoouunntt May 5r May 12r May 191 May 26r June 2 June 9 June 16 June 23 June 30 ALL COMMERCIAL BANKING INSTITUTIONS2 Assets 1 Loans and securities 3,123,682 3,126,037 3,122,233 3,119,586 3,156,959 3,165,855 3,177,550 3,147,184 3,162,824 7 Investment securities 833,066 833,365 830,586 827,496 838,119 838,891 835,650 834,503 840,103 U.S. government securities 669,498 669,437 666,738 665,010 676,005 677,499 675,293 673,547 676,925 4 Other 163,568 163,928 163,848 162,487 162,114 161,391 160,356 160,956 163,178 5 Trading account assets 39,679 36,011 40,591 36,429 43,947 43,587 43,448 45,503 33,814 6 U.S. government securities 25,640 22,142 25,330 21,413 28,805 27,421 27,598 29,153 19,088 7 Other securities 2,676 2,488 2,649 2,844 2,405 2,495 2,296 2,619 2,732 8 Other trading account assets 11,363 11,382 12,612 12,173 12,737 13,671 13,554 13,730 11,993 9 2,250,937 2,256,661 2,251,057 2,255,660 2,274,892 2,283,377 2,298,453 2,267,178 2,288,908 10 148,653 150,431 147,552 151,751 154,282 163,804 161,710 149,257 155,329 11 Loans excluding interbank 2,102,284 2,106,230 2,103,505 2,103,909 2,120,611 2,119,573 2,136,743 2,117,921 2,133,578 1? 594,882 592,577 593,431 593,465 598,110 593,562 597,780 594,718 597,218 N Real estate 890,884 894,640 892,670 893,720 897,566 899,737 900,730 897,705 902,840 14 Revolving home equity 74,339 74,416 74,382 74,500 74,505 74,449 74,867 74,757 74,822 IS Other 816,546 820,224 818,289 819,221 823,061 825,287 825,864 822,948 828,018 16 Individual 362,371 363,258 363,719 364,875 365,216 364,449 364,106 365,019 366,472 17 All other 254,147 255,755 253,685 251,849 259,718 261,825 274,127 260,479 267,049 18 Total cash assets 211,777 215,102 199,981 216,950 240,658 213,838 217,639 211,167 219,261 19 Balances with Federal Reserve Banks 29,306 35,087 24,594 38,277 27,645 27,083 26,530 32,905 23,826 70 Cash in vault 29,357 31,573 31,804 32,609 32,810 32,261 32,207 32,436 33,152 71 Demand balances at U.S. depository institutions .. 32,065 30,487 29,895 30,680 35,943 32,069 31,706 29,762 30,355 77 81,914 78,835 74,090 74,857 101,670 79,719 83,190 73,303 86,505 n Other cash assets 39,134 39,121 39,598 40,527 42,590 42,708 44,006 42,761 45,423 24 Other assets 276,743 270,765 273,830 268,455 288,925 278,541 282,400 272,884 279,821 25 Total assets 3,612,202 3,611,904 3,596,044 3,604,990 3,686,541 3,658,234 3,677,589 3,631,235 3,661,906 Liabilities 76 2,510,585 2,498,297 2,478,437 2,481,930 2,549,635 2,520,120 2,530,874 2,472,343 2,507,409 77 774,213 760,951 747,850 753,296 807,875 778,456 791,150 746,%5 795,187 78 Demand, U.S. government 3,564 3,011 3,133 3,331 4,225 3,501 7,487 3,161 4,281 79 Demand, depository institutions 40,210 38,621 38,019 38,961 45,779 39,281 39,962 37,674 38,447 30 Other demand and all checkable deposits 730,439 719,319 706,698 711,005 757,871 735,674 743,701 706,130 752,459 31 Savings deposits (excluding checkable) 760,815 763,898 758,811 758,309 769,140 772,890 770,404 760,900 759,265 V Small time deposits 621,495 620,726 619,332 618,035 618,209 616,658 616,871 615,026 615,412 Time deposits over $100,000 354,061 352,723 352,443 352,290 354,410 352,115 352,449 349,452 337,545 34 488,740 490,736 500,672 497,098 506,257 512,421 529,506 527,897 508,883 35 Treasury tax and loan notes 18,546 14,143 16,620 14,738 18,785 4,890 30,676 35,240 31,241 36 Other 470,194 476,593 484,052 482,360 487,472 507,531 498,830 492,657 477,642 37 Other liabilities 330,976 339,094 333,636 342,771 344,949 338,165 331,627 344,836 359,176 38 Total liabilities 3,330,302 3,328,127 3,312,745 3,321,800 3,400,841 3,370,706 3,392,007 3,345,076 3,375,468 39 Residual (assets less liabilities)3 281,900 283,777 283,299 283,190 285,700 287,528 285,582 286,159 286,438 Footnotes appear on 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 Account May 5r May 12r May 191 May 26r June 2 June 9 June 16 June 23 June 30 DOMESTICALLY CHARTERED COMMERCIAL BANKS4 Assets 4 4 4 4 4 4 4 4 5 4 4 5 5 5 5 5 5 5 6 6 6 6 5 5 0 1 2 3 4 7 8 9 0 5 6 1 2 3 4 5 6 9 0 1 2 3 7 8 L O T o o t T T I C D O C B h a t n a o r e a n a a e t v l O O U a I O L U r h t s s s l m n e a d h a h e o c t t . t a . l t s a A i C R n I a h r h S h S a a e s n t n n i i n l c . e e s e . m n e l o n r s g t c o d d l h O r R d r e r b e a s e m g a g a i s e v l m o a t a e t v t s o s s n o a s b e n m h r a n t h c v e i e e w s s v s v x t a h a u d k e c o c c s s e e d e c l i r e a l u o u t l s u e r a t t r l r r i v a l s h a e c u r t r u n n n n o s s t l i i c i i n g e d m c m n a t e t a F u t i i i e g n l t e e e e r a n e s s s a s i s d n g c a n h t s t a c n t e i o s e t i d o r e m s n s s a u U e t e t l i s e n e c c n . t R r u u S d e b r r . e a u q a i i s s s u t t d n i e i s t i e k e e r e r t s i p s y v t a s o e l s B ito an ry k s i nstitutions . 2 1 1 , , , 7 6 4 7 2 7 9 8 3 8 1 1 1 1 2 8 3 0 6 4 6 7 7 2 8 6 5 4 2 2 3 4 3 1 7 8 1 0 1 9 4 7 1 1 5 9 4 2 0 0 2 8 2 0 9 0 0 1 7 5 6 , , , , , , , , , , , , , , , , , , , , , , , , 7 5 6 5 0 3 9 7 8 0 6 7 3 3 6 8 5 2 3 3 3 6 1 6 2 9 6 7 7 7 3 8 9 6 5 4 9 3 9 7 0 9 6 2 2 5 8 5 2 7 1 9 1 3 7 8 1 0 9 0 6 9 9 6 8 9 3 8 6 5 9 8 2 1 1 , , , 7 6 7 7 4 8 3 2 9 8 1 1 1 1 2 7 7 2 7 3 2 6 3 0 6 4 8 5 3 7 3 4 2 1 8 1 7 2 9 1 6 2 2 8 6 2 9 4 1 3 3 6 1 4 0 8 4 1 8 7 7 , , , , , , , , , , , , , , , , , , , , , , , , 0 5 0 7 8 1 3 6 1 7 2 5 4 2 5 2 6 4 3 2 0 0 2 0 0 3 1 9 2 9 4 4 0 8 6 4 1 8 5 8 1 3 1 8 4 7 0 6 8 1 1 9 4 1 2 9 2 9 3 2 1 2 8 8 5 3 6 4 9 9 0 6 2 1 1 , , , 7 6 7 4 7 3 2 9 8 8 1 1 1 1 4 7 1 2 2 7 0 5 6 6 3 7 4 7 2 3 4 4 2 1 7 1 7 0 4 9 0 8 1 5 9 2 9 3 4 8 4 7 4 1 4 0 6 2 4 7 3 , , , , , , , , , , , , , , , , , , , , , , , , 4 5 6 9 3 1 8 7 6 5 9 3 7 9 4 1 7 2 3 6 8 1 7 5 8 4 9 5 8 0 6 5 1 4 6 8 0 1 9 3 3 4 9 7 1 7 2 8 4 5 1 2 2 2 7 9 9 9 8 1 1 2 1 4 0 1 5 4 8 1 1 0 2 1 1 . , . 7 6 7 7 4 3 9 8 8 1 1 1 1 1 7 1 7 3 7 6 3 5 7 4 2 7 3 2 4 3 3 1 2 9 9 7 1 0 7 0 6 2 2 4 7 7 9 6 1 9 4 2 5 9 7 2 9 8 8 0 0 . , , , , , , , . , , , , , , , , , , , , , , , 1 7 4 7 8 4 7 8 8 3 4 8 2 2 5 7 5 7 2 4 1 0 2 1 5 5 7 5 5 2 4 1 1 1 7 1 1 7 3 0 0 8 7 7 7 8 0 0 9 1 5 2 2 9 4 8 1 7 1 3 0 0 1 0 0 9 9 5 3 7 6 0 2 1 1 , , , 6 4 7 2 2 8 7 8 3 9 8 1 1 1 4 2 9 7 1 0 4 2 7 3 3 0 6 6 4 9 6 2 1 3 4 1 8 3 6 9 4 3 4 4 1 8 4 2 2 4 5 3 0 6 9 7 2 3 0 9 5 , , , , , , , , , , , , , , , , , , , , , , , , 9 3 3 5 7 2 5 8 6 3 0 8 5 4 7 6 2 2 2 7 2 2 6 0 4 8 6 1 0 7 4 6 2 4 0 0 1 0 7 3 3 3 5 7 8 2 3 7 7 6 7 6 9 8 3 3 5 6 5 5 9 5 9 7 9 4 3 8 3 9 7 9 2 1 1 , , , 6 8 7 4 7 3 2 8 9 8 1 1 1 1 4 2 1 0 6 3 7 6 2 7 3 3 7 6 9 5 2 1 3 4 8 1 7 3 8 1 7 4 8 7 8 0 7 7 1 4 9 2 2 6 1 3 7 0 5 8 6 , , , , , , , , , , , , , , , , , , , , , , , , 5 1 3 4 6 0 5 2 0 0 8 4 4 4 4 6 4 4 2 6 5 0 7 4 8 4 6 4 6 7 1 2 6 5 1 2 7 5 3 9 4 6 0 2 0 3 4 0 7 6 4 9 5 3 2 8 1 1 5 1 1 5 0 5 9 9 4 9 0 1 2 9 2 2 1 , , , 6 0 8 7 4 7 2 8 3 8 1 1 1 1 1 2 4 2 1 7 6 3 2 7 3 3 8 6 5 6 2 4 4 1 1 8 8 2 3 5 1 3 7 4 1 0 5 7 9 2 2 4 2 9 6 0 3 9 3 1 9 , , , , , , , , , , , , , , , , , , , , , , , , 1 4 1 4 0 8 1 7 0 4 8 1 5 8 1 8 2 2 0 3 6 5 5 5 0 4 5 4 0 6 3 0 7 3 0 0 3 9 8 2 8 5 7 7 9 5 5 4 1 0 0 8 6 7 0 7 1 1 4 0 3 8 6 3 0 6 8 6 4 6 6 6 2 1 1 , , , 7 6 4 3 2 7 7 8 8 9 1 1 1 1 7 4 0 6 2 7 3 2 7 3 8 4 5 2 3 6 7 8 2 1 1 4 8 4 5 0 5 2 8 4 4 1 8 7 3 9 2 6 9 2 5 2 3 7 3 0 0 , , , , , , , , , , , , , , , , , , , , , , , , 9 6 5 4 0 5 7 1 8 3 0 0 5 6 7 0 1 1 7 6 9 8 2 7 3 5 0 0 1 6 4 5 7 5 9 0 0 9 3 3 2 5 4 3 2 1 1 3 3 2 1 3 9 4 9 7 7 3 1 1 2 0 7 4 5 3 1 1 2 4 9 0 2 1 1 , , , 7 3 2 6 4 8 7 8 9 7 1 1 1 1 6 0 8 7 3 2 8 2 3 5 3 2 9 6 9 6 8 1 2 4 8 1 1 6 6 0 9 4 3 3 6 9 3 5 3 2 7 7 6 7 8 9 8 0 1 1 9 , , , , , , , , , , , , , , , , , , , , , , , , 4 4 0 2 8 7 7 8 8 1 0 0 8 4 7 7 4 8 5 9 7 7 9 0 7 6 1 6 4 2 7 9 1 9 1 1 8 8 4 8 3 7 3 0 3 6 9 8 2 6 2 3 1 2 5 3 4 8 8 9 5 0 5 2 2 8 8 4 6 0 3 8 64 Total assets 3,144,441 3,145,159 3,122,396 3,131,032 3,202,833 3,172,881 3,192,910 3,150,017 3,168,376 Liabilities 65 Total deposits 2,357,417 2,345,383 2,325,554 2,328,358 2,393,450 2,366,149 2,375,030 2,316,782 2,353,649 66 Transaction accounts 763,345 749,048 737,255 742,161 796,570 766,543 780,226 736,364 782,531 67 Demand, U.S. government 3,564 3,010 3,133 3,331 4,225 3,501 7,486 3,160 4,280 68 Demand, depository institutions 37,422 35,829 35,225 36,161 42,890 36,292 37,022 34,825 35,323 6 7 7 7 7 7 7 7 9 0 1 2 3 4 5 6 B O o t T S S O T h r a m r i e r t m O o v r e h a w a i e e t l l n s h r l i i a g u d e n t b s r r e i g y i m p s l d d i o e e t t e i a s p m e d x i o s t e a s s a p n i n o t o d s d v s i a e ( l t r e n s o x d a $ c n 1 a l 0 u l n l 0 d o , c i 0 t n h e 0 g e s 0 c c k h a e b c l k e a d b e le p ) o sits 7 7 6 2 3 3 1 5 1 2 1 7 5 1 3 6 9 2 8 0 1 7 8 , , , , , , , , 5 3 3 3 8 1 9 5 7 3 7 5 3 6 6 4 2 2 7 9 1 8 5 6 7 7 6 2 3 3 1 1 1 1 5 6 7 1 4 0 8 8 9 4 8 4 0 , , , , , , , , 2 1 6 5 3 5 1 6 0 4 1 7 7 2 4 % 9 9 7 0 8 1 3 6 7 6 2 3 3 1 9 1 5 1 8 6 3 1 8 7 4 6 0 4 6 6 , , , , , , , , 8 2 5 5 7 1 0 6 9 1 1 6 2 0 3 2 7 5 6 7 7 7 4 0 7 7 6 2 3 3 1 5 0 1 6 1 8 4 1 4 2 5 7 6 2 0 4 , , , , , , , , 0 6 9 4 2 2 4 7 0 6 3 9 5 3 6 3 7 9 3 9 8 7 4 8 7 7 6 2 3 3 1 6 1 4 1 6 8 1 4 4 6 9 6 7 5 8 1 , , , , , , , , 7 0 4 0 0 8 0 7 5 4 5 9 5 4 5 8 1 1 5 0 8 3 7 5 6 7 7 2 3 3 1 1 2 6 1 7 8 3 4 4 6 8 6 8 3 8 , , , , , , , , 5 7 5 4 5 6 8 8 6 3 5 7 7 4 9 8 5 7 1 1 1 7 0 5 6 7 7 2 4 3 1 1 1 6 3 0 3 7 3 4 4 5 5 0 0 0 4 , , , , , , , , 7 0 9 7 2 8 6 6 9 3 7 1 0 8 3 7 4 2 8 8 5 1 5 6 6 7 6 2 4 3 1 5 9 1 1 3 1 7 3 6 8 2 0 4 5 9 5 , , , , , , , , 5 3 9 9 1 3 2 9 8 0 7 2 1 5 4 4 7 1 9 9 3 3 1 0 7 7 6 2 3 3 1 4 1 5 0 3 5 8 4 2 3 4 2 1 4 5 5 , , , , , , , , 9 3 9 2 7 7 5 9 2 3 9 4 8 5 1 % 8 2 9 1 7 5 1 77 Total liabilities 2,865,759 2,864,599 2,842,315 2,851,059 2,920,350 2,888,571 2,910,546 2,867,075 2,885,156 78 Residual (assets less liabilities)3 278,683 280,559 280,082 279,973 282,483 284,310 282,364 282,941 283,220 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 investment corporations majority owned by foreign banks. Data are estimates securities data are estimates for the last Wednesday of the month based on a for the last Wednesday of the month based on a sample of weekly reporting sample of weekly reporting banks and quarter-end condition reports. foreign-related and domestic institutions and quarter-end condition reports. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic NonfinancialS tatistics • September 1993 1.27 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS Millions of dollars, Wednesday figures 1993 AAccccoouunntt May 5 May 12 May 19 May 26 June 2 June 9 June 16 June 23 June 30 ASSETS 1 Cash and balances due from depository institutions 106,657 110,686 97,947 113,587 123,642 107,686 110,042 106,219 106,087 2 U.S. Treasury and government securities 291,533r 287,911" 289,761" 284,656" 298,769 297,489 294,662 295,586 287,115 3 Trading account 23,455 19,998 23,059 19,204 26,418 25,254 24,990 26,847 17,023 4 Investment account 268,077r 267,913" 266,703" 265,451" 272,351 272,235 269,672 268,739 270,092 5 Mortgage-backed securities' 84,170r 83,720" 81,567" 81,776" 82,991 83,204 82,957 82,918 84,036 All others, by maturity 6 One year or less 42,333r 43,283" 4455,,221177"" 44,830" 46,785 47,567 48,490 47,526 45,486 7 One year through five years 73,628r 73,818" 73,738" 74,386" 74,058 73,959 71,471 71,551 70,477 8 More than five years 67,947r 67,092" 66,182" 64,460" 68,517 67,505 66,755 66,744 70,093 9 Other securities 55,819" 55,847" 55,889" 55,644" 55,637 55,893 55,829 56,077 56,305 10 Trading account 2,492 2,303 2,466 2,666 2,230 2,319 2,118 2,443 2,556 11 Investment account 53,328r 53,544" 53,423" 52,978" 53,407 53,575 53,711 53,635 53,749 12 State and political subdivisions, by maturity 19,777r 19,808" 19,814 19,828 19,699 19,754 19,780 19,800 19,387 13 One year or less 3,410" 3,455" 3,447" 3,467" 3,366 3,428 3,455 3,471 3,206 14 More than one year 16,367 16,354" 16,367" 16,361" 16,332 16,326 16,325 16,329 16,181 15 Other bonds, corporate stocks, and securities 33,551 33,735" 33,609" 33,150" 33,709 33,820 33,932 33,835 34,362 16 Other trading account assets 11,240 11,258 12,490 12,052 12,628 13,561 13,434 13,608 11,872 17 Federal funds sold2 86,252 85,455" 81,413 81,305 86,571 92,486 103,490 84,676 83,827 18 To commercial banks in the United States 53,820 53,475 52,407 55,686 56,298 58,088 64,049 53,995 57,389 19 To nonbank brokers and dealers 26,538 26,309" 24,746 20,464 24,309 27,353 31,870 23,612 20,459 20 To others3 5,893 5,670 4,259 5,156 5,965 7,045 7,571 7,068 5,978 21 Other loans and leases, gross 978,479" 980,072" 978,955" 982,237" 987,201 983,486 986,607 981,078 995,567 22 Commercial and industrial 277,523" 275,709" 275,228" 275,761" 277,115 274,713 276,343 275,029 276,631 23 Bankers acceptances and commercial paper 3,090 3,045 3,079 3,134 3,150 3,238 3,198 2,801 2,993 24 All other 274,433" 272,665" 272,149" 272,626" 273,964 271,475 273,144 272,228 273,638 25 U.S. addressees 272,836" 271,098" 270,644" 271,039" 272,316 269,741 271,312 270,416 271,805 26 Non-U.S. addressees 1,597 1,567 1,505 1,587 1,648 1,734 1,833 1,812 1,833 27 Real estate loans 395,631" 398,030" 395,859" 396,189" 398,365 400,463 400,332 398,515 401,2% 28 Revolving, home equity 43,855" 43,847" 43,851" 43,904" 43,763 43,696 44,018 43,942 43,921 29 All other 351,776" 354,183" 352,008" 352,285" 354,602 356,767 356,314 354,573 357,376 30 To individuals for personal expenditures 185,356" 185,627 186,093 186,766 186,414 185,367 186,497 187,445 188,255 31 To financial institutions 35,189 34,854 35,793 36,703 39,574 38,385 37,161 35,384 37,715 32 Commercial banks in the United States 12,072 11,954 13,153 13,863 14,641 14,428 14,594 13,412 14,225 33 Banks in foreign countries 2,385 2,431 2,629 2,479 3,358 2,224 2,220 2,240 2,606 34 Nonbank financial institutions 20,731 20,470 20,011 20,361 21,574 21,733 20,347 19,733 20,884 35 For purchasing and carrying securities 16,150" 16,882" 16,752" 16,602" 14,813 15,441 16,220 16,134 19,250 36 To finance agricultural production 5,648 5,639 5,688 5,6% 5,755 5,737 5,743 5,750 5,799 37 To states and political subdivisions 13,777 13,671 14,082 14,053 14,001 13,859 13,853 13,700 13,695 38 To foreign governments and official institutions 1,522 1,380 1,344 1,339 1,550 1,430 1,350 1,339 1,451 39 All other loans4 23,142" 23,735" 23,543" 24,439" 24,878 23,319 24,334 23,020 26,580 40 Lease-financing receivables 24,541 24,545 24,574 24,689 24,737 24,772 24,773 24,760 24,897 41 LESS: Unearned income 2,084 2,086 2,094 2,084 2,039 2,057 2,057 2,048 2,111 42 Loan and lease reserve5 36,447 36,384 36,401 36,313 36,579 36,657 36,634 36,413 35,618 43 Other loans and leases, net 939,948" 941,602" 940,459" 943,840" 948,584 944,772 947,915 942,616 957,838 44 Other assets 164,251" 164,605" 162,104" 159,492" 169,972 165,032 171,617 169,503 167,682 45 Total assets 1,655,70^ 1,657,363' 1,640,064' 1,650,576' 1,695,803 1,676,920 1,696,989 1,668,287 1,670,726 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 AAccccoouunntt May 5 May 12 May 19 May 26 June 2 June 9 June 16 June 23 June 30 LIABILITIES 46 Deposits l,121,675r l,113,712r l,099,371r l,102,573r 1,142,493 1,125,960 1,135,524 1,092,820 1,114,637 47 Demand deposits 276,877" 271,015r 263,537r 269,142r 296,175 278,548 289,747 263,260 290,932 48 Individuals, partnerships, and corporations 225,207r 222,007r 215,363r 217,932r 239,334 227,108 234,529 213,379 240,455 49 Other holders 51,670" 49,008r 48,174r 51,210"^ 56,842 51,440 55,217 49,881 50,477 50 States and political subdivisions 10,049 8,652 9,093 8,925 9,555 8,407 9,195 9,559 9,023 51 U.S. government 2,130 1,795 1,879 2,162 2,572 2,275 5,414 2,016 2,461 52 Depository institutions in the United States 23,308r 22,280r 21,415r 22,306r 26,994 23,404 23,431 21,870 21,771 53 Banks in foreign countries 5,639 5,163 5,191 5,591 5,940 4,658 5,199 4,962 5,406 54 Foreign governments and official institutions 652 615 749 631 852 550 658 597 768 55 Certified and officers' checks 9,891 10,502 9,847 11,596 10,928 12,146 11,321 10,876 11,048 56 Transaction balances other than demand deposits4 119,701 117,197 116,916 116,411 121,241 120,320 120,711 116,093 118,545 57 Nontransaction balances 725,097 725,499 718,918 717,021 725,077 727,093 725,066 713,467 705,160 58 Individuals, partnerships, and corporations 699,585 699,429" 692,816 690,682 698,526 700,562 699,247 688,308 684,496 59 Other holders 25,512 26,070 26,101 26,339 26,551 26,531 25,819 25,158 20,664 60 States and political subdivisions 20,750 21,364 21,399 21,539 21,338 21,351 20,556 20,253 18,352 61 U.S. government 2,200 2,206 2,211 2,270 2,653 2,635 2,678 2,688 498 62 Depository institutions in the United States 2,229 2,159 2,152 2,191 2,235 2,218 2,260 1,894 1,488 63 Foreign governments, official institutions, and banks .... 333 341 339 339 325 327 325 324 326 64 Liabilities for borrowed money5 280,649 287,083 288,744 292,143 295,427 294,764 308,635 321,194 292,782 65 Borrowings from Federal Reserve Banks 0 0 0 0 0 0 0 0 1,260 66 Treasury tax and loan notes 16,196 12,268 14,391r 12,779" 16,728 3,676 27,515 31,458 27,483 67 Other liabilities for borrowed money 264,453 274,815 274,353 279,365r 278,699 291,087 281,120 289,736 264,039 68 Other liabilities (including subordinated notes and debentures) 106,865 109,333r 104,660 109,029 109,460 107,170 103,375 104,493 114,033 69 Total liabilities l,509,189r 1,510,128r 1,492,775" l,503,745r 1,547,380 1,527,894 1,547,534 1,518,507 1,521,452 70 Residual (total assets less total liabilities)7 146,512 147,236 147,289 146,831 148,422 149,026 149,455 149,780 149,274 MEMO 71 Total loans and leases, gross, adjusted, plus securities .. 11,,335577,,443300"" 1,355,113r l,352,948r l,346,345r 1,369,867 1,370,399 1,375,379 1,363,619 1,363,072 7? Time deposits in amounts of $100,000 or more 109,684r 109,258r 108,008r 107,680" 107,739 108,161 106,118 103,453 96,471 73 Loans sold outright to affiliates9 871 867 866 864 862 863 854 853 813 74 Commercial and industrial 442 438 437 437 437 437 430 428 411 75 Other 428 428 428 426 425 426 425 425 402 7 7 7 6 N Fo e r t e o ig w n e d b r t a o n c r h e la c t r e e d d i i t n e st x i t t e u n ti d o e n d s t a o b r U o . a S d . residents10 -l 2 l 3 ,3 ,3 2 3 3 3 r r - 2 9 3 , , o 54 o 7 r r -1 2 3 3 , ,2 9 5 6 0 7 " r " -1 2 0 3 , , 0 1 3 1 9 8 " r -1 2 5 3 , , 7 7 7 1 9 5 -1 2 5 3 , , 0 3 7 2 2 0 -2 2 3 3 , , 9 0 2 2 6 6 -2 2 0 2 , , 3 9 7 2 7 9 - 2 9 2 , , 6 6 6 4 7 3 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 NonfinancialS tatistics • September 1993 1.28 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS Assets and Liabilities1 Millions of dollars, Wednesday figures 1993 AAccccoouunntt May 5 May 12 May 19 May 26 June 2 June 9 June 16 June 23 June 30 1 Cash and balances due from depository institutions 17,361 17,608 16,845 17,458 17,694 18,839 18,181 18,974 19,843 2 U.S. Treasury and government agency securities 30,723 2299,,992244 29,750 3300,,009999 31,259 31,131 31,405 30,592 3311,,557722 3 Other securities 8,988r 9,073r 9,049r 8,804" 8,436 8,001 7,470 7,740 8,665 4 Federal funds sold' 18,481 20,572 21,077 22,557 22,070 24,960 25,446 28,861 27,808 5 To commercial banks in the United States ... 3,872 5,889 5,341 5,585 5,269 7,740 3,592 7,436 7,570 6 To others2 14,609 14,683 15,736 16,973 16,802 17,220 21,854 21,426 20,238 7 Other loans and leases, gross 158,085r 159,484r 160,190* 159,426" 161,940 160,545 162,054 161,073 163,676 8 Commercial and industrial 95,381r 95.8071 96,548r 96,326" 98,110 97,113 97,739 97,562 98,074 9 Bankers acceptances and commercial paper 2,549 2,474 2,612 2,594 2,718 2,574 2,525 2,463 2,520 10 All other 92,831r 93,333r 93,936r 93,732" 95,392 94,539 95,214 95,099 95,554 11 U.S. addressees 89,596r 89,992r 90,508r 90,454" 92,075 91,261 91,845 91,745 92,288 12 Non-U.S. addressees 3,235r 3,342 3,428 3,278 3,317 3,277 3,368 3,353 3,266 13 Loans secured by real estate 32,201r 32,068r 32,020r 32,035" 31,847 31,858 31,889 31,627 31,471 14 To financial institutions 23,875r 24,950r 25,139"" 25,094" 25,693 25,237 26,285 25,618 26,637 15 Commercial banks in the United States.. 5,360 5,392 5,268 5,453 5,205 5,417 5,602 5,618 5,840 16 Banks in foreign countries 1,732 1,722 1,740 1,810 1,920 1,788 1,901 1,997 2,026 17 Nonbank financial institutions 16,783r 17,836r 18,131r 17,832" 18,567 18,032 18,782 18,004 18,772 18 For purchasing and carrying securities 3,375 3,533 3,491 2,965 3,299 3,332 3,130 3,105 4,574 19 To foreign governments ana official institutions 389 372 340 337755 372 372 378 459 401 70 All other 2,863r 2,753 2,651 2,630 2,619 2,632 2,633 2,702 2,518 21 Other assets (claims on nonrelated parties) .. 33,359r 32,015r 31,820" 32,176" 31,293 31,698 30,654 30,558 31,428 22 Total assets3 297,935 297,323 301,790 301,975 308,469 309,608 309,015 306,735 314,715 23 Deposits or credit balances owed to other than directly related institutions 101,440 101,271 101,527 102,538 103,993 102,021 103,491 103,969 102,617 24 Demand deposits 3,961 4,396 3,829 4,130 4,149 4,359 3,956 3,849 4,951 25 Individuals, partnerships, and corporations 3,134 3,111 3,056 3,332 3,088 2,915 2,968 3,060 4,057 76 Other 827 1,285 774 798 1,061 1,444 987 789 895 27 Nontransaction accounts 97,479 96,875 97,698 98,408 99,844 97,662 99,536 100,121 97,665 28 Individuals, partnerships, and corporations 68,601 68,173 68,175 68,352 69,517 67,898 68,720 69,144 67,650 29 Other 28,878 28,702 29,523 30,057 30,327 29,763 30,816 30,977 30,016 30 Borrowings from other than directly related institutions ., 85,582 81,673 86,786 8822,,664444 87,088 9922,,888855 92,669 82,619 88,518 31 Federal funds purchased 44,173 39,990 42,050 38,777 42,527 45,760 51,026 41,608 50,151 32 From commercial banks in the United States 13,997 11,530 13,393 13,528 14,494 16,449 18,569 10,884 18,568 33 From others 30,176 28,460 28,657 25,249 28,033 29,311 32,457 30,724 31,582 34 Other liabilities for borrowed money 41,409 41,683 44,735 43,867 44,562 47,125 41,643 41,011 38,367 35 To commercial banks in the United States 7,363 6,871 7,533 8,064 7,848 8,125 8,000 7,954 8,464 36 To others 34,046 34,812 37,202 35,803 36,713 39,000 33,643 33,057 29,903 37 Other liabilities to nonrelated parties 30,691 31,295 30,095 30,533 30,358 30,158 28,643 29,430 31,619 38 Total liabilities6 297,935 297,323 301,790 301,975 308,469 309,608 309,015 306,735 314,715 MEMO 39 Total loans (gross) and securities, adjusted7.. 207,045r 207,771r 209,457" 220099,,884499"" 213,231 211,480 217,183 215,212 218,310 40 Net owed to related institutions abroad 49,283 54,437 50,323 54,806 51,253 50,110 50,408 61,780 60,237 1. Includes securities purchased under agreements to resell. 5. Includes securities sold under agreements to repurchase. 2. Includes transactions with nonhank brokers and dealers in securities. 6. Includes net owed to related institutions abroad for U.S. branches and 3. Includes net due from related institutions abroad for U.S. branches and agencies of 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 Dec. Jan. Feb. Mar. Apr. May Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers. 458,464 525,831 562,656 531,724 549,433 549,433 540,198r 527,531r 534,118' 535,966r 541,671 Financial companies Dealer-placed paper Total 159,777 183,622 214,706 213,823 228,260 228,260 212,682r 202,046r 218,925r 210,230r 214,558 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 paper Total , 194,931 210,930 200,036 183,379 172,813 172,813 181,264 177,370 171,959 175,384 174,468 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 companies 103,756 131,279 147,914 134,522 148,360 148,360 146,252r 148,115r 143,234r 150,352r 152,645 Bankers dollar acceptances (not seasonally adjusted)6 7 Total 66,631 62,972 54,771 43,770 38,200 38,200 36,001 35,221 34,939 35,317 34,864 By holder 8 Accepting banks. 9,086 9,433 9,017 11,017 10,561 10,561 9,121 9,878 11,036 10,688r 10,934 9 Own bills 8,022 8,510 7,930 9,347 9,103 9,103 7,927 8,361 9,162 9,315r 9,624 10 Bills bought from other banks . 1,064 924 1,087 1,670 1,458 1,458 1,193 1,516 1,873 l,372r 1,310 Federal Reserve Banks7 11 Foreign correspondents. 1,493 1,066 918 1,739 1,276 1,276 1,317 1,169 1,108 909 690 12 Others 56,052 52,473 44,836 31,014 26,364 26,364 25,563 24,175 22,795 23,720r 23,239 By basis 13 Imports into United States .. 14,984 15,651 13,095 12,843 12,212 12,212 11,148 11,126 11,129 10,746 10,2% 14 Exports from United States . 14,410 13,683 12,703 10,351 8,096 8,0% 7,740 7,547 7,304 7,629 7,901 15 All other 37,237 33,638 28,973 20,577 17,893 17,893 17,112 16,548 16,506 16,942 16,667 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 aU financial-company paper sold by dealers in the open market. 6. Data on bankers dollar acceptances are gathered from approximately 100 3. Series were discontinued in January 1989. institutions. 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 dollar investors. acceptances for its own account. 1.33 PRIME RATE CHARGED BY BANKS Short-Term Business Loans1 Percent per year Av r e a r te a ge Av r e a r te a ge Period 1990— Jan. 1 10.50 1990 10.01 1991—Jan. . 9.52 1992— May . 8 10.00 1991 8.46 Feb. 9.05 June 1992 6.25 Mar. 9.00 July . 1991— J F a e n b . . 4 2 9 9 . . 0 5 0 0 1990—Jan. 10.11 A M p a r y . 9 8. . 5 0 0 0 A Se u p g t . May 1 8.50 Feb. 10.00 June 8.50 Oct. Sept. 13 8.00 Mar. 10.00 July . 8.50 Nov. Nov. 6 7.50 Apr. 10.00 Aug. 8.50 Dec. Dec. 23 6.50 May 10.00 Sept. 8.20 June 10.00 Oct. 8.00 1993—Jan. . 1992— July 2 6.00 July 10.00 Nov. 7.58 Feb Aug. 10.00 Dec. 7.21 Mar. Sept. 10.00 Apr. Oct. 10.00 1992—Jan. . 6.50 May Nov. 10.00 Feb. 6.50 June Dec. 10.00 Mar. 6.50 July . Apr. 6.50 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 • September 1993 1.35 INTEREST RATES Money and Capital Markets Averages, percent per year; figures are averages of business day data unless otherwise noted 1993 1993, week ending IItteemm 11999900 11999911 11999922 Mar. Apr. May June May 28 June 4 June 11 June 18 June 25 MONEY MARKET INSTRUMENTS 1 Federal funds12-3 8.10 5.69 3.52 3.07 2.% 3.00 3.04 3.07 3.09 2.96 3.01 3.00 2 Discount window borrowing ,4 6.98 5.45 3.25 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 Commercial paper3,5,6 3 1-month 8.15 5.89 3.71 3.15 3.13 3.11 3.19 3.15 3.18 3.20 3.18 3.20 4 3-month 8.06 5.87 3.75 3.17 3.14 3.14 3.25 3.19 3.23 3.28 3.24 3.26 5 6-month 7.95 5.85 3.80 3.24 3.19 3.20 3.38 3.30 3.34 3.41 3.34 3.39 Finance paper, directly placed3,5,1 6 1-month 8.00 5.73 3.62 3.15 3.06 3.05 3.12 3.09 3.07 3.15 3.12 3.14 7 3-month 7.87 5.71 3.65 3.17 3.06 3.07 3.16 3.13 3.15 3.19 3.14 3.15 8 6-month 7.53 5.60 3.63 3.14 3.07 3.07 3.16 3.13 3.15 3.17 3.15 3.15 Bankers acceptances3,5,8 9 3-month 7.93 5.70 3.62 3.07 3.05 3.06 3.16 3.12 3.16 3.21 3.13 3.16 10 6-month 7.80 5.67 3.67 3.14 3.10 3.13 3.28 3.23 3.28 3.33 3.25 3.28 Certificates of deposit, secondary marker'9 11 1-month 8.15 5.82 3.64 3.10 3.08 3.07 3.13 3.10 3.11 3.16 3.10 3.13 12 3-month 8.15 5.83 3.68 3.11 3.09 3.10 3.21 3.16 3.21 3.25 3.17 3.21 13 6-month 8.17 5.91 3.76 3.20 3.16 3.20 3.36 3.29 3.35 3.42 3.30 3.35 14 Eurodollar deposits, 3-month3,10 8.16 5.86 3.70 3.11 3.10 3.12 3.21 3.20 3.21 3.25 3.19 3.21 U.S. Treasury bills Secondary market ' 15 3-month 7.50 5.38 3.43 2.95 2.87 2.96 3.07 3.06 3.06 3.10 3.05 3.09 16 6-month 7.46 5.44 3.54 3.05 2.97 3.07 3.20 3.20 3.21 3.26 3.16 3.19 17 1-year 7.35 5.52 3.71 3.20 3.11 3.23 3.39 3.39 3.44 3.46 3.33 3.37 Auction average ' ' 18 3-month 7.51 5.42 3.45 2.97 2.89 2.% 3.10 3.06 3.08 3.14 3.07 3.10 19 6-month 7.47 5.49 3.57 3.08 3.00 3.07 3.23 3.19 3.22 3.30 3.19 3.19 20 1-year 7.36 5.54 3.75 3.09 3.24 3.13 3.40 n.a. 3.40 n.a. n.a. n.a. U.S. TREASURY NOTES AND BONDS Constant maturities12 21 1-year 7.89 5.86 3.89 3.33 3.24 3.36 3.54 3.55 3.58 3.61 3.49 3.53 22 2-year 8.16 6.49 4.77 3.95 3.84 3.98 4.16 4.21 4.20 4.27 4.11 4.15 23 3-year 8.26 6.82 5.30 4.40 4.30 4.40 4.53 4.60 4.58 4.65 4.50 4.50 24 5-year 8.37 7.37 6.19 5.19 5.13 5.20 5.22 5.36 5.29 5.32 5.19 5.18 25 7-year 8.52 7.68 6.63 5.66 5.59 5.66 5.61 5.78 5.70 5.70 5.59 5.56 26 10-year 8.55 7.86 7.01 5.98 5.97 6.04 5.