Federal Reserve Bulletin, 1993-10

VOLUME 79 • NUMBER 10 • OCTOBER 1993 FEDERAL RESERVE BULLETIN BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D.C. PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman • S. David Frost • Griffith L. Garwood • Donald L. Kohn • J. Virgil Mattingly, Jr. • Michael J. Prell • 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 913 U.S. BRANCHES AND AGENCIES OF motive—a need to use trade credit because FOREIGN BANKS: A NEW LOOK credit from other sources is limited— apparently prompt small businesses to use Branches and agencies of foreign banks have trade credit to pay for purchases, and that each been active in U.S. banking markets for the motive accounts for a sizable portion of trade past two decades. At year-end 1992, the total credit demand. assets of branches and agencies of non-U.S. banks located in the United States exceeded $700 billion. Data now available from a new 931 INDUSTRIAL PRODUCTION AND supplemental statistical report, used for the CAPACITY UTILIZATION FOR JULY 1993 first time in March 1993, indicate that Industrial production, which edged down in branches of non-U.S. banks located in offshore May and June, increased 0.4 percent in July. banking centers had assets in excess of Utilization of total industrial capacity rose to $300 billion, including almost $80 billion in 81.5 percent, a level about equal to the averbusiness loans to U.S. borrowers. The new age rate for the first half of the year. data suggest that banks headquartered in countries other than Japan played a larger role in U.S. markets than was previously estimated. 934 STATEMENT TO THE CONGRESS William L. Rutledge, Senior Vice President, 926 TREASURY AND FEDERAL RESERVE Federal Reserve Bank of New York, focuses FOREIGN EXCHANGE OPERATIONS on the supervisory process the Federal The dollar appreciated against most major cur- Reserve Bank of New York has followed in rencies during the May-July period under implementing the Community Reinvestment review, more than reversing its decline earlier Act (CRA), including trends in the ways in in the year. The one major exception was the which banks have been satisfying their CRA dollar's performance relative to the Japanese obligations, before the Subcommittee on Conyen: The dollar extended its earlier decline sumer Credit and Insurance and the Subcomagainst this currency by dropping 5.8 percent mittee on General Oversight, Investigations, and hitting successive new lows in June and and the Resolution of Failed Financial Institu- July. tions of the House Committee on Banking, Finance and Urban Affairs, August 10, 1993. 929 STAFF STUDIES Trade credit is an important source of funds 937 ANNOUNCEMENTS for business customers, yet little is known Proposal to amend Regulation A to implement about the reasons for its use. The authors of section 142 of the Federal Deposit Insurance The Demand for Trade Credit: An Investiga- Corporation Improvement Act of 1991 regardtion of Motives for Trade Credit Use by Small ing limits on Federal Reserve Bank credit; Businesses drew on data from the National proposed amendments to Regulation S regard- Survey of Small Business Finances to test two ing enhanced recordkeeping requirements for theories. Their analysis indicates that both a certain wire transfers by financial institutions. transaction motive—a desire to realize economies in cash management—and a financing Change in Board staff. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

938 MINUTES OF THE FEDERAL OPEN 949 LEGAL DEVELOPMENTS MARKET COMMITTEE MEETING Various bank holding company, bank service At its meeting on July 6-7,1993, the Commit- corporation, and bank merger orders; and tee voted to lower the ranges that it had estab- pending cases. lished in February for growth of M2 and M3 to ranges of 1 to 5 percent and 0 to 4 percent AI FINANCIAL AND BUSINESS STATISTICS respectively, measured from the fourth quarter These tables reflect data available as of of 1992 to the fourth quarter of 1993. The August 26, 1993. Committee also voted to reduce the monitoring range for growth of total domestic nonfi- A3 GUIDE TO TABULAR PRESENTATION nancial debt for the year to 4 to 8 percent. For the intermeeting period ahead, the A4 Domestic Financial Statistics Committee adopted a directive that called for A44 Domestic Nonfinancial Statistics maintaining the existing degree of pressure on A53 International Statistics reserve positions and that retained a bias toward possible firming of reserve conditions A69 GUIDE TO STATISTICAL RELEASES AND during the intermeeting period. Accordingly, SPECIAL TABLES in the context of the Committee's long-run objectives for price stability and sustainable A70 INDEX TO STATISTICAL TABLES economic growth, and giving careful consideration to economic, financial, and monetary A72 BOARD OF GOVERNORS AND STAFF developments, the directive indicated that slightly greater reserve restraint would be A74 FEDERAL OPEN MARKET COMMITTEE acceptable or slightly lesser reserve restraint AND STAFF; ADVISORY COUNCILS might be acceptable during the intermeeting period. The reserve conditions contemplated A76 FEDERAL RESERVE BOARD at this meeting were expected to be consistent PUBLICATIONS with modest growth in M2 and M3 over the third quarter. A78 MAPS OF THE FEDERAL RESERVE SYSTEM A80 FEDERAL RESERVE BANKS, BRANCHES, AND OFFICES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies of Foreign Banks: A New Look Henry S. Terrell, of the Board's Division of Interna- year-end 1990, the assets of U.S. branches and tional Finance, prepared this article. agencies of foreign banks grew rapidly, at an average annual rate of nearly 21 percent, and in no year Branches and agencies of non-U.S. banks have was asset growth less than 8 percent. Between been active in U.S. banking markets for the past year-end 1990 and year-end 1992, in contrast, two decades. Initially, these U.S.-based offices of annual growth averaged only 6.5 percent. The foreign banks served primarily the credit and other slowdown in asset growth occurred against a backbanking needs of U.S. affiliates of their home- drop of a slowing U.S. economy, an economic country customers. They also tended to be active in slowdown in the home countries of some of the the broad domestic U.S. interbank market, using banks, and concerns about meeting the enhanced that market as a source of funds, an outlet for capital standards required of their consolidated investments, and an element in their general liquid- banking entity. Nevertheless, the growth of assets ity management. In recent years, many foreign of foreign bank branches and agencies in the banks have expanded their customer base by United States exceeded the sluggish growth of actively soliciting business from U.S. companies, assets of domestic offices of U.S. banks, which competing in terms of price and quality of service, increased less than 1 percent over the two years. and in some cases by purchasing loans to U.S. The reported slowdown in asset growth at forcustomers that were originated by U.S. banks. For- eign bank branches and agencies between year-end eign bank branches and agencies have shown con- 1990 and year-end 1992 differed widely with siderable diversity in their approaches to U.S. respect to the home countries of these institutions. markets, and their activities cannot be described Over the two-year period, the assets of U.S. offices with simple generalizations. of Japanese banks declined about 8 percent, largely because of problems at their parent banks resulting from increasing levels of problem assets and the U.S. ACTIVITY OF FOREIGN BANKS, 1973-92: impact of the decline in the Japanese stock market TWO DECADES OF GROWTH on the value of their equity holdings. By contrast, the reported assets of U.S. branches and agencies of From year-end 1973, the first year for which the banks of other foreign countries increased nearly Federal Reserve collected data, through year-end 45 percent, and their share of total foreign bank 1992, the reported assets of branches and agencies branch and agency assets increased from 40 perof foreign banks located in the United States grew cent at year-end 1990 to 52 percent at year-end from $25 billion to more than $700 billion. Over 1992. Not all the rapid asset growth at U.S. the same period, assets at domestic offices of U.S. branches and agencies of non-Japanese banks was banks increased about threefold, to more than due to an expansion of their U.S. business, how- $3 trillion. U.S. branches and agencies of foreign ever; some of the growth reflected the transfer of banks currently account for about 18 percent of the business from offshore offices to branches and assets of all banking offices in the United States, up agencies located in the United States. These transfrom 3 percent at year-end 1973. fers, or rebookings, were largely a response to a Asset growth did not proceed at an even rate change in the reserve requirements for banking offices located in the United States: In December over the two decades. Between year-end 1973 and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

914 Federal Reserve Bulletin • October 1993 1990, the requirement for their large time deposits substantially expanded U.S. activities of foreign and Eurocurrency borrowings was reduced to zero.1 banks, Congress passed the Foreign Bank Super- Throughout the two decades of growth, the Fed- vision Enhancement Act (FBSEA). FBSEA eral Reserve collected detailed balance sheet data increased the Federal Reserve's supervisory powfor the branches and agencies of foreign banks ers over foreign banks by (1) requiring Federal located in the United States. Data on deposits and Reserve review before a foreign bank enters or loans at these offices were included in data on U.S. expands in the United States, (2) tightening the monetary and credit aggregates, as U.S. offices of standards for entry and expansion that must be foreign banks offer deposit and credit services to considered by the Federal Reserve (for example, a nonbank U.S. customers that are virtually identical foreign parent bank must be subject to consolidated to those offered by domestic U.S. banks. Where home-country supervision before entry or expanappropriate, these balance sheet data also aided in sion in the United States can be approved), supervision of these offices and were used in stud- (3) requiring Federal Reserve Board approval of ies of structural competitive issues in U.S. banking U.S. representative offices of foreign banks and, markets. Until March 1993, the data collected by (4) requiring that each U.S. office of a foreign the Federal Reserve covered only the assets and bank be examined at least once a year by the liabilities directly on the books of the branches and Federal Reserve.3 agencies of foreign banks located in the United States; transactions on the books of the offshore branches were not covered. BANKING FROM OFFSHORE BANKING CENTERS CHANGING LEGISLATIVE ENVIRONMENT For many years, both U.S.-chartered banks and foreign banks have conducted extensive activities The growth of reported foreign bank activity in at branches in offshore banking centers, principally U.S. markets over the 1970s and 1980s led to the Bahamas and the Cayman Islands. The activienactment of federal legislation governing these ties of offshore branches of U.S. banks, both in the banks' U.S. activities. Before passage of the Interaggregate and with respect to transactions with national Banking Act of 1978 (IBA), the US. U.S.-based residents, have been monitored closely activities of foreign banks were governed only by through regular monthly and quarterly statistical state laws. The IBA, in implementing a federal reports collected by the Federal Reserve from all legislative framework, established a policy of foreign branches of U.S. banks, including branches national treatment for U.S. offices of foreign banks in offshore centers. The data from foreign branches by (1) limiting any new multistate branching activof U.S. banks serve a variety of purposes, including ities to activities more comparable to those of US. improving information on deposits and credit transbanks, (2) placing the foreign bank offices under actions of U.S.-based customers for monetary polthe same reserve requirements that apply to U.S. icy, and in some cases have assisted in the superbanks, (3) limiting foreign bank involvement in vision of U.S. banks. Data on overnight Eurodollar U.S. securities and other US. nonbanking activideposits of U.S. residents are included in the US. ties, and (4) making federal deposit insurance availmonetary aggregate M2, while data on other (term) able to U.S. offices of foreign banks if they chose to Eurodollar deposits held by U.S. residents are engage in retail banking.2 included in the broader US. monetary aggregate In 1991, in response to a request by the Federal M3.4 Reserve for broader supervisory powers over the 1. For detailed information on such transfers, see David C. 3. See Ann E. Misback, "The Foreign Bank Supervision Lund, "Foreign Banking in the United States," in U.S. Department Enhancement Act of 1991," Federal Reserve Bulletin, vol. 79 of Commerce, Foreign Direct Investment in the United States: An (January 1993), pp. 1-14. Update (Department of Commerce, June 1993), pp. 40-50. 4. Data for M3 collected by the Federal Reserve are augmented 2. See Sydney J. Key and James M. Brandy, "Implementation by data on liabilities to nonbank U.S. residents at offices of nonof the International Banking Act," Federal Reserve Bulletin, U.S. banks in the United Kingdom and Canada through statistical vol. 65 (October 1979), pp. 785-96. cooperation with the Bank of England and the Bank of Canada. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies of Foreign Banks: A New Look 915 Offshore Branches of U.S. Banks US. banks, nonbank U.S. residents' deposits at offshore branches of U.S. banks are quite small. Over the past decade, the year-end assets of branches of U.S. banks in the Bahamas and the Cayman Islands, the two offshore centers where Offshore Branches of Foreign Banks US. banks conduct the preponderance of their foreign branch transactions with U.S. residents, aver- For a number of years, foreign banks have also aged about $150 billion (table l).5 Since the late offered banking services to nonbank US. residents 1980s, about two-thirds of the assets and liabilities from offices outside the United States, including of these branches arose from transactions with US. offices licensed in offshore banking centers. In residents, mainly the branches' parent banks. Over many instances, these banking services, though the same period, these branches' claims on non- booked offshore, are marketed to U.S. customers bank U.S. residents averaged only about $20 bil- from offices of the foreign banks located in the lion, a figure that has grown little in the past five United States. Some of the same general incentives years and is quite small relative to total loans to that induced U.S. residents to place deposits at nondepository institutions by the domestic offices offshore branches of U.S. banks existed for making of U.S. banks of about $1.2 trillion. deposits at offshore offices of non-U.S. banks. The year-end liabilities of branches of U.S. banks Before the Eurocurrency reserve requirements were in the Bahamas and the Cayman Islands to non- reduced to zero in December 1990, non-U.S. banks bank US. residents averaged about $40 billion over had an additional advantage in booking loans to the past decade; dollar-denominated deposits pay- U.S. borrowers at offshore branches: Such loans able in overnight funds accounted for about half were not subject to the Federal Reserve's Eurocurthat amount. Offshore branches are an attractive rency reserve requirements, whereas loans to U.S. booking location for deposits for both U.S. banks borrowers booked at foreign branches of US. banks and their U.S. customers because in some instances were potentially subject to the 3 percent Eurothese deposits are not subject to reserve require- currency reserve requirement.6 State-licensed ments and deposit insurance premia; avoidance of branches and agencies of foreign banks have addithe costs of required reserves and deposit insurance allows the branches to offer higher interest rates on 6. Loans to U.S. borrowers by foreign branches of U.S. banks deposits. Relative to deposits at domestic offices of were subject to the reserve requirement if the U.S. bank was a net borrower from its foreign branches. If the domestic office of the U.S. bank was a net lender to its foreign branches, the Eurocurrency 5. U.S. banks operate branches in other international banking reserves applied only to the excess of foreign branch loans to U.S. centers, such as Hong Kong, Singapore, and London. borrowers over net domestic office funding of branches. 1. Assets and liabilities of branches of U.S. banks in the Bahamas and the Cayman Islands, 1983-93 Billions of dollars n.a. Not available. SOURCE. Federal Reserve Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

916 Federal Reserve Bulletin • October 1993 tional incentives for booking transactions offshore, report of assets and liabilities (Call Report) for as some states impose capital equivalence and asset branches and agencies (form FFIEC 002s). The maintenance requirements, and all foreign banks new data are expected to serve some of the same have an incentive for booking transactions offshore purposes served by data collected from offshore when states and localities tax their U.S. activities. branches of U.S. banks. The primary reason for Before 1993, scattered data on the transactions collecting the data is to improve estimates of of non-U.S. banks with U.S. residents from offshore deposits and credits of U.S. residents. The informaoffices were available, but data were not collected tion will be available to supervisory personnel. It regularly. In early 1983, the Federal Reserve con- will also contribute to a more accurate estimate of ducted a one-time survey of loans to and deposits the size and nationality structure of foreign bank from nonbank U.S. residents on the books of off- participation in U.S. markets. shore branches of non-U.S. banks at the end of The new quarterly supplements covering the 1982. Conducted through contacts with the U.S. activities of these branches are filed by U.S. branch or agency offices of the foreign bank, the branches and agencies of foreign banks. To the survey indicated that at the end of 1982, the off- extent that the loans and deposits at these offshore shore branches of these offices had $18 billion in branches are transactions with U.S. customers, they commercial and industrial loans to U.S. borrowers are virtually indistinguishable from similar loans on their books, compared with about $57 billion on and deposits on the books of the banks' U.S. the books of the branches and agencies located in branches and agencies, except for a booking conthe United States. The survey also indicated that vention. Therefore, the new data will give a much dollar-denominated deposits of nonbank U.S. resi- more accurate picture of the extent of foreign bank dents at offshore branches of these non-U.S. banks business with U.S. customers and improve the dataamounted to $31.2 billion, about one-third of their base on the banking transactions of U.S. residents. U.S. branch and agency deposit liabilities. Data Because some non-U.S. banks that operate offcollected annually since 1989 by the Banking shore branches do not have branches and agencies Supervision Department of the Cayman Islands in the United States, and because some non-U.S. Government also indicate that foreign banks in that banks operating both in the United States and in offshore center conduct a large volume of transac- offshore centers do not manage or control their tions with U.S. residents. offshore branches from their U.S. offices, the sample of reporting banks, though large, does not cover all banking transactions with U.S. residents under- NEW REPORTING REQUIREMENT taken by all non-U.S. banks in these offshore cen- FOR FOREIGN BANKS ters. However, this gap in coverage may not be significant. The lack of a related U.S. agency or The volume of transactions at offshore branches of branch, or the lack of management or control of the foreign banks is large, a large proportion of the offshore branch from outside the United States, can transactions are with U.S. residents, and decision- be assumed to limit the extent to which these making about such matters as credit extension, nonreporting offshore branches of non-U.S. banks interest rate pricing, accounting, and other are conducting day-to-day transactions with U.S.customer-related activities often is located at the based customers. banks' U.S. branches or agencies. Therefore, the Federal Reserve, on behalf of the Federal Financial Institutions Examination Council (FF1EC), recently DATA FROM THE implemented new requirements for reporting on the FIRST QUARTERLY REPORTS offshore activities of non-U.S. banks that have related U.S. offices. As of March 31, 1993, data on The first quarterly supplemental reports of offshore assets and liabilities of offshore branches of non- activities were received from 132 foreign banking U.S. banks that are managed or controlled by a U.S. organizations, including 73 of the world's 100 largbranch or agency of the same parent bank must be est non-U.S. banks. Reported assets and liabilities reported on a supplement to the regular quarterly of these offshore branches at the end of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies of Foreign Banks: A New Look 917 March 1993 amounted to $329 billion—more than was reported by branches of non-U.S. banks twice the assets reported by offshore branches of licensed in the Cayman Islands. Most of the U.S. banks (table 2). Nine-tenths of this amount remainder was reported by branches licensed in the 2. Assets and liabilities of offshore branches of non-U.S. banks, by location, March 31, 19931 Billions of dollars Location of offshore branch Account All Cayman All other locations Islands Bahamas locations2 ASSETS Claims on U.S.-domiciled offices of related depository institutions denominated in U.S. dollars 86.3 82.3 4.0 * Claims on all other U.S. addresses denominated in U.S. dollars 137.7 125.9 10.4 1.4 Balances due from nonrelated depository institutions 7.1 6.2 .8 .1 Remaining maturities of one day or under continuing contract ("overnight") 1.0 .1 .1 All other maturities ("term") 6.1 5.4 .7 * Securities 16.5 15.4 1.1 * U.S. Treasury and federal agencies 4.9 4.7 .2 * Other securities , 11.6 10.7 .9 * Loans 110.2 101.1 8.0 1.3 Real estate 13.0 12.2 .8 * To nonrelated depository institutions 3.8 2.6 1.2 * Commercial and industrial 78.7 72.1 5.6 1.0 Other 15.0 14.3 .5 .2 Other claims 3.7 3.2 .5 * Claims on all U.S. addressees denominated in currencies other than U.S. dollars 10.3 9.7 .5 .1 Claims on home-country addressees denominated in any currency 41.3 35.5 5.7 .1 Related depository institutions 23.3 21.2 2.0 .1 Nonrelated depository institutions 4.6 4.0 .6 • Home-country government and official institutions 7.4 5.3 2.1 * Others 6.0 5.0 1.0 * Claims on all other non-U.S. addressees denominated in any currency .. 47.7 37.4 10.2 .1 All other assets 5.9 5.7 .2 * Total assets 329.0 296.5 31.1 1.4 LIABILITIES Liabilities to U.S.-domiciled offices of related depository institutions denominated in U.S. dollars 68.2 62.9 5.0 .3 Liabilities to all other U.S. addressees denominated in U.S. dollars 119.4 111.5 7.6 .3 To nonrelated depository institutions in the U.S 28.4 26.7 1.6 .1 Remaining maturities of one day or under continuing contract ("overnight") 8.9 8.7 .2 * All other maturities ("term") 19.5 18.0 1.4 .1 To all other U.S. addressees 91.0 84.8 6.0 .2 Remaining maturities of one day or under continuing contract ("overnight") 27.9 24.8 2.9 .2 All other maturities ("term") 63.1 60.0 3.1 * Liabilities to all U.S. addressees denominated in currencies other than U.S. dollars 13.6 13.2 .5 * Liabilities to home-country addressees denominated in any currency ... 47.2 39.2 7.7 .3 Related depository institutions 35.2 28.4 6.5 .3 Nonrelated depository institutions 3.0 2.5 .5 • Home-country government and official institutions 3.0 2.4 .6 * Others 6.0 5.9 .1 * Liabilities to all other non-U.S. addressees denominated in any currency 73.2 62.7 9.8 .7 All other liabilities 7.4 7.0 .4 • Total liabilities 329.0 296.5 31.1 1.4 1. Excludes assets and liabilities of subsidiaiy commercial banks operated 2. Panama, Netherlands Antilles, and Turks and Caicos Islands. by non-U.S. banks in offshore banking centers. In this and subsequent tables, * Less than $50 million. components may not sum to totals because of rounding. SOURCE. Federal Financial Institutions Examination Council. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

918 Federal Reserve Bulletin • October 1993 Bahamas; very small amounts of activity were claims likely also represented intrabank transfers of reported by branches in the other offshore funds.8 centers—Panama, the Netherlands Antilles, and Nearly two-thirds of the liabilities of offshore Turks and Caicos Islands. branches of non-U.S. banks on March 31, 1993, Approximately two-thirds of the total reported were dollar-denominated liabilities either to their assets of these offshore branches were dollar- related U.S. branch or agency or to nonrelated denominated claims on U.S. residents. The largest parties in the United States. More than $90 billion, categories of assets were (1) dollar-denominated or about three-fourths of their dollar-denominated claims of $86 billion on the branches' related US. liabilities to nonrelated parties in the United States, branches and agencies, mainly intrabank funding were overnight or term liabilities to nonbank U.S. of lending by related U.S. branches and agencies of residents, more than twice as much as reported by Japanese banks, and (2) dollar-denominated com- offshore branches of U.S. banks. This pattern for mercial and industrial loans to US. companies of liabilities is consistent with the pattern for assets nearly $80 billion, about four times as much as was and suggests that the offshore branches of foreign reported at the end of 1982 in the Federal Reserve banks were not heavily involved in interbank survey cited earlier. Lending to U.S. businesses by markets. offshore branches of non-U.S. banks was also about The offshore branches of non-U.S. banks also four times as large as the lending to all nonbank obtained funds from non-U.S. sources. In the aggre- U.S. residents by offshore branches of U.S. banks. gate, they obtained about $47 billion from home- Assets of other types held by these offshore country residents, largely their parent offices; relabranches of non-U.S. banks generally were fairly tively little came from nonbank residents in their small. Interbank claims on nonrelated depository home countries. In addition, they had liabilities of institutions in the United States, both loans to and about $73 billion to third-country parties, an balances due from nonrelated depository institu- unknown but presumably large proportion of which tions, amounted to only about $12 billion, or 4 per- was owed to their related branches operating in cent of total assets, a relatively small component other financial centers, such as related branches in for multinational banks that tend to be active in London or other international funding centers. interbank markets. These offshore branches of non- U.S. banks held $16.5 billion in securities issued by U.S. residents (including U.S. Treasury and federal OFFSHORE FOREIGN BANKING agencies), $13 billion in real estate loans to U.S. IN PERSPECTIVE residents, and about $10 billion in non-dollar denominated claims on U.S. residents, the latter Comparisons of data on assets and liabilities from reflecting primarily transactions with their related the new supplemental report with similar data for U.S. offices. branches and agencies of foreign banks located in Offshore branches of non-U.S. banks also the United States, and with data for U.S. banks, put engaged in transactions with non-U.S. residents. the activities of the offshore branches of non-U.S. About $40 billion, or one-eighth of their assets, banks into perspective (table 3). Unlike U.S. banks, were claims on residents of their home countries.7 which book the preponderance of their transactions More than half these home-country claims were with U.S. residents at their domestic offices, nonclaims on the banks' parent offices. In addition, U.S. banks book a large proportion of their transacthese branches reported approximately $48 billion tions with U.S. residents at their offshore offices. in claims on third-country residents (that is, resi- Adding the new data on offshore activities to dents of neither the United States nor their home existing data on branches and agencies increases by country) for which no customer detail was pro- nearly 50 percent the estimate of total U.S. assets of vided; a large proportion of these third-country 8. For example, an offshore branch of a Canadian bank in the 7. For example, a reporting branch of a Canadian bank dealing Cayman Islands may be using that branch to fund its London with customers resident in Canada. branch. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies of Foreign Banks: A New Look 919 foreign banks, to more than $1 trillion. The esti- lute amounts. Foreign bank assets and liabilities are mate of their total loans increases $110 billion, or even higher relative to the large (mainly moneyone-third, and the estimate of their commercial and center) banks who are the foreign banks' principal industrial loans to U.S. businesses increases nearly competitors. $80 billion, or more than one-half, to more than The new data have also helped refine estimates $220 billion. On the liabilities side, inclusion of of foreign banks' "share" of lending in U.S. mardata for offshore branches nearly doubles the esti- kets. Foreign banks' share of lending can be meamate of the deposits of nondepository U.S residents sured in several ways, depending on assumptions (individuals, partnerships, and corporations) at non- about the location of the banking office extending U.S. banks; the additional amount includes nearly the loan, the residence of the borrower (U.S. or $28 billion in overnight deposits and more than foreign), and the currency in which the loan is $63 billion in term deposits. denominated. Beyond issues of definition are more Comparable data for U.S.-chartered commercial general issues of what a lending share in a geobanks are also given in table 3. The first column for graphically defined market means in a world of U.S. banks gives data for large U.S. banks that have integrated global banking and capital markets, foreign offices and thus would appear to be the where businesses can either borrow from banks or principal competitors of the large multinational issue securities in a variety of centers, and can foreign banks operating in the United States. The alternatively use home-country companies or forsecond column for U.S. banks gives data for all eign subsidiaries as the nominal borrowing vehicle. U.S.-chartered banks. Both sets of data for U.S. Measures of market share in national banking marbanks cover their transactions with U.S. residents kets are heavily influenced by preferences of borfrom all domestic and foreign offices. The new data rowers and lenders as to where transactions are show that the branches and agencies of foreign booked, as well as by choices between obtaining banks operating in the United States, in combina- bank loans or issuing securities. Therefore, such tion with their branches in offshore banking cen- measures by themselves are not meaningful indicaters, had about 30 percent as much in total assets as tors of the competitive presence of foreign banks. all U.S. banks. With commercial and industrial The traditional approach to estimating market loans to U.S. borrowers of more than $220 billion, share from data made available by the Federal these offices of foreign banks have extended about Reserve has been to measure foreign banks' share one-half as much in business loans to U.S. residents of business loans to all domestic and foreign boras all U.S.-chartered banks. The new data on de- rowers, by all foreign-controlled banking offices in posit liabilities of reporting offshore branches also the United States, in all currencies. This traditional increase estimates of foreign bank participation in measure (which includes lending by domestically U.S. markets both in percentage terms and in abso- chartered U.S. commercial bank subsidiaries of 3. Selected assets and liabilities of banking offices, March 31, 1993 Billions of dollars Non-U.S. banks1 com U m .S e .- r c c h i a a r l te b r a e n d k s2 At U.S. branches At offshore Total Large banks3 All banks branches and agencies Total assets 683.1 329.0 1,012.1 1,919.7 3,487.3 All loans 291.3 110.4 401.7 1,116.5 2,008.5 Commercial and industrial4 143.7 78.7 222.4 297.4 455.2 Real estate 49.4 13.0 62.4 391.2 860.2 Liabilities to nondepository U.S. residents — 94.3 91.0 185.3 991.4 2,209.4 Overnight 4.5 27.9 32.4 335.5 679.5 Term 89.8 63.1 152.9 655.9 1,529.9 1. Includes U.S. branches and agencies of foreign banks and reporting 3. U.S.-chartered commercial banks with foreign offices. branches of foreign banks in offshore banking centers; excludes banking 4. To U.S. borrowers; for offshore branches, includes only loans denomisubsidiaries of foreign banks in the United States and in offshore centers. nated in U.S. dollars. 2. Includes transactions at domestic offices and all foreign offices. SOURCE. Federal Financial Institutions Examination Council. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

920 Federal Reserve Bulletin • October 1993 foreign banks not included in the foreign bank data reduce the estimated share of foreign bank lending in table 3) indicates that on March 31, 1993, offices to U.S. businesses of Japanese banks from more of foreign banks located in the United States to- than one-half to a proportion closer to one-third. gether had about 35 percent of such loans booked About two-thirds of the decline in the share of by all banking offices located in the United States. Japanese banks was accounted for by an increase in Adjusting the numerator of that share to include the shares of French, German, and British banks. business loans (denominated in U.S. dollars) to On the liabilities side, adding the new data for U.S. borrowers by offshore branches of non-U.S. offshore branches changes the nationality share in banks, and adjusting the denominator to include deposits relatively little, with declines in Canadian both that lending and business lending to U.S. and French banks' shares partially offset by borrowers by foreign offices of U.S. banks, results increases in British and Japanese banks' shares. in an estimated foreign bank lending share of about 42 percent. Japanese Banks: More Involved in Deposit Business and a Smaller Share of Lending NATIONALITY STRUCTURE: A CHANGING PICTURE Throughout most of the 1980s, the US. activities of foreign banks were heavily influenced by the activ- The new data on banking activities of offshore ities of U.S. branches and agencies of Japanese offices of non-U.S. banks modify estimates of the banks. Between year-end 1980 and year-end 1990, distribution of foreign bank participation in U.S. Japanese bank branches and agencies in the United markets by nationality of the parent bank. The States accounted for more than 80 percent of the following discussion focuses primarily on loans to reported growth in commercial and industrial lend- U.S. businesses and deposits from nonbank U.S. ing to U.S. businesses by all foreign bank branches residents, two lines of banking activity for which and agencies in the United States, and their share of direct customer contact, and therefore a U.S. pres- total foreign bank activity in the United States ence, is important. soared. The share of Japanese bank branch and Table 4 summarizes the effects of the new data agency lending to U.S. businesses in total foreign on the nationality distribution of foreign bank activ- bank branch and agency lending of all types ity in U.S. markets. On the asset side, the new data increased from slightly less than one-third in 1980 4. Nationality share of foreign bank activity in the United States and from offshore banking centers, March 31, 1993 Percent Lending to U.S. businesses Deposits from nonbank U.S. residents CCoouunnttrryy ooff ppaarreenntt bbaannkk By U.S. branches At U.S. branches By U.S. branches At U.S. branches and agencies and agencies and agencies and agencies and offshore branches and offshore branches Japan 54.1 36.3 31.6 33.5 France 7.7 11.6 18.9 14.6 Germany 2.1 6.9 15.4 15.3 Canada 9.4 10.5 8.4 5.0 Switzerland 7.4 8.5 6.5 6.1 United Kingdom 1.2 5.7 3.0 5.2 Subtotal 81.9 79.5 83.7 79.6 Australia .6 2.2 1.5 2.5 Austria .1 1.1 1.3 1.3 Belgium * 1.2 .7 1.6 Italy 3.8 3.8 2.7 3.9 Netherlands 6.1 4.2 5.4 4.8 Subtotal 12.5 11.6 14.1 All others 7.5 8.0 4.8 6.3 ^m Total 100.0 100.0 100.0 100.0 * Less than 0.05 percent. SOURCE. Federal Financial Institutions Examination Council. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies of Foreign Banks: A New Look 921 to well over two-thirds in 1990, before declining to through the middle of 1983. Starting in the second slightly more than one-half in early 1993 (chart 1). half of 1983 and continuing until 1989, business In contrast, other types of assets of Japanese bank lending by U.S. offices of Japanese banks expanded branches and agencies, particularly interbank much more rapidly than did Japanese external claims, increased much less as a share of total trade, and by June 1989 the ratio of U.S. office foreign bank activity in the United States, and by loans to trade was approximately five times as March 1993 that share was little different from its large as in June 1980, suggesting clearly that dur- 1980 level. ing the later period factors other than external trade Chart 2 scales the growth of business lending by were the principal determinants of lending at U.S. U.S. offices of Japanese banks (end-of-quarter data offices of Japanese banks. in U.S. dollars) to the growth of Japanese foreign Chart 2 also plots the quarterly average Nikkei trade, defined as the sum of total Japanese imports stock index. The rapid runup of the index between and exports (quarterly data in U.S. dollars). This 1984 and 1989 paralleled the expansion of Japanese scaling was motivated by previous research that bank lending in the United States. This statistical observed a statistical correlation between lending association is not surprising, as the increase in the at U.S. offices of Japanese banks and Japan's total market valuation of the stocks in the Nikkei index international trade.9 That correlation is due to the improved the capital position of Japanese banks nature of this lending: Lending by U.S. offices of because they were able to count unrealized gains Japanese banks often financed the foreign trade (up to 45 percent) on their equity holdings as tier 2 (typically invoiced in dollars) of large Japanese capital. This period of rapid increase in Japanese companies. Had Japanese international trade and bank lending in U.S. markets was characterized by Japanese branch and agency lending to U.S. busi- large purchases of loans originated by other banks, nesses grown at the same rate over time, the curve primarily U.S. banks. in chart 2 for commercial and industrial loans The sharp decline in the Nikkei index beginning would be a flat line at 100. in early 1990 affected the ability of Japanese banks Between mid-1980 and 1983, Japanese external to compete in U.S. markets because it reduced the trade and lending by U.S. offices of Japanese banks capital positions of their parent banks and raised retained a roughly proportional relationship, with their costs of acquiring additional capital through the ratio of lending to trade rising only slightly offerings of their own stock. With a time lag, these U.S. offices of Japanese banks began to reduce their lending to U.S. companies; the lag reflects the time 9. See Henry S. Terrell, Robert S. Dohner, and Barbara R. it took to reduce the absolute amount of loans Lowrey, "The United States and United Kingdom Activities of without incurring a major loss. Japanese Banks: 1980-1988," North American Review of Economics and Finance, vol. 1 (1990), pp. 53-73. 2. Commercial and industrial lending by U.S. branches and agencies of Japanese banks relative to Japanese foreign 1. Japanese bank share of activity of U.S. branches and trade, and Nikkei index, 1980:Q3-1992:Q41 agencies of foreign banks, 1980:Q2-1993:Q1' Scale, 1980:Q3 = 100 I Share of total assets less commercial and industrial loans to U.S. borrowers 1. Lending excludes lending by offshore branches. Foreign trade is total 1. Excludes lending by offshore branches. imports plus exports. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

922 Federal Reserve Bulletin • October 1993 5. U.S. activity of U.S. branches and agencies of banks of selected foreign countries, 1985-931 Billions of dollars Assets Liabilities DDaattee Commercial and Claims Deposits from To unrelated Total industrial on unrelated nonbank U.S. banks in assets loans to U.S. banks in U.S. residents U.S. residents Japanese banks December 31, 1985 151.2 20.1 41.0 8.3 51.6 1986 208.3 30.2 60.5 15.2 69.4 1987 252.3 45.6 63.4 17.3 85.2 1988 307.8 60.9 71.3 22.6 89.4 1989 361.1 78.4 88.7 29.7 111.6 1990 373.0 90.1 81.7 24.3 110.5 1991 364.3 84.3 75.8 33.5 100.5 1992 344.3 81.7 76.8 28.6 97.9 March 31, 1993 traditional 315.4 77.7 67.9 29.8 87.3 1993 augmented 365.8 80.7 68.0 62.0 97.3 French banks December 31, 1985 17.4 3.2 4.8 2.4 3.6 1986 18.7 tiillilBi 3.6 4.8 2.2 4.0 1987 21.1 3.7 4.2 1.8 4.1 1988 25.0 4.0 4.3 2.3 4.9 1989 25.4 •iliilliUlll 3.8 4.2 3.0 4.0 1990 31.9 4.0 6.8 3.3 3.8 1991 53.8 IffSl 7.6 8.6 12.7 5.3 1992 73.4 10.8 8.1 17.7 6.7 •iiisiiiftJl March 31, 1993 traditional 77.2 11.1 8.4 17.8 6.8 1993 augmented 119.3 25.8 8.9 27.0 10.1 German banks December 31, 1985 8.8 1.3 2.3 1.5 .9 1986 11.1 isii • s • t f il| i |l l § p 1.9 3.2 2.2 1.2 1987 13.5 1.6 4.7 2.5 .7 1988 13.0 2.1 3.5 2.1 .8 1989 15.6 2.4 4.9 2.5 1.2 1990 15.7 mmmtxBmtw2.m3 3.8 2.5 1.3 1991 23.3 PiiHpMIISi 1.9 4.4 9.5 1.2 1992 30.8 2.4 4.5 12.5 1.2 ilSlilllilte^^®^ March 31, 1993 traditional 32.0 3.0 4.6 14.5 1.7 1993 augmented 76.6 15.4 6.5 28.3 2.0 Table 5 shows how the new supplemental infor- (less than 10 percent) with deposits from nonbank mation collected from offshore branches of Japa- U.S. residents. nese banks changes the picture of the types of Augmenting the traditional data with the new business activities conducted in the United States data from branches in offshore banking centers by Japanese banks. U.S. offices of Japanese banks suggests several significant differences. The new have historically had very large domestic interbank data increase the estimate of assets of U.S.-run transactions in both assets and liabilities, and from offices of Japanese banks at the end of March 1993 1985 through 1992 they raised large amounts of only $50 billion, or about 16 percent, with a neglifunds, net, in U.S. interbank markets.10 They tended gible increase of $3 billion, or 4 percent, in estito fund a relatively small portion of their assets mated lending to U.S. businesses. On the funding side, however, the data covering offshore branches indicate more than twice as much in total deposits 10. Interbank assets consist of cash and amounts due from banks, federal funds sold, and deposits placed at depository institu- from nonbank U.S. residents. The new data indicate tions. Interbank liabilities include federal funds borrowed, deposits that Japanese banks also borrowed an additional owed to depository institutions, and borrowings from depository $10 billion, net, in U.S. interbank markets than was institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies of Foreign Banks: A New Look 923 5.—Continued Billions of dollars Assets Liabilities ' m Commercial and Claims Deposits from To unrelated industrial Total loans to U.S. on unrelated nonbank U.S. banks in assets residents banks in U.S. ^ZR r l e W sid H ent U s lHi U.S. Canadian banks December 31, 1985 29.5 9.0 SSaaaaffcciiffcc ,, PP 2.5 4.5 8.4 1986 31.0 9.8 ii ,, VV-- 2.7 5.0 7.1 1987 32.7 8.8 •lililillll 2.8 5.6 5.6 1988 27.9 8.2 mgmmmm 2.3 5.5 3.7 1989 26.7 6.6 1.8 3.2 3.1 1990 27.8 5.5 iiiissiiii 2.5 2.9 2.6 1991 43.0 13.4 1.6 7.1 4.7 1992 44.3 14.4 2.9 9.2 3.6 March 31, 1993 traditional . 44.6 13.5 2.6 7.9 2.8 1993 augmented 70.0 23.4 2.8 9.2 6.2 Swiss banks December 31, 1985 18.3 2.5 4.5 2.4 1986 24.2 3.9 7.0 3.6 1987 28.0 6.3 6.3 2.2 1988 23.9 4.9 6.1 1.7 1989 18.2 2.9 4.5 1.6 1990 25.6 2.6 4.9 2.5 1991 38.7 9.1 111 6.8 6.0 1992 44.0 10.2 6.0 7.0 March 31, 1993 traditional 10.7 6.2 1993 augmented 18.8 6.2 British banks December 31, 1985 .... 15.1 3.7 LIIFSSEFLL 2.4 2.6 1.4 1986 16.4 4.4 2.4 1.8 i 2.7 1987 16.1 4.4 3.4 2.6 1.6 1988 15.7 4.7 3 2.4 1.7 1.6 1989 14.5 3.4 2.8 1.0 1.2 1990 2.5 3.5 .8 1.1 1991 257 2.5 1YR1T^1F1J FF 2.9 2.3 2.6 1992 23I2 1.5 2.5 2.4 2.3 March 31, 1993 traditional . 21.9 1.7 3.4 2.8 1.8 1993 augmented 41.6 12.6 IWM 3.6 9.7 2.7 1. Data for 1985-92 and data labeled traditional are for branches and SOURCE. Federal Financial Institutions Examination Council. agencies located in the United States; data labeled 1993 augmented are for offshore branches as well as U.S. branches and agencies. estimated from data covering only branches and residents and were small net borrowers, rather than agencies located in the United States. small net placers, in US. interbank markets. French Banks: German Banks: More Loans and More Deposits More Loans and More Deposits The new data increase the estimate of assets of U.S. The new data more than double the estimated U.S.offices of French banks as of March 31,1993, more based assets of German banks as of March 31, than 50 percent and more than double the estimate 1993, and increase the estimate of their U.S. busiof business loans by French banks to U.S. borrow- ness lending fivefold, from $3 billion to more than ers. With U.S. assets of nearly $120 billion, French- $15 billion. On the liabilities side, German banks banks ranked second among non-U.S. banks in US. had about twice as much in deposits from nonbank markets. The new data indicate that French banks U.S. residents than was previously estimated. The had more than $25 billion in deposits from U.S. new data do not change the estimate that German Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

924 Federal Reserve Bulletin • October 1993 banks are small net placers of funds in domestic net placers of funds in domestic U.S. interbank U.S. interbank markets, a position they have main- markets. tained consistently over time. British Banks: Canadian Banks: More Loans More Loans and More Deposits The new data increase the estimate of assets of The traditional data for branches and agencies U.S.-based offices of Canadian banks by three- alone indicate a very small role for U.S. branches fourths. Estimated business loans to U.S. residents and agencies of British banks in both lending to by Canadian banks increased by the same propor- U.S. businesses and deposit-taking from nonbank tion despite the fact that in 1991 one large Cana- U.S. residents. The new data covering offshore dian bank shifted a large amount of commercial branches of British banks belie these conclusions. and industrial loans from its offshore branch to a Adding these data more than doubles the estimate U.S. office. The new data suggest that Canadian of total assets of U.S.-based British banks, increases banks were slightly larger net borrowers in U.S. more than sevenfold estimated lending to U.S. busiinterbank markets than was previously estimated. nesses, and more than triples estimated deposits They do not appear to have a significant amount of from nonbank U.S. residents. The new data confirm deposits from nonbank U.S. residents at their off- the general impression that British banks are small shore offices. The reason that these offshore net placers of funds in domestic U.S. interbank branches had relatively little in U.S.-resident depos- markets. its is that Canadian banks have a locational advantage over European and Japanese banks in booking such deposits at their head offices because of the SUMMARY AND CONCLUSION similarity of time zones and ease of direct communication with the United States.11 Collecting data on the assets and liabilities of offshore branches of non-U.S. banks will enhance the Federal Reserve's ability to monitor, on a quarterly Swiss Banks: basis, a major source of banking transactions with More Loans and More Deposits U.S. residents. The new information will improve the interpretation of domestic credit and deposit Until fairly recently, U.S. offices of Swiss banks aggregates and will also aid in evaluating the lent relatively little to U.S. companies. In 1991, the response of foreign banking institutions to various reported amount of loans to U.S. companies by policy measures, such as changes in reserve Swiss banks increased greatly, as loans from off- requirements. Besides improving aggregate bankshore branches of Swiss banks were rebooked to ing statistics, the new data will enhance the quality their U.S. offices. The new data indicate that even of information on the size, composition, and naafter that rebooking, Swiss banks still had about tionality structure of foreign bank activity in U.S. three-fourths as much in U.S. business loans at markets. The first quarterly supplementary reports, their offshore offices as they had on the books of which provide data as of March 31, 1993, indicate their U.S. branches and agencies. The new data that foreign banks are more active in U.S. markets nearly double the estimate of deposits from U.S. than was previously estimated, and that shares of residents at U.S.-based offices of Swiss banks. Add- foreign bank activity by nationality are different ing in data from the new supplemental report con- from the shares revealed by data covering only firm a tendency of Swiss banks, on balance, to be branches and agencies located in the United States. 11. As of March 31, 1993, Canadian banks located in Canada had on their books about $11 billion in U.S. dollar-denominated deposits from nonbank U.S. residents. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies of Foreign Banks: A New Look 925 REFERENCES McCauley, Robert N., and Rama Seth. "Foreign Bank Credit to U.S. Corporations: The Implica- Key, Sydney J., and James M. Brundy. "Implemen- tions of Offshore Loans," Federal Reserve Bank tation of the International Banking Act," Fed- of New York, Quarterly Review, vol. 17 (Spring eral Reserve Bulletin, vol. 65 (October 1979), 1992), pp. 52-65. pp. 785-96. Terrell, Henry S., Robert S. Dohner, and Barbara R. Lund, David C. "Foreign Banking in the United Lowrey. "The United States and United King- States," in U.S. Department of Commerce, For- dom Activities of Japanese Banks: 1980-1988," eign Direct Investment in the United States: An North American Review of Economics and Update. Washington, D.C.: Department of Com- Finance, vol. 1 (1990), pp. 53-73. • merce, June 1993, pp. 40-50. Misback, Ann E. "The Foreign Bank Supervision Enhancement Act of 1991," Federal Reserve Bulletin, vol. 79 (January 1993), pp. 1-14. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

926 Treasury and Federal Reserve Foreign Exchange Operations This quarterly report describes Treasury and Sys- authorities as appropriate and were not favoring a tem foreign exchange operations for the period weak dollar as a matter of policy. from May through July 1993. It was presented by Margaret L. Greene, Senior Vice President and Deputy Manager for Foreign Operations of the RESUMPTION OF THE DOLLAR'S Federal Reserve Bank of New York. Frank Keane DEPRECIATION AGAINST THE YEN was primarily responsible for preparation of the report.1 During the first few weeks of the period, the dollar was relatively stable against the yen, trading cau- The dollar appreciated against most major curren- tiously around ¥111, after having declined about cies during the May-July period, more than revers- 11 percent against the yen earlier in the year. Maring its decline earlier in the year. It rose 9.9 percent ket participants had taken note of Japan's widening against the German mark, for example, and 6.6 per- trade surplus and tried to assess the extent to which cent on a trade-weighted average basis.2 The one the exchange rate might be expected to adjust to major exception was the dollar's performance rela- help redress this growing imbalance. In April, just tive to the Japanese yen: The dollar extended its before the period under review, the U.S. monetary earlier decline against this currency by dropping authorities had intervened in the exchange market. 5.8 percent and hitting successive new lows in June They had also issued a public statement that underand July. scored the Administration's belief that exchange These exchange rate movements occurred in a rates should reflect economic fundamentals and context of cumulating evidence that several major that attempts to artificially influence or manipulate industrialized countries were experiencing less growth than had been expected at the start of the year. At the same time, central banks in many of 1. Federal Reserve reciprocal currency arrangements Millions of dollars these countries, including the Federal Reserve, demonstrated by their actions and policy state- Amount of Institution facility. ments that they remained cautious about the extent July 31, 1993 to which they would provide more monetary Austrian National Bank .......................... 250 accommodation, and long-term interest rates con- National Bank of Belgium........................ 1,000 Bank of Canada ................................. 2,000 tinued to decline in the United States and in most National Bank of Denmark ...................... 250 Group of Ten (G-10) countries. Bank of England ..,,.,,.,.,....,.....,..,..,.... 3,000 Bank of France ................................. 2,000 The US. authorities intervened on three occa- Deutsche Bundesbank ....,..,..,...,..,,,,,,.,,, 6,000 Bank of Italy ..,.....,,,..,......,.....,,..,,,... 3,000 sions during the period, purchasing a total of Bank of Japan ,................................, 5,000 $1,067.5 million against the yen to show that they Bank of Mexico ................................. 700 were willing to cooperate with other monetary Netherlands Bank 500 Bank of Norway 250 Bank of Sweden 300 Swiss National Bank ............................ 4,000 xH SK 1. The charts for the report are available from Publications Bank for International Settlements Si Services, Board of Governors of the Federal Reserve System, mail Dollars against Swiss francs 600 yii stop 158, Washington, DC 20551. Dollars against other authorized European 2. The dollar's movements on a trade-weighted basis are mea- currencies ....>............................. 1,250 sured using an index developed by the staff of the Board of Ibtal 1100,,110000 Governors of the Federal Reserve System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

927 exchange rates were inappropriate. However, with the dollar again declined against the yen as the the passage of time, intense trade negotiations with period ended, recording a historic low against the Japan, and the release on May 19 of U.S. trade data yen of ¥104.23 on July 30. that were worse than expected, many market participants came again to believe that a dollar decline against the yen would be welcomed by the U.S APPRECIATION OF THE DOLLAR AGAINST authorities. THE MARK AND OTHER EUROPEAN In this context, the yen again began to strengthen CURRENCIES ON THE EXPECTATION OF against the dollar as well as all other currencies. In NARROWING INTEREST RATE DIFFERENTIALS the weeks between the beginning of May and June 15, the yen's strength was reflected in a decline of The dollar, as well as many other currencies, was the dollar against the yen of 5.6 percent from firming against the German mark, especially during ¥111.05 to a low of ¥104.80 and a drop of the mark June when the market focused on growing eviagainst the yen of 8.5 percent from ¥70.09 to a low dence of recession, a widening fiscal deficit, and of ¥64.12. For much the same reasons as in April, high labor costs in Germany. From the beginning the U.S. monetary authorities intervened as the of May to the end of June, the dollar rose against dollar moved lower on three days—May 27, May the mark nearly 8 percent. During this period mar- 28, and June 8— buying $200 million, $492.5 mil- ket participants expected that the German Bundeslion, and $375 million respectively, against the yen. bank would continue to ease short-term interest These operations were shared equally between the rates in response to the weakening German econ- Federal Reserve and the Treasury's Exchange Sta- omy. These expectations contributed not only to bilization Fund (ESF). the firming of the dollar against the mark, but also About mid-June the yen temporarily reversed to a general diminishing of strains within the course and the dollar rose to a high of ¥111.80 Exchange Rate Mechanism (ERM) of the European when the Miyazawa government lost a confidence Monetary System (EMS) that permitted other Eurovote in the Diet, an event that presaged the end of pean countries, either within or outside the ERM, thirty-eight years of Liberal Democratic Party rule to rebuild their foreign currency reserves, lower in Japan. For a time, market participants were interest rates, or do both. Indeed, on July 1 the uncertain whether trade negotiations would con- Bundesbank announced a reduction in its official tinue in the midst of a change in leadership. They discount and Lombard rates of 50 and 25 basis were also unsure about what changes in economic points to 6.75 and 8.25 percent respectively. policy might emerge from this unusual government As July progressed, however, it became evident transition. But then the dollar eased below ¥110 as that further easing of German interest rates would market participants focused on the upcoming Eco- come only gradually and cautiously. Germany's nomic Summit of the Group of Seven (G-7) in money market rates continued to trend downward Tokyo on July 7-9. during the month. The Bundesbank accepted a drop Although the dollar received some lift from the in the rate at which it routinely supplies liquidity to perception that greater-than-expected progress on the banking system and announced a further reductrade negotiations was made around the time of the tion in its Lombard rate of Vi percentage point to summit, the dollar's gains against the yen proved 7.75 percent. However, the Bundesbank did not temporary. During the balance of the period under further reduce the discount rate, an adjustment that review, market participants came to believe that many market participants had expected and hoped achieving near-term progress on trade issues with might pave the way for a new round of official Japan would be difficult. Also, anxieties about the interest rate cuts throughout Europe. effects of the change in leadership on Japan's eco- Under these circumstances, other European curnomic policy began to dissipate. Moreover, with rencies came under increasing selling pressure as the renewal of exchange rate pressure in Europe, market participants came to question how long market participants bid up the yen as Japanese and European monetary authorities could justify using other investors hedged their assets denominated in interest rates to support existing ERM parities in European currencies. As a result of these factors, the face of high unemployment and slowing or Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

928 Federal Reserve Bulletin • October 1993 negative growth. During the month, pressures otherwise turned to the dollar as a refuge from the within the ERM intensified. Several currencies fell currency turmoil in Europe. As a result, the dollar toward their intervention floors against the mark, firmed on balance during July, gaining roughly leading to a decision on August 1 to widen tempo- another 2 percent, to close near the period high at rarily, by a significant amount, the obligatory inter- DM1.7410. vention bands in the ERM. The dollar was at times caught up in these pres- OTHER OPERATIONS sures as market participants attempted to gauge the effect of these developments and of possible policy The Federal Reserve and the Treasury's Exchange responses on the dollar-mark exchange rate. On Stabilization Fund (ESF) realized profits of balance, the dollar benefited somewhat as investors $128.0 million and $127.7 million respectively, either hedged exposures resulting from investments from the sales of yen in the market during the in European currencies other than the mark or period. Cumulative bookkeeping or valuation gains on outstanding foreign currency balances as of the end of July were $3,226.6 million for the Federal 2. Net profits or losses (-) on U.S. Treasury Reserve and $3,005.5 million for the ESF. and Federal Reserve foreign exchange operations1 Millions of dollars The Federal Reserve and the ESF regularly invest their foreign currency balances in a variety U.S. Treasury Federal Exchange of instruments that yield market-related rates of t .P eriod :a nd item .• - * Reserve Stabilization Fund return and that have a high degree of liquidity and credit quality. A portion of the balances is invested Valuation profits and losses on outstanding assets and liabilities in securities issued by foreign governments. As of as of July 31, 1993 4,152.0 3,221.8 the end of July, the Federal Reserve and the ESF Realized, April 30held either directly or under repurchase agreements July 31, 1993 128.0 127.7 Valuation profits and losses on $9,784.6 million and $10,115.8 million, respecoutstanding assets and liabilities as of July 31, 1993 3,226.6 3,005.5 tively, in foreign government securities valued at end-of-period exchange rates. • 1. Data are on a value-date basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

929 Staff Studies The staff members of the Board of Governors of the and do not necessarily indicate concurrence by the Federal Reserve System and of the Federal Reserve Board of Governors, by the Federal Reserve Banks, Banks undertake studies that cover a wide range of or by members of their staffs. economic and financial subjects. From time to time Single copies of the full text of each study are the studies that are of general interest are pub- available without charge. The titles available are lished in the Staff Studies series and summarized in shown under "Staff Studies" in the list of Federal the FEDERAL RESERVE BULLETIN. The analyses Reserve Board publications at the back of each and conclusions set forth are those of the authors BULLETIN. STUDY SUMMARY THE DEMAND FOR TRADE CREDIT: AN INVESTIGATION OF MOTIVES FOR TRADE CREDIT USE BY SMALL BUSINESSES Gregory E. Elliehausen and John D. Wolken Prepared as a staff study in spring 1993 Trade credit—credit extended by a seller who does both. Although trade credit is an important source not require immediate payment for delivery of a of funds for small businesses, little has been known product—is an important source of funds for busi- about the reasons business customers use it. ness customers. In 1987, such credit accounted for Theoreticians have linked the use of trade credit about 15 percent of the liabilities of nonfarm nonfi- to a transaction motive—a desire to realize econonancial businesses in the United States, approxi- mies in cash management—and to a financing mately the same percentage of liabilities as these motive—use of trade credit because credit from firms' nonmortgage loans from banks. Trade credit other sources, particularly from financial instituapparently is especially important for small busi- tions, is limited. These theories are not mutually nesses: In the same year, it accounted for about exclusive, yet no earlier study has integrated the 20 percent of small firms' liabilities. two in a single theoretical or empirical model. Businesses that choose to finance their purchases Previous studies have focused on one or the other through trade credit have several options for pay- of the motives, and available empirical evidence on ment: They may pay the supplier promptly and in trade credit use, especially by small businesses, is so doing receive a cash discount; wait until the limited. bill's due date and consequently pay the interest This paper presents a model of trade credit cost implicit in forgoing the cash discount, at a rate demand that incorporates both the transaction and frequently higher than the rate on credit from insti- financing theories of trade credit use. The model tutional lenders; or pay late, after the bill's due relates characteristics of the firm to trade credit use date, and thereby risk incurring additional costs in associated with either the transaction or the financthe form of explicit interest charges or penalties, or ing motive. One important feature of the model is a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

930 Federal Reserve Bulletin • October 1993 link between trade credit use and credit rationing. amount of trade credit outstanding, but also to a This link permits an empirical test for the presence greater probability that the firm made some perof rationing in markets for business credit. centage of its payments on trade credit after the due The model of trade credit demand was used to date. These results are consistent with the predicanalyze small businesses' decisions about using tions of theoretical models of transaction and trade credit at all, about making late payments, and financing motives for trade credit use. about the amount of trade credit to use. The data The results suggest that the financing motive came from the National Survey of Small Business does not stem from the substitutability of trade Finances, a one-time survey of a nationally repre- credit and institutional credit. Instead, firms having sentative sample of about 3,400 businesses having relatively large amounts of short-term institutional 500 or fewer employees that were operating at the credit were also the largest users of trade credit. end of December 1987. (The survey was conducted This finding is consistent with the hypothesis that in 1988-89 for the Board of Governors of the small businesses are subject to credit rationing by Federal Reserve System and the U.S. Small Busi- financial institutions: Firms with already-high levness Administration.) els of debt from financial institutions, facing limita- The results suggest that both the transaction and tions on additional institutional credit, turn to trade financing motives explain small businesses' use of credit as a source of additional credit despite the trade credit. Characteristics of firms associated with high implicit interest cost. the transaction motive—notably, a relatively large Also investigated using the model of trade credit volume of purchases and relatively great variability demand was the relative importance of the transacin the timing of delivery of the purchases—were tion and financing motives. The size of the financsignificantly related to a greater probability of using ing component of trade credit demand ranged from trade credit and a greater dollar amount of trade about two-fifths to one-half the estimated size of credit outstanding. Similarly, firm characteristics the transaction component. Clearly, each motive associated with a financing motive—relatively accounts for a sizable portion of total trade credit higher business and financial risk, among others— demand. Thus, both the transaction motive and the were significantly related not only to a greater financing motive appear to be economically sigprobability of using trade credit and a greater dollar nificant determinants of trade credit use. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

931 Industrial Production and Capacity Utilization for July 1993 Released for publication August 16 ment, and materials advanced, and hot weather during July boosted the use of electricity. At Industrial production, which edged down in May 110.6 percent of its 1987 annual average, total and June, increased 0.4 percent in July. Although industrial production was 0.2 percentage point the output of automobiles and light trucks declined above its level in April and 3.5 percent above its again, the production of consumer goods, equip- year-earlier level. Utilization of total 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 1981 1983 198S 1987 1989 1991 1993 1981 1983 1985 1987 1989 1991 1993 All series are seasonally adjusted. Latest series, July. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

932 Federal Reserve Bulletin • October 1993 Industrial production and capacity utilization1 Industrial production, index, 1987=100 Percentage change Category 1993 19932 July 1992 to Apr.r Mayr Juner July Apr.r May' June' JulyP July 1993 Total 110.4 110.2 110.2 110.6 .3 -.2 -.1 .4 3.5 Previous estimate 110.4 110.3 110.1 .3 .0 -.2 Major market groups Products, total' 109.6 109.4 109.1 109.5 .2 -.3 -.3 .4 3.5 Consumer goods 108.1 107.5 107.1 107.4 -.5 -.5 -.4 .3 2.4 Business equipment 134.8 135.2 135.1 135.4 1.0 .3 -.1 .2 9.5 Construction supplies 96.4 97.7 96.4 97.1 .0 1.3 -1.3 .7 3.0 Materials 111.5 111.5 111.8 112.3 .6 -.1 .3 .5 3.5 Major industry groups Manufacturing 111.4 111.1 111.0 111.1 .6 -.2 -.1 .2 3.8 Durable 115.0 114.8 114.4 114.7 .8 -.2 -.4 .3 5.9 Nondurable 106.9 106.6 106.8 106.8 .3 -.4 .2 .0 1.0 Mining 96.4 96.9 96.2 95.9 1.2 .5 -.7 -.3 -2.6 Utilities 114.4 114.3 116.0 119.8 -2.9 .0 1.5 3.3 7.7 Capacity utilization, percent MMMEEEMMMOOO CCCaaapppaaaccciiitttyyy,,, pppeeerrr--ccceeennntttaaagggeee 1992 1993 ccchhhaaannngggeee,,, AAvveerraaggee,, LLooww,, HHiigghh,, JJJuuulllyyy 111999999222 11996677--9922 11998822 11998888--8899 tttooo July Apr.' May' June' JulyP JJJuuulllyyy 111999999333 Total 81.9 71.8 84.8 80.0 81.7 81.5 81.3 81.5 1.6 Manufacturing 81.2 70.0 85.1 78.9 80.9 80.6 80.4 80.4 1.8 Advanced processing 80.7 71.4 83.3 77.3 79.5 79.2 78.8 78.8 2.2 Primary processing . 82.2 66.8 89.1 82.6 84.3 84.1 84.2 84.2 .8 Mining 87.4 80.6 87.0 87.6 86.4 86.9 86.3 86.1 -.9 Utilities 86.7 76.2 92.6 84.8 86.4 86.3 87.5 90.3 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. capacity rose to 81.5 percent, a level about equal to equipment rose 0.2 percent, with increases in the the average rate for the first half of the year. output of information processing, communications, When analyzed by market group, the data show and industrial equipment more than offsetting a that the output of consumer goods rose 0.3 percent, decrease in motor vehicle assemblies. with a rise in the production of nondurables more The output of construction supplies, which on than offsetting a slight drop in the output of dura- balance had not changed from March to June, bles. Among consumer durable goods, the output increased 0.7 percent. The output of industrial maof automotive products fell more than 2 percent for terials rose 0.5 percent in July, largely because of the third consecutive month, but the production of gains in semiconductors, computer parts, and the appliances and television sets rebounded. The out- generation of electricity. The production of nonput of consumer nondurables advanced 0.4 percent, durable materials edged down. with strong growth in sales of residential electric- When analyzed by industry group, the data show ity; decreases in the production of clothing, gaso- that within manufacturing, output increased line, and paper products slowed the overall pickup 0.2 percent; excluding motor vehicles and parts, it in nondurables. rose 0.4 percent. Production in nondurable manu- The production of equipment edged up in July, facturing was unchanged on balance. Durable manas declines in the output of defense equipment and ufacturing rose 0.3 percent, with increases of 1 peroil and gas well drilling largely offset the small cent or more in the machinery and lumber gain in business equipment. The output of business industries. At 80.4 percent, the utilization of manu- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Industrial Production and Capacity Utilization 933 factoring capacity was the same as in June and The output at mines fell 0.3 percent because of equal to the January-February average. The operat- the continued coal strike and a decline in the ing rate for advanced-processing industries held drilling of oil and gas wells. The output at utilities steady at 78.8 percent in July; the rate for primary- rose 3.3 percent after having gained 1.5 percent processing industries was also unchanged, at in June. • 84.2 percent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

934 Statement to the Congress Statement by William L. Rutledge, Senior Vice and to such other consumer statutes as the Equal President, Federal Reserve Bank of New York, Credit Opportunity Act. before the Subcommittee on Consumer Credit and Insurance and the Subcommittee on General Types of Shortcomings Found Oversight, Investigations, and the Resolution of Failed Financial Institutions of the Committee Our overall sense from these examinations is that on Banking, Finance and Urban Affairs, U,S, when less-than-satisfactory performance is House of Representatives, August 10, 1993 found, it is frequently characterized by shortcomings in two key areas. The first is a failure to In my comments today, I will focus primarily on commit significant dollars to lending and investthe supervisory process we have followed in ing for community development. Within that implementing the Community Reinvestment Act category, I would include specially structured (CRA). I will address four areas: (1) our current loans, investments, and grants directed to enexamination approach; (2) the kinds of problems hancing the long-term viability of a bank's comwe have been finding; (3) what we can do to munity; such credits and grants normally entail cause those problems to be corrected; and (4) innovative underwriting standards, some public how we are trying to make the examination funds, or the participation of not-for-profit orgaprocess more effective. I will close with a few nizations. Although some banks, including some observations on trends in the ways in which large wholesale-oriented ones, have been very banks have been satisfying their CRA obliga- active in this area, others have done very little. tions. The second typical shortcoming is the failure to achieve an appropriate geographic distribution of mortgage and small business loan products SUPERVISORY PROCESS throughout a bank's community. The bank either has failed to deliver its credit products within its Examination Approach delineated community—focusing instead on extending credit to more distant locales~or it has The Federal Reserve Bank of New York super- not adequately served the low- to moderatevises thirty-seven state member banks that are income neighborhoods within its delineated comsubject to the CRA, performing a comprehensive munity. examination approximately every eighteen months. Work before the on-site examination Enforcement Process includes extensive statistical analyses of a bank's Home Mortgage Disclosure Act (HMDA) data When our examiners find these or other shortand plotting of the data on maps to demonstrate comings in a bank's performance, the findings the geographic distribution of loan approvals and are presented to the bank's senior management denials, Once in the bank, our examiners review and its board of directors. Our examination reprocedures, interview bank personnel, and criti- port provides our rating of performance, details cally evaluate hundreds of loan files. The exam- the problems found, and presents actions we inations are conducted by specialized Federal believe should be pursued to remedy the prob- Reserve staff members—examiners whose train- lems. We require that the bank respond in writing and responsibilities are directed exclusively ing, laying out its remedial program. If there is a to the review of bank compliance with the CRA downgrade in the rating, we also shorten the time Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

935 period until the next examination—sometimes to be considered during examinations as part of the as short as six months, depending on the severity bank's overall CRA performance. of the problems. The composite rating and the evaluation in Improving the Examinations Process support of it are required to be made public by both the bank and ourselves, contributing to the We are continuously looking for ways to incentive of bank management to address its strengthen the examinations process. For examproblems as quickly as possible. ple, we at the the New York Fed have been at It is our experience that when a bank's board work to develop sophisticated statistical apof directors and its senior management are pre- proaches to direct our examination resources to sented with negative findings, they typically take individual banks, and individual credit files, in actions to improve that performance. In this which home mortgage discrimination appears District, of the thirty-seven state banks, there most likely. We are using the richer HMD A data have been five instances in the past two years now available as an initial source and then supwhen a bank that had been rated less than plementing the analysis with additional data from satisfactory improved to satisfactory. those banks in which race appears, in the initial The other key factor in enforcing CRA com- analysis, to be a statistically significant factor. If pliance is the applications process. Banks with race is still a statistically significant factor after general shortcomings in their CRA performance inclusion of the additional variables, we then have effectively been foreclosed from expanding develop statistically matched pairs of approved their bank operations. Although the Board of white applicants and denied minority applicants Governors has denied only a handful of applica- for review of individual credit files. tions on CRA grounds, numerous other applica- In addition, we and the other federal banking tions have been withdrawn, or proposals aban- regulators are exploring whether quantitative perdoned without the filing of an application, formance standards can and should be more because of this approach. strongly built into the assessment process. In some instances, a banking organization Clearly, the lack of specific performance guidewith some limited specific shortcoming in its lines has caused frustration for all involved in the CRA performance has been allowed to expand process and has created at least the potential for if it has made specific commitments to the the supervisory focus to be too heavily on form Board of Governors to address that shortcom- and not enough on substance. The recent request ing. We draw a distinction between commit- by President Clinton to the federal supervisory ments that have been made to the Board and agencies to develop more objective, perforcommitments that may have been made to a mance-based assessment standards is a clear private group but not to the Board. The former reflection of the concern. We were already in the set of commitments is always closely monitored process of conducting such a review ourselves to ensure compliance. The banks with commit- and expect to be heavily involved in the response ments to the Board are subjected to specific to the President's request. reporting requirements, and our examiners re- The resolution of the issue is not an easy one, view the extent to which the commitments have and the challenge will be to strike the right been satisfied as an integral part of the exami- balance. Beyond the obvious concern of avoiding nations process. Failure to fulfill a Board com- credit allocation, too much specificity could lead mitment is grounds for taking specific remedial to minimalist strategies and stifle the developaction, including the possible imposition of civil ment of innovative approaches to CRA complimoney penalties. ance. On the other hand, commitments made to a private party, but not to the Board, are not CURRENT TRENDS matters that are enforced by the Board. However, actions taken in satisfaction of such com- We have seen some banks taking innovative mitments, such as the providing of funding, will approaches. Historically, to many people com- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

936 Federal Reserve Bulletin • October 1993 munity reinvestment has been almost synony- bility in underwriting standards has been built mous with mortgage lending, but increasingly it into their mortgage programs. Two steps strike is now recognized that small businesses are cen- us as particularly important: (1) consumer edutral to the growth and vitality of communities. cation in the complexities of the mortgage appli- Some bankers have responded by developing cation process and home ownership; and (2) a mechanisms to work through local government mechanism to provide a second, and even a agencies and intermediaries to improve their third, look at applications that have been denied. delivery of loans to small businesses and mi- Sometimes these steps have been facilitated croenterprises. For example, in an effort to pro- through cooperative arrangements. For examvide small businesses and fledgling entrepreneurs ple, twelve banks serving New York City have with greater access to capital, seven banks are recently formed a coalition to administer an participating with New York City's Borough affordable mortgage program. Besides commit- Development Corporations in the Regional Eco- ting mortgage funds with no fixed upper limit, nomic Development Assistance Corporation they have committed $1 million per year for (REDAC) Mini Loan Program. three years to fund a program for credit coun- On the mortgage front, some bankers have seling and consumer education. They have also developed innovative approaches to try to ad- established a mechanism in which denied applidress the troubling disparities in the denial rate cants will be re-reviewed by the other bank that have persisted, even when increased flexi- participants. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

937 Announcements PROPOSED ACTIONS Certain Financial Records) regarding enhanced recordkeeping requirements for certain wire trans- The Federal Reserve Board issued for public com- fers by financial institutions. These amendments ment on August 20,1993, proposed amendments to would incorporate by reference certain proposed Regulation A (Extensions of Credit by Federal provisions of 31 CFR 103.33(e), (f), and (g). Com- Reserve Banks) to implement section 142 of the ments were requested by October 4,1993. Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) regarding limits on Federal Reserve bank credit. Comments were requested by September 24, 1993. CHANGE IN BOARD STAFF The Federal Reserve Board also requested public comment on August 23,1993, on proposed amend- The Federal Reserve Board announced on August ments to Regulation S (Reimbursement to Finan- 30, 1993, that MaryEllen A. Brown, Assistant to cial Institutions for Providing or Assembling Finan- the General Counsel and the Board's ethics official, cial Records; Recordkeeping Requirements for would retire at the end of August. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

938 Minutes of the Federal Open Market Committee Meeting of July 6-7,1993 A meeting of the Federal Open Market Committee Ms. Greene, Deputy Manager for Foreign was held in the offices of the Board of Governors Operations Ms. Lovett, Deputy Manager for Domestic of the Federal Reserve System in Washington, Operations D.C., on Tuesday, July 6, 1993, at 2:30 p.m. and Mr. Madigan, Associate Director, Division of continued on Wednesday, July 7,1993, at 9:00 a.m. Monetary Affairs, Board of Governors Mr. Stockton, Associate Director, Division of Present: Research and Statistics, Board of Governors Mr. Greenspan, Chairman Ms. Danker, Assistant Director, Division of Mr. Mullins1 Monetary Affairs, Board of Governors Mr. Angell Messrs. Small,3 and Whitesell,4 Section Chiefs, Mr. Boehne Division of Monetary Affairs, Board of Mr. Keehn Governors Mr. Kelley Ms. Kusko,4 Senior Economist, Division of Mr. LaWare Research and Statistics, Board of Governors Mr. Lindsey Ms. Low, Open Market Secretariat Assistant, Mr. McTeer Division of Monetary Affairs, Board of Mr. Oltman2 Governors Ms. Phillips Mr. Stern Messrs. Beebe, J. Davis, T. Davis, Goodfriend, and Ms. Tschinkel, Senior Vice Presidents, Messrs. Broaddus, Jordan, Forrestal, and Parry, Federal Reserve Banks of San Francisco, Alternate Members of the Committee Cleveland, Kansas City, Richmond, and Atlanta respectively Messrs. Hoenig, Melzer, and Syron, Presidents of the Federal Reserve Banks of Kansas City, Mr. McNees, Vice President, Federal Reserve Bank St. Louis, and Boston respectively of Boston, Messrs. Coughlin and Guentner, Assistant Vice Presidents, Federal Reserve Mr. Kohn, Secretary and Economist Banks of St. Louis and New York respectively Mr. Bernard, Deputy Secretary Mr. Coyne, Assistant Secretary By unanimous vote, the minutes for the meeting Mr. Gillum, Assistant Secretary of the Federal Open Market Committee held on Mr. Mattingly, General Counsel Mr. Patrikis, Deputy General Counsel May 18,1993, were approved. Mr. Prell, Economist The Manager of the System Open Market Mr. Truman, Economist Account reported on developments in foreign exchange markets and on System transactions in Messrs. R. Davis, Lang, Lindsey, Promisel, foreign currencies during the period May 18,1993, Rolnick, Rosenblum, Scheld, Siegman, Simpson, and Slifman, Associate Economists Mr. McDonough, Manager of the System Open Market Account 3. Attended portion of meeting relating to a discussion of the uses of a broad monetary aggregate that includes bond and stock mutual funds. 1. Acting Vice Chairman in Mr. Corrigan's absence. 4. Attended portion of meeting relating to the Committee's 2. First Vice President, Federal Reserve Bank of New York, discussion of the economic outlook and its longer-run growth attending as alternate member for Mr. Corrigan. objectives for monetary and debt aggregates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

939 through July 6, 1993. By unanimous vote, the over the two previous months. Among other Committee ratified these transactions. manufactured goods, the production of business The Deputy Manager for Domestic Operations equipment, led by computers and industrial equipreported on developments in domestic financial ment, recorded another brisk advance whereas the markets and on System open market transactions in output of non-auto consumer goods continued to government securities and federal agency obliga- expand sluggishly. Total utilization of industrial tions during the period May 18, 1993, through capacity was unchanged in May for a third straight July 6, 1993. By unanimous vote, the Committee month. ratified these transactions. Real personal consumption expenditures edged The Committee then turned to a discussion of the higher in May after a sizable rebound in April from economic outlook, the ranges for the growth of weather-related weakness. On balance, however, money and debt in 1993 and 1994, and the imple- consumer spending had increased only slightly thus mentation of monetary policy over the intermeeting far this year. Outlays for new cars and light trucks period ahead. A summary of the economic and advanced in May to their highest level since Janufinancial information available at the time of the ary 1990 and apparently remained near that elemeeting and of the Committee's discussion is pro- vated level in June. In addition, spending for nonvided below, followed by the domestic policy energy services had increased substantially in directive that was approved by the Committee and recent months. By contrast, energy consumption issued to the Federal Reserve Bank of New York. had fallen from the especially high levels of late The information reviewed at this meeting pro- winter, and outlays for nondurable goods in May vided a mixed reading on the economy, but on were still below their fourth-quarter level. Housing balance the available data suggested that the expan- starts increased in April and May from a depressed sion had picked up somewhat during the second first-quarter pace, with most of the rise attributable quarter from the very slow pace of the first quarter. to starts of single-family dwellings. Employment statistics, while tending to soften in Shipments of nondefense capital goods in May June, pointed to considerable strength for the sec- retraced only a portion of a sizable April decline. ond quarter as a whole, although recent spending However, for the two months combined, shipments indicators suggested a much more moderate expan- of such goods were above the average for the first sion. Consumer and producer price inflation slowed quarter and apparently remained on an upward substantially in May, but prices had risen at a faster trend that began early in 1992. The upward trajecrate over the first five months of the year than over tory for spending on machinery and on electrical the second half of 1992. and communications equipment seemed to have Total nonfarm payroll employment changed little reflected improved cash flows for the business secin June after registering substantial gains in April tor and a declining cost of capital, and incoming and May. For the second quarter as a whole, the data suggested that outlays for business equipment increase in employment matched that of the first would increase further over the months ahead. quarter. Manufacturing employment, which was Nonresidential construction activity was unchanged about unchanged over the first quarter, declined over the first quarter but picked up slightly on somewhat in June for a third straight month. Con- balance over April and May. Office building rose struction payrolls edged lower after rising apprecia- over the two months, while construction of nonbly over the preceding two months, and job gains office commercial structures was little changed and in the services industries were considerably smaller industrial building activity was down sharply. in June than those recorded earlier in the year. The Business inventories recorded another appreciacivilian unemployment rate backed up to 7.0 per- ble rise in April, and available data pointed to a cent in June. further increase in May. In manufacturing, inven- Industrial production increased in May at the tory accumulation stepped up in April and May relatively subdued rate recorded in March and after changing little in the first quarter; the ratio of April; for June, the limited data available suggested stocks to shipments edged higher in each month a modest decline in output. In May, assemblies and was only slightly above the very low level of motor vehicles declined after holding steady reached early in 1993. In the wholesale trade sec- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

940 Federal Reserve Bulletin • October 1993 tor, inventories advanced at a slower rate in May context of the Committee's long-run objectives for than in April, and the inventory-to-sales ratio fell to price stability and sustainable economic growth, the low end of the range for the past three years. and giving careful consideration to economic, The buildup of retail inventories slowed consider- financial, and monetary developments, slightly ably in April, and with sales rebounding from the greater reserve restraint would be acceptable or effect of March storms, the inventory-to-sales ratio slightly lesser reserve restraint might be acceptable declined for the retail sector. Nonetheless, the ratio during the intermeeting period. The reserve condistill was near the high end of its range for the past tions associated with this directive were expected several years. to be consistent with appreciable growth of the The nominal U.S. merchandise trade deficit for broader monetary aggregates over the second April was unchanged from March, with both quarter. imports and exports declining slightly. However, Open market operations were directed toward the April deficit was substantially above the aver- maintaining the existing degree of pressure on age for the first quarter, reflecting sizable increases reserve positions throughout the intermeeting in imports of capital goods, automotive products, period. Several upward adjustments were made to consumer goods, and oil. The value of exports in expected levels of adjustment plus seasonal bor- April was only slightly above the first-quarter aver- rowing during the period in anticipation of age. Recent indicators pointed to further weakness stepped-up demand for seasonal credit during the in economic activity in continental Europe thus far crop-growing season; borrowing averaged near this year. By contrast, economic recovery appeared expected levels over the period. The federal funds to be continuing in the United Kingdom and Can- rate remained close to 3 percent over the period, ada. In Japan, economic activity was up apprecia- although quarter-end pressures in money markets bly in the first quarter, but available data suggested pushed the rate higher for a brief period at the end that this strength had not carried over to the second of June. quarter. Other short-term interest rates also were little Changes in producer and consumer prices were changed on balance over the period since the May small in May following sizable increases earlier in meeting. Early in the period, unexpectedly robust the year. Producer prices of finished goods were employment data for May, coupled with media unchanged in May, as declines in prices of finished reports about the monetary policy stance adopted at consumer food and energy products offset small the May meeting, led to some upward pressure on advances in prices of other finished goods. Exclud- money market interest rates. Subsequently, howing the food and energy components, producer ever, this pressure abated in response to the release prices had risen more rapidly thus far in 1993 than of data suggesting slower inflation and a somewhat they had in the second half of 1992. At the con- weaker outlook for the economy. These developsumer level, prices of items other than food and ments along with the progress in the Congress energy rose only slightly in May, but this measure toward adoption of a deficit-reduction package fosof inflation also had risen faster this year than in tered a decline in bond yields; buoyed by the drop the second half of last year. Labor costs likewise in yields, major indexes of stock prices rose over had evidenced a quickened pace of increases this the intermeeting period in spite of disappointing year. Average hourly earnings of production or second-quarter earnings reports by several major nonsupervisory workers rose substantially in May companies. after edging lower in April, and these earnings had In foreign exchange markets, the trade-weighted grown more rapidly over the first five months of value of the dollar in terms of the other G-10 1993 than over the preceding six months. currencies increased on balance over the intermeet- At its meeting on May 18, the Committee ing period. After depreciating somewhat through adopted a directive that called for maintaining the the end of May, the dollar recovered in early June existing degree of pressure on reserve positions but when U.S. money market interest rates moved that included a tilt toward possible firming of higher. The dollar rose more strongly over the last reserve conditions during the intermeeting period. half of June, principally in response to actual and Accordingly, the directive indicated that in the expected monetary easing abroad. The rise in the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee Meeting 941 dollar over the intermeeting interval reflected demand was anticipated later as those economies sizable appreciations against European currencies, started to strengthen. The outlook for moderate especially the German mark. The dollar continued growth and continuing slack in resource utilization to fall against the Japanese yen through the middle suggested considerably more subdued price of June, in the process setting several new lows, increases than had occurred in the early months of before recovering a little over the remainder of the 1993. period. In the Committee's discussion, the members gen- After contracting during the first quarter, M2 and erally agreed that ongoing economic developments M3 expanded appreciably over the second quarter. remained consistent with moderate but sustained Most of this growth, which was especially pro- growth in economic activity. No sector of the econnounced in May, reflected strength in Ml and omy seemed poised at this juncture to provide occurred despite continued heavy outflows to bond strong impetus to the expansion, but a promising and equity funds. The May surge resulted in part basis for further growth was seen in the much from a strong pickup in mortgage refinancing activ- improved financial condition of many households ity and a reversal of the depressing effect in April and business firms. Lower long-term interest rates, of relatively damped individual nonwithheld tax which had contributed to the improvement in balpayments on the seasonally adjusted level of liquid ance sheets, were likely as well to bolster housing deposits. The growth of the broader aggregates and business capital spending more directly. While moderated substantially in June, and by more than the expansion now appeared to be firmly estabmight have been suggested by the waning of these lished, a number of members cautioned that it was mortgage and tax influences. For the year through subject to some downside risks, notably those asso- June, growth of both M2 and M3 was below the ciated with the still uncertain outlook for governlower ends of the ranges for 1993 that the Commit- ment budget and other policies. The possibility of tee had established in February. This sluggishness higher taxes, associated with the deficit reduction reflected ongoing changes in asset preferences and legislation currently under consideration in the financing patterns rather than restrictive financial Congress and with the forthcoming proposals for conditions. The velocity of M2 was estimated to national health care reform, was widely reported to have increased at a rate of about AV2 percent over be damping spending. With regard to the outlook the first half of the year after a 4 percent rise in for inflation, the most recent data on prices offered 1992. Total domestic nonfinancial debt expanded some encouragement that the earlier upturn in key somewhat further through April. measures of inflation might prove to be temporary, The staff projection prepared for this meeting especially in the context of still ample margins of suggested moderate growth in economic activity unutilized labor and other production resources. and modest reductions in margins of unemployed Even so, given generally held expectations among labor and capital through 1994. The projection the public that inflation was not likely to decline assumed the enactment of a federal budget bill that and might in fact trend higher, many members implied a moderately restrictive fiscal policy over concluded that for now the disinflationary trend the forecast horizon. As in earlier staff projections, might have been arrested or, at least, that further lower interest rates were expected to support appre- progress toward price stability would be quite difficiable gains in interest-sensitive expenditures, cult to achieve over the next several quarters. including housing, consumer durables, and busi- In conformance with the usual practice at meetness equipment. Private spending also would be ings when the Committee considers its longer-run buttressed by a favorable financial environment objectives for growth of the monetary and debt associated with strengthened balance sheets and aggregates, the members of the Committee and the reduced debt burdens and by the apparently Federal Reserve Bank presidents not currently servincreasing willingness of banking institutions to ing as members provided individual projections of make new loans. Export demand was likely to growth in real and nominal GDP, the rate of unemremain constrained over the near term by the weak- ployment, and the rate of inflation for the years ness in the economies of several major industrial 1993 and 1994. In light of the experience in the countries, but some improvement in foreign first half of the year, forecasts of real growth in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

942 Federal Reserve Bulletin • October 1993 1993 had been revised down somewhat since Feb- Turning to the outlook for individual sectors of ruary, while projections of inflation had been the economy, members referred to indications of an raised. The central tendency of the forecasts of the upturn in consumer spending in recent months, but rate of expansion in real GDP in 1993 was now they also noted that survey results and anecdotal 2Vi to 23A percent for the year as a whole; for 1994, reports still suggested generally cautious consumer these projections had a central tendency of 2xh to attitudes. The prospects for increased taxes might 3 lA percent. With regard to the expansion of nomi- be having some negative effect on consumer confinal GDP, the forecasts converged on growth rates dence, but consumers remained especially conof 5 to 53A percent for 1993 and 5 to 6V2 percent cerned about the outlook for jobs and incomes as for 1994. Given the projections of a moderate defense cutbacks continued and many firms, notauptrend in economic activity and expectations of bly larger business establishments, took further some further gains in labor productivity, the fore- steps to restructure and downsize their operations. casts incorporated only a small decline in unem- To an important extent the improvement in retail ployment to rates of around 63A percent in the sales in the second quarter was associated with fourth quarter of 1993 and only slightly lower by stronger sales of motor vehicles that, in the view of the fourth quarter of 1994. For the rate of inflation, at least some members, appeared to reflect previas measured by the CPI, the projections had a ously postponed replacement demand rather than a central tendency of 3 to 3 lA percent in 1993 and major shift in consumer attitudes. In any event, 3 to 3V2 percent in 1994, reflecting little change in moderate growth in consumer spending was likely both years from the rate of inflation experienced in to be maintained in the context of the improved 1992. financial condition and the related reduction in Members commented that the improved pros- debt-service burdens of many households. Further pects for significant reductions in the federal deficit growth in overall employment, in line with that had played an important role in fostering the achieved in the first half of the year, would if it declines in longer-term interest rates that had persisted provide important support toward sustainoccurred since the latter part of 1992; the lower ing the expansion of consumer spending and thus rates were having positive effects on spending deci- the growth of the economy more generally. sions in a number of interest-sensitive sectors of With regard to the outlook for business fixed the economy as well as on balance sheets more investment, members reported that many firms generally. At the same time, the prospects for were scaling back or putting on hold their capital higher taxes—accentuated by uncertainties about spending plans pending a resolution of the business their size and incidence—were widely reported to tax proposals under consideration in the Congress. be inhibiting spending decisions by business firms Nonetheless, business spending for equipment still and might also be adding to cautious consumer constituted a relatively robust sector of the econattitudes. Some of the anecdotal evidence sug- omy, at least according to the data available to date. gested that uncertainties associated with the poten- To a considerable extent, such spending reflected tial impact of the still unannounced proposals for ongoing efforts to improve the quality of products health care reform were making many businesses and the efficiency of business operations while especially cautious, notably in their hiring deci- holding down the number of employees, and the sions. Adding to the effects of anticipated federal members saw this trend as likely to continue. In legislation were concerns in various parts of the general, other business capital spending had country about further cuts in defense spending and remained sluggish, although construction activity the impact of additional reductions in state and other than office building appeared to have picked local expenditures or of increases in state and local up in parts of the country. The prospects for houstaxes. Some members observed that the fiscal pol- ing construction, though not ebullient, were viewed icy legislation before the Congress appeared to as more promising particularly in light of the have generated a perhaps exaggerated degree of declines in mortgage interest rates to relatively low concern, and passage of this legislation might have levels. The improved financial position of many a generally favorable effect on business and con- potential homebuyers also provided a basis for sumer sentiment. anticipating stronger housing markets. Despite Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee Meeting 943 these favorable factors, however, overall housing equipment. Unfortunately, these favorable elements activity had improved only modestly in recent in the underlying economic situation seemed at months as homebuyers tended to remain cautious, odds with the apparently widely held view by the and at least in some areas housing developers con- public that inflation would not diminish and indeed tinued to report that they were encountering diffi- was likely to increase and that in any event current culties in securing construction finance. On bal- inflation levels were tolerable. Such expectations ance, housing construction seemed likely to and attitudes would tend to temper the gains against provide some impetus to the expansion in coming inflation, if any, over the forecast horizon by quarters. their effects on the pricing and wage behavior of Relatively weak economic conditions in a num- business firms and employees and the reactions of ber of foreign industrial countries were likely to consumers toward rising prices. This inflationary continue to limit U.S. exports, which had declined climate underscored the importance of credible since the end of 1992. Indeed, available data sup- government policies—monetary, fiscal, trade, and plemented by reports from a variety of contacts regulatory—that encouraged reduced inflation over suggested that business conditions had remained time. quite weak or had worsened in a number of foreign In keeping with the requirements of the Full industrial nations. Even so, business contacts in Employment and Balanced Growth Act of 1978 some parts of the United States indicated that for- (the Humphrey-Hawkins Act), the Committee at eign demand for their products was still quite this meeting reviewed the ranges for growth in the robust. Business activity abroad, which already monetary and debt aggregates that it had estabwas trending higher in a few industrial nations, was lished in February for 1993, and it decided on viewed as likely to strengthen more generally over tentative ranges for growth in those aggregates in the year ahead, with positive effects on overall U.S. 1994. The current ranges for the period from the exports. fourth quarter of 1992 to the fourth quarter of 1993 Turning to the outlook for inflation, members included expansion of 2 to 6 percent for M2 and commented that despite favorable readings re- Vi to 4V2 percent for M3. A monitoring range for cently, a wide range of price and wage data had growth of total domestic nonfinancial debt had suggested some acceleration in the rate of inflation been set at to 8V2 percent for 1993. during the early months of the year. To some In the Committee's discussion, the members extent, the indications of intensified inflation might focused on the issue of whether or not to lower the have been the result of difficulties with seasonal ranges further. In February, the ranges for M2 and adjustments or other temporary factors, but there M3 had been reduced by V2 percentage point in the were reports of some successful efforts by business expectation that continuing rechanneling of credit firms to raise prices following the spurt in demand demands and savings flows into securities markets and the rise in capacity utilization toward the end and away from depository institutions would result of 1992. These price developments were disap- in further increases in velocity, the ratio of nominal pointing and suggested to many members that the GDP to monetary measures such as M2 or M3. In disinflationary trend might have been arrested, at fact, the strength of these forces was underleast for now, though the economic fundamentals estimated to some extent. Substantial increases remained consistent with a resumption of some occurred in the velocity of both M2 and M3, espefurther downward movement in the rate of infla- cially in the first quarter, that were reflected in tion. With regard to those fundamentals, many weak bank credit and huge inflows into bond and members saw significant, albeit diminished, slack stock mutual funds. In the circumstances, the in labor and product markets as likely to persist expansion of both aggregates through midyear was over the forecast horizon, given their current fore- below the lower ends of the reduced ranges estabcasts of moderate expansion in economic activity. lished by the Committee for the year. According to Other favorable factors in the inflation outlook a staff analysis, the developments boosting M2 and included efforts by businesses to hold down costs M3 velocity could be expected to persist over the and increase productivity by restructuring their balance of 1993. Such an outcome would imply operations and investing in new, more productive monetary growth for the year as a whole slightly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

944 Federal Reserve Bulletin • October 1993 below the Committee's current ranges, even if the basis subject to review early next year. Monetary growth of nominal GDP picked up in the second growth outcomes somewhat higher within these half of the year as implied by the central tendency ranges might be anticipated in association with the of the members' forecasts. somewhat faster economic growth and essentially In light of this expectation, many of the members unchanged rate of inflation that most members had indicated their support of a proposal to lower the forecast for next year. M2 and M3 ranges further for 1993 and on a Several members indicated that while they could tentative basis to retain the reduced ranges for accept reductions in the 1993 ranges, they nonethe- 1994. It was emphasized during the discussion that less preferred to retain the existing ranges. One the reductions were intended solely as technical reason given for this preference was that the proadjustments to reflect expected increases in veloc- spective performance of the broad monetary aggreity and that the lower ranges did not imply any gates in relation to developments in the economy tightening of monetary policy. Rather, the reduc- was not sufficiently understood to warrant the spections in the ranges would serve to align them with ification of new ranges. Indeed, a change might be monetary growth rates that were more likely to be misinterpreted as implying more knowledge about associated with a satisfactory economic perfor- velocity relationships than the Committee in fact mance. Indeed, M2 and M3 growth consistent with possessed and could set up expectations that the most members' forecasts might still leave the Committee would put greater and, depending on expansion of those aggregates near the lower ends emerging circumstances, perhaps undesirable of their reduced ranges for the year; at the same emphasis on achieving monetary growth within the time, the probability of a surge in monetary growth new ranges. Moreover, to the extent that some to levels above the new ranges appeared remote. In observers interpreted the ranges as the Committhis connection, some members commented that tee's proxies for presumed nominal GDP objecthe uncertainties surrounding the behavior of M2 tives, an erroneous conclusion could be reached and M3 might well persist for some time. The that the Committee had decided on a reduced target value of these aggregates in guiding policy seemed level of nominal GDP even though the Committee to have diminished in 1992 and 1993, and the had not in fact framed its objectives in terms of Committee needed to continue to rely on its evalu- GDP targets. On balance, while these members did ation of a broad array of other financial and eco- not view this choice as a matter of great consenomic developments in its assessment of an appro- quence in current circumstances, they concluded priate course for monetary policy. The members that it was marginally preferable to retain the did not rule out the possibility that a more normal ranges for this year, and if necessary, to accept and or predictable relationship between money and eco- explain the reasons for a shortfall once the latter nomic activity might be restored once the current were more clearly established. The members who process of balance sheet adjustments was com- preferred to retain the current ranges agreed that pleted, the yield curve flattened, and some stabiliza- there were plausible arguments on both sides of tion in the intermediation function of depository this issue and they could accept a proposal to institutions emerged. In the view of a few mem- reduce the ranges for both 1993 and 1994. bers, moreover, the lower range proposed for M2 In light of the limited reliance that the members might in fact be more consistent with the rate of felt they could place on the behavior of the current monetary growth that would be needed over the monetary aggregates, the Committee at this meetlong term to sustain price stability and satisfactory ing reviewed the possible advantages of a newly economic expansion, if the earlier relationships constructed measure of money. This measure between broad money growth and economic perfor- involved the addition of bond and stock mutual mance were to reemerge. funds to M2 as currently defined. There were indi- Many of these members commented that the cations that the shares of such funds had become considerations underlying the desirability of a tech- closer substitutes for M2, and large portfolio shifts nical adjustment to the ranges for this year applied into such funds seemed to account for much of the to 1994 as well, and they therefore supported weakness in M2 and its uncertain relationship to extending the reduced ranges to 1994 on a tentative income and the longer-run behavior of prices. After Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee Meeting 945 examining the properties of this measure and of 1993 to the fourth quarter of 1994, of 1 to 5 percent reviewing its past behavior in relation to key indi- for M2 and 0 to 4 percent for M3. The Committee provisionally set the monitoring range for growth of cators of economic performance, the members contotal domestic nonfinancial debt at 4 to 8 percent for cluded that it would not enhance the formulation or 1994. The behavior of the monetary aggregates will implementation of monetary policy, at least at this continue to be evaluated in the light of progress toward point. However, the members agreed that mutual price level stability, movements in their velocities, and funds flows should continue to be monitored for developments in the economy and financial markets. their effects on M2 and that the relevant data should Votes for this action: Messrs. Greenspan, Mullins, be made available to outside analysts. Angell, Boehne, Keehn, Kelley, LaWare, Lindsey, At the conclusion of its discussion, the Commit- McTeer, Oltman, Ms. Phillips, and Mr. Stern. Votes tee voted to lower the M2 range that it had estab- against this action: None. Absent: Mr. Corrigan. (Mr. lished in February by an additional 1 percentage Oltman voted as alternate for Mr. Corrigan.) point and to reduce the M3 range by another V2 percentage point, bringing the M2 range to 1 to 5 per- In the Committee's discussion of policy for the cent and that for M3 to 0 to 4 percent for 1993. The period until the next meeting, most of the members Committee also voted to reduce the annual moni- indicated that they saw little or no reason to change toring range for growth of total domestic nonfinan- monetary policy in either direction. The most recial debt by V2 percentage point to 4 to 8 percent. cent information on the performance of the econ- The members anticipated that this debt aggregate omy was mixed, and this together with questions would continue to grow at a rate that was roughly about the course of fiscal policy contributed to in line with that of nominal GDP. The Committee considerable uncertainty about the outlook. Even approved the following statement for inclusion in so, the members felt that the evidence pointed on its domestic policy directive. the whole to a sustained rate of economic expansion. The latest price statistics provided some en- The Federal Open Market Committee seeks monetary couragement that the apparent intensification of and financial conditions that will foster price stability inflation in earlier months of the year might have and promote sustainable growth in output. In furtherance abated. For now, therefore, nearly all the members of these objectives, the Committee at this meeting lowsaw the balance of factors bearing on the course of ered the ranges it had established in February for growth of M2 and M3 to ranges of 1 to 5 percent and 0 to economic activity and the outlook for inflation as 4 percent respectively, measured from the fourth quarter calling for an unchanged degree of pressure on of 1992 to the fourth quarter of 1993. The Committee reserve positions. anticipated that developments contributing to unusual According to a staff analysis prepared for this velocity increases would persist over the balance of the year and that money growth within these lower ranges meeting, the growth of M2 could be expected to would be consistent with its broad policy objectives. The slow markedly in the months ahead from its pace monitoring range for growth of total domestic nonfinan- over the second quarter. The projected deceleration cial debt also was lowered to 4 to 8 percent for the year. was mainly associated with some unwinding of the second-quarter bulge in mortgage refinancings Votes for this action: Messrs. Greenspan, Mullins, Angell, Boehne, Keehn, Kelley, LaWare, Lindsey, along with further heavy inflows to bond and stock McTeer, Oltman, Ms. Phillips, and Mr. Stern. Votes mutual funds. The expansion of M3 appeared likely against this action: None. Absent: Mr. Corrigan. (Mr. to be held down by weaker bank credit extensions Oltman voted as alternate for Mr. Corrigan.) as alternative sources of funds in the capital markets attracted more borrowers. On balance, modest For the year 1994, the Committee approved progrowth of both M2 and M3 would keep them close visional ranges that were unchanged from the to the lower ends of their downward-revised ranges reduced levels for 1993. Accordingly, the Committhrough September. tee voted to incorporate the following statement Some members cautioned that despite the very regarding the 1994 ranges in its domestic policy sluggish behavior of the broad measures of money directive. thus far this year, monetary policy was relatively expansive as evidenced by a variety of other indica- For 1994, the Committee agreed on tentative ranges for monetary growth, measured from the fourth quarter tors including the growth in narrow measures of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

946 Federal Reserve Bulletin • October 1993 money and reserves and the very low levels of for maintaining the existing degree of pressure on money market interest rates. Indeed, in the view of reserve positions and that retained a bias toward several members, in a period characterized by indi- possible firming of reserve conditions during the cations of some worsening in inflationary expecta- intermeeting period. Accordingly, in the context of tions, a policy course that maintained steady condi- the Committee's long-run objectives for price stations in reserve markets could be said to have bility and sustainable economic growth, and giving become more accommodative as the federal funds careful consideration to economic, financial, and rate, in real terms after adjustment for expected monetary developments, the Committee decided inflation, moved down from an already low level. that slightly greater reserve restraint would be Accordingly, while current monetary policy acceptable or slightly lesser reserve restraint might seemed likely to support further economic expan- be acceptable during the intermeeting period. The sion, the Committee needed to remain alert to the reserve conditions contemplated at this meeting potential for intensifying inflation. At some point were expected to be consistent with modest growth the current policy stance could well begin to foster in the broader monetary aggregates over the third greater price pressures. One member urged a quarter. prompt move toward restraint, given the prospect At the conclusion of the meeting, the Federal in his view that further progress toward price stabil- Reserve Bank of New York was authorized and ity was unlikely with the current, quite stimulative, directed, until instructed otherwise by the Commitstance of monetary policy. tee, to execute transactions in the System account A majority of the members, taking account of the in accordance with the following domestic policy current stance of monetary policy, favored a pro- directive: posal to retain the bias toward possible tightening The information reviewed at this meeting suggests that the Committee had adopted at the May meetthat the economic expansion has picked up somewhat in ing. In this connection, some commented that while recent months from the very slow pace of the first the need for any policy adjustment during the quarter. Total nonfarm payroll employment changed litperiod ahead seemed somewhat remote, the next tle in June after registering substantial gains in April and May, and the civilian unemployment rate edged up to policy move was more likely to be in the direction 7.0 percent in June. Industrial production has changed of some firming than toward easing. Other memlittle on balance over the last few months. Real conbers suggested that a symmetrical directive might sumer expenditures edged higher in May after a sizable be more consistent with current economic condi- rise in April but have increased only slightly thus far this tions and the related outlook for a steady policy year. Housing starts turned up in April from a depressed first-quarter pace and rose somewhat further in May. course over the near term. These members agreed, Incoming data suggest a continued brisk advance in however, that a return to symmetry so soon after outlays for business equipment, while nonresidential the adoption of a directive that was biased toward construction has remained soft. The nominal U.S. merrestraint could convey a misleading impression that chandise trade deficit was about unchanged in April but recent developments had increased the Commit- substantially larger than its average rate in the first quarter. Consumer and producer prices were about tee's concerns about the sustainability of the expanunchanged in May, but for the year to date inflation has sion or that the Committee had become less been more rapid than in the second half of 1992. committed to a disinflationary policy course. Short-term interest rates have changed little since the Accordingly, these members indicated that they Committee meeting on May 18 while bond yields have could support an asymmetric directive at this point. declined somewhat. In foreign exchange markets, the Several members observed that a number of key trade-weighted value of the dollar in terms of the other G-10 currencies increased on balance over the intermeeteconomic measures were scheduled for release ing period. during the intermeeting period and that the data in After contracting during the first quarter, M2 and M3 question should provide a firmer basis for evaluat- expanded appreciably over the second quarter. For the ing the performance of the economy and a desir- year through June, growth of the two aggregates was able course for monetary policy. below the lower ends of the ranges established by the Committee for 1993. Total domestic nonfinancial debt At the conclusion of the Committee's discussion, expanded somewhat further through April. all but one of the members indicated that they The Federal Open Market Committee seeks monetary preferred or found acceptable a directive that called and financial conditions that will foster price stability Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee Meeting 947 and promote sustainable growth in output. In furtherance implied a further easing of an already stimulative of these objectives, the Committee at this meeting low- monetary policy. In these circumstances, a tightenered the ranges it had established in February for growth ing of policy would not involve any significant risk of M2 and M3 to ranges of 1 to 5 percent and 0 to to the expansion but would foster changes in finan- 4 percent respectively, measured from the fourth quarter of 1992 to the fourth quarter of 1993. The Committee cial conditions and the outlook for inflation that anticipated that developments contributing to unusual would be more consistent with renewed progress velocity increases would persist over the balance of the toward price stability in 1994 and later. Declining year and that money growth within these lower ranges inflation around the world and a stronger trend of would be consistent with its broad policy objectives. The productivity growth in the United States, among monitoring range for growth of total domestic nonfinancial debt also was lowered to 4 to 8 percent for the year. other factors, were providing a favorable environ- For 1994, the Committee agreed on tentative ranges for ment for further disinflation, but those developmonetary growth, measured from the fourth quarter of ments needed to be supported and validated by 1993 to the fourth quarter of 1994, of 1 to 5 percent for appropriate monetary policy action. M2 and 0 to 4 percent for M3. The Committee provision- At this meeting, the Committee reviewed its ally set the monitoring range for growth of total domestic nonfinancial debt at 4 to 8 percent for 1994. The practices with regard to the release of information behavior of the monetary aggregates will continue to be to the public. This review was undertaken in evaluated in the light of progress toward price level response to media reports of the purported results stability, movements in their velocities, and developof the May meeting before the Committee had ments in the economy and financial markets. made public any information about that meeting. In In the implementation of policy for the immediate its discussion, the Committee reaffirmed its longfuture, the Committee seeks to maintain the existing degree of pressure on reserve positions. In the context of standing rules governing the confidentiality of the Committee's long-run objectives for price stability FOMC information, including the schedule that and sustainable economic growth, and giving careful calls for releasing the minutes of a Committee consideration to economic, financial, and monetary meeting, along with an explanation of the Commitdevelopments, slightly greater reserve restraint would or tee's decisions, a few days after the next meeting. slightly lesser reserve restraint might be acceptable in the intermeeting period. The contemplated reserve con- These rules are designed to safeguard the Commitditions are expected to be consistent with modest growth tee's flexibility to make needed adjustments to in the broader monetary aggregates over the third policy and also to provide adequate time to prepare quarter. a full report of the context and rationale for its decisions. Committee members emphasized the Votes for this action: Messrs. Greenspan, Mullins, Boehne, Keehn, Kelley, LaWare, Lindsey, McTeer, potential for inadvertent leaks of information in the Oltman, Ms. Phillips, and Mr. Stern. Vote against this course of general conversations with representaaction: Mr. Angell. Absent: Mr. Corrigan. (Mr. Olt- tives of the news media or others concerning the man voted as alternate for Mr. Corrigan.) members' views about economic developments or monetary policy. The members agreed that particu- Mr. Angell dissented because he favored a lar care needed to be taken for some period before prompt move to tighten policy. In his view, moneand after each of its meetings. tary policy was overly expansive at this point as It was agreed that the next meeting of the Comevidenced by what he viewed as excessive liquidity mittee would be held on Tuesday, August 17, 1993. in financial markets, the negative level of real The meeting adjourned at 12:25 p.m. on Wednesshort-term interest rates, and the disappointing lack day, July 7, 1993. of progress toward lower inflation this year. Given indications of worsening inflationary expectations, such as the substantial rise in the price of gold, as well as projections of an increase in inflation, a Donald L. Kohn, policy that led to a steady federal funds rate in fact Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

949 Legal Developments FINAL RULE—AMENDMENT TO REGULATIONS eral government will take appropriate measures and H, K, AND Y will maintain an interagency database that is derived from these reports. The Board of Governors is amending 12 C.F.R. Parts 208, 211, and 225, its Regulations H, K, and Y (b) Institution-affiliated party. Institution-affiliated (Membership of State Banking Institutions in the Fed- party means any institution-affiliated party as that term eral Reserve System; International Banking Opera- is defined in sections 3(u) and 8(b)(3) and (4) of the tions; Bank Holding Companies and Change in Bank FDIA (12 U.S.C. 1813(u) and 1818(b)(3) and (4)). Control; Criminal Referral Report). An interagency task force has designed a uniform multi-agency crim- (c) Reports Required. A state member bank shall file a inal referral form in order to facilitate compliance with criminal referral report using a standardized form (the financial institutions' criminal activity reporting re- "Form"),1 in accordance with instructions for the quirements, to enhance law enforcement agencies' Form, in every situation where: ability to investigate and prosecute the matters re- (1) The State member bank suspects one of its ported in the criminal referrals, and to develop and directors, officers, employees, agents, or other maintain a new interagency database. This uniform institution-affiliated parties of having committed or criminal referral form will replace the various criminal aided in the commission of a crime; referral forms that are currently being used by Federal (2) There is an actual or potential loss to the state bank, thrift and credit union regulatory agencies and member bank (before reimbursement or recovery) by the banking organizations they supervise. The of more than $1,000 where the State member bank purpose of the proposed regulation is to create a has a substantial basis for identifying a possible uniform criminal referral reporting requirement for all suspect or group of suspects and the suspect(s) is domestic and foreign financial institutions operating in not a director, officer, employee, agent, or instituthe United States. tion-affiliated party of the State member bank; Effective October 6, 1993, 12 C.F.R. Parts 208, 211, (3) There is an actual or potential loss to the state and 225 are amended as follows: member bank (before reimbursement or recovery) of $5,000 or more and where the State member bank Part 208—Membership of State Banking has no substantial basis for identifying a possible Institutions in the Federal Reserve System suspect or group of suspects; or (4) The State member bank suspects that it is being I. The authority citation for 12 C.F.R. Part 208 is used as a conduit for criminal activity, such as revised to read as follows: money laundering or structuring transactions to evade the Bank Secrecy Act reporting require- Authority: 12 U.S.C. 248(a) and (c), 321-328, 461, ments. 481-486, 601, 611, 814, 1818, 18230) and 1831o. (d) Time for Reporting. (1) A state member bank shall file the report required by paragraph (c) of this 2. Section 208.20 is added to read as follows: section no later than 30 calendar days after the date of detection of the loss or the known or suspected Section 208.20—Reports of crimes and criminal violation or activity. If no suspect has been suspected crimes. identified within 30 calendar days after the date of the detection of the loss or the known, attempted or (a) Purpose. This section applies to known or sus- suspected criminal violation or activity, reporting pected crimes involving state member banks. This may be delayed an additional 30 calendar days or section ensures that law enforcement agencies are notified by means of criminal referral reports when 1. Copies of the Form (FR 2230) are available from the Federal unexplained losses or known or suspected criminal Reserve Banks. The Form may be prepared using a computer shell acts are discovered. Based on these reports, the Fed- that is distributed by the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