% 6.14 6.07 6.06 5.% 5.89 27 30-year 8.61 8.14 7.67 6.82 6.85 6.92 6.81 6.97 6.88 6.87 6.82 6.76 Composite 28 More than 10 years (long-term) 8.74 8.16 7.52 6.65 6.64 6.68 6.55 6.75 6.65 6.63 6.55 6.48 STATE AND LOCAL NOTES AND BONDS Moody's series13 29 6.96 6.56 6.09 5.42 5.47 5.47 5.35 5.66 5.33 5.42 5.33 5.41 30 Baa 7.29 6.99 6.48 5.81 5.88 5.88 5.80 6.09 5.78 5.86 5.80 5.86 31 Bond Buyer series 7.27 6.92 6.44 5.64 5.76 5.73 5.63 5.73 5.67 5.68 5.61 5.57 CORPORATE BONDS 32 Seasoned issues, all industries15 9.77 9.23 8.55 7.83 7.76 7.78 7.66 7.82 7.74 7.72 7.66 7.61 Rating group 33 9.32 8.77 8.14 7.58 7.46 7.43 7.33 7.46 7.39 7.38 7.32 7.29 34 Aa 9.56 9.05 8.46 7.72 7.62 7.61 7.51 7.64 7.58 7.57 7.50 7.46 35 A 9.82 9.30 8.62 7.86 7.80 7.85 7.74 7.89 7.82 7.81 7.74 7.69 36 Baa 10.36 9.80 8.98 8.15 8.14 8.21 8.07 8.27 8.16 8.13 8.06 8.01 37 A-rated, recently offered utility bonds16 10.01 9.32 8.52 7.61 7.66 7.75 7.59 7.77 7.69 7.59 7.58 7.48 MEMO Dividend-price ratio 38 Preferred stocks 8.% 8.17 7.46 6.70 6.69 6.65 6.97 6.74 6.78 7.05 7.03 6.99 39 Common stocks 3.61 3.24r 2.99 2.76 2.82 2.77 2.81 2.77 2.77 2.82 2.82 2.84 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 & Poor's corporate series. Preferred stock ratio is 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 ratio is based on the 500 stocks in the price index. 10. Bid rates for Eurodollar deposits at 11 a.m. London time. Data are for NOTE. Data in this table also appear in the Board's H.15 (519) weekly and G.13 indication purposes only. (415) monthly statistical releases. 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 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Prices and trading volume (averages of daily figures) Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 183.66 206.35 229.00 226.97 232.84 239.47 239.75 243.41 248.12 244.72 246.02 247.16 2 Industrial 226.06 258.16 284.26 279.70 287.80 290.77 292.11 294.40 298.75 292.19 297.83 298.78 3 Transportation 158.80 173.97 201.02 192.30 204.63 212.35 221.00 226.96 229.42 237.97 237.80 234.30 4 Utility 90.72 92.64 99.48 101.62 101.13 103.85 105.52 109.45 112.53 113.78 111.21 113.27 5 Finance 133.21 150.84 179.29 181.36 189.27 196.87 203.38 209.93 217.01 216.02 209.40 209.75 6 Standard & Poor's Corporation (1941-43 = 10)' 335.01 376.20 415.75 412.50 422.84 435.64 435.40 441.76 450.15 443.08 445.25 448.06 7 American Stock Exchange (Aug. 31, 1973 = 50F 338.32 360.32 391.28 371.27 387.75 392.69 402.75 409.39 418.56 418.54 429.72 436.13 Volume of trading (thousands of shares) 8 New York Stock Exchange 156,359 179,411 202,558 204,787 208,221 222,736 266,011 288,540 251,170 279,778 255,843 250,230 9 American Stock Exchange 13,155 12,486 14,171 11,966 14,925 16,523 17,184 18,154 16,150 15,521 20,433 17,744 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers3 28,210 36,660 43,990 41,590 43,630 43,990 44,020 44,290 45,160 47,420 48,630 49,550 Free credit balances at brokers* 11 Margin accounts5 8,050 8,290 8,970 8,355 8,500 8,970 8,980 9,790 9,650 9,805 9,560 9,820 12 Cash accounts 19,285 19,255 22,510 18,700 19,310 22,510 20,360 22,190 21,395 21,450 21,610 22,625 Margin requirements (percent of market value and effective date)6 Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 1133 MMaarrggiinn ssttoocckkss 70 80 65 55 65 50 1144 CCoonnvveerrttiibbllee bboonnddss 50 60 50 50 50 50 1155 SShhoorrtt ssaalleess 70 80 65 55 65 50 1. Effective July 1976, includes a new financial group, banks and insurance on securities other than options are the difference between the market value (100 companies. With this change the index includes 400 industrial stocks (formerly percent) and the maximum loan value of collateral as prescribed by the Board. 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 Regulation T was adopted effective Oct. 15, 1934; Regulation U, effective May 1, financial. 1936; Regulation G, effective Mar. 11, 1968; and Regulation X, effective Nov. 1, 2. On July 5,1983, the American Stock Exchange rebased its index, effectively 1971. cutting previous readings in half. On Jan. 1, 1977, the Board of Governors for the first time established in 3. Since July 1983, under the revised Regulation T, margin credit at broker- Regulation T the initial margin required for writing options on securities, setting dealers has included credit extended against stocks, convertible bonds, stocks it at 30 percent of the current market value of the stock underlying the option. On acquired through the exercise of subscription rights, corporate bonds, and Sept. 30,1985, the Board changed the required initial margin, allowing it to be the government securities. Separate reporting of data for margin stocks, convertible same as the option maintenance margin required by the appropriate exchange or bonds, and subscription issues was discontinued in April 1984. self-regulatory organization; such maintenance margin rules must be approved by 4. Free credit balances are amounts in accounts with no unfulfilled commit- the Securities and Exchange Commission. Effective Jan. 31, 1986, the SEC ments to brokers and are subject to withdrawal by customers on demand. approved new maintenance margin rules, permitting margins to be the price of the 5. New series since June 1984. option plus 15 percent of the market value of the stock underlying the option. 6. These requirements, stated in regulations adopted by the Board of Gover- Effective June 8, 1988, margins were set to be the price of the option plus 20 nors pursuant to the Securities Exchange Act of 1934, limit the amount of credit percent of the market value of the stock underlying the option (or 15 percent in the that can be used to purchase and carry "margin securities" (as defined in the case of stock-index options). regulations) when such credit is collateralized by securities. Margin requirements Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Financial Statistics • September 1993 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Fiscal year Calendar year TTTyyypppeee ooofff aaaccccccooouuunnnttt ooorrr ooopppeeerrraaatttiiiooonnn 1993 11999900 11999911 11999922 Jan. Feb. Mar. Apr. May June U.S. budget1 1 Receipts, total 1,031,308 1,054,265 1,090,513 112,718 66,138 83,453 132,122 70,758 128,591 2 On-budget 749,654 760,382 788,087 90,129 41,038 57,259 96,413 44,636 98,685 3 Off-budget 281,654 293,883 302,426 22,589 25,100 26,194 35,709 26,122 29,906 4 Outlays, total l,252,691r l,323,785r 1,380,657 82,903 113,732 128,030 124,034 107,716 117,495 5 On-budget l,027,626r l,082,098r 1,128,318 84,928 89,276 103,793 101,861 83,320 103,501 6 Off-budget 225,064 241,685 252,339 -2,025 24,456 24,237 22,174 24,395 13,994 7 Surplus or deficit (-), total -221,384r -269,521r -290,144 29,815 -47,594 —44,577r 88,,008888 -36,957 11,096 8 On-budget -277,974r —321,719r -340,231 5,201 -48,238 -46,534 --55,,444488 -38,684 -4,816 9 Off-budget 56,590 52,198 50,087 24,614 644 1,957 13,535 1,727 15,912 Source of financing (total) 10 Borrowing from the public 220,101 276,802 310,918 -8,355 30,689 37,727 5,464 30,832 24,757 11 Operating cash (decrease, or increase (-)) ... 818 -1,329 -17,305 -16,436 27,227 -2,452 -18,945 20,1% -40,288 12 Other -461 -5,981 -3,469 -5,024 -10,322 9,302 5,393 -14,071 4,435 MEMO 13 Treasury operating balance (level, end of period) 40,155 41,484 58,789 46,326 19,099 21,551 40,496 20,300 60,588 14 Federal Reserve Banks 7,638 7,928 24,586 9,572 5,350 6,752 7,273 5,787 28,386 15 Tax and loan accounts 32,517 33,556 34,203 36,754 13,749 14,799 33,223r 14,514 32,202 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 and 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 1993 1991 1992 H2 HI H2 HI Apr. May RECEIPTS 1 All sources 1,054,265 1,090,513 519,181 560,350 540,506 593,780 132,122 70,758 2 Individual income taxes, net 467,827 475,979r 234,939 236,576r 246,961 256,105 56,137 17,919 3 4 5 6 P W R N r e o e i f t n s h u w i h d n i e e d t l n s h d t h i e al l d E lection Campaign Fund . 4 1 0 7 4 4 9 2 , , , 1 0 6 5 5 9 3 2 0 3 2 4 1 0 8 4 8 1 9 , , , 3 8 4 5 3 3 3 2 0 0 4 r 21 3 0 8 3 , , , 5 9 2 5 1 9 2 0 6 1 1 1 7 9 1 3 8 0 , , , 3 8 9 0 2 6 9 0 8 5 8 r 21 3 8 5 9 , , , 0 5 3 9 1 7 1 1 1 1 0 2 1 6 1 1 7 0 3 , , , 4 0 4 6 8 6 2 8 2 5 6 4 2 3 4 1 2 , , , 7 3 6 5 1 9 5 5 1 6 3 1 2 1 5 , , , 2 2 6 6 3 8 4 1 5 1 7 8 Co R G rp e r o o fu r s a s n t d r i s o e n c e i i n p c ts o me taxes 1 1 1 5 3 , ,5 5 9 1 9 3 1 1 1 7 7 , , 6 94 7 9 9 5 8 4 , , 6 0 4 1 9 6 6 9 1 , , 4 68 0 2 3 r 5 7 8 , , 2 0 1 2 9 2 6 7 9 , , 1 0 9 4 8 4 1 1 9 , , 4 27 7 2 7 3,0 6 2 4 2 6 9 Socia n l e t i nsurance taxes and contributions, 396,011 413,689 186,839 224,569 192,599 227,177 49,176 42,277 10 Employment taxes and contributions 370,526 385,491 175,802 208,110 180,758 208,776 45,164 33,062 11 Self- c e o m n p tr l i o b y u m ti e o n n t s taxes and 25,457 24,421 3,306 20,434r 3,988 16,270 12,183 1,620 12 Unemployment insurance 20,922 23,410 8,721 14,070 9,397 16,074 3,581 8,849 13 Other net receipts4 4,563 4,788 2,317 2,389 2,445 2,326 431 365 14 Excise taxes 42,430 45,570 24,429 22,389r 23,456 23,398 4,168 3,502 15 Customs deposits 15,921 17,359 8,694 8,146 9,497 8,860 1,544 1,419 16 Estate and gift taxes .. 11,138 11,143 5,507 5,701r 5,733 6,494 1,898 1,009 17 Miscellaneous receipts5 22,852 26,517r 13,406 10,690r 11,472 9,900 1,404 2,257 OUTLAYS 18 AH types 1,323,757 1,380,657 694,364 704,288 723,367 673,910 124,034 107,716 19 National defense 272,514 298,361 147,669 147,065 155,501 140,535 27,192 20,460 2 2 2 2 2 0 1 3 2 4 I N G A E n n a e g te t n e r u i r r e c n r g r u a y a a l l l t t i r u o s e r c n e s i a o e l n u a c r f c e f e , a s i s r p a s a n c d e, e n a v n i d r o t n ec m h e n n o t logy . 1 1 1 1 2 6 8 4 5 , , , , , 5 1 7 8 9 1 6 0 6 4 1 7 8 4 6 2 1 1 1 4 0 6 6 4 , , , , , 0 5 1 4 9 1 0 0 0 9 7 9 6 9 7 1 7 8 7 1 1 , , , , , 6 4 4 1 6 9 7 1 3 9 1 2 8 0 8 8 7 8 7 1 , , , , , 9 5 5 5 4 5 4 2 9 4 1 0 6 2 4 r 1 9 8 3 8 1 , , , , , 9 5 1 6 8 1 2 0 1 8 1 1 9 7 1 1 6 7 2 8 1 , , . , , 5 5 4 8 9 6 8 6 2 % 5 8 2 4 2 1 1 , , , 6 5 4 4 7 6 4 3 3 0 6 4 6 1 9 1 1 1 1 , , , , 0 4 3 7 4 7 1 8 3 5 1 0 2 9 3 25 Commerce and housing credit 75,639 9,753 36,534 15,615 -7,843 -15,112 -3,%1 -1,896 26 Transportation 31,531 33,759 17,093 15,673 18,477 16,109 2,591 2,398 27 Community and regional development .. 7,432 7,923 3,783 3,903 4,540 4,935 987 862 28 Educ s a o t c io ia n l , s t e r r a v in ic in es g , employment, and 41,479 45,248 21,114 23,767r 20,922 23,983 3,695 3,433 29 Health 71,183 89,570 41,459 44,164r 47,223 49,882 8,883 7,758 30 Social security and Medicare 373,494 406,569 193,098 205,500 232,109 195,933 37,236 35,020 31 Income security 171,618 197,867 87,693 104,537r 98,693 108,559 20,408 15,900 32 Veterans benefits and services 31,344 34,133 17,425 15,597 18,561 16,384 4,332 801 33 Administration of justice 12,295 14,450 6,574 7,435 7,283 7.463 1,581 1,199 3 3 4 5 G N e et n e in ra te l re g s o t® ve rnment 1 1 9 1 5 , , 3 0 5 1 8 2 1 1 9 2 9 , , 9 42 3 9 9 9 6 9 , , 7 1 9 4 4 9 10 5 0 , , 0 1 5 6 0 1 r 98 8 , ,1 5 3 4 8 9 99 5 , , 6 2 3 0 5 5 16, 6 58 5 5 5 17,4 8 2 8 0 6 36 Undistributed offsetting receipts' -39,356 -39,280 -20,436 -18,229 -20,914 -17,035 -2,935 -2,579 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 fiilly 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 fimd. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Financial Statistics • September 1993 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1991 1992 1993 IItteemm June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 1 Federal debt outstanding 3,563 3,683 3,820 3,897 4,001 4,083 4,196 4,250 n.a. ? Public debt securities 3,538 3,665 3,802 3,881 3,985 4,065 4,177 4,231 4,352 3 Held by public 2,643 2,746 2,833 2,918 2,977 3,048 3,129 3,188 n.a. 4 Held by agencies 895 920 969 964 1,008 1,016 1,048 1,043 n.a. 5 Agency securities 25 18 19 16 16 18 19 20 n.a. 6 Held by public 25 18 19 16 16 18 19 20 n.a. 7 Held by agencies 0 0 0 0 0 0 0 0 n.a. 8 Debt subject to statutory limit 3,450 3,569 3,707 3,784 3,891 3,973 4,086 4,140 4,256 9 Public debt securities 3,450 3,569 3,706 3,783 3,890 3,972 4,085 4,139 4,256 10 Other debt1 0 0 0 0 0 0 0 0 0 MEMO 11 Statutory debt limit 4,145 4,145 4,145 4,145 4,145 4,145 4,145 4,145 4,370 1. Consists of guaranteed debt of U.S. Treasury and other federal agencies, SOURCES. U.S. Treasury Department, Monthly Statement of the Public Debt of specified participation certificates, notes to international lending organizations, the United States and Treasury Bulletin. and District 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 Q3 Q4 Ql Q2 1 Total gross public debt 2,953.0 3,364.8 3,801.7 4,177.0 4,064.6 4,177.0 4,230.6 4,352.0 By type 2 Interest-bearing 2,931.8 3,362.0 3,798.9 4,173.9 4,061.8 4,173.9 4,227.6 4,349.0 3 Marketable 1,945.4 2,195.8 2,471.6 2,754.1 2,677.5 2,754.1 2,807.1 2,860.6 4 Bills 430.6 527.4 590.4 657.7 634.3 657.7 659.9 659.3 5 Notes 1,151.5 1,265.2 1,430.8 1,608.9 1,566.4 1,608.9 1,652.1 1,698.7 6 Bonds 348.2 388.2 435.5 472.5 461.8 472.5 480.2 487.6 7 Nonmarketable' 986.4 1,166.2 1,327.2 1,419.8 1,384.3 1,419.8 1,420.5 1,4!8 .4 8 State and local government series 163.3 160.8 159.7 153.5 157.6 153.5 151.6 152.8 9 Foreign issues2 6.8 43.5 41.9 37.4 37.0 37.4 37.0 43.0 10 Government 6.8 43.5 41.9 37.4 37.0 37.4 37.0 43.0 11 Public .0 .0 .0 .0 .0 .0 .0 .0 12 Savings bonds and notes.. 115.7 124.1 135.9 155.0 148.3 155.0 161.4 164.4 13 Government account series 695.6 813.8 959.2 1,043.5 1,011.0 1,043.5 1,040.0 1,097.8 14 Non-interest-bearing 21.2 2.8 2.8 3.1 2.8 3.1 3.0 2.9 By holder 4 15 U.S. Treasury and other federal agencies and trust funds, 707.8 828.3 968.7 1,047.8 1,016.3 1,047.8 1,043.2 16 Federal Reserve Banks 228.4 259.8 281.8 302.5 296.4 302.5 305.2 17 Private investors 2,015.8 2,288.3 2,563.2 2,839.9 2,765.5 2,839.9 2,895.0 18 Commercial banks 164.9 171.5 233.4 293.4 287.4 293.4 296.0 19 Money market funds 14.9 45.4 80.0 80.6 79.8 80.6 77.6 20 Insurance companies 125.1 142.0 168.7 190.3 185.6 190.3 194.0 21 Other companies 93.4 108.9 150.8 192.5 180.8 192.5 199.3 n.a. 22 State and local treasuries 487.5 490.4 520.3 534.8 529.5 534.8 536.0 Individuals 23 Savings bonds 117.7 126.2 138.1 157.3 150.3 157.3 163.6 24 Other securities 98.7 107.6 125.8 131.9 130.9 131.9 134.1 25 Foreign and international5 392.9 421.7 455.0 512.5 499.0 512.5 528.4 26 Other miscellaneous investors6 520.7 674.5 691.1 746.6 722.1 746.6 766.0 1. Includes (not shown separately) securities issued to the Rural Electrification 5. Consists of investments of foreign balances and international accounts in the Administration, depository bonds, retirement plan bonds, and individual retire- United States. ment bonds. 6. Includes savings and loan associations, nonprofit institutions, credit unions, 2. Nonmarketable series denominated in dollars, and series denominated in mutual savings banks, corporate pension trust funds, dealers and brokers, certain foreign currency held by foreigners. U.S. Treasury deposit accounts, and federally sponsored agencies. 3. Held almost entirely by U.S. Treasury and other federal agencies and trust SOURCES. U.S. Treasury Department, data by type of security, Monthly funds. Statement of the Public Debt of the United States; data by holder, 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 IItteemm Mar. Apr. May May 5 May 12 May 19 May 26 June 2 June 9 June 16 June 23 June 30 IMMEDIATE TRANSACTIONS2 By type of security U.S. Treasury securities 1 Bills 43,300 41,043 42,349 38,696 30,411 50,017 40,679 55,905 44,212 44,523 3355,,994422 4477,,662200 Coupon securities, by maturity 2 Less than 3.5 years 47,300 36,975 53,322 42,379 48,407 61,051 60,388 47,800 3399,,224422 4455,,002233 4488,,119944 4422,,337766 3 3.5 to 7.5 years 45,252 42,812 44,104 40,316 41,351 47,856 47,314 40,879 35,809 43,317 38,002 41,320 4 7.5 to 15 years 23,269 19,229 21,228 17,817 28,140 21,645 18,731 16,586 17,800 21,350 17,810 21,189 5 15 years or more 17,592 16,963 16,527 14,160 16,146 19,793 14,926 16,757 13,139 18,306 15,826 16,141 Federal agency securities Debt, by maturity 6 Less than 3.5 years 5,790 5,715 6,108 6,033 4,867 7,242 6,104 6,371 5,616 77,,115544 66,,994466 99,,442255 7 3.5 to 7.5 years 788 640 572 657 702 665 427 358 772 646 620 559 8 7.5 years or more 1,125 578 350 350 424 373 330 220 522 368 375 529 Mortgage-backed 9 Pass-throughs 14,705 17,293 18,294 12,820 24,851 20,592 15,170 14,214 19,781 2222,,991133 1122,,993333 1144,,113366 10 All others 4,059 3,336 3,262 4,414 3,556 2,998 3,118 2,302 2,776 2,752 2,861 3,664 By type of counterparty Primary dealers and brokers 11 U.S. Treasury securities 110,173 97,491 111,243 96,439 103,168 123,857 116,255 110,126 93,090 106,410 9966,,227799 110000,,991199 Federal agency securities 12 Debt 1,771 1,155 1,019 1,137 1,089 876 1,013 1,035 11,,000055 1,147 990077 11,,555544 13 Mortgage-backed 7,388 8,855 9,484 6,489 11,762 10,456 8,940 7,970 9,713 12,487 7,053 7,145 Customers 14 U.S. Treasury securities 66,539 59,531 66,289 56,928 61,288 76,504 65,784 67,801 57,113 66,108 5599,,449955 6677,,772288 Federal agency securities 15 Debt 5,931 5,778 6,011 5,903 4,903 7,404 5,847 5,914 55,,990055 77,,002200 77,,003333 88,,995599 16 Mortgage-backed 11,378 11,775 12,072 10,745 16,646 13,134 9,348 8,547 12,844 13,178 8,741 10,655 FUTURES AND FORWARD TRANSACTIONS4 By type of deliverable security U.S. Treasury securities 17 Bills 2,205 2,378 2,586 2,078 1,976 3,439 2,741 2,434 33,,663366 33,,333311 33,,777799 22,,226688 Coupon securities, by maturity 18 Less than 3.5 years 2,348 1,942 1,937 1,947 1,526 2,168 22,,001122 22,,110000 22,,111133 11,,778855 22,,112211 11,,663388 19 3.5 to 7.5 years 2,287 1,384 1,799 1,646 1,326 1,483 2,084 2,793 2,366 1,744 1,806 1,502 20 7.5 to 15 years 3,542 2,377 3,067 2,420 3,608 2,844 2,985 3,318 3,280 3,310 2,471 2,670 21 15 years or more 11,335 9,025 10,406 8,896 8,855 12,552 10,952 10,012 9,236 10,702 8,247 8,320 Federal agency securities Debt, by maturity 22 Less than 3.5 years 92 102 153 67 94 320 55 219 111122 334400 223366 119999 23 3.5 to 7.5 years 103 128 73 236 100 32 20 20 34 51 42 104 24 7.5 years or more 32 33 15 7 22 17 13 9 10 175 85 98 Mortgage-backed 25 Pass-tlyoughs 22,141 21,378 19,462 18,768 23,463 22,108 14,529 17,298 26,016 27,446 2211,,224433 2222,,336622 26 Others3 1,471 1,463 1,743 1,479 1,968 1,900 1,636 1,551 1,434 1,280 1,068 2,003 OPTIONS TRANSACTIONS5 By type of underlying security U.S. Treasury, coupon securities, by maturity 27 Less than 3.5 years 1,662 1,611 1,108 1,257 1,312 1,248 900 733 778833 11,,442266 11,,111177 779933 28 3.5 to 7.5 years 431 564 667 472 868 419 1,038 325 420 677 482 220 29 7.5 to 15 years 687 507 521 357 390 473 774 562 288 1,020 421 673 30 15 years or more 972 1,084 1,183 1,180 953 1,111 1,713 804 814 986 767 752 Federal agency, mortgagebacked securities 31 Pass-throughs 586 664 465 415 674 357 333 569 871 461 441111 667711 1. Transactions are market purchases and sales of securities as reported to the 4. Futures transactions are standardized agreements arranged on an exchange. Federal Reserve Bank of New York by the U.S. government securities dealers on Forward transactions are agreements made in the over-the-counter market that its published list of primary dealers. Averages are based on the number of trading specify delayed delivery. All futures transactions are included regardless of time days in the period. Immediate, forward, and futures transactions are reported at to delivery. Forward contracts for U.S. Treasury securities and federal agency principal value, which does not include accrued interest; options transactions are debt securities are included when the time to delivery is more than five business reported at the face value of the underlying securities. days. Forward contracts for mortgage-backed agency securities are included Dealers report cumulative transactions for each week ending Wednesday. when the time to delivery is more than thirty days. 2. Transactions for immediate delivery include purchases or sales of securities 5. Options transactions are purchases or sales of put-and-call options, whether (other than mortgage-backed agency securities) for which delivery is scheduled in arranged on an organized exchange or in the over-the-counter market, and include five business days or less and "when-issued" securities that settle on the issue options on futures contracts on U.S. Treasury and federal agency securities. date of offering. Transactions for immediate delivery of mortgage-backed agency NOTE. In tables 1.42 and 1.43, "n.a." indicates that data are not published securities include purchases and sales for which delivery is scheduled in thirty days or because of insufficient activity. less. Stripped securities are reported at market value by maturity of coupon or corpus. Data for several types of options transactions—U.S. Treasury securities, bills; 3. Includes such securities as collateralized mortgage obligations (CMOs), real Federal agency securities, debt; and federal agency securities, mortgage-backed, estate mortgage investment conduits (REMICs), interest-only securities (IOs), other than 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 NonfinancialS tatistics • September 1993 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 1993 1993, week ending xiem Mar. Apr. May May 5 May 12 May 19 May 26 June 2 June 9 June 16 June 23 Positions2 NET IMMEDIATE POSITIONS3 By type of security U.S. Treasury securities 1 Bills 13,550 18,483 7,999 13,757 4,818 8,062 55,,228855 1100,,440088 -266 33,,777766 77,,000022 Coupon securities, by maturity 2 Less than 3.5 years 1,628 2,928 10,275 6,038 11,219 8,007 13,584 11,734 9,691 8,957 14,549 3 3.5 to 7.5 years -14,104 -17,023 -19,900 -16,651 -17,854 -23,033 -20,542 -20,726 -20,498 -16,896 -14,357 4 7.5 to 15 years -10,240 -12,805 -10,222 -11,584 -6,990 -8,787 -11,841 -13,127 -11,570 -12,150 -10,155 5 15 years or more 9,342 9,248 8,228 8,447 7,707 7,439 77,,668877 1100,,660000 1111,,223333 1122,,006622 1111,,226688 Federal agency securities Debt, by maturity 6 Less than 3.5 years 6,451 6,342 5,389 4,274 5,910 3,829 6,819 5,954 6,085 6,697 7,794 7 3.5 to 7.5 years 3,332 3,178 2,798 3,510 3,197 2,617 2,379 2,370 1,610 2,233 2,303 8 7.5 years or more 4,896 3,958 2,957 33,,440088 33,,441166 22,,994433 22,,339911 22,,667788 22,,775544 22,,885533 22,,882255 Mortgage-backed 9 Pass-throughs 33,009 34,056 29,356 22,530 40,102 29,843 28,498 21,660 36,490 44,287 39,859 10 All others 25,734 25,866 27,158 27,808 26,619 25,617 2277,,336633 2299,,113355 2266,,887777 2244,,884488 2244,,889999 Other money market instruments 11 Certificates of deposit 3,212 3,203 3,681r 3,280 2,699 3,544 4,602 4,357 3,247 3,386 2,555 12 Commercial paper 6,237 5,145 6,066 4,671 5,403 5,387 7,245 7,687 6,504 7,998 5,721 13 Bankers acceptances l,138r 972 862 574 739 921 921 1,159 1,024 989 994 FUTURES AND FORWARD POSITIONS5 By type of deliverable security U.S. Treasury securities 14 Bills -5,103 -7,951 -5,222 -10,315 -8,312 -2,732 --22,,885511 --22,,661100 --22,,337733 --44,,88%% -8,102 Coupon securities, by maturity 15 Less than 3.5 years -568 -1,433 -1,556 -409 -1,679 -1,376 -1,408 -2,993 -3,388 -4,597 -2,900 16 3.5 to 7.5 years 4,333 4,857 4,626 4,086 4,763 5,267 4,949 3,627 3,747 3,441 3,515 17 7.5 to 15 years 2,954 4,385 4,410 4,861 3,877 5,681 3,744 3,858 3,400 1,789 1,148 18 15 years or more -5,119 -5,103 -4,613 -4,433 -5,518 -4,244 --33,,885577 --55,,110011 --55,,227777 --66,,225566 --66,,118888 Federal agency securities Debt, by maturity 19 Less than 3.5 years -194 -285 -209 -844 -272 18 -97 38 403 81 -104 20 3.5 to 7.5 years -39 -50 -111 -128 -93 -71 -143 -133 -102 60 -65 21 7.5 years or more 33 -74 -85 -27 -100 -220 -20 -21 -45 93 131 Mortgage-backed 22 Pass-throughs -13,086 -12,900 -6,758 -3,124 -18,952 -6,724 -3,061 1,459 -13,453 -20,674 -17,761 23 All others4^ 3,376r 4,770 1,773 3,139 2,907 2,164 1,135 -837 977 1,930 2,615 24 Certificates of deposit -160,960 -155,044 -144,995 -161,008 -161,550 -154,231 -148,775 -152,557 -144,525 -145,753 Financing? Reverse repurchase agreements 25 Overnight and continuing 233,038 223,214 223,931r 216,856 228,208 235,710 209,018 229,404 223,498 228,081 217,109 26 360,955 393,238 373,495r 387,767 409,092 357,602 365,809 342,400 375,852 394,328 392,882 Repurchase agreements 27 Overnight and continuing 403,942 406,560 399,943 386,607 397,630 419,306 390,122 403,158 3%,460 416,8% 401,316 28 Term 349,516 369,281 346,717 352,304 387,153 333,158 345,364 305,395 339,048 357,665 367,531 Securities borrowed 29 Overnight and continuing 115,244 117,774 123,353 120,427 120,229 125,020 123,144 128,611 132,690 132,367 130,809 30 Terni 40,753 44,365 42,805 43,553 43,315 41,154 45,152 40,368 39,756 41,689 43,267 Securities loaned 31 Overnight and continuing 3,504 4,762 5,055 4,484 4,668 5,358 5,581 5,007 4,311 4,997 4,662 32 Term 482 587 938 489 1,189 1,221 1,025 518 360 793 665 Collateralized loans 33 Overnight and continuing 14,209 14,434 14,538r 14,622 15,839 14,596 14,483 12,630 14,508 16,428 15,735 MEMO: Matched book7 Reverse repurchase agreements 34 Overnight and continuing 156,399 148,137 146,741 140,334 142,860 152,953 141,791 156,812 152,901 155,918 152,407 35 Term 313,182 341,856 321,698 336,744 356,067 303,795 314,935 293,069 320,084 339,480 336,714 Repurchase agreements 36 Overnight and continuing 214,034 204,658 210,160 210,027 213,256 210,595 201,427 217,574 212,836 218,737 198,694 37 Term 266,309 283,791 257,391 265,052 288,478 242,717 252,758 233,235 254,572 269,369 282,080 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 (ids), 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 Digitized for FRspAecSifEy Rde layed delivery. All futures positions are included regardless of time to activity. 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 Dec. Jan. Feb. Mar. Apr. 1 Federal and federally sponsored agencies 381,498 411,805 434,668 442,772 483,970 487,331 494,739 494,656 0 3 2 Fe D de e r f a e l n a se g e D n e c p ie a s r tment1f 35,668 8 35,664 7 42,159 7 41,035 7 41,829 7 41,641 7 42,115 7 42,051 7 42,619 7 4 Export-Import Bank2, ^ 11,033 10,985 11,376 9,809 7,208 7,208 7,208 6,749 6,749 5 Federal Housing Administration 150 328 393 397 374 231 237 259 263 6 Government National Mortgage Association certificates of participation5 0 0 0 0 0 0 0 0 0 7 Postal Service6 6,142 6,445 6,948 8,421 10,660 10,660 10,660 10,440 10,440 8 Tennessee Valley Authority 18,335 17,899 23,435 22,401 23,580 23,535 24,003 24,5% 25,160 9 United States Railway Association6 0 0 0 0 0 0 0 0 0 10 Federally sponsored agencies7 345,832 375,428 392,509 401,737 442,141 445,690 452,624 452,605 0 11 Federal Home Loan Banks 135,836 136,108 117,895 107,543 114,733 113,253 113,347 115,272 117,363 12 Federal Home Loan Mortgage Corporation 22,797 26,148 30,941 30,262 29,631 34,479 44,490 41,183 0 H Federal National Mortgage Association 105,459 116,064 123,403 133,937 166,300 165,958 163,538 165,818 165,135 14 Farm Credit Banks8 53,127 54,864 53,590 52,199 51,910 52,264 51,502 51,630 51,210 15 Student Loan Marketing Association9 22,073 28,705 34,194 38,319 39,650 39,812 39,822 38,776 0 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 Corporation11 690 847 1,261 1,261 1,261 1,261 1,261 1,261 1,261 18 Resolution Funding Corporation 2 0 4,522 23,055 29,996 29,996 29,996 29,996 29,9% 29,9% MEMO 19 Federal Financing Bank debt" 142,850 134,873 179,083 185,576 154,994 151,059 147,464 146,097 140,807 Lending to federal and federally sponsored agencies 20 Export-Import Bank3 11,027 10,979 11,370 99,,880033 77,,220022 77,,220022 77,,220022 66,,774433 66,,774433 21 Postal Service 5,892 6,195 6,698 8,201 10,440 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 6,975 6,825 6,825 6,675 6,675 24 United States Railway Association6 0 0 0 0 0 0 0 0 0 Other lending14 25 Fanners Home Administration 58,496 53,311 52,324 48,534 42,979 42,979 42,979 42,979 41,629 26 Rural Electrification Administration 19,246 19,265 18,890 18,562 18,172 18,037 18,036 17,966 18,008 27 26,324 23,724 70,896 84,931 64,436 60,786 57,192 56,504 52,522 1. Consists of mortgages assumed by the Defense Department between 1957 10. The Financing Corporation, established in August 1987 to recapitalize the and 1963 under family housing and homeowners assistance programs. Federal Savings and Loan Insurance Corporation, undertook its first borrowing in 2. Includes participation certificates reclassified as debt beginning Oct. 1,1976. October 1987. 