950 Federal Reserve Bulletin • October 1993 until a suspect has been identified; but in no case Section 211.8—Reports of crimes and shall reporting of known or suspected crimes be suspected crimes. delayed more than 60 calendar days after the date of the detection of the loss or the known, attempted or suspected criminal violation or activity. When a (a) An Edge corporation or any branch or subsidiary report requirement is triggered by the identification thereof or an Agreement corporation or branch or any of a suspect or group of suspects, the reporting subsidiary thereof shall file a criminal referral form in period commences with the identification of each accordance with the provisions of section 208.20 of the suspect or group of suspects. Board's Regulation H, 12 C.F.R. 208.20. (2) When a State member bank detects a pattern of crimes committed by an identifiable individual, the 3. Section 211.24 is amended by adding a new para- State member bank shall file a report no later than 30 graph (f) to read as follows: calendar days after the aggregated amount of the crimes exceeds $1,000. (3) In situations involving violations requiring imme- Section 211.24—Nonbanking activities of diate attention or where a reportable violation is foreign banking organizations. ongoing, the State member bank shall immediately notify by telephone the appropriate law enforcement agency and the appropriate Federal Reserve Bank in addition to filing a timely written report. (e) Reporting to State and Local Authorities. State (f) Reports of Crimes and Suspected Crimes. Except member banks are encouraged to file copies of the for a federal branch or a federal agency or a state Form with State and local authorities where appropri- branch that is insured by the Federal Deposit Insurate. ance Corporation, a branch or agency or a represen- (f) Exceptions. A State member bank need not file the tative office of a foreign bank operating in the United Form: States shall file a criminal referral form in accordance (1) For those robberies and burglaries that are with the provisions of section 208.20 of the Board's reported to local law enforcement authorities; and Regulation H, 12 C.F.R. 208.20. (2) For lost, missing, counterfeit or stolen securities if a report is filed pursuant to the reporting require- Part 225—Bank Holding Companies and ments of 17 C.F.R. 240.17f-l. Change in Bank Control (g) Retention of Records. A State member bank shall maintain copies of any Form that it filed and the 1. The authority citation for 12 C.F.R. Part 225 is originals of all related documents for a period of revised to read as follows: 10 years from the date of the report. (h) Notification to Board of Directors. The manage- Authority: 12 U.S.C. 18170(13); 1818(b); 1844(b); ment of a State member bank shall promptly notify its 3106 and 3108; and Pub. L. 98-181, title IX. board of directors of any report filed pursuant to this section. 2. Section 225.4 is amended by adding a new para- (i) Penalty. Failure to file a report in accordance with graph (g) to read as follows: the instructions on the Form and this regulation may subject the State member bank, its directors, officers, employees, agents, or other institution-affiliated parties to supervisory action. Section 225.4—Corporate practices. Part 211—International Banking Operations 1. The authority citation for 12 C.F.R. Part 211 is revised to read as follows: (g) Criminal referral report. A bank holding company or any nonbank subsidiary thereof, or a foreign bank Authority: 12 U.S.C. 221 et seq., 1818, 1841 et seq., that is subject to the BHC Act or any nonbank 3101 et seq., 3901 et seq., and Pub. L. 100-418, 102 subsidiary of such foreign bank operating in the United Stat. 1384 (1988). States, shall file a criminal referral form in accordance with the provisions of section 208.20 of the Board's 2. Section 211.8 is added to read as follows: Regulation H, 12 C.F.R. 208.20. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 951 ORDERS ISSUED UNDER BANK HOLDING AmSouth and Charter compete directly in the COMPANY ACT Tampa Bay Area banking market.5 Upon consummation of this proposal, AmSouth would become the Orders Issued Under Section 3 of the Bank eighth largest commercial bank or thrift institution Holding Company Act ("depository institution") in the market, controlling deposits of $507.8 million, representing 2.1 percent of AmSouth Bancorporation total deposits in depository institutions in the market.6 Birmingham, Alabama After considering the number of competitors remaining in the market, the relatively small increase in Order Approving the Acquisition of a Bank Holding concentration as measured by the Herfindahl- Company Hirschman Index ("HHI"),7 market shares, and all other facts of record, the Board concludes that con- AmSouth Bancorporation, Birmingham, Alabama summation of this proposal would not result in a ("AmSouth"), a bank holding company within the significantly adverse effect on competition in the meaning of the Bank Holding Company Act ("BHC Tampa Bay Area banking market or any other relevant Act"), has applied under section 3 of the BHC Act banking market. (12 U.S.C. § 1842) to acquire all the voting shares of Charter Banking Corp., St. Petersburg, Florida, Convenience and Needs Considerations ("Charter"), and thereby indirectly acquire First Gulf Bank, Gulfport, Florida ("First Gulf Bank").1 In reviewing an application to acquire a depository Notice of the application, affording interested per- institution under the BHC Act, the Board must consons an opportunity to submit comments, has been sider the convenience and needs of the communities to published (58 Federal Register 30,788 (1993)). The be served, and take into account the records of the time for filing comments has expired, and the Board relevant depository institutions under the Community has considered the application and all comments re- Reinvestment Act (12 U.S.C. § 2901 et seq.) ceived in light of the factors set forth in section 3 of the ("CRA"). The CRA requires the federal financial BHC Act. supervisory agencies to encourage financial institu- AmSouth, with total consolidated assets of tions to help meet the credit needs of the local com- $10.9 billion, operates four subsidiary banks in Ala- munities in which they operate, consistent with the bama, Florida, and Tennessee.2 AmSouth is the sixth safe and sound operation of such institutions. To largest commercial banking organization in Florida, accomplish this end, the CRA requires the appropriate controlling deposits of $1.4 billion, representing 1.2 federal supervisory authority to "assess the institupercent of total deposits in commercial banking organizations in the state.3 Charter is the 68th largest commercial banking organization in Florida, control- 5. The Tampa Bay Area banking market is approximated by ling deposits of $102.6 million, representing less than 1 Hernando, Hillsborough, Pasco, and Pinnelas Counties. percent of total deposits in commercial banking orga- 6. Market data are as of June 30,1992. Market share data are based nizations in the state. Upon consummation of this on calculations in which the deposits of thrift institutions are included at 50 percent. The Board previously has indicated that thrift instituproposal, AmSouth would remain the sixth largest tions have become, or have the potential to become, major competicommercial banking organization in Florida, control- tors of commercial banks. See Midwest Financial Group, 75 Federal ling deposits of $1.5 billion, representing 1.2 percent of Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Thus, the Board has regularly included total deposits in commercial banks in the state.4 thrift deposits in the calculation of market share on a 50 percent weighted basis. See, e.g., First Hawaiian Inc., 77 Federal Reserve Bulletin 52 (1991). 7. The HHI in this market would increase 1 point to 1456. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in which the post-merger HHI is 1. Upon consummation of this proposal, Charter will merge into between 1000 and 1800 is considered moderately concentrated. A AmSouth and First Gulf Bank will merge into AmSouth's subsidiary market in which the post-merger HHI is above 1800 is considered to bank, AmSouth Bank of Florida, Pensacola, Florida ("AmSouth be highly concentrated. In such markets, the Justice Department is Florida"). likely to challenge a merger that increases the HHI by more than 50 2. Asset data are as of December 31, 1992. points. The Justice Department has informed the Board that a bank 3. State deposit data are as of June 30, 1992. merger or acquisition generally will not be challenged (in the absence 4. The Board previously has determined that the interstate banking of other factors indicating anti-competitive effects) unless the poststatute of Florida permits an Alabama bank holding company to merger HHI is at least 1800 and the merger or acquisition increases the acquire banking organizations in Florida (see SouthTrust Corporation, HHI by at least 200 points. The Justice Department has stated that the 74 Federal Reserve Bulletin 56 (1988)), and AmSouth currently higher than normal threshold for an increase in the HHI when operates a commercial bank in Florida. Thus, consummation of this screening bank mergers and acquisitions for anti-competitive effects transaction is not barred by section 3(d) of the BHC Act (12 U.S.C. implicitly recognizes the competitive effect of limited-purpose lenders § (d)). and other non-depository financial entities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

952 Federal Reserve Bulletin • October 1993 tion's record of meeting the credit needs of its entire Currency ("OCC"), in October 1992.12 This rating community, including low- and moderate-income reflects an improvement from the "satisfactory" ratneighborhoods, consistent with the safe and sound ing received in July 1990. In addition, First Gulf Bank operation of such institution," and to take that record received a "satisfactory" rating from the FDIC in into account in its evaluation of bank holding company April 1992. applications.8 In this regard, the Board has received comments B. Other Aspects of CRA Performance critical of AmSouth's record of performance under the CRA from the Center for Research on Human Rights, Lending and Investment Programs. Since the 1990 Birmingham, Alabama, and the National Community Order, AmSouth Bank has taken various steps to Reinvestment Network ("Protestants"). Protestants increase the availability of credit to its delineated allege that AmSouth has not met the convenience and community and to address disparities in its lending. needs of low- and moderate-income African-American AmSouth Bank offers a variety of products and residents in Jefferson County and Birmingham, Ala- services, such as first-time real estate mortgage bama, and that AmSouth has not made direct invest- loans, rehabilitation loans, small business loans, and ments in inner-city neighborhoods.9 home improvement loans, that are specifically de- The Board has carefully reviewed the CRA perfor- signed to help meet the credit needs of its communimance records of AmSouth, Charter, and their subsid- ties, including low- and moderate-income neighboriary banks, as well as the comments received regard- hoods. In July 1992, AmSouth Bank established a ing this application, AmSouth's responses to those low-income mortgage loan program that applies more comments, and all other relevant facts of record in flexible underwriting criteria than are used for conlight of the CRA, the Board's regulations, and the ventional mortgages. Through June 1993, this pro- Statement of the Federal Financial Supervisory Agen- gram has resulted in the origination of 703 loans cies Regarding the Community Reinvestment Act totaling $28 million. AmSouth also has committed to ("Agency CRA Statement").10 extend an additional $25 million in home mortgage loans to families earning less than 80 percent of the A. CRA Performance Examinations median income of their local community. In addition, as of July 1992, AmSouth Bank and AmSouth Mortgage Company, Birmingham, Alabama ("AmSouth The Agency CRA Statement provides that a CRA Mortgage"), had $681 million in residential firstexamination is an important, and often controlling, mortgage loans outstanding and $51 million in resifactor in the consideration of an institution's CRA dential second-mortgage loans outstanding in the record, and that these reports will be given great weight in the applications process.11 The record in this communities they serve. case indicates that all of AmSouth's subsidiary banks AmSouth Bank is the largest investor in the Alahave received "outstanding" or "satisfactory" ratings bama Small Business Investment Company ("SBIC"), during the most recent examinations of their CRA having contributed $415,000 of the $1 million fund.13 performance. AmSouth's lead subsidiary bank, Am- AmSouth Bank also is the lead contributor in a multi- South Bank, N.A., Birmingham, Alabama ("AmSouth bank Community Development Corporation which, Bank"), which includes Birmingham and Jefferson from June 1990 to March 1993, extended 112 loans County in its delineated service area, received an totaling $4 million. "outstanding" rating for CRA performance from its In addition, AmSouth Bank originates various govprimary regulator, the Office of the Comptroller of the ernment sponsored or guaranteed loans including FHA and VA mortgage loans, government-backed 8. 12 U.S.C. § 2903. 12. AmSouth's other subsidiary banks have received the following 9. Protestants made substantially similar allegations relating to CRA ratings: AmSouth Bank of Florida, Pensacola, Florida, received AmSouth's record of performance under the CRA in connection with an "outstanding" rating from the FDIC in January 1993; AmSouth AmSouth's application to acquire First Bank of Maury County, Bank of Tennessee, Nashville, Tennessee, received a "satisfactory" Columbia, Tennessee. See AmSouth Bancorporation, 76 Federal rating from the FDIC in September 1992; and AmSouth Bank of Reserve Bulletin 957 (1990) (the "1990 Order"). In reviewing those Walker County, Jasper, Alabama, received a "satisfactory" rating comments in 1990, the Board stated that it would monitor AmSouth's from the FDIC in January 1991. AmSouth Bank of Georgia, Summerprogress under the CRA in future applications to expand its deposit- ville, Georgia, opened for business in February 1993 and has not yet taking facilities. had a CRA examination. 10. 54 Federal Register 13,742 (1989). 13. From April 1988 to December 1992, this SBIC extended 40 loans 11. 54 Federal Register at 13,745. totaling $3.7 million. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 953 education loans, and SBA-guaranteed loans for small needs and keeping staff informed of CRA-related issues businesses. As of July 31, 1992, AmSouth Bank had and the requirements of consumer protection and fair 30,157 FHA/VA loans outstanding totaling $819 mil- lending laws.14 In AmSouth's most recent CRA examlion in Alabama, and had provided 15,541 govern- ination, examiners noted that AmSouth Bank's ascerment-backed education loans totaling $66.6 million. tainment program showed improvement because of the As of June 22, 1992, AmSouth Bank had 108 out- implementation of a credit needs assessment call prostanding SBA loans totaling $18.7 million. gram that targets community contacts and specifically AmSouth participates in the Birmingham Commu- gathers information on credit needs. In Birmingham, nity Development Corporation, Inc., a lending pro- AmSouth Bank has established contact with local polgram, and has led efforts to establish multi-bank Com- iticians, minority and small business organizations, munity Development Corporations ("CDCs") in civic and religious leaders, local realtors, and corporate Mobile and Huntsville, Alabama. AmSouth Bank also individuals. AmSouth Bank also has hired a research has representatives on the boards of various organiza- firm to conduct a telephone survey of local consumers, tions that assist minority businesses in acquiring credit and encourages employee involvement in local commuincluding the Birmingham City Wide Local Develop- nity groups. ment Corporation, the Minority Enterprise Small Bus- AmSouth's Corporate Marketing Department has iness Investment Company, and the Birmingham Bus- developed overall goals, strategies, and action plans iness Assistance Network. designed to ensure that marketing and advertising In mid-1992, AmSouth Bank initiated the organiza- programs reach all segments of the communities to be tion of the Montgomery Area Loan Fund, a consor- served. In particular, AmSouth Bank markets availtium of eight banks, to provide small business devel- able products and services through sales calling proopment financing and capital for community grams and through the local media, including minoritydevelopment. AmSouth Bank also participated in the owned radio stations and newspapers. Directors of formation of the Greater Huntsville Loan Fund, a AmSouth Bank also attend meetings of various comconsortium of six area banks. In 1992, AmSouth Bank munity groups to inform members of available credit extended $265,000 in capital and lines of credit to this services. fund. In addition, AmSouth Bank supports municipal projects throughout Alabama. C. HMDA Analysis Policies and Programs. The record indicates that AmSouth has put in place the types of policies outlined Protestants allege generally that data which Amin the Agency CRA Statement that contribute to an South's subsidiary banks are required to file under effective CRA program. Although primary responsibil- the Home Mortgage Disclosure Act (12 U.S.C. § 2801 ity for monitoring CRA compliance has been assigned et seq.) ("HMDA") show that AmSouth has not met to the Audit Committee, the board of directors has the credit needs of low- and moderate-income and established a corporate CRA policy and reviews the minority communities in Birmingham, Alabama. In performance of each subsidiary bank's management. this regard, the Board noted in the 1990 Order that The board of directors receives annual reports from AmSouth Bank's HMDA data for 1984-1989 showed each subsidiary bank detailing efforts to meet the disparities between the bank's lending in low- to requirements of CRA, and the Audit Committee re- moderate-income census tracts as compared with views all CRA self-assessment reports and any signed lending in high-income census tracts. written comments concerning a subsidiary bank's The Board has carefully reviewed HMDA data filed CRA performance. AmSouth also has established an by AmSouth Bank and AmSouth Mortgage for the Office of Community Affairs to: years 1990 through 1992 in the Birmingham MSA.15 These data show improvement in AmSouth's record of (1) Ensure that each subsidiary bank fulfills its lending in low- to moderate-income and minority comobligations under CRA; munities. For example, data indicate that there has (2) Train AmSouth officers on the requirements of been an increase in the number of loan applications CRA; received by AmSouth from residents of low- to mod- (3) Coordinate corporate CRA programs; and erate-income census tracts as well as an increase in the (4) Evaluate the reasonableness of each subsidiary bank's CRA statement and community delineation. 14. AmSouth also maintains an Office of Consumer Compliance to ensure compliance with all fair lending and consumer protection laws. A City President in each of AmSouth's delineated 15. All 1992 HMDA data used in this analysis is preliminary data. communities is responsible for ascertaining local credit The Birmingham MSA includes Jefferson County, Alabama. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

954 Federal Reserve Bulletin • October 1993 number of loans originated in low- to moderate-income To further address approval rate disparities, Amcensus tracts by AmSouth. These data also show that, South Bank initiated a secondary review process for at the same time that the number of loan applications all minority purchase-money loan applications that are from residents of low- to moderate-income census denied. As a result of this secondary review process, tracts increased, the disparity in the ratio of loan during the period June 1992 through December 1992, originations to loan applications in low- to moderate- 27 applications have been approved, providing income census tracts has decreased compared with the $1.7 million in new loans. AmSouth also retained an same ratio in high-income census tracts served by outside consultant to review all 1990 loan applications AmSouth.16 and the consultant determined that disparities in the AmSouth also has shown improvement in its record approval rates between minority and non-minority of lending to minority communities. In particular, mortgage loan applicants were not the result of illegal HMDA data indicate an increase in the number of loan discrimination. applications received from African-Americans and in the number of loans originated to African-Americans, D. Conclusion Regarding the Convenience and as well as a decrease in the percentage of denied Needs Factor African-American loan applications. AmSouth also has improved the ratio of loans originated to African- The Board has carefully considered the entire record, Americans as compared to loans originated to white including comments filed in this case, in reviewing the residents in the Birmingham MSA.17 The Board notes convenience and needs factor under the BHC Act. The that HMDA data also indicate that mortgage loans Board also has considered the results of AmSouth made by AmSouth to African-Americans, as a per- Bank's most recent CRA examination conducted in centage of total mortgage loans originated by Am- October 1992 by the OCC. This examination indicated South, exceeds the aggregate percentage of mortgages that AmSouth Bank has achieved a reasonable penemade by all lenders in the Birmingham MSA. In tration in all segments of its local communities, and addition, AmSouth has originated a higher percentage found no evidence of illegal discrimination in Amof its total loans in low- to moderate-income census South Bank's lending practices. tracts to minority low- to moderate-income census Based on a review of the entire record of perfortracts than all lenders in this aggregate. mance of AmSouth and its subsidiary banks, the Since the 1990 Order, AmSouth has undertaken a Board believes that the efforts of AmSouth and its number of steps to address disparities in its record of subsidiary banks to help meet the credit needs of all lending to low- and moderate-income and minority segments of the communities they serve, including communities. In June 1992, AmSouth conducted a low- and moderate-income and minority communities, telephone survey in low- and moderate-income census are consistent with approval. The Board recognizes, tracts in various cities, including Birmingham, Ala- however, that HMDA data indicate that some disparbama. As a result of this survey, AmSouth Bank hired ities in lending to low- and moderate-income and minority loan originators in Birmingham, Huntsville, minority residents remain. In this regard, the Board and Mobile, Alabama, and developed a training pro- will continue to monitor AmSouth's efforts in meeting gram to ensure that all of its lending officers provide the credit needs of all its communities, including lowfair and equal treatment to all loan applicants. and moderate-income and minority neighborhoods, and consider those efforts in future applications. Based on all the facts of record, the Board concludes that convenience and needs considerations, including 16. In 1990, AmSouth received 281 loan applications from residents the CRA performance of AmSouth, Charter, and their of low- to moderate-income tracts and originated 59 percent (165) of subsidiary banks, are consistent with approval of this these loans. In 1991, AmSouth received 302 loan applications from residents of low- to moderate-income tracts and originated 66 percent application.18 (199). In 1992, AmSouth received 503 loan applications from residents of low- to moderate-income tracts and originated 68 percent (341). Over this period, AmSouth originated approximately 84 percent of the loan applications submitted by residents of high-income census tracts. 18. Protestants have requested that the Board hold a public meeting 17. In 1990, AmSouth received 457 loan applications from African- or hearing on this application. The Board is not required under section American residents and originated 56 percent (257) of these loans. In 3(b) of the BHC Act to hold a hearing on an application unless the 1991, AmSouth received 578 loan applications from African-American appropriate banking authority for the bank to be acquired makes a residents and originated 61 percent (350). In 1992, AmSouth received timely written recommendation of denial of the application. In this 627 loan applications from African-American residents and originated case, the OCC has not recommended denial of the proposal. 65 percent (409). Over this period, AmSouth originated approximately Generally, under the Board's rules, the Board may, in its discretion, 83 percent of loan applications submitted by white residents in the hold a public hearing or meeting on an application to clarify factual Birmingham MSA. In addition, data for these years indicate that the issues related to the application, and to provide an opportunity for denial rate for African-American loan applications decreased from testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). The 36 percent to 24 percent. Board has carefully considered this request. In the Board's view, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 955 Other Considerations Notice of the application, affording interested persons an opportunity to submit comments, has been The Board also concludes that the financial and man- published (58 Federal Register 11,411 (1993)). The time agerial resources and future prospects of AmSouth, for filing comments has expired, and the Board has Charter, and their subsidiary banks, and other super- considered the application and all comments received visory factors the Board must consider under section 3 in light of the factors set forth in section 3(c) of the BHC of the BHC Act, are consistent with approval. Act. Based on all the facts of record, the Board has Dickinson is the 20th largest commercial banking determined that this application should be, and hereby organization in North Dakota, controlling deposits of is, approved. The Board's approval is specifically $70.9 million, representing approximately 1 percent conditioned upon compliance by AmSouth with all the of total deposits in commercial banks in the state.1 commitments made in connection with this applica- Bowman Bank is the 27th largest commercial banktion. For the purpose of this action, these commit- ing organization in North Dakota, controlling deposments and conditions will both be considered condi- its of $50.4 million, representing less than 1 percent tions imposed in writing and, as such, may be enforced of total deposits in commercial banks in the state. in proceedings under applicable law. The Board's Upon consummation of this proposal, Dickinson approval also is conditioned upon AmSouth Florida would become the ninth largest commercial banking obtaining the approval of the FDIC to merge with First organization in North Dakota. Dickinson and Bow- Gulf Bank. man Bank do not compete directly in any banking This acquisition shall not be consummated before market. Accordingly, based on all the facts of record the thirtieth calendar day following the effective date in this case, consummation of this proposal would of this Order, or later than three months after the not have a significantly adverse effect on competition effective date of this Order, unless such period is or the concentration of banking resources in any extended for good cause by the Board or by the relevant banking market. Federal Reserve Bank of Atlanta, acting pursuant to The Board has carefully considered the comments delegated authority. of a bank holding company ("Commenter") currently By order of the Board of Governors, effective involved in litigation with Dickinson over the owner- August 23, 1993. ship of a minority (21.1 percent) interest in Dickinson's subsidiary bank, Liberty National Bank and Voting for this action: Vice Chairman Mullins and Gover- Trust Company, Dickinson, North Dakota ("Liberty nors LaWare, Lindsey, and Phillips. Absent and not voting: Bank").2 In particular, the Commenter alleges that the Chairman Greenspan and Governors Angell and Kelley. financial projections by Dickinson do not take into account Commenter's minority interest in Liberty JENNIFER J. JOHNSON Bank and rely on Bowman Bank as a source of funds. Associate Secretary of the Board In addition, Commenter asserts that Liberty Bank's managerial resources will be impaired as a result of the Dickinson Bancorporation, Inc. Bowman Bank acquisition. Dickinson, North Dakota The Board has carefully reviewed the financial aspects of this proposal on the basis of Dickinson Order Approving Acquisition of a Bank owning all or, in the alternative, 78.1 percent of Liberty Bank, and without regard to dividends from Dickinson Bancorporation, Inc., Dickinson, North Bowman Bank. In either event, Dickinson would be Dakota ("Dickinson"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has applied under section 3 of the BHC 1. State deposit data are as of December 31, 1992. Act (12 U.S.C. § 1842) to acquire all the voting shares 2. In a transaction approved in 1990 by the bank's primary regulaof First National Bank of Bowman, Bowman, North tor, the Office of the Comptroller of the Currency ("OCC"), Liberty Bank merged over Commenter's objection with a de novo national Dakota ("Bowman Bank"). bank wholly owned by Dickinson and thereby "cashed out" Commenter's minority interest in Liberty Bank. Commenter sued Dickinson in federal district court, and the court held that mergers in which minority shareholders were "cashed out" were not authorized under interested parties have had a sufficient opportunity to present written the National Bank Act. This decision was recently reversed on appeal submissions, and have submitted substantial written comments that by a federal appellate court, which found the transaction permissible have been considered by the Board. On the basis of all the facts of under the OCC's interpretation of the National Bank Act. Commenter record, the Board has determined that a public meeting or hearing is has questioned Liberty Bank's payment of legal fees associated with not necessary to clarify the factual record in this application, or this litigation. Dickinson has reimbursed Liberty Bank for its legal fees otherwise warranted in this case. Accordingly, the request for a public with the understanding that this reimbursement will be returned if meeting or hearing on this application is hereby denied. Dickinson prevails in the litigation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

956 Federal Reserve Bulletin • October 1993 able to service its acquisition debt consistent with the Order Approving Acquisition of Banks Board's guidelines. The Board also has considered the managerial resources and capabilities of Dickin- First United Bank Group, Inc., Albuquerque, New son and Liberty Bank, and Dickinson's proposed Mexico, Ford Bank Group, Inc., Lubbock, Texas, and management plan for Bowman Bank, in light of all Ford Bank Group Holdings, Inc., Wilmington, Delainformation in the record, including the assessment ware (together "Ford"), bank holding companies of managerial resources contained in reports of ex- within the meaning of the Bank Holding Company Act amination from Liberty Bank's primary regulator, ("BHC Act"), have applied for the Board's approval the OCC. On the basis of all facts of record, the under section 3(a)(3) of the BHC Act (12 U.S.C. Board concludes that Commenter's objections do not § 1842(a)(3)) to acquire Texas Commerce Bank Nawarrant denial of this proposal, and that the financial tional Association, Lubbock, Texas ("TCB-Luband managerial resources and future prospects of the bock").1 Ford also has applied to establish a de novo institutions involved are consistent with approval of bank subsidiary, Midland National Bank, Midland, the application. Texas ("Midland").2 Considerations relating to the convenience and Notice of the applications, affording interested perneeds of the communities to be served, and other sons an opportunity to submit comments, has been supervisory factors the Board must consider under published (58 Federal Register 33,097 (1993)). The section 3 of the BHC Act are also consistent with time for filing comments has expired, and the Board approval of this application. has considered the applications and all comments Based on the foregoing and other facts of record, received in light of the factors set forth in section 3(c) the Board has determined that the application should of the BHC Act. be, and hereby is, approved. The Board's approval is Ford has consolidated assets of approximately specifically conditioned on Dickinson's compliance $3.4 billion, and controls 19 banks in Texas and New with the commitments made in connection with this Mexico.3 Upon consummation of this proposal, Ford application. All of the commitments and conditions would become the 16th largest commercial banking relied upon by the Board in reaching its decision are organization in Texas, controlling deposits of $1.3 bilboth conditions imposed in writing in connection lion, representing approximately 1 percent of the dewith the Board's findings and decision and, as such, posits in commercial banks in the state.4 may be enforced in proceedings under applicable law. The transaction approved in this Order shall not Competitive Effects be consummated before the thirtieth calendar day following the effective date of this Order, or later In every bank holding company application to acquire than three months after the effective date of this a bank, the Board must consider the competitive Order, unless such period is extended for good cause aspects of the proposal. In this regard the Board has by the Board or by the Federal Reserve Bank of carefully reviewed comments opposing the proposal Minneapolis, acting pursuant to delegated authority. from an individual ("Protestant"). In particular, Prot- By order of the Board of Governors, effective estant contends that this proposal will materially August 2, 1993. lessen competition for all banking activities in Lubbock, Texas. Ford and TCB-Lubbock compete in the Lubbock County banking market.5 Voting for this action: Chairman Greenspan and Governors Mullins, Angell, Kelley, and La Ware. Absent and not voting: Ford is the largest depository institution6 in the Governors Lindsey and Phillips. JENNIFER J. JOHNSON 1. First United Bank Group owns Ford Bank Group which is a Associate Secretary of the Board multi-bank holding company that owns Ford Bank Group Holdings. TCB-Lubbock will be merged into First National Bank of West Texas, Lubbock, Texas ("FNB-West Texas"), a wholly owned subsidiary of Ford. First United Bank Group, Inc. 2. Midland will purchase certain assets and assume certain liabilities Albuquerque, New Mexico from Texas Commerce Bank National Association, Midland, Texas. 3. Asset data are as of June 30, 1993. 4. Market deposit data are as of June 30, 1992. Ford Bank Group, Inc. 5. The Lubbock County banking market is approximated by Lub- Lubbock, Texas bock County, Texas. 6. In this context, depository institutions include commercial banks, savings banks, and savings associations. The Board previously has Ford Bank Group Holdings, Inc. indicated that thrift institutions have become, or have the potential to become, major competitors of commercial banks. See Midwest Finan- Wilmington, Delaware cial Group, 75 Federal Reserve Bulletin 386 (1989); National City Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 957 Lubbock banking market, controlling deposits of deposits in this market.9 Ford would become the $610 million, representing 24.9 percent of total depos- second largest depository institution in the Midland its in depository institutions in the market ("market banking market, controlling deposits of $265 million, deposits"). TCB-Lubbock is the fifth largest deposi- representing 20 percent of market deposits. tory institution in the market, controlling deposits of Based on all the facts of record, and for the reasons $171.2 million, representing 7 percent of market de- discussed above, the Board believes that consummaposits. Upon consummation of this proposal, Ford tion of this proposal would not have a significantly would remain the largest depository institution in the adverse effect on competition or the concentration of Lubbock banking market, controlling deposits of banking resources in any relevant banking market. $781.2 million, representing 31.9 percent of market deposits.7 The Herfindahl-Hirschman Index ("HHI") Other Considerations would increase by 347 points to 1761, and therefore not exceed the threshold standards in the Department The Board also concludes that the financial and manof Justice's revised guidelines.8 agerial resources and future prospects of Ford, its A number of other factors also indicate that this subsidiaries, TCB-Lubbock, and Midland, are consisproposal would not have an adverse effect on compe- tent with approval of this proposal. Convenience and tition. For example, upon consummation of this pro- needs considerations and the other supervisory factors posal, fourteen depository institutions, including one that the Board is required to consider under section 3 national commercial banking organization, would con- of the BHC Act, also are consistent with approval.10 tinue to serve the market. In addition, the legal barri- Based on the foregoing and all the facts of record, ers to entry are low. Texas permits statewide branch the Board has determined that the application should banking and nationwide interstate banking, which fa- be, and hereby is, approved. The Board's approval of cilitates entry into the market for potential competi- this proposal is expressly conditioned on compliance tors. with the commitments made by Ford in connection Ford's acquisition of Midland also would not have with this application. For purposes of this action, an adverse effect on competition in the Midland bank- these commitments and conditions relied on in reaching market because Ford currently does not control ing this decision are deemed to be conditions imposed in writing by the Board in connection with its findings and decision, and, as such, may be enforced in pro- Corporation, 70 Federal Reserve Bulletin 743 (1984). Thus, the Board ceedings under applicable law. has regularly included thrift deposits in the calculation of market share on a 50 percent weighted basis. See, e.g., First Hawaiian, Inc., 11 Federal Reserve Bulletin 52 (1991). In considering the competition offered by thrifts in all banking markets in this case, thrift deposits are weighted at 50 percent. 7. Protestant also has expressed concern that this transaction would 9. The Midland banking market is approximated by Midland lessen competition among the trust departments operating in Lub- County, Texas. bock. For the reasons explained in previous decisions, the Board 10. Protestant has expressed concern about the future employment continues to believe that the competitive analysis of bank expansion of individuals who worked at TCB-Lubbock. In response, Ford has proposals should be based on the availability of the cluster of banking stated that four of the six officers who worked at TCB-Lubbock have services to a range of customers in the local banking market. See accepted offers of employment with FNB-West Texas. One of the SouthTrust Corporation, 78 Federal Reserve Bulletin 710, 713 (1992); remaining officers has been offered employment at another Texas First Hawaiian, Inc., 11 Federal Reserve Bulletin 52 , 53 (1991); Commerce Bank subsidiary. FNB-West Texas also plans to hire most United States v. Philadelphia National Bank, 374 U.S. 321 (1963). of the remaining employees of TCB-Lubbock. Ford has committed to Protestant has provided no data supporting treatment of trust services provide full severance benefits for those few employees of TCBas a separate product market. In any event, the Board has considered Lubbock who ultimately are affected by the acquisition. the effect of this proposal on trust services, and given the availability In addition, Protestant believes that this merger would cause the of these services by depository institutions and others, and the broad closing of an office building in downtown Lubbock, and, therefore, geographical market for these services, the Board has determined that adversely affect the development of the downtown area. Protestant this proposal would not have a significantly adverse effect on compe- also has asked that no merger be permitted without requiring the tition for trust services in the Lubbock banking market. present management of TCB-Lubbock to investigate the possibility of 8. Under the revised Department of Justice Merger Guidelines, 49 local investors buying the bank. Ford has stated that TCB-Lubbock Federal Register 26,823 (June 29, 1984), a market in which the currently occupies a portion of one office building in downtown post-merger HHI is above 1800 is considered to be highly concen- Lubbock and that this acquisition will not affect the economic vitality trated. In such markets, the Justice Department is likely to challenge of the downtown area. Protestant has not stated any reason why the a merger that increases the HHI by more than 50 points. The Justice sale of TCB-Lubbock to non-local investors should adversely impact Department has informed the Board that a bank merger or acquisition the convenience and needs considerations that the Board is required generally will not be challenged (in the absence of other factors to examine under the BHC Act. The Board notes that the majority of indicating anti-competitive effects) unless the post-merger HHI is at the senior management from TCB-Lubbock has accepted employment least 1800 and the merger or acquisition increases the HHI by at least at FNB-West Texas. In addition, the Board expects that Ford will 200 points. The Justice Department has stated that the higher than continue to meet its statutory obligation to serve the convenience and normal threshold for an increase in the HHI when screening bank needs of Lubbock after this acquisition. Based on all the facts of mergers and acquisitions for anti-competitive effects implicitly recog- record, the Board does not believe that these comments cause the nizes the competitive effect of limited-purpose lenders and other balancing of the convenience and needs factors to be inconsistent with non-depository financial entities. approval of this proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

958 Federal Reserve Bulletin • October 1993 This transaction shall not be consummated before Financial, Managerial, and Competitive the thirtieth day following the effective date of this Considerations Order, or later than three months after the effective date of this Order, unless such period is extended for The Board concludes that the financial and managerial good cause by the Board or by the Federal Reserve factors and future prospects of PNC and TMC, and Bank of Dallas, acting pursuant to delegated authority. other supervisory factors that the Board must consider By order of the Board of Governors, effective under section 3 of the BHC Act, are consistent with August 30, 1993. approval of this application. The competitive factors under section 3 also are consistent with approval. Voting for this action: Chairman Greenspan and Governors Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips. Convenience and Needs Considerations JENNIFER J. JOHNSON In considering an application under the BHC Act, the Associate Secretary of the Board Board is required to consider the convenience and needs of the communities to be served, and take into account the records of the relevant depository institu- PNC Bank Corp. tions under the Community Reinvestment Act Pittsburgh, Pennsylvania (12 U.S.C. § 2901 et seq.) ("CRA"). The CRA requires the federal financial supervisory agencies to Order Approving Acquisition of a Bank encourage financial institutions to help meet the credit needs of the local communities in which they operate, PNC Bank Corp., Pittsburgh, Pennsylvania ("PNC"), consistent with safe and sound operation of such a bank holding company within the meaning of the institutions. To accomplish this end, the CRA requires Bank Holding Company Act ("BHC Act"), has ap- the appropriate federal supervisory agency to "assess plied under section 3(a)(3) of the BHC Act (12 U.S.C. the institution's record of meeting the credit needs of § 1842(a)(3)) to acquire The Massachusetts Company, its entire community, including low- and moderate- Boston, Massachusetts ("TMC").1 income neighborhoods, consistent with the safe and Notice of this application, affording interested per- sound operation of such institutions," and to take that sons an opportunity to submit comments, has been record into account in its evaluation of bank holding published (58 Federal Register 31,714 (1993)). The company applications.4 time for filing comments has expired, and the Board In this regard, the Board has received comments has considered the application and all comments refrom the Pittsburgh Community Reinvestment Group ceived in light of the factors set forth in section 3(c) of supporting PNC's application to purchase TMC. The the BHC Act. Board also has received comments from the United PNC, with total consolidated assets of $51.5 billion, Paperworkers International Union ("Protestant") aloperates 13 subsidiary banks in Pennsylvania, Kenleging that 1991 Home Mortgage Disclosure Act tucky, Ohio, Indiana, New Jersey, and Delaware.2 ("HMDA") data indicate that PNC rejects minority Upon consummation of this proposal, PNC would mortgage applicants at rates far higher than white become the tenth largest commercial banking organi- applicants.5 The Board has carefully reviewed the zation in Massachusetts, controlling deposits of CRA performance record of PNC, as well as all $644.6 million, representing approximately 1.2 percent comments received, the responses to those comments, of the deposits in commercial banks in the state.3 and all the other relevant facts of record in light of the CRA, the Board's regulations, and the Statement of the Federal Financial Supervisory Agencies Regarding the Community Reinvestment Act ("Agency CRA Statement").6 1. TMC became a bank for purposes of the BHC Act upon enactment of the Competitive Equality in Banking Act of 1987 ("CEBA"), but its ownership by The Travelers Corporation was grandfathered under section 101(c) of CEBA. 4. 12 U.S.C. § 2903. 2. Asset and state banking data are as of March 31, 1993. 5. The HMDA requires banks to report certain information regard- 3. The Board previously has determined that the interstate banking ing loan applications, approvals, and denials to the various banking statute of Massachusetts permits a Pennsylvania bank holding com- agencies and the public. This information includes data on the race, pany to acquire banking organizations in Massachusetts. See Mellon gender, and income of individual loan applicants, as well as the Bank Corporation, 79 Federal Reserve Bulletin 626 (1993). Thus, location of the property securing the potential loan, and a description consummation of this transaction is not barred by section 3(d) of the of the application. BHC Act (12 U.S.C. § (d)). 6. 54 Federal Register 13,742 (1989). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 959 Record of Performance Under the CRA evidence of illegal discrimination or other illegal credit practices.9 In this regard, examiners randomly se- A. CRA Performance Examinations lected and reviewed the banks' loan documentation, including files for rejected loans. The Agency CRA Statement provides that a CRA The Board also notes that PNC has taken a number examination is an important, and often controlling, of steps to address the disparities in its HMDA data. factor in the consideration of an institution's CRA For example, PNC affiliates have fair mortgage lending record and that these reports will be given great weight programs that include credit counseling, second loan in the applications process.7 In this case, the Board reviews, sensitivity training, special mortgage prodnotes that all of PNC's 13 subsidiary banks received ucts, marketing to minorities, minority business goals, "outstanding" or "satisfactory" ratings during the and compliance monitoring. In 1992, PNC Bank-Pittsmost recent examinations of their CRA performance.8 burgh created the Community Mortgage Department In addition, TMC received a "satisfactory" rating which is a specialized unit dedicated to originating and during its most recent examination of its CRA perfor- underwriting mortgage loans in Pittsburgh. mance conducted by the FDIC in August 1991. PNC has worked with community groups in all markets to establish or renew support for local credit B. Analysis of HMDA Data and Other Lending counseling programs to help minority and low-income Activities applicants. In Pittsburgh, this initiative led to the development of the Community Lender Credit Pro- The Board has carefully reviewed the 1991 HMDA gram designed to provide comprehensive credit and data reported by PNC in light of the Protestant's financial education to low-income Pittsburgh resicomments. These data indicate that, as a general dents. In Dayton, PNC participates in Neighbor to matter, PNC has extended a significant number and Neighbor, Inc., a program designed to provide technipercentage of home mortgage loans in low- and cal assistance services, training and financial resource moderate-income neighborhoods. In certain neighbor- development to neighborhood-based development corhoods, however, the data reflect disparities between porations. the loan rejection rates for minority applicants when PNC offers special mortgage products to attract compared to white applicants. minority customers. For example, the Neighborhood The Board is concerned when the record of an Mortgage Program in Pittsburgh and similar programs institution indicates disparities in lending to minority in other markets, offer reduced interest rates, points applicants and believes that all banks are obligated to and fees, higher acceptable debt-to-income and loanensure that their lending practices are based on criteria to-value ratios and specialized credit histories for that assure not only safe and sound lending, but also borrowers who normally do not use credit. In Cincinassure equal access to credit by creditworthy appli- nati, PNC met with community groups and enhanced cants regardless of race. The Board recognizes, how- its Open Door Mortgage program to better meet miever, that HMDA data alone provide an incomplete nority credit needs. These enhancements included a measure of an institution's lending in its community. zero downpayment requirement for the lowest income The Board also recognizes that HMDA data have homebuyers, flexible underwriting criteria and relimitations that make the data an inadequate basis, duced interest rates. absent other information, for concluding that an insti- PNC affiliates help meet the credit needs of small tution has engaged in illegal discrimination in making businesses through loans, investments, and technical lending decisions. assistance. For example, PNC banks in Pennsylvania The Board notes that the most recent CRA exami- have committed $1 million to the Keystone Minority nations of all 13 PNC subsidiary banks found no Capital Fund which will be managed by local minority enterprise corporations in Pittsburgh and Philadelphia. The Fund will provide both start-up and development financing to Black, Hispanic, and Asian owned busi- 7. Id. at 13,745. 8. PNC's lead subsidiary bank, PNC Bank, N.A., Pittsburgh, nesses. In Philadelphia, PNC worked with the His- Pennsylvania, is the product of a merger between Pittsburgh National Bank, Pittsburgh, Pennsylvania, Provident National Bank, Philadelphia, Pennsylvania, and Marine Bank, Erie, Pennsylvania. At present, the consolidated PNC Bank, N.A. has not received a CRA exam rating, but the former Pittsburgh National Bank had received an 9. Protestant identified PNC Bank of Pittsburgh, Central Trust of "outstanding" rating for two years in a row from the Office of the Ohio, and Provident National Bank as PNC subsidiaries that reject Comptroller of the Currency ("OCC") prior to the merger and minority mortgage applicants at rates higher than for white applicants. Provident National Bank also received an "outstanding" rating from PNC Bank of Pittsburgh and Provident National Bank are now part of the OCC. Marine Bank did not receive a public CRA rating from the PNC Bank, N.A., Pittsburgh, Pennsylvania. Central Trust is now part Federal Deposit Insurance Corporation ("FDIC"). of PNC Bank, Ohio, N.A., Cincinnati, Ohio. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

960 Federal Reserve Bulletin • October 1993 panic Chamber of Commerce to establish a special PNC markets its CRA-related products through a multibank micro-business loan pool. In 1992, PNC wide variety of media. In addition to traditional media made over $150 million available in new credit to small advertising, PNC utilizes minority newspaper adverbusinesses located in low- and moderate-income tisements and spots on minority radio stations. For neighborhoods. PNC banks also provide Small Busi- example, PNC officers in Cincinnati have been guests ness Administration ("SBA") loans and have been on a minority radio station to discuss the bank's named preferred lenders under the SBA Preferred special mortgage products for minorities and low- and Lender Program. moderate-income individuals. In Pittsburgh, PNC has PNC also helps meet the credit needs of its commu- sponsored radio and television shows on minority nities through its participation in programs such as owned stations. PNC also has advertised in Spanish Project HOPE. This program is designed to help when appropriate for a particular market. unemployed and underemployed homeowners, who are having difficulty meeting mortgage payments and risk foreclosure, keep their homes. Further, PNC also has helped to develop affordable rental housing for D. Conclusion Regarding Convenience and low-income communities. For example, PNC made Needs Factors over $50 million in loans to non-profit developers of affordable rental housing in 1992 and provided over $10 million in equity investments in affordable rental The Board has carefully considered all the facts of projects during that time. record, including the comments filed in this case, in reviewing the convenience and needs factor under the BHC Act. In considering PNC's CRA record, the C. Additional Elements of CRA Performance Board has examined PNC's record of lending to minorities, including HMDA data, as well as other as- In addition to HMDA data and other lending activities, pects of PNC's CRA performance, such as the various the Board also has considered other elements of the types of lending programs offered by PNC, its subsid- CRA performance of PNC. The record indicates that iaries' CRA ratings, PNC's corporate CRA policies, PNC has in place the types of policies outlined in the and its ascertainment and marketing efforts. Based on Agency CRA Statement that contribute to an effective a review of the entire record of this application, CRA program. In evaluating a bank's CRA program including the most recent CRA performance examinathe Board examines factors such as, but not limited to, tions of the institutions involved in this case, the a bank's corporate CRA policies, its ascertainment of Board believes that the efforts of PNC to help meet the community needs and its marketing efforts. credit needs of all segments of the communities PNC has in place the types of corporate policies served, including low- and moderate-income neighbornecessary to ensure a successful CRA program. For hoods, and all other convenience and needs considerexample, PNC Bank-Pittsburgh has a CRA Policy ations, are consistent with approval of this application. committee, whose membership includes the chief ex- Based on the foregoing and all the facts of record, ecutive officer, that exercises policy supervision for the Board has determined that this application should the CRA program at the bank. The committee's re- be, and hereby is, approved. The Board's approval is sponsibilities include internal audit examinations de- specifically conditioned upon compliance by PNC with signed to verify that compliance with CRA regulatory all the commitments made in its application. For requirements is consistently met. PNC affiliates also purposes of this action, the commitments are considprepare annual CRA Business Plans designed to meet ered conditions imposed in writing by the Board in the requirements of the PNC CRA Model Compliance connection with its findings and decisions, and, as Program. The Model Compliance Program establishes such, may be enforced in proceedings under applicable minimum standards and encompasses compliance with law. each of the 12 CRA regulatory assessment factors used This transaction shall not be consummated before by bank supervisory agencies. the thirtieth calendar day after the effective date of this A major focus of PNC's ascertainment of commu- Order, or later than three months after the effective nity credit needs is through outreach to community- date of this Order, unless such period is extended for based organizations. PNC requires that subsidiary good cause by the Board or by the Federal Reserve banks regularly meet with community leaders. Ascer- Bank of Cleveland, acting pursuant to delegated autainment findings are then analyzed by senior manage- thority. ment to determine if new products need to be devel- By order of the Board of Governors, effective oped. August 4, 1993. 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Legal Developments 961 Voting for this action: Governors Kelley and LaWare traded on the CME and The Bond Buyer Municipal under authority specifically delegated by the Board of Gov- Bond Index futures, options on The Bond Buyer ernors. Municipal Bond Index futures, and Major Market Index Maxi Stock Index futures traded on the JENNIFER J. JOHNSON CBOT;3 Associate Secretary of the Board (3) Acting as a FCM for nonaffiliated persons in the purchase and sale on customer order, through om- Orders Issued Under Section 4 of the Bank nibus accounts on certain major futures exchanges Holding Company Act other than the CME and the CBOT, of futures contracts and options on futures contracts for bul- Commerzbank Aktiengesellschaft lion, foreign exchange, government securities, cer- Frankfurt am Main, Federal Republic of tificates of deposit, other money market instruments Germany that a bank may buy or sell in the cash market for its own account, and those futures contracts and op- Order Approving Application to Engage in Futures tions on futures contracts listed in the Appendix;4 Commission Merchant Activities and Other and Nonbanking Activities (4) Data processing and transmission services, pursuant to section 225.25(b)(7) of the Board's Regula- Commerzbank Aktiengesellschaft, Frankfurt am tion Y (12 C.F.R. 225.25(b)(7)). Main, Federal Republic of Germany ("Applicant"), a foreign banking organization subject to the provisions Applicant has committed that Company will conduct of the Bank Holding Company Act ("BHC Act"),1 has these activities in accordance with the provisions and applied under section 4(c)(8) of the BHC Act subject to the limitations of Regulation Y (12 C.F.R. (12 U.S.C. § 1843(c)(8)) and section 225.23(a) of the 225.25(b)(18) and 225.25(b)(7)).5 Board's Regulation Y (12 C.F.R. 225.23(a)) to engage Notice of the application, affording interested perde novo through its subsidiary, CB Clearing, Inc., Chicago, Illinois ("Company"),2 in clearing trades of sons an opportunity to submit comments, has been duly published (57 Federal Register 22,769 (1992)). institutional customers relating to futures contracts The time for filing comments has expired, and the and options on futures contracts that have been exe- Board has considered the application and all comcuted by nonaffiliated floor brokers, and in other ments received in light of the factors set forth in futures commission merchant ("FCM") and related section 4(c)(8) of the BHC Act. nonbanking activities. In particular, Company pro- Applicant, with total consolidated assets of approxposes to engage in the following nonbanking activities: imately $149.2 billion, is the fourth largest banking (1) Acting as a FCM for nonaffiliated persons in the organization in the Federal Republic of Germany and execution and clearance, and in the clearance withthe 35th largest banking organization in the world.6 In out execution, on the Chicago Mercantile Exchange the United States, Applicant operates branches in ("CME") and the Board of Trade of the City of New York, New York; Chicago, Illinois; and Los Chicago ("CBOT") of futures contracts and options Angeles, California; and an agency in Atlanta, Georon futures contracts for bullion, foreign exchange, government securities, certificates of deposit, and other money market instruments that a bank may buy or sell in the cash market for its own account, 3. Company currently conducts the same FCM clearing activities described in the proposal for affiliated persons pursuant to section pursuant to section 225.25(b)(18) of the Board's 4(c)(1)(C) of the BHC Act (12 U.S.C. § 1843(c)(1)(C)) and section Regulation Y (12 C.F.R. 225.25(b)(18)); 225.22(a)(1) of the Board's Regulation Y (12 C.F.R. 225.22(a)(1)). (2) Acting as a FCM for nonaffiliated persons in the 4. Company would not become a member of any of the exchanges identified for this activity, or any other exchange except for the CME execution and clearance, and in the clearance with- and the CBOT, without prior notice to and, if required, approval by out execution, of Standard and Poor's 500 Stock the Federal Reserve System. See SR Letter No. 93-27 (FIS) (May 21, 1993). Price Index futures and options on such futures 5. The Board notes that Company would not trade for its own account except for the purpose of hedging a cash position in the related financial instrument as permitted by Regulation Y (see 12 C.F.R. 225.25(b)(18)(ii)) or to offset or liquidate a clearing error 1. As a foreign banking organization operating branches and an arising in the normal course of business. The Board considers such agency in the United States, Applicant is subject to certain provisions trading for the purpose of correcting clearing errors to be incidental to of the BHC Act by operation of section 8(a) of the International the permissible FCM activities under Regulation Y and the Board's Banking Act of 1978 (12 U.S.C. § 3106(a)). previous orders, and therefore to be consistent with approval of this 2. Applicant owns 62.5 percent of the voting shares of Company. application. The remaining voting shares are owned by senior management offi- 6. Asset and ranking data are as of December 31, 1991, and employ cials of Company. exchange rates then in effect. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

962 Federal Reserve Bulletin • October 1993 gia. In addition to these banking operations, Applicant clearing member on the CBOT, and would not qualify owns a finance company, Commerzbank U.S. Fi- any non-clearing member on the CME.10 nance, Inc., Wilmington, Delaware, and, pursuant to Company also proposes to conduct FCM activities the grandfather provisions of section 8(c) of the Inter- through omnibus customer trading accounts estabnational Banking Act of 1978 (12 U.S.C. § 3106(c)), lished in its own name with clearing members of the engages in investment banking and securities broker- exchanges on which Company would not itself be a age activities through Commerzbank Capital Markets clearing member.11 These omnibus accounts would be Corporation, New York, New York ("CCMC"). used for customers of Company wishing to purchase Company has registered as a FCM with the Com- or sell contracts on such exchanges, and would be modity Futures Trading Commission ("CFTC"), and divided into segments reflecting separately the positherefore is subject to the record-keeping, reporting, tions of each such customer. Using these omnibus fiduciary standards, and other requirements of the accounts, Company could, as agent for customers, Commodity Exchange Act (7 U.S.C. § 1 et seq.) and purchase and sell contracts described in section the CFTC. In addition, Company is a member of the 225.25(b)(18) of Regulation Y or listed in the Appendix National Futures Association, and Company and its through a clearing member of the relevant exchange. officers have obtained the memberships necessary for Alternatively, a customer of Company could place Company to become a clearing member of the CME orders for such contracts, for its segment of an omniand the CBOT. bus account, directly with the clearing firm with which Company maintains the omnibus account. Proposed Activities In addition, Company proposes to engage in certain financial data processing activities in connection with Applicant seeks authority for Company to execute and its FCM services, including the creation of trade data, clear trades as a FCM on the CME and the CBOT. In the production of account statements and activity addition, Applicant seeks authority for Company to reports, and the balancing of clearing accounts.12 clear trades of sophisticated institutional investors7 that have been executed by nonaffiliated floor brokers. In particular, Company proposes to accept for clear- 10. See generally CBOT Rules 333.00(a) and 350.06; CME Rules 511 and 524. ance orders of its customers that have been executed 11. An omnibus account is an arrangement between a member by preapproved execution groups pursuant to so- clearing firm of an exchange and a nonmember FCM that seeks to called "give-up agreements".8 Applicant expects that, conduct business on that exchange. Under such an arrangement, the member clearing firm executes and clears transactions for the noninitially, this clearing-only FCM activity will be the member FCM and its customers. The omnibus account reflects all primary activity of Company, and that Company will positions of the nonmember FCM's customers, but is divided into provide only limited execution services.9 Company separate segments for each customer for purposes of calculating margin requirements, reporting current holdings, and other matters. would not be the primary clearing firm for any non- Applicant has stated that this service would be provided as an accomodation to institutional customers: the customer would not need to open its own account with a clearing member, a transaction which may not be justifiable if anticipated trading activity is minimal, and Company would be able to provide each customer with a single statement describing the customer's overall futures position. Com- 7. Applicant expects these institutional investors to include banks, pany would be financially responsible to the clearing member with corporations, insurance companies, and pension and investment which it establishes an omnibus account with respect to all trades funds, and has stated that it will not perform FCM services for properly made by the clearing member through the account, but would customers who are not "institutional customers" as defined in not hold an ownership interest in the traded contracts. 12 C.F.R. 225.2(g)(1) and (2). Company will not execute or clear 12. Company also proposes to engage in certain other activities contracts, or perform other FCM services, for individuals (including which Applicant maintains are incidental to its FCM services, includlocals, market makers, specialists, and other professional floor traders ing the management of institutional customer funds under its control acting for their own accounts). and the provision to institutional customers, on request, of general 8. Under a give-up agreement, the executing floor broker or advice as to sources of information, the selection and arrangement of execution group, pursuant to a customer's instructions, gives up the an appropriate execution group, the availability of computer software order for clearance to a clearing member other than the executing relating to futures and options on futures, order placement alternabroker's primary (or qualifying) clearing firm. These agreements will tives, and cost-reduction methods in the use of futures and options for describe the parameters for each customer within which Company hedging purposes. Applicant has stated that Company's funds manwould be obligated to accept an order for clearance. Orders not agement activities will consist of investing customers' earned or satisfying the risk and other parameters established by the relevant deposited funds (including funds deposited for purposes of satisfying give-up agreement may be rejected by Company. margin requirements) in obligations of the United States in accordance 9. Applicant has stated that although Company would have the with applicable rules of the CFTC. See 17 C.F.R. 1.25 et seq. long-term objective of creating a full-service execution capability, Company would not provide investment advice relating to futures, Company does not intend initially to employ phone clerks or salaried options on futures, or any other matter. In view of Applicant's floor brokers. However, at a customer's request, Company would commitments and representations with respect to these incidental employ "dedicated" phone clerks to enter the customer's orders into services, the Board has determined that such services are an integral a specified exchange pit. In addition, Company eventually could part of Company's proposed FCM activities, including its marketing employ "general" phone clerks that would compete with execution efforts on behalf thereof, and therefore necessary to the conduct of groups for the right to provide order entry and execution services. such activities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 963 Closely Related to Banking Standard houses of the exchanges on which they operate, the Board concluded that the proposed activity presented The Board previously has determined by regulation or substantial credit risk exposure to the parent bank order that the provision of FCM services for the holding company, and that public benefit considerfutures contracts and options on futures contracts at ations precluded approval of the applications under issue in this application is an activity closely related to section 4(c)(8) of the BHC Act. banking for purposes of section 4(c)(8) of the BHC Applicant's proposal differs from the situation pre- Act.13 In addition, the Board has authorized by regu- sented in the Amro Order in a number of respects. For lation the provision of the financial data processing example, in the Amro Order, the bank-affiliated FCM services proposed to be offered by Company. See would have been the primary clearing firm for custom- 12 C.F.R. 225.25(b)(7). ers (market makers and other professional floor traders acting for their own accounts) who executed their Proper Incident to Banking Standard own trades. As a primary clearing firm, the FCM would have been obligated to clear all trades executed In order to approve this application, the Board also by any of these customers regardless of the risk to the must find that the performance of the proposed activ- FCM or the ability of the customer to meet its financial ities by Company "can reasonably be expected to obligations. In the present case, by contrast, Company produce benefits to the public . . . that outweigh would not serve as the primary or qualifying clearing possible adverse effects, such as undue concentration firm for any broker that executes Company's clearingof resources, decreased or unfair competition, con- only trades, or for any nonaffiliated customer. Comflicts of interests, or unsound banking practices." pany would clear only those trades that Company 12 U.S.C. § 1843(c)(8). itself executes, or that other executing brokers exe- The Board previously has denied a proposal in which cute and Company accepts for clearance pursuant to a a nonbanking subsidiary of a bank holding company customer give-up agreement.15 primarily would have cleared, but not executed, trades Applicant has represented that, under these give-up for professional floor traders (primarily market makers agreements, Company will have the contractual right and specialists) trading for their own accounts on major to refuse to clear trades that exceed the trading paramsecurities and commodity exchanges. See Stichting eters established by Company and contained in the Prioriteit ABN AMRO Holding, et al, 11 Federal give-up agreement for the particular customer con- Reserve Bulletin 189 (1991) ("Amro Order"). In the cerned. As an operational matter, if a trade varies from Amro Order, the Board was concerned that, by not the customer's authorized limits as set forth in the engaging in both the execution and clearance of a trade, relevant give-up agreement, Company would be able the nonbanking subsidiary would have been unable to to reject the trade, either by refusing to accept the decline transactions that presented unacceptable risk. order from the customer or, if the customer places the In this regard, the subsidiary would have been obligated order with the executing broker and the trade is to settle each trade entered into by one of its customers, executed, by refusing to clear the trade. In this regard, even if the customer did not have the financial re- the Board notes that Company will have a period of sources to honor its obligations. The Board also noted time in which to determine whether a trade already that no mechanism existed in that case by which the executed was within established parameters and othnonbanking subsidiary could monitor, on a contempo- erwise properly authorized and, if the trade was not raneous basis, the intra-day trading activities of the properly authorized, to decide whether to reject the floor traders who were to be its primary customers.14 trade for clearance.16 In connection with Company's On the basis of this inability of the subsidiary to monitor and control the risks it would undertake, and in light of the fact that clearing agents must guarantee the finan- 15. The Board notes that, in these circumstances, an executing cial performance of their customers to the clearing broker ordinarily will have an incentive to review all trades that it gives up for clearance to a nonaffiliated clearing FCM, because the clearing FCM, pursuant to the give-up agreement, may refuse to accept the trade for clearance if the trade exceeds the customer's trading limits or otherwise does not conform to the parameters 13. See 12 C.F.R. 225.25(b)(18); The Long-Term Credit Bank of contained in the give-up agreement. In such a case, the executing Japan, Limited, 74 Federal Reserve Bulletin 573 (1988) (Standard and broker or its primary or qualifying clearing firm would be obligated to Poor's 500 Stock Price Index futures, and options on such futures); clear the trade. The Board also notes that Company will not knowingly The Hongkong and Shanghai Banking Corporation, et al., 76 Federal enter into any give-up agreement where the customer and the execu- Reserve Bulletin 770 (1990) (The Bond Buyer Municipal Bond Index tion group are affiliated. futures, and options on such futures, and Major Market Index Maxi 16. Under the rules of the CBOT, the pertinent execution group Stock Index futures). See also the Board's orders referred to in the would be required to deliver trading cards to Company within 15 Appendix. minutes after the half-hour interval during which an order was 14. See Amro Order at 191. executed or 15 minutes after the close of the relevant market; because Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

964 Federal Reserve Bulletin • October 1993 ability to refuse to clear non-conforming trades, the proposed clearing-only activities on the CME and the Board also notes that Company would implement a CBOT are consistent with approval of this application. computerized risk management system to monitor and In this regard, the Board notes that it recently has control risk on both an inter-day and intra-day basis. approved applications by two bank-affiliated FCM's to Company's risk management department, in addition engage in clearing-only activities on these exchanges. to monitoring each account on a daily basis for viola- See Northern Trust Corporation, 79 Federal Reserve tions of risk parameters, will review each trade before Bulletin 723 (1993) ("Northern Trust"); Sakura Bank, accepting it for clearance.17 Limited, 79 Federal Reserve Bulletin 728 (1993) In addition, the Board has noted that Company's ("Sakura Bank"). proposed customer base consists of sophisticated in- Based upon all the facts of record, including the stitutional investors.18 Company will review the cred- foregoing considerations and the commitments made itworthiness and other characteristics of each potential by Applicant regarding the conduct of the proposed customer, and, based on such review, will approve or activities and other matters,21 the Board has deterreject the customer and establish appropriate trading, mined that the performance of the proposed activities credit, margin, and exposure limits for the customer.19 by Company can reasonably be expected to produce Also, as previously noted, Company will accept for benefits to the public that would outweigh any possible clearance only trades executed by preapproved exe- adverse effects of this proposal. In this regard, the cution groups trading on the CBOT or the CME.20 Board expects that consummation of the proposal will On the basis of the framework described in this provide added service and convenience to Applicant's Order, including the fact that Company will not be the customers, and that the de novo entry of Company primary or qualifying clearing firm for any broker that into the market for the proposed services in the United executes Company's clearing-only trades, or for any States will increase the level of competition among nonaffiliated customer, and the other contractual and providers of those services. Moreover, there is no operational distinctions between Applicant's proposal evidence in the record to indicate that consummation and the proposal reviewed in the Amro Order, as well of this proposal, subject to the commitments and as other facts of record, the Board has determined that conditions noted in the application or in this Order, credit and other risk considerations associated with the would result in any significant adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interest,22 or unsound bank- CBOT rules require that trades be submitted to the clearing corporation for matching within one hour after the end of any such half-hour interval or market close, Company would have at least 45 minutes to review a trade before it would be required to submit the trade to the 21. In this regard, the Board has noted that Company would employ CBOT Clearing Corporation for matching. See Memorandum of CBOT the same credit approval and risk management procedures developed dated May 3, 1990; CBOT Clearing Corporation Submission Deadlines for its clearing-only activities with respect to its omnibus account dated November, 1991. Under the comparable rules of the CME, customers. In particular, Company's omnibus account activities will Company would have at least one hour to review a trade before be conducted only pursuant to agreements which impose duties on submitting it to the exchange's clearing house. See CME Clearing clearing firms to comply with Company's instructions as to customer Member Transfer Agreement Procedures Guide dated May, 1989; trade parameters. In addition, Company would open omnibus ac- Memorandum of CME Clearing House Division dated February 26, counts only with clearing firms that satisfied Company's financial, 1990. managerial, and operational standards. The Board has approved these 17. Any trade not properly authorized or outside the parameters omnibus account activities for other bank-affiliated FCM's. See agreed to by Company would need to be reviewed by Company's Northern Trust, supra; Sakura Bank, supra. officer responsible for risk management, who could decide to accept 22. Applicant has made numerous commitments designed to sepathe trade despite such non-conformance. In particular, the risk rate the operations of Company from the operations of CCMC, which manager will have authority to the extent prescribed by Company's is a securities firm that Applicant is permitted to retain under the Executive Committee to approve some trades that do not conform to grandfathering provisions of the International Banking Act of 1978. general risk system parameters. Trades that would violate a custom- See 12 U.S.C. § 3106(c). Applicant has requested that the Board er's specific risk parameters may be accepted by the risk manager only permit an individual, who is a member of the board of CCMC, to serve if the trade results in a reduction of overall portfolio risk. as chairman of Company's board of directors. This individual has 18. It is a condition of the Board's approval in this case that Applicant general oversight authority over several subsidiaries of Applicant, and provide the Federal Reserve System with prior notice of any significant would not have daily management or operational responsibilities with change in the characteristics of Company's customer base. respect to either CCMC or Company. Company and CCMC would not 19. Company's Executive Committee will serve as a credit commit- engage in any activities or transactions with or on behalf of the other tee to evaluate the creditworthiness of all potential clients. This company, and, with the exception of the proposed director interlock, evaluation will include examination of a potential customer's current would not maintain any other relationship of any kind. In addition, this and prior financial statements, the customer's previous trading state- individual would not disclose to Company any confidential informaments, and a profile of the customer's intended market usage. A tion of CCMC, or vice versa. In view of the commitments and review of the customer's credit standing will be conducted at least representations made by Applicant in this case, the Board has annually. The committee will have the benefit of consultations with concluded that the interlock proposed in this case does not provide the Applicant's credit departments in Chicago and Frankfurt. potential for any significant competitive advantage or conflict of 20. Applicant has stated that Company would approve an execution interest, and is a prudent measure to provide control and awareness of group only if the floor brokers and their primary or qualifying clearing Applicant's nonbanking operations in the United States. See Deutsche firms satisfy Company's financial, managerial, and operational stan- Bank AG, 79 Federal Reserve Bulletin 133 (1992). Accordingly, the dards. Board does not object to the establishment of the proposed director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 965 ing practices, that are not outweighed by these ex- Appendix pected public benefits. In making this determination, the Board has considered the financial and managerial Deutsche Terminborse GmbH: resources of Applicant and its subsidiaries, including Company, and the effect of this proposal upon such Deutsche Aktienindex 30 stock index (DAX) futures1 resources, and has concluded that these factors are German government bond futures1 consistent with approval of this application.23 Based on all the facts of record, including all the Kansas City Board of Trade: commitments made by Applicant in this case and the conditions and limitations discussed in this Order, the Mini Value Line futures2 Board has determined that the application should be, Value Line Index futures3 and hereby is, approved. The Board's approval is specifically conditioned on compliance with all of the London International Financial Futures and Options commitments made in connection with this application Exchange: and with the conditions and limitations discussed in this Order. The Board's determination also is subject to all 3-Month Eurodollar Deposit Interest Rate futures4 of the conditions set forth in Regulation Y, including 3-Month Sterling Deposit Interest Rate futures4 those in sections 225.4(d) and 225.23(b) of Regulation U.K. Bond futures4 Y, and to the Board's authority to require such modification or termination of the activities of a bank holding Marche A Terme International de France: company or any of its subsidiaries as the Board finds necessary to assure compliance with, and to prevent French Government Bond Index futures4 evasion of, the provisions of the BHC Act and the Board's regulations and orders issued thereunder. For New York Futures Exchange: purposes of this action, the commitments and conditions relied on in reaching this decision are deemed to New York Stock Exchange Composite Index futures3 be conditions imposed in writing by the Board in Options on the NYSE Composite Index futures3 connection with its findings and decision, and, as such, may be enforced in proceedings under applicable law. Philadelphia Board of Trade: This transaction shall not be consummated later than three months after the effective date of this National Over-The-Counter Index futures5 Order, unless such period is extended for good cause by the Board or by the Federal Reserve Bank of New Singapore International Monetary Exchange: York, acting pursuant to delegated authority. By order of the Board of Governors, effective Nikkei 225 Stock Average futures6 August 2, 1993. Tokyo International Financial Futures Exchange: Voting for this action: Chairman Greenspan and Governors Mullins, Kelley, and LaWare. Voting against this action: Governor Angell. Absent and not voting: Governors Lindsey 3-Month Euroyen futures7 and Phillips. 3-Month Eurodollar futures7 JENNIFER J. JOHNSON Japanese Yen/U.S. dollar futures7. Associate Secretary of the Board interlock. Any change in the individual serving as the interlocking director, or in the responsibilities or role of this individual over the 1. Northern Trust Corporation, 79 Federal Reserve Bulletin 723 operations or management of CCMC or Company, would require prior (1993). approval by the Board. 2. Saban, S.A., 73 Federal Reserve Bulletin 224 (1987). 23. See 12 C.F.R. 225.24; The Fuji Bank, Limited, 75 Federal 3. Manufacturers Hanover Corporation, 72 Federal Reserve Bulle- Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 Federal tin 144 (1985). Reserve Bulletin 155 (1987). In this regard, the Board has noted that 4. The Hongkong and Shanghai Banking Corporation, et al., 76 Applicant's capital ratios satisfy applicable risk-based standards es- Federal Reserve Bulletin 770 (1990). tablished under the Basle Accord, and are considered equivalent to 5. The Chase Manhattan Corporation, 72 Federal Reserve Bulletin the capital levels that would be required of a U.S. banking organiza- 203 (1986). tion. The Board specifically has considered the size of the investment 6. BankAmerica Corporation, 75 Federal Reserve Bulletin 78 expected to be required by this proposal in relation to Applicant's (1988). consolidated capital. 7. Citicorp, 76 Federal Reserve Bulletin 664 (1990). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

966 Federal Reserve Bulletin • October 1993 Dissenting Statement of Governor Angell Notice of these applications, affording interested persons an opportunity to submit comments, has been The Board previously has required that a foreign published (58 Federal Register 25,989 (1993)). The banking organization that operates a grandfathered time for filing comments has expired, and the Board securities subsidiary in the United States separate has considered the applications and all comments completely the operations of this subsidiary from the received in light of the public interest factors set forth operations of other U.S. subsidiaries of the organiza- in section 4(c)(8) of the BHC Act. tion engaged in activities approved under the bank The Board has determined that the operation of a Holding Company Act. The Board has required this savings association by a bank holding company is separation to ensure that foreign banking organiza- closely related to banking for purposes of section tions will not gain an unfair competitive advantage 4(c)(8) of the BHC Act.2 In making this determination, over domestic bank holding companies by combining the Board required that savings associations acquired impermissible activities of a grandfathered subsidiary by bank holding companies conform their direct and with the permissible activities of other subsidiaries, or indirect activities to those permissible for bank holding by otherwise using the grandfathered subsidiary to companies under section 4(c)(8) of the BHC Act. First support or enhance the activities of the organization's Hawaiian has committed to conform all activities of other domestic subsidiaries. Savings Bank to the requirements of section 4 of the I do not believe that allowing Commerzbank to have BHC Act and the Board's Regulation Y.3 a director interlock between CB Clearing and CCMC First Hawaiian is the second largest commercial is consistent with the Board's prior policy of com- bank or thrift institution ("depository institution") in pletely separating grandfathered subsidiaries from Hawaii, controlling deposits of $4.7 billion, representother domestic subsidiaries of foreign banking organi- ing approximately 29.9 percent of the total deposits in zations. Allowing a director interlock may, in fact, commercial banking organizations in the state.4 Pioserve to undermine this policy. For this reason, I neer is the second largest thrift institution in Hawaii, would deny this application. controlling deposits of $406 million, representing approximately 14.0 percent of the total deposits in thrift institutions in the state. Upon consummation of the August 2, 1993 proposal, First Hawaiian would remain the second First Hawaiian, Inc. largest depository institution in Hawaii, controlling Honolulu, Hawaii deposits of $5.1 billion, representing approximately 27.4 percent of the total deposits in depository institutions in the state. Order Approving Applications to Acquire a Savings Association and to Engage in Insurance Agency Activities Competitive Considerations First Hawaiian, Inc., Honolulu, Hawaii ("First Ha- Under section 4(c)(8) of the BHC Act, the Board must waiian"), a bank holding company within the meaning consider the competitive aspects of each proposal.5 In of the Bank Holding Company Act ("BHC Act"), has applied for the Board's approval under section 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) and section activities), and Pioneer Properties, Inc. (engaging in real property 225.23 of the Board's Regulation Y (12 C.F.R. 225.23), management), all located in Honolulu, Hawaii. to acquire Pioneer Fed BanCorp, Inc., Honolulu, 2. See 12 C.F.R. 225.25(b)(9). 3. First Hawaiian has committed to terminate all impermissible Hawaii ("Pioneer"), and thereby acquire both Pioneer insurance activities of Pioneer Insurance Agency within two years of Federal Savings Bank, Honolulu, Hawaii ("Savings consummation of the proposal and to limit the insurance agency Bank"), a wholly owned, federally chartered stock activities to those permissible pursuant to section 225.25(b)(8) of the Board's Regulation Y (12 C.F.R. 225.25(b)(8)). During this two-year savings bank subsidiary of Pioneer, and the wholly period, First Hawaiian has committed to limit the agency's impermisowned subsidiaries of Savings Bank.1 sible insurance activities to renewals of existing policies. First Hawaiian has also committed to limit Pioneer Advertising Agency's activities to those which are permissible for bank holding companies pursuant to section 225.22(a)(2)(ii) of the Board's Regulation Y 1. First Hawaiian will operate Savings Bank as a separate subsid- (12 C.F.R. 225.22(a)(2)(ii)). Finally, First Hawaiian has committed to iary. In connection with this proposal, Pioneer has issued to First terminate Pioneer Properties's activities on or before consummation Hawaiian an option to purchase, under certain circumstances, approx- of this proposal. imately 16.6 percent of the outstanding common stock of Pioneer. The 4. All data are as of June 30, 1992. option will terminate upon the occurrence of certain events. 5. Section 4(c)(8) of the BHC Act requires the Board to determine Savings Bank operates three wholly owned subsidiaries: Pioneer that the acquisition of Savings Bank "can reasonably be expected to Insurance Agency, Inc. (engaging in general insurance agency activ- produce benefits to the public . . . that outweigh possible adverse ities), Pioneer Advertising Agency, Inc. (engaging in advertising effects, such as undue concentration of resources, decreased or unfair Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 967 this regard, the Board has carefully reviewed com- still seek to obtain this cluster of services.11 Because ments opposing the proposal from a competitor of thrift institutions, such as Savings Bank, offer or have Savings Bank ("Protestant") maintaining that ap- the potential to offer nearly all the same products and proval of this transaction will result in significantly services offered by banks, the Board believes that the adverse competitive effects for banking services in cluster of services represents the appropriate product Hawaii. In particular, Protestant contends that the market for evaluating the acquisition of a thrift instieffect of the merger on the availability of certain tution by a bank holding company. After considering individual banking products, including time and sav- all the facts of record in light of relevant Board and ings deposits and 1-4 family mortgages, indicates that judicial precedents, the Board believes that the approthe merger would be significantly anticompetitive. priate product market in this case is the cluster of Protestant also maintains that the proposed acquisition banking products and services.12 of Savings Bank will remove one of the few attractive First Hawaii and Pioneer compete directly in the candidates for merger among small local institutions or following five Hawaiian banking markets: Eastern for some potential future acquisition by an out-of-state Hawaii Island, Honolulu, Kauai, Maui, and Western financial institution. Hawaii Island.13 Consummation of this proposal The Board has previously stated that thrift institu- would not exceed the threshold levels of market tions must be recognized as competitors of banks concentration in the Justice Department merger guidebecause they offer the same cluster of products and lines as measured by the Herfindahl-Hirschman Index services.6 In this regard, the ability of thrifts and banks ("HHI"),14 in all the markets except the Eastern to offer their products and services in combination distinguishes them from other institutions. The Board has long held that the product market for evaluating bank mergers and acquisitions is the cluster of prod- 11. See Gregory E. Elliehausen and John D. Wolken, Banking ucts and services offered by banking institutions.7 The Markets and the Use of Financial Services by Small and Medium- Supreme Court has emphasized that it is this cluster of Sized Businesses, 76 Federal Reserve Bulletin 726 (1990). For a discussion of this study, see First Hawaiian Order, supra note 6, at products and services that, as a matter of trade reality, 53-54. makes banking a distinct line of commerce.8 Accord- 12. In evaluating acquisitions of banks, the Board has weighted the measure of market share of thrift institutions at 50 percent to account ing to the Court, this clustering facilitates the convefor the fact that all thrifts in the market may not in fact exercise their nient access to these products and services, and vests authority to offer the full cluster of bank products and services. the cluster with economic significance beyond the Because Savings Bank will be affiliated with a commercial banking organization upon consummation of this proposal, the deposits of individual products and services that constitute the Savings Bank are weighted equally with the deposits of insured banks cluster.9 The courts have continued to follow this in the calculation of pro forma market share. See Norwest Corporaposition.10 In addition, a recent study conducted by tion, 78 Federal Reserve Bulletin 452 (1992); First Banks, Inc., 76 Federal Reserve Bulletin 669, 670 n.9 (1990). Board staff supports the conclusion that customers 13. The Board previously has identified these five local geographic areas in Hawaii as the appropriate markets in which the effects of bank holding company expansion proposals on competition must be analyzed. See First Hawaiian Order, supra note 6, at 54; Bancorp Hawaii, Inc., 76 Federal Reserve Bulletin 759 (1990). Protestant does competition, conflicts of interests, or unsound banking practices." not challenge this definition of the geographic market, and has 12 U.S.C. § 1843(c)(8). provided no evidence to support a different delineation of the relevant 6. See Midwest Financial Group, 75 Federal Reserve Bulletin 386 banking markets. Moreover, the record indicates that consummation (1989); National City Corporation, 70 Federal Reserve Bulletin 743 of this proposal would not exceed the levels of concentration under (1984). See also First Hawaiian, Inc., 77 Federal Reserve Bulletin 52, the Justice Department merger guidelines if Hawaii is considered as a 56 - 57 (1991) ("First Hawaiian Order"). Protestant argues that thrifts single banking market. should be weighted at the same level as commercial banks for 14. Under the revised Department of Justice merger guidelines, a purposes of considering the competitive effects of this proposal. For market in which the post-merger HHI is above 1800 is considered to the reasons discussed in this order, the Board does not believe that the be highly concentrated. See 49 Federal Register 26,823 (1984). In such proposal would be significantly adverse if deposits of banks and thrifts markets, the Justice Department is likely to challenge a merger that are weighted equally. increases the HHI by more than 50 points. Protestant maintains that 7. Even assuming that deposit accounts and mortgage lending this threshold, which is a standard generally applied, should be constitute separate product markets as maintained by the Protestant, applied to this proposal. A more lenient threshold, however, is the record does not demonstrate significantly adverse competitive routinely applied under the merger guidelines to bank mergers and effects in this case when the competitive effect of other institutions acquisitions. The Justice Department has informed the Board that a that offer insured deposit products, such as credit unions, and bank merger or acquisition generally will not be challenged (in the companies that offer mortgage products, such as finance companies, absence of other factors indicating anticompetitive effects) unless the operating in the Hawaiian banking markets are taken into account. post-merger HHI is at least 1800 and the merger increases the HHI by 8. United States v. Philadelphia National Bank, 374 U.S. 321, 357 more than 200 points. The Justice Department has stated that the (1963). Accord United States v. Connecticut National Bank, 418 U.S. higher than normal HHI thresholds for screening bank mergers for 656 (1974); United States v. Phillipsburg National Bank, 399 U.S. 350 anticompetitive effects implicitly recognizes the competitive effect of (1969) ("l/.S. v. Phillipsburg"). limited-purpose lenders and other non-depository financial entities. In 9. U.S. v. Phillipsburg, 399 U.S. at 361. this case, Hawaii's limited-purpose lenders and non-depository finan- 10. See United States v. Central State Bank, 621 F. Supp. 1276 cial entities include a number of mortgage banks affiliated with (W.D. Mich. 1985), affd per curiam, 817 F.2d 22 (6th Cir. 1987). mainland based industrial companies and super-regional banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

968 Federal Reserve Bulletin • October 1993 Hawaii Island banking market.15 In the Eastern Ha- The Board has also considered the views of the waii Island banking market, the HHI would increase Department of Justice regarding the likely competitive by 227 points to 2919, representing 37.5 percent of the effects of this proposal. The Justice Department has deposits in depository institutions in the market advised the Board that First Hawaiian's acquisition of ("market deposits") upon consummation of the pro- Savings Bank is not likely to have a significantly posal. First Hawaiian would become the largest de- adverse effect on competition in any of the Hawaiian pository institution in this market, controlling deposits banking markets. of approximately $311.3 million. Based on all the facts of record, including the The Board believes that there are a number of other comments submitted by Protestant and First Hawairelevant factors that must be considered in analyzing ian's response to those comments, the Board's previthe effects of this proposal on competition in all these ous consideration of these banking markets, and the markets. For example, a number of depository insti- factors discussed above, the Board concludes that tution competitors would remain in each market fol- consummation of this proposal would not have a lowing consummation of the proposal: (1) Honolulu — significantly adverse effect on competition in any 11 competitors; (2) Maui — 9 competitors; (3) Kauai — relevant banking market. 6 competitors; (4) Western Hawaii Island — 6 competitors; and (5) Eastern Hawaii Island — 7 competitors. Other Considerations In addition, all five banking markets have experienced the recent entry of a very large California commercial The financial and managerial resources of First Hawaibank competitor through the acquisition of a savings association.16 Moreover, on average, credit unions ian and its subsidiaries and Pioneer are consistent with approval. In assessing the financial factors, the Board compete in these markets on a stronger level in Hawaii believes that bank holding companies must maintain than in the rest of the United States. In this regard, 127 adequate capital at savings associations they propose credit unions control 14 percent of the total deposits in to acquire. Upon consummation, Savings Bank will depository institutions in Hawaii as compared with the meet all applicable capital requirements and will meet nationwide average for credit unions of 7 percent of all current and future minimum capital ratios adopted such deposits. In the Eastern Hawaii Island, Western for savings association by the Office of Thrift Super- Hawaii Island, and Kauai banking markets, where the vision or the Federal Deposit Insurance Corporation. proposal would have the most significant structural effect, credit unions control 26 percent, 24 percent, In considering First Hawaiian's acquisition of the and 28 percent, respectively, of the total market de- nonbanking activities of Savings Bank, the Board posits in depository institutions. notes that these subsidiaries compete in geographic markets that are regional or national in scope. These Protestant's concerns regarding the elimination of markets are served by numerous competitors, and an attractive candidate for acquisition by smaller in- First Hawaiian does not have a significant market market and out-of-market acquirors are substantially share in any of these markets. Accordingly, the Board mitigated by the facts of record in this case. As concludes that consummation of this proposal would discussed above, a number of other merger candidates not have a significant adverse effect on competition in remain in each market.17 In addition, out-of-state entry any relevant market. by federal savings associations is permissible under applicable law, and, as discussed above, a large outof-state commercial bank holding company recently Conclusion established branches of its federal savings bank in all five banking markets. The record does not indicate that consummation of this proposal is likely to result in any significantly adverse effects, such as undue concentration of re- 15. Upon consummation of this proposal, the HHI and First sources, decreased or unfair competition, conflicts of Hawaiian's market share in these markets would increase as follows: (1) Honolulu (61 points to 2491; 1.8 percentage points to interests, or unsound banking practices that are not 27.6 percent of market deposits); likely to be outweighed by the public benefits of this (2) Maui (98 points to 3126; 2.1 percentage points to 36 percent of proposal. Accordingly, on the basis of all the facts of market deposits); (3) Kauai (101 points to 3594; 1.5 percentage points to 44.1 percent record and commitments made by First Hawaiian, the of market deposits) ; and Board concludes that the public benefits that would (4) Western Hawaii Island (157 points to 3404; 2.8 percentage points result from approval of these applications outweigh to 40.7 percent of market deposits). 16. See BankAmerica Corporation, 78 Federal Reserve Bulletin 707 the potential adverse effects, and that the public inter- (1992). est factors it must consider under section 4(c)(8) of the 17. Protestant is in the process of acquiring an in-market thrift BHC Act are consistent with approval. institution. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 969 Based on the foregoing and all the facts of record, Savings Bank, Honolulu, Hawaii ("Pioneer"), is a the Board has determined that these applications thrift institution that, while having the authority to should be, and hereby are, approved. The Board's engage in commercial lending, is not actively engaged approval of this proposal is specifically conditioned on in commercial lending. Thus, First Hawaiian's acquicompliance by First Hawaiian with the commitments sition of Pioneer should increase the availability of made in connection with these applications, as supple- small business loans and other types of commercial mented, and with previous applications. loans in the Hawaiian banking markets. For these The Board's determination also is subject to all the reasons and the reasons stated in the Board's Order, I conditions set forth in the Board's Regulation Y, believe that consummation of this proposal would not including those in sections 225.4(d) and 225.23(b)(3), have a significantly adverse effect on competition in and to the Board's authority to require modification or any of the Hawaiian banking markets. termination of the activities of a bank holding company or any of its subsidiaries as the Board finds August 2, 1993 necessary to assure compliance with, and to prevent evasion of, the provisions and purposes of the BHC Dissenting Statement of Governor LaWare Act and the Board's regulations and orders issued thereunder. The commitments and conditions relied I dissent from the Board's action in this case. This is on by the Board in reaching this decision are deemed the second acquisition in Hawaii for First Hawaiian, to be conditions imposed in writing by the Board in Inc., Honolulu, Hawaii ("First Hawaiian"), within the connection with its findings and decision, and as such last two and one-half years. While I voted in favor of may be enforced in proceedings under applicable law. the acquisition of First Interstate of Hawaii, Inc., also This transaction shall not be consummated later of Honolulu, Hawaii, by First Hawaiian, I felt at that than three months after the effective date of this time that the proposal represented the upper limit of Order, unless such period is extended for good cause permissible concentration in these highly concentrated by the Board or by the Federal Reserve Bank of San banking markets. This acquisition would further sub- Francisco, pursuant to delegated authority. stantially concentrate the already highly concentrated By order of the Board of Governors, effective Hawaiian banking markets, and, when viewed in light August 2, 1993. of First Hawaiian's previous acquisition, represents, in my view, a significantly adverse lessening of com- Voting for this action: Chairman Greenspan and Governors petition. The anti-competitive effects of this trend are Mullins, Angell, and Kelley. Voting against this action: particularly troubling in light of the barriers to poten- Governor LaWare. Absent and not voting: Governors Lindtial competition imposed by Hawaii's decision not to sey and Phillips. permit interstate banking acquisitions. I am also unable to find any significant competitive developments JENNIFER J. JOHNSON Associate Secretary of the Board in these markets that would mitigate my concerns. I would therefore deny these applications. Concurring Statement of Governor Angell August 2, 1993 I concur in the Board's decision in this case. While I Orders Issued Under Sections 3 and 4 of the dissented from the Board's decision to approve a Bank Holding Company Act previous acquisition by First Hawaiian, Inc., Honolulu, Hawaii ("First Hawaiian"), see First Hawaiian, NationsBank Corporation Inc., 77 Federal Reserve Bulletin 52, 58 (1991), I Charlotte, North Carolina believe that a number of factors differentiate this case and, on balance, warrant approval of this proposal. First, since the last acquisition by First Hawaiian, a Order Approving the Merger of Bank Holding major commercial bank holding company has entered Companies the five Hawaiian banking markets. See BankAmerica Corporation, 78 Federal Reserve Bulletin 707 (1992). NationsBank Corporation, Charlotte, North Carolina Entry of this bank holding company should increase ("NationsBank"), a bank holding company within the competition and indicates a method by which others meaning of the Bank Holding Company Act ("BHC may enter into the Hawaiian banking markets. Act"), has applied under section 3 of the BHC Act In addition, unlike the previous case, which in- (12 U.S.C. § 1842) to merge with MNC Financial, volved the acquisition of a bank, Pioneer Federal Inc., Baltimore, Maryland ("MNC"), and thereby Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

970 Federal Reserve Bulletin • October 1993 indirectly acquire MNC's subsidiary banks: the United States, with consolidated assets of $134.6 (1) American Security Bank, National Association, billion and total domestic deposits of $94.4 billion.3 Washington, D.C.;1 and (2) Maryland National Bank, Baltimore, Maryland. Interstate Banking Provisions NationsBank also has applied under section 4(c)(8) Section 3(d) of the BHC Act (the "Douglas Amendof the BHC Act (12 U.S.C. § 1843(c)(8)) and section ment") prohibits a bank holding company from acquir- 225.23 of the Board's Regulation Y (12 C.F.R. 225.23) ing a bank located outside of its home state4 "unless to acquire MNC's subsidiary savings association, Vir- the acquisition of ... a State bank by an out-of-State ginia Federal Savings Bank, Richmond, Virginia, and bank holding company is specifically authorized by the thereby engage in the operation of a savings associa- statute laws of the State in which [the] bank is located, tion pursuant to section 225.25(b)(9) of the Board's by language to that effect and not merely by implica- Regulation Y (12 C.F.R. 225.25(b)(9)). In addition, tion."5 For purposes of the Douglas Amendment, the NationsBank has applied under section 4(c)(8) to ac- home state of NationsBank is North Carolina. The quire the shares of certain nonbanking subsidiaries Board previously has determined that the interstate owned by MNC, and listed in the Appendix to this statutes of the District of Columbia and Maryland Order. Each of these companies engages in nonbank- permit a bank holding company located in North ing activities that have been authorized by the Board Carolina to acquire banking organizations in those by order or regulation. jurisdictions.6 Based on a review of the relevant stat- NationsBank also has given notice to acquire Equi- utes and the facts of record, the Board has determined table Bancorporation Overseas Finance N.V., Cura- that approval of this proposal is not prohibited by the Douglas Amendment. This finding and the Board's cao, Netherlands Antilles, a foreign subsidiary of action in this case are conditioned upon NationsBank MNC engaged in raising funds for its parent, pursuant receiving all required state regulatory approvals. to section 4(c)(13) of the BHC Act (12 U.S.C. 1843(c)(13)) and the Board's Regulation K; and MNC International Bank, Baltimore, Maryland, a corpora- Competitive Considerations tion chartered pursuant to section 25A of the Federal Reserve Act (12 U.S.C. § 611 et seq.). NationsBank and MNC own depository institutions7 Notice of these applications, affording interested that compete directly in the following nine banking persons an opportunity to submit comments, has been markets: Annapolis, Baltimore, and Frederick published (58 Federal Register 30,790 (1993)). The time for filing comments has expired, and the Board has considered these applications and all comments 3. Deposit data and asset data are as of December 31, 1992. received in light of the factors set forth in sections 4. A bank holding company's home state is that state in which the operations of the bank holding company's banking subsidiaries were 3 and 4 of the BHC Act.2 principally conducted on July 1, 1966, or the date on which the NationsBank, with total consolidated assets of company became a bank holding company, whichever is later. The $118 billion, operates 11 subsidiary banks in Delaware, operations of a bank holding company are considered principally conducted in that state in which the total deposits of all such banking the District of Columbia, Florida, Georgia, Kentucky, subsidiaries are largest. Maryland, North Carolina, South Carolina, Tennes- 5. 12 U.S.C. § 1842(d). see, Texas, and Virginia, and holds approximately 6. See Statement by the Board of Governors of the Federal Reserve System Regarding the Application by NCNB Corporation to Acquire $82.7 billion in total domestic deposits. MNC, with C&SISovran Corporation, 78 Federal Reserve Bulletin 141 (1992) total consolidated assets of $17 billion, controls two ("C&S/Sovran Order"); see also Md. Fin. Inst. Code Ann. § 5-1001 et seq. ; see also D.C. Code Ann. § 26-801 et seq. subsidiary banks that operate in the District of Colum- 7. When used in this context, depository institutions include combia and Maryland, and holds approximately mercial banks and savings associations. Market deposit share data, $11.7 billion in total domestic deposits. Upon consum- except for data for Virginia Federal Savings Bank, MNC's savings association subsidiary, are based on calculations in which the deposits mation of this proposal, NationsBank would remain of thrift institutions are included at 50 percent. The Board previously the fourth largest commercial banking organization in has indicated that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. See Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Thus, the Board has regularly included thrift deposits in the calcula- 1. This bank is owned by American Security Corporation, Wash- tion of market share on a 50 percent weighted basis. See, e.g., First ington, D.C., a wholly owned bank holding company subsidiary of Hawaiian Inc., 77 Federal Reserve Bulletin 52 (1991). In this case, the MNC that also will be acquired as part of this proposal. deposits of Virginia Federal Savings Bank are controlled by a com- 2. The Board has considered comments filed after the close of the mercial banking organization, and would continue to be controlled by a commercial banking organization under this proposal. Accordingly, public comment period. Under the Board's rules, the Board may in its these deposits are included at 100 percent in the calculation of the discretion, take into account the substance of such comments. pre-consummation and pro forma market share. 12 C.F.R. 262.3(e). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 971 County, all in Maryland; Charlottesville, Newport Based on all the facts of record, including the News, Orange County, Richmond and Staunton, all in number of competitors remaining in these markets, the Virginia; and Washington, D.C. Consummation of this relatively small increase in the market concentration proposal would not exceed the levels of market con- and market share, and NationsBank's divestiture comcentration contained in the Department of Justice mitments, the Board believes that consummation of Merger Guidelines8 in the Maryland and Washington, this proposal would not have a significantly adverse D.C. banking markets, or in the Virginia banking effect on competition in the Maryland or Washington, markets of Newport News and Richmond.9 D.C. banking markets or in the Virginia banking In the Virginia banking markets of Charlottesville markets of Charlottesville, Newport News, Orange and Orange County, market concentration as mea- County and Richmond. sured by the HHI would increase above the levels NationsBank is the second largest depository instiprescribed in the merger guidelines.10 In order to tution in the Staunton, Virginia, banking market,12 mitigate the anticompetitive effects that would result controlling deposits of $172.5 million, representing from consummation of this proposal in these markets, 21.1 percent of market deposits. MNC is the seventh NationsBank has committed to divest certain offices of largest depository institution in the market, controlling sufficient size, and in such a manner, so that the deposits of $48.6 million, representing 5.9 percent of transaction would not result in an increase in market market deposits. Upon consummation of this proconcentration that would exceed the Department of posal, NationsBank would remain the second largest Justice guidelines.11 depository institution, controlling deposits of $221.1 million, representing 24.8 percent of market deposits with eight depository institutions remaining in 8. Under the revised Department of Justice Merger Guidelines, 49 the market. The HHI would increase by 212 points to Federal Register 26,823 (June 29, 1984), a market in which the 1881. post-merger Herfindahl-Hirschman Index ("HHI") is above 1800 is considered to be highly concentrated. In such markets, the Justice The Board believes that a number of factors indicate Department is likely to challenge a merger that increases the HHI by that this increased level of concentration in the Staunmore than 50 points. The Justice Department has informed the Board that a bank merger or acquisition generally will not be challenged (in ton banking market, as measured by the HHI, overthe absence of other factors indicating anti-competitive effects) unless states the competitive effect of this proposal. For the post-merger HHI is at least 1800 and the merger or acquisition increases the HHI by at least 200 points. The Justice Department has example, eight depository institution competitors, instated that the higher than normal threshold for an increase in the HHI cluding five of the state's ten largest bank holding when screening bank mergers and acquisitions for anti-competitive companies would remain in the market. Moreover, the effects implicitly recognizes the competitive effect of limited-purpose lenders and other non-depository financial entities. Staunton banking market also has a number of features 9. Market data are as of June 30, 1992. Upon consummation of this that make it attractive for entry.13 The Virginia bankproposal, the HHI in the Maryland and Washington, D.C. banking ing statute permits statewide branching and regional markets would increase as follows: (1) Annapolis (by 88 points to 1185, and NationsBank's market bank holding company entry on a reciprocal basis. In share would increase to 14.9 percent of the market deposits); addition, the depository institution to be acquired in (2) Baltimore (by 102 points to 1215, and NationsBank's market this market does not offer non-real estate commercial share would increase to 28.4 percent of market deposits); (3) Frederick County (by 63 points to 1545, and NationsBank's loans or extend lines of credit to small- and/or medimarket share would increase to 11.2 percent of market deposits); um-sized businesses. Moreover, since 1987, the savand ings association has not originated commercial real (4) Washington, D.C. (by 270 points to 943, and NationsBank's market share would increase to 23.6 percent of market deposits). estate loans, and therefore does not compete with In the Virginia banking markets, the levels of concentration would commercial banks in the market on an equal basis. increase as follows: (1) Newport News (by 45 points to 1232, and NationsBank's market Based on all the facts of record, and in light of these share would increase to 17.9 percent of market deposits); and factors, the Board does not believe that consummation (2) Richmond (by 90 points to 1569, and NationsBank's market of this proposal would have a significantly adverse share would increase to 18.8 percent of market deposits). 10. In the Charlottesville banking market, the HHI would increase effect on competition in the Staunton banking market. by 388 points to 2275, and NationsBank's market share would increase to 34.2 percent of market deposits. In the Orange County banking market, the HHI would increase by 840 points to 4263, and NationsBank's market share would increase to 51.8 percent of market (1992); United New Mexico Financial Corporation, 77 Federal Redeposits. serve Bulletin 484,485 (1991). If the proposed divestitures are made to 11. NationsBank has committed to execute final sales agreements to an in-market competitor, the HHI would increase by 162 points to effect these divestitures prior to the consummation of the acquisition 2049 in the Charlottesville banking market, and the HHI would of MNC, and to consummate these divestitures within 180 days of increase by 164 points to 3587 in the Orange County banking market. consummation of the acquisition of MNC. NationsBank also has 12. The Staunton, Virginia, banking market is approximated by committed that, in the event it is unsuccessful in completing the Augusta County, Virginia, and Waynesboro, Virginia. divestiture within 180 days of consummation of the proposal, Nations- 13. For example, the Staunton banking market is the largest of 85 Bank will transfer the relevant office or offices to an independent non-metropolitan statistical area markets in Virginia, and exceeds trustee that has been instructed to sell the office promptly. See, e.g., these markets substantially in terms of growth in deposits and BankAmerica Corporation, 78 Federal Reserve Bulletin 338, 340 population. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

972 Federal Reserve Bulletin • October 1993 The Board also sought comments from the United maintains that NationsBank has been reluctant to States Attorney General, the Office of the Comptroller enter into partnerships with community and non-profit of the Currency ("OCC"), and the Federal Deposit organizations and that NationsBank has not fulfilled Insurance Corporation on the competitive effects of certain commitments to improve CRA performance by this proposal. The Attorney General indicated that, targeting lending efforts as discussed by the Board in subject to NationsBank's proposed divestitures, there connection with the acquisition of C&S/Sovran Corwould be no significantly adverse effects on competi- poration.16 The targeted lending areas identified by tion in any relevant banking market. In light of all the Protestant include rural development/agricultural facts of record, the Board concludes that the proposal lending, affordable multi-family housing, and rehabiliwould not have a significantly adverse effect on com- tation/mortgage financing. petition or the concentration of banking resources in The Board has carefully reviewed the CRA perforany of the relevant banking markets in which Nations- mance record of NationsBank and MNC, and their Bank and MNC compete. subsidiary banks, as well as the comments and NationsBank's responses to those comments, and all the Convenience and Needs Considerations other relevant facts of record in light of the CRA, the Board's regulations, and the Statement of the Federal In acting upon an application to acquire a depository Financial Supervisory Agencies Regarding the Cominstitution under the BHC Act, the Board must con- munity Reinvestment Act ("Agency CRA Statesider the convenience and needs of the communities to ment").17 be served, and take into account the records of the relevant depository institutions under the Community Record of Performance Under the CRA Reinvestment Act (12 U.S.C. § 2901 et seq.). The CRA requires the federal financial supervisory agen- A. Evaluations of CRA Performance cies to encourage financial institutions to help meet the credit needs of the local communities in which they The Agency CRA Statement provides that a CRA operate consistent with the safe and sound operation examination is an important and often controlling of such institutions. To accomplish this end, the CRA factor in the consideration of an institution's CRA requires the appropriate federal supervisory authority record and that these reports will be given great weight to "assess the institution's record of meeting the credit in the applications process.18 The Board notes that all needs of its entire community, including low- and of NationsBank's subsidiary banks were examined for moderate-income neighborhoods, consistent with the CRA performance prior to the acquisition of C&S safe and sound operation of such institution," and to Sovran Corporation, and received "satisfactory" rattake that record into account in its evaluation of bank ings from their primary supervisors during the most expansion proposals.14 recent examinations of their CRA performance. In In connection with these applications, the Board particular, NationsBank's lead subsidiary bank, Nareceived comments from an organization ("Protes- tionsBank of North Carolina, N.A., Charlotte, North tant") criticizing NationsBank's record of perfor- Carolina, received a "satisfactory" rating for CRA mance under the CRA in Virginia.15 In particular, the performance from the OCC in November 1991.19 In group contends that an analysis of data collected under addition, all of MNC's subsidiary banks have received the Home Mortgage Disclosure Act ("HMDA") and in reports published by NationsBank indicate that Virginia's low- and moderate-income and African- American borrowers have not benefitted from NationsBank's operations in Virginia. Protestant also 16. See C&S/Sovran Order. 17. 54 Federal Register 13,742 (1989). 18. Id. at 13,745. 14. 12 U.S.C. § 2903. 19. NationsBank's subsidiary banks in Delaware, Florida, Georgia, 15. Another organization in Maryland has raised issues regarding Maryland, South Carolina and Texas received "satisfactory" ratings whether NationsBank would honor an existing community reinvest- for CRA performance from the OCC in November 1991. Nationsment agreement with MNC and enter into such agreements in the Bank's predecessor banks, the C&S/Sovran Corporation's subsidiary future. This commenter also has raised concerns regarding the respon- banks in Florida, Georgia, South Carolina, Virginia and Washington, siveness of NationsBank's centralized management to the credit needs D.C. received "satisfactory" ratings for CRA performance from the of low- and moderate-income neighborhoods in Maryland. Nations- OCC in October 1991. NationsBank's predecessor bank subsidiary in Bank has committed to fulfill MNC's current agreement with the group, Tennessee received a "satisfactory" rating for CRA performance and to coordinate future initiatives through its 10-year/$10-billion Com- from the Federal Reserve Bank of Atlanta in September 1991, and munity Investment Program rather than on an agreement-by-agreement NationsBank's Kentucky bank subsidiary received a "satisfactory" basis. NationsBank also has stated that the Maryland bank will con- rating for CRA performance from the Federal Reserve Bank of tinue to make local lending decisions under the program. St. Louis in March 1992. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 973 "satisfactory" ratings during their most recent exam- home mortgage and home improvement loans totalling inations for CRA performance.20 $399.2 million in low- and moderate-income census tracts, and 7,543 home mortgage and home improve- B. CRA Performance Record of NationsBank ment loans totalling $387.2 million to minority applicants as part of its Community Investment Program. In addition to considering the record of CRA perfor- NationsBank also engages in commercial real estate mance examinations of the subsidiary banks of Na- lending activities as part of this program. In 1992, tionsBank and MNC, the Board has carefully consid- NationsBank's subsidiaries made 1,353 commercial ered the actual CRA-related policies, procedures, and loans totalling $417.8 million, including loans to fund programs instituted and in place at these institutions. 6,950 single- and multi-family housing units for low- In this regard, the Board conducted a thorough review and moderate-income residents, and rehabilitation of the CRA performance record of NationsBank in the loans for retail and community centers in underserved C&S Sovran Order. In that Order, the Board con- areas. cluded that the overall CRA performance record of the NationsBank also has established the "Nations NationsBank organization, including its CRA pro- Housing Fund" as part of its Community Investment grams and policies, efforts to ascertain community Program. Nations Housing Fund will provide credit needs, marketing programs, HMDA data and $100 million for use in the construction of up to 4,000 lending practices, and record of lending, community low-cost housing units in inner cities and other areas development, and other CRA-related activities, was throughout the United States over the next three years. consistent with approval of NationsBank's proposal to NationsBank's Community Development Corporaacquire C&S/Sovran. The Board also noted that it tion ("CDC") is a nonprofit subsidiary of Nationswould take into account NationsBank's efforts to Bank established to provide financing for residential improve its CRA performance record through its com- and commercial developments in inner-city areas. The mitment to initiate a 10-year/$10 billion Community CDC has purchased 25 multi-family developments Investment Program in future acquisitions.21 Lending with the purpose of rehabilitating the units, stabilizing in the first year of this program totalled $2.2 billion.22 and increasing the number of affordable housing units, With regard to residential lending, NationsBank and selling the developments to local entities. provides residential mortgage loans, housing rehabili- NationsBank also participates in a number of other tation loans, and home improvement loans. For examprograms designed to help meet the housing-related ple, in 1992, NationsBank's subsidiaries made 7,025 credit needs of low- and moderate-income borrowers. For example, NationsBank is an active participant in the Federal Housing Administration, and Veterans 20. Maryland National Bank, Baltimore, Maryland, and American Administration government-insured lending programs. Security Bank, National Association, Washington, D.C., each received a "satisfactory" CRA rating from the OCC in November 1992. With respect to small business lending, Nations- Virginia Federal Savings Bank received a "satisfactory" rating from Bank participates in a variety of Small Business Adthe Office of Thrift Supervision in April 1993. ministration ("SBA") loan programs and actively sup- 21. This program contained a 10-year commitment to lend a minimum of $10 billion for the purposes of community development in ports local small business development. In 1992, banking markets served by NationsBank. Under this program, Na- NationsBank's subsidiaries made more than 35,000 tionsBank targets consumers who live in low- to moderate-income areas or have an income that is less than 80 percent of the market's calls on small and minority-owned businesses to solicit median income; small businesses and businesses located in low- and new banking relationships and expand existing ones. moderate-income areas; real estate projects in low-income areas that Moreover, as part of its Community Investment Prouse low-income housing tax credits or benefit consumers with incomes less than 80 percent of the county median income; loans that support gram, NationsBank's subsidiaries made 6,220 loans the agriculture industry, including Farmers Home Administration and totalling $917 million to small businesses in low- and other government-sponsored loans; and loans to nonprofit organizamoderate-income areas, and 188 SBA loans totalling tions, government agencies and other programs that serve low- and moderate-income consumers and neighborhoods. $50.7 million that year. The record also indicates that 22. NationsBank's residential and small business lending to low- in 1992 NationsBank's subsidiaries originated 869 and moderate-income and minority areas in Virginia are discussed in loans, totalling $35.9 million to agriculturally-oriented the next section. In Washington, D.C., NationsBank made 197 home mortgage and home improvement loans totalling $23.7 million in low- businesses and small farmers. NationsBank recently and moderate-income census tracts, and 102 home mortgage and announced its plan to provide additional funding to home improvement loans totalling $11 million to minority applicants. Small business lending in Washington, D.C., included 14S loans of less small businesses through the establishment of a "Busthan $500,000 for a total of $16.4 million. In Maryland, NationsBank iness Banking" unit that will target small businesses make 260 home mortgage and home improvement loans totalling with annual revenues of less than $4 million. Business $22.7 million in low- and moderate-income census tracts, and 329 home mortgage and home improvement loans totalling $32 million to Banking has committed to lend more than $1 billion minority applicants. Small business lending in Maryland included 132 over the next three years as part of NationsBank's loans totalling $47.4 million to businesses in low- and moderate- Community Investment Program. The unit will make income areas. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