3. On-budget since Sept. 30, 1976. 11. The Farm Credit Financial Assistance Corporation, established in January 4. Consists of debentures issued in payment of Federal Housing Administration 1988 to provide assistance to the Farm Credit System, undertook its first insurance claims. Once issued, these securities may be sold privately on the borrowing in July 1988. securities market. 12. The Resolution Funding Corporation, established by the Financial Institu- 5. Certificates of participation issued before fiscal year 1969 by the Government tions Reform, Recovery and Enforcement Act of 1989, undertook its first National Mortgage Association acting as trustee for the Fanners 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, whereas the Rural Electrification Admin- 9. Before late 1982, the Association obtained financing through the Federal istration 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 NonfinancialS tatistics • September 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 Nov. Dec. Jan. Feb. Mar. Apr. May June 1 All issues, new and refunding1 120,339 154,402 215,191 14,133 19,577 18,039" 18,285r 28,920" 20,956' 27,178' 28,529 By type of issue 2 General obligation 39,610 55,100 78,611 5,203 6,024 4,840 6,%3 8,254 8,272 9,452 8,415 3 Revenue 81,295 99,302 136,580 8,930 13,553 13,199 11,322 20,666 12,684 17,726 20,114 By type of issuer 4 State 15,149 24,939 25,295 1,688 2,339 1,339 3,485 2,139 1,463 2,910 3,562 5 Special district or statutory authority2 72,661 80,614 127,618 8,197 11,159 12,706 10,146 19,804 9,923 15,441 18,132 6 Municipality, county, or township 32,510 48,849 60,210 4,248 6,079 3,994 4,654 6,977 9,570 8,827 6,835 7 Issues for new capital 103,235 116,953 120,272 8,028 8,010 5,604r 4,775r 9,741r 4,941r 8,681r 11,208 By use of proceeds 8 Education 17,042 21,121 22,071 1,800 1,658 1,033 1,264 1,482 833 1,596 2,208 9 Transportation 11,650 13,395 17,334 531 831 829 131 2,111 699 813 772 10 Utilities and conservation 11,739 21,039 20,058 960 1,258 894 423 538 806 955 1,629 11 Social welfare 23,099 25,648 21,7% 1,070 1,121 777 618 1,556 942 1,756 2,073 12 Industrial aid 6,117 8,376 5,424 581 339 337 69 765 134 601 1,042 13 Other purposes 34,607 30,275 33,589 3,086 2,803 1,734 2,270 3,289 1,527 2,960 3,484 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 before then. 1.46 NEW SECURITY ISSUES U.S. Corporations Millions of dollars 1992 1993 TTyyppee ooff iissssuuee,, ooffffeerriinngg,, 11999900 11999911 11999922 oorr iissssuueerr Oct. Nov. Dec. Jan. Feb. Mar. Apr. May 1 All issues1 340,049 465,243' n.a. 39,280 35,525 39,424 50,692' 59,427' 55,929" 40,173' 43,108 2 Bonds2 299,884 389,822' 471,125' 32,314 31,026 33,375 45,458' 49,367" 47,091' 33,922' 34,100 By type of offering 3 Public, domestic 188,848 228866,,993300"" 377,681" 30,249 28,774 31,835 41,575" 47,084" 41,888" 30,718" 31,100 4 Private placement, domestic3 86,982 74,930 65,853 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5 Sold abroad 23,054 27,%2 27,591" 2,066 2,252 1,540 3,884 2,283" 5,203" 3,204" 3,000 By industry group 6 Manufacturing 51,779 86,628 81,998" 7,975 3,467 4,232 9,393 8,150 8,067 66,,223344"" 3,950 7 Commercial and miscellaneous 40,733 36,666 42,869" 2,813 2,3% 2,176 3,074 2,268 2,695 2,194" 3,450 8 Transportation 12,776 13,598 9,979" 290 0 611 316 248 1,067 123" 800 9 Public utility 17,621 23,945 48,055" 3,700 1,289 2,867 4,282 5,624 7,058 5,767" 3,000 10 Communication 6,687 9,431 15,394" 427 374 516 3,019 2,890 3,270 2,015" 2,100 11 Real estate and financial 170,288 219,750 272,830" 17,110 23,499 22,973 25,374" 30,187" 24,935" 17,588" 20,800 12 Stocks2 40,175' 75,424' 88,324 6,966 4,499 6,049 5,234 10,060 8,838 6,251 8,698 By type of offering 13 Public preferred 3,998 17,085" 21,339 2,901 1,540 1,608 1,112 1,898 1,647 702 3,124 14 Common 19,442 48,230" 57,119 4,065 2,958 4,441 4,122 8,161 7,191 5,549 5,574 15 Private placement 16,736 10,109 9,866 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. By industry group 16 Manufacturing 5,649 24,111" 22,722 1,779 288 1,468 722 2,616 1,741 1,387 1,413 17 Commercial and miscellaneous 10,171 19,418 20,231 940 1,366 2,226 1,688 2,021 2,488 1,564 2,836 18 Transportation 369 2,439 2,595 53 304 118 65 64 336 250 111 19 Public utility 416 3,474 6,532 359 150 92 310 350 743 412 753 20 Communication 3,822 475 2,365 99 22 126 0 0 7 30 279 21 Real estate and financial 19,738 25,507 33,879 3,735 2,369 2,019 2,438 5,009 3,522 2,579 3,307 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., Securities Data Company, and the investment companies other than closed-end, intracorporate transactions, equi- Board of Governors of the Federal Reserve System. ties sold abroad, and Yankee bonds. Stock data include ownership securities 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 Assets1 Millions of dollars 1992 1993 IItteemm 11999911 11999922 Oct. Nov. Dec. Jan. Feb. Mar. Apr.r May 1 Sales of own shares2 463,645 647,055 52,214 52,019 70,618 71,607 60,676 69,080 66,766 60,594 2 Redemptions of own shares 342,547 447,140 37,134 34,126 51,993 46,545 39,684 47,414 46,518 38,792 3 Net sales 121,098 199,915 15,080 17,893 18,625 25,062 20,992 21,666 20,248 21,802 4 Assets4 808,582 1,056,310 983,151 1,019,618 1,056,310 1,082,653 1,116,784 1,154,445 1,178,663 1,219,443 5 Cash5 60,292 73,999 75,808 80,247 73,999 76,764 79,763 81,536 87,140 84,993 6 Other 748,290 982,311 907,343 939,371 982,311 1,005,889 1,037,021 1,072,910 1,091,523 1,134,450 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 11999922 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Qlr 1 Profits with inventory valuation and capital consumption adjustment 361.7 346.3 393.8 347.3 341.2 347.1 384.0 388.4 374.1 428.5 424.2 2 Profits before taxes 355.4 334.7 371.6 332.3 336.7 332.3 366.1 376.8 354.1 389.4 393.0 3 Profits tax liability 136.7 124.0 140.2 122.9 127.0 125.0 136.4 144.1 131.8 148.5 147.2 4 Profits after taxes 218.7 210.7 231.4 209.4 209.6 207.4 229.7 232.7 222.2 241.0 245.7 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 85.5 7 Inventory valuation -14.2 3.1 -7.4 9.9 -4.8 .7 -5.4 -15.5 -9.7 1.0 -9.4 8 Capital consumption adjustment 20.5 8.4 29.5 5.1 9.3 14.1 23.3 27.0 29.7 38.1 40.6 SOURCE. U.S. Department of Commerce, Survey of Current Business. 1.50 NONFARM BUSINESS EXPENDITURES New Plant and Equipment Billions of dollars; quarterly data at seasonally adjusted annual rates 1991 1992 1993 IInndduussttrryy 11999911 11999922 1199993311 Q4 Ql Q2 Q3 Q4 Ql Q2 Q31 1 Total nonfarm business 528.39 546.08 581.12 529.87 535.72 540.91 547.53 560.16 564.81 587.29 587.05 Manufacturing 2 Durable goods industries 77.64 73.41 77.49 76.40 7744..1199 74.26 71.84 73.34 79.32 78.06 75.01 3 Nondurable goods industries 105.17 100.50 100.74 102.66 99.79 97.52 100.39 104.28 95.85 104.73 102.17 Nonmanufacturing 4 Mining 10.02 8.90 9.51 9.99 88..8877 9.18 9.09 8.44 8.84 10.10 10.15 Transportation 5 Railroad 5.95 6.77 6.71 5.44 6.65 6.50 6.87 7.08 6.01 6.68 6.87 6 Air 10.17 8.97 7.50 10.41 8.86 9.75 10.13 7.13 7.43 8.89 7.59 7 Other 6.54 7.04 9.12 6.45 6.37 7.27 7.69 6.84 9.06 8.42 9.09 Public utilities 8 Electric 43.76 48.05 52.75 44.75 46.06 48.45 47.73 49.95 49.87 54.11 53.66 9 Gas and other 22.82 23.91 22.99 22.67 22.75 24.19 23.92 24.78 23.44 23.58 22.54 10 Commercial and other2 246.32 268.54 294.32 251.11 262.17 263.80 269.86 278.32 284.99 292.72 299.% 1. Figures are amounts anticipated by business. insurance, personal and business services, and communication. 2. "Other" consists of construction, wholesale and retail trade, finance and SOURCE. U.S. Department of Commerce, Survey of Current Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Nonfinancial Statistics • September 1993 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1 Billions of dollars, end of period; not seasonally adjusted 1991 1992 1993 AAccccoouunntt 11999900 11999911 11999922 Q3 Q4 Q1 Q2 Q3 Q4 Q1 ASSETS 1 Accounts receivable, gross2 492.3 480.6 482.1 485.2 480.6 475.6 476.7 473.9 482.1 473.7 2 Consumer 133.3 121.9 117.1 125.3 121.9 118.4 116.7 116.7 117.1 111.9 i Business 293.6 292.9 296.5 293.7 292.9 290.8 293.2 288.5 296.5 293.7 4 Real estate 65.5 65.8 68.4 66.2 65.8 66.4 66.8 68.8 68.4 68.1 5 LESS: Reserves for unearned income 57.6 55.1 50.8 57.6 55.1 53.6 51.2 50.8 50.8 48.1 b Reserves for losses 9.6 12.9 15.8 13.1 12.9 13.0 12.3 12.0 15.8 14.9 7 Accounts receivable, net 425.1 412.6 415.5 414.6 412.6 409.0 413.2 411.1 415.5 410.7 8 All other 113.9 149.0 150.6 136.4 149.0 145.5 139.4 146.5 150.6 153.0 9 Total assets 539.0 561.6 566.1 551.1 561.6 554.5 552.6 557.6 566.1 563.7 LIABILITIES AND CAPITAL 10 Bank loans 31.0 42.3 37.6 39.6 42.3 38.0 37.8 38.1 37.6 34.1 11 Commercial paper 165.3 159.5 156.4 156.8 159.5 154.4 147.7 153.2 156.4 149.8 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 36.5 34.5 34.5 34.8 34.9 37.8 41.9 15 Not elsewhere classified 178.2 191.3 195.3 185.0 191.3 189.8 191.9 191.4 195.3 195.1 lb All other liabilities 63.9 69.0 71.2 68.8 69.0 72.0 73.4 73.7 71.2 76.2 1/ Capital, surplus, and undivided profits 63.7 64.8 67.8 63.8 64.8 66.0 67.1 68.1 67.8 66.7 18 Total liabilities and capital 539.6 561.2 566.1 550.5 561.2 554.6 552.7 559.4 566.1 563.7 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 Dec. Jan. Feb. Mar. Apr.r May Seasonally adjusted Total 522,474 519,910 534,845 534,845 529,256 531,398 532,144 532,468 522,449 Consumer 160,468 154,822 157,707 157,707 156,551 157,733 156,277 156,390 152,638 Real estate2 65,147 65,383 68,011 68,011 68,942 70,016 68,726 69,803 66,361 Business 296,858 299,705 309,127 309,127 303,763 303,649 307,141 306,276 303,450 Not seasonally adjusted Total 525,888 523,192 538,158 538,158 528,847 528,490 532,298 534,328 523,520 Consumer 161,360 155,713 158,631 158,631 156,430 155,929 154,933 155,389 152,073 MMoottoorr vveehhiicclleess 75,045 63,415 57,605 57,605 57,165 54,036 53,508 53,977 53,907 OOtthheerr ccoonnssuummeerr 58,213 58,522 59,522 59,522 58,844 58,651 58,346 58,546 55,344 Securitized motor vehicles4 19,837 23,166 29,775 29,775 28,894 32,860 32,915 32,443 32,717 SSeeccuurriittiizzeedd ootthheerr ccoonnssuummeerr44 8,265 10,610 11,729 11,729 11,527 10,383 10,164 10,423 10,105 RReeaall eessttaattee22 65,509 65,760 68,410 68,410 68,889 69,216 68,135 69,356 66,115 Business 299,019 301,719 311,118 311,118 303,527 303,345 309,230 309,583 305,332 MMoottoorr vveehhiicclleess 92,125 90,613 87,456 87,456 86,491 86,412 91,647 91,692 89,328 RReettaaiill55 26,454 22,957 19,303 19,303 19,124 17,881 16,961 17,228 16,524 Wholesale6 33,573 31,216 29,962 29,962 28,727 30,059 35,894 35,063 32,242 Leasing 32,098 36,440 38,191 38,191 38,640 38,472 38,792 39,400 40,562 Equipment 137,654 141,399 151,607 151,607 146,820 145,886 145,878 145,877 145,237 Retail 31,968 30,962 32,212 32,212 32,458 32,430 32,560 32,170 32,384 Wholesale6 11,101 9,671 8,669 8,669 8,582 8,318 8,656 8,642 8,556 LLeeaassiinngg 94,585 100,766 110,726 110,726 105,780 105,138 104,662 105,066 104,297 OOtthheerr bbuussiinneessss 63,773 60,900 57,464 57,464 55,760 55,962 56,153 56,144 54,487 Securitized business assets4 5,467 8,807 14,590 14,590 14,457 15,085 15,552 15,870 16,280 Retail 667 576 1,118 1,118 1,036 973 904 1,434 1,375 Wholesale 3,281 5,285 8,756 8,756 8,582 9,408 9,824 9,745 9,590 Leasing 1,519 2,946 4,716 4,716 4,839 4,704 4,824 4,691 5,315 1. Includes finance company subsidiaries of bank holding companies but not of 5. Passenger car fleets and commercial land vehicles for which licenses are retailers and banks. Data are before deductions for unearned income and losses. required. Data in this table also appear in the Board's G.20 (422) monthly statistical release. 6. Credit arising from transactions between manufacturers and dealers, that is, For ordering address, see inside front cover. floor plan financing. 2. Includes all loans secured by liens on any type of real estate, for example, 7. includes loans on commercial accounts receivable, factored commercial first and junior mortgages and home equity loans. accounts, and receivable dealer capital; small loans used primarily for business or 3. Includes personal cash loans, mobile home loans, and loans to purchase other farm purposes; and wholesale and lease paper for mobile homes, campers, and types of consumer goods such as appliances, apparel, general merchandise, and travel trailers. recreation vehicles. Digitized for FRAS4E. ORu tstanding balances of pools upon which securities have been issued; these http://fraser.stloubiaslafencdes. oarrge /n o longer carried on the balance sheets of the loan originator. 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 11999911 11999922 Dec. Jan. Feb. Mar. Apr. May June Terms and yields in primary and secondary markets PRIMARY MARKETS Terms1 1 Purchase price (thousands of dollars) 153.2 155.0 158.1 154.0 158.6 159.7 156.2 150.9 153.1 185.6 2 Amount of loan (thousands of dollars) 112.4 114.0 118.1 117.7 119.5 114.5 121.5 115.0 118.8 125.3 3 Loan-to-price ratio (percent) 74.8 75.0 76.6 77.7 76.8 75.4 79.3 78.5 79.5 75.3 4 Maturity (years) 27.3 26.8 25.6 26.1 25.7 23.8 26.9 24.9 26.9 25.4 5 Fees and charges (percent of loan amount) 1.93 1.71 1.60 1.31 1.49 1.43 1.50 1.23 1.43 1.32 Yield (percent per year) 6 Contract rate1 , 9.68 9.02 7.98 7.65 7.57 7.52 7.22 7.26 7.14 7.02 7 Effective rate1'3 10.01 9.30 8.25 7.88 7.82 7.77 7.46 7.46 7.37 7.23 8 Contract rate (HUD series)4 10.08 9.20 8.43 8.19 7.93 7.63 7.59 7.51 7.59 7.52 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (Section 203)5 10.17 9.25 8.46 8.12 8.04 7.55 7.57 7.56 7.59 7.33 10 GNMA securities6 9.51 8.59 7.77 7.57 7.39 7.02 6.79 6.77 6.79 6.75 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 113,329 122,837 142,833 158,119 159,204 159,766 161,147 163,719 166,849 171,232 12 FHA/VA 21,028 21,702 22,168 22,593 22,640 22,573 22,700 22,682 22,691 22,656 13 Conventional 92,302 101,135 120,664 135,526 136,564 137,193 138,447 141,037 144,158 148,576 Mortgage transactions (during period) 14 Purchases 23,959 37,202 75,905 8,832 4,993 4,118 4,730 6,761 7,526 9,131 Mortgage commitments (during period) 15 Issued 23,689 40,010 74,970 6,185 4,189 4,177 6,644 7,764 7,791 8,697 16 To sell8 5,270 7,608 10,493 1,811 1,159 221 0 112 30 323 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)8 17 Total 20,419 24,131 29,959 33,665 32,370 32,454 35,421 38,361 39,960 n.a. 18 FHA/VA 547 484 408 352 347 343 337 330 325 n.a. 19 Conventional 19,871 23,283 29,552 33,313 32,023 32,112 35,084 38,031 39,635 n.a. Mortgage transactions (during period) 20 Purchases 75,517 97,727 191,125 20,792 15,512 12,063 12,587 15,885 18,842 n.a. 21 Sales 73,817 92,478 179,208 19,602 16,536 12,105 10,286 13,807 17,532 18,159 Mortgage commitments (during periodf 22 Contracted 102,401 114,031 261,637 32,453 17,591 23,366 21,103 20,731 18,908 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 rate 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). Based Home Loan Mortgage Corporation's mortgage commitments and mortgage transon transactions on the first day of the subsequent month. actions include activity under mortgage securities swap programs, whereas the 5. Average gross yield on thirty-year, minimum-downpayment first mort- corresponding data for FNMA exclude swap activity. gages insured by the Federal Housing Administration (FHA) for immediate 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 • September 1993 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1992 1993 Type of holder and property 11998899 11999900 11999911 Q1 Q2 Q3 Q4 QLP 1 All holders 3,537,301 3,751,476 3,890,830 3,933,754 3,%7,017 4,003,714 4,035,405 4,059,391 By type of property 2 One- to four-family residences 2,392,742 2,597,175 2,741,824 2,788,987 2,833,318 2,887,877 2,940,165 2,976,623 3 Multifamily residences 307,045 310,095 307,944 308,514 304,104 300,728 293,376 289,202 4 Commercial 757,038 765,458 761,782 753,578 746,357 731,407 718,910 710,208 5 Farm 80,476 78,748 79,281 82,676 83,237 83,702 82,953 83,359 By type of holder 6 Major financial institutions 1,931,537 1,914,315 1,846,910 1,825,983 1,803,488 1,793,505 1,769,058 1,750,365 7 Commercial banks 767,069 844,826 876,284 880,377 884,598 891,484 894,549 888,395 8 One- to four-family 389,632 455,931 486,572 492,910 4%,518 506,658 511,976 508,4% 9 Multifamily 38,876 37,015 37,424 37,710 38,314 38,985 38,011 37,814 10 Commercial 321,906 334,648 333,852 330,837 330,229 325,934 324,681 322,166 11 Farm 16,656 17,231 18,436 18,919 19,538 19,906 19,882 19,919 12 Savings institutions 910,254 801,628 705,367 682,338 659,624 648,178 627,972 620,755 13 One- to four-family 669,220 600,154 538,358 524,536 508,545 501,604 489,622 486,126 14 Multifamily 106,014 91,806 79,881 77,166 74,788 73,723 69,791 67,491 15 Commercial 134,370 109,168 86,741 80,278 75,947 72,517 68,235 66,812 16 Farm 650 500 388 358 345 334 324 327 17 Life insurance companies 254,214 267,861 265,258 263,269 259,266 253,843 246,537 241,214 18 One- to four-family 12,231 13,005 11,547 11,214 10,676 10,451 10,158 9,830 19 Multifamily 26,907 28,979 29,562 29,693 29,425 28,804 27,997 27,454 20 Commercial 205,472 215,121 214,105 212,865 210,139 205,709 199,943 195,816 21 Farm 9,604 10,756 10,044 9,497 9,026 8,878 8,439 8,114 22 Federal and related agencies 197,778 239,003 266,146 278,3% 278,091 277,485 285,%5 288,199 23 Government National Mortgage Association 23 20 19 19 23 27 30 45 24 One- to four-family 23 20 19 19 23 27 30 37 25 Multifamily 0 0 0 0 0 0 0 8 26 Farmers Home Administration4 41,176 41,439 41,713 41,791 41,628 41,671 41,695 41,724 27 One- to four-family 18,422 18,527 18,496 18,488 17,718 17,292 16,912 16,418 28 Multifamily 9,054 9,640 10,141 10,270 10,356 10,468 10,575 10,679 29 Commercial 4,443 4,690 4,905 4,%1 4,998 5,072 5,158 5,226 30 Farm 9,257 8,582 8,171 8,072 8,557 8,839 9,050 9,402 31 Federal Housing and Veterans' Administrations 6,087 8,801 10,733 11,332 11,480 11,768 12,581 13,950 32 One- to four-family 2,875 3,593 4,036 4,254 4,403 4,531 5,153 6,159 33 Multifamily 3,212 5,208 6,697 7,078 7,077 7,236 7,428 7,791 34 Resolution Trust Corporation 0 32,600 45,822 49,345 44,624 37,099 32,045 27,331 35 One- to four-family 0 15,800 14,535 15,458 15,032 12,614 12,960 11,375 36 Multifamily 0 8,064 15,018 16,266 13,316 11,130 9,621 8,070 37 Commercial 0 8,736 16,269 17,621 16,276 13,356 9,464 7,886 38 Farm 0 0 0 0 0 0 0 0 39 Federal National Mortgage Association 99,001 104,870 112,283 118,238 122,939 126,476 137,584 141,192 40 One- to four-family 90,575 94,323 100,387 105,869 110,223 113,407 124,016 127,252 41 Multifamily 8,426 10,547 11,896 12,369 12,716 13,069 13,568 13,940 42 Federal Land Banks 29,640 29,416 28,767 28,776 28,775 28,815 28,365 28,536 43 One- to four-family 1,210 1,838 1,693 1,693 1,693 1,695 1,669 1,679 44 Farm 28,430 27,577 27,074 27,083 27,082 27,119 26,6% 26,857 45 Federal Home Loan Mortgage Corporation 21,851 21,857 26,809 28,895 28,621 31,629 33,665 35,421 46 One- to four-family 18,248 19,185 24,125 26,182 26,001 29,039 31,032 32,831 47 Multifamily 3,603 2,672 2,684 2,713 2,620 2,591 2,633 2,589 48 Mortgage pools or trusts5 917,848 1,079,103 1,250,666 1,288,823 1,341,338 1,385,460 1,425,546 1,459,899 49 Government National Mortgage Association 368,367 403,613 425,295 421,977 422,922 422,255 419,516 421,514 50 One- to four-family 358,142 391,505 415,767 412,574 413,828 413,063 410,675 412,798 51 Multifamily 10,225 12,108 9,528 9,404 9,094 9,192 8,841 8,716 52 Federal Home Loan Mortgage Corporation 272,870 316,359 359,163 367,878 382,797 391,762 407,514 420,932 53 One- to four-family 266,060 308,369 351,906 360,887 376,177 385,400 401,525 415,279 54 Multifamily 6,810 7,990 7,257 6,991 6,620 6,362 5,989 5,654 55 Federal National Mortgage Association 228,232 299,833 371,984 389,853 413,226 429,935 444,979 457,316 56 One- to four-family 219,577 291,194 362,667 380,617 403,940 420,835 435,979 448,483 57 Multifamily 8,655 8,639 9,317 9,236 9,286 9,100 9,000 8,833 58 Farmers Home Administration 80 66 47 43 43 41 38 36 59 One- to four-family 21 17 11 10 9 9 8 7 60 Multifamily 0 0 0 0 0 0 0 0 61 Commercial 26 24 19 18 18 18 17 17 62 Farm 33 26 17 16 15 14 13 13 63 Private mortgage conduits 48,299 59,232 94,177 109,071 122,350 141,468 153,499 160,100 64 One- to four-family 43,325 53,335 84,000 95,600 105,700 123,000 132,000 137,000 65 Multifamily 462 731 3,698 4,686 5,7% 5,7% 6,305 6,858 66 Commercial 4,512 5,166 6,479 8,784 10,855 12,673 15,194 16,242 67 Farm 0 0 0 0 0 0 0 0 68 Individuals and others6 490,138 519,055 527,108 540,552 544,100 547,263 554,836 560,929 69 One- to four-family 303,181 330,378 327,704 338,676 342,832 348,252 356,451 362,853 70 Multifamily 84,800 86,695 84,842 84,932 84,698 84,272 83,617 83,306 71 Commercial 86,310 87,905 99,411 98,213 97,8% %,129 96,218 %,043 72 Farm 15,846 14,077 15,150 18,732 18,675 18,610 18,549 18,727 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 Federcd 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. SOURCE. Line 64, Inside Mortgage Securities. 4. FmHA-guaranteed securities sold to the Federal Financing Bank were reallocated from FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4 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 1992 1993 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11999900 11999911 11999922 Dec. Jan. Feb. Mar. Apr.r May Seasonally adjusted 1 Total 738,765 733,510 741,093 741,093 744,196 748,765 751,727 754,719 753,917 2 Automobile 284,739 260,898 259,627 259,627 258,463 260,945 261,449 261,826 263,552 3 Revolving 222,552 243,564 254,299 254,299 256,435 259,378 260,990 262,700 263,642 4 Other 231,474 229,048 227,167 227,167 229,299 228,443 229,288 230,193 226,723 Not seasonally adjusted 5 Total 752,883 749,052 756,944 756,944 749,153 746,914 744,713 748,955 748,375 By major holder 6 Commercial banks 347,087 340,713 331,869 331,869 330,355 330,060 329,764 331,649 333,314 7 Finance companies 133,258 121,937 117,127 117,127 116,009 112,686 111,854 112,523 109,251 8 Credit unions 93,057 92,681 97,641 97,641 98,261 98,785 99,778 101,534 102,967 9 Retailers 43,464 39,832 42,079 42,079 40,057 38,462 38,030 38,218 38,681 10 Savings institutions 52,164 45,965 43,461 43,461 43,428 43,516 43,255 43,451 43,785 11 Gasoline companies 4,822 4,362 4,365 4,365 4,366 4,148 4,080 4,280 4,486 12 Pools of securitized assets 79,030 103,562 120,402 120,402 116,677 119,257 117,952 117,300 115,891 By major type of credit* 13 Automobile 284,903 261,219 259,964 259,964 257,744 259,344 259,089 260,224 262,407 14 Commercial banks 124,913 112,666 109,743 109,743 109,671 111,005 111,287 111,351 113,322 15 Finance companies 75,045 63,415 57,605 57,605 57,165 54,036 53,508 53,977 53,907 16 Pools of securitized assets 24,620 28,915 33,878 33,878 32,388 36,031 36,096 36,178 35,974 17 Revolving 234,801 256,876 267,949 267,949 261,217 258,430 257,544 259,015 260,506 18 Commercial banks 133,385 138,005 132,582 132,582 129,567 127,877 128,079 129,464 130,531 19 Retailers 38,448 34,712 36,629 36,629 34,666 33,110 32,681 32,838 33,254 20 Gasoline companies 4,822 4,362 4,365 4,365 4,366 4,148 4,080 4,280 4,486 21 Pools of securitized assets2 45,637 63,595 74,243 74,243 71,927 72,024 70,890 69,919 69,054 22 Other 233,178 230,957 229,031 229,031 230,192 229,141 228,080 229,716 225,462 23 Commercial banks 88,789 90,042 89,544 89,544 91,117 91,178 90,398 90,834 89,461 24 Finance companies 58,213 58,522 59,522 59,522 58,844 58,651 58,346 58,546 55,344 25 Retailers 5,016 5,120 5,450 5,450 5,391 5,352 5,349 5,380 5,427 26 Pools of securitized assets 8,773 11,052 12,281 12,281 12,362 11,202 10,966 11,203 10,863 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 Nov. Dec. Jan. Feb. Mar. Apr. May INTEREST RATES Commercial banks2 1 48-month new car 11.78 11.14 9.29 8.60 n.a. n.a. 8.57 n.a. n.a. 8.17 2 24-month personal 15.46 15.18 14.04 13.55 n.a. n.a. 13.57 n.a. n.a. 13.63 3 120-month mobile home 14.02 13.70 12.67 12.36 n.a. n.a. 12.38 n.a. n.a. 12.00 4 Credit card 18.17 18.23 17.78 17.38 n.a. n.a. 17.26 n.a. n.a. 17.15 Auto finance companies 5 New car 12.54 1122..4411 9.93 9.65 9.65 10.08 10.32 9.95 9.61 9.51 6 Used car 15.99 15.60 13.80 13.37 13.66 13.72 13.90 13.21 12.74 12.61 OTHER TERMS3 Maturity (months) 7 New car 54.6 55.1 54.0 54.1 53.6 53.9 54.3 54.6 54.5 54.4 8 Used car 46.0 47.2 47.9 47.8 47.7 49.2 49.0 49.0 48.9 48.9 Loan-to-value ratio 9 New car 87 88 89 89 90 90 91 90 90 91 10 Used car 95 % 97 97 97 97 98 98 98 98 Amount financed (dollars) 11 New car 12,071 12,494 13,584 14,043 14,315 13,975 13,849 14,013 14,021 14,146 12 Used car 8,289 8,884 9,119 9,475 9,464 9,472 9,457 9,641 9,731 9,829 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 Financial Statistics • September 1993 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 1991 1992 1993 11998888 11998899 11999900 11999911 11999922 Q3 Q4 Ql Q2 Q3 Q4 Ql Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .. 