974 Federal Reserve Bulletin • October 1993 loans up to $500,000, and will target companies in over awareness on products and services available for small 30 communities. business and low- and moderate-income neighborhoods in 1992. NationsBank—Va. also provided ap- C. NationsBank's CRA Performance in Virginia proximately 234 credit education seminars including Home Buyer Education and Basic Banking classes. The Board has reviewed the CRA performance of NationsBank—Va. markets its products and ser- NationsBank of Virginia, N.A., Richmond, Virginia vices through a variety of advertising activities, in- ("NationsBank—Va.") in light of Protestant's com- cluding print media, direct mail, outdoor billboard ments criticizing NationsBank's CRA record in Vir- advertising, and radio and television advertising. ginia. HMD A Data and Lending Practices. The Board has Corporate Policies. NationsBank—Va. has in place carefully reviewed the HMDA data reported by Nathe types of policies outlined in the Agency CRA tionsBank—Va. in light of Protestant's comments. Statement that contribute to an effective CRA pro- These data indicate disparities in rates of housinggram. The bank has adopted its own community related loan applications, and in approvals and denials investment policy modeled on the NationsBank cor- that vary by racial and ethnic group in areas served by porate format that includes goals, objectives, and NationsBank—Va. Because all banks are obligated to methodology for community needs assessment, prod- ensure that their lending practices are based on criteria uct development, strategic target marketing, internal that assure not only safe and sound lending, but also assessment and review, management involvement, assure equal access to credit by creditworthy applitraining, and community and economic development, cants regardless of race, the Board is concerned when and maintains a board of directors CRA Committee the record of an institution indicates disparities in that has oversight responsibility for the bank's com- lending to minority applicants. The Board recognizes, munity reinvestment strategy and performance. The however, that HMDA data alone provide only a limcommittee meets prior to each regularly scheduled ited measure of any given institution's lending in its board meeting to review the bank's CRA initiatives community. The Board also recognizes that HMDA and performance. NationsBank—Va. also conducts data have limitations that make the data an inadequate regular CRA self-assessments, and provides CRA basis, absent other information, for conclusively detraining to bank personnel. termining whether an institution has engaged in illegal Ascertainment and Marketing. NationsBank—Va. discrimination on the basis of race or ethnicity in uses several methods to ascertain community credit making lending decisions. needs, including surveys, direct contacts and commu- In this regard, the Board notes that the OCC deternity outreach programs. For example, NationsBank— mined at the 1991 examination of Sovran Bank, N.A., Va. ascertains the credit needs of communities Richmond, Virginia, the predecessor of Nationsthrough direct contacts with civic and community- Bank—Va., that the community delineation of the based organizations, nonprofit entities, religious bank was reasonable, and did not arbitrarily exclude groups, trade and special interest groups, and govern- any low- and moderate-income neighborhoods. The ment agencies. These outreach efforts include joint OCC also concluded that the bank's geographic distriefforts with community organizations. For example, bution of credit applications, extensions, and denials NationsBank—Va., in conjunction with the National demonstrated reasonable penetration of all segments Association for the Advancement of Colored People, of its local community, including low- and moderatehas established a Community Development Resource income and minority areas, with no evidence of exclu- Center in Richmond to prepare consumers, small sionary practices. The OCC also found no evidence of businesses and non-profit organizations to apply for illegal discrimination or other illegal credit practices. credit, and to assist these groups in the applications NationsBank—Va. also has taken steps under the process. Bank representatives also participate in meet- NationsBank Community Investment Program deings with numerous organizations, and serve on the signed to improve its lending to minorities and lowboards of directors of organizations that represent and moderate-income communities. For example, prelow- and moderate-income neighborhoods, small bus- liminary 1992 data indicate that NationsBank—Va. inesses and minority consumers and other special originated 430 home mortgage and home improvement interest groups. Since 1992, NationsBank—Va. has loans totalling $5.3 million in low- and moderatemet with approximately 260 organizations. Moreover, income census tracts, and 431 home mortgage and the bank's outreach efforts also include educational home improvement loans totalling $4.7 million to programs for members of the public. For example, minority applicants. Moreover, NationsBank's mort- NationsBank—Va. participated in approximately gage subsidiary, NationsBank Mortgage Corporation, 13 outreach programs that provided education and originated 441 home mortgage loans totalling $36 mil- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 975 lion in low- and moderate-income census tracts, and under section 3 of the BHC Act, are consistent with 714 home mortgage loans totalling $75.5 million to approval.23 minority applicants in the state. Commercial real es- NationsBank also has applied under section 4(c)(8) tate lending under the Community Investment Pro- of the BHC Act to acquire the nonbanking subsidiaries gram in Virginia consisted of 124 loans totalling of MNC. The Board has determined by regulation or $57 million in 1992. The bank also has made a three- order that each of the activities of these companies is year commitment to the Norfolk Redevelopment and closely related to banking and generally permissible Housing Authority loan rehabilitation program, which for bank holding companies under section 4(c)(8) of provides homeowners in designated conservation ar- the BHC Act, and has approved applications by MNC eas with low-cost deferred loans to improve their to own shares in each of these companies. homes. In addition, NationsBank—Va. is an active NationsBank operates subsidiaries engaged in nonparticipant in the Federal Housing Administration and banking activities that compete with many of the Veterans Administration government-insured lending nonbanking subsidiaries of MNC. In each case, the programs. markets for nonbanking services are unconcentrated NationsBank—Va. participates in a number of and there are numerous providers of these services. In Small Business Administration ("SBA") loan pro- light of these facts and the shares of each of these grams and actively supports local small business de- markets controlled by NationsBank and MNC, the velopment. In 1992, NationsBank—Va. made approx- Board concludes that consummation of this proposal imately 1,483 small and minority-owned businesses to would not have a significantly adverse effect on comsolicit new banking relationships and expand existing petition for these services in any relevant market. ones. Moreover, as part of its Community Investment The evidence of record does not indicate that ap- Program, NationsBank—Va. originated 1,196 loans proval of the proposed acquisition of shares of any of totalling $80.4 million to businesses in low- and mod- the nonbanking companies of MNC would result in erate-income areas and 50 SBA loans totalling any significantly adverse effects, such as undue con- $14.6 million to small businesses. The bank's rural centration of resources, decreased or unfair competidevelopment and agricultural lending program origi- tion, conflicts of interests, or unsound banking pracnated 66 loans totalling $611,000 to agriculturally- tices that are not outweighed by public benefits. oriented businesses and small farmers in 1992. Accordingly, the Board has determined that the balance of public interest factors that the Board must consider under section 4(c)(8) of the BHC Act is D. Conclusion Regarding Convenience and favorable and consistent with approval of Nations- Needs Factors Bank's application to acquire the nonbank subsidiaries of MNC. The Board has carefully considered the entire record, NationsBank also has requested Board approval to including the comments filed in this case, in reviewing permit American Security Insurance Corporation, Elthe convenience and needs factor under the BHC Act. licott City, Maryland ("ASIC"), to continue, follow- Based on a review of the entire record of performance, ing its acquisition by NationsBank, to conduct insurincluding information provided by Protestant and Naance agency activities pursuant to section 4(c)(8)(D) of tionsBank, the results of the most recent CRA performance examinations conducted by the relevant primary regulators, and NationsBank's progress in 23. The Board has received comments from two individuals relating implementing its commitments, the Board believes to loan transactions at NationsBank's Florida and Virginia subsidiary that the efforts of NationsBank and MNC to help meet banks. One commenter alleges violations under the Fair Debt Collecthe credit needs of all segments of the communities tion Practices Act in connection with a debt incurred when Nations- Bank of Florida purchased an insurance policy to replace the lapsed served by NationsBank and MNC, including low- and coverage on an automobile securing the bank's loan. The complaint moderate-income neighborhoods, as well as all other has been referred to the bank's primary regulator, the OCC, for investigation. Another commenter contends that Nationsbank—Va. convenience and needs considerations, are consistent violated the Equal Credit Opportunity Act by erroneously disclosing with approval. that a credit report was used to deny the commenter's loan. The OCC has investigated this complaint and concluded that, while no credit reports were used in the evaluation of the commenter's loan, the bank Other Considerations considered appropriate underwriting criteria in evaluating the application. The Board has carefully reviewed these comments in light of the The Board also concludes that the financial and man- relevant reports of examination for these banks. Based on all facts of agerial resources and future prospects of NationsBank record, the Board believes that these isolated incidents do not warrant denial of the applications. The Board also notes that federal law and MNC, and their respective subsidiaries, and the provides adequate civil remedies to the commenters if they are able to other supervisory factors that the Board must consider establish any improper action on the part of the banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

976 Federal Reserve Bulletin • October 1993 the BHC Act ("Exemption D").24 ASIC sells single- Bank, the Board has determined that the applications interest property and casualty insurance in Maryland, should be, and hereby are, approved. The Board's Virginia, and Washington, D.C., respectively. Exemp- determination is subject to all the commitments made tion D permits bank holding companies to continue to in connection with these applications as well as all the engage in insurance agency activities that were "en- conditions set forth in the Board's Regulation Y, gaged in" by the bank holding company or any of its including the Board's authority to require modification subsidiaries on "May 1, 1982." NationsBank has or termination of the activities of a bank holding provided evidence that ASIC was engaged in selling company or any of its subsidiaries as the Board finds these insurance lines on May 1, 1982.25 necessary to assure compliance with, and to prevent ASIC would remain a separate subsidiary of Na- evasion of, the provisions of the BHC Act and the tionsBank, and its grandfathered insurance activities Board's regulations and orders thereunder. All the would not be conducted by any of NationsBank's commitments and conditions relied upon by the Board other subsidiaries.26 Based on the record, the Board in reaching its decision are conditions imposed in has determined that ASIC may continue to engage in writing in connection with the Board's findings and insurance activities pursuant to Exemption D follow- decision and, as such, may be enforced in proceedings ing its acquisition by NationsBank.27 under applicable law. The Board also has considered NationsBank notice The acquisition of banks shall not be consummated of intent to acquire Equitable Bancorporation Over- before the thirtieth calendar day following the effective seas Finance N.V. pursuant to section 4(c)(13) of the date of this Order, and the acquisition of the banks and BHC Act, and MNC International Bank pursuant to nonbanking subsidiaries of MNC shall not be consumsection 25A of the Federal Reserve Act, and has mated later than three months after the effective date determined that disapproval of the acquisitions is not of this Order, unless such period is extended for good warranted. cause by the Board or by the Federal Reserve Bank of Richmond, acting pursuant to delegated authority. Conclusion By order of the Board of Governors, effective August 2, 1993. Based upon the foregoing and all the other facts of record, including commitments made by Nations- Voting for this action: Chairman Greenspan and Governors Mullins, Angell, Kelley, and LaWare. Absent and not voting: Governors Lindsey and Phillips. 24. 12 U.S.C. § 1843(c)(8)(D). Exemption D permits a bank holding company to engage in "any insurance activity which was engaged in JENNIFER J. JOHNSON by the bank holding company or any of its subsidiaries on May 1, Associate Secretary of the Board 1982." Such activities may be conducted in the grandfathered company's home state, states adjacent thereto, or any state where the company was authorized to operate an insurance business before the Appendix grandfather date. The Board has previously determined that an insurance agency that is entitled to continue to sell insurance under Exemption D does not lose its grandfathered rights if the agency is acquired by another bank holding company, provided the agency Nonbanking subsidiaries to be acquired: maintains its separate corporate structure and its insurance activities are not extended to other subsidiaries within the acquiror's organization. Sovran Financial Corporation, 73 Federal Reserve Bulletin 672 (1) American Security Insurance Corporation, Ellicott (1987) ("Sovran"). This determination has been upheld by the courts. City, Maryland, and thereby engage in insurance National Ass' n of Casualty and Surety Agents v. Board of Governors, 856 F.2d 282, reh'g denied en banc, 862 F.2d 351 (D.C. Cir. 1988), agency activities pursuant to § 225.25(b)(8)(iv) of the cert, denied, 490 U.S. 1090 (1989). Board's Regulation Y; 25. This evidence was consistent with the types of evidence relied upon by the Board in previous orders in which the Board found that a (2) ASB Capital Management, Inc., Washington, company met the requirements of Exemption D. See MidAmerican D.C., and thereby engage in furnishing investment Corporation, 76 Federal Reserve Bulletin 559 (1990); Citicorp, 76 advisory services pursuant to § 225.25(b)(4) of the Federal Reserve Bulletin 70 (1990). 26. This condition is not intended to preclude NationsBank from Board's Regulation Y; seeking Board approval to merge ASIC into one subsidiary or merge (3) Fayette Insurance Corporation, Baltimore, Maryit into other subsidiaries of NationsBank and continue to engage land, and thereby engage in the sale as agent of through the resulting company in insurance agency activities under Exemption D if the merger is for legitimate business purposes and credit-related insurance pursuant to § 225.25(b)(8)(i) of otherwise conforms with the limitations in this order and the require- the Board's Regulation Y; ments of the Board's regulations. See 12 C.F.R. 225.25(b)(8)(iv), footnote 10. (4) IFCO, Inc., Fayetteville, North Carolina, and 27. Pursuant to Exemption D, the insurance agency activities of thereby engage in the making and servicing of loans ASIC may be conducted only in Maryland, Virginia, or Washington, pursuant to § 225.25(b)(1) of the Board's Regula- D.C., or states in which this company lawfully engaged in insurance activities on May 1, 1982. tion Y; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 977 (5) Maryland National Mortgage Corporation, Balti- acquire all the shares of RNYCH.1 RNYCH also has more, Maryland, and thereby engage in the making applied under section 4(c)(8) of the BHC Act and servicing of loans pursuant to § 225.25(b)(1) of the (12 U.S.C. § 1843(c)(8)) and the Board's Regulation Board's Regulation Y; Y to acquire indirectly the domestic nonbanking (6) Maryland National Pennsylvania Corporation, Bal- subsidiaries of RNYC set forth in Appendix A, and timore, Maryland, and thereby engage in the making under section 4(c)(13) of the BHC Act (12 U.S.C. and servicing of loans pursuant to § 225.25(b)(1) of the § 1843(c)(13)) and the Board's Regulation K to ac- Board's Regulation Y; quire indirectly the foreign banking and nonbanking (7) Mid-Atlantic Life Insurance Company, Phoenix, subsidiaries of RNYC set forth in Appendix B. Arizona, and thereby engage in the sale as principal, RNYCH also proposes to acquire indirectly from agent or broker of credit- related insurance pursuant to Saban the shares of Republic International Bank of § 225.25(b)(8)(i) of the Board's Regulation Y; New York, Miami, Florida, and Republic Interna- (8) MN Credit Corporation, Baltimore, Maryland, and tional Bank of New York (California), Beverly Hills, thereby engage in the making and servicing of loans California, which are corporations chartered under pursuant to § 225.25(b)(1) of the Board's Regula- section 25A of the Federal Reserve Act ("Edge tion Y; Act") (12 U.S.C. § 611 et seq.). (9) MNC American Corporation, Towson, Maryland, Notice of the applications, affording interested perand thereby engage in industrial banking activities sons an opportunity to submit comments, has been pursuant to § 225.25(b)(2) of the Board's Regula- published (58 Federal Register 15,351 (1993)). The tion Y; time for filing comments has expired, and the Board (10) MNC Credit Corp., Towson, Maryland, and has considered the applications and all comments thereby engage in the making and servicing of loans received in light of the factors set forth in sections 3(c), pursuant to § 225.25(b)(1) of Regulation Y, and the 4(c)(8), and 4(c)(13) of the BHC Act. leasing of personal or real property pursuant to RNYC, with $36.2 billion in total consolidated as- § 225.25(b)(5) of the Board's Regulation Y; and sets, is the seventh largest commercial banking orga- (11) Prime Rate Premium Finance Corporation, Flo- nization in New York.2 RNYC operates one commerrence, South Carolina, and thereby engage in the cial bank and one savings bank in New York, and making and servicing of loans pursuant to engages directly and through its subsidiaries in a broad § 225.25(b)(1) of the Board's Regulation Y. range of permissible nonbanking activities throughout the United States. Considerations relating to the financial and mana- Saban, S.A. gerial resources and future prospects of Saban, Marina Bay, Gibraltar RNYCH, RNYC, and their subsidiaries, the convenience and needs of the communities to be served, the effect that consummation of this proposal will RNYC Holdings Limited have on competition or the concentration of banking Marina Bay, Gibraltar resources in any relevant banking market, and other supervisory factors that the Board is required to consider under section 3 of the BHC Act are consis- Order Approving Acquisition of a Bank Holding tent with approval of these applications. In addition, Company the Board has received commitments to ensure that it will have access to information on the operations or RNYC Holdings Limited, Marina Bay, Gibraltar activities of Saban and RNYCH, and of their affili- ("RNYCH"), has applied under section 3(a)(1) of the ates, to permit the Board to determine and enforce Bank Holding Company Act ("BHC Act")(12 compliance with the BHC Act and other federal U.S.C. § 1842(a)(1)) to acquire up to 28 percent of banking law. The record also indicates that the the outstanding shares of Republic New York Cor- conduct of the activities that Saban, RNYCH and poration ("RNYC"), and thereby to acquire indi- RNYC propose to conduct through nonbanking subrectly Republic National Bank of New York and Republic Bank for Savings, all of New York, New York. RNYCH proposes to acquire the RNYC 1. This proposal represents a corporate reorganization of Saban whereby RNYCH will be established as an intermediate holding shares from Saban, S.A., Marina Bay, Gibraltar company between Saban and RNYC. Saban also would retain direct ("Saban"), a bank holding company within the ownership of 1.01 percent of the outstanding shares of RNYC, and meaning of the BHC Act, and Saban in turn has would retain its interest in Safra Republic Holdings, S.A., Luxembourg City, Grand Duchy of Luxembourg. applied pursuant to section 3 of the BHC Act to 2. Asset data are as of June 30, 1993. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

978 Federal Reserve Bulletin • October 1993 sidiaries can reasonably be expected to produce Voting for this action: Chairman Greenspan and Governors public benefits that outweigh the possible adverse Mullins, Kelley, LaWare, Lindsey, and Phillips. Absent and not voting: Governor Angell. effects associated with this proposal. Thus, based on consideration of all the relevant facts, the Board JENNIFER J. JOHNSON concludes that the balance of public interest factors Associate Secretary of the Board that it is required to consider under section 4(c)(8) of the BHC Act is consistent with approval of RNYCH's application to acquire the nonbank sub- Appendix A sidiaries of RNYC set forth in Appendix A. The Board also has considered RNYCH's applica- Domestic Nonbanking Subsidiaries Controlled and tion to acquire indirectly the foreign banking and Activities Engaged in under Section 4(c)(8) and nonbanking subsidiaries of RNYC set forth in Appen- Regulation Y dix B pursuant to section 4(c)(13) of the BHC Act, and to acquire indirectly the shares of Republic Interna- Republic Clearing Corporation, New York, New York tional Bank of New York and Republic International (futures commission merchant activities) Bank of New York (California) under the Edge Act. Republic Factors Corporation, New York, New York After consideration of all the factors specified in the (factoring activities) Board's Regulation K and based on all the facts of Republic Information and Communications Services, record, the Board has determined that disapproval of Inc., New York, New York these acquisitions is not warranted. (disaster recovery product and services) Based on the foregoing and all the facts of record, Republic New York Trust Company of Florida, Nathe Board has determined that the applications tional Association, North Miami, Florida should be, and hereby are, approved. The Board's (trust and other fiduciary services) approval of this proposal is expressly conditioned on Republic New York Mortgage Corporation, Pompano compliance with the commitments made in connec- Beach, Florida tion with these applications, and with the commit- (originating and servicing mortgage loans) ments made in previous applications to the extent Republic New York Securities Corporation, New such commitments are not modified or superseded by York, New York the commitments made in connection with these (providing investment advisory services and finanapplications. The Board's determination also is sub- cial advisory services, securities brokerage serject to all the conditions set forth in Regulation Y, vices, purchasing and selling all types of securities including those in sections 225.4(d) and 225.23(b), as "riskless principal," and engaging in securities and to the Board's authority to require modification credit activities) or termination of the activities of a bank holding company or any of its subsidiaries as the Board finds Appendix B necessary to ensure compliance with, and to prevent evasion of, the provisions of the BHC Act and the Foreign Banking Subsidiaries Controlled and Board's regulations and orders issued thereunder. Activities Engaged in under Section 4(c)(l3) and For purposes of this action, these commitments and Regulation K conditions are deemed to be conditions imposed in writing by the Board in connection with its findings and decision and, as such, may be enforced in Republic National Bank of New York (Luxembourg) proceedings under applicable law. S.A., Luxembourg City, Grand Duchy of Luxem- The banking acquisitions approved in this Order bourg shall not be consummated before the thirtieth calen- (foreign commercial banking) dar day following the effective date of this Order, and Republic National Bank of New York (France) S.A., the banking and nonbanking acquisitions shall not be Paris, France consummated later than three months after the effec- (foreign commercial banking) tive date of this Order, unless such period is ex- Republic National Bank of New York (Suisse) S.A., tended for good cause by the Board or by the Federal Geneva, Switzerland Reserve Bank of New York, pursuant to delegated (foreign commercial banking) authority. Republic National Bank of New York (Guernsey) By order of the Board of Governors, effective Limited, St. Peter Port, Channel Islands August 18, 1993. (foreign commercial banking) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 979 Republic National Bank of New York (Gibraltar) Notice of the applications, affording interested per- Limited, Marina Bay, Gibraltar sons an opportunity to submit comments, has been (foreign commercial banking) given in accordance with the Bank Merger Act and the Republic National Bank of New York (International) Board's Rules of Procedure (12 C.F.R. 262.3(b)). As Limited, Nassau, Bahamas required by the Bank Merger Act, reports on the (foreign commercial banking) competitive effects of the merger were requested from Republic National Bank of New York (Canada) Lim- the United States Attorney General, the Office of the ited, Montreal, Canada Comptroller of the Currency ("OCC"), and the Fed- (foreign commercial banking) eral Deposit Insurance Corporation ("FDIC"). The Republic National Bank of New York (Cayman) Lim- time for filing comments has expired, and the Board ited, Cayman Islands, British West Indies has considered the applications and all comments (foreign commercial banking) received in light of the factors set forth in the Bank Republic National Bank of New York (Singapore) Merger Act and the Federal Reserve Act. Ltd., Singapore Banco Popular is a wholly owned subsidiary of (foreign commercial banking) BanPonce Corporation, Hato Rey, Puerto Rico, a bank holding company within the meaning of the Bank Foreign Nonbanking Subsidiaries Controlled and Ac- Holding Company Act (12 U.S.C. § 1841 et seq.) and tivities Engaged in under Section 4(c)(13) and Regu- incorporated under the laws of the Commonwealth of lation K Puerto Rico. Banco Popular, with total consolidated assets of $9.6 billion, is the largest commercial banking RIBNY Overseas Investments Holding Corporation, organization in Puerto Rico.2 In addition to Puerto Wilmington, Delaware Rico and the U.S. Virgin Islands, Banco Popular (holding company for foreign commercial banks and operates branches in New York, Chicago and Los foreign services corporations) Angeles, and it operates two nonbanking subsidiaries Republic Overseas Banks Holding Corporation, Wilm- in Puerto Rico. ington, Delaware Banco Popular is the fourth largest commercial (holding company for foreign commercial banks and banking organization in the U.S. Virgin Islands, conforeign services corporations) trolling deposits of $166.1 million, representing Safra Republic Holdings S.A., Luxembourg City, 12.8 percent of the total deposits in commercial bank- Grand Duchy of Luxembourg ing organizations in the U.S. Virgin Islands.3 Upon (holding company for foreign commercial banks and consummation of this proposal, Banco Popular would foreign services corporations) become the largest commercial banking organization in the U.S. Virgin Islands, controlling deposits of Orders Issued Under Bank Merger Act $445.4 million, representing 34.4 percent of the total deposits in commercial banking organizations in the Banco Popular de Puerto Rico U.S. Virgin Islands. Hato Rey, Puerto Rico Competitive Considerations Order Approving the Merger of Banks The Board may not approve any application filed Banco Popular de Puerto Rico, Hato Rey, Puerto Rico under the Bank Merger Act if the effect of the proposal ("Banco Popular"), a state member bank, has applied in any section of the country may be substantially to under section 18(c) of the Federal Deposit Insurance lessen competition, unless the Board finds that the Act (12 U.S.C. § 1828(c)) (the "Bank Merger Act") to "anticompetitive effects of the proposed transaction acquire certain assets and assume certain liabilities of are clearly outweighed in the public interest by the the St. Thomas, U.S. Virgin Islands, branches and the probable effect of the transaction in meeting the con- Tortola, British Virgin Islands, branch of CoreStates venience and needs of the community to be served." Bank, N.A., Philadelphia, Pennsylvania ("Core States").1 (12 C.F.R. 211.3). In addition, Banco Popular has applied pursuant to section 24A of the Federal Reserve Act (12 U.S.C. § 371d) to make an 1. Banco Popular also has applied to establish branches in St. additional investment in bank premises. Thomas, U.S. Virgin Islands, and in Tortola, British Virgin Islands, 2. Asset data are as of December 31, 1992. pursuant to sections 9 and 25 of the Federal Reserve Act (12 U.S.C. 3. Deposit data are as of June 30, 1992, for domestic banking §§ 321 and 601) and section 211.3 of the Board's Regulation K organizations and March 31, 1993, for foreign banking organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

980 Federal Reserve Bulletin • October 1993 12 U.S.C. § 1828(c)(5)(B). In this regard, the Board The Board believes that a calculation of the Herfinhas received comments concerning the competitive dahl-Hirschman Index ("HHI") based on total market effects of this proposal, including comments from an deposits does not accurately reflect the competitive elected local representative in the U.S. Virgin Islands effect of this proposal in the St. Thomas banking ("Protestant"), maintaining that the proposed acqui- market because of the unique characteristics of this sition would substantially reduce competition in the market.7 In particular, the record indicates that gov- U.S. Virgin Islands.4 ernment deposits represent a significant amount of the In the U.S. Virgin Islands, Banco Popular and deposits held by CoreStates. Local government depos- CoreStates compete directly in the St. Thomas bank- its may be volatile and subject to restrictive collateral ing market.5 The record indicates that thrift institu- requirements that often restrict a bank's ability to use tions in this market are active in commercial lending these deposits for making loans or providing other and are fully competitive with commercial banks.6 banking products.8 The Board previously has deter- Banco Popular is the fifth largest commercial bank or mined that individual, partnership, and corporation thrift institution ("depository institution") in the St. ("IPC") deposits may be the proper focus of the Thomas banking market, controlling deposits of competitive analysis in mergers and acquisitions in $118.5 million, representing 11 percent of total depos- markets, such as those including state capitals, in its in depository institutions in the market ("market which government deposits constitute a relatively large share of total deposits.9 In this case, deposits deposits"). CoreStates is the largest depository instiattributable to the U.S. Virgin Islands government tution in the St. Thomas banking market, controlling account for substantially all the non-IPC deposits in deposits of $279.4 million, representing 25.9 percent of the St. Thomas banking market, and non-IPC deposits market deposits. Upon consummation of this prorepresent approximately 23.2 percent of all market posal, Banco Popular would become the largest deposdeposits.10 In light of these and all the facts of record, itory institution in the St. Thomas banking market, the Board concludes that the competitive effects of controlling deposits of $397.9 million, representing this proposal should be considered on the basis of IPC 36.9 percent of market deposits. deposits. Banco Popular is the fifth largest depository institu- 4. Protestant also raises concerns that local residents were given tion in the market, controlling IPC deposits of inadequate notice of the proposed transaction, and that Banco Popu- $52.9 million, representing 6.4 percent of market delar's acquisition of the proposed branches would eliminate jobs in the posits. CoreStates is the fourth largest depository U.S. Virgin Islands. As noted above, notice of the proposed transaction was published in accordance with the Bank Merger Act and the institution in the market, controlling IPC deposits of Board's Rules of Procedure. In addition, Banco Popular distributed $111.5 million, representing 13.5 percent of market press releases announcing the proposed transaction to all newspapers, and radio and television stations in the Virgin Islands, and has met with the Governor and Lieutenant Governor of the U.S. Virgin Islands, and the U.S. Virgin Islands Banking Board. In response to Protestant's comments regarding the possible loss of jobs, Banco 7. The HHI would increase 569 points to 2465. Under the revised Popular, as part of the branch sale agreement with CoreStates, has Department of Justice Merger Guidelines, 49 Federal Register 26,823 guaranteed that it will offer equivalent jobs and benefits to all affected (June 29, 1984), a market in which the post-merger HHI is between CoreStates employees for a period of at least two years, and has 1000 and 1800 is considered moderately concentrated. A market in committed to the Lieutenant Governor of the U.S. Virgin Islands that which the post-merger HHI is above 1800 is considered to be highly it will not close any of the acquired branches. concentrated. In such markets, the Justice Department is likely to 5. The St. Thomas banking market is approximated by the islands of challenge a merger that increases the HHI by more than 50 points. The St. Thomas and St. John. This definition takes into account the Justice Department has informed the Board that a bank merger or geographic and economic separation, identified by Protestant, be- acquisition generally will not be challenged (in the absence of other tween these islands and St. Croix island. Originally, this proposal factors indicating anti-competitive effects) unless the post-merger included the acquisition of CoreStates's branches on St. Croix Island HHI is at least 1800 and the merger or acquisition increases the HHI and Protestant raised concerns about the acquisition of these by at least 200 points. The Justice Department has stated that the branches. The Lieutenant Governor of the U.S. Virgin Islands, who higher than normal threshold for an increase in the HHI when also serves as Commissioner of Banking and Insurance, commented screening bank mergers and acquisitions for anti-competitive effects that he had no objection to the acquisition of the St. Croix branches. implicitly recognizes the competitive effect of limited-purpose lenders Banco Popular amended its proposal to exclude the St. Croix and other non-depository financial entities. branches and therefore the acquisition of these branches is not before 8. Deposits of the Virgin Islands government are subject to an the Board. informal bidding process on a short-term basis under the supervision 6. Commercial lending constitutes on average 6.5 percent of the of the Virgin Islands Commissioner of Finance and are required to be total assets of these institutions, which is significantly greater than the collateralized with government securities. national thrift average of 1 percent. The Board previously has recog- 9. See, for example, United Bank Corporation of New York, 66 nized that thrifts in certain markets compete fully with banks and Federal Reserve Bulletin 61 (1980); Valley Bank of Nevada, 74 should be fully weighted in analyzing the competitive effects of bank Federal Reserve Bulletin 67 (1987). expansion proposals. See e.g., Fleet/Norstar Financial Group, Inc., 10. On average, non-IPC deposits account for approximately 77 Federal Reserve Bulletin 750 (1991); BanPonce Corporation, 77 7 percent of total deposits in banks in the United States. Non-IPC Federal Reserve Bulletin 42 (1991). Based on all the facts of record in deposits represent 55.4 percent of Banco Popular's total deposits and this case, the deposits of these institutions have been weighted at 60.1 percent of CoreStates's total deposits in the St. Thomas banking 100 percent. market. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 981 deposits. Upon consummation of this proposal, Banco connection with its findings and decisions, and, as Popular would become the third largest depository such, may be enforced in proceedings under applicable institution in the St. Thomas banking market, control- law. ling IPC deposits of $164.4 million, representing 19.9 The bank merger transactions should not be conpercent of all IPC deposits in the market. The HHI summated before the thirtieth calendar day following would increase 172 points to 2191. the effective date of this Order, or later than three Four commercial banks and two thrift institutions, months after the effective date of this Order, unless representing 63.1 percent of all market deposits, would such period is extended for good cause by the Federal remain in the market upon consummation of this Reserve Bank of New York, acting pursuant to deletransaction. Among these remaining institutions are gated authority. two large bank holding companies with market shares By order of the Board of Governors, effective of approximately 42.9 percent, and two foreign bank- August 12, 1993. ing organizations with market shares of approximately 14 percent. Voting for this action: Chairman Greenspan and Governors The Attorney General has indicated that consumma- Mullins, Kelley, La Ware, and Phillips. Absent and not voting: Governors Angell and Lindsey. tion of this proposal would not have a significantly adverse effect on competition in the St. Thomas bank- JENNIFER J. JOHNSON ing market. Neither the OCC nor the FDIC objected to Associate Secretary of the Board consummation of the proposal or indicated that the proposal would have any significantly adverse competitive effects. Accordingly, based on all the facts of ACTIONS TAKEN UNDER THE FEDERAL DEPOSIT record, including Protestant's comments and Banco INSURANCE CORPORATION IMPROVEMENT ACT Popular's response, the number of competitors remaining in the market, and the level of increase in By the Board market concentration, the Board concludes that consummation of this proposal is not likely to result in any AmSouth Bancorporation significantly adverse effect on competition in the St. Birmingham, Alabama Thomas banking market or any other relevant banking market. Order Approving the Merger of a Savings Association With a Commercial Bank Other Considerations AmSouth Bancorporation, Birmingham, Alabama Based on all the facts of record, the Board concludes ("AmSouth"), a bank holding company within the that considerations relating to the financial and manameaning of the Bank Holding Company Act, has gerial resources and future prospects of Banco Popular applied to the Board for its subsidiary bank, AmSouth and CoreStates and their subsidiaries, and the conve- Bank of Florida, Pensacola, Florida ("Bank"), to nience and needs of the community to be served, are acquire certain assets and assume certain liabilities of consistent with approval of the applications filed by Mid-State Federal Savings Bank, Ocala, Florida Banco Popular under the Bank Merger Act. In addi- ("Mid-State"), pursuant to section 5(d)(3) of the Fedtion, the Board has reviewed Banco Popular's applieral Deposit Insurance Act (12 U.S.C. § 1815(d)(3)) cations to establish branches and invest in bank prem- ("FDI Act"), as amended by the Federal Deposit ises in light of the factors it must consider under Insurance Corporation Improvement Act of 1991, Pub. sections 9, 25, and 24A of the Federal Reserve Act, L. No. 102-242, § 102-242, § 501, 105 Stat. 2236, 2388 and finds those factors to be consistent with approval. (1991). Section 5(d)(3) of the FDI Act requires the Board to review the transfer of such assets and liabil- Conclusion ities to a bank holding company's subsidiary bank that is a Bank Insurance Fund member, and, in reviewing Based on the foregoing and other facts of record, the these proposals, to follow the procedures and consider Board has determined that the applications should be, the factors set forth in section 18(c) of the FDI Act and hereby are, approved. The Board's approval is (12 U.S.C. § 1828(c)) ("the Bank Merger Act"). specifically conditioned upon compliance by Banco 12 U.S.C. § 1815(d)(3)(E).1 Popular with all the commitments made in connection with these applications. For purposes of this action, these commitments and conditions are both consid- 1. These factors include considerations relating to competition, ered conditions imposed in writing by the Board in financial and managerial resources, and future prospects of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

982 Federal Reserve Bulletin • October 1993 Notice of the application, affording interested per- in the market, resulting market shares, the relatively sons an opportunity to submit comments, has been small increase in concentration as measured by the published in accordance with the Bank Merger Act Herfindahl-Hirschman Index ("HHI"),5 and all other and the Board's Rules of Procedure (12 C.F.R. facts of record, the Board concludes that consumma- 262.3(b)). Reports on the competitive effects of the tion of this proposal would not have a significantly merger were requested from the United States Attor- adverse effect on competition in the Tampa Bay Area ney General, the Office of the Comptroller of the banking market or any other relevant banking market. Currency, the Federal Deposit Insurance Corporation, The Board also concludes that the financial and and the Office of Thrift Supervision. The time for filing managerial resources and future prospects of Amcomments has expired, and the Board has considered South and Mid-State, and considerations relating to the application and all comments received in light of the convenience and needs of the communities to be the factors set forth in the Bank Merger Act and served, are consistent with approval of this applicasection 5(d)(3) of the FDI Act. tion. Moreover, the record in this case shows that: AmSouth, with total consolidated assets of $11 bil- (1) The transaction will not result in the transfer of lion, controls subsidiary banks in Alabama, Florida, any federally insured depository institution's federal and Tennessee.2 AmSouth is the sixth largest commer- deposit insurance from one federal deposit insurcial banking organization in Florida, controlling depos- ance fund to the other; its of $1.5 billion, representing 1.2 percent of total (2) AmSouth and Bank currently meet, and upon deposits in commercial banking organizations in the consummation of the proposed transaction will constate. Mid-State is the 17th largest thrift institution in tinue to meet, all applicable capital standards; and Florida, controlling deposits of $653.8 million, repre- (3) Because AmSouth is in Alabama and is acquiring senting 2 percent of total deposits in thrift institutions in certain assets and assuming certain liabilities of a the state. Upon consummation of the proposed trans- Florida federal savings bank, the proposed transacaction, AmSouth would become the fifth largest com- tion would comply with the Douglas Amendment if mercial banking organization in Florida, controlling Mid-State were a state bank that AmSouth was deposits of $2.2 billion, representing 1.9 percent of total applying to acquire directly. See 12 U.S.C. deposits in commercial banking organizations in the § 1815(d)(3). state.3 AmSouth and Mid-State compete directly in the Based on the foregoing and all the facts of record, Tampa Bay Area banking market.4 Upon consumma- the Board has determined that this application should tion of this proposal, AmSouth would become the be, and hereby is, approved. This approval is subject seventh largest commercial bank or thrift institution to Bank obtaining the required approval of the appro- ("depository institution") in the market, controlling priate Federal banking agency for the proposed merger deposits of $604.8 million, representing 2.5 percent of under the Bank Merger Act. The Board's approval of total deposits in depository institutions in the market. this application also is conditioned upon AmSouth's After considering the number of competitors remaining compliance with the commitments made in connection with this application. For purposes of this action, the commitments and conditions relied on in reaching this decision are both conditions imposed in writing by the existing and proposed institutions, and the convenience and needs of the communities to be served. 12 U.S.C. § 1828(c). Board and, as such, may be enforced in proceedings 2. Asset data are as of December 31, 1992. under applicable law. This approval is limited to the 3. Deposit data are as of June 30, 1992, and include AmSouth's acquisition of Charter Banking Corp., St. Petersburg, Florida, approved by the Board by Order dated August 23, 1993. See AmSouth Bancorporation, 79 Federal Reserve Bulletin 951 (1993). State deposit concentration and market share data are based on calculations in 5. The HHI in this market would not increase. Under the revised which the deposits of thrift institutions are included at 50 percent. The Department of Justice Merger Guidelines, 49 Federal Register 26,823 Board previously has indicated that thrift institutions have become, or (June 29, 1984), a market in which the post-merger HHI is between have the potential to become, major competitors of commercial 1000 and 1800 is considered moderately concentrated. A market in banks. See Midwest Financial Group, 75 Federal Reserve Bulletin 386 which the post-merger HHI is above 1800 is considered to be highly (1989); National City Corporation, 70 Federal Reserve Bulletin 743 concentrated. In such markets, the Justice Department is likely to (1984). Thus, the Board has regularly included thrift deposits in the challenge a merger that increases the HHI by more than 50 points. The calculation of market share on a 50 percent weighted basis. See, e.g., Justice Department has informed the Board that a bank merger or First Hawaiian Inc., 77 Federal Reserve Bulletin 52 (1991). Because acquisition generally will not be challenged (in the absence of other Mid-State would be merged with a commercial bank under AmSouth's factors indicating anti-competitive effects) unless the post-merger proposal, the deposits of Mid-State are included at 100 percent in the HHI is at least 1800 and the merger or acquisition increases the HHI calculation of the pro forma state deposit concentration and market by at least 200 points. The Justice Department has stated that the share. See First Banks, Inc., 76 Federal Reserve Bulletin 669, 670 n.9 higher than normal threshold for an increase in the HHI when (1990); Norwest Corporation, 78 Federal Reserve Bulletin 452 (1992). screening bank mergers and acquisitions for anti-competitive effects 4. The Tampa Bay Area banking market is approximated by implicitly recognizes the competitive effect of limited-purpose lenders Hernando, Hillsborough, Pasco, and Pinnelas Counties. and other non-depository financial entities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 983 proposal presented to the Board by AmSouth, and may By order of the Board of Governors, effective not be construed as applying to any other transaction. August 23, 1993. This transaction may not be consummated before the thirtieth calendar day after the effective date of this Voting for this action: Vice Chairman Mullins and Order, or later than three months after the effective Governors LaWare, Lindsey, and Phillips. Absent and not date of this Order, unless such period is extended by voting: Chairman Greenspan and Governors Angell and the Board or by the Federal Reserve Bank of Atlanta, Kelley. acting pursuant to delegated authority. In connection with this provision, advice of the fact of consumma- JENNIFER J. JOHNSON tion should be given in writing to the Reserve Bank. Associate Secretary of the Board ACTIONS TAKEN UNDER THE FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991 By the Director of the Division of Banking Supervision and Regulation and the General Counsel of the Board Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Acquired Surviving Approval Bank Holding Company Thrift Bank(s) Date Button Gwinnett Financial Button Gwinnett National The Bank of August 11, 1993 Corporation, Bank, Gwinnett County, Lawrenceville, Georgia Snellville, Georgia Lawrence ville, Georgia CoBancorp, The Crestline Savings and PremierBank & Trust July 30, 1993 Elyria, Ohio Loan Association, Company, Crestline, Ohio Elyria, Ohio The Colonial BancGroup, Inc., First Federal Savings and Colonial Bank, July 23, 1993 Montgomery, Alabama Loan Association of Montgomery, Russell County, Alabama Phenix City, Alabama The Colonial BancGroup, Inc., United Savings Bank, Colonial Bank, July 30, 1993 Montgomery, Alabama F.S.B., Montgomery, Anniston, Alabama Alabama First Alabama Bancshares, Inc., First Federal Savings Sunshine Bank, July 30, 1993 Birmingham, Alabama Bank, Pensacola, Florida Marianna, Florida First Alabama Bancshares, Inc., First Federal Savings Sunshine Bank, August 24, 1993 Birmingham, Alabama Bank of DeFuniak Pensacola, Florida Springs, DeFuniak Springs, Florida First Citizens BancShares, Inc., Pioneer Savings Bank, First Citizens Bank & July 29, 1993 Raleigh, North Carolina Inc., Trust Company, Rocky Mount, North Raleigh, North Carolina Carolina Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

984 Federal Reserve Bulletin • October 1993 FDICIA Orders—Continued Acquired Surviving Approval Bank Holding Company Thrift Bank(s) Date InterCounty Bancshares, Inc., The Williamsburg The National Bank August 23, 1993 Wilmington, Ohio Building and Loan and Trust Company, Company, Williamsburg, Ohio Wilmington, Ohio Mountain Holding Corporation, Button Gwinnett National Mountain National August 11, 1993 Tucker, Georgia Bank, Bank, Norcross, Georgia Tucker, Georgia Pueblo Bancorporation, Inc., Thatcher Bank, Pueblo Bank and August 2, 1993 Pueblo, Colorado F.S.B., Trust Company, Salida, Colorado Pueblo, Colorado SouthTrust Corporation, First Federal Savings and SouthTrust Bank of July 23, 1993 Birmingham, Alabama Loan Association of Dothan, N.A., Russell County, Dothan, Alabama Phenix City, Alabama Summit Bancorporation, Marine View Federal Summit Bank, August 6, 1993 Chatham, New Jersey Savings Bank, Chatham, New North Middletown, Jersey New Jersey Synovus Financial Corp. TB&C Bancshares, Inc., Birmingham Federal August 6, 1993 Columbus, Georgia Columbus, Georgia Savings Bank, First Commercial Birmingham, Bancshares, Inc., Alabama Jasper, Alabama First Commercial Bank, Birmingham, Alabama ACTIONS TAKEN UNDER THE FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991 By the Secretary of the Board Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Acquired Surviving Approval Bank Holding Company Thrift Bank(s) Date Southern National Corporation, East Coast Savings Bank, Southern National August 18, 1993 Lumberton, North Carolina Inc., SSB, Bank of North Goldsboro, North Carolina, Carolina Lumberton, North Carolina Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 985 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 Southern National Corporation, East Coast Savings Bank, Inc., SSB, August 18, 1993 Lumberton, North Carolina Goldsboro, North Carolina 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 BB&T Financial Corporation, Citizens Savings Bank, Richmond July 28, 1993 Wilson, North Carolina SSB, Inc., Newton, North Carolina BB&T Financial Corporation, Mutual Savings Bank of Richmond August 11, 1993 Wilson, North Carolina Rockingham County, SSB, Reidsville, North Carolina BNMHC Acquisition The Bank of New Mexico Kansas City August 19, 1993 Corporation, Holding Company, New Port, Minnesota Albuquerque, New Mexico Carbon County Holding Rawlins National Kansas City August 19, 1993 Company, Bancorporation, Inc., Englewood, Colorado Denver, Colorado Castle BancGroup, Inc., B.O.Y. Bancorp, Inc., Chicago August 13, 1993 DeKalb, Illinois Yorkville, Illinois Castle Rock Bank Holding Castle Rock Bank, Kansas City August 6, 1993 Company, Castle Rock, Colorado Castle Rock, Colorado Cherokee County Banshares, First State Bank, Kansas City August 13, 1993 Inc., Hulbert, Oklahoma Hulbert, Oklahoma Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

986 Federal Reserve Bulletin • October 1993 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank Date Citizens Banking Corporation, Royal Bank Group, Inc., Chicago August 12, 1993 Flint, Michigan Royal Oak, Michigan Citizens Holding Corporation and Citizens Holding Kansas City August 6, 1993 Bank ESOP, Corporation, Keenesburg, Colorado Keenesburg, Colorado City Holding Company, First National Bank, Richmond August 2, 1993 Charleston, West Virginia Beckley, West Virginia Community Bancs of Oklahoma, Community Bank and Kansas City August 12, 1993 Inc., Trust Company, Tulsa, Oklahoma Tulsa, Oklahoma Community National Bank Community National Atlanta July 30, 1993 Corporation, Bank of Sarasota Venice, Florida County, Venice, Florida Continental Security Bancshares, Deepwater State Bank, Kansas City July 23, 1993 Inc., Deepwater, Missouri Springfield, Missouri Corte Banc Corporation, First Bank and Trust, Atlanta July 26, 1993 New Orleans, Louisiana New Orleans, Louisiana D Bancorp, Inc., Bank of DeSoto, N.A., Dallas August 19, 1993 DeSoto, Texas DeSoto, Texas Dairyland Bancorp, Inc., Bruce Bancshares, Inc., Minneapolis July 29, 1993 Bruce, Wisconsin Bruce, Wisconsin Dakota Company, Inc., O'Neill Properties, Inc., Minneapolis July 23, 1993 Minneapolis, Minnesota Minneapolis, Minnesota South Dakota Bancorp, Inc., Minneapolis, Minnesota South Dakota Financial Bancorporation, Inc., Minneapolis, Minnesota DeWitt Bancorp, Inc., River Valley Bancorp, Chicago July 27, 1993 DeWitt, Iowa Inc., Eldridge, Iowa Dickinson Financial Corporation, Livingston Life Insurance Kansas City August 24, 1993 Kansas City, Missouri Company, Phoenix, Arizona East Dubuque Bancshares, Inc., East Dubuque Investment Chicago August 19, 1993 East Dubuque, Illinois Company, East Dubuque, Illinois Elkhart Bancorporation, Inc., The Elkhart State Bank, Dallas August 5, 1993 Elkhart, Texas Elkhart, Texas Enevoldsen Management The Potter State Bank, Kansas City August 17, 1993 Company, Potter, Nebraska Potter, Nebraska Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 987 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank Date Farmers State Corporation, Green Lake Minneapolis July 30, 1993 Mountain Lake, Minnesota Bancorporation, Inc., Spicer, Minnesota Finger Interests Number One, Charter Bancshares, Inc., Dallas August 26, 1993 Ltd., Houston, Texas Houston, Texas CBH, Inc., Wilmington, Delaware University National Bank, Galveston, Texas Charter National Bank-Colonial, Houston, Texas Charter Bank-Houston, Houston, Texas First American Corporation, First American National Atlanta August 20, 1993 Nashville, Tennessee Bank of Kentucky, Bowling Green, Kentucky First Bancorp of Louisiana, Inc., Southern National Bank Dallas July 27, 1993 West Monroe, Louisiana at Tallulah, First Bancorp of Louisiana, Inc., Tallulah, Louisiana Employee Stock Ownership Plan Trust, West Monroe, Louisiana First Community Bancshares, Winn Bancshares, Inc., Dallas August 13, 1993 Inc., Winnfield, Louisiana Winnfield, Louisiana Winn State Bank and Trust Company, Winnfield, Louisiana First Security Bancorp, Inc., First Security Trust & Chicago August 18, 1993 Elmwood Park, Illinois Savings Bank, Elmwood Park, Illinois First Sonora Bancshares, Inc., First Sonora Delaware Dallas August 13, 1993 Sonora, Texas Bancshares, Inc., Dover, Delaware The First National Bank of Sonora, Sonora, Texas First Sonora Delaware The First National Bank Dallas August 13, 1993 Bancshares, Inc., of Sonora, Dover, Delaware Sonora, Texas FNB Financial Services, Inc. FNB Financial Services, Kansas City August 5, 1993 Employee Stock Ownership Inc., Plan, Durant, Oklahoma Durant, Oklahoma FNB, Inc., Poudre Valley Bank, Kansas City August 24, 1993 Greeley, Colorado Fort Collins, Colorado Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

988 Federal Reserve Bulletin • October 1993 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank Date The Fort Bancorp, Inc., First Lowndes Bank, Atlanta August 18, 1993 Fort Deposit, Alabama Fort Deposit, Alabama Harris Financial, MHC, Harris Savings Bank, Philadelphia July 29, 1993 Harrisburg, Pennsylvania Harrisburg, Pennsylvania HeartWay Bancorporation, Wayland State Bank, Chicago August 18, 1993 Way land, Iowa Way land, Iowa Holcomb Bancshares, Inc., First National Bank of Kansas City August 6, 1993 Holcomb, Kansas Holcomb, Holcomb, Kansas Independent Bank Corporation, American Home Bank, Chicago August 24, 1993 Ionia, Michigan Unionville, Michigan Industry Bancshares, Inc., Industry State Bank, Dallas July 26, 1993 Industry, Texas Industry, Texas Liberty Bancorp, Inc., First Edmond Kansas City August 19, 1993 Oklahoma City, Oklahoma Bancshares, Inc., Edmond, Oklahoma Missoula Bancshares, Inc., First Security Bank of Minneapolis August 4, 1993 Missoula, Montana Missoula, Missoula, Montana ONBANCorp, Inc., Franklin First Financial New York July 30, 1993 Syracuse, New York Corp., Wilkes-Barre, Pennsylvania Otto Bremer Foundation, Valley Bancshares, Inc., Minneapolis August 18, 1993 St. Paul, Minnesota Grand Forks, North Bremer Financial Corporation, Dakota St. Paul, Minnesota Peotone Bancorp, Inc., Rock River Chicago August 10, 1993 Peotone, Illinois Bancorporation, Inc., Oregon, Illinois River Valley Bancorp, Inc., Valley State Bank, Chicago July 27, 1993 Eldridge, Iowa Eldridge, Iowa Saban S.A., SafraCorp California, New York August 20, 1993 Marina Bay, City of Gibraltar Los Angeles, California RNYC Holdings Limited, Marina Bay, City of Gibraltar Republic of New York Corporation, New York, New York Snyder Holding Corporation, The Armstrong County Cleveland July 28, 1993 Kittanning, Pennsylvania Trust Company, F&A Financial Company, Kittanning, Kittanning, Pennsylvania Pennsylvania THE Bancorp, Inc., THE BANK - Oldham St. Louis August 2, 1993 LaGrange, Kentucky County, Inc., LaGrange, Kentucky Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 989 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank Date Union Bancorp, Inc., The Peoples State Bank, Philadelphia July 26, 1993 Potts ville, Pennsylvania East Berlin, Pennsylvania Valentine Bancorporation, The First National Bank Kansas City July 29, 1993 Valentine, Nebraska of Valentine, Valentine, Nebraska Van Buren Bancorporation Van Buren Chicago August 23, 1993 Employee Stock Ownership Bancorporation, Plan, Keosauqua, Iowa Keosauqua, Iowa Wilmington Trust Corporation, Freedom Valley Bank, Philadelphia August 13, 1993 Wilmington, Delaware West Chester, Pennsylvania Section 4 Nonbanking Reserve Effective Applicant(s) Activity/Company Bank Date BB&T Financial Corporation, Old Stone Bank of North Richmond August 13, 1993 Wilson, North Carolina Carolina, a Federal Savings Bank, High Point, North Carolina Chambanco, Inc., to engage de novo in the Kansas City August 13, 1993 Chambers, Nebraska making and servicing of loans Chemical Banking Corporation, Bishop Trust Company, New York August 20, 1993 New York, New York Limited, Honolulu, Hawaii Cheshire Financial Corporation, Colonial Mortgage, Inc., Boston August 12, 1993 Keene, New Hampshire Amherst, New Hampshire Community Banc-Corp. of G & H Insurance Agency, Chicago August 13, 1993 Sheboygan, Inc., Sheboygan, Wisconsin Sheboygan, Wisconsin Community Bankers, Inc., Community Data Dallas August 2, 1993 Granbury, Texas Services, Inc., Cleburne, Texas Crestar Financial Corporation, Richmond, Virginia Richmond August 11, 1993 Internet, Inc., Reston, Virginia Farmers State Corporation, United Prairie Insurance Minneapolis August 4, 1993 Mountain Lake, Minnesota Agency, Slayton, Minnesota First Alabama Bancshares, Inc., First Federal Enterprises, Atlanta July 30, 1993 Birmingham, Alabama Inc., Marianna, Florida Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

990 Federal Reserve Bulletin • October 1993 Section 4—Continued Nonbanking Reserve Effective Applicant(s) Activity/Company Bank Date First Citizens BancShares, Inc., Pioneer Bancorp, Inc., Richmond July 29, 1993 Raleigh, North Carolina Rocky Mount, North Carolina First Union Corporation, Dominion Mortgage Richmond August 23, 1993 Charlotte, North Carolina Corporation, Charlotte, North Carolina Internationale Nederlanden to engage de novo in New York July 29, 1993 Group N.V., investment advisory Amsterdam, The Netherlands activities, securities brokerage activities and underwriting and dealing in government obligations Northern Bankshares, Inc., to engage in the making Chicago July 28, 1993 McFarland, Wisconsin and servicing of loans PNC Bank Corp, PNC Asset Management Cleveland July 26, 1993 Pittsburgh, Pennsylvania Corp., Pittsburgh, Pennsylvania Whitaker Bank Corporation of Whitaker Management Cleveland July 26, 1993 Kentucky, Corporation, Lexington, Kentucky Lexington, Kentucky Whitaker Bancorp, Inc., Lexington, Kentucky Sections 3 and 4 . .. Nonbanking Reserve Effective P Activity/Company Bank Date First Alabama Bancshares, Inc., First Federal Bancshares Atlanta August 24, 1993 Birmingham, Alabama of DeFuniak Springs, Inc., DeFuniak, Florida First Federal Savings Bank of DeFuniak Springs, DeFuniak Springs, Florida Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 991 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 PremierBank & Trust, The Crestline Federal Cleveland July 30, 1993 Elyria, Ohio Savings and Loan Association, Crestline, Ohio Sulphur Springs State Bank, Wolfe City National Dallas July 29, 1993 Sulphur Springs, Texas Bank, Wolfe City, Texas PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits U.S. Check v. Board of Governors, No 92-2892 (D. against the Federal Reserve Banks in which the Board D.C., filed December 30, 1992). Challenge to partial of Governors is not named a party. denial of request for information under the Freedom of Information Act. CBC, Inc. v. Board of Governors, No. 92-9572 (10th Kubany v. Board of Governors, et al., No. 93-1428 (D. Cir., filed December 2, 1992). Petition for review of D.C., filed July 9, 1993). Action challenging Board civil money penalty assessment against a bank holddetermination under the Freedom of Information ing company and three of its officers and directors Act. for failure to comply with reporting requirements. Bennett v. Greenspan, No. 93-1813 (D. D.C., filed The Board's brief was filed on March 19, 1993. April 20, 1993). Employment discrimination action. DLG Financial Corporation v. Board of Governors, Ezell v. Federal Reserve Board, No. 93-0361 (D. No. 392 Civ. 2086-G (N.D. Texas, filed October 9, D.C., filed February 19, 1993). Action seeking dam- 1992). Action to enjoin the Board and the Federal ages for personal injuries arising from motor vehicle Reserve Bank of Dallas from taking certain enforcecollision. The case was dismissed by the court on ment actions, and seeking money damages on a July 30, 1993. variety of tort and contract theories. On October 9, Amann v. Prudential Home Mortgage Co., et al., No. 1992, the court denied plaintiffs' motion for a tem- 93-10320 WD (D. Massachusetts, filed February 12, porary restraining order. On March 30, 1993, the 1993). Action for fraud and breach of contract court granted the Board's motion to dismiss as to it, arising out of a home mortgage. On April 17, 1993, and also dismissed certain claims against the Rethe Board filed a motion to dismiss. serve Bank. On April 29, the plaintiffs filed an Adams v. Greenspan, No. 93-0167 (D. D.C., filed amended complaint. The Board's motion to dismiss January 27,1993). Action by former employee under the amended complaint was filed on May 17. the Civil Rights Act of 1964 and the Rehabilitation Zemel v. Board of Governors, No. 92-1056 (D. D.C., Act of 1973 concerning termination of employment. filed May 4, 1992). Age Discrimination in Employ- Sisti v. Board of Governors, No. 93-0033 (D. D.C., ment Act case. The parties' cross-motions for sumfiled January 6, 1993). Challenge to Board staff mary judgment are pending. interpretation with respect to margin accounts. The State of Idaho, Department of Finance v. Board of Board's motion to dismiss was granted on May 13, Governors, No. 92-70107 (9th Cir., filed Febru- 1993. On June 3,1993, the petitioner filed a notice of ary 24, 1992). Petition for review of Board order appeal. Cross-motions for summary disposition returning without action a bank holding company were filed on August 13, 1993. application to relocate its subsidiary bank from Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

992 Federal Reserve Bulletin • October 1993 Washington to Idaho. On June 4, 1993, the Court of of the Comptroller of the Currency of the United Appeals denied the petition for review. States of America ("OCC") seeks to prohibit Preston In re Subpoena Served on the Board of Governors, J. Brooks from further participation in the affairs of Nos. 91-5427, 91-5428 (D.C. Cir., filed Decem- any federally-supervised financial institution as a reber 27, 1991). Appeal of order of district court, sult of his conduct during his former affiliation as dated December 3, 1991, requiring the Board and president and director of First National Bank of Dethe Office of the Comptroller of the Currency to port, N.A., Deport, Texas (the "Bank"). As required produce confidential examination material to a by the FDI Act, the OCC has referred the action to the private litigant. On June 26, 1992, the court of Board of Governors of the Federal Reserve System appeals affirmed the district court order in part, but ("Board") for final decision. held that the bank examination privilege was not The proceeding comes before the Board in the form waived by the agencies' provision of examination of a Recommended Decision by Administrative Law materials to the examined institution, and re- Judge ("ALJ") Arthur L. Shipe, issued following an manded for further consideration of the privilege administrative hearing held on September 22 and 23, issue. On August 6, 1992, the district court ordered 1992, in Dallas, Texas, and the filing of post-hearing the matter held in abeyance pending settlement of briefs by the parties. In the Recommended Decision, the underlying action. the ALJ found that as president and chairman of the Board of Governors v. Kemal Shoaib, No. CV 91-5152 Bank, Brooks participated in violations of banking (C.D. California, filed September 24, 1991). Action laws and engaged in an unsafe and unsound practice to freeze assets of individual pending administrative that caused loss to the Bank and financial gain to him. adjudication of civil money penalty assessment by The ALJ concluded, however, that the violations did the Board. On October 15, 1991, the court issued a not reflect willful or continuing disregard for safety or preliminary injunction restraining the transfer or soundness or personal dishonesty, but instead resulted disposition of the individual's assets. from good-faith mistakes and therefore were not of a Board of Governors v. Ghaith R. Pharaon, No. 91- sufficiently serious character to justify Brooks's pro- CIV-6250 (S.D. New York, filed September 17, hibition from banking. 1991). Action to freeze assets of individual pending The OCC's Enforcement and Compliance Diviadministrative adjudication of civil money penalty sion, which prosecuted the case, has submitted exassessment by the Board. On September 17, 1991, ceptions to the Recommended Decision. The OCC the court issued an order temporarily restraining the argues, first, that Brooks's testimony at the hearing transfer or disposition of the individual's assets. should be stricken from the record because he refused to answer questions at a pre-hearing deposition on the basis of his rights under the Fifth Amendment. FINAL ENFORCEMENT DECISION ISSUED BY THE The OCC also argues that the ALJ applied erroneous BOARD OF GOVERNORS legal standards in concluding that Brooks's violations of law and unsafe and unsound practices were On Certification of the Department of the insufficiently serious to satisfy the culpability re- Treasury—Office of the Comptroller of the quirements for an order of prohibition. Brooks has Currency filed no exceptions. Upon review of the record and the OCC's excep- In the Matter of a Notice to Prohibit Further Partici- tions, the Board concludes that the record estabpation Against lishes that Brooks was responsible for a variety of substandard practices during his tenure with the Preston J. Brooks Bank, and that a number of these were unsafe or Former President and Director unsound practices or violated regulatory restrictions, First National Bank of Deport, N. A. thereby satisfying the first, misconduct, test for Deport, Texas prohibition. The Board also finds the effects test satisfied in that some of these practices resulted in OCC No. AA-EC-91-154 financial gain to Brooks or in loss or other damage to the Bank. Final Decision The Board concludes, however, after a close review of the record including the ALJ's findings of This is an administrative proceeding pursuant to fact, that the preponderance of the evidence does not section 8(e) of the Federal Deposit Insurance Act support the OCC's allegations as to Brooks's culpa- ("FDI Act"), 12 U.S.C. § 1818(e), in which the Office bility. Accordingly, the Board adopts the ALJ's Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 993 findings and conclusions, except as specifically Matter of Magee, 78 Federal Reserve Bulletin 968,974 noted, and orders that this proceeding be dismissed.1 (1992). A "continuing disregard for safety or soundness" standard is established by a mental state akin to Statement of the Case "recklessness" in connection with a repetition of unsafe or unsound banking practices. Brickner v. A. Standards for Prohibition Order FDIC, 747 F.2d 1198, 1203 & n.6.5 (8th Cir. 1984). The Board has generally found that a "continuing disre- Under the FDI Act, the ALJ is responsible for con- gard" exists when a respondent continues to engage in ducting an administrative hearing on a notice of inten- an unsafe or unsound course of action after the occurtion to prohibit participation. 12 U.S.C. § 1818(e)(4). rence of some event, such as a warning from a Following the hearing, the ALJ issues a recommended regulator, that should have made him or her aware that decision that is referred to the Board. The parties may the practice was unsafe and unsound. See, e.g., In the then file with the Board exceptions to the ALJ's Matter of Freitag, OCC No. AA-EC-89-139 (1991). recommendations. The Board makes the final findings "Willful disregard" may be shown in the absence of a of fact, conclusions of law, and determination whether continuing course of conduct where the unsafe or to issue an order of prohibition. Id.; 12 C.F.R. 263.40. unsound practice is such that a degree of intent greater The FDI Act sets forth the substantive basis upon than recklessness may be inferred. See Brickner, 747 which a federal banking agency may issue against a F.2d at 1203. bank official an order of prohibition from further participation in banking. In order to issue such an B. Relevant Individuals and Business Entities order pursuant to section 1818(e)(1), the Board must make each of three findings: At all times relevant to this proceeding, the Bank was (1) There must be a specified type of misconduct — a national banking association, chartered and examviolation of law, unsafe or unsound practice,2 or ined by the OCC. Recommended Finding of Fact breach of fiduciary duty;3 ("RFF") RFF 1. At all times relevant to this proceed- (2) The misconduct must have a prescribed effect — ing, Brooks was chairman of the board of directors and financial gain or other benefit to the respondent or chief executive officer of the Bank and therefore an financial harm or other damage4 to the institution or "institution-affiliated party" under the terms of the prejudice to the institution's depositors; and FDI Act subject to the OCC's supervisory authority. (3) The misconduct must involve culpability of a RFF 4. Brooks was a controlling and principal sharecertain degree—personal dishonesty or willful or holder of Deport Financial Company, a bank holding continuing disregard for the safety or soundness of company, which owned 100 percent of another bank the institution. holding company, Deport Bancshares, Inc., of which the Bank was a wholly owned subsidiary. Recom- "Disregard for safety or soundness" is established mended Decision ("RD") RD 3. Brooks therefore by participation in an unsafe or unsound practice, i.e. controlled both the bank holding companies and the one that is contrary to prudent practices and that could Bank. expose a bank to abnormal risk of harm or loss. In the Discussion A. Procedural Issues 1. The Board notes that the Comptroller of the Currency has penalized Brooks $18,000 in a parallel civil money penalty proceeding on the basis of the illegal dividend and preferential loan charges The OCC excepts first to the ALJ's ruling that permitdiscussed below. In the Matter of Preston J. Brooks, No. AA-EC-91- 153, June 17, 1993. ted Brooks to testify in his own behalf at the hearing 2. An "unsafe or unsound banking practice" has been defined as a practice "deemed contrary to accepted standards of banking operations which might result in abnormal risk or loss to a banking institution or shareholder.'' First Nat'I Bank of Eden v. Comptroller of 5. The Brickner court made clear that the standard did not encomthe Currency, 568 F.2d 610, 611 n.2 (8th Cir. 1978) (per curiam). pass an "honest error of judgment," 747 F.2d at 1201, 1202, but also 3. As the OCC notes in its exceptions, the Recommended Decision rejected the argument that the agency must show that the respondent misstated this standard by indicating that the misconduct prong intentionally did something to endanger the bank's safety. Id. at 1202. requires both a finding of a violation of law and either an unsafe or In Brickner, the respondents conceded that, after a warning from a unsound practice or breach of fiduciary duty. Recommended Decision regulator, they knew that the practices found unsafe and unsound ("RD") 32. There is no indication that this error is reflected in the were occurring, but failed to disclose that knowledge to the board of ALJ's analysis or that it is anything other than a clerical error. directors or to take other steps to prevent losses to the bank. The 4. Because of statutory amendments, a slightly different standard court found such failure to act sufficient to establish continuing for the effects requirement applies to conduct engaged in before disregard for safety or soundness, even though the respondents had August 15, 1989, but the culpability standards that are here at issue not been directly responsible for the practices, and had received no remained substantively unchanged by the amendments. benefit as a result. Id. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

994 Federal Reserve Bulletin • October 1993 even though, the OCC alleges, he had evaded docu- cally, the ALJ is vested with the power "to consider ment discovery, failed definitively to identify himself and rule upon all procedural and other motions [other as a witness on the prehearing witness list, and had than granting a motion to dismiss] appropriate in an refused to answer questions at a prehearing deposition adjudicatory proceeding. 12 C.F.R. 19.5(b)(7). An on Fifth Amendment grounds. OCC Exceptions ("Ex- ALJ's evidentiary rulings therefore are generally accept.") Except. 7. The OCC argues that this ruling corded deference in the absence of an abuse of discreviolated the Rules of Practice and Procedure applica- tion or manifest unfairness. ble to the hearing, and prejudiced the agency by While the Board is concerned about the potential for unfairly denying the OCC discovery. misuse of the Fifth Amendment privilege to evade The OCC's Rules of Practice and Procedure require pre-hearing deposition testimony, the Board cannot that before the hearing each party must serve upon conclude on the circumstances of this case, including every other party, inter alia, a final list of witnesses to the availability to OCC Enforcement Counsel of alterbe called to testify at the hearing, including a short natives that were not pursued at the hearing stage, that summary of the expected testimony of each witness. the ALJ's decision to permit Brooks to testify ren- 12 C.F.R. 19.32(a)(2). The Rule further provides that dered the proceeding manifestly unfair. Accordingly, "no witness may testify . . . if such witness ... is not the Board finds that the OCC has not sustained its listed in the prehearing submissions . . . except for burden of showing that the ALJ abused his discretion good cause shown." 12 C.F.R. 19.32(b). In this case, in permitting Brooks to testify and declines to strike the OCC identified its witnesses in compliance with Brooks's testimony. this Rule. Brooks also filed a list of witnesses, but did not definitively identify himself as a witness, purport- B. Substantive Basis for Prohibition edly reserving the decision to testify to see whether the OCC established a prima facie case against him. 1. Illegal Dividend Payments. The OCC charged that Brooks did, however, provide a roughly three-page in 1989 Brooks caused the Bank to declare dividends summary of his expected testimony in the event that that exceeded the amount permitted by section 60 of he did testify. the National Bank Act. 12 U.S.C. § 60. The OCC The OCC states that "[0]n the eve of trial and out of alleged that this conduct warranted Brooks's prohibian abundance of caution" the OCC conducted a tion from banking in that he engaged in a violation of deposition of Brooks as a potential hearing witness law that resulted in financial gain to him and that five days before the hearing. OCC Except. 5. The OCC involved willful or continuing disregard for the safety asserts, without contradiction from Brooks, that at the and soundness of the Bank.6 The ALJ found that deposition Brooks refused to answer any substantive Brooks had violated Section 60 by causing the Bank to questions on Fifth Amendment grounds. At the hear- declare and pay excessive dividends, and that Brooks ing, the OCC moved to prohibit Brooks from testifying received some financial gain by reason of this violaon the basis of his failure to identify himself defini- tion.7 Recommended Conclusion of Law 4; RD 32; tively as a witness, and because of his failure to RFF 14-18. The ALJ further found that Brooks's respond to questions at the deposition. Transcript violation resulted from an "honest mistake" and did ("Tr.") 21-23. Brooks replied that his pre-hearing not evidence a willful or continuing disregard for the statement provided sufficient detail to preclude unfair safety and soundness of the Bank, and therefore did surprise to the OCC, and that the OCC was at fault for not warrant his prohibition from banking. noticing the deposition only on the eve of trial. Tr. OCC Enforcement Counsel strongly excepts to the 23-25. The ALJ denied the OCC's motion without ALJ's conclusions regarding the absence of willful or explanation and permitted Brooks to testify. Tr. 25. continuing disregard for safety or soundness. The The OCC did not move to adjourn the hearing to OCC argues, among other things, that the record depose Brooks before his hearing testimony, did not supports a finding that Brooks's actions demonstrated cross-examine Brooks, and did not address the issue in continuing disregard in that Brooks, in declaring an its post-hearing brief to the ALJ. The OCC asks that illegal dividend, recklessly failed to heed prior OCC the Board strike Brooks's testimony from consider- warnings. ation. OCC Except. 7. In these circumstances, the Board declines to impose the extreme sanction of striking the testimony of 6. The OCC does not argue that the misconduct satisfied the a respondent in his own defense. The ALJ is generally alternative culpability test of "personal dishonesty". OCC Except. vested with "all powers necessary to conduct a pro- 50-60. ceeding in a fair and impartial manner and to avoid 7. The dividends declared by the Bank were paid to its holding companies in order to enable them to service debt that Brooks had unnecessary delay." 12 C.F.R. 19.5(a). More specifi- personally guaranteed. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 995 While the Board generally defers to an ALJ's factual tions in section 60. RD 16. Beginning in at least May findings, especially those based on the ALJ's judg- 1987 and continuing through at least 1990, Brooks used ments as to the credibility of the witnesses, the Board a consistent method to determine the amount of net is not bound by them, and may reach different factual profits that were eligible under section 60 to be paid findings so long as there is substantial evidence in the out as dividends in each quarter. Respondent Exhibit record to support those findings.8 ("RX") 4. Under this method, Brooks computed net Here, however, upon a careful review of the record, profits by adding the amount of net income from the the Board concludes that while there is some record prior quarter that had not been paid out as dividends to evidence supporting a finding that Brooks's conduct in the net income from the current quarter. Id. This causing illegal dividends meets the culpability test of method of computing net profits differed from the section 1818(e), that evidence is outweighed by coun- method prescribed in section 60 and described in the tervailing evidence showing that Brooks did not act Board's interpretation in two ways. First, this method recklessly or with willful disregard for safety and did not limit the amount of prior years' retained net soundness. Accordingly, the Board adopts the ALJ's profits used in the calculations to the previous two conclusion that the OCC did not establish that years, as required by the terms of section 60. Second, Brooks's actions with respect to the excessive divi- this method did not make the specific additions and dends demonstrated willful or continuing disregard for subtractions to net income (such as actual loan recovsafety or soundness. eries and losses) required by the applicable interpretation. RX 4.H Section 60 limits the dividends that a national bank may declare out of the "net profits" of the bank. The The Bank paid dividends for each quarter in 1989, approval of the OCC is required if the total of the aggregating $143,000 for the year, using Brooks's dividends in a calendar year exceeds the total of its net method for calculating net profits for purposes of profits for that year combined with its retained net section 60.12 RD 14. In January 1990, Brooks caused profits of the preceding two years (less any required the holding company to refund $1,347 of the $40,000 transfers to surplus or a fund for the retirement of any fourth quarter 1989 dividend, which turned out to be preferred stock). 12 U.S.C. § 60(b). "Net profits" is excessive under Brooks's computation method, as a defined by the statute as current earnings plus certain result of unexpected losses during December. RD 16. adjustments (such as actual loan recoveries) less cur- In March 1990, the OCC, based on a routine off-site rent expenses and certain other deductions (such as review of the Bank's filings, advised the Bank that its actual loan losses).9 Prior to December 1990,10 a dividends for 1989 exceeded the section 60 limitations Federal Reserve interpretation of section 60 applicable by over $63,000.13 RD 16-17. Brooks then wrote to the to national banks established a uniform means of OCC admitting the miscalculation of the permissible determining net profits for purposes of dividend re- dividend amount, taking responsibility for the error, strictions. 12 C.F.R. 250.104 (1989). The interpreta- and asking that the OCC retroactively grant approval tion allowed "net profits" to be computed using net for the excessive dividends. RD 17. When approval income determined from the call report, with certain was denied,14 the board of directors, including Brooks, other additions and deductions required by the terms stipulated to the entry of a cease and desist order by of section 60 (such as actual recoveries and losses). Id. The record shows that Brooks was responsible for making the computations necessary to assure that 11. Although the method Brooks used to calculate net profits did not comply with section 60, there is no evidence in the record that the dividends paid by the Bank complied with the limitadividends paid by the Bank during the years 1987 and 1988 exceeded the limits in that provision. The OCC examinations of the Bank in early 1988 and early 1989 found no violations of section 60. For those years, there is no evidence that the OCC reviewed the specific 8. Universal Camera Corp. v. NLRB, 340 U.S. 474, 496 (1951). It is computations the Bank used to apply the section 60 limitation on the agency, and not the ALJ, whose factual determinations are dividends. entitled to deference by a reviewing court. Penasquitos Village, Inc. 12. At the end of the OCC's examination that began in February v. NLRB, 565 F.2d 1074, 1076 (9th Cir. 1977). Thus, the Board has 1989, the OCC advised the Bank's board of directors that earnings for been upheld by reviewing courts in enforcement decisions where it year-to-date 1989 were weak. Noting that the holding company's debt has declined to adopt an ALJ's findings, both as to issues of legal service requirements were anticipated to exceed 1988's earnings, the interpretation (Van Dyke v. Board of Governors, 876 F.2d 1377, 1379 Report of Supervisory Activity expressly advised the Bank that "[a] (8th Cir. 1989)), and as to issues of fact, including credibility (Stanley careful review of 12 U.S.C. § 56 and 12 U.S.C. § 60 should be v. Board of Governors, 940 F.2d 267, 272 (7th Cir. 1991)). performed prior to the declaration of dividends to ensure future 9. The statute defines "net profits" as "the remainder of all earnings dividend payments do not exceed legal limitations." OCCX 5 at 3. from current operations plus actual recoveries on loans and invest- 13. The Bank had experienced reduced earnings in the last quarter ments and other assets, after deducting from the total thereof all of 1989. current operating expenses, actual losses, accrued dividends on 14. The OCC denied the request on August 3, 1990, because the preferred stock, and ail Federal and state taxes". 12 U.S.C. § 60(c). dividends caused the Bank's capital to be low, because the Bank was 10. The interpretation was repealed in December 1990, as discussed exposed to loss from high-risk loans, and because of the OCC's below. concerns with the Bank's supervision and management. OCCX 70. 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996 Federal Reserve Bulletin • October 1993 the OCC calling for the members of the board of income should not be made.16 Although adoption of directors to pay back into the bank the excessive the new rules in 1990 does not excuse the violation of dividends plus interest. RFF 48-49. The six directors section 60 in 1989, the new rules, which employ a who had voted for the excessive dividends, including method that coincides at least in part with the method Brooks, then reimbursed the Bank for the excessive Brooks had been using, tend to show that he was not dividends (but not interest on those amounts) pursuant acting in a manner that was necessarily detrimental to to the order. RD 18; RFF 42. the Bank. Moreover, the fact that Brooks used a The Board finds, as the OCC asserts, that there is consistent method to calculate the section 60 limitaevidence in the record tending to show that Brooks's tions from at least 1987 until 1989 tends to negate the use of his own method of calculating permissible allegation that Brooks devised his calculation method dividends is considerably more serious than an "hon- solely as a means to assure high dividend levels in the est mistake". This evidence includes Brooks's back- face of declining earnings in 1989, so that debt service ground as a CPA and bank examiner, the OCC's demands could be met.17 repeated criticisms of Brooks's conduct at the Bank Other facts of record also mitigate Brooks's culpaand general warning to comply with dividend restric- bility with respect to the excessive dividends. There is tions, and Brooks's apparent motive to maximize no evidence that Brooks deliberately concealed his dividends in light of the need to meet debt service method of calculating the dividends. The OCC's preobligations. vious general warnings as to capitalization and com- On balance, however, the Board finds that the pliance with section 60, while they should have made weight of the evidence in the record as a whole does Brooks more careful with respect to his dividend not support the conclusion that Brooks acted with calculations, did not alert him that his specific method continuing or willful disregard for the Bank's safety or of computing dividends was impermissible. Moreover, soundness. Brooks testified that the method he used Brooks promptly and on his own initiative caused the for computing compliance with section 60 was one he bank holding company to refund to the Bank $1,300 in devised when he was an OCC examiner.15 Brooks January 1990 when his method indicated that the Bank offered into evidence a sheet of calculations purporting dividends paid in December had been excessive in that to show how he calculated the available dividends amount.18 from 1987 to 1990. RX 4. While Brooks does not Accordingly, while the excessive dividends were a except to the ALJ's finding that his dividend calcula- violation of law and an unsafe or unsound practice tion method caused the Bank to pay dividends during from which Brooks received financial gain, the Board 1989 that violated section 60, it does not appear that concludes that, on this record, the OCC has not his calculation method was in all respects inherently sustained its burden of establishing that the miscondisadvantageous to the Bank. As explained above, one duct demonstrated the willful or continuing disregard of the reasons why Brooks's method was inconsistent for safety or soundness necessary for an order of with section 60 was that, in determining the amount of prohibition. "net profits" for purposes of these restriction, Brooks failed to make the adjustments to the Bank's reported net income—adjustments for amounts added to the 16. 12 C.F.R. 208.19(b)(2); 12 C.F.R. 5.62(c). The amended regula- Bank's provision for loan loss reserves and for actual tions did not alter the two-year limitation on use of prior year retained loan recoveries and charge-offs—called for by the net profits. 17. The ALJ's conclusion as to Brooks's culpability was also based applicable regulatory interpretation of net profits. See on the ALJ's finding, grounded solely on Brooks's uncorroborated 12 C.F.R. 225.104(e)(1989). However, shortly thereaf- testimony, that in September 1989, before all of the excessive dividends had been paid, an OCC examiner reviewed the Bank's dividend ter, in December 1990, the OCC and the Board computation method. RD 19. The OCC excepts to this finding as adopted new rules for computing net profits providing unsupported by the weight of the evidence, arguing that the OCC that, given current accounting principles and regula- examiners involved denied discussing dividends with Brooks at that time. The Board finds it unnecessary to resolve this factual dispute. tory reporting procedures, these adjustments to net Even if the OCC's version were to be accepted, there would, in the Board's judgment, still be inadequate evidence in the record to support the requisite determination of culpability. 15. Brooks testified that: "[T]he basis of my computation of the 18. The Board adopts OCC Enforcement Counsel's argument that compliance sheet was the fact that when I worked for the OCC and we the ALJ was in error in finding that the improper dividends were the analyzed the change to accrual accounting, we decided that the most result of Brooks's mistaken use of the cash accounting method, rather conservative way to compute the dividend—to restrict the dividends than the accrual method. There is abundant evidence that Brooks according to 12 U.S.C. 60 was by just taking the fully-accrued knew that the Bank used accrual accounting, as national banks have earnings and subtracting off the dividend, and then . . . taking the been required to do since 1976. The erroneous dividends were caused, previous two years' excess . . . ." Tr. at 334-35. Brooks denied ever not by a mistake over the proper accounting method, but by Brooks's having seen the OCC's compliance worksheet that implemented failure to make the adjustments to current earnings required by the 12 C.F.R. 250.104 (OCCX 42) until the OCC's 1990 examination applicable interpretation and by failing to use the three-year statutory revealed the excessive dividends. Tr. 334. computation period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 997 2. Unauthorized Real Estate Brokerage. The OCC sound practice and breach of fiduciary duty in conbased this prohibition action in part on allegations that nection with alleged manipulation of the Bank's Brooks caused the Bank to exceed its statutory au- correspondent account at another bank based on four thority under 12 U.S.C. § 24 (seventh) to engage in wire transfers from the account. The first two transbanking activities by operating a real estate agency for fers were made on October 31, 1989, from the Bank's one year, and that Brooks received benefit from its correspondent account to an account at another bank operation. RD 5-6. The ALJ found, however, that the owned by a trust for which Brooks's mother was OCC did not establish that the practice evidenced a trustee and Brooks a beneficiary. RFF 55-58. The willful or continuing disregard for safety or soundness ALJ found that the transfers were made pursuant to by Brooks. RD 10-11. loans approved by the board of directors, one a The ALJ found that in 1984 the Bank's board of $5,000 loan to a bank customer that was then used to directors approved the establishment of a real estate buy an automobile from Brooks, and the second, an brokerage in the Bank in order to sell a number of $18,150 loan to Brooks to repay a debt to his mother. vacant houses located in the small town where the RD 19. The other two wire-transfers, in the amounts Bank was located. RD 5. Brooks, as a licensed real of $700 and $300, were initiated by Brooks on Noestate broker, was responsible for the operation of the vember 8, 1993, to transfer funds on behalf of his real estate activities, which continued for one year, brother to an account held by his sister-in-law. RD 20-21. In each case, the accounts were not promptly and which generated commissions for the Bank. RD reconciled after the transfers and remained out of 5-6. After an OCC examination criticized the real balance for 14 days with respect to the first two estate operation as an unauthorized activity for a transfers, and for 51 days with respect to the second national bank, Brooks reimbursed the Bank for the two. RD 20-21. expenses of the operation borne by the Bank, and claimed the commissions generated by the sales. The ALJ found that Brooks was not responsible for RD 5-6, 11. posting the wire-transferred amounts,19 and was not The ALJ found that the real estate activities ex- aware of the delays in reconciling the account. ceeded the authorization of the statute, but found that RFF 69, 70. The ALJ therefore rejected the OCC the violation resulted from the board of directors' charges that Brooks had directed that unauthorized mistaken belief that it was a permissible activity. wire transfers be made to members of his family, then RD 9. The ALJ found that the Bank conducted the tried to correct the problem with subsequently authoactivity openly, with no attempt to conceal the activ- rized loans, the proceeds of which were used to ities from the OCC. RD 10. Accordingly, the ALJ reconcile the Bank's correspondent account. Instead, found that Brooks did not act with the culpability the ALJ found that the transfers were authorized and requisite to an order of prohibition. RD 11. that the Bank's cashier was responsible for the delays The OCC excepts to that conclusion, arguing that in posting the wire-transferred amounts. RD 21-24. the factual record indicates that Brooks in fact com- The Board adopts the ALJ's findings on this issue, mingled his real estate operations with those of the which are based on conflicting evidence, and in part, Bank, keeping the commissions earned while charging on credibility determinations. While Brooks's actions the Bank with the expenses, without the knowledge of with regard to the wire transfers were unsafe and the board of directors. OCC Except. 38-40. The OCC unsound, and as discussed below embodied a preferalso argues that the mistake-of-law finding is inher- ential extension of credit, the record is insufficient to ently flawed in light of Brooks's previous experience find that these actions evidenced the culpability requias a national bank examiner. OCC Except. 42. site for an order of prohibition. The Board finds that the record is insufficient to 4. Preferential extension of credit. The ALJ found, as establish the precise circumstances of Brooks's in- the OCC alleged, that a $18,150 loan to Brooks that volvement in the real estate operations in 1984-1985, funded one of the wire transfers on October 31, 1989 including the circumstances bearing upon his culpabil- was preferential, and therefore a violation of ity. The Board notes that the record evidence cited by 12 U.S.C. § 375b, and 12 C.F.R. 215. RD 23-25. The the OCC tends to show that the real estate operation loan clearly constituted financial gain to Brooks. The was entirely owned and operated by Brooks, which, if ALJ concluded, however, that the violation did not evidence a willful or continuing disregard for safety or true, would not establish a violation of 12 U.S.C. § 24. soundness. RD 33. Accordingly, the Board finds that the OCC has not proved its charges with respect to the real estate operations. 19. Indeed, the ALJ noted that the internal control policy of the 3. Alleged manipulation of bank accounts. The OCC Bank prohibited Brooks from making debit entries to the corresponalleged that Brooks engaged in an unsafe and un- dent account for wire transfer activities that he initiated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