775.8 740.8 665.0 461.0 574.4 411.5 403.8 672.2 560.3 486.7 578.2 539.2 By sector and instrument 2 U.S. government 155.1 146.4 246.9 278.2 304.0 288.4 320.4 368.9 351.9 193.4 301.7 274.7 3 Treasury securities 137.7 144.7 238.7 292.0 303.8 317.2 316.6 380.1 351.5 184.4 299.1 271.6 4 Agency issues and mortgages 17.4 1.6 8.2 -13.8 .2 -28.8 3.8 -11.2 .4 9.0 2.7 3.2 5 Private 620.7 594.4 418.2 182.8 270.4 123.1 83.4 303.3 208.5 293.2 276.5 264.4 By instrument 6 Tax-exempt obligations 53.7 65.0 51.2 45.8 53.3 53.5 45.5 52.0 73.0 52.3 35.9 50.8 7 Corporate bonds 103.1 73.8 47.1 78.8 67.3 81.6 60.2 76.3 77.8 61.3 53.7 75.0 8 Mortgages 317.3 303.0 244.0 138.5 140.9 53.3 106.3 194.1 96.5 140.9 132.3 130.8 9 Home mortgages 241.8 245.3 219.4 144.6 198.3 135.4 128.4 225.0 140.9 212.6 214.9 180.6 10 Multifamily residential 16.7 16.4 3.7 -2.4 -14.6 -36.3 10.2 2.4 -17.7 -13.6 -29.5 -16.7 U Commercial 60.8 42.7 21.0 -4.3 -42.9 -45.3 -32.4 -32.5 -28.9 -60.0 -50.1 -34.7 12 Farm -2.1 -1.5 -.1 .5 .1 -.4 .0 -.8 2.2 1.9 -3.0 1.6 13 Consumer credit 50.1 41.7 17.5 -13.1 9.3 -24.8 -11.9 -2.0 -15.5 9.2 45.6 27.8 14 Bank loans n.e.c 41.0 40.2 4.4 -33.3 -17.7 -18.2 -65.3 -22.9 -22.9 -4.5 -20.6 -5.4 15 Open market paper 11.9 21.4 9.7 -18.4 8.6 -36.3 -7.0 13.3 -3.1 .5 23.8 -9.6 16 Other 43.6 49.3 44.2 -15.6 8.6 13.8 -44.3 -7.5 2.7 33.5 5.8 -5.0 By borrowing sector 17 State and local government 48.9 63.2 48.3 38.5 47.0 37.6 41.9 46.1 63.4 50.0 28.6 58.8 18 Household 318.6 305.6 254.2 160.2 222.6 148.3 136.5 231.5 157.9 238.0 262.8 224.1 19 Nonfinancial business 253.1 225.6 115.6 -15.9 .8 -62.8 -95.0 25.8 -12.9 5.2 -14.9 -18.4 20 Farm -7.5 1.6 2.5 2.2 .0 1.9 -2.2 -1.4 6.6 1.0 -6.2 2.3 21 Nonfarm noncorporate 61.8 50.4 26.7 -23.4 -40.1 -65.8 -51.9 -22.9 -49.9 -38.6 -49.0 -36.9 22 Corporate 198.8 173.6 86.4 5.3 40.9 1.2 -40.9 50.0 30.5 42.8 40.3 16.2 23 Foreign net borrowing in United States 6.4 10.2 23.9 14.1 23.9 15.6 41.0 9.7 55.2 29.5 1.1 64.4 24 Bonds 6.9 4.9 21.4 14.9 17.8 15.5 22.3 4.9 21.9 21.0 23.5 76.2 25 Bank loans n.e.c -1.8 -.1 -2.9 3.1 2.3 1.4 6.5 1.5 14.1 3.9 -10.3 1.8 26 Open market paper 8.7 13.1 12.3 6.4 5.2 16.0 14.9 -8.0 27.8 13.1 -12.1 -21.7 27 U.S. government loans -7.5 -7.6 -6.9 -10.2 -1.4 -17.2 -2.7 11.4 -8.5 -8.6 .0 8.0 28 Total domestic plus foreign 782.2 750.9 688.9 475.1 598.2 427.1 444.8 681.8 615.5 516.2 579.3 603.5 Financial sectors 29 Total net borrowing by financial sectors 211.4 220.1 187.1 138.4 226.0 146.0 170.0 155.9 233.8 277.7 236.4 228.5 By instrument 30 U.S. government-related 119.8 151.0 167.4 150.0 167.1 156.0 158.5 137.4 222.8 165.6 142.7 172.3 31 Sponsored-credit-agency securities 44.9 25.2 17.1 9.2 40.2 20.6 32.6 11.5 48.3 67.7 33.5 35.4 32 Mortgage pool securities 74.9 125.8 150.3 140.9 126.9 135.5 125.9 125.9 174.4 97.9 109.2 137.0 33 Loans from U.S. government .0 .0 -.1 .0 .0 .0 -.1 .0 .0 .0 .0 .0 34 Private 91.7 69.1 19.7 -11.6 58.8 -10.0 11.6 18.5 11.0 112.1 93.7 56.2 35 Corporate bonds 16.2 46.8 34.4 54.3 51.5 31.8 50.6 11.4 14.9 73.5 106.1 98.0 36 Mortgages .3 .0 .3 .9 .0 .4 2.1 -.4 .1 .3 .2 -.1 37 Bank loans n.e.c .6 1.9 1.2 3.2 7.2 10.2 4.5 8.2 3.9 5.4 11.3 3.1 38 Open market paper 54.8 31.3 8.6 -32.0 -.7 -16.7 -12.7 8.8 -13.4 11.6 -9.7 -64.4 39 Loans from Federal Home Loan Banks 19.7 -11.0 -24.7 -38.0 .8 -35.7 -33.0 -9.5 5.7 21.3 -14.2 19.6 By borrowing sector 40 Sponsored credit agencies 44.9 25.2 17.0 9.1 40.2 20.6 32.5 11.5 48.3 67.7 33.5 35.4 41 Mortgage pools 74.9 125.8 150.3 140.9 126.9 135.5 125.9 125.9 174.4 97.9 109.2 137.0 42 Private 91.7 69.1 19.7 -11.6 58.8 -10.0 11.6 18.5 11.0 112.1 93.7 56.2 43 Commercial banks -3.0 -1.4 -1.1 -13.3 4.5 -9.2 -14.1 7.2 .8 1.6 8.3 6.4 44 Bank affiliates 5.2 6.2 -27.7 -2.5 2.3 -6.8 9.6 2.7 -8.2 10.5 4.0 8.1 45 Savings and loan associations 19.9 -14.1 -29.9 -39.5 -4.7 -41.1 -25.1 -20.3 2.7 10.0 -11.2 10.0 46 Mutual savings banks 1.9 -1.4 -.5 -3.5 1.8 -5.5 -8.7 4.3 .3 8.3 -5.6 6.1 47 Finance companies 31.5 59.7 35.6 7.8 16.4 11.8 12.8 1.1 -20.0 28.6 55.9 -12.6 48 Real estate investment trusts (REITs) 3.6 -1.9 -1.9 .9 .6 -.3 3.6 1.1 .9 1.3 -.9 1.0 49 Securitized credit obligation (SCO) issuers 32.5 22.0 45.2 38.5 38.0 41.1 33.3 22.4 34.5 52.0 43.2 37.1 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A41 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1—Continued 1991 1992 1993 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11998888 11998899 11999900 11999911 11999922 Q3 Q4 Ql Q2 Q3 Q4 Ql All sectors 50 Total net borrowing, all sectors 993.6 971.0 876.0 613.5 824.2 573.1 614.8 837.8 849.4 793.9 815.7 832.0 51 U.S. government securities 274.9 297.3 414.4 428.3 471.1 444.4 479.0 506.3 574.7 359.0 444.4 447.1 52 State and local obligations 53.7 65.0 51.2 45.8 53.3 53.5 45.5 52.0 73.0 52.3 35.9 50.8 53 Corporate and foreign bonds 126.3 125.5 102.9 147.9 136.6 128.9 133.2 92.6 114.5 155.8 183.3 249.2 54 Mortgages 317.5 303.0 244.3 139.4 141.0 53.7 108.4 193.6 96.6 141.1 132.5 130.7 55 Consumer credit 50.1 41.7 17.5 -13.1 9.3 -24.8 -11.9 -2.0 -15.5 9.2 45.6 27.8 56 Bank loans n.e.c 39.9 41.9 2.8 -26.9 -8.2 -6.7 -54.3 -13.2 -4.9 4.9 -19.6 -.5 57 Open market paper 75.4 65.9 30.7 -44.0 13.1 -37.0 -4.9 14.1 11.2 25.2 2.0 -95.7 58 Other loans 55.8 30.6 12.4 -63.9 8.0 -39.0 -80.1 -5.6 -.2 46.3 -8.4 22.5 External corporate equity funds raised in United States 59 Total net share issues -118.4 -65.7 22.1 198.9 279.6 232.5 268.5 263.6 291.7 286.8 276.5 342.8 60 Mutual funds 6.1 38.5 67.9 150.5 215.4 182.5 195.9 183.5 236.2 233.3 208.4 274.4 61 All other -124.5 -104.2 -45.8 48.4 64.3 50.0 72.6 80.1 55.5 53.6 68.1 68.4 62 Nonfinancial corporations -129.5 -124.2 -63.0 18.3 26.8 19.0 48.0 46.0 36.0 11.0 14.0 27.0 63 Financial corporations 4.1 2.7 9.8 .0 6.4 -3.2 1.7 4.1 8.5 7.9 5.0 7.8 64 Foreign shares purchased in United States .9 17.2 7.4 30.2 31.2 34.1 22.9 29.9 11.0 34.7 49.1 33.6 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 • September 1993 1.58 SUMMARY OF FINANCIAL TRANSACTIONS1 Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates 1991 1992 1993 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11998888 11998899 11999900 11999911 11999922 Q3 Q4 Ql Q2 Q3 Q4 QL NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets 993.6 971.0 876.0 613.5 824.2 573.1 614.8 837.8 849.4 793.9 815.7 832.0 2 Private domestic nonfinancial sectors 226.2 209.6 203.8 31.8 75.0 -131.1 -25.9 162.4 118.0 -166.4 186.1 -20.4 3 Households 198.9 179.5 172.3 .4 79.9 -170.1 -67.8 181.9 105.3 -159.0 191.5 -1.5 4 Nonfarm noncorporate business 3.1 -.8 -1.4 -2.3 -2.2 -1.9 -2.8 -1.9 -2.6 -2.2 -2.2 -2.0 5 Nonfinancial corporate business 5.7 12.9 6.6 17.5 8.8 28.8 26.6 -1.4 11.8 10.6 14.3 -9.2 6 State and local governments 18.6 17.9 26.2 16.3 -11.5 12.1 18.2 -16.1 3.4 -15.9 -17.6 -7.7 7 U.S. government -10.6 -3.1 33.7 10.0 -12.7 -2.1 -17.9 13.9 -24.9 -27.0 -12.8 -16.7 8 Foreign 96.3 74.1 58.4 42.6 95.3 37.3 71.0 88.4 139.2 63.4 90.3 86.1 9 Financial sectors 681.8 690.4 580.2 529.1 666.5 669.0 587.6 573.0 617.0 924.0 552.1 783.1 10 Sponsored credit agencies 37.1 -.5 16.4 14.2 68.7 31.7 19.7 93.1 39.9 76.5 65.3 16.9 11 Mortgage pools 74.9 125.8 150.3 140.9 126.9 135.5 125.9 125.9 174.4 97.9 109.2 137.0 12 Monetary authority 10.5 -7.3 8.1 31.1 27.9 48.1 22.3 33.2 9.8 10.8 57.8 49.6 13 Commercial banking 157.1 176.8 125.4 84.0 91.9 82.4 104.3 98.9 58.4 157.4 53.1 131.7 14 U.S. commercial banks 127.1 145.7 95.2 38.9 69.5 26.5 45.6 91.9 .5 132.0 53.4 103.9 15 Foreign banking offices 29.4 26.7 28.4 48.5 16.5 56.7 61.3 .6 58.6 6.5 .4 27.9 16 Bank affiliates -.1 2.8 -2.8 -1.5 5.7 2.4 -1.1 6.4 -.6 18.5 -1.6 -1.2 17 Banks in U.S. possession .7 1.6 4.5 -1.9 .3 -3.3 -1.5 .0 -.1 .4 .8 1.1 18 Private nonbank finance 402.2 395.7 279.9 259.0 351.1 371.3 315.3 222.0 334.5 581.3 266.8 447.9 19 Thrift institutions 119.0 -91.0 -151.9 -144.9 -61.7 -176.8 -49.5 -113.1 -81.4 -40.5 -11.8 -14.7 20 Savings and loan associations • 87.4 -93.9 -143.9 -140.9 -76.7 -156.3 -83.3 -137.9 -92.4 -38.5 -38.1 -32.5 21 Mutual savings banks 15.3 -4.8 -16.5 -15.5 -1.4 -30.8 11.5 7.6 -7.4 -1131.0. 0 7.4 -9.5 72 Credit unions 16.3 7.7 8.5 11.5 16.4 10.3 22.3 17.2 18.5 18.9 27.3 73 Insurance 186.2 207.7 188.5 219.5 178.9 259.0 159.2 110.7 183.9 247.1 174.0 192.8 24 Life insurance companies 103.8 93.1 94.4 83.2 89.7 73.8 13.2 80.6 81.9 96.5 99.9 74.3 25 Other insurance companies 29.2 29.7 26.5 34.7 17.3 36.8 32.1 33.1 22.2 2.5 11.2 9.4 26 Private pension funds 18.1 36.2 16.6 64.7 36.9 115.0 96.9 -32.2 49.7 109.8 20.3 60.6 27 State and local government retirement funds 35.1 48.7 51.0 37.0 35.0 33.4 17.0 29.2 30.0 38.2 42.6 48.5 78 Finance n.e.c 96.9 278.9 243.3 184.4 233.9 289.2 205.6 224.4 232.0 374.8 104.5 269.8 29 Finance companies 49.2 69.3 41.6 -22.5 21.5 -5.4 -54.9 39.2 -22.3 8.5 60.5 11.1 30 Mutual funds 11.9 23.8 41.4 90.3 132.3 117.1 124.8 99.1 169.0 150.7 110.4 161.0 31 Money market funds 10.7 67.1 80.9 30.1 1.3 1.1 53.8 65.8 -24.8 -16.3 -19.2 -16.8 32 Real estate investment trusts (REITs) .9 .5 -.7 -1.0 .6 -.6 -1.9 .3 2.6 -.3 -.1 .8 33 Brokers and dealers -8.2 96.3 34.9 49.0 40.2 135.8 50.5 -2.4 73.0 180.3 -90.2 76.5 34 Securitized credit obligation (SCOs) issuers ... 32.5 22.0 45.2 38.5 38.0 41.1 33.3 22.4 34.5 52.0 43.2 37.1 RELATION OF LIABILITIES TO FINANCIAL ASSETS 35 Net flows through credit markets 993.6 971.0 876.0 613.5 824.2 573.1 614.8 837.8 849.4 793.9 815.7 832.0 Other financial sources 36 Official foreign exchange 4.0 24.8 2.0 -5.9 -1.6 -15.5 -5.0 3.5 -6.5 -8.5 5.1 7.6 37 Treasury currency and special drawing rights .5 4.1 2.5 .0 -1.8 .4 .5 .1 .3 .2 -7.7 .3 38 Life insurance reserves 25.3 28.8 25.7 24.5 29.9 19.4 19.2 30.5 28.4 33.3 27.5 27.6 39 Pension fund reserves 193.6 221.4 186.8 268.6 232.9 344.1 244.2 125.5 178.6 325.8 301.6 286.1 40 Interbank claims 2.9 -16.5 34.2 -3.7 50.5 99.9 -32.5 55.4 22.1 118.0 6.4 80.2 41 Deposits at financial institutions 259.9 290.0 96.8 61.1 14.5 27.3 47.8 73.5 -77.2 194.2 -132.4 99.3 47 Checkable deposits and currency 43.2 6.1 44.2 75.8 122.7 104.5 114.4 88.6 92.8 202.7 106.8 31.9 43 Small time and savings deposits 120.8 96.7 59.9 16.7 -61.1 -42.4 13.0 -29.9 -89.3 -83.0 -42.1 -111.4 44 Large time deposits 53.6 17.6 -66.7 -60.9 -79.7 -78.1 -117.4 -78.8 -104.9 -54.8 -80.4 -3.7 45 Money market fund shares 21.9 90.1 70.3 41.2 3.9 4.0 26.8 110.2 -42.3 -13.0 -39.1 33.4 46 Security repurchase agreements 23.5 78.3 -23.5 -16.4 34.1 36.3 16.0 10.2 118.9 77.1 -69.7 152.2 47 Foreign deposits -3.1 1.1 12.6 4.6 -5.5 3.0 -5.0 -26.9 -52.5 65.2 -8.0 -3.0 48 Mutual fund shares 6.1 38.5 67.9 150.5 215.4 182.5 195.9 183.5 236.2 233.3 208.4 274.4 49 Corporate equities -124.5 -104.2 -45.8 48.4 64.3 50.0 72.6 80.1 55.5 53.6 68.1 68.4 50 Security credit 3.0 15.6 3.5 51.4 4.2 82.4 120.7 -72.1 -5.3 84.9 9.3 31.9 51 Trade debt 89.2 60.0 44.1 10.4 52.5 47.6 -7.3 71.1 38.8 64.8 35.1 38.3 52 Taxes payable 5.3 2.0 -.5 -9.0 7.8 13.1 -3.2 10.6 9.4 -.6 11.7 .1 53 Noncorporate proprietors' equity -31.2 -32.5 -39.3 -2.7 -4.3 43.2 4.8 -16.7 10.7 -18.2 7.0 -12.3 54 Miscellaneous 222.3 269.9 120.5 136.8 186.3 39.0 204.4 181.9 260.8 225.2 77.3 166.1 55 Total financial sources 1,650.2 1,772.7 1,374.3 1,343.9 1,674.7 1,506.5 1,477.1 1,564.6 1,601.2 2,099.8 1,433.0 1,900.2 Floats not included in assets (-) 56 U.S. government checking deposits 1.6 8.4 3.3 -13.1 .7 23.9 -73.1 4.4 -11.7 -5.3 15.3 -6.2 57 Other checkable deposits .8 -3.2 2.5 2.0 1.6 -2.1 -6.1 16.7 2.5 -13.9 1.1 -18.4 58 Trade credit -.9 .6 21.5 15.0 22.4 23.8 -7.1 24.3 -7.8 55.3 17.7 11.1 Liabilities not identified as assets (-) 59 Treasury currency -.1 -.2 .2 -.6 -.2 -.2 -.1 -.4 -.1 -.3 -.1 -.1 60 Interbank claims -3.0 -4.4 1.6 26.2 -5.5 28.4 .2 13.4 -15.1 -2.6 -17.7 10.8 61 Security repurchase agreements -29.8 23.9 -34.8 10.4 11.5 36.9 44.0 -46.5 86.3 26.1 -19.8 122.4 62 Taxes payable 6.3 2.3 6.5 5.6 14.4 23.4 11.4 1.6 24.5 15.3 16.3 -10.3 63 Miscellaneous 4.4 -95.6 -13.8 -34.1 -38.6 -195.7 182.3 -119.0 -95.7 27.6 32.8 -92.5 64 Total identified to sectors as assets 1,670.7 1,841.0 1,387.5 1,332.5 1,668.5 1,568.1 1,325.7 1,670.2 1,618.4 1,997.7 1,387.6 1,883.4 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 1993 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11998899 11999900 11999911 11999922 Q3 Q4 Ql Q2 Q3 Q4 Ql Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 10,087.1 10,760.8 11,222.9 11,801.3 11,095.2 11,222.9 11,353.6 11,488.0 11,634.5 11,801.3 11,897.1 By lending sector and instrument 2 U.S. government 2,251.2 2,498.1 2,776.4 3,080.3 2,687.2 2,776.4 2,859.7 2.923.3 2,998.9 3,080.3 3,140.2 3 Treasury securities 2,227.0 2,465.8 2,757.8 3,061.6 2,669.6 2,757.8 2,844.0 2.907.4 2,980.7 3,061.6 3,120.6 4 Agency issues and mortgages 24.2 32.4 18.6 18.8 17.6 18.6 15.8 15.9 18.1 18.8 19.6 5 Private 7,835.9 8,262.6 8,446.6 8,720.9 8,408.0 8,446.6 8,493.9 8,564.7 8,635.6 8,720.9 8,756.9 By instrument 6 Tax-exempt obligations 1.004.4 1,055.6 1,101.4 1,154.7 1,089.3 1,101.4 1,111.5 1,128.6 1,145.6 1,154.7 1,164.8 7 Corporate bonds 926.1 973.2 1,051.9 1,119.2 1,036.9 1,051.9 1,071.0 1,090.4 1,105.8 1,119.2 1,138.0 8 Mortgages 3.647.5 3,907.3 4,045.7 4,190.2 4,020.3 4,045.7 4.088.7 4.122.0 4.158.6 4,190.2 4.214.3 9 Home mortgages 2,515.1 2,760.0 2,904.6 3,102.9 2,873.6 2,904.6 2.951.8 2.996.1 3.050.7 3,102.9 3.139.4 10 Multifamily residential 304.4 305.8 303.3 288.7 300.8 303.3 303.9 299.5 296.1 288.7 284.6 11 Commercial 742.6 757.6 753.3 710.4 761.4 753.3 745.2 737.9 722.9 710.4 701.7 12 Farm 85.3 84.0 84.5 88.2 84.5 84.5 87.9 88.5 88.9 88.2 88.6 13 Consumer credit 791.8 809.3 799.9 809.2 790.1 799.9 777.6 776.9 784.5 809.2 794.0 14 Bank loans n.e.c 760.7 758.0 724.7 707.0 734.1 724.7 713.7 710.3 705.7 707.0 700.9 15 Open market paper 107.1 116.9 98.5 107.1 107.0 98.5 110.4 112.0 108.2 107.1 114.9 16 Other 598.4 642.6 624.5 633.5 630.3 624.5 620.8 624.5 627.3 633.5 630.2 By borrowing sector 17 State and local government 815.7 864.0 902.5 949.6 891.4 902.5 911.3 925.9 942.3 949.6 961.6 18 Household 3.508.2 3,780.6 3.944.5 4,167.0 3,897.0 3.944.5 3,970.3 4,023.0 4,087.8 4,167.0 4,191.5 19 Nonfinancial business 3,512.0 3,618.0 3.599.6 3,604.3 3.619.6 3.599.6 3,612.3 3,615.8 3,605.5 3,604.3 3,603.8 20 Farm 139.2 140.5 140.1 143.8 141.7 140.1 141.3 145.1 146.2 143.8 142.3 21 Nonfarm noncorporate 1,177.5 1,204.2 1.180.7 1,140.6 1,191.3 1.180.7 1,174.5 1,163.5 1,150.8 1,140.6 1.130.7 22 Corporate 2.195.3 2,273.4 2,278.7 2,319.9 2.286.7 2,278.7 2,296.5 2,307.2 2,308.5 2,319.9 2.330.8 23 Foreign credit market debt held in United States 254.8 278.6 292.7 307.3 282.2 292.7 282.3 298.3 306.6 307.3 319.5 24 Bonds 88.0 109.4 124.2 142.0 118.6 124.2 125.4 130.9 136.2 142.0 161.1 25 Bank loans n.e.c 21.4 18.5 21.6 23.9 20.0 21.6 22.0 25.5 26.5 23.9 24.4 26 Open market paper 63.0 75.3 81.8 77.7 78.0 81.8 70.5 77.4 80.7 77.7 72.3 27 U.S. government loans 82.4 75.4 65.2 63.7 65.6 65.2 64.4 64.5 63.3 63.7 61.8 28 Total credit market debt owed by nonfinancial sectors, domestic and foreign 10,341.9 11,039.4 11,515.7 12,108.6 11,377.5 11,515.7 11,635.9 11,786.3 11,941.1 12,108.6 12,216.6 Financial sectors 29 Total credit market debt owed by financial sectors 2,333.0 2,524.2 2,670.3 2,897.0 2,618.4 2,670.3 2,701.2 2,758.1 2,828.6 2,897.0 2,946.6 By instrument 30 U.S. government-related 1,249.3 1,418.4 1,574.3 1,741.5 1,531.1 1,574.3 1,603.8 1,658.3 1,702.0 1,741.5 1,779.7 31 Sponsored credit-agency securities 373.3 393.7 402.9 443.1 394.7 402.9 405.7 417.8 434.7 443.1 451.9 32 Mortgage pool securities 871.0 1,019.9 1,166.7 1,293.5 1,131.5 1,166.7 1,193.2 1,235.6 1,262.5 1,293.5 1,322.9 33 Loans from U.S. government 5.0 4.9 4.8 4.8 4.9 4.8 4.8 4.8 4.8 4.8 4.8 34 Private 1,083.7 1,105.8 1,095.9 1,155.6 1,087.3 1,095.9 1,097.4 1,099.8 1,126.6 1,155.6 1,167.0 35 Corporate bonds 491.9 528.2 584.2 627.2 572.8 584.2 581.3 583.7 602.3 627.2 650.0 36 Mortgages 3.4 4.2 5.1 5.1 4.6 5.1 5.0 5.0 5.1 5.1 5.1 37 Bank loans n.e.c 37.5 38.6 41.8 49.0 39.0 41.8 41.6 43.7 44.5 49.0 47.6 38 Open market paper 409.1 417.7 385.7 394.3 387.0 385.7 393.2 390.5 394.6 394.3 379.3 39 Loans from Federal Home Loan Banks 141.8 117.1 79.1 79.9 83.9 79.1 76.3 76.9 80.2 79.9 85.0 By borrowing sector 40 Sponsored credit agencies 378.3 398.5 407.7 447.9 399.5 407.7 410.5 422.6 439.5 447.9 456.8 41 Mortgage pools 871.0 1,019.9 1,166.7 1,293.5 1,131.5 1,166.7 1,193.2 1,235.6 1,262.5 1,293.5 1,322.9 42 Private financial sectors 1,083.7 1,105.8 1,095.9 1,155.6 1,087.3 1,095.9 1,097.4 1,099.8 1,126.6 1,155.6 1,167.0 43 Commercial banks 77.4 76.3 63.0 67.4 64.6 63.0 60.8 61.7 63.3 67.4 64.8 44 Bank affiliates 142.5 114.8 112.3 114.6 110.6 112.3 115.0 112.7 114.4 114.6 118.7 45 Savings and loan associations 145.2 115.3 75.9 71.1 79.0 75.9 71.2 70.3 70.9 71.1 74.8 46 Mutual savings banks 17.2 16.7 13.2 15.1 15.2 13.2 13.5 14.3 16.2 15.1 15.7 47 Finance companies 504.2 539.8 547.5 563.8 543.3 547.5 546.7 541.6 549.1 563.8 559.8 48 Real estate investment trusts (REITs) 10.1 10.6 12.3 13.6 11.2 12.3 12.7 13.2 13.7 13.6 14.1 49 Securitized credit obligation (SCO) issuers... 187.1 232.3 271.9 309.9 263.6 271.9 277.5 286.1 299.1 309.9 319.2 All sectors 50 Total credit market debt, domestic and foreign.. 12,674.9 13,563.6 14,186.0 15,005.6 13,995.8 14,186.0 14,337.1 14,544.4 14,769.7 15,005.6 15,163.3 51 U.S. government securities 3,495.6 3,911.7 4,345.9 4,817.0 4,213.5 4,345.9 4,458.7 4,576.8 4,696.0 4,817.0 4,915.0 52 State and local obligations 1,004.4 1,055.6 1,101.4 1,154.7 1,089.3 1,101.4 1,111.5 1,128.6 1,145.6 1,154.7 1,164.8 53 Corporate and foreign bonds 1,506.0 1,610.7 1,760.4 1,888.5 1,728.3 1,760.4 1,777.8 1,805.0 1,844.2 1,888.5 1,949.0 54 Mortgages 3,650.9 3,911.5 4,050.8 4,195.4 4,024.9 4,050.8 4,093.8 4,127.0 4,163.7 4,195.4 4,219.4 55 Consumer credit 791.8 809.3 799.9 809.2 790.1 799.9 777.6 776.9 784.5 809.2 794.0 56 Bank loans n.e.c 819.6 815.1 788.2 780.0 793.2 788.2 777.3 779.5 776.6 780.0 772.8 57 Open market paper 579.2 609.9 565.9 579.0 572.0 565.9 574.1 579.9 583.6 579.0 566.4 58 Other loans 827.5 839.9 773.5 781.9 784.7 773.5 766.3 770.7 775.5 781.9 781.8 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 Nonfinancial Statistics • September 1993 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 1991 1992 1993 Transaction category or sector 11998899 11999900 11999911 11999922 Q3 Q4 Ql Q2 Q3 Q4 Ql CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 12,674.9 13,563.6 14,186.0 15,005.6 13,995.8 14,186.0 14,337.1 14,544.4 14,769.7 15,005.6 15,163.3 2 Private domestic nonfinancial sectors 2,440.5 2,644.2 2,552.8 2,622.8 2,666.2 2,552.8 2,559.5 2,561.6 2,551.6 2,622.8 2,599.4 3 Households 1,710.1 1,882.3 1,760.5 1,835.5 1,897.3 1,760.5 1,784.6 1,773.4 1,776.1 1,835.5 1,829.5 4 Nonfarm noncorporate business 56.4 55.0 52.6 50.4 52.6 52.6 51.4 50.8 50.2 50.4 49.2 5 Nonfinancial corporate business 180.3 186.9 203.4 212.3 186.3 203.4 192.1 204.2 197.7 212.3 198.8 6 State and local governments 493.7 519.9 536.2 524.7 530.0 536.2 531.4 533.3 527.6 524.7 521.9 7 U.S. government 205.1 238.7 246.2 233.5 252.0 246.2 250.2 245.3 238.1 233.5 229.8 8 Foreign 734.2 792.4 835.1 930.8 817.2 835.1 857.2 892.0 908.2 930.8 943.7 9 Financial sectors 9,295.1 9,888.3 10,552.0 11,218.5 10,260.3 10,552.0 10,670.2 10,845.5 11,071.8 11,218.5 11,390.4 10 Sponsored credit agencies 367.2 383.6 397.7 466.4 389.0 397.7 419.9 429.0 446.3 466.4 470.2 11 Mortgage pools 871.0 1,019.9 1,166.7 1,293.5 1,131.5 1,166.7 1,193.2 1,235.6 1,262.5 1,293.5 1,322.9 12 Monetary authority 233.3 241.4 272.5 300.4 264.7 272.5 271.8 282.6 285.2 300.4 303.6 13 Commercial banking 2,643.9 2,769.3 2,853.3 2,945.2 2,817.8 2,853.3 2,860.6 2,882.9 2,922.9 2,945.2 2,961.1 14 U.S. commercial banks 2,368.4 2,463.6 2,502.5 2,571.9 2,488.7 2,502.5 2,514.0 2,521.9 2,556.7 2,571.9 2,587.0 15 Foreign banking offices 242.3 270.8 319.2 335.8 297.5 319.2 313.3 328.2 328.9 335.8 336.5 16 Bank affiliates 16.2 13.4 11.9 17.6 11.6 11.9 13.6 13.1 17.5 17.6 17.4 17 Banks in U.S. possession 17.1 21.6 19.7 20.0 20.0 19.7 19.7 19.7 19.8 20.0 20.2 18 Private nonbank finance 5,179.7 5,474.1 5,861.7 6,212.9 5,657.2 5,861.7 5,924.8 6,015.4 6,155.0 6,212.9 6,332.7 19 Thrift institutions 1,484.9 1,335.5 1,190.7 1,129.0 1,205.1 1,190.7 1,161.8 1,143.1 1,133.7 1,129.0 1,124.8 20 Savings and loan associations 1,088.9 945.1 804.2 727.5 826.1 804.2 771.1 748.8 737.9 727.5 720.8 21 Mutual savings banks 241.1 227.1 211.5 210.2 208.7 211.5 213.4 211.6 208.3 210.2 207.8 22 Credit unions 154.9 163.4 174.9 191.3 170.2 174.9 177.3 182.7 187.4 191.3 196.2 23 Insurance 2,140.3 2,329.1 2,676.8 2,855.7 2,508.7 2,676.8 2,709.0 2,757.3 2,818.1 2,855.7 2,908.9 24 Life insurance companies 1,013.1 1,116.5 1,199.6 1,289.4 1,201.4 1,199.6 1,224.3 1,247.1 1,270.3 1,289.4 1,313.0 25 Other insurance companies 317.5 344.0 378.7 396.0 370.7 378.7 387.0 392.5 393.1 396.0 398.3 26 Private pension funds 394.7 431.3 624.2 661.1 466.6 624.2 616.1 628.5 656.0 661.1 676.2 27 State and local government retirement funds. 414.9 437.4 474.3 509.3 470.1 474.3 481.6 489.1 498.7 509.3 521.5 28 Finance n.e.c 1,554.5 1,809.4 1,994.3 2,228.2 1,943.5 1,994.3 2,053.9 2,115.0 2,203.1 2,228.2 2,298.9 29 Finance companies 617.1 658.7 635.5 656.9 647.5 635.5 640.5 641.2 640.7 656.9 654.8 30 Mutual funds 307.2 360.2 450.5 582.8 421.4 450.5 478.8 522.0 557.5 582.8 626.6 31 Money market funds 291.8 372.7 402.7 404.1 389.5 402.7 424.0 413.5 408.8 404.1 404.5 32 Real estate investment trusts (REITs) 8.4 7.7 6.8 7.4 7.2 6.8 6.8 7.5 7.4 7.4 7.6 33 Brokers and dealers 142.9 177.9 226.9 267.1 214.3 226.9 226.3 244.6 289.6 267.1 286.2 34 Securitized credit obligation (SCOs) issuers . 187.1 232.3 271.9 309.9 263.6 271.9 277.5 286.1 299.1 309.9 319.2 RELATION OF LIABILITIES TO FINANCIAL ASSETS 35 Total credit market debt 12,674.9 13,563.6 14,186.0 15,005.6 13,995.8 14,186.0 14,337.1 14,544.4 14,769.7 15,005.6 15,163.3 Other liabilities 36 Official foreign exchange 53.6 61.3 55.4 51.8 52.9 55.4 52.7 54.4 55.4 51.8 54.5 37 Treasury currency and special drawing rights certificates 23.8 26.3 26.3 24.5 26.2 26.3 26.3 26.4 26.5 24.5 24.6 38 Life insurance reserves 354.3 380.0 402.0 431.9 397.2 402.0 409.6 416.7 425.0 431.9 438.8 39 Pension fund reserves 3,210.5 3,303.0 4,208.8 4,573.7 3,717.7 4,208.8 4,226.3 4,278.7 4,418.1 4,573.7 4,688.0 40 Interbank claims 32.4 64.0 65.2 115.4 60.9 65.2 67.2 70.8 101.6 115.4 123.5 41 Deposits at financial institutions 4,644.6 4,741.4 4,802.5 4,817.0 4,769.5 4,802.5 4,796.4 4,785.1 4,829.9 4,817.0 4,818.6 42 Checkable deposits and currency 888.6 932.8 1,008.5 1,131.0 948.3 1,008.5 984.3 1,032.3 1,071.6 1,131.0 1,093.2 43 Small time and savings deposits 2,265.4 2,325.3 2,342.0 2,281.0 2,339.7 2,342.0 2,340.9 2,314.7 2,293.3 2,281.0 2,259.7 44 Large time deposits 615.4 548.7 487.9 408.4 517.1 487.9 469.7 438.7 428.8 408.4 409.2 45 Money market fund shares 428.1 498.4 539.6 543.6 533.1 539.6 572.0 557.2 553.2 543.6 556.6 46 Security repurchase agreements 403.2 379.7 363.4 397.5 368.9 363.4 375.1 401.0 425.4 397.5 444.9 47 Foreign deposits 43.9 56.6 61.2 55.6 62.4 61.2 54.4 41.3 57.6 55.6 54.9 48 Mutual fund shares 566.2 602.1 813.9 1,050.2 744.2 813.9 860.4 928.3 971.2 1,050.2 1,155.7 49 Security credit 133.9 137.4 188.9 217.3 158.1 188.9 194.6 193.3 214.5 217.3 224.8 50 Trade debt 903.9 938.0 940.9 11,,000033..66 935.3 940.9 939.8 944.9 987.7 1,003.6 993.6 51 Taxes payable 81.8 81.4 72.3 8800..11 71.9 72.3 77.4 72.7 75.8 80.1 82.6 52 Miscellaneous 2,508.3 2,678.8 2,817.3 2,931.8 2,733.9 2,817.3 2,834.5 2,876.0 2,911.5 2,931.8 2,953.8 53 Total liabilities 25,188.3 26,577.2 28,579.6 30,303.0 27,663.7 28,579.6 28,822.3 29,191.8 29,786.8 30,303.0 30,721.8 Financial assets not included in liabilities (+) 54 Gold and special drawing rights 21.0 22.0 22.6 19.6 22.1 22.6 22.7 23.2 24.5 19.6 19.8 55 Corporate equities 3,819.7 3,506.6 4,357.9 4,827.2 4,170.5 4,357.9 4,461.9 4,404.7 4,576.8 4,827.2 4,964.0 56 Household equity in noncorporate business 2,524.9 2,449.4 2,366.0 2,260.8 2,493.4 2,366.0 2,365.5 2,346.4 2,322.2 2,260.8 2,260.9 Floats not included in assets (-) 57 U.S. government checking deposits 6.1 15.0 3.8 6.8 19.8 3.8 .9 1.4 4.0 6.8 3.4 58 Other checkable deposits 26.5 28.9 30.9 32.5 23.6 30.9 29.5 32.6 23.3 32.5 22.2 59 Trade credit -159.7 -148.0 -138.5 -105.9 -157.7 -138.5 -135.3 -149.5 -131.3 -105.9 -104.0 Liabilities not identified as assets (-) 60 Treasury currency -4.3 -4.1 -4.8 -5.0 -4.7 -4.8 -4.9 -4.9 -5.0 -5.0 -5.0 61 Interbank claims -31.0 -32.0 -4.2 -9.9 -4.7 -4.2 -1.8 -4.0 -5.9 -9.9 -7.5 62 Security repurchase agreements 11.5 -23.3 -12.9 -2.8 -10.6 -12.9 -11.4 5.8 16.7 -2.8 41.4 63 Taxes payable 20.6 21.8 18.9 32.0 17.6 18.9 14.7 20.9 25.4 32.0 29.2 64 Miscellaneous -251.1 -247.3 -458.5 -558.3 -300.6 -458.5 -458.1 -476.5 -527.9 -558.3 -540.0 65 Total identified to sectors as assets 31,935.2 32,944.3 35,891.3 38,021.1 34,767.1 35,891.3 36,238.9 36,540.2 37,311.0 38,021.1 38,526.9 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 and 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, and indexes 1987=100, except as noted 1992 1993 MMeeaassuurree 11999900 11999911 11999922 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June 1 Industrial production1 106.0 104.1 106.5 107.5 108.4 108.9 109.3 109.9 110.1 110.4r 110.3r 110.1 Market groupings ? 3 Pro F d in u a c l t , s , t o t t o a t l a l 1 10 0 5 7 . . 5 0 1 1 0 0 3 5 . . 1 3 1 10 0 5 8 . . 6 2 1 1 0 1 7 0 . . 1 1 110171..80 1 10 1 8 1 . . 2 5 1 10 1 8 1 . . 5 9 1 1 1 0 2 9 . . 4 2 1 10 1 9 2 . . 5 7 r 11 1 00 1 99 2 .. . 55 8 r 1 11 1 00 2 99 . .. 6 44 r rr 1 1100 1 99 2 .. . 11 2 4 Consumer goods 103.4 102.8 105.2 106.4 107.1 107.5 107.6 108.5 108.6r 108.3r 107.9* 107.1 5 Equipment 112.1 108.9 112.7 115.4 116.7 117.2 118.1 118.0 118.7r 119.4r 119.5 119.6 6 Intermediate 101.2 96.5 97.6 97.8 98.1 98.3 98.2 99.3 99.6 99.6r 99.6 99.5 7 Materials 106.8 105.5 107.9 108.1 109.3 110.0 110.4 110.9 110.9 111.6r 111.6 111.6 Industry groupings 8 Manufacturing 106.1 103.7 106.9 108.0 108.9 109.2 109.9 110.5 110.8r 111.3r 111111..22'' 111100..88 9 Capacity utilization, manufacturing (percent)2 81.1 77.8 78.8 79.2 79.7 79.8 80.3 80.5 80.6 8800..99** 8800..77rr 8800..33 10 Construction contracts3 95.3 89.7 94.5r 104.0 92.0 90.0 100.0 95.0 94.0 94.0 91.0 104.0 11 Nonagricultural employment, total4 107.7 106.2 106.4 106.7 106.8 107.0 107.1 107.4 107.5 107.7 107.9 107.9 17 Goods-producing, total 101.2 96.6 94.9 93.2 93.2 93.2 93.2 93.5 93.3 93.1 93.2 92.9 13 Manufacturing, total 100.6 97.1 95.8 94.3 94.3 94.3 94.4 94.5 94.4 94.0 93.8 93.5 1 1 4 5 Se M rv a ic n e u - f p a r c o t d u u ri c n i g n , g production workers ... 1 1 0 0 0 9 . . 2 8 1 9 0 6 9 . . 3 3 1 9 1 5 0 . . 3 0 1 9 1 3 1 . . 9 0 1 9 1 4 1 . . 0 2 1 9 1 4 1 . . 1 4 1 9 1 4 1 . . 3 6 1 9 1 4 1 . . 5 9 1 9 1 4 2 . . 4 0 1 9 1 4 2 . . 0 4 r 1 9 1 3 2 . . 8 6 1 9 1 3 2 . . 5 7 16 Personal income, total 122.7 127.0 133.0 135.3 135.3 136.6 137.4 137.5 138.4 138.5 139.3 n.a. 17 Wages and salary disbursements 121.3 124.4 129.0 130.5 131.2 132.3 133.1 132.9 132.8 133.3 134.6 n.a. 18 Manufacturing 113.5 113.6 115.4 116.5 116.0 118.0 117.2 117.8 117.8 118.1 118.0 n.a. 19 Disposable personal income 122.9 128.0 134.7 137.0 136.8 138.2 138.8 139.0 140.0 140.1 140.9 n.a. 20 Retail sales6 120.2 121.3 127.lr 130.7 130.5 131.9 132.0 131.9 130.5 133.0* 133.5r 134.0 Prices7 71 Consumer (1982-84=100) 130.7 136.2 140.3 141.8 142.0 141.9 142.6 143.1 143.6 144.0 144.2 114444..44 22 Producer finished goods (1982=100) 119.2 121.7 123.2 124.4 124.0 123.8 124.2 124.5r 124.6 125.3 125.7 125.6 1. A major revision of the industrial production index and the capacity 6. Based on data from U.S. Department of Commerce, Survey of Current utilization rates was released in April 1990. See "Industrial Production: 1989 Business. Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April 7. Based on data not seasonally adjusted. Seasonally adjusted data for changes 1990), pp. 187-204. in the price indexes can be obtained from the U.S. Department of Labor, Bureau 2. Ratio of index of production to index of capacity. Based on data from the of Labor Statistics, Monthly Labor Review. Federal Reserve, DRI McGraw-Hill, U.S. Department of Commerce, and other NOTE. Basic data (not indexes) for series mentioned in notes 4, 5,and 6, and sources. indexes for series mentioned in notes 3 and 7 can also be found in the Survey of 3. Index of dollar value of total construction contracts, including residential, Current Business. nonresidential, and heavy engineering, from McGraw-Hill Information Systems Figures for industrial production for the latest month are preliminary, and many Co., F.W. Dodge Division. figures for the three months preceding the latest month have been revised. See 4. Based on data from U.S. Department of Labor, Employment and Earnings. "Recent Developments in Industrial Capacity and Utilization," Federal Reserve Series covers employees only, excluding personnel in the armed forces. Bulletin, vol. 76 (June 1990), pp. 411-35. 5. Based on data from U.S. Department of Commerce, Survey of Current Business. 2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data seasonally adjusted except as noted 1992 1993 CCaatteeggoorryy 11999900 11999911 11999922 Nov. Dec. Jan. Feb. Mar. Apr. Mayr June HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 189,686 191,329 193,142 193,847 194,026 194,159 194,298 194,456 194,618 194,767 194,933 ? Labor force1 126,424 126,867 128,548 128,896 129,108 128,598 128,839 128,926 128,833 129,615 129,604 3 Civilian labor force 124,787 125,303 126,982 127,365 127,591 127,083 127,327 127,429 127,341 128,131 128,127 4 Nonagricultural industries 114,728 114,644 114,391 114,855 115,049 114,879 115,335 115,483 115,356 116,203 116,195 5 Agriculture 3,186 3,233 3,207 3,209 3,262 3,191 3,116 3,082 3,060 3,070 3,024 Unemployment 6 Number 6,874 8,426 9,384 9,301 9,280 9,013 8,876 8,864 8,925 88,,885588 8,908 7 Rate (percent of civilian labor force) — 5.5 6.7 7.4 7.3 7.3 7.1 7.0 7.0 7.0 6.9 7.0 8 Not in labor force 63,262 64,462 64,594 64,951 64,918 65,561 65,459 65,530 65,785 65,152 65,329 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 109,782 108,310 108,434 108,921 109,079 109,235 109,539 109,565 109,820r 110,035 110,048 10 Manufacturing 19,117 18,455 18,192 17,917 17,913 17,936 17,954 17,935 17,863R 17,820 17,767 11 Mining 710 691 635 616 613 611 600 600 600R 602 595 17 Contract construction 5,133 4,685 4,594 4,462 4,459 4,454 4,515 4,481 4,517 4,572 4,566 N Transportation and public utilities 5,808 5,772 5,741 5,699 5,707 5,719 5,725 5,724 5,720* 5,723 5,718 14 Trade 25,877 25,328 25,120 25,466 25,522 25,609 25,726 25,707 25,758R 25,809 25,835 15 Finance 6,729 6,678 6,672 6,569 6,575 6,578 6,577 6,574 6,585R 6,590 6,587 16 Service 28,130 28,323 28,903 29,430 29,524 29,573 29,665 29,756 29,977R 30,096 30,152 17 Government 18,304 18,380 18,578 18,762 18,766 18,755 18,777 18,788 18,800* 18,823 18,828 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 Digitized for FR3A. ISnEcluRd es all full- and part-time employees who worked during, or received Earnings. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • September 1993 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1992 1993 1993 Series Q3 Q4 Qlr Q2 Q3 Q4 Ql Q2 Q3 Q4 Qlr Q2 Output (1987-100) Capacity (percent of 1987 output) Capacity utilization rate (percent) 1 Total industry 106.5 108.3 109.7 110.3 133.7 134.2 134.8 135.3 79.7 80.7 81.4 2 Manufacturing 107.0 108.7 110.4 111.1 136.0 136.6 137.2 137.8 78.7 79.6 80.5 80.6 3 Primary processing 103.7 104.7 106.4 106.8 126.4 126.6 126.8 127.1 82.1 82.7 83.9 84.0 4 Advanced processing 108.5 110.6 112.3 113.1 140.6 141.3 142.1 142.9 77.2 78.3 79.0 79.2 5 Durable goods 108.3 110.8 113.6 114.6 141.9 142.6 143.4 144.1 76.3 77.7 79.2 79.5 6 Lumber and products 96.0 98.5 99.7 97.0 112.4 112.5 112.6 112.7 85.4 87.6 88.5 86.1 7 Primary metals 99.7 101.5 105.0 104.2 125.3 125.0 124.9 124.9 79.6 81.2 84.1 83.4 8 Iron and steel 103.5 105.0 109.1 108.3 130.4 129.9 129.8 130.0 79.4 80.8 84.1 83.4 9 Nonferrous 94.5 96.7 99.3 98.5 118.3 118.2 118.1 117.9 79.8 81.8 84.1 83.5 10 Nonelectrical machinery 126.8 132.4 137.1 143.8 160.6 162.1 163.7 165.5 79.0 81.7 83.8 86.9 11 Electrical machinery 120.9 124.0 127.1 129.1 151.3 152.6 154.1 155.7 80.0 81.2 82.5 82.9 12 Motor vehicles and parts 103.6 111.4 120.6 118.6 152.9 154.5 155.8 156.8 67.7 72.1 77.4 75.7 13 Aerospace and miscellaneous transportation equipment 99.5 97.7 95.7 93.0 135.7 135.8 135.7 135.5 73.3 72.0 70.5 68.6 14 Nondurable goods 105.4 106.1 106.5 106.8 128.7 129.1 129.6 130.1 81.9 82.1 82.2 82.1 15 Textile mill products 105.2 105.2 106.2 104.8 116.6 116.7 116.9 117.1 90.3 90.1 90.8 89.5 16 Paper and products 108.6 107.9 110.0 112.8 121.7 122.1 122.5 122.9 89.2 88.4 89.8 91.7 17 Chemicals and products 114.7 116.9 116.9 118.0 142.6 143.5 144.4 145.4 80.4 81.4 80.9 81.2 18 Plastics materials 110.5 106.6 111.7 128.3 128.8 129.5 86.2 82.8 86.2 86.4 19 Petroleum products 100.2 104.2 104.2 104.9 116.6 116.2 115.9 115.7 85.9 89.7 89.9 90.7 20 Mining 97.5 97.9 96.5 96.5 112.3 112.0 111.7 111.5 86.9 87.4 86.3 86.6 21 Utilities 110.9 114.7 116.0 115.4 131.4 131.8 132.2 132.5 84.5 87.1 87.8 87.1 22 Electric 110.6 114.3 115.2 115.1 127.9 128.5 129.0 129.4 86.4 89.0 89.3 88.9 1973 1975 Previous cycle Latest cycle3 1992 1993 High Low High Low High Low June Jan. Feb. Mar/ Apr/ Mayr Junep Capacity utilization rate (percent) 1 Total industry 99.0 82.7 87.3 71.8 84.8 78.3 79.5 81.2 81.5 81.6 81.7 81.5 81.2 2 Manufacturing 99.0 82.7 87.3 70.0 85.1 76.6 78.6 80.3 80.5 80.6 80.9 80.7 80.3 3 Primary processing 99.0 82.7 89.7 66.8 89.1 77.9 82.2 83.5 84.3 83.8 84.2 84.1 83.8 4 Advanced processing 99.0 82.7 86.3 71.4 83.3 76.1 77.0 78.9 79.0 79.3 79.5 79.2 78.8 5 Durable goods 99.0 82.7 86.9 65.0 83.9 73.8 76.1 78.9 79.4 79.5 79.8 79.6 79.1 6 Lumber and products 99.0 82.7 87.6 60.9 93.3 76.8 83.5 88.2 90.4 87.0 86.5 86.8 85.0 7 Primary metals 99.0 82.7 102.4 46.8 92.9 74.3 80.6 82.3 86.5 83.4 83.5 83.4 83.4 8 Iron and steel 99.0 82.7 110.4 38.3 95.7 72.3 79.4 82.4 87.0 82.9 83.5 83.2 83.4 9 Nonferrous 99.0 82.7 90.5 62.2 88.9 75.9 82.3 82.2 85.9 84.3 83.6 83.6 83.4 10 Nonelectrical machinery 99.0 82.7 92.1 64.9 83.7 73.0 77.6 82.8 83.5 85.0 86.4 86.9 87.3 11 Electrical machinery 99.0 82.7 89.4 71.1 84.9 76.8 79.3 82.0 82.5 83.1 82.9 83.1 82.7 12 Motor vehicles and parts 99.0 82.7 93.0 44.5 84.5 57.9 69.1 77.7 77.5 76.9 77.3 75.9 73.8 13 Aerospace and miscellaneous transportation equipment. 99.0 82.7 81.1 66.9 88.3 78.1 74.2 71.2 70.6 69.8 69.3 68.7 67.9 14 Nondurable goods 99.0 82.7 87.0 76.9 86.8 80.4 81.9 82.2 82.1 82.2 82.4 82.1 81.8 15 Textile mill products 99.0 82.7 91.7 73.8 92.1 78.7 89.1 91.5 90.8 90.1 89.1 90.0 89.3 16 Paper and products 99.0 82.7 94.2 82.0 94.9 86.0 89.5 88.8 90.1 90.6 92.2 91.8 91.3 17 Chemicals and products 99.0 82.7 85.1 70.1 85.9 78.5 80.9 81.1 80.4 81.3 81.1 81.2 81.3 18 Plastics materials 99.0 82.7 90.9 63.4 97.0 75.5 86.3 86.0 85.3 87.4 87.7 85.7 85.9 19 Petroleum products 99.0 82.7 89.5 68.2 88.5 84.2 87.2 89.0 90.3 90.4 90.1 91.4 90.6 20 Mining 99.0 82.7 96.6 80.6 87.0 86.8 86.3 87.9 85.8 85.3 86.4 86.9 86.4 21 Utilities 99.0 82.7 88.3 76.2 92.6 83.4 83.9 85.4 88.9 89.0 86.8 86.7 87.8 22 Electric 99.0 82.7 88.3 78.7 94.8 87.4 85.8 87.7 90.3 90.0 88.6 88.5 89.8 1. Data in this table also appear in the Board's G.17 (419) monthly statistical Production Capacity and Capacity Utilization Since 1987," Federal Reserve release. For ordering address, see inside front cover. For a detailed description of Bulletin, vol. 79, (June 1993), pp. 590-605. the series, see "Recent Developments in Industrial Capacity and Utilization," 2. Monthly highs, 1978 through 1980; monthly lows, 1982. Federal Reserve Bulletin, vol. 76 (June 1990), pp. 411-35. See also "Industrial 3. Monthly highs, 1988-89; monthly lows, 1990-91. 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 June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.r Apr.r Mayr Junep Index (1987 = 100) MAJOR MARKETS 1 Total index 100.0 106.5 106.0 106.8 106.6 106.2 107.5 108.4 108.9 109.3 109.9 110.1 110.4 110.3 110.1 1 1 1 1 4 6 9 2 3 5 7 8 1 2 3 0 Pro F d in C u a c o l D t n s p s u A r O u r o a m u t d A C A A h b t u e o e l a u p u e r T c A r m r t p t t p o o r g s u c l o u s e i o o t t a p t c o o i n a i n a k v s n d n s c r , e s g u s d t e , s , c m p s a c t o , t a r n r e o o n o n u A d r n t s d d c a s / u g f l u k C u u a m o s c , m l r o t l e n s i a d e r e i n s r d t d u r g e T o o V d — s. . 4 6 2 6 6 2 0 5 33 1 1 . . . .. . .. . . . . . . 0 0 5 88 8 11 6 9 6 9 5 0 1 1 1 1 1 1 1 1 9 9 9 7 0 1 0 0 2 0 0 0 9 6 9 9 8 0 5 2 7 3 5 5 . . . . . . . . . . . . 4 9 9 0 2 4 2 5 7 9 6 2 1 1 1 1 1 1 1 1 9 8 9 9 0 0 1 0 0 0 0 0 8 6 3 9 7 4 9 3 4 9 2 4 . . . . . . . . . . . . 5 0 5 0 1 0 2 2 8 6 6 0 1 1 1 1 1 1 1 1 1 9 9 8 0 0 0 0 1 0 0 0 0 5 8 1 8 4 1 9 9 2 5 4 6 . . . . . . . . . . . . 3 8 2 1 9 7 7 8 7 8 6 3 1 1 1 1 1 1 11 9 9 9 7 0 2 0 0 0 0 0 1 7 9 6 7 8 8 5 1 4 5 5 1 . . . . . . . . . . . . 7 5 0 0 9 8 1 9 0 9 3 0 1 1 1 1 1 1 1 1 9 9 9 7 0 0 1 2 0 0 0 0 7 3 8 7 8 4 2 0 0 5 4 3 . . . . . . . . . . . . 3 5 2 9 1 4 9 4 3 9 1 7 1 1 1 1 1 1 1 1 1 1 7 9 1 4 0 0 1 0 0 0 0 0 8 8 0 1 6 1 0 7 4 3 5 4 . . . . . . . . . . . . 5 5 1 5 4 8 1 1 1 3 9 9 1 1 1 1 1 1 1 1 1 1 1 7 0 0 1 0 0 0 4 0 0 0 1 9 5 3 0 7 4 2 3 7 7 6 1 . . . . . . . . . . . . 6 7 7 8 1 1 9 3 8 1 0 0 1 1 1 1 1 1 1 1 1 1 1 8 0 1 1 5 0 0 1 0 0 0 0 6 7 1 0 4 7 5 1 8 7 8 3 . . . . . . . . . . . . 9 5 4 5 5 7 6 9 2 2 7 8 1 1 1 1 1 1 1 1 1 1 1 8 0 1 0 1 6 1 1 1 0 0 0 6 5 6 7 6 9 1 0 2 9 5 8 . . . . . . . . . . . . 6 5 0 6 8 1 3 9 9 7 8 5 1 1 1 1 1 1 1 1 1 1 1 9 0 5 0 1 1 0 1 1 0 1 1 0 8 6 6 2 0 7 4 7 9 1 1 . . . . . . . . . . . . 2 5 9 7 4 7 4 6 6 2 9 3 1 1 1 1 1 1 1 1 1 1 1 9 0 1 2 0 1 1 1 1 5 0 0 0 4 3 5 8 1 1 2 1 3 9 7 . . . . . . . . . . . . 5 5 4 0 6 2 5 7 7 1 5 5 1 1 1 1 1 1 1 1 1 1 1 9 0 1 1 0 0 5 2 1 0 1 1 0 8 2 2 9 8 5 3 4 5 2 2 . . . . . . . . . . . . 2 3 8 1 5 5 9 9 3 3 1 0 1 1 1 1 1 1 1 1 1 1 1 8 0 0 2 1 0 0 1 5 1 0 1 6 8 9 2 2 7 9 0 0 0 8 2 . . . . . . . . . . . . 5 5 4 4 6 9 3 8 9 1 1 1 1 1 1 1 1 1 1 1 1 1 1 8 1 0 0 1 0 0 4 1 0 0 0 3 2 7 8 8 4 9 2 0 7 7 6 . . . . . . . . . . . . 5 2 1 2 9 4 1 1 5 0 9 0 14 Miscellaneous home goods .. 1.4 105.6 106.0 107.4 104.1 102.9 105.8 107.1 106.6 108.0 109.5 108.9 109.6 108.7 108.3 15 Nondurable consumer goods 20.4 105.9 104.6 105.5 106.0 105.3 107.1 107.5 107.4 106.7 107.7 107.7 107.2 107.0 106.7 16 Foods and tobacco 9.1 104.7 103.3 105.0 107.0 104.9 105.9 105.2 104.8 104.6 105.5 104.3 104.6 104.4 103.7 17 Clothing 2.6 95.0 94.5 95.1 94.0 94.3 94.5 95.9 96.0 95.7 95.0 94.6 94.8 94.6 94.1 2 1 1 0 8 9 E C P n a h p e e e r m g r i y c p a r l o d p u ro ct d s u cts 2 2 3 . . . 7 5 5 1 1 11 0 0 8 8 0 . . . 7 3 8 1 1 1 0 1 0 0 7 5 . . . 6 6 2 1 1 11 0 0 7 0 6 . . . 3 1 3 1 1 1 1 0 0 6 5 0 . . . 5 6 2 1 1 11 0 0 8 0 4 . . . 5 4 6 1 1 1 0 2 1 0 1 1 . . . 1 1 1 1 1 1 0 2 1 0 3 2 . . . 9 3 0 1 1 1 0 2 1 0 1 4 . . . 9 7 4 1 1 1 2 0 0 2 0 9 . . . 4 2 5 1 1 1 0 2 1 1 1 5 . . . 8 1 5 1 1 1 2 0 1 3 2 6 . . . 7 1 0 1 1 1 2 0 1 3 1 1 . . . 1 7 7 1 1 1 2 0 1 2 1 2 . . . 2 7 6 1 1 1 0 2 1 1 2 2 . . . 4 3 9 21 Fuels .7 104.7 103.8 104.1 98.9 103.5 109.8 107.7 106.1 106.5 108.9 107.1 106.6 109.0 106.6 22 Residential utilities 2.0 109.6 105.8 107.2 108.2 105.1 111.6 113.6 117.5 110.7 118.0 119.5 113.6 113.9 115.3 23 Equipment 20.0 112.7 111.6 112.7 114.3 113.5 115.4 116.7 117.2 118.1 118.0 118.7 119.4 119.5 119.6 24 Business equipment 13.9 123.2 121.9 123.7 126.1 125.0 127.5 129.0 129.6 131.2 131.7 133.4 134.4 134.7 134.9 25 Information processing and related . 5.6 134.7 134.3 137.4 138.5 138.2 142.2 142.9 143.2 144.4 146.1 149.1 150.4 152.4 153.9 26 Office and computing 1.9 168.3 167.3 171.8 173.7 178.3 183.1 184.5 186.4 192.0 198.0 203.3 209.1 214.9 220.3 27 Industrial 4.0 108.5 108.7 109.1 109.2 109.6 110.1 112.0 112.3 113.1 112.2 113.7 114.6 114.7 114.6 28 Transit 2.5 137.1 133.9 135.3 143.3 134.5 137.4 140.4 144.1 146.7 146.5 145.0 144.2 141.2 136.9 29 Autos and trucks 1.2 117.9 117.2 114.2 117.3 114.7 121.7 123.9 131.4 136.7 136.8 135.8 136.2 133.1 127.3 30 Other 1.9 104.7 99.2 100.2 105.6 107.3 108.8 110.7 109.2 112.6 113.4 114.9 117.3 116.4 117.9 3 3 1 2 O D i e l f a e n n d se g a a n s d w s e p ll a c d e r i e ll q in u g i pment 5. . 4 6 7 8 8 5 . . 3 9 8 73 6 . . 1 5 8 7 5 3 . . 1 8 7 8 5 4 . . 6 5 7 8 6 4 . . 3 4 8 82 3 . . 7 5 8 86 3 . . 4 2 9 8 1 2 . . 2 5 8 89 2 . . 0 0 7 8 7 1 . . 9 5 8 71 0 . . 1 7 7 8 2 0 . . 4 5 7 7 5 9 . . 1 8 7 82 8 . . 4 8 33 Manufactured homes .2 99.7 90.1 101.3 96.9 100.9 110.4 118.5 128.6 129.4 127.1 116.2 114.9 112.1 112.3 34 Intermediate products, total 14.7 97.6 97.7 98.6 97.0 96.9 97.8 98.1 98.3 98.2 99.3 99.6 99.6 99.6 99.5 3 3 6 5 B C u o s n i s n t e ru ss c t s i u on p p s l u ie p s p lies 6 8. . 7 0 9 8 3 . . 3 8 1 9 0 3 0 . . 6 6 1 9 0 4 1 . . 3 4 9 9 9 4 . . 0 1 9 99 3 . . 5 0 9 9 9 4 . . 9 7 1 9 0 5 0 . . 1 0 1 9 0 4 0 . . 5 8 1 9 0 4 0 . . 8 5 1 9 0 7 0 . . 5 5 1 9 0 6 1 . . 4 8 1 9 0 5 2 . . 9 0 1 9 0 6 1 . . 9 4 1 9 0 6 1 . . 3 6 3 3 3 8 9 7 Ma D te u D r r i a u a b r ls a le b l g e o c o o d n s s m um at e e r r i p al a s r ts 3 1 4 9 9 . . . 2 2 4 1 10 0 3 8 7 . . . 9 9 9 1 1 1 0 0 0 1 8 7 . . . 5 7 8 1 1 1 0 0 0 9 8 0 . . . 3 5 6 1 1 10 0 0 1 7 8 . . . 4 6 9 1 1 9 0 0 8 7 7 . . . 5 4 6 1 1 1 0 0 0 9 8 1 . . . 7 1 8 1 1 1 0 0 1 4 9 1 . . . 3 3 1 1 1 1 0 1 1 7 1 0 . . . 5 9 0 1 1 1 1 1 1 3 0 0 . . . 3 8 4 1 1 1 1 1 1 1 4 0 . . . 2 8 9 1 1 1 1 1 1 4 2 0 . . . 1 2 9 1 1 1 1 1 1 3 4 1 . . . 0 8 6 1 1 1 1 1 1 3 5 1 . . . 0 0 6 1 1 1 1 1 1 3 4 1 . . . 0 9 6 4 4 4 1 2 0 O Eq t B h u e a i r p s i m c e m nt e t p a a l r m ts aterials 7 7 2. . . 8 9 3 1 1 1 0 0 1 6 8 6 . . . 0 3 5 1 1 1 0 0 1 5 7 6 . . . 4 8 6 1 1 1 0 0 1 8 6 7 . . . 7 3 7 1 1 10 1 0 7 7 5 . . . 7 1 5 1 1 1 0 0 1 5 4 6 . . . 8 6 2 1 1 1 0 0 1 6 8 8 . . . 2 3 3 1 1 1 0 1 0 7 9 9 . . . 4 3 8 1 1 10 0 1 8 7 9 . . . 8 5 7 1 1 11 0 2 0 8 0 . . . 4 6 4 1 1 11 0 2 3 9 1 . . . 2 7 0 1 1 10 2 0 9 1 8 . . . 9 3 9 1 1 1 0 1 2 9 0 2 . . . 4 3 3 1 110 2 19 3 1. . .3 0 1 1 1 1 1 0 2 0 8 3 . . . 6 9 3 43 Nondurable goods materials 9.0 110.9 111.5 111.5 110.7 111.7 110.7 112.0 111.5 112.4 112.1 112.8 113.8 113.7 113.9 44 Textile materials 1.2 102.8 101.8 107.7 101.6 103.3 102.7 103.4 102.9 104.2 103.2 104.2 103.0 102.1 101.6 45 Pulp and paper materials 1.9 109.9 110.8 110.3 108.7 112.3 109.1 110.2 110.7 110.7 111.9 112.8 115.4 114.7 114.0 46 Chemical materials 3.8 114.2 114.8 114.1 114.5 114.5 114.4 115.6 114.6 114.9 114.6 115.6 116.0 117.3 118.1 47 Other 2.1 110.4 111.6 110.0 110.5 110.5 109.7 112.0 111.3 114.1 112.5 112.6 114.4 112.7 112.7 48 Energy materials 10.9 103.4 103.1 104.4 102.5 103.6 103.0 103.9 105.1 103.4 103.8 103.5 103.8 103.6 103.5 5 4 0 9 C Pr o i n m v a e r r y t e e d n e fu rg e y l materials 7 3. . 7 2 1 9 1 9 0 . . 7 6 1 9 0 9 9 . . 6 9 1 1 1 0 2 0 . . 3 4 1 9 0 9 8 . . 4 7 1 9 1 9 1. . 4 6 1 9 1 9 0 . . 4 0 1 1 1 0 1 0. . 2 I 1 1 1 0 2 1 . . 4 3 1 1 0 0 9 0 . . 1 4 1 9 1 8 4 . . 3 6 1 9 1 7 5 . . 4 4 1 9 1 9 1 . . 9 5 19191..90 1 9 1 9 2 . . 0 2 SPECIAL AGGREGATES 5 5 2 1 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 i c t l r e u s c a k n s d parts.. 9 9 7 5 . . 3 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 10 0 6 6 . . 4 3 1 10 0 7 7 . . 5 4 1 1 0 0 8 8 . . 4 4 1 1 0 0 8 8 . . 6 6 1 1 0 0 8 8 . . 9 7 1 1 0 0 9 9 . . 5 3 1 1 0 0 9 9 . . 7 6 1 10 1 9 0 . . 8 0 1 1 1 0 0 9 . . 1 9 1 10 1 9 0 . . 8 0 53 Total m e a x c c h l i u n d e i s n g office and computing 97.5 105.0 104.6 105.3 105.0 104.5 105.7 106.6 107.1 107.3 107.8 107.8 108.0 107.8 107.4 5 5 4 5 C C o o n n s s t u u ru m m c e e k r r s g g o o o o d d s s e e x x c c l l u u d d i i n n g g a e u n t e o r s g y a nd 2 2 4 3 . . 5 3 1 1 0 0 5 4 . . 7 8 1 1 0 0 4 3 . . 6 9 1 1 0 0 5 4 . . 5 7 1 1 0 0 5 5 . . 7 0 1 1 0 0 5 4 . . 1 3 1 1 0 0 6 5 . . 8 9 1 1 0 0 7 6 . . 4 6 1 1 0 0 7 6 . . 3 8 1 1 0 0 7 7 . . 0 4 1 10 0 7 8 . . 7 1 1 1 0 0 8 7 . . 2 7 1 1 0 0 7 7 . . 9 9 1 1 0 0 7 7. . 7 3 1 10 0 7 6 . . 2 4 56 Business equipment excluding autos and trucks 12.7 123.7 122.3 124.5 126.9 125.9 128.0 129.5 129.5 130.7 131.3 133.2 134.2 134.8 135.5 57 Business equipment excluding office and computing equipment 12.0 115.7 114.3 115.6 118.1 116.1 118.1 119.7 120.1 121.0 120.6 121.6 121.8 121.2 120.5 58 Materials excluding energy 28.4 109.5 109.5 110.0 109.4 108.8 110.0 111.4 111.8 113.0 113.6 113.7 114.5 114.6 114.6 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • September 1993 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued 1987 1992 1993 r ro p c S o I d C e 2 p p o ro r- - a 1 v 9 g 9 . 2 tion June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.r Apr/ Mayr Junep Index (1987 = 100) MAJOR INDUSTRIES 59 Total index 100.0 106.5 106.0 106.8 106.6 106.2 107.5 108.4 108.9 109.3 109.9 110.1 110.4 110.3 110.1 60 Manufacturing 84.3 106.9 106.5 107.1 107.0 106.8 108.0 108.9 109.2 109.9 110.5 110.8 111.3 111.2 110.8 61 Primary processing 27.1 103.8 103.7 104.3 103.5 103.3 104.1 105.1 105.0 105.8 106.9 106.4 106.9 106.9 106.7 62 Advanced processing 57.1 108.3 107.9 108.4 108.7 108.4 109.9 110.7 111.3 111.9 112.2 112.9 113.4 113.2 112.8 63 Durable goods 46.5 108.1 107.6 108.2 108.5 108.1 109.8 110.9 111.8 112.9 113.8 114.1 114.8 114.7 114.3 64 Lumber and products... "24 2.1 96.4 93.8 96.6 96.6 94.7 97.8 99.8 98.0 99.3 101.8 98.0 97.4 97.9 95.8 65 Furniture and fixtures... 25 1.5 99.0 94.2 97.5 99.2 100.5 100.4 102.3 103.9 105.2 106.0 107.3 108.1 107.8 108.3 66 Clay, glass, and stone products 32 2.4 96.0 95.6 96.8 95.7 96.5 96.8 97.6 98.0 97.0 98.9 98.6 99.8 98.8 98.8 67 Primary metals 33 3.3 101.1 101.2 100.6 100.5 98.0 100.5 101.6 102.4 102.8 108.0 104.2 104.3 104.1 104.1 68 Iron and steel 331,2 1.9 104.7 103.8 104.7 103.8 102.0 104.1 103.6 107.4 107.0 112.9 107.6 108.4 108.2 108.4 69 Raw steel .1 101.2 101.6 101.7 99.1 98.9 99.8 102.8 104.6 103.4 105.9 102.0 102.6 105.1 70 Nonferrous 333-6,9 1.4 96.1 97.5 95.0 96.1 92.4 95.6 98.7 95.7 97.1 110011..44 9999..44 9988..66 9988..55 9988!!22 71 Fabricated metal products 34 5.4 96.7 97.1 97.0 97.0 96.5 97.5 97.6 97.8 99.8 99.7 100.3 101.0 110000..22 110000..33 72 Industrial and commercial machinery and computer equipment . 35 8.5 124.8 123.8 125.7 126.9 127.9 130.6 132.8 133.8 135.0 136.7 139.6 142.5 143.9 145.0 73 Office and computing machines 357 2.3 168.3 167.3 171.8 173.7 178.3 183.1 184.5 186.4 192.0 198.0 203.3 209.1 214.9 220.3 74 Electrical machinery 36 6.9 119.8 119.3 120.7 120.6 121.5 122.6 124.4 124.8 125.8 127.1 128.5 128.6 129.4 129.2 75 Transportation equipment 37 9.9 102.6 102.7 101.4 102.4 100.5 103.0 103.6 106.3 108.4 107.8 106.9 107.0 105.6 103.6 76 Motor vehicles and parts 371 4.8 104.8 104.8 103.1 105.0 102.6 108.0 109.9 116.2 120.9 120.7 120.1 120.9 119.0 116.0 77 Autos and light trucks 2.2 101.4 102.7 100.8 99.7 97.9 104.1 105.4 114.4 118.2 117.8 116.9 117.5 113.1 108.1 78 Aerospace and miscellaneous transportation equipment... 372- 6,9 5.1 100.6 100.8 99.8 100.0 98.6 98.3 97.7 97.1 96.7 95.8 94.6 93.9 93.2 91.9 79 Instruments 38 5.1 104.2 104.4 104.9 104.3 103.7 103.7 103.6 103.3 103.0 102.2 103.3 102.5 102.3 101.6 80 Miscellaneous 39 1.3 109.7 109.7 111.6 109.1 108.7 110.5 111.4 111.8 110.9 111.9 112.6 114.5 113.8 112.8 81 Nondurable goods 37.8 105.4 105.2 105.7 105.2 105.2 105.8 106.4 106.0 106.4 106.4 106.6 107.0 106.9 106.6 82 Foods "20 8.8 106.0 105.4 105.9 106.3 105.6 106.8 106.4 106.2 105.9 106.9 106.7 106.8 106.1 105.3 83 Tobacco products 21 1.0 99.2 96.4 101.5 115.5 101.7 102.4 101.9 96.1 100.5 99.3 92.4 96.2 98.1 98.0 84 Textile mill products.... 22 1.8 104.7 103.8 107.0 103.5 105.1 103.5 106.0 106.0 106.9 106.2 105.4 104.3 105.4 104.7 85 Apparel products 23 2.3 92.3 91.7 92.7 91.3 91.5 91.7 92.9 92.7 93.1 92.5 92.1 92.0 91.6 91.0 86 Paper and products 26 3.6 108.2 108.7 109.1 107.1 109.5 107.3 108.2 108.3 108.6 110.4 111.1 113.2 112.8 112.3 87 Printing and publishing.. 27 6.5 95.0 95.6 95.7 93.5 94.1 94.5 94.2 94.7 94.7 94.0 94.7 94.9 94.5 94.8 88 Chemicals and products. 28 8.8 115.0 114.9 114.6 114.4 115.2 116.2 117.7 116.7 116.8 116.2 117.6 117.7 118.1 118.4 89 Petroleum products 29 1.3 102.0 101.8 101.5 98.0 101.1 105.3 103.9 103.4 103.2 104.7 104.7 104.3 105.7 104.7 90 Rubber and plastic products 30 3.2 109.7 109.7 110.7 110.7 108.5 109.9 111.3 111.3 113.6 112.7 112.9 113.4 112.9 112.2 91 Leather and products ... 31 .3 92.6 92.3 93.6 92.0 93.8 95.1 96.6 96.7 97.1 99.0 99.1 100.2 98.0 96.2 92 Mining 8.0 97.6 97.1 98.5 97.0 97.1 97.6 97.8 98.2 98.3 95.9 95.3 96.4 96.9 96.3 93 Metal "lO .3 161.7 157.8 156.5 165.5 159.8 168.1 171.6 158.1 167.7 163.0 158.2 163.2 170.7 167.6 94 Coal 11,12 1.2 105.5 101.9 108.0 103.9 103.6 103.8 103.5 107.9 108.2 101.7 102.3 108.2 103.8 99.5 95 Oil and gas extraction 13 5.8 92.6 93.1 93.6 91.9 92.7 92.7 92.8 93.4 92.7 90.9 90.4 90.5 91.5 91.8 96 Stone and earth minerals .. 14 .7 93.8 92.7 94.1 93.8 91.9 93.6 94.4 92.6 93.8 95.2 93.4 92.4 94.3 93.6 97 Utilities 7.7 112.0 110.0 111.2 110.4 111.2 112.7 114.7 116.8 112.8 117.5 117.8 115.0 114.9 116.4 98 Electric 49I,3PT 6.1 111.6 109.5 110.8 110.0 110.9 112.6 114.1 116.4 112.9 116.5 116.3 114.5 114.6 116.3 99 Gas 492,3PT 1.6 113.2 112.0 112.8 112.1 112.0 113.2 117.3 118.2 112.4 121.4 123.3 116.7 116.2 116.9 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 79.5 107.0 106.6 107.4 107.2 107.1 108.0 108.8 108.8 109.3 109.8 111100..22 110.7 111100..77 111100..55 101 Manufacturing excluding office and computing machines 81.9 105.1 104.8 105.3 105.1 104.8 105.9 106.7 107.0 107.6 108.0 108.1 108.5 108.2 107.7 Gross value (billions of 1987 dollars, annual rates) MAJOR MARKETS 102 Products, total 1,707.0 1,806.4 1,794.6 1,806.8 1,802.7 1,799.9 1,835.6 1,846.7 1,857.5 1,864.9 1,880.2 1,880.3 1,881.5 1,878.0 1,868.4 103 Final 1,314.6 1,420.1 1,408.8 1,416.7 1,417.8 1,415.7 1,448.1 1,457.1 1,466.8 1,476.4 1,485.7 1,484.3 1,486.0 1,482.8 1,473.2 104 Consumer goods 866.6 913.0 906.6 912.6 908.1 905.1 928.4 931.6 936.3 940.0 949.4 946.1 945.1 942.8 934.5 105 Equipment 448.0 507.1 502.2 504.1 509.7 510.6 519.7 525.5 530.5 536.5 536.3 538.2 540.8 540.0 538.7 106 Intermediate 392.5 386.4 385.9 390.1 385.0 384.2 387.4 389.6 390.7 388.4 394.5 396.0 395.5 395.2 395.2 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 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.r Apr.r May Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 1,111 949 1,095 1,081 1,120 1,141 1,136 1,196 1,157 1,141 1,034 1,101 1,121 2 One-family 794 754 911 885 918 954 963 1,037 972 957 871 925 919 3 Two-or-more-family 317 195 184 196 202 187 173 159 185 184 163 176 202 4 Started 1,193 1,014 1,200 1,229 1,218 1,226 1,226 1,286 1,171 1,180 1,124 1,206 1,254 5 One-family 895 840 1,030 1,038 1,045 1,079 1,089 1,133 1,051 1,036 987 1,059 1,110 6 Two-or-more-family 298 174 169 191 173 147 137 153 120 144 137 147 144 7 Under construction at end of period 711 606 612 633 637 645 641 644 641 641 635 639 647 8 One-family 449 434 473 479 485 493 498 501 506 508 502 507 513 9 Two-or-more-family 262 173 140 154 152 152 143 143 135 133 133 132 134 10 Completed 1,308 1,091 1,158 1,133 1,128 1,137 1,229 1,227 1,136 1,241 1,108 1,198 1,125 11 One-family 966 838 964 945 942 964 1,002 1,016 980 1,049 995 1,070 986 1 1 3 2 Mo T b w il o e - o h r o - m m e o s r e s - h f i a p m p i e l d y 3 1 4 8 2 8 2 1 5 7 3 1 2 1 1 9 0 4 2 1 0 8 2 8 2 1 1 8 7 6 2 1 2 7 8 3 2 24 2 4 7 2 2 6 1 6 1 2 1 6 5 7 6 2 1 6 9 2 2 2 1 4 1 7 3 2 1 4 2 1 8 2 1 3 3 0 9 Merchant builder activity in one-family units 14 Number sold 535 507 610 625 672 637 615 662 603 597r 595 723 571 15 Number for sale at end of period1 . 321 284 265 270 267 264 262 265 266 268 271 271 278 Price of units sold (thousands 1 1 6 7 A M v e e d r i o a a f g n e dollars) 1 1 2 4 2 9 . . 3 0 1 1 2 4 0 7 . . 0 0 1 1 2 4 1 4 . . 3 9 1 1 2 4 3 5 . . 5 3 1 1 1 4 9 2 . . 5 2 1 14 2 8 5 . . 4 0 1 14 2 7 8 . . 2 9 1 1 2 4 6 6 . . 0 2 1 1 1 3 8 8 . . 0 9 1 1 2 4 9 9 . . 4 4 r r 1 1 2 4 5 7 . . 0 0 1 14 2 7 6 . . 1 9 1 1 2 5 8 3 . . 4 4 EXISTING UNITS (one-family) 18 Number sold 3,211 3,219 3,520 3,340 3,380 3,710 3,860 4,040 3,780 3,460 3,370 3,450 3,620 Price of units said (thousands of dollars) 19 Median 95.2 99.7 103.6 105.0 103.5 103.4 102.7 104.2 103.1 103.6 105.1 105.8 106.1 20 Average 118.3 127.4 130.8 132.4 131.0 129.3 128.8 131.0 129.4 129.6 131.5 133.0 132.4 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 442,142R 403,439R 436,043R 430,350" 433,545" 442,565" 449,269" 455,239" 451,271" 453,820" 454,465 451,447 453,473 22 Private 334,681r 293,536r 317,256r 312,266" 317,448" 324,842" 328,196" 335,354" 335,484" 334,801" 336,972 331,260 334,792 2 2 2 2 2 2 3 8 4 5 6 7 R N e o P C O I s n n i u o t r d d b h e m e u l e s n i s m r i c t t d i r b e e u a i r u a n l t c i l i t l l i i i d a b a t l i u l i n e i b s g l u d s a i i l n n d g d i s n o g t s h er 1 1 4 2 6 2 8 5 2 3 1 2 1 3 , , , , , 8 8 5 8 , 8 5 6 4 9 5 2 6 9 1 6 5 ^ r 1 1 4 2 4 2 3 5 4 8 0 2 5 7 , , , , , , 1 4 7 2 6 8 3 8 9 8 9 3 9 2 7 1 9 7 " " 1 1 4 4 2 2 8 2 5 1 0 1 7 9 , , , , , , 6 5 7 4 8 4 9 2 2 9 2 3 9 0 3 4 0 6 " r r r r r 1 1 4 3 2 8 1 2 5 9 1 7 8 4 , , , , , , 8 1 1 2 8 9 0 2 3 9 9 6 5 6 9 7 9 9 " " " " " " 1 1 4 4 2 8 2 1 0 6 1 9 9 8 , , , , , , 3 5 9 2 2 2 9 7 7 2 7 2 8 4 8 1 7 7 " " " " " " 1 1 4 4 2 9 3 1 7 1 1 4 0 9 , , , , , , 7 6 4 5 4 2 5 9 1 7 0 6 5 1 8 8 0 4 " " " " " " 1 1 4 4 2 9 1 2 6 1 1 9 9 8 , , , , , , 9 1 5 3 2 8 8 4 1 0 4 9 6 3 7 4 6 2 " " " " " " 2 1 4 0 3 2 1 2 8 6 9 0 9 8 , , , , , , 4 4 6 9 9 9 7 1 0 0 6 3 7 4 2 0 1 7 " " " " " " 2 1 4 4 2 0 1 2 6 1 1 7 9 8 , , , , , , 1 4 1 2 6 2 3 1 2 1 0 7 3 4 4 3 0 0 " " " " " " 2 1 4 2 4 2 0 2 4 2 1 0 5 9 , , , , , , 7 3 5 7 4 0 0 1 6 3 8 7 6 0 7 4 4 1 " " " " " " 2 1 4 4 0 2 2 3 6 1 5 1 2 1 , , , , , , 4 3 5 4 1 4 9 1 2 8 5 5 4 9 3 4 2 3 2 1 4 0 4 2 1 3 6 0 2 2 9 0 , , , , , , 6 1 5 4 5 7 2 2 3 6 1 9 3 1 1 6 9 4 2 1 2 4 4 0 2 3 2 8 0 3 0 4 , , , , , , 1 5 3 0 7 0 0 2 0 8 7 2 7 2 5 7 1 1 29 Public 107,461r 109,900" 118,784r 118,084" 116,097" 117,723" 121,073" 119,885" 115,786" 119,019" 117,493 120,187 118,681 30 Military 2,664 1,837 2,502r 2,504" 2,503" 3,032" 2,557" 2,394" 2,621" 2,703" 2,586 2,416 2,320 31 Highway 32,108" 32,026r 34,929" 35,546" 35,545" 33,408" 37,698" 33,411" 30,648" 33,009" 33,413 34,012 31,983 32 Conservation and development... 4,557r 4,861r 5,918r 5,497" 6,148" 5,790" 6,441" 8,144" 5,732" 6,688" 7,112 5,916 5,974 33 Other 68,132r 71,176r 75,435" 74,537" 71,901" 75,493" 74,377" 75,936" 76,785" 76,619" 74,382 77,843 78,404 1. Not at annual rates. Institute and seasonally adjusted by the Census Bureau, and (2) sales and prices 2. Not seasonally adjusted. of existing units, which are published by the National Association of Realtors. All 3. Recent data on value of new construction may not be strictly comparable back and current figures are available from the originating agency. Permit with data for previous periods because of changes by the Census Bureau in its authorizations are those reported to the Census Bureau from 17,000 jurisdictions estimating techniques. For a description of these changes, see Construction beginning in 1984. Reports (C-30-76-5), issued by the Census Bureau in July 1976. SOURCE. Census Bureau estimates for all series except (1) mobile homes, which are private, domestic shipments as reported by the Manufactured Housing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics • September 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 19931 JJJuuunnneee 11999922 11999933 111999999333111 JJuunnee JJuunnee Sept. Dec. Mar. June Feb. Mar. Apr. May June CONSUMER PRICES2 (1982-84=100) 1 All items 3.1 3.0 2.6 3.2 4.0 2.2 .3 .1 .4 .1 .0 144.4 2 .1 2.2 3.2 1.4 2.6 1.4 .1 .1 .4 .4 -.4 140.4 3 Energy items 2.3 .6 1.2 1.9 3.1 -3.8 -.4 .7 .2 -1.0 -.2 106.5 4 All items less food and energy 3.8 3.3 2.5 3.8 4.3 2.9 .5 .1 .4 .2 .1 151.8 5 Commodities 3.0 2.0 1.8 1.5 4.6 .6 .5 .1 .3 .0 -.1 134.9 6 Services 4.2 4.0 2.9 4.7 4.4 4.1 .4 .2 .4 .3 .2 161.5 PRODUCER PRICES (1982=100) 7 Finished goods 1.6 1.4 1.3 -.3 3.9 1.0 ,4r .2r .6 .0 -.3 125.6 8 Consumer foods -1.8 1.9 4.3 3.3 -2.2 1.9 .ff .OF 1.4 -.1 -.9 125.4 9 Consumer energy 3.3 -.7 -3.5 -10.2 17.2 -4.0 1.7 1.3 .1 -.6 -.5 80.4 10 Other consumer goods 3.0 1.7 1.5 1.2 2.9 1.4 .3 .1 .4 .2 -.3 139.7 11 Capital equipment 1.9 1.8 1.2 .6 3.4 2.2 .3r .<f .2 .2 .2 131.2 Intermediate materials 12 Excluding foods and feeds 1.0 1.2 .7 -2.1 5.3 .7 .6 .3 .1 -.2 .3 117.0 13 Excluding energy .5 1.3 1.3 -.3 4.3 .0 .5r .2 .2 -.2 .1 123.6 Crude materials 14 Foods .0 -.1 -4.8 5.1 1.1 -.8 .(f -,2r 2.5 .5 -3.1 107.3 15 Energy 3.9 1.4 19.8 -17.8 -9.7 18.7 — 1.4r ,4r -.6 4.8 .2 81.2 16 Other 1.9 9.5 2.2 1.9 25.0 10.2 2.0r .y 1.8 .4 .2 141.5 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 Ql 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 6,145.8 By source 3.748.4 3,887.7 4,095.8 4,022.8 4,057.1 4.108.7 4,194.8 4.234.7 2 Personal consumption expenditures 464.3 446.1 480.4 469.4 470.6 482.5 499.1 498.8 3 4 5 N D Se o u r r n v a d i b c u l e r e s a g b o le o d g s o ods 2 1 , . 