998 Federal Reserve Bulletin • October 1993 The Federal Reserve Act and Regulation O require conduct—violation of laws and unsafe or unsound that extensions of credit from banks to individuals who practices—which caused financial gain to Brooks and are bank "insiders," i.e., individuals who are bank loss to the Bank, thereby satisfying the first two executive officers, directors, or principal sharehold- requirements for an order of prohibition. The Board is ers, must be on substantially the same terms as are unable to conclude on this record, however, that the available to non-insiders. 12 U.S.C. § 375b(3); OCC established the third requirement, that Brooks's 12 C.F.R. 215.4. misconduct reflected personal dishonesty or willful or The ALJ reasonably found that the loan was prefer- continuing disregard for safety or soundness. This ential in a number of respects. RD 23-25. Brooks conclusion in no way indicates that the OCC lacked a wire-transferred the proceeds from the loan to an reasonable basis for bringing this action. Nor does this account other than his own immediately upon signing disposition excuse Brooks's actions, which clearly the promissory note, an action possible only because of involved a variety of substandard practices. his position with the Bank. RD 24. The value of the Accordingly, the Board orders that this prohibition collateral for the loan, a 1964 Corvette and a 1984 proceeding be dismissed. recreational boat with outboard motor, was not sup- By Order of the Board of Governors, this 6th day of ported by an appraisal or other documentation. RD 24. August, 1993. An OCC examination also criticized the extension of credit to Brooks because he was financially illiquid, had Board of Governors of the numerous and continuing overdraft problems, had a Federal Reserve System high level of contingent liabilities, and because his creditworthiness did not support an extension of credit WILLIAM W. WILES on the terms applied. RD 24. The ALJ therefore found Secretary of the Board that the loan was a violation of law, a breach of Brooks's fiduciary duty, and an unsafe and unsound banking practice. While Brooks clearly received financial gain as a result of the violation, the ALJ found that FINAL ENFORCEMENT ORDERS ISSUED BY THE he did not act with the requisite culpability to justify his BOARD OF GOVERNORS prohibition. The OCC's theory of the case was that it was Piedmont Trust Bank Brooks's entire course of conduct with respect to the Martinsville, Virginia manipulation of the Bank accounts that included the preferential loan that justified his prohibition. Notice of The Federal Reserve Board announced on August 6, Intention to Prohibit, Articles IV-VIII; OCC Except. 1993, the issuance of a Cease and Desist Order against 28-35. The OCC therefore did not argue that the single the Piedmont Trust Bank, Martinsville, Virginia. preferential loan, standing alone, was a basis for prohibition. In the past, the Board has found that isolated or discrete violations of the restrictions against insider- WRITTEN AGREEMENTS APPROVED BY FEDERAL dealing do not necessarily warrant an order of prohibi- RESERVE BANKS tion, while they may readily be the subject of civil money penalties.20 See In the Matter of John Van Commerce Exchange Bank Dyke, OCC No. AA-EC-87-88 (1988) at 36. In these Beachwood, Ohio circumstances, the Board adopts the ALJ's conclusion that the record did not establish a basis for Brooks's The Federal Reserve Board announced on August 2, prohibition with respect to the preferential loan. 1993, the execution of a Written Agreement among the Federal Reserve Bank of Cleveland, the Superinten- Conclusion dent of the Ohio Division of Banks, and the Commerce Exchange Bank, Beachwood, Ohio. After a close examination of the record, the Board concludes that the OCC has established by a prepon- Sparta State Bank derance of the evidence that Brooks engaged in mis- Sparta, Michigan The Federal Reserve Board announced on August 19, 1993, the execution of a Written Agreement between the Federal Reserve Bank of Chicago and the Sparta 20. The Board notes that the preferential loan was part of the basis for the Comptroller's final civil money penalty. State Bank, Sparta, Michigan. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Al 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 A13 Aggregate reserves of depository institutions SECURITIES MARKETS AND 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 A35 Open-end investment companies—Net sales A17 Bank debits and deposit turnover and assets A18 Loans and securities—All commercial banks A3 5 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 • October 1993 Domestic Financial Statistics—Continued A54 Foreign official assets held at Federal Reserve Banks A55 Foreign branches of U.S. banks—Balance REAL ESTATE sheet data A37 Mortgage markets A57 Selected U.S. liabilities to foreign official A3 8 Mortgage debt outstanding institutions CONSUMER INSTALLMENT CREDIT REPORTED BY BANKS IN THE UNITED STATES A39 Total outstanding A39 Terms A57 Liabilities to and claims on foreigners A58 Liabilities to foreigners A60 Banks' own claims on foreigners FLOW OF FUNDS A61 Banks' own and domestic customers' claims on foreigners A40 Funds raised in U.S. credit markets 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 NonfinancialS tatistics • October 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 Q2r Mar. Apr.r Mayr June1 July Reserves of depository institutions2 1 Total 9.3 25.8 9.3 10.8 5.3 .7 36.5 5.1 9.4 2 Required 9.9 25.3 8.7 12.4 3.0 3.3 39.5 7.0 5.7 i Nonborrowed 8.4 27.1 9.5 10.6 4.3 1.1 35.5 3.8 8.1 4 Monetary base 10.5 12.6 9.1 9.8 8.9 7.6 13.8 10.9 9.5 Concepts of money, liquid assets, and debt4 5 Ml 11.7 16.8 6.6 10.5 2.6 8.9 27.4 7.3 13.6 6 M2 .8 2.7 -1.9 2.1 -.9 .5 10.3 2.4 1.8 7 M3 .1 -.2 -3.7r 2.3 -1.3 3.1 8.3 -1.2 -2.2 8 L 1.1 1.6 -2.4r 3.4 -,5r 4.0 9.7 1.1 n.a. 9 Debt 4.9 4.3 4.4 5.4 5.3r 5.2 5.7 6.4 n.a. Nontrqnsaction components 10 In M2y -3.2 -2.8 -5.3r -1.5 -2.4 -3.1 2.9 .3 -3.3 11 In M3 only6 -3.5 -14.4 -13.0 3.4 -3.3 17.0 -2.2 -20.2 -23.8 Time and savings deposits Commercial banks 12 Savings, including MMDAs 10.9 12.9 1.6 4.6 -2.9 3.3 14.0 6.4 .8 13 Small time -17.4 -17.2 -7.9" -8.0 -5.2r -11.2 -10.6 -10.5 -12.8 14 Large time8,9 -18.6 -18.4 -17.9 .4 -20.9 21.7 3.0 -11.9 -20.2 Thrift institutions 15 Savings, including MMDAs 9.2 8.7 -.2 .7 -5.1 2.0 9.0 2.8 2.5 16 Small time7 -18.6 -21.7 -17.9r -10.1 -9.9" -7.2 -8.3 -11.5 -12.0 17 Large time ' -14.9 -11.3 -17.3 -7.9 -18.3 11.2 -14.7 -9.3 -1.9 Money market mutual funds 18 General purpose and broker-dealer -7.4 -4.2 -10.1 -.4 -1.8 -4.7 18.1 -1.1 -.7 19 Institution-only 32.9 -19.4 -14.1 .5 -5.9 -3.0 14.4 -27.8 -18.8 Debt components4 20 Federal 10.7 6.0 8.6 11.5 15.0 10.9 10.9 13.2 n.a. 21 Nonfederal 3.0 3.7 2.9 3.2 1.9" 3.2 3.9 3.9 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 fund 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 May June July June 16 June 23 June 30 July 7 July 14 July 21 July 28 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 346,081 354,051r 354,701 350,351 354,576 361,071r 355,464 355,871 357,374 351,105 U.S. government securities 2 Bought outright—System account 305,421 312,928 313,725 313,630 314,888 314,052 315,101 311,945 313,429 313,911 3 Held under repurchase agreements ... 2,598 3,537 3,235 0 2,351 7,754 2,825 5,728 5,774 0 Federal agency obligations 4 Bought outright 5,086 5,050 5,011 5,054 5,054 5,035 5,032 5,024 5,013 4,992 5 Held under repurchase agreements ... 117 220 278 0 178 581 220 369 643 0 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 43 55 16 5 19 202 39 5 14 11 8 Seasonal credit 83 143 211 130 160 185 195 203 218 224 9 Extended credit 0 0 0 0 0 0 0 0 0 0 10 Float 435 466r 490 412 402 639r 711 678 326 290 11 Other Federal Reserve assets 32,298 31,652 31,734 31,119 31,525 32,622 31,342 31,919 31,957 31,677 12 Gold stock 11,054 11,056 11,057 11,055 11,058 11,057 11,057 11,058 11,057 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 21,651r 21,695r 21,731 21,692r 21,701r 21,71 lr 21,718 21,726 21,733 21,741 ABSORBING RESERVE FUNDS 15 Currency in circulation 338,475r 342,775r 346,485 342,967r 342,675r 342,846r 346,321 347,781 346,415 345,573 16 Treasury cash holdings 497 469 414 481 461 448 431 425 408 405 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 5,851 8,781 6,266 5,364 9,667 16,256 6,833 6,822 6,065 5,435 18 Foreign 272 238 222 225 206 218 222 192 197 253 19 Service-related balances and adjustments 6,193 6,221r 6,186 6,135 6,209 6,279r 6,249 6,192 6,208 6,141 20 Other 310 284 274 284 274 291 288 294 273 259 21 Other Federal Reserve liabilities and capital 9,509 9,360 9,232 9,440 9,379 9,301 8,953 9,287 9,325 9,306 22 Reserve balances with Federal Reserve Banks3 25,699 26,694r 26,428 26,220 26,481 26,217r 26,960 25,680 29,292 24,548 End-of-month figures Wednesday figures May June July June 16 June 23 June 30 July 7 July 14 July 21 July 28 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 346,958 368,859*" 352,092 351,462 362,036 368,859r 361,528 356,556 360,505 350,467 U.S. government securities2 Bought outright—System account . 304,494 313,143 314,614 314,658 313,453 313,143 313,556 313,142 312,748 312,990 Held under repurchase agreements 5,347 15,056 0 0 10,261 15,056 8,111 5,852 8,918 0 Federal agency obligations Bought outright 5,054 5,032 4,964 5,054 5,054 5,032 5,032 5,013 5,013 4,964 Held under repurchase agreements 0 949 0 0 993 949 712 200 846 0 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions Adjustment credit 37 1,357 11 12 22 1,357 198 4 12 9 Seasonal credit 92 177 223 144 181 177 1% 210 225 220 Extended credit 0 0 0 0 0 0 0 0 0 0 Float 52 22 lr 460 414 -229 22 r 1,648 106 470 499 Other Federal Reserve assets 31,881 32,924 31,819 31,180 32,301 32,924 32,075 32,029 32,273 31,785 12 Gold stock 11,053 11,057 11,057 11,058 11,058 11,057 11,057 11,057 11,057 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 21,674r 21,711r 21,748 21,692r 21,701r 21,711r 21,718 21,726 21,733 21,741 ABSORBING RESERVE FUNDS 15 Currency in circulation 340,856r 344,123r 346,113 342,972r 342,617r 344,123r 347,637 347,425 345,944 345,753 16 Treasury cash holdings 489 432 386 481 451 432 428 408 408 386 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 5,787 28,386 5,818 8,605 13,673 28,386 6,566 7,097 6,787 5,747 18 Foreign 194 286 284 292 186 286 247 203 198 234 19 Service-related balances and adjustments 6,297 6,279r 6,076 6,135 6,209 6,279r 6,249 6,192 6,208 6,141 20 Other 300 297 232 348 268 297 266 471 262 233 21 Other Federal Reserve liabilities and capital 9,263 8,705 9,349 9,238 9,240 8,705 9,099 9,237 9,187 9,153 22 Reserve balances with Federal Reserve Banks3 24,518 21,136r 24,659 24,158 30,169 21,136r 31,829 26,326 32,320 23,636 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 NonfinancialS tatistics • October 1993 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RReesseerrvvee ccllaassssiiffiiccaattiioonn 1990 1991 1992 1993 Dec. Dec. Dec. Jan. Feb. Mar. Apr. May June July 1 Reserve balances with Reserve Banks 30,237 26,659 25,368 23,636 23,515 24,383 26,975 25,968 26,462 26,561 2 Total vault cash3 31,789 32,510 34,535 35,991 33,914 33,293 32,721 33,462 34,106 34,535 3 Applied vault cash4, 28,884 28,872 31,172 32,368 30,368 29,912 29,567 30,133 30,776 31,189 4 Surplus vault cash 2,905 3,638 3,364 3,623 3,546 3,381 3,154 3,329 3,330 3,347 5 Total reserves6 59,120 55,532 56,540 56,004 53,882 54,296 56,541 56,101 57,238 57,750 6 Required reserves 57,456 54,553 55,385 54,744 52,778 53,083 55,445 55,104 56,328r 56,661 7 Excess reserve balances at Reserve Banks7... 1,664 979 1,155 1,260 1,104 1,213 1,096 996 91 lr 1,089 8 Total borrowings at Reserve Banks8 326 192 124 165 45 91 73 121 181 244 9 Seasonal borrowings 76 38 18 11 18 26 41 84 142 210 10 Extended credit 23 1 1 1 0 0 0 0 0 0 Biweekly averages of daily figures for weeks ending on date indicated 1993 Mar. 31 Apr. 14 Apr. 28 May 12 May 26 June 9 June 23 July 7r July 21 Aug. 4 1 Reserve balances with Reserve Banks 24,747 26,612 27,586 25,228 26,396 26,543 26,352 26,579 27,489 25,250 2 Total vault cash3 32,343 33,218 32,010 34,225 32,728 33,685 34,237 34,385 34,026 35,354 3 Applied vault cash 29,098 29,995 28,960 30,816 29,455 30,391 30,897 31,032 30,772 31,883 4 Surplus vault cash 3,245 3,223 3,050 3,409 3,273 3,294 3,341 3,354 3,255 3,470 5 Total reserves6 53,845 56,607 56,546 56,044 55,851 56,933 57,248 57,610 58,261 57,134 6 Required reserves 52,572 55,763 55,160 55,217 54,649 56,109 56,477 56,311 57,294 56,021 7 Excess reserve balances at Reserve Banks ... 1,273 844 1,387 828 1,202 824 772 1,299 967 1,112 8 Total borrowings at Reserve Banks 98 38 99 142 105 118 158 311 220 232 9 Seasonal borrowings 32 31 47 71 90 101 145 190 211 222 10 Extended credit9 0 0 1 1 0 0 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 31 June 7 June 14 June 21 June 28 July 5 July 12 July 19 July 26 Federal funds purchased, repurchase agreements, and other selected borrowings From commercial banks in the United States 1 For one day or under continuing contract 70,624 74,804 76,818 72,102 67,613 77,333 77,723 76,026 72,614 2 For all other maturities 12,825 13,802 14,807 14,560 1133,,550055 1111,,666699 1122,,661188 1133,,440077 1133,,554499 From other depository institutions, foreign banks and official institutions, and U.S. government agencies 3 For one day or under continuing contract 18,376 19,975 18,784 19,191 20,843 18,304 17,751 19,858 19,395 4 For all other maturities 20,968 21,003 21,028 18,699 19,745 17,843 20,809 20,483 18,974 Repurchase agreements on U.S. government and federal agency securities Brokers and nonbank dealers in securities 5 For one day or under continuing contract 13,028 15,690 15,708 13,790 11,380 9,795 17,059 16,820 18,943 6 For all other maturities 27,872 28,435 28,888 27,625 27,186 28,988 4455,,556666 44,578 44,430 All other customers 7 For one day or under continuing contract 24,170 23,262 25,386 24,028 23,209 23,528 24,644 24,587 26,362 8 For all other maturities 14,364 14,441 14,530 14,457 15,108 14,270 14,172 14,520 14,312 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 43,503 44,107 43,067 44,117 41,742 49,013 43,078 42,975 43,555 10 To all other specified customers2 20,169 23,201 24,632 25,825 21,259 27,332 30,529 30,192 29,535 1. Banks with assets of $4 billion or more as of Dec. 31, 1988. 2. Brokers and nonbank dealers in securities, other depository institutions, Data in this table also appear in the Board's H.5 (507) weekly statistical release. foreign banks and official institutions, and U.S. government agencies. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic NonfinancialS tatistics • October 1993 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels Adjustment credit1 Seasonal credit2 Extended credit3 FFeeddeerraall RReesseerrvvee BBaannkk 9/ O 3/ n 9 3 Effective date Previous rate 9/ O 3/ n 9 3 Effective date Previous rate 9/ O 3/ n 9 3 Effective date Previous rate Boston 3 7/2/92 3.5 3.10 9/2/93 3.10 3.60 9/2/93 3.60 New York 7/2/92 9/2/93 9/2/93 Philadelphia 7/2/92 9/2/93 9/2/93 Cleveland 7/6/92 9/2/93 9/2/93 Richmond 7/2/92 9/2/93 9/2/93 Atlanta 7/2/92 9/2/93 9/2/93 Chicago 7/2/92 9/2/93 9/2/93 St. Louis 7/7/92 9/2/93 9/2/93 Minneapolis 7/2/92 9/2/93 9/2/93 Kansas City 7/2/92 9/2/93 9/2/93 Dallas 7/2/92 9/2/93 9/2/93 San Francisco ... 3 7/2/92 3.5 3.10 9/2/93 3.10 3.60 9/2/93 3.60 Range of rates for adjustment credit in recent years4 Range (or F.R. Range (or F.R. Range (or F.R. Effective date A le l v l e F l) . — R. B o an f k Effective date A le l v l e F l) . — R. B o an f k Effective date A le l v l e F l) . — R. Ba o n f k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1977 1981—May 5 13-14 14 1986—Aug. 21 5.5-6 5.5 8 14 14 22 5.5 5.5 1978—Jan. 9 6-6.5 6.5 Nov. 2 13-14 13 20 6.5 6.5 6 13 13 1987—Sept. 4 5.5-6 6 May 11 6.5-7 7 Dec. 4 12 12 11 6 6 12 7 7 July 3 7-7.25 7.25 1982—July 20 11.5-12 11.5 1988—Aug. 9 6-6.5 6.5 10 7.25 7.25 23 11.5 11.5 11 6.5 6.5 Aug. 21 7.75 7.75 Aug. 2 11-11.5 11 Sept. 22 8 8 3 11 11 1989—Feb. 24 6.5-7 7 Oct. 16 8-8.5 8.5 16 10.5 10.5 27 7 7 20 8.5 8.5 27 10-10.5 10 Nov. 1 8.5-9.5 9.5 30 10 10 1990—Dec. 19 6.5 6.5 3 9.5 9.5 Oct. 12 9.5-10 9.5 13 9.5 9.5 1991—Feb. 1 6-6.5 6 1979—July 20 10 10 Nov. 22 9-9.5 9 4 6 6 Aug. 17 10-10.5 10.5 26 9 9 Apr. 30 5.5-6 5.5 20 10.5 10.5 Dec. 14 8.5-9 9 May 2 5.5 5.5 Sept. 19 10.5-11 11 15 8.5-9 8.5 Sept. 13 5-5.5 5 21 11 11 17 8.5 8.5 17 5 5 Oct. 8 11-12 12 Nov. 6 4.5-5 4.5 10 12 12 1984—Apr. 9 8.5-9 9 7 4.5 4.5 13 9 9 Dec. 20 3.5-4.5 3.5 1980—Feb. 15 12-13 13 Nov. 21 8.5-9 8.5 24 3.5 3.5 19 13 13 26 8.5 8.5 May 29 12-13 13 Dec. 24 8 8 1992—July 2 3-3.5 3 30 12 12 7 3 3 June 13 11-12 11 1985—May 20 7.5-8 7.5 16 11 11 24 7.5 7.5 29 10 10 IInn eeffffeecctt SSeepptt.. 33,, 11999933 3 3 July 28 10-11 10 1986—Mar. 7 7-7.5 7 S N e o p v t . . 1 2 7 6 1 11 2 1 1 2 1 Apr. 2 1 1 0 6.5 7 - 7 6 7 .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 deposit2 Net transaction accounts 1 $0 million-$46.8 million... 12/15/92 2 More than $46.8 million4.. 12/15/92 3 Nonpersonal time deposits' 12/27/90 4 Eurocurrency liabilities6. . 12/27/90 1. Required reserves must be held in the form of deposits with Federal Reserve permit no more than six preauthorized, automatic, or other transfers per month, Banks or vault cash. Nonmember institutions may maintain reserve balances with of which no more than three may be checks, are not transaction accounts (such a Federal Reserve Bank indirectly on a pass-through basis with certain approved accounts are savings deposits). institutions. For previous reserve requirements, see earlier editions of the Annual The Monetary Control Act of 1980 requires that the amount of transaction Report or the Federal Reserve Bulletin. Under provisions of the Monetary accounts against which the 3 percent reserve requirement applies be modified Control Act, depository institutions include commercial banks, mutual savings annually by 80 percent of the percentage change in transaction accounts held by banks, savings and loan associations, credit unions, agencies and branches of all depository institutions, determined as of June 30 each year. Effective Dec. 15, foreign banks, and Edge Act 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 \ Vz years was reduced from 3 on an annual basis as of June 30. No corresponding adjustment is to be made in percent to IVi percent for the maintenance period that began Dec. 13, 1990, and the event of a decrease. On Dec. 15, 1992, the exemption was raised from $3.6 to zero for the maintenance period that began Dec. 27, 1990. The reserve million to $3.8 million. The exemption applies in the following order: (1) net requirement on nonpersonal time deposits with an original maturity of 1 Vi years negotiable order of withdrawal (NOW) accounts (NOW accounts less allowable or more has been zero since Oct. 6, 1983. deductions); and (2) net other transaction accounts. The exemption applies only to For institutions that report quarterly, the reserve requirement on nonpersonal accounts that would be subject to a 3 percent reserve requirement. time deposits with an original maturity of less than IVi years was reduced from 3 3. Include ail 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 was the reserve for the purpose of making payments to third persons or others. However, money requirement on nonpersonal time deposits with an original maturity of less than market deposit accounts (MMDAs) and similar accounts subject to the rules that 1 Vi years (see note 4). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Nonfinancial Statistics • October 1993 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 1992 1993 TTyyppee ooff ttrraannssaaccttiioonn aanndd mmaattuurriittyy 11999900 11999911 11999922 Dec. Jan. Feb. Mar. Apr. May June U.S. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 24,739 20,158 14,714 3,669 0 0 0 121 349 7,280 2 Gross sales 7,291 120 1,628 0 0 0 0 0 0 0 Exchanges 241,086 277,314 308,699 29,562 24,542 19,832 23,796 30,124 26,610 24,821 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 1,0% 0 0 0 279 244 0 0 6 Gross sales 0 0 0 0 0 0 0 0 0 0 7 Maturity shifts 25,638 24,454 36,662 2,777 561 2,892 4,303 1,950 4,108 4,002 8 Exchanges -27,424 -28,090 -30,543 -1,570 -1,202 -6,044 -2,602 -1,100 -4,013 -2,152 9 Redemptions 0 1,000 0 0 0 0 0 0 0 0 One to five years 10 Gross purchases 250 6,583 13,118 200 0 0 1,441 2,490 0 0 11 Gross sales 200 0 0 0 0 0 0 0 0 0 12 Maturity shifts -21,770 -21,211 -34,478 -2,777 -64 -2,617 -4,303 -1,630 -3,652 -4,002 13 Exchanges 25,410 24,594 25,811 1,570 882 4,564 2,602 800 3,245 2,152 Five to ten years 14 Gross purchases 0 1,280 2,818 100 0 0 716 1,147 0 0 15 Gross sales 100 0 0 0 0 0 0 0 0 0 16 Maturity shifts -2,186 -2,037 -1,915 0 -497 -98 0 -320 -333 0 17 Exchanges 789 2,894 3,532 0 0 1,000 0 300 468 0 More than ten years 18 Gross purchases 0 375 2,333 0 0 0 705 1,110 0 0 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shifts -1,681 -1,209 -269 0 0 -177 0 0 -123 0 21 Exchanges 1,226 600 1,200 0 0 480 0 0 300 0 All maturities 22 Gross purchases 25,414 31,439 34,079 3,969 0 0 3,141 5,111 349 7,280 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 1,482,467 144,232 114,543 111,491 146,563 127,115 124,462 111,726 26 Gross purchases 1,363,434 1,571,534 1,480,140 142,578 116,510 113,349 143,049 128,924 123,227 113,095 Repurchase agreements 7.7 Gross purchases 219,632 310,084 378,374 48,904 34,768 28,544 37,815 30,197 33,987 5533,,005511 28 Gross sales 202,551 311,752 386,257 44,697 42,231 25,889 33,714 36,953 28,640 43,342 29 Net change in U.S. Treasury securities 24,886 29,729 20,642 6,521 -5,497 4,513 3,728 163 4,461 18,357 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 183 292 632 121 103 85 101 28 41 22 Repurchase agreements 33 Gross purchases 41,836 22,807 14,565 1,601 2,237 1,107 1,811 197 22,,110055 22,,996688 34 Gross sales 40,461 23,595 14,486 1,224 2,868 832 1,519 764 2,105 2,019 35 Net change in federal agency obligations 1,192 -1,085 -554 256 -734 190 191 -595 -41 927 36 Total net change in System Open Market Account 26,078 28,644 20,089 6,777 -6,231 4,703 3,918 -431 4,420 19,284 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 June 30 July 7 July 14 July 21 July 28 May 31 June 30 July 31 Consolidated condition statement ASSETS 1 Gold certificate account 11,057 11,057 11,057 11,057 11,057 11,053 11,057 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 408 376 379 386 388 441 408 398 Loans 4 To depository institutions 1,534 394 214 237 229 129 1,534 234 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 5,032 5,032 5,013 5,013 4,964 5,054 5,032 4,964 8 Held under repurchase agreements 949 712 200 846 0 0 949 0 9 Total U.S. Treasury securities 328,199 321,667 318,994 321,666 312,990 309,841 328,199 314,614 10 Bought outright2 313,143 313,556 313,142 312,748 312,990 304,494 313,143 314,614 11 Bills 151,796 152,209 151,795 151,699 151,941 143,148 151,796 153,366 12 Notes 123,870 123,870 123,870 123,572 123,572 123,870 123,870 123,772 13 Bonds 37,477 37,477 37,477 37,477 37,477 37,477 37,477 37,477 14 Held under repurchase agreements 15,056 8,111 5,852 8,918 0 5,347 15,056 0 15 Total loans and securities 335,714 327,805 324,422 327,762 318,183 315,025 335,714 319,813 16 Items in process of collection 5,522 9,393 5,953 5,438 5,006 4,473 5,522 4,958 17 Bank premises 1,041 1,041 1,041 1,041 1,043 1,039 1,041 1,043 Other assets 18 Denominated in foreign currencies 22,334 22,352 22,370 22,398 22,416 23,143 22,334 22,352 19 All other 9,614 8,777 8,761 8,924 8,257 7,820 9,614 8,336 20 Total assets 393,709 388,819 382,001 385,026 374,368 371,013 393,709 375,975 LIABILITIES 21 Federal Reserve notes 323,253 326,723 326,486 325,005 324,786 320,112 323,253 325,149 22 Total deposits 56,693 45,443 41,051 46,034 35,824 37,279 56,693 37,062 23 Depository institutions 27,724 38,364 33,283 38,787 29,610 31,000 27,724 30,725 24 U.S. Treasury—General account 28,386 6,566 7,097 6,787 5,747 5,787 28,386 5,818 25 Foreign—Official accounts 286 247 203 198 234 194 286 284 26 Other 297 266 471 262 233 300 297 232 27 Deferred credit items 5,059 7,554 5,226 4,800 4,605 4,358 5,059 4,415 28 Other liabilities and accrued dividends5. 2,229 2,328 2,331 2,288 2,236 2,217 2,229 2,369 29 Total liabilities. 387,233 382,048 375,095 378,127 367,450 363,966 387,233 368,995 CAPITAL ACCOUNTS 30 Capital paid in 3,288 3,293 3,294 3,297 3,296 3,300 3,288 3,299 31 Surplus 3,038 3,053 3,054 3,054 3,054 3,054 3,038 3,054 32 Other capital accounts. 150 424 558 548 568 693 150 628 33 Total liabilities and capital accounts 393,709 388,819 382,001 385,026 374,368 371,013 393,709 375,975 MEMO 34 Marketable U.S. Treasury securities held in custody for foreign and international accounts 314,236 313,312 318,112 313,664 311,303 317,523 314,236 316,176 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to Banks)— 385,553 386,680 387,881 388,872 389,104 382,009 385,553 389,182 36 LESS: Held by Federal Reserve Banks 62,301 59,957 61,395 63,867 64,319 61,897 62,301 64,034 37 Federal Reserve notes, net 323,253 326,723 326,486 325,005 324,786 320,112 323,253 325,149 Collateral held against notes, net: 38 Gold certificate account 11,057 11,057 11,057 11,057 11,057 11,053 11,057 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 304,178 307,647 307,411 305,930 305,710 301,040 304,178 306,073 42 Total collateral. 323,253 326,723 326,486 325,005 324,786 320,112 323,253 325,149 1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly 3. Valued monthly at market exchange rates. statistical release. For ordering address, see inside front cover. 4. Includes special investment account at the Federal Reserve Bank of Chicago 2. Includes securities loaned—fully guaranteed by U.S. Treasury securities in Treasury bills maturing within ninety days. pledged with Federal Reserve Banks—and excludes securities sold and scheduled 5. Includes exchange-translation account reflecting the monthly revaluation at to be bought back under matched sale-purchase transactions. market exchange rates of foreign exchange commitments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Nonfinancial Statistics • October 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 30 July 7 July 14 July 21 July 28 May 31 June 30 July 30 1 Total loans 1,534 394 214 237 229 129 1,534 234 2 Within fifteen days1 1,447 238 52 207 210 82 1,447 103 3 Sixteen days to ninety days ... 87 156 162 31 19 47 87 132 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.. 328,199 321,667 318,994 321,666 312,990 304,494 328,199 314,614 10 Within fifteen days1 29,971 19,584 20,611 24,426 15,788 8,196 29,971 7,871 11 Sixteen days to ninety days ... 74,113 75,869 72,075 71,274 74,606 79,097 74,113 79,998 12 Ninety-one days to one year .. 101,750 103,849 103,944 103,886 100,516 94,431 101,750 104,466 13 One year to five years 70,660 70,660 70,660 71,041 71,041 71,065 70,660 71,241 14 Five years to ten years 21,606 21,606 21,606 20,940 20,940 21,606 21,606 20,940 15 More than ten years 30,099 30,099 30,099 30,099 30,099 30,099 30,099 30,099 16 Total federal agency obligations 5,981 5,744 5,213 5,859 4,964 5,054 5,981 4,964 17 Within fifteen days1 1,179 727 249 9% 101 301 1,179 101 18 Sixteen days to ninety days ... 612 831 783 682 747 527 612 747 19 Ninety-one days to one year .. 1,132 1,127 1,132 1,132 1,087 1,136 1,132 1,087 20 One year to five years 2,181 2,180 2,176 2,176 2,156 2,237 2,181 2,156 21 Five years to ten years 736 736 732 732 732 711 736 732 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 1989 1990 1991 1992 IItteemm Dec. Dec. Dec. Dec. Dec. Jan. Feb. Mar. Apr. May June July Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS: 1 Total reserves3 . 40.49 41.77 45.53 54.35 54.35 54.67 54.92 55.17 55.20 56.88 57.12 57.57 2 Nonborrowed reserves 40.23 41.44 45.34 54.23 54.23 54.50 54.88 55.07 55.12 56.76 56.94 57.32 3 Nonborrowed reserves plus extended credit3. 40.25 41.46 45.34 54.23 54.23 54.50 54.88 55.07 55.12 56.76 56.94 57.32 4 Required reserves 39.57 40.10 44.56 53.20 53.20 53.41 53.82 53.95 54.10 55.88 56.21 56.48 5 Monetary base 267.73 293.19 317.17 350.80 350.80 353.22 355.73 358.37 360.63r 364.77r 368.07r 370.98 Not seasonally adjusted 6 Total reserves' 41.77 43.07 46.98 56.06 56.06 55.97 53.81 54.18 56.37 55.88 56.96 57.42 7 Nonborrowed reserves 41.51 42.74 46.78 55.93 55.93 55.80 53.77 54.09 56.29 55.76 56.78 57.17 8 Nonborrowed reserves plus extended credit . 41.53 42.77 46.78 55.93 55.93 55.80 53.77 54.09 56.29 55.76 56.78 57.17 9 Required reserves 40.85 41.40 46.00 54.90 54.90 54.71 52.71 52.96 55.27 54.88 56.05 56.33 10 Monetary base9 271.18 296.68 321.07 354.55 354.55 354.41 353.18 356.00 361.64 364.08r 368.73r 372.02 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS' 11 Total reserves11 62.81 59.12 55.53 56.54 56.54 56.00 53.88 54.30 56.54 56.10 57.24 57.75 12 Nonborrowed reserves 62.54 58.80 55.34 56.42 56.42 55.84 53.84 54.20 56.47 55.98 57.06 57.51 13 Nonborrowed reserves plus extended credit5. 62.56 58.82 55.34 56.42 56.42 55.84 53.84 54.20 56.47 55.98 57.06 57.51 14 Required reserves 61.89 57.46 54.55 55.39 55.39 54.74 52.78 53.08 55.45 55.10 56.33 56.66 15 Monetary base12, 292.55 313.70 333.61 360.90 360.90 360.88 359.56 362.59 368.18 370.46r yis.w 378.48 16 Excess reserves1 .92 1.66 .98 1.16 1.16 1.26 1.10 1.21 1.10 1.00 .91 1.09 17 Borrowings from the Federal Reserve .27 .33 .19 .12 .12 .17 .05 .09 .07 .12 .18 .24 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 (1) 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 NonfinancialS tatistics • October 1993 1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES1 Billions of dollars, averages of daily figures 1993 IItteemm 1989 1990 1991 1992 Dec. Dec. Dec. Dec. Apr.r Mayr Juner July Seasonally adjusted Measures 1 Ml 794.6 827.2 899.3 1,026.6 1,043.0 1,066.8 1,073.3 1,085.5 2 M2 3,233.3 3.345.5 3,445.8 3,496.8r 3,475.0 3,504.8 3.511.8 3,517.2 3 M3 4,056.1 4,116.7 4.168.1 4,166.4 4,142.5 4,171.1 4.166.9 4,159.2 4 L 4,886.1 4.966.6 4.982.2 5,043.6 5,028.7 5,069.4 5,074.2 n.a. 5 Debt 10,086.5 10,755.3 11,219.3 11,779.7 11,952.5 12,009.5 12,073.1 n.a. Ml components 6 Currency 222.7 246.7 267.2 292.3 301.4 304.0 306.8 309.6 7 Travelers checks 6.9 7.8 7.8 8.1 8.1 8.2 8.0 7.9 8 Demand deposits5 279.8 278.2 290.5 340.9 347.3 359.1 360.6 365.8 9 Other checkable deposits6 285.3 294.5 333.8 385.2 386.2 395.5 397.9 402.3 Nontransaction components 10 In M2 2,438.7 2,518.3 2,546.6 2,470.2 2,432.0 2,437.9 2,438.5 2,431.7 11 In M38 822.8 771.2 722.3 669.6 667.5 666.3 655.1 642.1 Commercial banks 12 Savings deposits, including MMDAs 541.4 582.2 666.2 756.1 756.1 764.9 769.0 769.5 13 Small time deposits 534.9 610.3 601.5 506.9 497.1 492.7 488.4 483.2 14 Large time deposits10' 11 387.7 368.7 341.3 290.2 280.9 281.6 278.8 274.1 Thrift institutions 15 Savings deposits, including MMDAs 349.6 338.6 376.3 429.9 425.5 428.7 429.7 430.6 16 Small time deposits9. 617.8 562.0 463.2 363.2 347.1 344.7 341.4 338.0 17 Large time deposits10 161.1 120.9 83.4 67.3 65.1 64.3 63.8 63.7 Money market mutual funds 18 General purpose and broker-dealer . 317.4 350.5 363.9 342.3 331.8 336.8 336.5 336.3 19 Institution-only 108.8 135.9 182.1 202.3 200.4 202.8 198.1 195.0 Debt components 20 Federal debt 2,249.5 2,493.4 2,764.8 3,069.0 3,156.8 3,185.5 3.220.5 n.a. 21 Nonfederal debt 7,837.0 8,261.9 8,454.5 8,710.7 8,795.7 8,824.0 8.852.6 n.a. Not seasonally adjusted Measures 22 Ml 811.5 843.7 916.4 1,045.8 1,058.2 1,057.6 1,072.7 1,084.2 23 M2 3,245.1 3,357.0 3,457.9 3,511.1 3.498.5 3,489.2 3,507.4 3.513.7 24 M3 4,066.4 4,126.3 4.178.1 4,178.5 4.161.6 4,157.6 4.162.0 4.152.8 25 L 4,906.0 4,988.0 5.004.2 5,068.1 5,046.5 5,044.1 5.061.1 n.a. 26 Debt 10,073.4 10,743.9 11,209.4 11,771.3 11,910.7 11,962.5 12,025.4 n.a. Ml components 27 Currency3 225.3 249.5 269.9 295.0 301.4 304.4 307.4 311.1 28 Travelers checks 6.5 7.4 7.4 7.8 7.8 7.9 8.2 8.4 29 Demand deposits5 291.5 289.9 302.9 355.3 350.6 352.0 359.5 365.5 30 Other checkable deposits 288.1 296.9 336.3 387.7 398.5 393.2 397.6 399.2 Nontransaction components 31 In M2 2,433.6 2,513.2 2,541.5 2,465.3 2,440.3 2,431.6 2,434.7 2,429.5 32 In M38 821.4 769.3 720.1 667.4 663.0 668.4 654.7 639.1 Commercial banks 33 Savings deposits, including MMDAs 543.0 580.1 663.3 752.3 760.9 766.0 772.3 772.2 34 Small time deposits9 533.8 610.5 602.0 507.7 495.9 490.5 486.5 483.1 35 Large time deposits10- u 386.9 367.7 340.1 289.1 280.1 283.3 280.4 273.7 Thrift institutions 36 Savings deposits, including MMDAs 347.4 337.3 374.7 427.8 428.2 429.3 431.5 432.1 37 Small time deposits9. 616.2 562.1 463.6 363.8 346.2 343.1 340.1 337.9 38 Large time deposits 162.0 120.6 83.1 67.1 64.9 64.7 64.2 63.7 Money market mutual funds 39 General purpose and broker-dealer 315.7 348.4 361.5 340.0 338.1 335.1 333.3 332.0 40 Institution-only 109.1 136.2 182.4 202.4 199.5 203.0 194.3 191.8 Repurchase agreements and Eurodollars 41 Overnight 77.5 74.7 76.3 73.9 71.0 67.6 70.8 72.1 42 Term 178.4 158.3 130.1 126.3 138.6 139.8 139.2 138.2 Debt components 43 Federal debt 2,247.5 2,491.3 2,765.0 3,069.8 3,142.9 3,161.1 3,188.9 n.a. 44 Nonfederal debt 7,826.0 8,252.5 8,444.4 8,701.5 8,767.8 8,801.4 8,836.5 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 ftind 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 DomesticN onfinancialS tatistics • October 1993 1.22 DEPOSIT INTEREST RATES AND AMOUNTS OUTSTANDING Commercial and BIF-insured saving banks1 1992 1993 IItteemm Nov. Dec. Jan. Feb. Mar.r Apr/ Mayr Juner July Interest rates (annual effective yields) INSURED COMMERCIAL BANKS 1 Negotiable order of withdrawal accounts ... 4.89 3.76 2.36 2.33 2.32 2.27 2.21 2.15 2.12 2.09 2.06 2 Savings deposits 5.84 4.30 2.90 2.88 2.85 2.80 2.73 2.68 2.65 2.61 2.59 Interest-bearing time deposits with balances of less than $100,000, by maturity 3 7 to 91 days 6.94 4.18 2.91 2.90 2.86 2.81 2.75 2.72 2.70 2.68 2.67 4 92 to 182 days 7.19 4.41 3.14 3.16 3.13 3.08 3.03 2.99 2.98 2.98 2.97 I 183 days to 1 year 7.33 4.59 3.34 3.37 3.35 3.29 3.22 3.19 3.18 3.18 3.18 6 More than 1 year to 2Vi years 7.42 4.95 3.83 3.88 3.88 3.83 3.74 3.66 3.64 3.64 3.64 7 More than 2Vi years 7.53 5.52 4.70 4.77 4.72 4.59 4.52 4.47 4.47 4.44 4.43 BIF-INSURED SAVINGS BANKS3 8 Negotiable order of withdrawal accounts ... 5.38 4.44 2.52 2.45 2.40 2.37 2.32 2.25 2.21 2.14 2.09 9 Savings deposits2 6.01 4.97 3.22 3.20 3.17 3.14 3.05 2.98 2.93 2.88 2.83 Interest-bearing time deposits with balances of less than $100,000, by maturity 10 1 to 91 days 7.64 4.68 3.10 3.13 3.06 3.01 2.95 2.91 2.87 2.86 2.80 11 92 to 182 days 7.69 4.92 3.42 3.44 3.38 3.35 3.28 3.23 3.19 3.17 3.15 12 183 days to 1 year 7.85 4.99 3.59 3.61 3.58 3.57 3.52 3.48 3.45 3.43 3.40 13 More than 1 year to 2Vi years 7.91 5.23 3.93 4.02 3.94 3.89 3.83 3.86 3.76 3.79 3.75 14 More than 2 Vi years 7.99 5.98 4.88 5.00 5.02 4.97 4.89 4.84 4.78 4.74 4.73 Amounts outstanding (millions of dollars) INSURED COMMERCIAL BANKS 15 Negotiable order of withdrawal accounts ... 209,855 244,637 275,465 286,541 277,271 279,944 287,811 280,073 283,863 287,325 284,366 16 Savings deposits2 570,270 652,058 740,841 738,253 733,836 742,952 747,809 745,038 753,441 754,756 757,664 17 Personal n.a. 508,191 575,399 578,757 579,701 585,189 591,388 586,863 591,211 592,508 593,478 18 Nonpersonal n.a. 143,867 165,442 159,4% 154,135 157,764 156,422 158,175 162,230 162,247 164,185 Interest-bearing time deposits with balances of less than $100,000, by maturity 19 7 to 91 days 50,189 47,094 38,985 38,474 38,256 36,738 35,459 34,675 33,304 31,783 30,733 20 92 to 182 days 168,044 158,605 127,636 127,831 128,083 128,209 125,630 122,136 119,281 115,441 112,573 21 183 days to 1 year 221,007 209,672 166,995 163,098 160,630 159,631 158,173 156,957 156,851 155,686 155,988 22 More than 1 year to 2Vi years 150,188 171,721 153,784 152,977 151,905 151,798 147,798 146,830 144,870 145,080 143,575 23 More than 2Vl years 139,420 158,078 168,586 169,708 169,371 172,362 177,558 178,657 179,994 179,122 180,9% 24 IRA/Keogh Plan deposits 131,006 147,266 147,319 147,350 147,069 146,841 148,515 147,463 146,670 146,888 147,020 BIF-INSURED SAVINGS BANKS3 25 Negotiable order of withdrawal accounts 8,404 9,624 10,642 10,871 9,858 9,821 10,199 9,876 10,017 10,407 10,512 26 Savings deposits2 64,456 71,215 82,919 81,786 79,271 79,649 77,390 76,970 77,542 77,607 78,434 27 Personal n.a. 68,638 79,667 78,695 76,337 76,634 74,430 74,077 74,554 74,674 75,093 28 Nonpersonal n.a. 2,577 3,252 3,091 2,934 3,016 2,961 2,893 2,987 2,932 3,341 Interest-bearing time deposits with balances of less than $100,000, by maturity 29 7 to 91 days 5,724 4,146 3,895 3,867 3,541 3,468 3,201 3,167 3,120 3,029 2,870 30 92 to 182 days 25,864 21,686 17,632 17,345 16,088 15,857 14,468 14,328 14,174 13,840 13,758 31 183 days to 1 year 37,929 29,715 22,888 21,780 20,627 20,301 19,074 18,778 18,571 18,463 18,419 32 More than 1 year to 2>/5 years 26,103 25,379 19,258 18,442 17,524 17,387 16,842 16,433 16,281 16,0% 16,319 33 More than 2Vl years 20,243 18,665 19,543 18,845 18,461 18,759 18,564 18,646 18,798 19,041 19,246 34 IRA/Keogh Plan accounts 23,535 23,007 22,265 21,713 21,320 21,260 20,089 19,%9 19,8% 19,870 19,937 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 1199990022 1199991122 1199992222 Dec. Jan. Feb. Mar. Apr.r May DEBITS Seasonally adjusted Demand deposits3 1 All insured banks 277,157.5 277,758.0 315,806.1 331,038.8 300,602.9 331,126.3 331,026.3 324,610.6 306,616.7 2 Major New York City banks 131,699.1 137,352.3 165,572.7 176,089.1 159,191.7 176,683.2 166,866.6 163,539.8 155,494.9 3 Other banks 145,458.4 140,405.7 150,233.5 154,949.8 141,411.3 154,443.1 164,159.7 161,070.8 151,121.8 4 Other checkable deposits4 3,349.0 3,645.5 3,788.1 3,683.9 3,292.5 3,601.4 3,572.6 3,586.6 3,328.1 5 Savings deposits (including MMDAs) 3,483.3 3,266.1 3,331.3 3,407.3 3,032.3 3,363.3 3,562.8 3,523.3 3,436.1 DEPOSIT TURNOVER Demand deposits3 6 All insured banks 797.8 803.5 832.4 830.5 746.5 817.3 811.3 791.6 722.2 7 Major New York City banks 3,819.8 4,270.8 4,797.9 4,693.3 4,154.7 4,525.8 4,129.1 4,120.9 3,852.8 8 Other banks 464.9 447.9 435.9 429.1 388.1 421.9 446.6 434.9 393.4 9 Other checkable deposits4 16.5 16.2 14.4 13.1 11.6 12.6 12.5 12.7 11.4 10 Savings deposits (including MMDAs) 6.2 5.3 4.7 4.6 4.1 4.5 4.8 4,7 4.5 DEBITS Not seasonally adjusted Demand deposits3 11 All insured banks 277,290.5 277,715.4 315,808.2 340,982.1 304,760.9 303,619.8 339,172.4 324,502.1 306,719.9 12 Major New York City banks 131,784.7 137,307.2 165,595.0 179,987.6 159,198.8 161,174.1 170,855.0 161,923.2 154,606.6 13 Other banks 145,505.8 140,408.3 150,213.3 160,994.5 145,562.0 142,445.7 168,317.4 162,578.9 152,113.3 14 Other checkable deposits4 ^ 3,346.7 3,645.6 3,788.1 3,849.3 3,596.2 3,296.7 3,630.2 3,807.3 3,243.3 15 Savings deposits, (including MMDAs) 3,483.0 3,267.7 3,329.0 3,588.0 3,248.8 3,080.3 3,529.2 3,741.2 3,445.0 DEPOSIT TURNOVER Demand deposits3 16 All insured banks 798.2 803.4 832.5 815.2 738.2 771.7 854.5 786.4 737.6 17 Major New York City banks 3,825.9 4,274.3 4,803.5 4,418.1 3,936.3 4,213.4 4,385.4 4,108.4 3,948.9 18 Other banks 465.0 447.9 436.0 426.5 390.9 401.1 470.2 435.6 403.8 19 Other checkable deposits4 16.4 16.2 14.4 13.5 12.4 11.6 12.6 13.0 11.2 20 Savings deposits (including MMDAs) 6.2 5.3 4.7 4.8 4.4 4.1 4.7 5.0 4.5 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 in 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 • October 1993 1.24 LOANS AND SECURITIES All Commercial Banks1 Billions of dollars, averages of Wednesday figures 1992 1993r IItteemm Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Seasonally adjusted 1 Total loans, leases, and securities2 . 2,902.2 2,917.4 2,926.0 2,932.4 2,937.6 2,935.3 2,943.9 2,959.7 2,969.3 2,990.5 3,013.6 3,038.3 2 U.S. government securities 632.6 640.6 647.3 651.4 657.1 656.5 666.2 680.0 690.0 692.6 702.8 707.6 3 Other securities 178.2 178.2 178.8 177.3 176.0 174.5 176.4 178.7 179.7 180.3 179.4 181.5 4 Total loans and leases2 2,091.4 2,098.6 2,099.8 2,103.8 2,104.6 2,104.4 2,101.3 2,101.1 2,099.5 2,117.6 2,131.5 2,149.2 5 Commercial and industrial ..... 601.4 601.2 600.8 600.5 597.6 598.0 596.7 593.3 588.9 591.9 593.5 592.5 6 Bankers acceptances held ... 6.5 6.3 7.5 7.9 7.7r 7.3 8.4 8.5 8.5 9.1 9.1 9.7 7 Other commercial and industrial 594.9 594.9 593.3 592.6 589.9 590.7 588.3 584.8 580.3 582.8 584.5 582.8 8 U.S. addressees4 584.3 583.6 582.6 582.3 580.2 581.2 578.8 575.1 571.2 573.5 575.8 573.8 9 Non-U.S. addressees 10.6 11.3 10.7 10.3 9.7 9.6 9.5 9.7 9.1 9.3 8.7 9.0 10 Real estate 883.1 886.8 890.7 892.5 892.4 890.8 890.1 891.7 891.3 897.1 902.8 906.6 11 Individual 357.4 357.0 355.8 355.4 355.5 358.4 361.9 362.3 364.4 367.2 368.4 371.9 12 Security 61.6 64.0 64.7 64.2 64.8 63.5 62.8 64.3 62.6 69.0 71.9 82.1 13 Nonbank financial institutions 42.0 44.0 43.9 44.7 43.6 45.1 44.6 44.2 44.8 45.5 45.4 46.1 14 Agricultural 35.3 35.2 35.1 35.2 35.0 34.5 34.3 34.0 34.0 34.2 34.0 34.5 15 State and political subdivisions 25.9 25.8 25.4 25.1 24.8 24.2 23.8 23.7 23.4 23.5 23.5 23.7 16 Foreign banks 7.2 7.9 7.6 7.5 7.7 7.7 8.8 8.5 8.4 8.5 8.6 9.1 17 Foreign official institutions 2.3 2.5 2.4 2.8 2.8 2.9 3.2 3.2 3.2 3.1 3.3 3.3 18 Lease-financing receivables 30.8 31.0 30.8 30.9 30.9 30.4 30.6 30.6 30.7 31.0 31.3 31.7 19 All other loans 44.3 43.2 42.6 45.0 49.5 48.8 44.5 45.3 48.0 46.6 48.7 47.9 Not seasonally adjusted 20 Total loans, leases, and securities2 . 2,894.5 2,914.9 2,925.2 2,939.0 2,947.4 2,937.4 2,946.7 2,963.4 2,970.8 2,985.4 3,013.4 3,026.5 21 U.S. government securities 631.3 638.7 645.1 654.1 655.8 656.9 669.8 685.6 691.8 691.5 700.5 702.9 22 Other securities 178.1 177.9 179.2 178.3 176.2 175.0 176.6 178.4 179.1 179.8 178.9 180.4 23 Total loans and leases 2,085.0 2,098.3 2,100.9 2,106.6 2,115.4 2,105.5 2,100.3 2,099.4 2,099.9 2,114.1 2,134.0 2,143.2 24 Commercial and industrial ..... 597.6 597.6 598.4 600.8 600.6 596.4 595.9 596.5 591.8 593.6 595.3 591.4 25 Bankers acceptances held ... 6.3 6.2 7.4 8.2 8.0 7.4 8.8 8.6 8.4 9.0 8.9 9.4 26 Other commercial and industrial 591.4 591.4 591.0 592.6 592.5 589.0 587.1 587.9 583.4 584.6 586.4 582.1 27 U.S. addressees4 580.5 580.3 580.7 582.8 583.0 579.5 577.5 578.4 574.2 575.4 576.9 572.7 28 Non-U.S. addressees4 10.8 11.1 10.3 9.8 9.5 9.5 9.5 9.5 9.2 9.2 9.5 9.3 29 Real estate 883.7 887.6 891.5 893.9 893.7 890.5 888.3 889.1 890.1 897.2 903.2 906.8 30 Individual 356.9 358.6 356.2 356.3 360.0 362.5 361.9 359.9 361.7 365.4 366.5 369.6 31 Security 59.4 62.5 64.2 63.5 65.6r 65.0 65.8 66.4 66.0 65.9 71.2 78.0 32 Nonbank financial institutions 41.8 43.5 43.5 45.0 45.6 45.3 44.5 43.9 44.2 44.9 46.0 45.8 33 Agricultural 36.5 36.7 36.1 35.2 34.8 33.6 32.9 32.6 33.2 33.8 34.5 35.3 34 State and political subdivisions 25.9 25.9 25.5 25.2 24.8 24.0 23.7 23.7 23.4 23.5 23.5 23.6 35 Foreign banks 7.0 8.1 7.8 7.8 8.2 7.8 8.6 8.2 8.1 8.3 8.4 9.2 36 Foreign official institutions 2.3 2.5 2.4 2.8 2.8 2.9 3.2 3.2 3.2 3.1 3.3 3.3 37 Lease-financing receivables 30.6 30.8 30.8 30.8 30.9 30.8 30.8 30.8 30.8 31.0 31.2 31.4 38 All other loans 43.2 44.6 44.4 45.4 48.6 46.6 44.6 45.0 47.4 47.3 50.8 48.9 1. All commercial banks include domestically chartered insured banks, U.S. large branches and agencies and quarterly reports of all domestically chartered branches and agencies of foreign banks, New York state investment companies insured banks and all agencies, branches, investment companies, and Edge Act majority owned by foreign bainks, and Edge Act and agreement corporations and agreement corporation engaged in banking. owned by domestically chartered foreign banks. Data are prorated averages of 2. Adjusted to exclude loans to commercial banks in the United States. Wednesday estimates for domestically chartered and foreign related institutions, 3. Includes nonfinancial commercial paper held. based on weekly reports of a sample of domestically chartered insured banks and 4. United States includes the fifty states and the District of Columbia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions A19 1.25 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1 Billions of dollars, monthly averages 1992 1993r SSoouurrccee ooff ffuunnddss Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Seasonally adjusted 11111 TTTTToooootttttaaaaalllll nnnnnooooonnnnndddddeeeeepppppooooosssssiiiiittttt fffffuuuuunnnnndddddsssss22222 302.3 309.3 303.2r 306.8r 310.3r 312.8 316.0 330.8 341.3 337.2 345.8 369.6 22222 NNNNNeeeeettttt bbbbbaaaaalllllaaaaannnnnccccceeeeesssss ooooowwwwweeeeeddddd tttttooooo rrrrreeeeelllllaaaaattttteeeeeddddd fffffooooorrrrreeeeeiiiiigggggnnnnn oooooffffffffffiiiiiccccceeeeesssss .......... 61.5 63.9 62.6 67.3 71.1 74.2 73.6 79.5 89.5 84.4 86.3 100.8 33333 BBBBBooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss fffffrrrrrooooommmmm ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn cccccooooommmmmmmmmmeeeeerrrrrccccciiiiiaaaaalllll bbbbbaaaaannnnnkkkkksssss iiiiinnnnn UUUUUnnnnniiiiittttteeeeeddddd SSSSStttttaaaaattttteeeeesssss 240.8 245.4 240.5r 239.5r 239.2r 238.6 242.5 251.4 251.8 252.8 259.5 268.8 44444 DDDDDooooommmmmeeeeessssstttttiiiiicccccaaaaallllllllllyyyyy ccccchhhhhaaaaarrrrrttttteeeeerrrrreeeeeddddd bbbbbaaaaannnnnkkkkksssss 151.7 153.4 154.6 153.9 154.8 155.5 155.8 160.6 164.4 162.4 168.6 178.1 55555 FFFFFooooorrrrreeeeeiiiiigggggnnnnn-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaannnnnkkkkksssss 89.2 91.9 85. Sf 85.6r 84.4r 83.1 86.6 90.8 87.4 90.3 90.9 90.7 Not seasonally adjusted 66666 TTTTToooootttttaaaaalllll nnnnnooooonnnnndddddeeeeepppppooooosssssiiiiittttt fffffuuuuunnnnndddddsssss22222 297.3 303.8 305.4r 312.1r 310.3r 311.7 320.4 335.8 337.7 342.0 345.0 363.5 77777 NNNNNeeeeettttt bbbbbaaaaalllllaaaaannnnnccccceeeeesssss ooooowwwwweeeeeddddd tttttooooo rrrrreeeeelllllaaaaattttteeeeeddddd fffffooooorrrrreeeeeiiiiigggggnnnnn oooooffffffffffiiiiiccccceeeeesssss .......... 57.7 61.6 63.8 68.9 75.2 76.8 75.4 80.2 86.6 86.6 84.3 97.5 88888 DDDDDooooommmmmeeeeessssstttttiiiiicccccaaaaallllllllllyyyyy ccccchhhhhaaaaarrrrrttttteeeeerrrrreeeeeddddd bbbbbaaaaannnnnkkkkksssss -9.2 -11.2 -13.4 -12.4 -15.0 -15.8 -10.6 -7.0 -9.5 -9.8 -15.4 -15.3 99999 FFFFFooooorrrrreeeeeiiiiigggggnnnnn-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaannnnnkkkkksssss 66.9 72.7 77.2 81.4 90.2 92.6 86.0 87.2 96.1 96.4 99.7 112.8 1111100000 BBBBBooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss fffffrrrrrooooommmmm ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn cccccooooommmmmmmmmmeeeeerrrrrccccciiiiiaaaaalllll bbbbbaaaaannnnnkkkkksssss iiiiinnnnn UUUUUnnnnniiiiittttteeeeeddddd SSSSStttttaaaaattttteeeeesssss44444 239.6 242.3 241.6r 243.2r 235.lr 234.9 245.0 255.6 251.1 255.4 260.7 266.0 1111111111 DDDDDooooommmmmeeeeessssstttttiiiiicccccaaaaallllllllllyyyyy ccccchhhhhaaaaarrrrrttttteeeeerrrrreeeeeddddd bbbbbaaaaannnnnkkkkksssss 150.5 152.3 155.8 158.3 153.8 152.4 157.6 163.4 162.4 164.0 168.4 174.4 1111122222 FFFFFeeeeedddddeeeeerrrrraaaaalllll fffffuuuuunnnnndddddsssss aaaaannnnnddddd ssssseeeeecccccuuuuurrrrriiiiitttttyyyyy RRRRRPPPPP bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss 146.7 148.4 152.2 154.2 149.9 148.8 154.3 160.1 158.9 160.2 164.6 170.2 1111133333 OOOOOttttthhhhheeeeerrrrr66666 3.9 3.8 3.6 4.1 4.0 3.6 3.2 3.3 3.5 3.8 3.8 4.2 1111144444 FFFFFooooorrrrreeeeeiiiiigggggnnnnn-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaannnnnkkkkksssss66666 89.1 90.0 85.9" 84.8r 81.2r 82.4 87.4 92.2 88.7 91.4 92.3 91.6 MMMMMEEEEEMMMMMOOOOO GGGGGrrrrrooooossssssssss lllllaaaaarrrrrgggggeeeee tttttiiiiimmmmmeeeee dddddeeeeepppppooooosssssiiiiitttttsssss''''' 1111155555 SSSSSeeeeeaaaaasssssooooonnnnnaaaaallllllllllyyyyy aaaaadddddjjjjjuuuuusssssttttteeeeeddddd 385.8 383.2 375.7 371.3 366.5 359.9 358.4 355.7 355.0 356.3 352.6 344.6 1111166666 NNNNNooooottttt ssssseeeeeaaaaasssssooooonnnnnaaaaallllllllllyyyyy aaaaadddddjjjjjuuuuusssssttttteeeeeddddd 387.1 383.6 374.9 371.1 365.5 358.0 358.0 356.5 354.2 357.9 354.1 344.2 UUUUU.....SSSSS..... TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy dddddeeeeemmmmmaaaaannnnnddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaattttt cccccooooommmmmmmmmmeeeeerrrrrccccciiiiiaaaaalllll bbbbbaaaaannnnnkkkkksssss 1111177777 SSSSSeeeeeaaaaasssssooooonnnnnaaaaallllllllllyyyyy aaaaadddddjjjjjuuuuusssssttttteeeeeddddd 28.0 24.1 21.5 20.7 20.4 25.6 23.6 18.8 24.2 19.1 26.1 30.1 1111188888 NNNNNooooottttt ssssseeeeeaaaaasssssooooonnnnnaaaaallllllllllyyyyy aaaaadddddjjjjjuuuuusssssttttteeeeeddddd 22.4 28.6 21.9 16.5 19.5 33.1 29.5 17.4 20.3 20.3 26.5 25.6 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 statistical 6. Figures are partly averages of daily data and partly averages of Wednesday release. For 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 • October 1993 1.26 ASSETS AND LIABILITIES OF COMMERCIAL BANKS1 Wednesday figures Millions of dollars 1993 AAccccoouunntt June 2r June 9r June 16r June 23r June 30r July 7 July 14 July 21 July 28 ALL COMMERCIAL BANKING INSTITUTIONS2 Assets 1 Loans and securities 3,159,843 3,167,964 3,180,352 3,150,868 3,170,514 3,193,365 3,174,216 3,172,700 3,165,561 2 Investment securities 837,591 838,364 834,699 834,199 841,761 838,676 838,726 840,703 839,173 U.S. government securities 673,820 675,392 673,028 671,985 676,514 673,594 673,189 674,086 674,301 4 Other 163,770 162,972 161,670 162,214 165,246 165,082 165,537 166,617 164,872 5 Trading account assets 44,482 43,420 43,349 45,636 34,546 43,278 42,597 41,384 41,981 6 U.S. government securities 28,947 27,541 27,763 29,290 19,213 28,008 28,208 27,225 27,181 7 Other securities 2,362 2,450 2,244 2,564 2,677 2,883 2,854 2,578 2,983 8 Other trading account assets 13,173 13,429 13,342 13,782 12,656 12,387 11,536 11,581 11,817 9 Total loans 2,277,770 2,286,180 2,302,304 2,271,033 2,294,208 2,311,411 2,292,893 2,290,613 2,284,407 10 Interbank loans 150,640 159,573 158,957 144,920 152,271 163,066 151,521 150,714 145,393 11 Loans excluding interbank 2,127,130 2,126,608 2,143,347 2,126,114 2,141,937 2,148,345 2,141,371 2,139,899 2,139,015 1? Commercial and industrial 596,819 593,022 596,575 594,656 596,849 596,018 590,232 590,826 588,095 N Real estate 900,603 902,630 903,518 900,624 906,206 906,802 907,353 905,469 906,122 14 Revolving home equity 74,547 74,477 74,897 74,802 74,927 74,965 74,742 74,744 74,665 N Other 826,056 828,153 828,621 825,823 831,279 831,837 832,611 830,724 831,457 16 Individual 366,864 365,823 365,644 366,612 368,158 367,499 368,287 369,871 371,620 17 All other 262,844 265,133 277,610 264,222 270,724 278,027 275,500 273,733 273,178 18 Total cash assets 238,178 211,194 214,249 208,369 216,566 241,105 211,939 207,498 202,843 19 Balances with Federal Reserve Banks 27,734 27,179 26,628 33,010 23,923 33,767 29,592 34,610 26,278 20 Cash in vault 32,911 32,359 32,304 32,536 33,247 32,461 33,930 32,895 33,287 21 Demand balances at U.S. depository institutions .. 