0 2 5 2 9 4 . . 7 5 2 1 , , 1 2 9 5 0 1 . . 1 5 2 1 , , 3 2 2 9 4 0 . . 7 7 2 1 , , 2 2 7 7 9 4 . . 3 1 2 1 , , 3 2 0 7 9 7 . . 0 5 2 1 , . 3 2 3 9 3 2 . . 3 8 2 1 , , 3 3 7 1 7 8 . . 1 6 2 1 , . 4 3 1 2 5 0 . . 1 8 6 Gross private domestic investment 799.5 721.1 770.4 722.4 773.2 781.6 804.3 844.0 7 Fixed investment 793.2 731.3 766.0 738.2 765.1 766.6 794.0 809.0 8 Nonresidential 577.6 541.1 548.2 531.0 550.3 549.6 562.1 573.8 9 Structures 201.1 180.1 168.4 170.1 170.3 166.1 167.0 168.0 1 1 1 0 Re P si r d o e d n u t c ia e l r s s ' tr d u u c r t a u b r l e e s equipment 2 3 1 7 5 6 . . 6 5 3 1 6 9 0 0 . . 9 3 2 3 1 7 7 9 . . 7 9 2 3 0 6 7 0 . . 2 8 2 3 1 8 4 0 . . 8 0 2 3 1 8 7 3 . . 0 5 2 3 3 9 1 5 . . 9 1 4 2 0 3 5 5. . 2 8 12 Change in business inventories 6.3 -10.2 4.4 -15.8 8.1 15.0 10.3 34.9 13 Nonfarm 3.3 -10.3 2.2 -13.3 6.4 9.7 6.2 32.6 14 Net exports of goods and services -68.9 -21.8 -30.4 -8.1 -37.1 -36.0 -40.5 -49.4 1 1 5 6 E Im x p p o o r r t t s s 5 6 5 2 7 5 . . 0 9 5 6 9 2 8 0 . . 2 0 6 6 3 6 6 6 . . 3 7 6 6 2 3 8 6 . . 1 2 6 6 2 6 5 2 . . 4 5 6 6 3 7 9 5 . . 0 0 6 6 5 9 2 3 . . 7 2 6 6 4 9 9 8 . . 4 9 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 1,116.6 18 Federal 426.4 447.3 449.1 445.0 444.8 455.2 451.6 441.1 19 State and local 616.8 643.2 665.8 658.0 664.3 669.0 671.7 675.4 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 6,110.8 21 Goods 2,160.1 2.192.8 2.260.3 2,233.6 2.233.2 2,258.4 2,316.1 2,309.2 2 2 2 2 2 3 4 5 S S e tr N D r u v u o c i r c n t a u e d b s r u e le r s a ble 2 1 , , 8 9 5 2 4 0 2 3 6 9 0 9 . . . . 4 4 6 5 3 1 , , 0 9 4 2 3 6 0 8 0 4 7 5 . . . . 3 7 6 1 3 1 , . 4 1 9 3 9 8 4 1 7 8 3 6 . . . . 1 8 9 4 3 1 , , 1 9 4 3 4 8 2 1 2 0 3 0 . . . . 2 1 6 0 3 1 , , 1 4 9 3 7 8 3 0 3 7 2 0 . . . . 4 6 3 8 3 1 , . 4 2 9 3 8 1 4 1 7 7 3 4 . . . . 3 8 8 6 3 1 , , 2 5 9 3 5 0 7 4 5 0 5 0 . . . . 1 3 8 3 3 1 , , 2 5 9 3 9 0 6 4 9 2 8 0 . . . . 4 3 8 4 2 2 2 6 7 8 Ch N D an o u g n ra e d b u i l n r e a b g b u o le s o i d g n s o e s o s d s i nventories - 6 7 .9 . . 3 2 - - 1 1 0 9 9 . . . 2 3 0 -3 4 7 . . . 5 4 9 - -1 1 9 5 3 . . . 3 8 5 -1 8 9 . . . 4 1 5 1 1 2 5 2 . . . 7 0 3 - 1 1 6 7 0 . . . 9 2 3 3 1 1 4 7 7 . . . 9 2 8 29 T M o E ta M l O G DP in 1987 dollars 4,877.5 4,821.0 4,922.6 4,873.7 4,892.4 4,933.7 4,990.8 4,999.9 NATIONAL INCOME 30 Total 4,468.3 4,544.2 4,743.4 4,679.4 4,716.5 4,719.6 4,858.0 4,914.2r 3 3 3 3 3 3 3 4 5 1 2 3 6 7 Co S W m u a G O E O p p g e m p t o t e n h h l v s p e s e e e m l r a r a r o t n n l e i y a d o m n e b n t r s e o t a n o r c o l t f o a i n w n r a e i t c n m a e r o d i s g p b m e l g u s o e o t y i a v o e n e n e d r s s n s m f a o l e r a n r s t i o e e c s n ia t l e r i p n r s i u s r e a s nc . e . 3 2 2 , , , 2 2 5 2 7 5 2 2 9 4 7 4 1 7 8 8 1 7 2 4 1 . . . . . . . 4 0 2 4 9 8 0 3 2 2 , , , 2 3 8 5 2 5 2 6 9 7 1 9 4 8 8 8 0 2 0 3 8 . . . . . . . 7 7 2 8 4 5 3 2 3 2 , , , 3 6 5 9 5 3 3 5 0 2 1 6 0 0 4 8 5 6 2 2 5 . . . . . . . 1 6 2 5 7 9 6 3 2 2 , , , 4 3 5 2 8 5 2 7 9 2 9 7 9 5 8 6 9 3 7 9 4 . . . . . . . 7 3 4 0 2 6 6 2 3 2 , , , 3 6 5 9 5 3 3 3 0 0 0 0 6 0 5 9 6 1 1 1 3 . . . . . . . 0 3 3 5 4 9 6 2 3 2 , , , 3 6 9 5 3 5 3 5 1 2 3 0 6 0 9 0 3 4 2 4 7 . . . . . . . 1 8 5 3 3 9 9 2 3 2 , , , 3 5 6 9 5 3 3 8 1 9 6 6 0 1 3 9 4 3 9 7 2 . . . . . . . 7 8 3 9 2 6 6 2 3 2 , , , 4 6 6 9 3 5 3 2 2 2 9 1 1 7 8 8 1 9 2 6 8 . . . . . . . 6 4 8 6 0 5 2 38 Proprietors'income1 . 366.9 368.0 404.5 393.6 398.4 397.4 428.4 441.9 39 Business and professional 325.2 332.2 364.9 353.6 359.9 365.9 380.4 389.0 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 17.7 42 Corporate profits1 .. 361.7 346.3 393.8 384.0 388.4 374.1 428.5 424.2r 43 Profits before tax3 355.4 334.7 371.6 366.1 376.8 354.1 389.4 393.0" 44 Inventory valuation adjustment -14.2 3.1 -7.4 -5.4 -15.5 -9.7 1.0 -9.4 45 Capital consumption adjustment 20.5 8.4 29.5 23.3 27.0 29.7 38.1 40.6 46 Net interest 460.7 449.5 415.2 430.0 420.0 407.3 403.6 402.0 1. With inventory valuation and capital consumption adjustments. 3. For after-tax profits, dividends, and the like, see table 1.48. 2. With capital consumption adjustment. SOURCE. U.S. Department of Commerce, Survey of Current Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 Domestic Nonfinancial Statistics • September 1993 2.17 PERSONAL INCOME AND SAVING Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1992 1993 11999900 11999911 11999922 Ql Q2 Q3 Q4 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 3,005.8 3 Commodity-producing industries 745.6 737.4 743.2 736.8 743.1 742.4 750.6 754.4 4 Manufacturing 556.1 556.9 565.7 559.9 564.7 565.5 572.8 576.5 5 Distributive industries 634.6 647.4 666.8 660.9 662.9 667.7 675.8 685.0 6 Service industries 847.8 883.9 945.5 925.3 933.9 949.1 973.9 988.2 7 Government and government enterprises 514.8 543.6 562.5 554.6 561.4 564.3 569.6 578.2 8 Other labor income 271.0 288.3 305.7 299.2 303.6 307.9 312.2 316.5 9 Proprietors' income 366.9 368.0 404.5 393.6 398.4 397.4 428.4 441.9 10 Business and professional 325.2 332.2 364.9 353.6 359.9 365.9 380.4 389.0 11 Farm' 41.7 35.8 39.5 40.1 38.5 31.5 48.1 52.9 12 Rental income of persons -12.3 -10.4 4.7 -4.5 3.3 6.4 13.6 17.7 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 685.8 771.1 866.1 842.7 859.7 874.1 888.0 909.9 16 Old-age survivors, disability, and health insurance benefits ... 352.0 382.0 414.1 405.7 412.1 417.1 421.6 434.1 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 621.3 618.7 627.3 619.6 617.1 628.8 643.6 656.0 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 4,581.7 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 4,358.8 22 EQUALS: Personal saving 175.6 199.6 212.6 214.6 232.3 203.3 200.4 222.9 MEMO Per capita (1987 dollars) 23 Gross domestic product 19,513.0 19,077.1 19,271.4 19,158.5 19,181.8 19,288.4 19.456.3 19,444.3 24 Personal consumption expenditures 13,043.6 12,824.1 12,973.9 12,930.2 12,893.3 12,973.3 13.098.4 13,092.1 25 Disposable personal income 14,068.0 13,886.0 14,035.0 14,017.0 14,021.0 13,998.0 14,105.0 14,165.0 26 Saving rate (percent) 4.3 4.7 4.8 4.9 5.3 4.6 4.4 4.9 GROSS SAVING 27 Gross saving 718.0 708.2 686.3 677.5 682.9 696.9 687.9 732.8R 28 Gross private saving 854.1 901.5 968.8 950.1 968.1 992.1 965.0 994.8r 2 3 9 0 P U e n r d s i o s n t a ri l b s u a t v ed in g c orporate profits 1 7 7 5 5 . . 7 6 1 7 9 5 9 . . 8 6 2 1 1 0 2 4 . . 6 3 2 1 1 0 4 4 . . 6 0 2 9 3 7 2. . 3 7 20 9 3 1 . . 3 2 2 1 0 2 0 4 . . 4 1 2 1 2 1 2 6 . . 9 8 r 31 Corporate inventory valuation adjustment -14.2 3.1 -7.4 -5.4 -15.5 -9.7 1.0 -9.4 Capital consumption allowances 32 Corporate 368.3 383.0 394.8 386.1 391.2 407.2 394.7 400.0 33 Noncorporate 234.6 243.1 258.6 245.3 247.0 290.4 251.8 261.2 34 Government surplus, or deficit (-), national income and product accounts -136.1 -193.3 -282.5 -272.6 -285.2 -295.2 -277.2 -262.0 35 Federal -166.2 -210.4 -298.0 -289.2 -302.9 -304.4 -295.5 -272.1 36 State and local 30.1 17.1 15.5 16.6 17.7 9.2 18.3 10.1 37 Gross investment 723.4 730.1 720.4 706.5 713.8 732.0 729.5 776.3R 3 3 9 8 N Gr e o t s f s o r p e r i i g v n a te domestic - 7 7 9 6 9 . . 1 5 72 9 1. . 1 0 - 7 4 7 9 0 . . 9 4 - 7 1 2 6 2 . . 0 4 - 7 5 7 9 3 . . 4 2 - 7 4 8 9 1 . . 6 6 - 8 7 0 4 4 . . 7 3 — 84 6 4 7 . . 0 7 r 40 Statistical discrepancy 5.4 21.9 34.1 29.0 30.9 35.1 41.7 43.4 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 1993 1990 1991 1992 Ql Q2 Q3 Q4 Qlp 1 Balance on current account -91,861 -8,324 -66,400 -6,685 -18,253 -17,775 -23,687 -22,249 2 Merchandise trade balance2 -109,033 -73,802 -96,138 -17,763 -24,801 -27,612 -25,962 -29,068 3 Merchandise exports 389,303 416,937 440,138 108,347 108,306 109,493 113,992 111,627 4 Merchandise imports -498,336 -490,739 -536,276 -126,110 -133,107 -137,105 -139,954 -140,695 5 Military transactions, net -7,834 -5,851 -2,751 -571 -727 -617 -836 -383 6 Other service transactions, net 38,485 51,733 59,163 14,619 14,378 15,898 14,265 15,006 7 Investment income, net 20,348 13,021 6,222 4,419 907 1,703 -806 273 8 U.S. government grants -17,434 24,073 -14,688 -2,788 -3,234 -2,783 -5,883 -3,412 9 U.S. government pensions and other transfers -2,934 -3,461 -3,735 -830 -1,118 -940 -846 -971 10 Private remittances and other transfers -13,459 -14,037 -14,473 -3,770 -3,659 -3,424 -3,619 -3,694 11 Change in U.S. government assets other than official reserve assets, net (increase, -) 2,307 2,905 -1,609 -275 -293 -305 -737 309 12 Change in U.S. official reserve assets (increase, -) -2,158 0 5,7630 3,9010 -1,057 0 1,4640 1,9520 1,5420 -9830 13 Gold 1 1 4 5 R Sp e e s c e i r a v l e d p r o aw si i t n io g n ri in g h I t n s te (S rn D a R ti s o ) n al Monetary Fund -1 7 9 3 2 1 - - 1 3 7 6 7 7 -2 2 , , 6 3 9 1 2 6 -1 1 7 1 2 1 -1681 - - 1 11 7 8 3 -2 2 , , 6 8 8 2 5 9 - - 1 22 4 8 0 16 Foreign currencies -2,697 6,307 4,277 -9% 1,631 2,243 1,398 -615 17 Change in U.S. private assets abroad (increase, -) -44,280 -68,643 -53,253 303 -9,866 -12,445 -31,243 -2,639 18 Bank-reported claims3 16,027 3,278 24,948 17,795 4,050 6,584 -3,481 33,921 19 Nonbank-reported claims -4,433 1,932 4,551 5,339 1,294 -3,214 1,132 20 U.S. purchases of foreign securities, net -28,765 -44,740 -47,961 -8,493 -8,276 -13,787 -17,405 -26,578 21 U.S. direct investments abroad, net -27,109 -29,113 -34,791 -14,338 -6,934 -2,028 -11,489 -9,982 22 Change in foreign official assets in United States (increase, +) .. 34,198 17,564 40,684 21,124 21,008 -7,378 5,931 10,990 23 U.S. Treasury securities 29,576 14,846 18,454 14,916 11,240 -323 -7,379 1,039 24 Other U.S. government obligations 667 1,301 3,949 464 1,699 912 874 710 25 Other U.S. government liabilities 2,156 1,542 2,542 58 678 864 943 -210 26 Other U.S. liabilities reported by U.S. banks' 3,385 -1,484 16,427 5,573 7,466 -7,831 11,219 8,046 27 Other foreign official assets5 -1,586 1,359 113 -75 -1,000 274 1,404 28 Change in foreign private assets in United States (increase, +).. 70,976 65,875 88,895 -1,290 23,442 33,828 32,914 8,600 29 U.S. bank-reported liabilities3 16,370 -11,371 18,609 -3,339 -528 23,647 -1,171 -22,048 30 U.S. nonbank-reported liabilities 7,533 -699 741 926 979 1,553 -2,717 31 Foreign private purchases of U.S. Treasury securities, net -2,534 18,826 36,893 623 10,168 4,870 21,232 14,179 32 Foreign purchases of other U.S. securities, net 1,592 35,144 30,274 4,613 10,453 2,730 12,478 10,635 33 Foreign direct investments in United States, net 48,015 23,975 2,378 -4,113 2,370 1,028 3,092 5,834 0 0 0 0 0 0 0 0 34 Allocation of special drawing rights 3 3 5 6 Di D sc u r e e p to a n s c e y a sonal adjustment 30,820 -15,140 -12,218 -12 4 , , 1 8 2 7 0 8 -17,5 6 0 5 2 3 -6 2 , , 7 1 5 2 4 3 15 1 , , 2 2 8 2 0 2 5 5, , 7 9 2 7 6 3 37 Before seasonal adjustment 30,820 -12,218 -16,998 -18,155 8,877 14,058 247 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) -2,158 5,763 3,901 -1,057 1,464 1,952 1,542 -983 39 Foreign official assets in United States, excluding line 25 (increase, +) 32,042 16,022 38,142 21,066 20,330 -8,242 4,988 11,199 40 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) 1,707 5,857 2,583 -2,113 3,051 2,336 639 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 • September 1993 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data seasonally adjusted 1992 1993 IItteemm 11999900 11999911 11999922 Nov. Dec. Jan. Feb. Mar. Apr.r May? 1 Exports of domestic and foreign merchandise, excluding grant-aid shipments 393,592 421,730 448,164 37,7% 3399,,117788 37,505 36,928 38,895 38,479 38,953 2 General imports including merchandise for immediate consumption plus entries into bonded warehouses 495,311 488,453 532,665 45,633 46,143 45,176 44,832 49,347 48,660 47,319 3 Trade balance -101,718 -66,723 -84,501 -7,837 -6,965 -7,672 -7,904 -10,453 -10,182 -8,366 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 through 4) primarily for reasons missions abroad for their own use, (3) U.S. goods returned to the United States by of 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. Since 1990, data for U.S. exports to Canada have been SOURCE. (U.S. Department of Commerce, Bureau of the Census), FT900, U.S. derived from import data compiled by Canada; similarly, in Canadian statistics, Merchandise Trade. 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 1993 Asset 1989 1991 Jan. Feb. Mar. Apr. May Junep 1 Total 74,609 83,316 77,719 71,323 71,962 72,847 74,378 75,644 76,711 2 Gold stock, including Exchange Stabilization Fund1 11,059 11,058 11,057 11,056 11,055 11,055 11,054 11,054 11,053 3 Special drawing rights2'3 9,951 10,989 11,240 8,503 8,546 8,651 8,787 8,947 9,147 4 Reserve position in International Monetary Fund 9,048 9,076 9,488 11,759 12,079 12,021 12,184 12,317 12,195 5 Foreign currencies4 44,551 52,193 45,934 40,005 40,282 41,120 42,353 43,326 44,316 1. Gold held "under earmark" at Federal Reserve Banks for foreign and 1981, five currencies have been used. U.S. SDR holdings and reserve positions in international accounts is not included in the gold stock of the United States; see the IMF 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, sixteen currencies were used; since January 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 Dec. Jan. Feb. Mar. Apr. May Junep 1 Deposits 589 369 %8 205 325 2% 317 221 193 286 Held in custody 2 U.S. Treasury securities 224,911 278,499 281,107 314,481 324,356 329,183 326,486 339,3% 345,060 343,672 3 Earmarked gold3 13,456 13,387 13,303 13,686 13,077 13,074 12,989 12,924 12,854 12,829 1. Excludes deposits and U.S. Treasury securities held for international and 3. Held in foreign and international accounts and valued at $42.22 per fine troy regional organizations. 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 Nov. Dec. Jan. Feb. Mar. Apr. May ASSETS All foreign countries 1 Total payable in any currency ... 545,366 556,925 548,999' 566,721 542,545 543,624 554,280 546,941 543,833 2 Claims on United States 198,835 188,496 176,487r 177,443 166,798 169,278 172,304 171,648 164,142 3 Parent bank 157,092 148,837 137,695r 141,542 132,275 134,218 139,170 138,532 128,611 4 Other banks in United States . 17,042 13,296 12,884 10,019 9,703 9,570 9,249 9,073 10,830 5 Nonbanks 24,701 26,363 25,908 25,882 24,820 25,490 23,885 24,043 24,701 6 Claims on foreigners 300,575 312,449 303,934 328,592 318,071 314,736 317,868 314,912 315,428 7 Other branches of parent bank 113,810 135,003 111,729 125,143 123,256 116,325 115,323 112,598 110,189 1 1 8 9 0 1 Ot N P h B u e o a r b n n l a k b ic s s a s n b e k o t s r f r o o r w ei e g r n s ers 9 4 7 1 5 0 9 6 , , , , 9 7 6 4 5 0 0 5 6 3 6 6 7 5 8 1 5 2 7 7 , , , , 9 6 2 5 8 0 8 5 0 2 9 5 6 8 9 1 8 1 1 8 , , , , 5 5 9 6 8 7 7 5 3 0 2 8 r 6 8 2 9 0 0 6 6 , , , , 6 3 0 9 8 7 8 8 6 8 6 5 9 5 8 2 7 1 2 0 , , , , 6 8 1 7 7 6 9 5 6 9 0 6 8 9 5 1 6 9 1 9 . , , , 6 6 8 9 1 1 1 8 5 0 2 4 6 8 9 1 4 8 4 9 , , , , 1 2 4 8 0 8 3 2 8 4 9 2 6 8 9 1 0 8 4 8 , , , , 3 4 9 9 8 9 0 1 1 0 9 5 6 8 9 1 4 7 9 8 , , , , 2 2 3 6 6 2 2 9 3 5 0 4 12 Total payable in U.S. dollars 382,498 379,479 364,078' 374,420 365,824 353,643 361,251 353,315 344,319 13 Claims on United States 191,184 180,174 169,848r 171,938 162,125 164,681 167,773 167,051 159,541 14 Parent bank 152,294 142,962 133,662r 138,424 129,329 131,554 136,650 135,939 126,181 15 Other banks in United States . 16,386 12,513 12,025 9,291 9,266 9,213 8,704 8,336 10,168 16 Nonbanks 22,504 24,699 24,161 24,223 23,530 23,914 22,419 22,776 23,192 17 Claims on foreigners 169,690 174,451 167,010 182,360 183,527 171,120 174,726 170,338 169,206 18 Other branches of parent bank 82,949 95,298 78,114 83,902 83,117 77,606 77,681 75,871 73,049 19 Banks 48,396 36,440 41,635 45,931 47,250 41.616 43,067 41,266 43,566 20 Public borrowers 10,961 12,298 13,685 13,995 14,313 13,883 13,710 13,068 12,537 21 Nonbank foreigners 27,384 30,415 33,576 38,532 38,847 38,015 40,268 40,133 40,054 22 Other assets 21,624 24,854 27,220" 20,122 20,172 17,842 18,752 15,926 15,572 United Kingdom 23 Total payable in any currency ... 161,947 184,818 175,599 168,333 165,850 164,360 165,132 162,122 163,194 24 Claims on United States 39,212 45,560 35,257 38,358 36,403 37,609 34,919 34,989 33,353 25 Parent bank 35,847 42,413 31,931 35,027 33,460 34,290 32,779 31,719 29,605 26 Other banks in United States . 1,058 792 1,267 925 1,298 886 783 892 757 27 Nonbanks 2,307 2,355 2,059 2,406 1,645 2,433 1,357 2,378 2,991 28 Claims on foreigners 107,657 115,536 109,692 113,193 111,623 108,362 110,420 106,944 109,428 29 Other branches of parent bank 37,728 46,367 35,735 45,092 46,165 42,894 41,317 39,466 39,673 30 Banks 36,159 31,604 36,394 34,559 33,399 33,513 36,601 34,914 38,138 31 Public borrowers 3,293 3,860 3,306 3,370 3,329 3,059 2,542 2,531 2,755 32 Nonbank foreigners 30,477 33,705 34,257 30,172 28,730 28,896 29,960 30,033 28,862 33 Other assets 15,078 23,722 30,650 16,782 17,824 18,389 19,793 20,189 20,413 34 Total payable in U.S. dollars — 103,208 116,762 105,974 109,479 109,493 101,375 99,755 94,870 95,612 35 Claims on United States 36,404 41,259 32,418 35,956 34,508 35,481 32,929 32,783 31,233 36 Parent bank 34,329 39,609 30,370 33,765 32,186 33,070 31,559 30,443 28,420 37 Other banks in United States . 843 334 822 438 1,022 684 428 413 393 38 Nonbanks 1,232 1,316 1,226 1,753 1,300 1,727 942 1,927 2,420 39 Claims on foreigners 59,062 63,701 58,791 65,164 66,335 59,505 60,695 57,530 60,180 40 Other branches of parent bank 29,872 37,142 28,667 34,434 34,124 30,823 28,856 30,017 29,388 41 Banks 16,579 13,135 15,219 16,848 17,089 14,316 16,800 13,422 16,903 42 Public borrowers 2,371 3,143 2,853 2,501 2,349 2,154 1,883 1,949 1,888 43 Nonbank foreigners 10,240 10,281 12,052 11,381 12,773 12,212 13,156 12,142 12,001 44 Other assets 7,742 11,802 14,765 8,359 8,650 6,389 6,131 4,557 4,637 Bahamas and Cayman Islands 45 Total payable in any currency .. 176,006 162,316 168,512' 156,176 147,422 144,894 151,175 148,867 143,859 142,184 46 Claims on United States 124,205 112,989 115,430" 104,245 96,280 96,976 102,836 100,687 96,829 94.292 47 Parent bank 87,882 77,873 81,706' 73,856 66,608 67,219 73,825 72,841 67,190 65,568 48 Other banks in United States 15,071 11,869 10,907 8,282 7,828 7,962 7,892 7,424 9,279 7,184 49 Nonbanks 21,252 23,247 22,817 22,107 21,844 21,795 21,119 20,422 20,360 21,540 50 Claims on foreigners 44,168 41,356 45,229 44,156 44,509 41,185 40,821 41,314 40,442 41.293 51 Other branches of parent bank 11,309 13,416 11,098 8,238 7,293 7,041 7,311 6,650 6,873 6,999 52 Banks 22,611 16,310 20,174 20,122 21,212 18,464 17,440 18,797 17,662 18,442 5 5 5 3 4 5 Ot P N h u e o r b n l a b ic s a s n b e k o t s r f r o o r w ei e g r n s ers 5 5 7 , , , 2 6 0 1 3 3 7 3 1 5 5 7 , , , 8 9 8 0 7 2 7 1 3 7 6 7 , , , 1 7 8 6 9 5 1 6 3 7 8 7, , , 7 2 5 7 0 8 5 9 7 7 6 8 , , , 6 7 2 3 8 1 3 6 8 7 8 6 , , , 5 7 1 6 3 1 4 3 6 7 7 8 , , , 4 5 6 2 1 4 2 8 8 6 7 8 , , , 8 1 6 6 8 7 6 8 9 6 6 9 , , , 5 6 2 8 9 1 8 0 7 6 6 9 , , , 5 5 3 9 2 2 9 7 5 56 Total payable in U.S. dollars 170,780 158,390 163,957' 151,436 142,861 140,332 146,809 144,627 139,351 137,514 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 • September 1993 3.14 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data1—Continued 1992 1993 A * Nov. Dec. Jan. Feb. Mar. Apr. May LIABILITIES All foreign countries 57 Total payable in any currency 545,366 556,925 548,999" 566,721 542,545 543,624 554,280 546,941 543,833 548,340 58 Negotiable certificates of deposit (CDs) .. 23,500 18,060 16,284 12,342 10,032 12,320 11,872 11,596 13,748 14,348 59 To United States 197,239 189,412 198,307" 188,116 189,444 175,978 184,155 187,088 176,082 174,889 60 Parent bank 138,412 138,748 136,431 131,918 134,339 122,627 124,123 125,650 114,%5" 116,691 61 Other banks in United States 11,704 7,463 13,260 13,392 12,182 12,829 12,373 13,306 11,952 14,062 62 Nonbanks 47,123 43,201 48,616" 42,806 42,923 40,522 47,659 48,132 49,165" 44,136 63 To foreigners 296,850 311,668 288,254 330,315 309,704 321,297 319,638 312,417 316,661 322,140 64 Other branches of parent bank 119,591 139,113 112,033 126,018 125,160 120,179 119,601 115,535 113,845 115,189 65 Banks 76,452 58,986 63,097 74,536 62,189 67,843 70,056 68,411 68,381" 69,323 66 Official institutions 16,750 14,791 15,5% 20,645 19,731 23,654 21,469 18,312 21,326 22,271 67 Nonbank foreigners 84,057 98,778 97,528 109,116 102,624 109,621 108,512 110,159 113,109" 115,357 68 Other liabilities 27,777 37,785 46,154" 35,948 33,365 34,029 38,615 35,840 37,342 36,%3 69 Total payable in U.S. dollars 396,613 383,522 370,7^ 372,819 368,773 353,725 363,285 353,431 343,867 343,766 70 Negotiable CDs 19,619 14,094 11,909 7,503 6,238 7,102 6,640 6,519 7,062 7,248 71 To United States 187,286 175,654 185,472" 175,%9 178,674 164,634 172,223 175,354 163,715 161,775 72 Parent bank 132,563 130,510 129,669 124,770 127,948 116,008 117,228 119,040 107,949" 109,645 73 Other banks in United States 10,519 6,052 11,707 12,246 11,512 11,710 11,418 12,467 11,282 13,126 74 Nonbanks 44,204 39,092 44,0%" 38,953 39,214 36,916 43,577 43,847 44,484" 39,004 75 To foreigners 176,460 179,002 158,993 175,791 172,189 169,595 170,756 160,774 163,149 165,162 76 Other branches of parent bank 87,636 98,128 76,601 82,957 83,700 79,144 79,594 77,685 75,682 75,313 77 Banks 30,537 20,251 24,156 28,404 26,118 23,281 25,571 21,227 22,150 22,%9 78 Official institutions 9,873 7,921 10,304 12,342 12,430 14,067 14,034 10,762 12,627 12,653 79 Nonbank foreigners 48,414 52,702 47,932 52,088 49,941 53,103 51,557 51,100 52,690 54,227 80 Other liabilities 13,248 14,772 14,336" 13,556 11,672 12,394 13,666 10,784 9,941 9,581 United Kingdom 81 Total payable in any currency 161,947 184,818 175,599 168,333 165,850 164,360 165,132 162,122 163,194 165,044 82 Negotiable CDs 20,056 14,256 11,333 5,636 4,517 5,774 5,597 4,753 5,414 5,644 83 To United States 36,036 39,928 37,720 34,532 39,174 32,780 33,092 38,011 34,661 37,272 84 Parent bank 29,726 31,806 29,834 26,471 31,100 25,099 24,250 29,759 22,611 28,095 85 Other banks in United States 1,256 1,505 1,438 1,689 1,065 1,742 1,633 1,192 1,110 1,652 86 Nonbanks 5,054 6,617 6,448 6,372 7,009 5,939 7,209 7,060 10,940 7,525 87 To foreigners 92,307 108,531 98,167 113,395 107,176 111,351 110,514 104,356 108,670 106,834 88 Other branches of parent bank 27,397 36,709 30,054 35,560 35,983 35,376 35,143 33,424 33,545 31,437 89 Banks 29,780 25,126 25,541 30,609 25,231 25,%5 27,227 23,985 26,082 27,184 90 Official institutions 8,551 8,361 9,670 11,438 12,090 14,188 12,938 10,531 12,342 11,752 91 Nonbank foreigners 26,579 38,335 32,902 35,788 33,872 35,822 35,206 36,416 36,701 36,461 92 Other liabilities 13,548 22,103 28,379 14,770 14,983 14,455 15,929 15,002 14,449 15,294 93 Total payable in U.S. dollars 108,178 116,094 108,755 105,699 108,214 100,731 101,342 95,892 94,159 96,152 94 Negotiable CDs 18,143 12,710 10,076 4,494 3,894 4,770 4,444 3,765 4,214 4,392 95 To United States 33,056 34,697 33,003 30,204 35,417 28,545 28,874 33,552 30,170 32,457 96 Parent bank 28,812 29,955 28,260 25,160 29,957 23,767 23,097 28,405 21,145 26,631 97 Other banks in United States 1,065 1,156 1,177 906 709 1,063 1,097 707 676 1,311 98 Nonbanks 3,179 3,586 3,566 4,138 4,751 3,715 4,680 4,440 8,349 4,515 99 To foreigners 50,517 60,014 56,626 62,899 62,048 60,107 59,643 51,850 54,407 54,576 100 Other branches of parent bank 18,384 25,957 20,800 22,8% 22,026 20,807 20,516 19,516 18,958 17,449 101 Banks 12,244 9,488 11,069 13,050 12,540 9,740 10,359 6,702 8,327 9,065 102 Official institutions 5,454 4,692 7,156 8,459 8,847 10,114 9,%7 7,008 8,803 8,210 103 Nonbank foreigners 14,435 19,877 17,601 18,494 18,635 19,446 18,801 18,624 18,319 19,852 104 Other liabilities 6,462 8,673 9,050 8,102 6,855 7,309 8,381 6,725 5,368 4,727 Bahamas and Cayman Islands 105 Total payable in any currency 176,006 162,316 168,512r 156,176 147,422 144,894 151,175 148,867 143,859 142,184 106 Negotiable CDs 678 646 1,173 1,939 1,350 1,355 1,142 1,713 1,692 1,812 107 To United States 124,859 114,738 130,058" 116,699 111,861 108,150 110,729 110,391 105,895 102,211 108 Parent bank 75,188 74,941 79,394 71,381 67,347 65,122 62,336 59,668 59,416" 56,566 109 Other banks in United States 8,883 4,526 10,231 10,944 10,445 10,265 10,059 11,492 10,291 11,220 110 Nonbanks 40,788 35,271 40,433" 34,374 34,069 32,763 38,334 39,231 36,188" 34,425 111 To foreigners 47,382 44,444 35,200 35,411 32,556 33,766 37,690 35,369 34,773 36,146 112 Other branches of parent bank 23,414 24,715 17,388 16,287 15,169 15,411 18,056 18,015 17,462 18,626 113 Banks 8,823 5,588 5,662 7,574 6,422 6,350 7,%7 6,476 6,219 6,123 114 Official institutions 1,097 622 572 932 805 932 1,036 858 905 1,052 115 Nonbank foreigners 14,048 13,519 11,578 10,618 10,160 11,073 10,631 10,020 10,187 10,345 116 Other liabilities 3,087 2,488 2,081 2,127 1,655 1,623 1,614 1,394 1,499 2,015 117 Total payable in U.S. dollars 171,250 157,132 163,789" 151,527 143,150 140,734 146,875 144,291 138,741 137,159 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 Nov. Dec. Jan. Feb. Mar. Apr.* May? 1 Total1 344,529 360,530 394,841r 398,672 411,802r 413,220r 409,977* 413,255 423,033 By type 2 Liabilities reported by banks in the United States-' 39,880 38,3% 54,007 54,823 63,792 66,454 62,974 62,480 67,624 3 U.S. Treasury bills and certificates3 79,424 92,692 100,702 104,5% 111,540 113,594 113,547 113,293 120,785 U.S. Treasury bonds and notes 4 Marketable 202,487 203,677 211,268r 210,553 207,573r 203,209* 202,552* 205,138 201,851 5 Nonmarketable 4,491 4,858 4,503 4,532 4,563 4,592 4,622 5,431 5,417 6 U.S. securities other than U.S. Treasury securities 18,247 20,907 24,361 24,168 24,334 25,371 26,282 26,913 27,356 By area 7 Western Europe1 167,191 168,365 184,204r 118888,,770000** l%,232r 199,65lr 187,394* 184,986 190,992 8 Canada 8,671 7,460 6,381 7,920 8,411 7,886 9,326 8,302 8,899 9 Latin America and Caribbean 21,184 33,554 38,945 40,015 41,388 42,502 44,509 48,970 47,592 10 Asia 138,0% 139,465 154,493 152,142r 156,205r 154,009* 157,912* 159,623 164,114 11 Africa 1,434 2,092 3,779 3,565 3,705 3,866 3,919 3,782 3,782 12 Other countries6 7,955 9,592 7,037r 6,328r 5,859r 5,304* 6,915* 7,590 7,652 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* 1993* IItteemm 11998899 11999900 11999911 June Sept. Dec. Mar. 1 Banks' liabilities 67,835 70,477 75,129 70,%9 84,162 72,7% 82,201 2 Banks' claims 65,127 66,7% 73,195 58,354 72,164 62,789 64,061 3 Deposits 20,491 29,672 26,192 23,468 28,074 24,240 25,014 4 Other claims 44,636 37,124 47,003 34,886 44,090 38,549 39,047 5 Claims of banks' domestic customers 3,507 6,309 3,398 4,375 3,987 4,432 2,625 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 • September 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 Nov. Dec. Jan. Feb. Mar." Apr." May" HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 759,634 756,066 810,025r 801,930r 810,025r 802,216" 814,725r 798,117 791,119 793,006 2 Banks' own liabilities 577,229 575,374 606,210" 603,413" 606,210" 592,754" 606,005" 586,175 581,291 574,204 3 Demand deposits 21,723 20,321 21,823r 21,935 21,823" 21,106 22,310 21,582 22,239 22,136 4 Time deposits2 168,017 159,649 160,374r 156,601" 160,374" 150,062" 147,284" 141,905 145,659 145,155 5 Other. 65,822 66,305 93,840" 96,547" 93,840" 103,910" 106,262" 99,193 103,328 106,386 6 Own foreign offices 321,667 329,099 330,173r 328,330" 330,173" 317,676" 330,149" 323,495 310,065 300,527 7 Banks' custodial liabilities5 182,405 180,692 203,815r 198,517 203,815" 209,462" 208,720" 211,942 209,828 218,802 8 U.S. Treasury bills and certificates 96,796 110,734 127,649 122,480 127,649 133,799 135,300 137,062 138,016 144,725 9 Other negotiable and readily transferable instruments7 17,578 18,664 21,982 21,755 21,982 22,%9 20,735 22,309 21,550 23,971 10 Other 68,031 51,294 54,184r 54,282 54,184" 52,694" 52,685" 52,571 50,262 50,106 11 Nonmonetary international and regional organizations 5,918 8,981 9,350 9,915 9,350 11,099 11,538 9,160 1100,,773311 88,,997744 12 Banks' own liabilities 4,540 6,827 6,951 6,982 6,951 7,837 8,884 5,902 5,834 6,481 13 Demand deposits 36 43 46 58 46 39 47 1% 33 35 14 Time deposits 1,050 2,714 3,214 2,561 3,214 2,702" 2,311" 2,622 1,687 2,989 15 Other. 3,455 4,070 3,691 4,363 3,691 5,0%" 6,526" 3,084 4,114 3,457 16 Banks' custodial liabilities5 1,378 2,154 2,399 2,933 2,399 3,262 2,654 3,258 4,897 2,493 17 U.S. Treasury bills and certificates6 364 1,730 1,908 2,371 1,908 2,774 2,348 2,876 4,461 1,883 18 Other negotiable and readily transferable instruments7 1,014 424 486 561 486 488 306 382 433 604 19 Other 0 0 5 1 5 0 0 0 3 6 20 Official institutions9 119,303 131,088 159,419 154,709 159,419 175,332 180,048 176,521 175,773 188,409 21 Banks' own liabilities 34,910 34,411 51,058 50,027 51,058 59,577 62,687 59,471 59,059 62,741 22 Demand deposits 1,924 2,626 1,274 1,492 1,274 1,397 1,764 1,457 1,358 1,385 23 Time deposits 14,359 16,504 17,823r 17,735" 17,823" 18,685 18,9% 18,727 18,853 21,416 24 Other 18,628 15,281 31,961r 30,800" 31,961" 39,495 41,927 39,287 38,848 39,940 25 Banks' custodial liabilities5 84,393 96,677 108,361 104,682 108,361 115,755 117,361 117,050 116,714 125,668 26 U.S. Treasury bills and certificates6 79,424 92,692 104,596 100,702 104,5% 111,540 111133,,559944 113,547 113,293 120,785 27 Other negotiable and readily transferable instruments7 4,766 3,879 3,726 3,784 3,726 4,054 3,648 3,411 3,284 4,739 28 Other 203 106 39 196 39 161 119 92 137 144 29 Banks10 540,805 522,265 546,556r 546,350" 546,556" 522,700" 530,365" 520,516 511,473 503,753 30 Banks' own liabilities 458,470 459,335 475,340" 475,319" 475,340" 453,849" 462,769" 451,438 445,235 436,864 31 Unaffiliated foreign banks 136,802 130,236 145,167r 146,989" 145,167" 136,173" 132,620" 127,943 135,170 136,337 32 Demand deposits 10,053 8,648 10,168 10,088 10,168 9,903 10,974 10,495 10,883 11,382 33 Time deposits 88,541 82,857 90,175r 87,477" 90,175" 80,351 77,823 72,422 77,457 74,035 34 Other. 38,208 38,731 44,824r 49,424" 44,824" 45,919" 43,823" 45,026 46,830 50,920 35 Own foreign offices 321,667 329,099 330,173R 328,330" 330,173" 317,676" 330,149" 323,495 310,065 300,527 36 Banks' custodial liabilities5 82,335 62,930 71,216R 71,031 71,216" 68,851" 67,5%" 69,078 66,238 66,889 37 U.S. Treasury bills and certificates6 10,669 7,471 11,087 10,444 11,087 9,685 99,,22%% 9,976 9,908 10,837 38 Other negotiable and readily transferable instruments7 5,341 5,694 7,568 7,572 7,568 7,708 6,692 7,957 7,360 7,412 39 Other 66,325 49,765 52,561r 53,015 52,561" 51,458" 51,608" 51,145 48,970 48,640 40 Other foreigners 93,608 93,732 94,700" 90,956" 94,700" 93,085" 92,774" 91,920 93,142 91,870 41 Banks' own liabilities 79,309 74,801 72,861" 71,085" 72,861" 71,491" 71,665" 69,364 71,163 68,118 42 Demand deposits 9,711 9,004 10,335" 10,297 10,335" 9,767 9,525 9,434 9,%5 9,334 43 Time deposits 64,067 57,574 49,162" 48,828" 49,162" 48,324" 48,154" 48,134 47,662 46,715 44 Other 5,530 8,223 13,364" 11,960" 13,364" 13,400" 13,986" 11,7% 13,536 12,069 45 Banks' custodial liabilities5 14,299 18,931 21,839 19,871 21,839 21,594 21,109 22,556 21,979 23,752 46 U.S. Treasury bills and certificates6 6,339 8,841 10,058 8,963 10,058 9,800 10,062 10,663 1100,,335544 11,220 47 Other negotiable and readily transferable instruments7 6,457 8,667 10,202 9,838 10,202 10,719 10,089 10,559 10,473 11,216 48 Other 1,503 1,423 1,579 1,070 1,579 1,075 958 1,334 1,152 1,316 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 7,073 7,456 9,114 7,716 9,114 9,724 9,499 9,548 9,410 9,585 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 owed 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 owed to head office or parent International Settlements. foreign bank, and foreign branches, agencies, or wholly owned subsidiaries of 10. Excludes central banks, which are included in "Official institutions." head office 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 1993 1990 1991 1992 Nov. Dec Jan. Feb. Mar. Apr/ AREA 1 Total, all foreigners . 759,634 756,066 810,025r 801,930r 810,025* 802,216r 814,725' 798,117' 791,119 2 Foreign countries ... 753,716 747,085 800,675' 792,015' 800,675* 791,117* 803,187* 788,957' 780,388 3 Europe 254,452 249,097 308,418r 311,838r 308,418* 303,751* 304,752' 293,346* 298,874 4 Austria 1,229 1,193 1,611 l,356r 1,611 1,158 1,942 1,256 1,497 Belgium and Luxembourg .. 12,382 13,337 20,572 19,662 20,572 21,255 19,729 19,475 19,775 Denmark 1,399 937 3,060 1,481 3,060 1,885 2,835 1,536 1,229 Finland 602 1,341 1,299 1,144 1,299 1,862 2,049 2,297 2,265 France 30,946 31,808 41,459 39,968 41,459 34,285 32,457 31,712 31,087 Germany 7,485 8,619 18,631 15,401 18,631 20,685 18,934 16,107 19,803 Greece 934 765 910 749 910 815 758 763* 742 11 Italy 17,735 13,541 10,041 12,494 10,041 8,759 10,701 8,889* 8,094 12 Netherlands 5,350 7,161 7,372 8,411 7,372 8,722* 11,702* 11,409* 11,502 13 Norway 2,357 1,866 3,319 2,014 3,319 3,550 2,521 2,350 2,355 14 Portugal 2,958 2,184 2,465 2,255 2,465 2,518 2,508 2,489 2,476 2 2 2 2 1 1 1 1 1 0 1 2 3 5 6 7 8 9 Y O T O R U S S Sp w w u u t t u n h h a r s i g i e k i e e t s t d n o z e r r i e a e s d e s y E n r l i l a a n K a v s n i W t i d n e a g r . e n d s t o E e m r u n r o E p u e1 r 3 o pe — 12 1 3 1 0 7 6 1 9 1 1 1 . , , , , , . 5 6 9 5 6 8 1 5 1 4 9 2 3 5 8 6 4 1 4 0 8 7 5 9 9 5 9 1 3 1 0 9 2 7 3 0 1 1 , , , , , , , 2 2 2 4 2 6 3 5 2 7 2 3 9 6 2 9 4 9 4 2 8 2 7 2 1 1 8 1 2 3 1 2 5 9 2 9 3 2 , , , , , , , 8 6 7 9 4 4 5 5 4 3 6 2 9 8 0 4 7 5 4 6 2 6 6 4 0 7 4 r 1 2 4 1 1 6 4 0 2 7 3 0 , , , , , , , 6 3 3 4 7 3 6 5 6 9 7 9 9 2 6 7 9 0 0 0 3 1 0 5 9 1 4 * * * r 1 2 3 1 5 9 2 2 3 2 9 , , , , , , , 4 8 9 4 6 5 4 5 7 5 3 8 2 0 6 4 7 % 4 4 6 2 4 6 0 7 * 1 4 2 0 1 1 5 2 2 2 6 4 , , , , , , , 7 5 7 9 5 5 4 9 % 3 3 1 2 3 0 0 3 9 3 2 8 6 3 4 6 6 * 1 4 2 0 1 7 0 2 2 5 7 1 , , , , , , , 5 4 2 3 8 4 5 9 2 1 9 2 8 6 9 1 0 3 0 1 7 2 2 7 2 2 3 * 1 2 3 0 1 5 2 2 6 9 5 1 , , , , , , , 3 4 7 5 5 5 7 6 5 2 5 4 2 3 2 1 3 % 8 9 8 0 5 3 9 5 * 1 2 3 0 1 4 3 2 9 3 9 4 , , , , , , , 5 6 1 1 7 5 5 7 0 2 6 4 5 7 0 0 5 2 1 4 9 3 1 3 7 5 6 24 Canada. 20,349 21,605 22,746 22,052 22,746 21,467 22,898 25,040 22,302 25 Latin America and Caribbean. 332,997 345,529 316,020r 312,118* 316,020* 313,754* 321,062* 318,681* 316,472 26 Argentina 7,365 7,753 9,477 8,716* 9,477 10,792 10,608 11,568 10,856 27 Bahamas 107,386 100,622 82,222r 86,318* 82,222* 84,777* 87,812* 83,597* 81,737 28 Bermuda 2,822 3,178 7.079 6,355 7.079 6,319 6,508 6,269* 6,135 29 Brazil 5,834 5,704 5,584 5,236* 5,584 5,321 5,304 5,462 5.463 30 British West Indies 147,321 163,620 151,886 145,375* 151,886 147,375* 150,063* 151,216* 147,386 31 Chile 3,145 3,283 3,035 2,931* 3,035 3,638 3,420 3,325 3,479 32 Colombia 4,492 4,661 4,580 4,675* 4,580 4,438 4,417 4,183 4,359 33 Cuba 11 2 3 11 3 2 3 3 2 34 Ecuador 1,379 1,232 993 1,022* 993 945 886 928 919 35 Guatemala 1,541 1,594 1,377 1,324* 1,377 1,311 1,311 1,382 1,352 36 Jamaica 257 231 371 271 371 294 279 309 293 37 Mexico 16,650 19,957 19,456 19,567* 19,456 20,023 21,1%* 21,762* 24,8% 38 Netherlands Antilles 7,357 5,592 5,205 6,098* 5,205 4,352 4,869 4,221 4,537 39 Panama 4,574 4,695 4,177 3,965* 4,177 4,013 4,214 3,927 4,154 40 Peru 1,294 1,249 1.080 1,059* 1.080 1,052 1,045 995 1,070 41 Uruguay 2,520 2,096 1,955 2,092 1,955 1,898 2,061 1,815 1,767 42 Venezuela 12,271 13,181 11,387 11,020* 11,387 11,106 10,984 11,446 11,511 43 Other 6,779 6,879 6,153r 6,083* 6,153* 6,098 6,082 6,273* 6,556 44 Asia 136,844 120,462 143,436r 136,120* 143,436* 141,633* 143,636* 140,335* 130,994 China 45 People's Republic of China 2,421 2,626 3,202 2,559 3,202 3,114 3,007 2,957 3,527 46 Republic of China (Taiwan) 11,246 11,491 8,379 8,750 8,379 8,929 9,102 9,022 8,856 47 Hong Kong 12,754 14,269 18,509* 16,322 18,509* 17,588* 19,543* 17,041* 16,353 48 India 1,233 2,418 1,396 1,210 1,3% 1,323 1,377 1,399 989 49 Indonesia 1,238 1.463 1,480 1,217 1,480 1,392 1,460 1,871 1.464 5 5 5 5 5 5 5 5 6 2 3 4 0 1 O M P I T J K s a h h t o r i p h i a d a r l a e i e d i e n l r p l a l a e p n ( i d E n S e o a s s u t t e h r ) n oil-exporting countries14 6 1 1 2 7 2 5 6 1 1 , , , , , , . 7 0 2 9 8 5 4 6 7 6 8 8 2 4 7 6 5 7 5 9 3 4 1 1 2 7 2 2 2 6 5 , , , , , , , 0 2 4 5 0 0 7 1 5 4 8 6 7 5 5 2 9 7 9 1 2 5 2 1 2 1 8 3 5 3 5 , , , , , , , 2 7 5 4 3 3 7 7 7 8 4 1 4 3 5 5 2 6 4 6 2 r 5 2 1 5 3 2 5 0 3 5 , , , , , , , 3 7 2 6 2 6 0 6 9 2 9 6 2 9 5 7 3 1 6 2 8 * 2 5 1 1 8 3 2 5 3 5 , , , , , , , 3 7 2 5 4 7 3 4 7 7 1 8 4 3 2 5 5 4 2 6 6 * 5 1 1 3 6 2 5 3 9 8 , , , , , , , 0 4 3 7 3 8 4 0 4 2 8 5 7 % 9 4 2 9 0 7 * * 5 1 1 7 3 2 5 3 6 9 , , , , , , , 4 3 3 2 7 9 8 8 7 7 7 4 9 9 8 7 1 5 6 3 7 * 5 1 1 3 2 5 6 3 9 6 , , , , , , , 3 7 7 3 9 8 0 1 3 7 4 3 4 9 8 7 4 2 0 5 9 * * 5 1 1 3 2 4 1 3 3 9 , , , , , , , 7 7 1 5 9 6 % 8 0 9 6 0 8 7 5 4 1 3 8 7 57 Africa 4,630 4,825 5,884 6,062 5,884 5,913 6,364 6,508* 6,438 58 Egypt 1,425 1,621 2,472 2,601 2,472 2,756 3,077 3,084 2,938 59 Morocco 104 79 76 93 76 88 92 87 151 60 South Africa 228 228 190 214 190 158 319 243 246 61 Zaire 53 31 19 23 19 25 17 13 14 62 OA-exporting countries 1,110 1,082 1,346 1,402 1,346 1,125 1,135 1,239 1,294 63 Other 1,710 1,784 1,781 1,729 1,781 1,761 1,724 1,842* 1,795 64 Other 4.444 5,567 4,171 3,825 4,171 4,599 4,475 5,047 5,308 65 Australia 3,807 4.464 3,047 2,654 3,047 3,502 3,388 4,013 4,056 66 Other ... 637 1,103 1,124 1,171 1,124 1,097 1,087 1,034 1,252 67 Nonmonetary international and regional organizations 5,918 8,981 9,350 9,915 9,350 11,099 11,538 9,160 10,731 68 International16 4,390 6,485 7,434 6,764 7,434 7,864 8,857 6,116 7,590 69 Latin American regional1 1,048 1,181 1,415 2,248 1,415 2,327 1,738 2,021 2,223 70 Other regional18 479 1,315 501 903 501 908 943 1,023 918 11. Since December 1992, has excluded 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. Since December 1992, has included, 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 • September 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 Nov. Dec. Jan. Feb. Mar." Apr." May" 1 Total, all foreigners 511,543 514,339 495,761r 490,768" 495,761" 484,670" 495,033" 473,944 469,559 458,629 2 Foreign countries 506,750 508,056 490,679" 487,887" 490,679" 481,570" 490,925" 470,622 467,142 456,947 3 113,093 114,310 124,130 122,156" 124,130 117,355" 124,763" 122,721 120,310 118,175 4 362 327 341 463 341 366 530 1,101 1,013 1,357 5 Belgium and Luxembourg 5,473 6,158 6,404 6,423 6,404 6,473 5,886 6,066 6,177 5,097 6 497 686 707 1,056 707 705 785 682 645 628 7 1,047 1,907 1,419 1,230 1,419 1,275 1,226 1,010 998 885 8 14,468 15,112 14,847 15,718 14,847 14,012 14,670 13,340 13,141 11,614 9 3,343 3,371 4,229 5,328 4,229 5,544 5,370 5,800 5,322 6,089 10 727 553 718 598 718 670" 668 583 618 5% 11 Italy 6,052 8,242 9,048 9,443 9,048 8,716 8,466 8,493 8,724 8,218 17 Netherlands 1,761 2,546 2,497 3,006 2,497 2,927 3,279 2,676 2,607 3,278 13 782 669 356 435 356 649 750 645 714 676 14 292 344 325 330 325 390 494 454 513 593 IS 2,668 1,881 2,772 3,481 2,772 2,593 4,158 3,889 3,642 3,441 16 2,094 2,335 4,929 5,781" 4,929 5,340 5,155 4,809 4,509 4,229 17 4,202 4,540 4,722 3,591 4,722 4,493 4,971 4,423 4,355 4,729 18 Turkey 1,405 1,063 %2 950 %2 1,071 1,041 943 1,285 1,508 19 United Kingdom 65,151 60,395 63,980 59,009" 63,980 56,308" 61,433" 62,098 60,722 59,665 70 1,142 825 569 661 569 571 567 553 551 550 71 Others in Western Europe 597 789 1,706 1,019 1,706 1,607 1,607 1,780 1,316 1,455 ?? 530 1,970 3,147 3,174 3,147 3,154 3,154 2,906 2,889 3,080 23 Other Eastern Europe 499 597 452 460 452 491 553 470 569 487 24 Canada 16,091 15,113 14,185 15,834 14,185 16,465" 14,972 18,356 17,090 16,461 75 Latin America and Caribbean 231,506 246,137 213,772 217,036" 213,772 219,079" 212,204" 202,343 200,804 194,931 76 6,967 5,869 4,882 4,605 4,882 4,804 4,859 4,835 3,922 3,932 77 76,525 87,138 59,532 65,139 59,532 62,831 63,898 57,030 57,721 54,118 78 4,056 2,270 5,934 6,035 5,934 6,797 2,851 3,910 5,609 3,089 79 Brazil 17,995 11,894 10,733 11,581" 10,733 10,924 10,507 10,863 10,799 10,6% 30 88,565 107,846 98,738 %,323" 98,738 101,614" %,324" 92,666 89,191 90,023 31 Chile 3,271 2,805 3,397 3,309 3,397 3,690 3,795 3,638 3,548 3,717 37 2,587 2,425 2,750 2,698 2,750 2,752 2,819 2,807 2,786 2,875 33 Cuba 0 0 0 0 0 0 0 0 0 0 34 1,387 1,053 884 926 884 853 835 809 798 760 35 191 228 262 255 262 240 257 274 269 256 36 238 158 167 162 167 170 164 168 161 158 37 14,851 16,567 15,049 16,495 15,049 15,216 15,988 15,103 15,533 14,966 38 Netherlands Antilles 7,998 1,207 1,379 1,529 1,379 1,735 1,938 2,107 1,971 2,354 39 1,471 1,560 4,474 2,080 4,474 2,024 2,307 2,539 2,309 2,268 40 663 739 730 723 730 735 708 650 691 675 41 786 599 936 877 936 895 844 846 787 778 47 2,571 2,516 2,525 2,880 2,525 2,409 2,485 2,558 2,859 2,541 43 Other 1,384 1,263 1,400 1,419 1,400 1,390 1,625" 1,540 1,850 1,725 44 138,722 125,262 131,296" 126,181" 131,2%" 121,777" 131,494 119,578 121,956 120,546 China 45 People's Republic of China 620 747 906 624 906 774 892 939 1,388 881 46 Republic of China (Taiwan) 1,952 2,087 2,046 1,653 2,046 1,683 1,585 1,630 1,670 1,562 47 10,648 9,617 9,673 9,287 9,673 9,145 10,298 10,542 9,215 10,419 48 655 441 529 539 529 532 549 443 549 489 49 933 952 1,189 1,135 1,189 1,323 1,292 1,469 1,432 1,386 50 774 860 820 937 820 877 809 8% 1,057 814 51 90,699 84,807 78,647" 77,714" 78,647" 74,631" 79,791 67,294 71,244 71,471 57 Korea (South) 5,766 6,048 6,180" 6,288 6,180" 6,073" 6,753 6,938 7,048 7,206 53 1,247 1,910 2,145 2,034 2,145 1,871 1,842 1,713 1,645 1,521 5 5 5 4 M Th i a d i d l l a e n d E astern oil-exporting countries5< 10 1 , , 7 5 4 73 9 8 1 , , 2 7 8 1 4 3 18 1 , , 5 86 5 7 9 16 1 , , 8 8 5 7 8 3 18 1 , , 5 86 5 7 9 17 1 , , 0 7 8 % 3 17 1 , , 7 7 7 3 5 7 19 1 , , 0 67 4 8 8 17 1 , ,7 9 9 0 4 9 17 1 , , 9 6 5 9 3 2 56 Other 13,106 7,7% 8,735 7,239 8,735 5,989 8,171 6,988 7,005 5,152 57 5,445 4,928 4,289 4,233 4,289 4,262 4,147 3,871 3,731 3,626 58 Egypt 380 294 194 214 194 171 291 192 151 151 59 513 575 441 443 441 421 403 3% 3% 420 60 South Africa 1,525 1,235 1,041 1,063 1,041 1,069 1,030 1,011 924 803 61 Zaire 16 4 4 4 4 3 3 3 3 3 67 Oil-exporting countries 1,486 1,298 1,004 1,029 1,004 1,067 1,108 1,140 1,128 1,134 63 Other 1,525 1,522 1,605 1,480 1,605 1,531 1,312 1,129 1,129 1,115 64 Other 1,892 2,306 3,007 2,447 3,007 2,632 3,345 3,753 3,251 3,208 65 Australia 1,413 1,665 2,263 1,601 2,263 1,8% 2,552 3,117 2,635 2,534 66 Other 479 641 744 846 744 736 793 636 616 674 67 Nonmonetary international and regional organizations 44,,779933 66,,228833 55,,008822 22,,888811 55,,008822 3,100 4,108 3,322 2,417 1,682 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. Since December 1992, has excluded 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. Since December 1992, has included, 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 1992r 1993 CCllaaiimm 11999900 11999911 11999922rr Nov. Dec. Jan.r Feb/ Mar.r Apr/ May" 11 TToottaall 579,044 579,683 555,799 555,799 525,833 22 BBaannkkss'' ccllaaiimmss 511,543 514,339 495,761 490,768 495,761 484,670 495,033 473,944 469,559 458,629 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 41,900 37,126 31,245 30,849 31,245 32,972 30,349 33,631 30,631 29,483 44 OOwwnn ffoorreeiiggnn ooffffiicceess 304,315 318,800 299,916 291,126 299,916 291,819 305,438 290,671 285,196 280,311 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 117,272 116,602 109,788 112,308 109,788 101,868 102,737 97,320 97,805 94,729 66 DDeeppoossiittss 65,253 69,018 60,949 61,752 60,949 52,707 50,634 49,134 47,940 47,310 77 OOtthheerr 52,019 47,584 48,839 50,556 48,839 49,161 52,103 48,186 49,865 47,419 88 AAllll ootthheerr ffoorreeiiggnneerrss 48,056 41,811 54,812 56,485 54,812 58,011 56,509 52,322 55,927 54,106 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss33...... 67,501 65,344 60,038 60,038 51,889 1100 DDeeppoossiittss 14,375 15,280 15,452 15,452 12,000 1111 NNeeggoottiiaabbllee aanndd rreeaaddiillyy ttrraannssffeerraabbllee iinnssttrruummeennttss 41,333 37,125 31,454 31,454 27,283 1122 OOuuttssttaannddiinngg ccoolllleeccttiioonnss aanndd ootthheerr ccllaaiimmss 11,792 12,939 13,132 13,132 12,606 MMEEMMOO 1133 CCuussttoommeerr lliiaabbiilliittyy oonn aacccceeppttaanncceess 13,628 8,974 8,700 8,700 7,876 1144 DDoollllaarr ddeeppoossiittss iinn bbaannkkss aabbrrooaadd,, rreeppoorrtteedd bbyy nnoonnbbaannkkiinngg bbuussiinneessss eenntteerrpprriisseess iinn tthhee UUnniitteedd SSttaatteess 44,638 40,297r 33,604 33,710 33,604 36,127 36,801 36,425 33,501 n.a. 1. For banks' claims, data are monthly; for claims of banks' domestic custom- foreign bank, and foreign branches, agencies, or wholly owned subsidiaries of ers, data are quarterly. head office or parent foreign bank. Reporting banks include all types of depository institution, as well as some 3. Assets held by reporting banks in the accounts 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 1992r 1993 MMaattuurriittyy,, bbyy bboorrrroowweerr aanndd aarreeaa22 11998899 11999900 11999911 June Sept. Dec. Mar. 1 Total 238,123 206,903 195,302 196,776 187,272 195,517 182,949 By borrower 2 Maturity of one year or less 178,346 165,985 162,573 162,382 155,072 163,873 152,965 3 Foreign public borrowers 23,916 19,305 21,050 20,400 17,739 17,689 21,140 4 All other foreigners 154,430 146,680 141,523 141,982 137,333 146,184 131,825 5 Maturity of more than one year 59,776 40,918 32,729 34,394 32,200 31,644 29,984 6 Foreign public borrowers 36,014 22,269 15,859 15,165 13,314 13,268 12,199 7 All other foreigners 23,762 18,649 16,870 19,229 18,886 18,376 17,785 By area Maturity of one year or less 8 Europe 53,913 49,184 51,835 55,123 55,964 53,865 55,526 9 Canada 5,910 5,450 6,444 7,986 5,949 6,118 7,932 10 Latin America and Caribbean 53,003 49,782 43,597 48,983 45,241 50,316 45,117 11 Asia 57,755 53,258 51,059 41,343 40,664 45,726 37,935 12 Africa 3,225 3,040 2,549 2,127 2,183 1,784 1,680 13 All other3 4,541 5,272 7,089 6,820 5,071 6,064 4,775 Maturity of more than one year 14 Europe 4,121 3,859 3,878 6,752 6,624 5,380 4,896 15 Canada 2,353 3,290 3,595 3,158 3,227 3,290 3,139 16 Latin America and Caribbean 45,816 25,774 18,277 16,847 15,111 15,159 14,386 17 4,172 5,165 4,459 5,018 4,853 5,015 5,033 18 Africa 2,630 2,374 2,335 2,356 2,107 2,390 2,094 19 All other3 684 456 185 263 278 410 436 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 • September 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 1991 1992 1993 AArreeaa oorr ccoouunnttrryy 11998899 11999900 Mar. June Sept. Dec. Mar. June Sept. Dec. Mar. 1 Total 340.9" 320. lr 326.6r 322.3" 338.4" 343.6r 349.8r 357.4 343.9 345.6r 360.6 152.9 132.2" 129.3" 130.3" 135.0" 137.6" 131.1 136.3 137.5 134.0 144.1 6.3 5.9 6.2 6.1 5.8 6.0 5.3 6.2 6.2 5.6 5.9 11.7 10.4 9.7 10.5 11.1 11.0 10.0 12.0 15.5 15.4 13.7 10.5 10.6 8.8 8.3 9.7 8.3 8.4 8.8 10.9 9.3 10.0 6 Italy 7.4 5.0 4.0 3.6 4.5 5.6 5.4 8.0 6.4 6.5 6.8 3.1 3.0 3.3 3.3 3.0 4.7 4.3 3.3 3.7 2.8 3.7 2.0 2.2 2.0 2.5 2.1 1.9 2.0 1.9 2.2 2.3 3.0 7.1 4.4 3.7 3.3 3.9 3.4 3.2 4.6 5.2 4.8 5.4 67.2 60.9" 61.7" 59.5 65.6" 68.5 64.8 65.9 61.9" 61.4 66.5 5.4 5.9 6.8 8.2 5.8 5.8 6.6 6.7 6.7 6.6 8.6 32.3r 24.0" 23.2 25.1" 23.5" 22.6" 21.1 18.7 18.9 19.2 20.5 21.0 22.9 23.5 21.3 22.1 22.8 21.5 25.5 25.1 24.1 25.6 1.5 1.4 1.4 1.1 1.0 .6 .8 .8 .8 1.2 1.5 1.1 1.1 .9 1.2 .9 .9 .8 1.3 1.5 .9 .8 1.0 .7 1.0 .8 .6 .7 .8 .8 1.0 .7 .7 2.5 2.7 2.5 2.4 2.3 2.6 2.3 2.8 3.0 3.0 2.8 1.4 1.6 1.5 1.5 1.4 1.4 1.5 1.7 1.6 1.2 1.8 19 Portugal .4 .6 .6 .6 .5 .6 .5 .5 .5 .4 .7 20 Spain 7.1 8.3 9.0 7.1 8.3 8.3 7.7 10.1 9.8 9.0 9.6 21 Turkey 1.2 1.7 1.7 1.9 1.6 1.4 1.2 1.5 1.5 1.3 1.4 1.0 1.2 1.2 1.1 1.3 1.8 1.5 2.0 1.5 1.7 2.0 23 South Africa 2.0 1.8 1.8 1.8 1.6 1.9 1.8 1.7 1.7 1.7 1.6 1.6 1.8 1.9 2.0 2.4 2.7 2.3 2.3 2.3 2.9 2.8 25 OPEC2 17.1 12.8 17.1 14.0 15.6 14.5" 15.8 16.2 15.9 16.1 16.7 1.3 1.0 .9 .9 .8 .7 .7 .7 .7 .6 .6 7.0 5.0 5.1 5.3 5.6 5.4 5.4 5.3 5.4 5.2 5.3 2.0 2.7 2.8 2.6 2.8 2.7" 3.0 3.0 3.0 3.0 3.1 5.0 2.5 6.6 3.7 5.0 4.2 5.3 5.9 5.4 6.2 6.7 1.7 1.7 1.6 1.5 1.5 1.5 1.4 1.4 1.4 1.1 1.0 77.5 65.4 66.4 64.4" 64.7" 63.9" 69.7" 68.1 72.9 72.2 74.3 Latin America 6.3 5.0 4.7 4.6 4.5 4.8 5.0 5.1 6.2 6.6 7.0 33 Brazil 19.0 14.4 13.9 11.6 10.5 9.6 10.8 10.6 10.8 10.8 11.6 34 Chile 4.6 3.5 3.6 3.6 3.7 3.6 3.9 4.0 4.2 4.4 4.6 1.8 1.8 1.7 1.6 1.6 1.7 1.6 1.6 1.7 1.8 1.9 17.7 13.0 13.7 14.3 16.2 15.5 17.7" 16.3 17.1 16.0 16.8 37 Peru .6 .5 .5 .5 .4 .4 .4 .4 .5 .5 .4 38 Other 2.8 2.3 2.2 2.0 1.9 2.1 2.2 2.2 2.5 2.6 2.6 Asia China .3 .2 .4 .6 .4 .3 .3 .3 .3 .7 .6 4.5 3.5 3.6 4.1 4.1 4.1 4.8 4.6 5.0 5.2 5.3 3.1 3.3 3.5 3.0 2.8 3.0 3.6 3.8 3.6 3.2 3.1 .7 .5 .5 .5 .5 .5 .4 .4 .4 .4 .5 43 Korea (South) 5.9 6.2 6.8 6.9 6.5 6.8 6.9 6.9 7.4 6.6 6.5 1.7 1.9 2.0 2.1 2.3 2.3 2.5 2.7 3.0 3.0 3.3 4.1 3.8 3.7 3.7 3.6 3.7 3.6 3.1 3.6 3.6 3.4 46 Thailand 1.3 1.5 1.6 1.7 1.9 1.7 1.7 1.9 2.2 2.2 2.2 47 Other Asia3 1.0 1.7 2.1 1.8" 2.0" 2.0" 2.3 2.5 2.7 2.7 2.7 Africa 48 Egypt .4 .4 .4 .4 .4 .4 .3 .5 .3 .2 .2 .9 .8 .8 .7 .7 .7 .7 .7 .6 .6 .5 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 51 Other Africa3 1.0 1.0 .8 .8 .8 .7 .7 .6 .9 1.0 1.0 3.5 2.3 2.1 2.1 1.8 2.4 2.9 3.0 3.1 3.1 2.9" .7 .2 .3 .4 .4 .9 1.4 1.7 1.8 1.9 1.7 1.6 1.2 1.0 1.0 .8 .9 .8 .7 .7 .6 .6 55 Other 1.3 .9 .8 .7 .7 .7 .6 .6 .7 .6 .7 38.4r 44.7" 51.9" 50.2" 54.6" 54.2" 60.9" 59.4 52.3 55.0" 57.5 5.5 2.9" 8.3 6.8 6.7 11.9 14.5" 12.2 8.1 5.6 8.3 1.7 4.4 4.4 4.2 7.1 2.3 3.9 5.1 3.8 6.2 4.1 9.0 11.7" 14.1 1144..99 13.8 15.8 17.4 1188..11 15.7 19.9" 16.4 2.3 7.9 1.1 11..44 3.9 1.2 1.0 ..88 .7 1.1 1.6 1.4 1.4 1.5 1.3 1.3 1.4" 1.4" 1.7 1.8 1.7 1.9 .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 11.3" 9.7" 13.5" 14.3" 14.0" 14.4" 14.0" 15.0 15.2 13.8 16.7 7.0 6.6 8.9 7.2 7.7 7.1 8.5 6.4 6.8 6.5 8.4 65 Other .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 30.5" 39.9" 36.4 40.0" 44.4" 4488..00"" 47.8" 4488..66 3366..88 4411..00 3399..33 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. 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 1993 TTyyppee ooff lliiaabbiilliittyy aanndd aarreeaa oorr ccoouunnttrryy 11998899 11999900 11999911rr Dec. Mar. June Sept. Dec. Mar.P 1 38,764 46,043 43,453 43,453' 44,193' 44,109' 45,184' 43,144' 43,146 ? Payable in dollars 33,973 40,786 38,061 38,061r 38,735r 37,616' 36,792' 35,739' 35,251 3 Payable in foreign currencies 4,791 5,257 5,392 5,392 5,458 6,493' 8,392' 7,405 7,895 By type 4 Financial liabilities 17,879 21,066 21,872 21,872r 22,185' 21,756' 23,281' 22,047' 22,290 5 Payable in dollars 14,035 16,979 17,760 17,76c 17,957' 16,714' 16,546' 15,700' 15,760 6 Payable in foreign currencies 3,844 4,087 4,112 4,112 4,228 5,042' 6,735' 6,347 6,530 7 Commercial liabilities 20,885 24,977 21,581 21,581r 22,008' 22,353' 21,903' 21,097 20,856 8 Trade payables 8,070 10,683 8,662 8,662r 9,125' 9,715' 9,586' 9,046' 9,437 9 Advance receipts and other liabilities 12,815 14,294 12,919 12.9191 12,883' 12,638' 12,317' 12,051' 11,419 10 Payable in dollars 19,938 23,807 20,301 20,301r 20,778' 20,902' 20,246' 20,039' 19,491 11 Payable in foreign currencies 947 1,170 1,280 1,280 1,230 1,451 1,657' 1,058 1,365 By area or country Financial liabilities 1? Europe 11,660 10,978 11,805 11,805r 12,349' 12,728' 1133,,776677'' 1122,,5533cc 1122,,669944 n Belgium and Luxembourg 340 394 217 217 174 194 256 434' 299 14 258 975 2,106 2,106 1,997 2,324 2,785 1,608 1,610 15 Germany 464 621 682 682 666 634' 738' 740 751 16 Netherlands 941 1,081 1,056 1,056 1,025 979 980 606 639 17 Switzerland 541 545 408 408 355 490 627 569 503 18 United Kingdom 8,818 6,357 6,329 6,329r 7,238' 7,244' 7,580' 7,910' 8,331 19 Canada 610 229 267 267 283 337 320 491 551 70 Latin America and Caribbean 1,357 4,153 4,404 4,404r 4,092' 3,373' 3,462' 3,515' 3,544 ?1 Bahamas 157 371 537 537 3% 343 220 349 594 ?? Bermuda 17 0 114 114 114 114 115 114 114 73 Brazil 0 0 6 6 8 10 18 19 18 74 British West Indies 724 3,160 3,144 3,144' 2,96C 2,232' 2,408' 2,342' 2,142 7,5 Mexico 6 5 7 7 7 8 12 12 13 26 Venezuela 0 4 4 4 4 4 5 6 5 77 4,151 5,295 5,338 5,338 5,366 5,229' 5,642' 5,477' 5,451 78 Japan 3,299 4,065 4,102 4,102 4,107 4,136' 4,609' 4,451 4,479 29 Middle East oil-exporting countries 2 5 13 13 13 10 17 19 24 30 Africa 2 2 6 6 7 0 5 6 6 31 Oil-exporting countries3 0 0 4 4 6 0 0 0 0 32 Mother4 100 409 52 52 88 89 85 28 44 Commercial liabilities 33 Europe 9,071 10,310 8,126 8,126r 7,666' 77,,330099rr 66,,887799rr 66,,770044'' 66,,447711 34 Belgium and Luxembourg 175 275 248 248 256 240 173 287 143 35 877 1,218 957 957r 678 659 688 663 653 36 Germany 1,392 1,270 944 944 880 702 744 621' 613 37 Netherlands 710 844 709 709 574 605 601 556 666 38 693 775 575 575r 543' 461' 430' 398 504 39 United Kingdom 2,620 2,792 2,310 2,310 2,445 2,404 2,262 2,250 2,041 40 1,124 1,261 990 990 1,095 1,077 1,085 892' 915 41 Latin America and Caribbean 1,224 1,672 1,352 1,352 1,701 1,803 1,4%' 1,586 1,548 4? Bahamas 41 12 3 3 13 8 3 6 18 43 Bermuda 308 538 310 310 493 409 338 293 437 44 Brazil 100 145 219 219 230 212 115 203 107 45 British West Indies 27 30 107 107 108 73 85 57 87 46 323 475 304 304 375 475 322 444 343 47 Venezuela 164 130 94 94 168 279 125' 130 158 48 7,550 9,483 9,330 9,330 9,890 10,439 11,006 10,787' 10,695 49 2,914 3,651 3,720 3,720 3,549 3,537 3,909 3,994 4,006 50 Middle Eastern oil-exporting countries2'3 1,632 2,016 1,498 1,498 1,591 1,778 1,813 1,792' 1,589 51 886 844 713 713 644 775 675 556 559 52 Oil-exporting countries3 339 422 327 327 253 389 335' 295 224 53 Other4 1,030 1,406 1,070 1,070 1,012 950 762 572 668 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 • September 1993 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1991r 1992r 1993 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11998899 11999900 11999911 Dec. Mar. June Sept. Dec. Mar.P 1 Total 33,173 35,348 42,233 42,233 40,899 41,037 38,345 38,039 40,567 2 Payable in dollars 30,773 32,760 39,688 39,688 38,281 38,071 35,460 35,562 37,884 3 Payable in foreign currencies 2,400 2,589 2,545 2,545 2,618 2,966 2,885 2,477 2,683 By type 4 Financial claims 19,297 19,874 25,264 25,264 24,289 24,037 21,311 21,041 22,046 5 Deposits 12,353 13,577 17,290 17,290 16,262 15,056 12,436 12,615 12,774 6 Payable in dollars 11,364 12,552 16,415 16,415 15,076 13,717 11,353 11,826 11,720 1 Payable in foreign currencies 989 1,025 875 875 1,186 1,339 1,083 789 1,054 8 Other financial claims 6,944 6,297 7,974 7,974 8,027 8,981 8,875 8,426 9,272 9 Payable in dollars 6,190 5,280 7,094 7,094 7,305 8,277 7,868 7,688 8,546 10 Payable in foreign currencies 754 1,017 880 880 722 704 1,007 738 726 11 Commercial claims 13,876 15,475 16,969 16,969 16,610 17,000 17,034 16,998 18,521 12 Trade receivables 12,253 13,657 14,244 14,244 14,044 14,538 14,330 14,711 16,457 13 Advance payments and other claims 1,624 1,817 2,725 2,725 2,566 2,462 2,704 2,287 2,064 14 Payable in dollars 13,219 14,927 16,179 16,179 15,900 16,077 16,239 16,048 17,618 15 Payable in foreign currencies 657 548 790 790 710 923 795 950 903 By area or country Financial claims 16 Europe 8,463 9,645 13,724 13,724 14,243 13,225 11,433 99,,551144 10,295 17 Belgium and Luxembourg 28 76 13 13 12 25 16 88 5 18 France 153 371 314 314 279 788 811 776 909 19 Germany 152 367 335 335 285 377 319 399 437 20 Netherlands 238 265 385 385 727 732 767 537 581 21 Switzerland 153 357 591 591 682 780 602 507 493 22 United Kingdom 7,496 7,971 11,445 11,445 11,669 8,789 7,915 6,130 6,838 23 Canada 1,904 2,934 2,716 2,716 2,753 2,533 2,245 1,721 2,086 24 Latin America and Caribbean 8,020 6,201 7,689 7,689 6,200 6,849 6,452 8,326 5,647 25 Bahamas 1,890 1,090 758 758 493 523 1,099 618 302 26 Bermuda 7 3 8 8 12 12 65 40 79 27 Brazil 224 68 144 144 143 134 396 4% 592 28 British West Indies 5,486 4,635 6,304 6,304 5,124 5,759 4,449 6,530 4,213 29 Mexico 94 177 212 212 212 244 239 286 235 30 Venezuela 20 25 40 40 34 32 26 29 23 31 Asia 590 860 675 675 642 975 727 846 3,263 32 Japan 213 523 385 385 380 728 481 683 33,,006666 33 Middle East oil-exporting countries2 8 8 5 5 3 4 4 3 88 34 Africa 140 37 57 57 60 57 71 79 128 35 Oil-exporting countries3 12 0 1 1 0 0 1 9 1 36 All other4 180 195 403 403 391 398 383 555 627 Commercial claims 37 Europe 6,209 7,044 7,935 7,935 7,842 8,087 7,742 7,442 8,065 38 Belgium and Luxembourg 242 212 192 192 181 255 172 184 166 39 France 964 1,240 1,542 1,542 1,560 1,561 1,739 11,,339922 1,385 40 Germany 696 807 940 940 933 905 870 888800 916 41 Netherlands 479 555 643 643 646 666 588 541 714 42 Switzerland 313 301 295 295 323 394 294 260 414 43 United Kingdom 1,575 1,775 2,084 2,084 2,082 2,169 1,973 1,799 2,171 44 Canada 1,091 1,074 1,109 1,109 1,115 1,058 1,105 1,192 1,137 45 Latin America and Caribbean 2,184 2,375 2,562 2,562 2,544 2,653 3,113 2,827 33,,225555 46 Bahamas 58 14 11 11 11 9 7 18 88 47 Bermuda 323 246 263 263 272 291 245 237 194 48 Brazil 297 326 418 418 364 438 395 336 809 49 British West Indies 36 40 41 41 45 32 43 39 17 50 Mexico 508 661 801 801 865 829 942 837 898 51 Venezuela 147 192 202 202 206 251 302 317 320 52 Asia 3,570 4,127 4,558 4,558 4,343 4,456 4,300 4,649 5,248 53 Japan 1,199 1,460 1,878 1,878 1,782 1,786 1,793 1,850 2,129 54 Middle Eastern oil-exporting countries2 518 460 621 621 635 609 511 677 764 55 Africa 429 48$ 418 418 418 422 430 540 446 56 Oil-exporting countries3 108 67 95 95 75 73 60 78 75 57 Other4 393 367 387 387 348 324 344 348 370 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 1992r 1993 Transaction and area or country 1991 1992r J M an ay .