35,037 31,177 30,803 28,893 29,493 34,056 30,040 29,106 29,811 22 Cash items 101,256 79,347 82,798 72,972 86,139 99,198 78,044 72,527 72,903 73 Other cash assets 41,240 41,133 41,716 40,959 43,764 41,622 40,333 38,361 40,564 24 Other assets 298,946 288,598 292,317 281,943 288,030 284,817 290,805 278,962 270,828 25 Total assets 3,696,967 3,667,756 3,686,917 3,641,180 3,675,110 3,719,287 3,676,959 3,659,160 3,639,232 Liabilities ?.6 Total deposits 2,556,940 2,527,682 2,538,834 2,479,874 2,515,498 2,554,756 2,518,173 2,479,775 2,477,392 7.7 Transaction accounts 806,775 777,445 790,116 745,901 794,005 817,542 783,887 758,020 759,468 28 Demand, U.S. government 4,165 3,442 7,428 3,102 4,223 3,052 3,373 2,570 2,669 29 Demand, depository institutions 45,326 38,891 39,565 37,271 38,069 44,753 37,574 38,461 39,023 30 Other demand and all checkable deposits 757,284 735,113 743,123 705,529 751,713 769,737 742,940 716,989 717,776 31 Savings deposits (excluding checkable) 771,104 774,849 772,381 762,673 761,000 772,764 772,876 765,388 763,870 37 Small time deposits 619,252 617,846 618,065 616,378 617,183 617,505 615,594 614,274 613,473 33 Time deposits over $100,000 359,810 357,541 358,273 354,922 343,310 346,945 345,815 342,093 340,581 34 Borrowings 507,738 513,668 530,461 529,648 510,794 532,502 523,390 526,873 502,663 35 Treasury tax and loan notes 18,775 4,879 30,666 35,230 31,232 20,386 21,342 18,165 22,368 36 Other 488,963 508,789 499,795 494,418 479,562 512,116 502,048 508,708 480,295 37 Other liabilities 347,146 340,374 333,376 346,769 361,485 345,098 347,538 362,875 369,135 38 Total liabilities 3,411,824 3,381,723 3,402,672 3,356,291 3,387,776 3,432,355 3,389,100 3,369,523 3,349,190 39 Residual (assets less liabilities)3 285,143 286,034 284,246 284,889 287,333 286,931 287,859 289,637 290,043 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 June 2r June 9r June 16r June 23r June 301 July 7 July 14 July 21 July 28 DOMESTICALLY CHARTERED COMMERCIAL BANKS4 Assets 4 4 4 4 4 4 5 6 4 4 4 4 5 5 5 5 5 5 5 5 5 6 6 6 1 6 7 8 0 2 4 0 3 4 5 9 0 1 2 3 5 6 7 8 9 1 3 2 T O L o o t T D T I C C B O h t a n a o r e a a n a e t l v O O a O I L U U r t h s s s l m n a e d a h h c e o t t t . a . l s t i n A a R I C a h h r h a S S a e s n t n i i n n c s l e e e . . e m l n o s n r g t c o d h d l d r O R r e r e b e a s m g a g a i s e l m o v t e a a v t t s s a o o n s s b n e m r h a t v h c n e e w i s s e s v v a t h x a d u e k c o c s s c e d e e l i c e r a u l o t u e l s u t a r t r r r i l a v h l s a e t c u r n n n u r n o s t s l i i c i i g n e c m d m n t a e t F a u t i e i g i n l t e e e r e e a n s s s a s i s d n a n c g h t s a t e t n c i o s t e i d r o e m n s s s a u U t e e l t i s e n e c c n . R t r u S u d e b r . r e u a q a i i s s s t u t d n e i i t s i e k e e r r e 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 , , , 8 6 4 7 7 9 8 3 2 2 8 1 1 1 0 2 4 3 6 7 7 2 3 3 9 2 9 5 6 6 0 1 1 4 8 3 1 6 5 4 2 9 6 7 4 3 8 2 7 8 5 2 4 6 5 1 3 0 5 1 9 , , , , , , , , , , , , , , , , , , , , , , , , 9 5 4 3 5 5 5 5 5 9 6 8 1 0 8 1 9 4 6 1 5 9 5 0 7 9 8 8 5 6 6 4 9 4 5 4 7 0 6 3 4 6 3 7 9 2 1 7 3 7 2 7 2 2 3 7 7 7 3 1 8 6 4 7 7 3 3 3 0 3 1 6 2 2 1 , , , 8 0 6 4 7 7 8 3 2 8 1 1 1 1 1 2 0 2 4 3 6 7 7 2 3 7 2 5 0 6 6 1 8 4 3 7 1 7 2 0 9 3 7 2 8 9 4 2 6 6 7 4 7 5 4 3 2 0 5 7 7 , , , , , , , , , , , , , , , , , , , . . , , , 6 8 1 8 7 4 6 4 6 4 3 6 0 9 3 5 8 4 9 9 9 9 4 9 1 8 0 6 6 0 2 1 5 2 7 2 8 4 1 2 3 4 8 8 6 0 1 4 7 4 2 1 3 1 0 2 0 9 7 7 9 9 3 3 8 1 5 4 3 1 3 6 2 2 1 , , , 8 0 6 7 4 8 7 2 3 8 1 1 1 1 2 2 1 4 7 3 2 6 7 5 3 1 2 2 8 6 7 1 8 1 4 8 4 4 3 4 2 9 3 4 2 5 9 4 8 3 0 7 5 5 2 3 6 0 8 2 1 , , , , , , , , , , , , , , , , , , , , , , , , 5 2 5 5 3 8 3 4 7 2 6 6 5 6 8 7 9 3 8 5 9 9 1 8 6 7 6 2 8 4 9 4 8 3 6 4 6 4 7 9 6 8 3 5 6 8 3 8 2 2 1 1 5 9 7 4 2 6 6 4 3 2 7 8 3 3 2 9 1 6 8 0 2 1 1 , , , 7 6 4 7 8 7 2 9 8 3 1 1 1 1 8 2 3 4 7 3 2 7 0 7 6 5 2 3 7 6 5 1 4 7 1 8 2 2 9 4 6 7 4 2 5 0 1 7 5 2 8 1 9 6 6 3 0 9 6 1 1 , , , , , , , , , , , , , , , , , , , , , , , , 8 5 6 5 9 8 2 5 6 0 6 5 7 6 3 9 2 9 7 8 8 8 5 3 1 6 6 0 4 9 7 1 6 0 0 3 1 0 6 9 7 9 8 0 3 9 3 3 1 8 4 2 4 2 8 2 6 0 5 6 6 6 2 3 4 0 2 6 4 9 8 0 2 1 1 , , , 8 4 6 8 7 2 7 3 9 8 1 1 1 1 2 0 3 7 3 2 8 5 0 6 3 2 8 9 6 7 1 8 1 1 8 2 4 7 8 3 3 8 4 2 3 8 6 9 2 3 4 9 8 1 6 2 9 9 1 8 1 , , . , , , , , , , , , , , , , , , , , , . , , 1 9 2 9 7 8 9 6 1 0 7 3 3 8 5 1 8 7 6 1 9 2 1 4 4 1 1 2 5 7 0 4 8 7 7 5 7 9 1 5 4 5 5 0 1 1 2 5 1 4 7 7 2 6 3 6 4 7 3 3 3 9 7 8 6 6 9 2 2 3 5 6 2 2 1 , , , 0 8 6 4 7 8 7 3 2 2 8 1 1 1 1 2 2 3 4 7 3 3 % 6 1 8 5 6 1 2 3 7 1 1 8 4 4 6 5 6 7 2 3 2 7 2 3 8 7 2 8 2 2 4 5 2 8 3 1 0 , , , , , , , , , , , , , , , , , , , , , , , , 0 9 2 6 3 6 0 8 4 8 7 2 4 1 0 8 9 3 3 0 3 1 5 % 4 7 2 6 4 4 8 1 2 0 7 9 2 0 7 8 3 3 3 4 1 1 % 5 2 8 4 0 4 7 3 6 6 5 0 9 9 8 8 7 8 1 4 6 0 1 2 2 1 , , , 6 0 8 4 7 7 8 3 2 8 1 1 1 1 2 0 2 1 8 3 6 4 2 7 3 7 5 1 6 2 7 1 1 4 8 8 3 5 8 6 6 2 5 8 2 4 2 6 5 9 4 8 8 3 5 1 1 5 8 4 1 , , , , , , , , , , , , , , , , , , , , , , , , 3 6 8 9 5 1 2 7 5 9 8 8 9 3 9 2 5 5 4 4 7 0 5 8 9 5 5 9 0 3 7 4 3 9 7 0 8 5 4 6 8 3 6 0 6 8 7 % 4 8 4 2 8 4 6 2 2 7 8 0 1 9 1 5 7 6 2 1 4 9 5 2 2 1 , , , 0 6 4 8 7 8 7 2 3 8 1 1 1 1 0 2 3 4 7 2 0 5 8 1 6 2 3 7 6 3 7 1 4 1 3 8 7 1 2 1 4 7 2 2 7 7 2 7 3 0 4 0 9 3 1 0 2 6 0 0 9 , , , , , , , , , , , , , , , , , , , , , , , , 3 3 7 7 5 8 3 2 1 9 2 7 1 3 8 3 5 2 4 8 4 4 9 6 7 7 8 4 8 6 2 6 5 5 1 8 1 7 9 2 4 8 4 9 8 6 5 % 7 8 4 4 0 1 5 0 8 4 1 6 1 9 7 9 8 3 5 2 7 0 1 2 1 1 , , , 6 4 8 7 8 9 3 2 7 8 1 1 1 1 2 3 4 2 7 3 2 8 5 2 7 9 0 1 7 7 6 1 4 1 7 2 7 2 0 4 8 1 7 3 2 3 8 0 8 5 1 3 1 2 1 0 8 6 6 3 6 , , , , , , , , , , , , , , , , , , , , , , , , 3 3 6 5 9 1 2 5 9 8 9 5 9 6 8 6 8 4 9 9 1 6 2 2 0 6 5 7 8 8 8 1 5 4 9 4 5 8 9 3 2 2 6 4 6 8 0 % 1 5 8 9 3 1 1 7 5 1 4 1 9 3 7 8 0 0 0 7 3 0 8 64 Total assets 3,204,167 3,173,282 3,193,129 3,150,915 3,172,522 3,222,107 3,186,758 3,167,795 3,157,487 Liabilities 65 Total deposits 2,396,111 2,369,027 2,377,927 2,319,653 2,356,825 2,399,%2 2,366,855 2,330,258 2,330,960 66 Transaction accounts 795,949 765,975 779,669 735,811 781,869 804,609 772,717 746,427 749,3% 67 Demand, U.S. government 4,165 3,441 7,428 3,101 4,222 3,052 3,372 2,569 2,669 68 Demand, depository institutions 42,837 36,296 37,027 34,829 35,352 41,767 35,174 35,669 36,490 6 7 7 7 7 7 7 7 9 4 5 6 0 1 2 3 O Bo t T O T S S h rr a e r m i t O m o e r h v a a w e i t e l l n s h r i l i a u g d e n t b s r r e i g y i m p s l d d i o e t e t e a i s p m e x d i o s t e a s s a p n i n o d o t d s v s a i e ( l t n r e o s d x a $ c n 1 a l 0 u l n l 0 d o c , i t 0 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 4 6 1 6 8 1 1 4 8 6 6 6 5 6 8 0 , , , , , , , , 9 5 8 7 5 7 7 4 1 4 7 5 6 2 8 1 2 6 5 2 8 7 3 5 7 6 3 7 2 3 1 7 2 1 8 7 1 3 4 8 6 5 3 0 7 8 , , , , , , , , 8 1 2 0 3 4 2 1 7 7 5 8 3 0 6 9 5 9 4 2 8 3 6 7 7 7 6 2 4 3 1 3 6 3 1 6 0 1 3 0 9 5 5 7 0 4 3 , , . , , , , , 7 6 2 6 7 4 8 5 7 1 6 2 4 3 9 4 3 5 6 0 6 9 3 7 6 7 6 2 4 3 1 9 3 7 5 1 1 1 3 7 5 8 8 3 4 1 5 , , , , , , , , 8 2 2 8 9 0 6 3 3 1 3 3 6 8 % 4 3 4 0 3 3 0 0 7 7 6 3 2 3 1 3 4 5 5 1 0 8 4 1 2 6 5 4 3 6 5 , , , , , , , , 2 2 5 1 7 6 3 0 3 9 8 5 5 2 9 0 2 5 2 9 3 2 1 2 7 7 6 2 3 3 1 2 5 1 1 7 6 9 3 0 9 2 5 9 8 9 8 , , , , , , , , 3 7 0 0 5 9 2 3 9 8 0 8 1 3 6 2 1 6 5 2 7 1 6 7 7 7 6 2 3 3 1 3 1 6 2 9 1 7 3 4 1 3 8 8 2 6 6 , , , , , , , , 3 1 1 3 3 6 7 % 4 7 7 0 4 2 6 2 2 1 6 4 3 9 0 7 7 6 2 4 3 1 9 1 0 1 6 1 1 3 3 1 8 1 0 1 8 9 , , , , , , , , 1 8 1 0 9 3 1 5 8 5 8 4 3 5 6 7 5 1 9 7 3 0 5 9 7 7 6 2 3 3 1 5 1 1 2 7 1 9 4 9 1 2 0 6 1 8 0 , , , , , , , , 4 0 6 3 2 9 0 5 9 6 0 6 3 6 0 4 5 2 0 8 6 8 5 8 77 Total liabilities 2,922,053 2,890,278 2,911,913 2,869,056 2,888,219 2,938,206 2,901,928 2,881,187 2,870,474 78 Residual (assets less liabilities)3 282,113 283,004 281.216 281,860 284,304 283,902 284,830 286,608 287,013 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 DomesticN onfinancial Statistics • October 1993 1.27 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS Millions of dollars, Wednesday figures 1993 AAccccoouunntt June 2r June 9 June 16r June 23r June 30r July 7 July 14 July 21 July 28 ASSETS 1 Cash and balances due from depository institutions 124,459 108,284 109,988 106,588 106,671 126,447 107,898 105,954 102,520 2 U.S. Treasury and government securities 299,158 297,848 295,021 295,945 287,477 294,901 295,033 292,517 292,764 3 Trading account 26,418 25,254 24,990 26,847 17,026 24,853 25,856 24,980 25,039 4 Investment account 272,740 272,594 270,031 269,098 270,451 270,048 269,177 267,537 267,724 5 Mortgage-backed securities' 83,385 83,563 83,316 83,277 8844,,440022 8866,,111199 8855,,004433 8844,,446655 8855,,225566 All others, by maturity 6 One year or less 46,763 47,529 48,436 47,478 45,456 44,736 46,548 46,269 46,471 7 One year through five years 73,653 73,554 71,085 71,154 70,073 71,094 70,125 71,294 71,832 8 More than five years 68,939 67,948 67,195 67,188 70,519 68,099 67,461 65,509 64,166 9 Other securities 55,669 55,930 55,861 56,105 56,239 56,441 56,630 56,539 55,771 10 Trading account 2,267 2,355 2,149 2,470 2,580 2,787 2,758 2,482 2,887 11 Investment account 53,402 53,575 53,711 53,635 53,659 53,654 53,872 54,057 52,884 12 State and political subdivisions, by maturity 19,699 19,754 19,780 19,800 19,387 19,292 19,311 19,314 19,406 13 One year or less 3,366 3,428 3,455 3,471 3,205 3,253 3,313 3,326 3,407 14 More than one year 16,332 16,326 16,325 16,329 16,181 16,038 15,998 15,988 15,999 15 Other bonds, corporate stocks, and securities 33,703 33,820 33,932 33,835 34,273 34,363 34,561 34,743 33,478 16 Other trading account assets 12,590 12,837 12,715 12,893 11,848 11,561 10,880 10,902 11,231 17 Federal funds sold2 86,571 92,486 103,490 84,676 83,827 98,575 96,085 96,341 91,724 18 To commercial banks in the United States 56,298 58,088 64,049 53,995 57,399 64,614 57,249 59,008 54,445 19 To nonbank brokers and dealers 24,309 27,353 31,870 23,612 20,459 27,231 31,263 31,704 31,664 20 To others3 5,965 7,045 7,571 7,068 5,969 6,730 7,573 5,630 5,615 21 Other loans and leases, gross 987,040 983,175 986,174 980,542 995,092 992,640 986,307 983,472 983,371 22 Commercial and industrial 277,101 274,731 276,360 275,085 276,669 275,620 272,133 272,237 270,459 23 Bankers acceptances and commercial paper 3,150 3,238 3,198 2,801 3,003 3,392 3,246 3,238 3,211 24 Allother 273,951 271,493 273,162 272,284 273,666 272,228 268,887 268,998 267,248 25 U.S. addressees 272,294 269,751 271,321 270,464 271,839 270,572 267,254 267,409 265,705 26 Non-U.S. addressees 1,657 1,742 1,841 1,820 1,827 1,656 1,633 1,590 1,544 27 Real estate loans 397,907 400,034 399,903 397,969 400,793 402,142 402,190 400,133 400,268 28 Revolving, home equity 43,763 43,6% 44,018 43,942 43,973 44,018 43,730 43,743 43,747 29 All other 354,145 356,338 355,885 354,027 356,820 358,123 358,460 356,390 356,521 30 To individuals for personal expenditures 186,678 185,406 186,536 187,454 188,283 187,965 188,293 188,911 189,599 31 To financial institutions 39,574 38,385 37,161 35,384 37,791 38,588 37,851 36,770 36,243 32 Commercial banks in the United States 14,641 14,428 14,594 13,412 14,244 14,102 13,941 14,295 14,375 33 Banks in foreign countries 3,358 2,224 2,220 2,240 2,657 2,945 2,828 2,618 2,343 34 Nonbank financial institutions 21,574 21,733 20,347 19,733 20,890 21,540 21,082 19,857 19,524 35 For purchasing and carrying securities 14,813 15,441 16,220 16,136 19,267 16,839 17,128 16,311 17,241 36 To finance agricultural production 5,756 5,737 5,743 5,750 5,797 5,827 5,859 5,857 5,856 37 To states and political subdivisions 14,044 13,911 13,905 13,752 13,742 13,764 13,670 13,738 13,877 38 To foreign governments and official institutions 1,550 1,430 1,350 1,339 1,451 1,498 1,419 1,386 1,381 39 All other loans4 24,877 23,327 24,222 22,912 26,385 25,532 22,895 23,235 23,517 40 Lease-financing receivables 24,738 24,772 24,773 24,760 24,916 24,865 24,871 24,893 24,929 41 LESS: Unearned income 2,037 2,057 2,057 2,048 2,114 2,121 2,140 2,150 2,150 42 Loan and lease reserve 36,586 36,665 36,642 36,373 35,575 35,347 35,468 35,428 35,371 43 Other loans and leases, net 948,417 944,453 947,475 942,121 957,404 955,172 948,699 945,894 945,851 44 Other assets 169,021 164,403 171,555 169,256 167,305 168,304 173,173 167,453 165,065 45 Total assets 1,695,885 1,676,241 1,696,105 1,667,584 1,670,771 1,711,400 1,688,398 1,675,599 1,664,927 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 June 2r June 9r June 16r June 23r June 30" July 7 July 14 July 21 July 28 LIABILITIES 46 Deposits 1,142,563 1,125,736 1,135,700 1,092,235 1,113,843 1,143,770 1,122,307 1,094,489 1,095,298 47 Demand deposits 296,266 278,324 289,923 262,675 290,199 301,635 283,657 265,984 269,608 48 Individuals, partnerships, and corporations 239,399 226,877 234,697 212,788 239,479 243,769 236,030 218,737 219,858 49 Other holders 56,867 51,447 55,226 49,887 50,720 57,865 47,627 47,247 49,749 50 States and political subdivisions 9,553 8,407 9,195 9,559 9,072 8,329 8,243 8,253 8,384 51 U.S. government 2,572 2,275 5,414 2,016 2,461 1,827 2,056 1,486 1,613 52 Depository institutions in the United States ... 27,018 23,411 23,439 21,876 21,902 26,166 21,154 21,440 22,569 53 Banks in foreign countries 5,940 4,658 5,199 4,962 5,451 5,730 5,404 5,455 5,241 54 Foreign governments and official institutions .. 852 550 658 597 769 2,692 581 684 615 55 Certified and officers' checks 10,932 12,146 11,321 10,876 11,065 13,122 10,190 9,929 11,326 56 Transaction balances other than demand deposits4 . 121,246 120,320 120,711 116,093 118,542 121,879 118,640 117,770 116,717 57 Nontransaction balances 725,051 727,093 725,066 713,467 705,102 720,256 720,011 710,736 708,972 58 Individuals, partnerships, and corporations 698,485 700,545 699,230 688,293 684,612 696,495 696,278 686,883 684,981 59 Other holders 26,566 26,548 25,835 25,174 20,490 23,761 23,732 23,853 23,992 60 States and political subdivisions 21,353 21,368 20,573 20,270 18,178 19,060 18,800 18,792 18,786 61 U.S. government 2,653 2,635 2,678 2,687 497 2,666 2,665 2,660 2,661 62 Depository institutions in the United States ... 2,235 2,218 2,260 1,894 1,488 1,719 1,944 2,082 2,230 63 Foreign governments, official institutions, and banks . 325 327 325 324 326 317 322 319 315 64 Liabilities for borrowed money5 295,233 294,564 308,436 320,995 292,620 309,091 309,145 320,826 308,594 65 Borrowings from Federal Reserve Banks 0 0 0 0 1,260 157 0 0 0 66 Treasury tax and loan notes 16,728 3,677 27,520 31,459 27,483 17,984 18,564 15,350 19,190 67 Other liabilities for borrowed money6 278,505 290,888 280,916 289,536 263,877 290,950 290,581 305,477 289,405 68 Other liabilities (including subordinated notes and debentures) 109,661 107,369 103,193 104,750 114,128 107,834 106,199 108,662 109,646 69 Total liabilities 1,547,457 1,527,670 1,547,329 1,517,979 1,520,592 1,560,695 1,537,650 1,523,978 1,513,538 70 Residual (total assets less total liabilities)7 148,428 148,571 148,776 149,605 150,179 150,705 150,748 151,621 151,388 MEMO 71 Total loans and leases, gross, adjusted, plus securities 1,370,088 1,369,759 1,374,618 1,362,754 1,362,840 1,375,401 1,373,744 1,366,467 1,366,041 72 Time deposits in amounts of $100,000 or more 107,855 108,311 106,268 103,603 96,623 103,718 104,411 102,867 102,801 73 Loans sold outright to affiliates9 862 863 854 853 813 823 825 823 821 74 Commercial and industrial 437 437 430 428 411 425 404 402 402 75 Other 425 426 425 425 402 398 421 421 419 76 Foreign branch credit extended to U.S. residents'"... 23,715 23,320 23,026 22,929 22,643 22,319 22,454 22,382 22,382 77 Net owed to related institutions abroad -15,779 -15,072 -23,926 -20,377 -9,667 -14,939 -22,413 -15,817 -15,817 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 • October 1993 1.28 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS Assets and Liabilities1 Millions of dollars, Wednesday figures 1993 AAccccoouunntt June 2 June 9 June 16 June 23 June 30 July 7 July 14 July 21 July 28 ASSETS 1 Cash and balances due from depository institutions 17,694 18,839 18,181 18,974 19,843 19,276 1177,,661177 1177,,660088 1177,,331144 2 U.S. Treasury and government agency securities 31,226r 31,131 31,405 30,592 31,572 30,861 31,093 33,698 33,644 3 Other securities 8,469r 8,001 7,470 7,740 8,665 8,622 8,745 8,885 8,695 4 Federal funds sold 22,070 24,960 25,446 28,861 27,808 29,773 26,116 27,996 25,871 5 To commercial banks in the United States ... 5,269 7,740 3,592 7,436 7,570 6,645 4,868 5,679 5,345 6 To others2 16,802 17,220 21,854 21,426 20,238 23,129 21,248 22,317 20,526 7 Other loans and leases, gross 161,910r 160,545 162,054 161,073 163,754r 162,253 160,199 160,098 159,684 8 Commercial and industrial 97,913r 96,936r 97,570r 97,447r 97,891r 98,219 9977,,663311 9988,,006622 9977,,446677 9 Bankers acceptances and commercial paper 2,718 2,574 2,525 2,463 2,520 2,499 2,592 2,727 2,675 10 All other 95,195r 94,362r 95,045r 94,984r 95,372r 95,720 95,040 95,335 94,792 11 U.S. addressees 91,878r 91,084r 91,676r 91,631r 92,003r 92,290 91,667 91,923 91,561 12 Non-U.S. addressees 3,317 3,277 3,368 3,353 3,369r 3,430 3,373 3,412 3,231 13 Loans secured by real estate 31,847 31,858 31,889 S l ^ 31,513r 31,366 31,099 31,106 31,085 14 To financial institutions 25,860r 25,414r 26,454r 25,781r 26,863r 26,677 26,620 25,772 25,753 15 Commercial banks in the United States.. 5,205 5,417 5,602 5,618 5,836r 5,974 6,034 5,375 5,171 16 Banks in foreign countries 1,920 1,788 1,901 1,997 2,026 2,059 1,979 2,136 2,067 17 Nonbank financial institutions 18,734r 18,lO^ 18,95lr 18,167r 19,001r 18,644 18,607 18,261 18,514 18 For purchasing and carrying securities 3,299 3,332 3,130 3,105 4,574 2,910 2,172 22,,442255 22,,669922 19 To foreign governments and official institutions 372 372 378 459 401 385 392 433 382 20 All other 2,619 2,632 2,633 2,702 2,511r 2,695 2,284 2,301 2,306 21 Other assets (claims on nonrelated parties) .. 31,293 31,698 30,654 30,558 31,215r 31,473 30,869 31,182 31,186 22 Total assets3 308,469 309,608 309,015 306,735 314,580' 311,100 306,679 307,421 301,318 LIABILITIES 23 Deposits or credit balances owed to other than directly-related institutions 103,745r 101,773r 103,491 103,969 102,618r 99,172 97,513 96,819 95,563 24 Demand deposits 4,149 4,359 3,956 3,849 44,,995533rr 55,,113388 44,,442211 44,,555577 33,,886699 25 Individuals, partnerships, and corporations 3,088 2,915 2,968 3,060 4,059r 3,575 3,605 3,345 3,046 26 Other 1,061 1,444 987 789 895 1,563 815 1,211 822 27 Nontransaction accounts 99,596r 97,414r 99,536 100,121 9977,,666655 9944,,003344 9933,,009922 9922,,226622 9911,,669955 28 Individuals, partnerships, and corporations 69,270" 67,651r 68,720 69,144 67,650 64,839 64,408 64,241 63,978 29 Other 30,327 29,763 30,816 30,977 3300,,001166 2299,,119955 2288,,668844 2288,,002222 2277,,771177 30 Borrowings from other than directlyrelated institutions 87,336r 93,133r 92,669 82,619 88,518 95,373 90,194 83,910 75,091 31 Federal funds purchased 42,527 45,760 51,026 41,608 50,151 5544,,335511 4488,,553399 4466,,999988 4411,,773300 32 From commercial banks in the United States 14,494 16,449 18,569 10,884 18,568 20,072 15,175 11,620 12,013 33 From others 28,033 29,311 32,457 30,724 31,582 34,279 33,364 35,378 29,716 34 Other liabilities for borrowed money 44,809" 47,373r 41,643 41,011 38,367 41,022 41,655 3366,,991122 33,361 35 To commercial banks in the United States 7,848 8,125 8,000 7,954 8,464 7,705 7,477 7,180 6,880 36 To others 36,961r 39,248r 33,643 33,057 29,903 33,318 34,177 29,731 26,481 37 Other liabilities to nonrelated parties 30,358 30,158 28,643 29,430 31,623r 28,860 28,751 28,757 30,126 38 Total liabilities6 308,469 309,608 309,015 306,735 314,580R 311,100 306,679 307,421 301,318 MEMO 39 Total loans (gross) and securities, adjusted7.. 213,201r 211,480 217,183 215,212 218,392r 218,890 215,252 219,623 217,378 40 Net owed to related institutions abroad 51,223r 50,110 50,408 61,780 60,097r 58,853 58,183 69,981 75,614 1. Includes securities purchased under agreements to resell. 5. Includes securities sold under agreements to repurchase. 2. Includes transactions with nonbank brokers and dealers in securities. 6. Includes net 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 1993 IItteemm 1988 1989 1990 1991 1992 Jan. Feb. Mar. Apr. Mayr June Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 458,464 525,831 562,656 531,724 549,433 540,198 527,531 534,118 535,966 541,761 544,107 Financial companies1 Dealer-placed paper 2 Total 159,777 183,622 214,706 221133,,882233 228,260 212,682 220022,,004466 218,925 210,230 214,558 221,834 3 Bank-related (not seasonally adjusted) 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 4 Total 194,931 210,930 200,036 118833,,337799 172,813 181,264 117777,,337700 171,959 117755,,338844 174,558 171,479 5 Bank-related (not seasonally adjusted)3 43,155 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 6 Nonfinancial companies5 103,756 131,279 147,914 134,522 148,360 146,252 148,115 143,234 150,352 152,645 150,794 Bankers dollar acceptances (not seasonally adjusted)6 7 Total 66,631 62,972 54,771 43,770 38,200 36,001 35,221 34,939 35,317 34,927 34,149 By holder 8 Accepting banks 9,086 9,433 9,017 11,017 10,561 9,121 9,878 11,036 10,688 11,096 11,568 9 Own bills 8,022 8,510 7,930 9,347 9,103 7,927 8,361 9,162 9,315 9,786 10,236 10 Bills bought from other banks 1,064 924 1,087 1,670 1,458 1,193 11,,551166 1,873 1,372 11,,331100 1,333 Federal Reserve Banks 11 Foreign correspondents 1,493 1,066 918 1,739 1,276 1,317 1,169 1,108 909 690 613 12 Others 56,052 52,473 44,836 31,014 26,364 25,563 24,175 22,795 23,720 23,141 21,967 By basis 13 Imports into United States 14,984 15,651 13,095 12,843 12,212 11,148 11,126 11,129 10,746 10,274 10,066 14 Exports from United States 14,410 13,683 12,703 10,351 8,096 7,740 7,547 7,304 7,629 7,809 7,650 15 All other 37,237 33,638 28,973 20,577 17,893 17,112 16,548 16,506 16,942 16,844 16,433 1. Institutions engaged primarily in commercial, savings, and mortgage bank- 5. Includes public utilities and firms engaged primarily in such activities as ing; sales, personal, and mortgage financing; factoring, finance leasing, and other communications, construction, manufacturing, mining, wholesale and retail trade, business lending; insurance underwriting; and other investment activities. transportation, and services. 2. Includes all financial-company paper sold by dealers in the open market. 6. Data on bankers 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 Rate Period Av r e a r t a e ge Period Av r e a r te a ge Period 10.50 1990 10.01 1991— 9.52 1992— May ... 10.00 1991 8.46 Feb. . 9.05 1992 6.25 Mar. .. 9.00 July ... 9.50 9.00 Aug. .. 9.00 1990- 10.11 8.50 Sept. .. 8.50 Feb. 10.00 8.50 Oct. ... 8.00 Mar. 10.00 July ... 8.50 Nov. .. 7.50 Apr. 10.00 Aug. .. 8.50 Dec. .. 6.50 May . 10.00 Sept. .. 8.20 June 10.00 Oct. ... 8.00 1993— Jan. ... 6.00 July . 10.00 Nov. .. 7.58 Feb. .. Aug. 10.00 Dec. .. 7.21 Mar. ,, Sept. 10.00 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 Aug. .. 1. The prime rate is one of several base rates that banks use to price short-term date on which the first bank made a change in the rate. Data in this table also business loans. The table shows the date on which a new rate came to be the appear in the Board's H.15 (519) weekly and G.13 (415) monthly statistical predominant one quoted by a majority of twenty-nine large banks, rather than the 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 • October 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 Apr. May June July July 2 July 9 July 16 July 23 July 30 MONEY MARKET INSTRUMENTS 1 Federal funds1-2,3 8.10 5.69 3.52 2.% 3.00 3.04 3.06 3.13 3.10 3.01 3.09 3.03 2 Discount window borrowing • 6.98 5.45 3.25 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 Commercial paper3,5 6 3 1-month 8.15 5.89 3.71 3.13 3.11 3.19 3.15 3.20 3.16 3.13 3.14 3.15 4 3-month 8.06 5.87 3.75 3.14 3.14 3.25 3.20 3.25 3.19 3.18 3.19 3.22 5 6-month 7.95 5.85 3.80 3.19 3.20 3.38 3.35 3.38 3.33 3.31 3.34 3.39 Finance paper, directly placed* 51 6 1-month 8.00 5.73 3.62 3.06 3.05 3.12 3.08 3.13 3.08 3.08 3.07 3.09 7 3-month 7.87 5.71 3.65 3.06 3.07 3.16 3.12 3.15 3.11 3.11 3.12 3.14 8 6-month 7.53 5.60 3.63 3.07 3.07 3.16 3.15 3.18 3.11 3.14 3.16 3.19 Bankers acceptances15 * 9 3-month 7.93 5.70 3.62 3.05 3.06 3.16 3.12 3.13 3.12 3.10 3.14 3.13 10 6-month 7.80 5.67 3.67 3.10 3.13 3.28 3.26 3.25 3.24 3.23 3.29 3.29 Certificates of deposit, secondary market 11 1-month 8.15 5.82 3.64 3.08 3.07 3.13 3.10 3.12 3.11 3.09 3.10 3.10 12 3-month 8.15 5.83 3.68 3.09 3.10 3.21 3.16 3.18 3.16 3.14 3.16 3.17 13 6-month 8.17 5.91 3.76 3.16 3.20 3.36 3.34 3.34 3.32 3.30 3.35 3.39 14 Eurodollar deposits, 3-month310 8.16 5.86 3.70 3.10 3.12 3.21 3.17 3.19 3.14 3.18 3.15 3.19 U.S. Treasury bills Secondary market ,5 15 3-month 7.50 5.38 3.43 2.87 2.96 3.07 3.04 3.01 3.02 3.02 3.07 3.06 16 6-month 7.46 5.44 3.54 2.97 3.07 3.20 3.16 3.11 3.11 3.13 3.20 3.21 17 1-year 7.35 5.52 3.71 3.11 3.23 3.39 3.33 3.29 3.28 3.27 3.37 3.43 Auction average • 1 18 3-month 7.51 5.42 3.45 2.89 2.96 3.10 3.05 3.05 3.01 3.04 3.05 3.10 19 6-month 7.47 5.49 3.57 3.00 3.07 3.23 3.15 3.14 3.10 3.14 3.15 3.24 20 1-year 7.36 5.54 3.75 3.24 3.13 3.40 3.42 3.40 n.a. n.a. n.a. 3.44 U.S. TREASURY NOTES AND BONDS Constant maturities12 21 1-year 7.89 5.86 3.89 3.24 3.36 3.54 3.47 3.42 3.42 3.41 3.53 3.57 22 2-year 8.16 6.49 4.77 3.84 3.98 4.16 4.07 4.01 4.00 4.00 4.14 4.19 23 3-year 8.26 6.82 5.30 4.30 4.40 4.53 4.43 4.37 4.36 4.34 4.49 4.54 24 5-year 8.37 7.37 6.19 5.13 5.20 5.22 5.09 5.04 5.03 5.00 5.15 5.21 25 7-year 8.52 7.68 6.63 5.59 5.66 5.61 5.48 5.45 5.45 5.39 5.52 5.56 26 10-year 8.55 7.86 7.01 5.97 6.04 5.96 5.81 5.79 5.79 5.74 5.83 5.88 27 30-year 8.61 8.14 7.67 6.85 6.92 6.81 6.63 6.68 6.67 6.58 6.61 6.63 Composite 28 More than 10 years (long-term) 8.74 8.16 7.52 6.64 6.68 6.55 6.34 6.38 6.37 6.28 6.33 6.37 STATE AND LOCAL NOTES AND BONDS Moody's series13 29 6.96 6.56 6.09 5.47 5.47 5.35 5.27 5.25 5.25 5.28 5.23 5.34 30 Baa 7.29 6.99 6.48 5.88 5.88 5.80 5.74 5.72 5.72 5.76 5.70 5.80 31 Bond Buyer series14 7.27 6.92 6.44 5.76 5.73 5.63 5.57 5.55 5.55 5.50 5.61 5.65 CORPORATE BONDS 32 Seasoned issues, all industries15 9.77 9.23 8.55 7.76 7.78 7.66 7.50 7.55 7.53 7.46 7.49 7.50 Rating group 33 9.32 8.77 8.14 7.46 7.43 7.33 7.17 7.24 7.22 7.16 7.17 7.14 34 Aa 9.56 9.05 8.46 7.62 7.61 7.51 7.35 7.40 7.38 7.31 7.34 7.37 35 A 9.82 9.30 8.62 7.80 7.85 7.74 7.53 7.59 7.56 7.49 7.52 7.54 36 Baa 10.36 9.80 8.98 8.14 8.21 8.07 7.93 7.96 7.96 7.90 7.93 7.95 37 A-rated, recently offered utility bonds'6 10.01 9.32 8.52 7.66 7.75 7.59 7.43 7.46 7.44 7.36 7.48 7.37 MEMO Dividend-price ratio 38 Preferred stocks 8.96 8.17 7.46 6.69 6.65 6.97 6.89 7.00 6.88 6.92 6.88 6.89 39 Common stocks 3.61 3.24 2.99 2.82 2.77 2.81 2.81 2.80 2.84 2.79 2.82 2.80 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 A115 1.36 STOCK MARKET Selected Statistics 1992 1993 IInnddiiccaattoorr 11999900 11999911 11999922 Nov. Dec. Jan. Feb. Mar. Apr. May June July Prices and trading volume (averages of daily figures) Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 183.66 206.35 229.00 232.84 239.47 239.75 243.41 248.12 244.72 246.02 247.16 247.85 2 Industrial 226.06 258.16 284.26 287.80 290.77 292.11 294.40 298.75 292.19 297.83 298.78 295.34 3 Transportation 158.80 173.97 201.02 204.63 212.35 221.00 226.96 229.42 237.97 237.80 234.30 238.30 4 Utility 90.72 92.64 99.48 101.13 103.85 105.52 109.45 112.53 113.78 111.21 113.27 116.27 5 Finance 133.21 150.84 179.29 189.27 196.87 203.38 209.93 217.01 216.02 209.40 209.75 218.89 6 Standard & Poor's Corporation (1941-43 = 10)' 335.01 376.20 415.75 422.84 435.64 435.40 441.76 450.15 443.08 445.25 448.06 447.29 7 American Stock Exchange (Aug. 31, 1973 = 50? 338.32 360.32 391.28 387.75 392.69 402.75 409.39 418.56 418.54 429.72 436.13 434.99 Volume of trading (thousands of shares) 8 New York Stock Exchange 156,359 179,411 202,558 208,221 222,736 266,011 288,540 251,170 279,778 255,843 250,230 247,574 9 American Stock Exchange 13,155 12,486 14,171 14,925 16,523 17,184 18,154 16,150 15,521 20,433 17,753 17,766 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers3 28,210 36,660 43,990 43,630 43,990 44,020 44,290 45,160 47,420 48,630 49,550 49,080 Free credit balances at brokers4 11 Margin accounts 8,050 8,290 8,970 8,500 8,970 8,980 9,790 9,650 9,805 9,560 9,820 9,585 12 Cash accounts 19,285 19,255 22,510 19,310 22,510 20,360 22,190 21,395 21,450 21,610 22,625 21,475 Margin requirements (percent of market value and effective date)5 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 • October 1993 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Fiscal year Calendar year TTTyyypppeee ooofff aaaccccccooouuunnnttt ooorrr ooopppeeerrraaatttiiiooonnn 1993 11999900 11999911 11999922rr Feb. Mar. Apr. May June July U.S. budget1 1 Receipts, total 1,031,308 l,054,264r 1,090,449 66,133r 83,447r 132,117r 70,753r 128,586r 80,639 2 On-budget 749,652r 760,380* 788,023 41,033r 57,253r 96,408r 44,63lr 98,68c 57,152 3 Off-budget 281,656r 293,885r 302,426 25,100 26,194 35,709 26,122 29,906 23,487 4 Outlays, total 1,252,691 1,323,785 1,380,637 114,330r 127,422r 124,026r 107,717r 117,487r 120,216 5 On-budget 1,027,626 1,082,098 1,128,321 89,874r 103,184r 101,852r 83,322r 103,493r 96,252 6 Off-budget 225,065r 241,687r 252,316 24,456 24,237 22,174 24,395 13,994 23,964 7 Surplus or deficit (-), total -221,384 -269,521 -290,188 -48,197r -43,974r 8,091r -36,963r 11,099"" -39,577 8 On-budget -277,974 -321,719 -340,298 -48,842r -45,931r -5,445r -38,690" -4,813r -39,099 9 Off-budget 56,590 52,198 50,110 644 1,957 13,535 1,727 15,912 -478 Source of financing (total) 10 Borrowing from the public 220,101 276,802 310,918 30,689 37,727 5,464 30,832 24,757 1,055 11 Operating cash (decrease, or increase (-)) ... 818 -1,329 -17,305 27,227 -2,452 -18,945 20,196 -40,288 32,447 12 OtherT 465r -5,952r -3,425r —9,719"" 8,699r 5,39c -14,065r 4,432r 6,075 MEMO 13 Treasury operating balance (level, end of period) 40,155 41,484 58,789 19,099 21,551 40,496 2200,,330000 6600,,558888 28,141 14 Federal Reserve Banks 7,638 7,928 24,586 5,350 6,752 7,273 5,787 28,386 5,818 15 Tax and loan accounts 32,517 33,556 34,203 13,749 14,799 33,223r 14,514 32,202 22,324 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. Tne act has 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) oflf-budget. The Postal Service is included as an off-budget SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of item in the Monthly Treasury Statement beginning in 1990. Receipts and Outlays of the U.S. Government and Office of Management and 2. Includes special drawing rights (SDRs); reserve position on the U.S. quota Budget, Budget of the U.S. Government. 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. B UDGET RECEIPTS AND OUTLAYS1 Millions of dollars Fiscal year Calendar year Source or type 1991 1992 1993 1993 11999911 11999922 H2 HI H2 HI May June July RECEIPTS 1 All sources l,054,264r l,090,449r 519,165r 560,318' 540,474' 593,749' 70,753' 128,586' 80,639 2 Individual income taxes, net 467,827 475,979 234,939 236,576 246,954' 256,105 17,919 56,463 37,489 4 5 3 6 R P N W 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 7 0 4 9 4 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 4 0 0 21 3 8 0 3 , , , 9 5 2 5 1 9 2 0 6 1 1 1 7 1 9 3 0 8 , , , 3 9 8 0 2 9 6 8 0 5 8 21 3 7 5 9 , , , 5 9 2 9 2 8 1 1 9 4 0 ' ' 2 1 1 6 1 0 7 3 , , , 4 0 4 6 6 8 2 8 6 2 5 3 1 1 2 5 , , , 2 2 6 6 8 3 4 1 1 5 3 21 6 1 , , , 7 1 5 7 9 1 4 8 4 2 3 2 6 1 , , , 7 3 6 5 9 6 9 6 2 8 Corporation income taxes 7 Gross receipts 113,599 117,949 54,016 61,682 58,022 69,044 3,022 25,627 3,848 8 Refunds 15,513 17,679 8,649 9,403 7,219 7,198 646 678 1,154 9 Social insurance taxes and contributions net 396,011 413,689 186,839 224,569 192,599 227,177 42,277 38,405 32,284 10 Employment taxes and contributions 370,526 385,491 175,802 208,110 180,758 208,776 33,062 37,738 30,156 11 Self-employment taxes and contributions3 25,457 24,421 3,306 20,434 3,988 16,270 1,620 3,139 104 12 Unemployment insurance 20,922 23,410 8,721 14,070 9,397 16,074 8,849 301 1,709 13 Other net receipts4 4,563 4,788 2,317 2,389 2,445 2,326 365 366 419 14 Excise taxes 42,430 45,570 24,429 22,389 23,456 23,398 3,502 4,565 4,214 15 Customs deposits 15,921 17,359 8,694 8,146 9,497 8,860 1,419 1,642 1,761 16 Estate and gift taxes 11,138 11,143 5,507 5,701 5,733 6,494 1,009 900 944 17 Miscellaneous receipts5 22,852 26,453r 13,390r 10,658r l l^ 9,867' 2,252' 1,662' 1,252 OUTLAYS 18 All types 1,323,785' 1,380,637r 694,345r 704,266' 723,365' 673,878' 107,717' 117,487' 120,216 19 National defense 272,514 298,361 147,669 147,065 155,501 140,535 20,460 24,786 25,916 2 2 2 2 2 1 2 3 4 0 G N E A In n e g a t e n t e r u i r r e c g n r r u a y a a l l l t t i u r o s e r c n e s i a o e l u n a c rc f e f e , a s s i r p a s n a c d e , e n a v n i d r o t n e m ch e n n o t logy . 1 1 1 1 2 4 8 6 5 , , , , , 5 8 7 1 9 1 6 0 6 4 1 4 8 7 6 2 1 1 1 4 0 4 6 6 , , , , , 5 0 9 1 4 0 1 9 0 0 9 7 7 6 9 1 7 7 8 1 1 , , , , , 4 6 4 6 1 1 9 7 9 3 8 1 2 8 0 7 8 7 8 1 , , , , , 5 5 5 9 4 2 9 4 4 5 6 4 0 2 1 1 9 8 3 8 1 , , , , , 8 9 1 5 6 8 1 0 2 0 1 1 9 1 1 ' 1 6 2 7 8 1 , , , , , 4 5 5 9 8 6 6 8 9 2 2 5 8 6 4 1 1 1 1 , , , , 4 0 3 7 4 5 7 8 3 1 3 1 2 9 0 1 1 1 , , , 6 3 8 0 6 0 4 2 2 0 4 7 4 4 5 1 1 1 , , , 2 2 5 4 1 4 0 2 2 9 1 6 1 1 8 25 Commerce and housing credit 75,639 9,753 36,534 15,615 -7,846' -15,112 -1,896 -2,523 -2,014 26 Transportation 31,531 33,759 17,074r 15,651r 18,464' 16,077' 2,399' 3,273' 3,250 27 Community and regional development .. 7,432 7,923 3,783 3,903 4,540 4,935 862 986 962 28 Education, training, employment, and social services 41,479 45,248 21,114 23,767 20,975' 23,983 3,433 3,820 3,113 29 Health 71,183 89,570 41,459 44,164 47,229' 49,882 7,758 8,981 8,023 30 Social security and Medicare 373,495 406,569 193,098 205,500 232,109 195,933 35,020 41,061 37,670 31 Income security 171,618 197,867 87,693 104,537 98,632' 108,559 15,900 13,801 18,665 32 Veterans benefits and services 31,344 34,133 17,425 15,597 18,561 16,384 801 2,871 4,289 33 Administration of justice 12,295 14,450 6,574 7,435 7,243' 7,463 1,199 1,131 1,350 34 General government 11,358 12,939 6,794 5,050 8,183' 5,205 886 1,497 340 35 Net interest6 195,012 199,429 99,149 100,161 98,575' 99,635 17,420 15,464 17,159 36 Undistributed offsetting receipts' -39,356 -39,280 -20,436 -18,229 -20,914 -17,035 -2,579 -3,065 -3,094 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. toti for outlays does not correspond to calendar year data because revisions from 7. Consists of rents and royalties for the outer continental shelf and U.S. the Budget have not been fully distributed across months. government contributions for employee retirement. 2. Old-age, disability, and hospital insurance, and railroad retirement accounts. SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of 3. Old-age, disability, and hospital insurance. Receipts and Outlays of the U.S. Government, and the U.S. Office of Manage- 4. Federal employee retirement contributions and civil service retirement and ment and Budget, Budget of the U.S. Government, Fiscal Year 1994. disability fund. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Financial Statistics • October 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. 2 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. Department of the Treasury, Monthly Statement of the Public specified participation certificates, notes to international lending organizations, Debt of 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 Q1 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 Nonmarketable1 986.4 1,166.2 1,327.2 1,419.8 1,384.3 1,419.8 1,420.5 1,488.4 8 State and local government series 163.3 160.8 159.7 153.5 157.6 153.5 151.6 152.8 9 Foreign issues 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 international .. 392.9 421.7 455.0 512.5 499.0 512.5 528.4 26 Other miscellaneous investors 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 Apr. May" June June 2 June 9 June 16 June 23 June 30 July 7 July 14 July 21 July 28 IMMEDIATE TRANSACTIONS2 By type of security U.S. Treasury securities 1 Bills 41,054r 41,652 44,237 55,862" 44,212 44,523 35,942 47,620 41,568 36,212 3344,,772233 4422,,228800 Coupon securities, by maturity 2 Less than 3.5 years 36,657r 53,473 44,081 47,800 39,242 45,023 48,194 42,376 39,191 3322,,774444 3399,,228866 5511,,773344 3 3.5 to 7.5 years 42,456r 44,120 39,727 40,879 35,809 43,317 38,002 41,320 32,899 31,233 42,160 47,445 4 7.5 to 15 years 18,335r 21,112 19,269 16,586 17,800 21,350 17,810 21,189 19,449 21,097 22,148 20,233 5 15 years or more 15,130" 16,130 15,935 16,757 13,139 18,306 15,826 16,141 14,652 17,744 19,494 16,730 Federal agency securities Debt, by maturity 6 Less than 3.5 years 5,715 6,095 7,202 6,371 5,616 7,154 6,946 9,425 6,759 66,,889944 55,,669944 66,,776611 7 3.5 to 7.5 years 640 583 623 358 772 646 620 559 541 636 789 492 8 7.5 years or more 578 356 428 220 522 368 375 529 488 743 473 1,083 Mortgage-backed 9 Pass-throughs 17,293 18,498 17,147 14,214 19,781 22,913 12,933 14,136 15,048 28,818 1199,,667700 1177,,002266 10 All others . 3,010r 3,073 2,949 2,302 2,776 2,752 2,861 3,664 2,697 4,057 3,044 3,463 By type of counterparty Primary dealers and brokers 11 U.S. Treasury securities 95,038r 110,416 100,166 110,082" 93,090 106,410 96,279 100,919 89,398 84,300 97,930 111133,,887777 Federal agency securities 12 Debt 1,155 1,019 1,143 1,035 1,005 1,147 907 1,554 979 1,247 994499 992244 13 Mortgage-backed 8,855 9,560 8,997 7,970 9,713 12,487 7,053 7,145 7,984 14,663 11,065 9,106 Customers 14 U.S. Treasury securities 58,594r 66,070 63,083 67,801 57,113 66,108 59,495 67,728 58,360 54,731 5599,,888800 6644,,554444 Federal agency securities 15 Debt 5,778 6,015 7,110 5,914 5,905 7,020 7,033 8,959 6,809 7,026 66,,000077 77,,441122 16 Mortgage-backed 11,449" 12,012 11,099 8,547 12,844 13,178 8,741 10,655 9,761 18,213 11,648 11,383 FUTURES AND FORWARD TRANSACTIONS4 By type of deliverable security U.S. Treasury securities 17 Bills 2,378 2,594 3,179 2,434 3,636 3,331 3,779 2,268 2,650 2,270 3,007 22,,336688 Coupon securities, by maturity 18 Less than 3.5 years 1,942 1,929 1,931 2,100 2,113 1,785 2,121 1,638 2,124 1,885 22,,228866 22,,007755 19 3.5 to 7.5 years 1,384 1,749 1,940 2,793 2,366 1,744 1,806 1,502 1,114 1,123 1,185 1,746 20 7.5 to 15 years 2,377 3,054 2,990 3,318 3,280 3,408 2,471 2,670 2,501 2,268 2,966 2,908 21 15 years or more 9,025 10,425 9,234 10,012 9,236 10,820 8,247 8,320 9,928 10,453 12,465 12,746 Federal agency securities Debt, by maturity 22 Less than 3.5 years 102 149 222 219 112 340 236 199 26 220088 5544 5533 23 3.5 to 7.5 years 128 75 54 20 34 51 42 104 113 34 134 130 24 7.5 years or more 33 15 84 9 10 175 85 98 7 17 14 23 Mortgage-backed 25 Pass-throughs 21,378 19,570 23,633 17,298 26,016 27,446 21,243 22,362 23,177 28,714 21,086 2211,,444477 26 Others3 1,463 1,753 1,456 1,551 1,434 1,280 1,068 2,003 1,644 1,403 2,845 2,353 OPTIONS TRANSACTIONS5 By type of underlying security U.S. Treasury, coupon securities, by maturity 27 Less than 3.5 years 1,611 1,127 1,003 733 783 1,426 1,117 793 1,598 1,551 11,,772211 1,311 28 3.5 to 7.5 years 564 685 438 325 420 677 482 220 808 812 775 884 29 7.5 to 15 years 507 522 570 562 288 903 421 673 1,013 1,042 828 1,239 30 15 years or more 1,084 1,202 799 804 814 859 767 752 1,816 3,512 1,343 2,981 Federal agency, mortgagebacked securities 31 Pass-throughs 664 460 600 569 871 461 411 671 853 533 479 344 1. Transactions are market purchases and sales of securities as reported to the and principal-only securities (POs). Federal Reserve Bank of New York by the U.S. government securities dealers on 4. Futures transactions are standardized agreements arranged on an exchange. its published list of primary dealers. Averages are based on the number of trading Forward transactions are agreements made in the over-the-counter market that days in the period. Immediate, forward, and futures transactions are reported at specify delayed delivery. All futures transactions are included regardless of time principal value, which does not include accrued interest; options transactions are to delivery. Forward contracts for U.S. Treasury securities and federal agency reported at the face value of the underlying securities. debt securities are included when the time to delivery is more than five business Dealers report cumulative transactions for each week ending Wednesday. days. Forward contracts for mortgage-backed agency securities are included 2. Transactions for immediate delivery include purchases or sales of securities when the time to delivery is more than thirty business days. (other than mortgage-backed agency securities) for which delivery is scheduled in 5. Options transactions are purchases or sales of put-and-call options, whether five business days or less and "when-issued" securities that settle on the issue arranged on an organized exchange or in the over-the-counter market, and include date of offering. Transactions for immediate delivery of mortgage-backed agency options on futures contracts on U.S. Treasury and federal agency securities. securities include purchases and sales for which delivery is scheduled in thirty business NOTE. In tables 1.42 and 1.43, "n.a." indicates that data are not published days or less. Stripped securities are reported at market value by maturity of coupon or because of insufficient activity. 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Nonfinancial Statistics • October 1993 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 1993 1993, week ending item Apr. May June June 2 June 9 June 16 June 23 June 30 July 7 July 14 July 21 Positions2 NET IMMEDIATE POSITIONS3 By type of security U.S. Treasury securities 1 Bills 18,483 7,999 5,000 10,408 -266 33,,777766 77,,000022 77,,994411 88,,996688 44,,117700 22,,665522 Coupon securities, by maturity 2 Less than 3.5 years 2,928 10,275 10,982 11,734 9,691 8,957 14,549 10,515 13,202 11,217 6,778 3 3.5 to 7.5 years -17,023 -19,900 -16,778 -20,726 -20,498 -16,896 -14,357 -14,235 -14,839 -17,558 -18,842 4 7.5 to 15 years -12,805 -10,222 -10,051 -13,127 -11,570 -12,150 -10,155 -5,448 -5,764 -4,115 -6,350 5 15 years or more 9,248 8,228 11,948 10,600 11,233 12,062 11,268 13,613 1111,,224488 13,652 10,276 Federal agency securities Debt, by maturity 6 Less than 3.5 years 6,342 5,389 6,554 5,954 6,085 6,697 7,794 5,813 7,203 8,555 7,155 7 3.5 to 7.5 years 3,178 2,798 2,197 2,370 1,610 2,233 2,303 2,591 2,921 2,969 3,165 8 7.5 years or more 3,958 2,957 2,921 2,678 2,754 22,,885533 22,,882255 33,,332211 33,,660022 33,,664444 33,,445555 Mortgage-backed 9 Pass-throughs 34,056 29,356 36,731 21,660 36,490 44,287 39,859 30,596 27,987 40,975 42,297 10 All others 25,866 27,158 26,354 29,135 26,877 24,848 24,899 2277,,999977 2277,,881177 2255,,660011 2244,,229988 Other money market instruments 11 Certificates of deposit 3,203 3,681 3,280 4,357 3,247 3,386 2,555 3,625 2,727 2,488 2,337 12 Commercial paper 5,145 6,066 6,950 7,687 6,504 7,998 5,721 7,368 6,763 6,909 5,967 13 Bankers acceptances 972 862 1,048 1,159 1,024 989 994 1,152 1,286 1,273 940 FUTURES AND FORWARD POSITIONS5 By type of deliverable security U.S. Treasury securities 14 Bills -7,951 -5,222 -5,751 -2,610 -2,373 -4,896 -8,102 -8,531 -6,953 -6,306 -6,912 Coupon securities, by maturity 15 Less than 3.5 years -1,433 -1,556 -3,242 -2,993 -3,388 -4,597 -2,900 -2,154 -1,714 -1,926 -1,770 16 3.5 to 7.5 years 4,857 4,626 3,462 3,627 3,747 3,441 3,515 3,098 3,033 4,348 4,212 17 7.5 to 15 years 4,385 4,410 2,013 3,858 3,400 1,789 1,148 1,187 887 1,469 6,635 18 15 years or more -5,103 -4,613 -6,175 -5,101 -5,277 --66,,225566 -6,188 -7,285 --55,,006655 --77,,888855 --55,,005544 Federal agency securities Debt, by maturity 19 Less than 3.5 years -285 -209 38 38 403 81 -104 -229 30 122 56 20 3.5 to 7.5 years -50 -111 -33 -133 -102 60 -65 3 -11 19 -236 21 7.5 years or more -74 -85 85 -21 -45 93 131 190 -28 27 55 Mortgage-backed 22 Pass-throughs -12,900 -6,916r -15,024 1,459 -13,453 -20,674 -17,761 -12,916 -9,915 -24,769 -25,928 23 All others 4,770 1,773 1,764 -837 977 1,930 2,615 2,278 1,565 756 4,754 24 Certificates of deposit -160,960 -155,044 - 149,623r -148,775 -152,557 -144,525 -145,753 -155,901 -169,169 -173,639 -179,462 Financing6 Reverse repurchase agreements 25 Overnight and continuing 223,214 223,931 221,171 229,404 223,498 228,081 217,109 213,645 235,842 247,901 248,270 26 Term 393,238 373,495 370,986 342,400 375,852 394,328 392,882 329,050 383,677 414,509 404,744 Repurchase agreements 27 Overnight and continuing 406,560 399,943 399,663 403,158 396,460 416,896 401,316 382,980 443,644 426,213 456,672 28 Term 369,281 346,717 337,604 305,395 339,048 357,665 367,531 295,376 345,353 371,666 366,221 Securities borrowed 29 Overnight and continuing 117,774 123,353 129,101 128,611 132,690 132,367 130,809 120,678 123,247 127,851 127,866 30 Term 44,365 42,805 41,518 40,368 39,756 41,689 43,267 41,689 44,946 48,401 47,380 Securities loaned 31 Overnight and continuing 4,762 5,055 4,774 5,007 4,311 4,997 4,662 5,058 5,200 4,721 4,937 32 Term 587 938 639 518 360 793 665 772 806 561 752 Collateralized loans 33 Overnight and continuing 14,434 14,538 14,128r 12,630 14,508 16,428 14,579 11,427 13,600 18,267 16,190 MEMO: Matched book7 Reverse repurchase agreements 34 Overnight and continuing 148,137 146,741 149,942 156,812 152,901 155,918 152,407 136,578 151,832 157,774 168,241 35 Term 341,856 321,698 317,835 293,069 320,084 339,480 336,714 282,136 335,783 362,514 350,445 Repurchase agreements 36 Overnight and continuing 204,658 210,160 206,698 217,574 212,836 218,737 198,694 193,416 215,874 223,597 230,084 37 Term 283,791 257,391 254,497 233,235 254,572 269,369 282,080 218,040 258,419 284,224 275,200 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 business 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 business days or less. borrowing and lending transactions are matched. Matched-book data are included 4. Includes such securities as collateralized mortgage obligations (CMOs), real in the financing breakdowns given above. The reverse repurchase and repurchase estate mortgage investment conduits (REMICs), interest-only securities (IOs), numbers are not always equal because of the "matching" of securities of different and principal-only securities (POs). values or different types of collateralization. 5. Futures positions reflect standardized agreements arranged on an exchange. NOTE. Data for futures and forward commercial paper and bankers acceptances and Forward positions reflect agreements made in the over-the-counter market that for term financing of collateralized loans are no longer available because of insufficient Digitized for FspRecAifSy EdeRla yed 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 1993 AAggeennccyy 11998888 11998899 11999900 11999911 Jan. Feb. Mar. Apr. May 1 Federal and federally sponsored agencies 381,498 411,805 434,668 442,772 487,331 494,739 494,656 0 0 2 Federal agencies 35,668 35,664 42,159 41,035 41,641 42,115 42,051 42,619 42,738 3 Defense Department1 8 7 7 7 7 7 7 7 7 4 Export-Import Bank 3 11,033 10,985 11,376 9,809 7,208 7,208 6,749 6,749 6,749 5 Federal Housing Administration4 150 328 393 397 231 237 259 263 271 6 Government National Mortgage Association certificates of participation 0 0 0 0 0 0 0 0 0 7 Postal Service6 6,142 6,445 6,948 8,421 10,660 10,660 10,440 10,440 10,440 8 Tennessee Valley Authority 18,335 17,899 23,435 22,401 23,535 24,003 24,5% 25,160 25,271 9 United States Railway Association6 0 0 0 0 0 0 0 0 0 10 Federally sponsored agencies7 345,832 375,428 392,509 401,737 445,690 452,624 452,605 0 0 11 Federal Home Loan Banks 135,836 136,108 117,895 107,543 113,253 113,347 115,272 117,363 120,172 12 Federal Home Loan Mortgage Corporation 22,797 26,148 30,941 30,262 34,479 44,490 41,183 47,903 46,555 13 Federal National Mortgage Association 105,459 116,064 123,403 133,937 165,958 163,538 165,818 165,135 170,768 14 Farm Credit Banks8 53,127 54,864 53,590 52,199 52,264 51,502 51,630 51,210 51,538 15 Student Loan Marketing Association9 22,073 28,705 34,194 38,319 39,812 39,822 38,776 0 0 16 Financing Corporation10 5,850 8,170 8,170 8,170 8,170 8,170 8,170 8,170 0 17 Farm Credit Financial Assistance Corporation" 690 847 1,261 1,261 1,261 1,261 1,261 1,261 0 18 Resolution Funding Corporation12 0 4,522 23,055 29,996 29,996 29,996 29,996 29,9% 0 MEMO 19 Federal Financing Bank debt13 142,850 134,873 179,083 185,576 151,059 147,464 146,097 140,807 137,215 Lending to federal and federally sponsored agencies 20 Export-Import Bank3 11,027 10,979 11,370 9,803 7,202 7,202 6,743 6,743 6,743 21 Postal Service6 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 6,825 6,825 6,675 6,675 6,575 24 United States Railway Association6 0 0 0 0 0 0 0 0 0 Other lending14 25 Farmers Home Administration 58,496 53,311 52,324 48,534 42,979 42,979 42,979 41,629 40,379 26 Rural Electrification Administration 19,246 19,265 18,890 18,562 18,037 18,036 17,966 18,008 17,970 27 Other 26,324 23,724 70,896 84,931 60,786 57,192 56,504 52,522 50,318 1. Consists of mortgages assumed by the Defense Department between 1957 10. The Financing Corporation, established in August 1987 to recapitalize the and 1963 under family housing and homeowners assistance programs. Federal Savings and Loan Insurance Corporation, undertook its first borrowing in 2. Includes participation certificates reclassified as debt beginning Oct. 1, 1976. October 1987. 3. On-budget since Sept. 30, 1976. 11. The Farm Credit Financial Assistance Corporation, established in January 4. Consists of debentures issued in payment of Federal Housing Administration 1988 to provide assistance to the Farm Credit System, undertook its first insurance claims. Once issued, these securities may be sold privately on the borrowing in July 1988. securities market. 12. The Resolution Funding Corporation, established by the Financial Institu- 5. Certificates of participation issued before fiscal year 1969 by the Government tions Reform, Recovery and Enforcement Act of 1989, undertook its first National Mortgage Association acting as trustee for the Farmers Home Admin- borrowing in October 1989. istration, the Department of Health, Education, and Welfare, the Department of 13. The FFB, which began operations in 1974, is authorized to purchase or sell Housing and Urban Development, the Small Business Administration, and the obligations issued, sold, or guaranteed by other federal agencies. Because FFB Veterans' Administration. incurs debt solely for the purpose of lending to other agencies, its debt is not 6. Off-budget. included in the main portion of the table in order to avoid double counting. 7. Includes outstanding noncontingent liabilities: notes, bonds, and deben- 14. Includes FFB purchases of agency assets and guaranteed loans; the latter tures. Some data are estimated. are loans guaranteed by numerous agencies, with the amounts guaranteed by any 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 • October 1993 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1992 1993 TTyyppee ooff ii oo ss rr ss uu uu ee ss ee oo rr iissssuueerr,, 11999900 11999911 11999922 Dec. Jan. Feb. Mar. Apr. May June July 1 All issues, new and refunding' 120,339 154,402 215,191 19,577 18,039 18,285 28,920 20,956 27,178 28,529 21,603 By type of issue 2 General obligation 39,610 55,100 78,611 6,024 4,840 6,963 8,254 8,272 9,452 8,415 7,713 3 Revenue 81,295 99,302 136,580 13,553 13,199* ll,322r 20,666r 12,684r 17,726r 20,114r 13,890 By type of issuer 4 State 15,149 24,939 25,295 2,339 1,339 3,485 2,139 1,463 2,910 3,562 2,944 5 Special district or statutory authority2 72,661 80,614 129,686r 11,159 12,706r 10,146r 19,804r 9,923r 15,441r 18,132r 10,043 6 Municipality, county, or township 32,510 48,849 60,210 6,079 3,994 4,654 6,977 9,570 8,827 6,835 8,616 7 Issues for new capital 103,235 116,953 120,272 8,010 l,734r 2,270r 3,289r l,527r 2,960r 3,484r 7,737 By use of proceeds 8 Education 17,042 21,121 22,071 1,658 1,033 1,264 1,482 833 1,596 2,208 1,723 9 Transportation 11,650 13,395 17,334 831 829 131 2,111 699 813 772 653 10 Utilities and conservation 11,739 21,039 20,058 1,258 894 423 538 806 955 1,629 922 11 Social welfare 23,099 25,648 21,796 1,121 777 618 1,556 942 1,756 2,073 1,555 12 Industrial aid 6,117 8,376 5,424 339 337 69 765 134 601 1,042 492 13 Other purposes 34,607 30,275 33,589 2,803 2,005 2,131 3,264 1,971 3,665 3,046 2,455 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 oo ii rr ss ss iiss uu ss ee uu ,, ee oo rr ffffeerriinngg,, 11999900 11999911 11999922 Nov. Dec. Jan. Feb. Mar. Apr. May June 1 All issues' 340,049 465,243 n.a. 35,525 39,424 50,692 59,427 56,284r 40,173r 42,951r 65,440 2 Bonds2 299,884 389,822 471,125 31,026 33,375 45,458 49,367 47,446r 33,922r 34,253r 55,646 By type of offering 3 Public, domestic 188,848 286,930 377,681 28,774 31,835 41,575 47,084 42,243r 30,718r 30,924r 51,146 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 27,962 27,591 2,252 1,540 3,884 2,283 5,203 3,204r 3,329r 4,500 By industry group 6 Manufacturing 51,779 86,628 81,998 3,467 4,232 9,393 8,150 8,137r 6,234 3,690r 8,292 7 Commercial and miscellaneous 40,733 36,666 42,869 2,396 2,176 3,074 2,268 2,695 2,194 3,015r 2,505 8 Transportation 12,776 13,598 9,979 0 611 316 248 1,067 123 685r 948 9 Public utility 17,621 23,945 48,055 1,289 2,867 4,282 5,624 7,058 5,767r 2,857r 5,812 10 Communication 6,687 9,431 15,394 374 516 3,019 2,890 3,270 2,015 1,820* 2,473 11 Real estate and financial 170,288 219,750 272,830 23,499 22,973 25,374 30,187 25,220r 17,588r 22,186r 35,616 12 Stocks2 40,175 75,424 n.a. 4,499 6,049 5,234 10,060 8,838 6,251 8,698 9,794 By type of offering 13 Public preferred 3,998 17,085 21,332 1,540 1,608 1,112 1,898 1,647 702 3,124 876 14 Common 19,442 48,230 57,099 2,958 4,441 4,122 8,161 7,191 5,549 5,574 8,918 15 Private placement3 16,736 10,109 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. By industry group 16 Manufacturing 5,649 24,111 n.a. 288 1,468 722 2,616 1,741 1,387 1,413 1,982 17 Commercial and miscellaneous 10,171 19,418 n.a. 1,366 2,226 1,688 2,021 2,488 1,564 2,836 2,025 18 Transportation 369 2,439 n.a. 304 118 65 64 336 250 111 168 19 Public utility 416 3,474 n.a. 150 92 310 350 743 412 753 893 20 Communication 3,822 475 n.a. 22 126 0 0 7 30 279 65 21 Real estate and financial 19,738 25,507 n.a. 2,369 2,019 2,438 5,009 3,522 2,579 3,307 4,660 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 Nov. Dec. Jan. Feb. Mar. Apr. Mayr June 1 Sales of own shares2 463,645 647,055 52,019 70,618 71,607 60,676 69,080 66,766 60,504 68,371 2 Redemptions of own shares 342,547 447,140 34,126 51,993 46,545 39,684 47,414 46,518 38,752 46,794 3 Net sales 121,098 199,915 17,893 18,625 25,062 20,992 21,666 20,248 21,759 21,577 