- Nov. Dec. Jan.r Feb.r Mar.r Apr/ Mayp U.S. corporate securities STOCKS 1 Foreign purchases 211,207 221,307 122,966 17,708 22,725 19,170 28,753 27,013 25,009 23,021 2 Foreign sales 200,116 226,428 117,433 16,426 20,382 19,353 25,980 24,548 25,329 22,223 3 Net purchases or sales (—) 11,091 -5,121 5,533 1,282 2,343 -183 2,773 2,465 -320 798 4 Foreign countries 10,522 -5,154 5,287 1,279 2,319 -178 2,683 2,308 -328 802 5 Europe 53 -4,912 2,022 368 1,505 52 2,271 975 -645 -631 6 France 9 -1,350 -225 -54 -154 -25 223 -183 -154 -86 7 Germany -63 -65 440 46 162 91 97 103 144 5 8 Netherlands -227 -262 187 -5 190 64 -11 68 32 34 9 Switzerland -131 168 1,388 -39 221 205 501 356 277 49 10 United Kingdom -352 -3,301 -559 361 705 -350 1,135 476 -1,134 -686 11 Canada 3,845 1,407 -124 42 176 -341 57 176 103 -119 12 Latin America and Caribbean 2,177 2,203 1,236 647 422 305 -235 410 241 515 13 Middle East1 -134 -88 -105 -219 70 -92 -65 -13 7 58 14 Other Asia 4,255 -3,943 2,147 374 122 -123 593 763 1 913 15 Japan 1,179 -3,598 -422 220 215 28 -624 250 -531 455 16 Africa 153 10 -5 -18 -7 4 27 2 -48 10 17 Other countries 174 169 116 85 31 17 35 -5 13 56 18 Nonmonetary international and regional organizations 568 33 246 3 24 -5 90 157 88 -4 BONDS2 19 Foreign purchases 153,096 215,041 104,652 18,083 19,264 17,220 21,934 25,223 20,728 19,547 20 Foreign sales 125,637 175,560 89,117 16,318 15,391 15,454 18,8% 23,275 16,233 15,259 21 Net purchases or sales (-) 27,459 39,481 15,535 1,765 3,873 1,766 3,038 1,948 4,495 4,288 22 Foreign countries 27,590 38,365 15,948 1,600 3,328 1,862 3,164 2,084 4,536 4,302 23 Europe 13,112 17,836 5,156 -494 2,118 1,090 2,143 27 1,079 817 24 France 847 1,203 1,590 -7 217 101 311 75 508 595 25 Germany 1,577 2,486 1,127 -113 857 91 52 -57 811 230 26 Netherlands 482 540 -329 144 48 -119 -133 -178 108 -7 27 Switzerland 656 -579 -355 -261 105 122 -38 11 -239 -211 28 United Kingdom 8,931 12,836 3,011 -313 962 334 2,376 -229 394 136 29 Canada 1,623 237 159 281 -38 -437 145 138 291 22 30 Latin America and Caribbean 2,672 9,300 3,285 542 513 419 482 490 632 1,262 31 Middle East1 1,787 3,166 1,389 515 360 300 248 263 463 115 32 Other Asia 8,459 7,545 5,814 692 119 305 149 1,216 2,082 2,062 33 Japan 5,767 -450 2,777 266 9 190 61 595 991 940 34 Africa 52 354 206 -4 302 168 27 -10 0 21 35 Other countries -116 -73 -61 68 -46 17 -30 -40 -11 3 36 Nonmonetary international and regional organizations -131 1,116 -413 165 545 -96 -126 -136 --4411 --1144 Foreign securities 37 Stocks, net purchases or sales (-)3 -31,967 -32,268 -16,238 -3,704 -4,376 -2,351 -1,571 -4,565 -4,006 -3,745 38 Foreign purchases 120,598 150,022 80,920 11,673 12,782 12,732 15,055 17,447 19,291 16,395 39 Foreign sales3 152,565 182,290 97,158 15,377 17,158 15,083 16,626 22,012 23,297 20,140 40 Bonds, net purchases or sales (-) -14,828 -18,277 -20,100 -715 -2,866 -5,107 -9,528 -4,629 -810 -26 41 Foreign purchases 330,311 486,238 279,912 52,281 39,617 38,545 56,046 70,126 55,752 59,443 42 Foreign sales 345,139 504,515 300,012 52,996 42,483 43,652 65,574 74,755 56,562 59,469 43 Net purchases or sales (-), of stocks and bonds -46,795 -50,545 -36,338 -4,419 -7,242 -7,458 -11,099 -9,194 -4,816 -3,771 44 Foreign countries -46,711 -53,881 -35,812 -4,492 -7,1% -6,451 -11,237 -8,925 -5,088 -4,111 45 Europe -34,452 -37,557 -23,875 -4,958 -4,507 -6,486 -6,669 -3,084 -2,773 -4,863 46 Canada -7,004 -6,635 -9,020 575 -1,167 -161 -5,028 -3,034 -816 19 47 Latin America and Caribbean 759 -2,298 507 -1,672 511 195 25 68 -904 1,123 48 Asia -7,350 -6,629 -3,043 1,529 -1,678 -394 539 -2,477 -528 -183 49 Africa -9 -2 -226 42 -11 -7 3 -18 -18 -186 50 Other countries 1,345 -760 -155 -8 -344 402 -107 -380 -49 -21 51 Nonmonetary international and regional organizations -84 3,336 -526 73 -46 -1,007 138 -269 272 340 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 • September 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 ay .- Nov. Dec.r Jan/ Feb/ Mar/ Apr/ May" Transactions, net purchases or sales (-) during period1 1 Estimated total 19,865 39,288r 8,811 17,631" 14 439 -1,273 6,129 4,369 -853 2 Foreign countries 19,687 37,935r 7,191 17,644" -188 -144 -2,166 5,577 4,513 -589 3 Europe 8,663 19,625r -3,056 7,267" 3,173 -600 -382 -3,826 1,615 137 4 Belgium and Luxembourg 523 1,985 798 370 -28 -59 45 622 -345 535 5 Germany -4,725 2,076 -8,470 -1,584 898 697 -1,632 -2,757 -1,382 -3,396 6 Netherlands -3,735 —2,959" 251 1,827 -804 -1,238 206 66 731 486 7 Sweden -663 -804 213 668 -344 -54 258 -540 -100 649 8 Switzerland 1,007 488r -2,835 1,334 213 -199 -455 -1,569 -721 109 9 United Kingdom 6,218 24,184 8,546 7,209 2,833 2,025 183 672 2,662 3,004 10 Other Western Europe 10,024 -5,995r -2,028 -2,775" 405 -1,774 975 -509 631 -1,351 11 Eastern Europe 13 650 469 218 0 2 38 189 139 101 12 Canada -3,019 562 7,783 -1,087 -99 3,302 82 2,490 1,386 523 13 Latin America and Caribbean 10,285 -3,222r -7,489 7,270 -4,519 -1,495 445 -537 -2,015 -3,887 14 Venezuela 10 539 384 27 11 -175 179 154 74 152 15 Other Latin America and Caribbean 4,179 -l,956r -6,205 2,385 415 -3,309 -1,656 -471 1,101 -1,870 16 Netherlands Antilles 6,097 -1,805 -1,668 4,858 -4,945 1,989 1,922 -220 -3,190 -2,169 17 3,367 23,517r 11,839 4,000 1,184 -1,136 -1,032 7,215 3,831 2,961 18 Japan -4,081 9,817 10,177 3,383 2,201 -743 804 3,457 3,348 3,311 19 689 1,103 -173 119 0 -33 -139 -66 67 -2 20 -298 -3,650" -1,713 75 73 -182 -1,140 301 -371 -321 21 Nonmonetary international and regional organizations 178 1,353 1,620 -13 202 583 893 552 -144 -264 22 International -358 1,018 354 -38 76 228 581 56 -211 -300 23 Latin American regional -72 533 505 -31 97 270 235 1 16 -17 MEMO 24 Foreign countries 19,687 37,935r 7,191 17,644" -188 -144 -2,166 5,577 4,513 -589 25 Official institutions 1,190 6,876 -8,702 -620" -715 -2,980 -4,364 -657 2,586 -3,287 26 Other foreign2 18,496 31,059" 15,893 18,264 527 2,836 2,198 6,234 1,927 2,698 Oil-exporting countries 27 Middle East2 -6,822 4,317" -2,310 407 505 -238 -1,855 811 100 -1,128 28 239 11 2 0 0 8 0 0 -6 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 July 31, 1993 Rate on July 31, 1993 Rate on July 31, 1993 Country Country Country 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 Austria.. 6.25 July 1993 Germany... 6.75 July 1993 Norway 7.5 July 1993 Belgium . 6.0 July 1993 Italy 9.0 July 1993 Switzerland 4.5 July 1993 Canada.. 4.41 July 1993 Japan 2.5 July 1992 United Kingdom 12.0 Sept. 1992 Denmark 9.25 July 1993 Netherlands 6.0 July 1993 France .. 10.0 July 1993 1. Rates shown are mainly those at which the central bank either discounts or 2. Since February 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 Percent per year, averages of daily figures 1993 TTyyppee oorr ccoouunnttrryy 11999900 11999911 11999922 Jan. Feb. Mar. Apr. May June July 8.16 5.86 3.70 3.22 3.12 3.11 3.10 3.12 3.21 3.17 14.73 11.47 9.56 6.88 6.10 5.91 5.90 5.91 5.83 5.88 13.00 9.07 6.76 7.03 6.38 5.59 5.43 5.29 4.91 4.48 8.41 9.15 9.42 8.50 8.29 7.85 7.81 7.41 7.51 7.12 8.71 8.01 7.67 5.52 5.34 5.05 4.97 4.97 4.99 4.62 8.57 9.19 9.25 8.00 7.98 7.47 7.43 6.98 6.64 6.45 10.20 9.49 10.14 11.69 11.70 10.89 8.73 7.48 7.19 7.72 8 Italy 12.11 12.04 13.91 12.56 11.43 11.26 11.41 10.74 10.18 9.42 9.70 9.30 9.31 8.19 8.75 8.27 7.94 7.16 6.87 7.12 7.75 7.33 4.39 3.70 3.27 3.26 3.22 3.24 3.23 3.22 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 • September 1993 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar except as noted Country/currency unit 1990 1991 1992 Feb. Mar. Apr. May July 1 Australia/dollar^ 78.069 77.872 73.521 68.294 70.775 71.155 69.859 67.492 67.788 2 Austria/schilling 11.331 11.686 10.992 11.556 11.586 11.234 11.305 11.637 12.071 3 Belgium/franc 33.424 34.195 32.148 33.841 33.919 32.857 33.044 34.009 35.483 4 Canada/dollar 1.1668 1.1460 1.2085 1.2602 1.2471 1.2621 1.2698 1.2789 1.2820 5 China, P.R./yuan 4.7921 5.3337 5.5206 5.7874 5.7455 5.7202 5.7392 5.7504 5.7756 6 Denmark/krone 6.1899 6.4038 6.0372 6.3019 6.3242 6.1339 6.1751 6.3380 6.6531 7 Finland/markka 3.8300 4.0521 4.4865 5.8534 5.9767 5.6190 5.4847 5.5674 5.7852 8 France/franc 5.4467 5.6468 5.2935 5.5594 5.5944 5.3984 5.4180 5.5700 5.8464 9 Germany/deutsche mark. 1.6166 1.6610 1.5618 1.6414 1.6466 1.5964 1.6071 1.6547 1.7157 10 Greece/drachma 158.59 182.63 190.81 220.60 223.57 217.90 218.12 225.45 234.77 11 Hong Kong/dollar 7.7899 7.7712 7.7402 7.7335 7.7332 7.7306 7.7290 7.7362 7.7556 12 India/rupee 17.492 22.712 28.156 30.042 31.939 31.610 31.613 31.668 31.600 13 Ireland/pound2 165.76 161.39 170.42 148.11 147.58 152.75 151.65 147.47 140.83 14 Italy/lira 1,198.27 1,241.28 1,232.17 1,550.43 1,591.35 1,536.14 1,475.66 1,505.05 1,586.02 15 Japan/yen 145.00 134.59 126.78 120.76 117.02 112.41 110.34 107.41 107.69 16 Malaysia/ringgit 2.7057 2.7503 2.5463 2.6295 2.6051 2.5777 2.5661 2.5696 2.5672 17 Netherlands/guilder. — 1.8215 1.8720 1.7587 1.8473 1.8507 1.7942 1.8026 1.8559 1.9299 18 New Zealand/dollar2 59.619 57.832 53.792 51.603 53.026 53.904 54.290 53.949 54.900 19 Norway/krone 6.2541 6.4912 6.2142 6.9779 6.9989 6.7399 6.8027 6.9986 7.3179 20 Portugal/escudo 142.70 144.77 135.07 149.89 152.17 148.25 151.89 157.63 167.87 21 Singapore/dollar 1.8134 1.7283 1.6294 1.6463 1.6446 1.6228 1.6136 1.6175 1.6206 22 South Africa/rand 2.5885 2.7633 2.8524 3.1313 3.1790 3.1718 3.1787 3.2408 3.3518 23 South Korea/won 710.64 736.73 784.58 799.25 796.42 798.61 803.19 805.91 809.58 24 Spain/peseta 101.96 104.01 102.38 117.51 117.71 115.64 121.30 127.11 134.93 25 Sri Lanka/rupee 40.078 41.200 44.013 46.351 47.069 47.712 47.965 48.073 48.643 26 Sweden/krona 5.9231 6.0521 5.8258 7.5566 7.7362 7.4500 7.3271 7.4541 7.9802 27 Switzerland/franc 1.3901 1.4356 1.4064 1.5178 1.5206 1.4599 1.4504 1.4769 1.5147 28 Taiwan/dollar 26.918 26.759 25.160 25.837 26.026 25.987 25.978 26.267 26.682 29 Thailand/baht 25.609 25.528 25.411 25.508 25.425 25.251 25.234 25.214 25.331 30 United Kingdom/pound2 178.41 176.74 176.63 143.95 146.17 154.47 154.77 150.82 149.55 MEMO 31 United States/dollar3 89.09 89.84 86.61 93.82 90.62 91.81 94.59 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 June 30, 1992 November 1992 A70 September 30, 1992 February 1993 A70 December 31, 1992 May 1993 A70 March 31, 1993 August 1993 A70 Terms of lending at commercial banks August 1992 November 1992 A76 November 1992 February 1993 A76 February 1993 May 1993 A76 May 1993 August 1993 A76 Assets and liabilities of U.S. branches and agencies of foreign banks June 30, 1992 November 1992 A80 September 30, 1992 February 1993 A80 December 31, 1992 May 1993 A80 March 31, 1993 August 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 Federal credit agencies, 33 CAPACITY utilization, 46 Federal finance Capital accounts Debt subject to statutory limitation, and types and ownership Banks, by classes, 20 of gross debt, 30 Federal Reserve Banks, 11 Receipts and outlays, 28, 29 Central banks, discount rates, 67 Treasury financing of surplus, or deficit, 28 Certificates of deposit, 26 Treasury operating balance, 28 Commercial and industrial loans Federal Financing Bank, 28, 33 Commercial banks, 18, 22 Federal funds, 7, 19, 22, 23, 24, 26, 28 Weekly reporting banks, 22-24 Federal Home Loan Banks, 33 Commercial banks Federal Home Loan Mortgage Corporation, 33, 37, 38 Assets and liabilities, 20-23 Federal Housing Administration, 33, 37, 38 Commercial and industrial loans, 18, 20, 21, 22, 23, 24 Federal Land Banks, 38 Consumer loans held, by type and terms, 39 Federal National Mortgage Association, 33, 37, 38 Deposit interest rates of insured, 16 Federal Reserve Banks Loans sold outright, 22 Condition statement, 11 Nondeposit funds, 19 Discount rates (See Interest rates) Real estate mortgages held, by holder and property, 38 U.S. government securities held, 5, 11, 12, 30 Time and savings deposits, 4 Federal Reserve credit, 5, 6, 11, 12 Commercial paper, 25, 26, 36 Federal Reserve notes, 11 Condition statements (See Assets and liabilities) Federally sponsored credit agencies, 33 Construction, 45, 49 Finance companies Consumer installment credit, 39 Assets and liabilities, 36 Consumer prices, 45,46 Business credit, 36 Consumption expenditures, 52, 53 Loans, 39 Corporations Paper, 25, 26 Nonfinancial, assets and liabilities, 35 Financial institutions, loans to, 22, 23, 24 Profits and their distribution, 35 Float, 51 Security issues, 34, 65 Flow of funds, 40, 42, 43, 44 Cost of living (See Consumer prices) Foreign banks, assets and liabilities of U.S. branches and Credit unions, 39 agencies, 23, 24 Currency in circulation, 5, 14 Foreign currency operations, 11 Customer credit, stock market, 27 Foreign deposits in U.S. banks, 5, 11, 22, 23 Foreign exchange rates, 68 DEBITS to deposit accounts, 17 Foreign trade, 54 Debt (See specific types of debt or securities) Foreigners Demand deposits Claims on, 55, 57, 60, 61, 62, 64 Banks, by classes, 20-24 Liabilities to, 23, 54, 55, 57, 58, 63, 65, 66 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A71 GOLD REAL estate loans Certificate account, 11 Banks, by classes, 18, 22, 23, 38 Stock, 5, 54 Terms, yields, and activity, 37 Government National Mortgage Association, 33, 37, 38 Type of holder and property mortgaged, 38 Gross domestic product, 51 Repurchase agreements, 7, 19, 22, 23, 24 Reserve requirements, 9 HOUSING, new and existing units, 49 Reserves Commercial banks, 20 Depository institutions, 4, 5, 6, 13 INCOME, personal and national, 45, 51, 52 Federal Reserve Banks, 11 Industrial production, 45, 47 U.S. reserve assets, 54 Installment loans, 39 Residential mortgage loans, 37 Insurance companies, 30, 38 Retail credit and retail sales, 39,40,45 Interest rates Bonds, 26 Consumer installment credit, 39 SAVING Deposits, 16 Flow of funds, 40,42,43, 44 Federal Reserve Banks, 8 National income accounts, 51 Savings and loan associations, 38, 39,40. (See also SAIF-insured Foreign central banks and foreign countries, 67 Money and capital markets, 26 institutions) Mortgages, 37 Savings banks, 38, 39 Prime rate, 25 Savings deposits (See Time and savings deposits) International capital transactions of United States, 53-67 Securities (See also specific types) International organizations, 57, 58, 60, 63, 64 Federal and federally sponsored credit agencies, 33 Inventories, 51 Foreign transactions, 65 New issues, 34 Investment companies, issues and assets, 35 Prices, 27 Investments (See also specific types) Special drawing rights, 5,11, 53, 54 Banks, by classes, 20, 21, 22, 23, 24 State and local governments Commercial banks, 4, 18, 20-23 Deposits, 22, 23 Federal Reserve Banks, 11, 12 Financial institutions, 38 Holdings of U.S. government securities, 30 New security issues, 34 Ownership of securities issued by, 22, 23 LABOR force, 45 Rates on securities, 26 Life insurance companies (See Insurance companies) Stock market, selected statistics, 27 Loans (See also specific types) Stocks (See also Securities) Banks, by classes, 20-23 New issues, 34 Commercial banks, 4, 18, 20-23 Prices, 27 Federal Reserve Banks, 5, 6, 8, 11, 12 Financial institutions, 38 Student Loan Marketing Association, 33 Insured or guaranteed by United States, 37, 38 TAX receipts, federal, 29 MANUFACTURING Thrift institutions, 4. (See also Credit unions and Savings and Capacity utilization, 46 loan associations) Production, 46, 48 Time and savings deposits, 4, 14, 16, 19, 20, 21, 22, 23, 24 Margin requirements, 27 Trade, foreign, 54 Member banks (See also Depository institutions) Treasury cash, Treasury currency, 5 Federal funds and repurchase agreements, 7 Treasury deposits, 5, 11, 28 Reserve requirements, 9 Treasury operating balance, 28 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, 32 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 HI, Assistant Director DIANE E. WERNEKE, Special Assistant to the Board KAREN H. JOHNSON, Assistant Director RALPH W. SMITH, JR., Assistant Director LEGAL DIVISION DIVISION OF RESEARCH AND STATISTICS J. VIRGIL MATTINGLY, JR., General Counsel SCOTT G. ALVAREZ, Associate General Counsel MICHAEL J. PRELL, Director RICHARD M. ASHTON, Associate General Counsel EDWARD C. ETTIN, Deputy Director OLIVER IRELAND, Associate General Counsel WILLIAM R. JONES, Associate Director KATHLEEN M. O'DAY, Associate General Counsel THOMAS D. SIMPSON, Associate Director MARYELLEN A. BROWN, Assistant to the General Counsel LAWRENCE SLIFMAN, Associate Director DAVID J. STOCKTON, Associate Director OFFICE OF THE SECRETARY MARTHA BETHEA, Deputy Associate Director WILLIAM W. WILES, Secretary PETER A. TINSLEY, Deputy Associate Director JENNIFER J. JOHNSON, Associate Secretary MYRON L. KWAST, Assistant Director BARBARA R. LOWREY, Associate Secretary PATRICK M. PARKINSON, Assistant Director MARTHA S. SCANLON, Assistant Director ELLEN MALAND, Assistant Secretary JOYCE K. ZICKLER, Assistant Director JOHN J. MINGO, Adviser DIVISION OF BANKING LEVON H. GARABEDIAN, Assistant Director SUPERVISION AND REGULATION (Administration) RICHARD SPILLENKOTHEN, Director STEPHEN C. SCHEMERING, Deputy Director DIVISION OF MONETARY AFFAIRS DON E. KLINE, Associate Director 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

A73 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 FLORENCE M. YOUNG, Assistant Director JOHN R. WEIS, Associate 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

74 Federal Reserve Bulletin • September 1993 Federal Open Market Committee and Advisory Councils FEDERAL OPEN MARKET COMMITTEE MEMBERS ALAN GREENSPAN, Chairman WILLIAM J. MCDONOUGH, 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 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, IE, 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, Texas, 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 161. A REVIEW OF CORPORATE RESTRUCTURING ACTIVITY, Bulletin 1980-90, by Margaret Hastings Pickering. May 1991. 21pp. Studies and papers on economic and financial subjects that are of general interest. Requests to obtain single copies of the full 162. EVIDENCE ON THE SIZE OF BANKING MARKETS FROM text or to be added to the mailing list for the series may be sent MORTGAGE LOAN RATES IN TWENTY CITIES, by Stephen A. Rhoades. February 1992. 11 pp. to Publications Services. 163. CLEARANCE AND SETTLEMENT IN U.S. SECURITIES MAR- KETS, by Patrick Parkinson, Adam Gilbert, Emily Gollob, Staff Studies 1-145 are out of print. Lauren Hargraves, Richard Mead, Jeff Stehm, and Mary Ann Taylor. March 1992. 37 pp. 146. THE ROLE OF THE PRIME RATE IN THE PRICING OF 164. THE 1989-92 CREDIT CRUNCH FOR REAL ESTATE, by BUSINESS LOANS BY COMMERCIAL BANKS, 1977-84, by James T. Fergus and John L. Goodman, Jr. July 1993. Thomas F. Brady. November 1985. 25 pp. 20 pp. 147. REVISIONS IN THE MONETARY SERVICES (DIVISIA) IN- DEXES OF THE MONETARY AGGREGATES, by Helen T. Farr and Deborah Johnson. December 1985. 42 pp. REPRINTS OF SELECTED Bulletin ARTICLES 148. THE MACROECONOMIC AND SECTORAL EFFECTS OF THE ECONOMIC RECOVERY TAX ACT: SOME SIMULATION Some Bulletin articles are reprinted. The articles listed below RESULTS, by Flint Brayton and Peter B. Clark. December are those for which reprints are available. Most of the articles 1985. 17 pp. reprinted do not exceed twelve pages. Limit of ten copies 149. THE OPERATING PERFORMANCE OF ACQUIRED FIRMS IN BANKING BEFORE AND AFTER ACQUISITION, by Stephen Recent Developments in the Bankers Acceptance Market. 1/86. A. Rhoades. April 1986. 32 pp. The Use of Cash and Transaction Accounts by American 150. STATISTICAL COST ACCOUNTING MODELS IN BANKING: Families. 2/86. A REEXAMINATION AND AN APPLICATION, by John T. Financial Characteristics of High-Income Families. 3/86. Rose and John D. Wolken. May 1986. 13 pp. Prices, Profit Margins, and Exchange Rates. 6/86. 151. RESPONSES TO DEREGULATION: RETAIL DEPOSIT PRICING Agricultural Banks under Stress. 7/86. FROM 1983 THROUGH 1985, by Patrick I. Mahoney, Alice Foreign Lending by Banks: A Guide to International and U.S. P. White, Paul F. O'Brien, and Mary M. McLaughlin. Statistics. 10/86. January 1987. 30 pp. Recent Developments in Corporate Finance. 11/86. 152. DETERMINANTS OF CORPORATE MERGER ACTIVITY: A Measuring the Foreign-Exchange Value of the Dollar. 6/87. REVIEW OF THE LITERATURE, by Mark J. Warshawsky. Changes in Consumer Installment Debt: Evidence from the April 1987. 18 pp. 1983 and 1986 Surveys of Consumer Finances. 10/87. 153. STOCK MARKET VOLATILITY, by Carolyn D. Davis and Home Equity Lines of Credit. 6/88. Alice P. White. September 1987. 14 pp. Mutual Recognition: Integration of the Financial Sector in the 154. THE EFFECTS ON CONSUMERS AND CREDITORS OF European Community. 9/89. PROPOSED CEILINGS ON CREDIT CARD INTEREST RATES, The Activities of Japanese Banks in the United Kingdom and in by Glenn B. Canner and James T. Fergus. October 1987. the United States, 1980-88. 2/90. 26 pp. Industrial Production: 1989 Developments and Historical 155. THE FUNDING OF PRIVATE PENSION PLANS, by Mark J. Revision. 4/90. Warshawsky. November 1987. 25 pp. Recent Developments in Industrial Capacity and Utilization. 156. INTERNATIONAL TRENDS FOR U.S. BANKS AND BANKING 6/90. MARKETS, by James V. Houpt. May 1988. 47 pp. Developments Affecting the Profitability of Commercial Banks. 157. M2 PER UNIT OF POTENTIAL GNP AS AN ANCHOR FOR 7/90. THE PRICE LEVEL, by Jeffrey J. Hallman, Richard D. Recent Developments in Corporate Finance. 8/90. Porter, and David H. Small. April 1989. 28 pp. U.S. Exchange Rate Policy: Bretton Woods to Present. 11/90. 158. THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIRE- The Transmission Channels of Monetary Policy: How Have MENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE They Changed? 12/90. PRODUCTS, by Mark J. Warshawsky with the assistance of Changes in Family Finances from 1983 to 1989: Evidence from Dietrich Eanihart. September 1989. 23 pp. the Survey of Consumer Finances. 1/92. 159. NEW DATA ON THE PERFORMANCE OF NONBANK SUBSID- U.S. International Transactions in 1991. 5/92. IARIES OF BANK HOLDING COMPANIES, by Nellie Liang and Donald Savage. February 1990. 12 pp. 160. BANKING MARKETS AND THE USE OF FINANCIAL SER- VICES BY SMALL AND MEDIUM-SIZED BUSINESSES, by Gregory E. Elliehausen and John D. Wolken. September 1990. 35 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 Maps of the Federal Reserve System LEGEND Both pages Facing page • Federal Reserve Bank city • Federal Reserve Branch city • Board of Governors of the Federal — Branch boundary Reserve System, Washington, D.C. NOTE The Federal Reserve officially identifies Districts Commonwealth of Puerto Rico and the U.S. Virgin by number and Reserve Bank city (shown on both Islands; the San Francisco Bank serves American pages) and by letter (shown on the facing page). Samoa, Guam, and the Commonwealth of the In the 12th District, the Seattle Branch serves Northern Mariana Islands. The Board of Governors Alaska, and the San Francisco Bank serves Hawaii. revised the branch boundaries of the System most The System serves commonwealths and terri- recently in December 1991. tories as follows: the New York Bank serves the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A79 1-A 2-B 3-C 4-D 5_£ Baltimore Pittsburgh VT i< CT Charlotte / NN •Cincinnati MAB Buffalo \ KY NJ NY CT VRI BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F 7-G 8-H • Nashville Birmingham, M" - Detroit • KY L ouisville 1L • ' Jacksonville WBtKMFmi^' • Memphis NwcTOrleans „ Uttl? ) m J Rock ATLANTA * CHICAGO ST. LOUIS 9-1 MINNEAPOLIS 10-J 12-L WA ALASKA • Seattle • /ID OklahomajCity OR i(Bp(Ill ) o KANSAS CITY CA NV 7 11-K / UT i|jj||fj»1 # • R\ \ Salt Lake City |\ P T v AZ HAWAII Digitized for FRASER DALLAS SAN FRANCISCO 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 William J. McDonough 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 Fred R. 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; East Rutherford, 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. Digitized for FRAS1E. RSe nior Vice President. 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

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

Publications of Interest FEDERAL RESERVE CONSUMER CREDIT PUBLICATIONS The Federal Reserve Board publishes a series of Three booklets on the mortgage process are also pamphlets covering individual credit laws and topics, available: A Consumer's Guide to Mortgage Lock-Ins, as pictured below. The series includes such subjects A Consumer's Guide to Mortgage Refinancings, and as how the Equal Credit Opportunity Act protects A Consumer's Guide to Mortgage Settlement Costs. women against discrimination in their credit dealings, These booklets were prepared in conjunction with the how to use a credit card, and how to resolve a billing Federal Home Loan Bank Board and in consultation error. with other federal agencies and trade and consumer The Board also publishes the Consumer Handbook groups. to Credit Protection Laws, a complete guide to con- Copies of consumer publications are available free sumer credit protections. This forty-four-page booklet of charge from Publications Services, mail stop 138, explains how to shop and obtain credit, how to main- Board of Governors of the Federal Reserve System, tain a good credit rating, and how to dispute unfair Washington, DC 20551. Multiple copies for classcredit transactions. room use are also available free of charge. Business A Consumer's Credit Guide to for Women, Mortgage Minorities, and Lock-Ins Small Businesses r to Credit Protection 1 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis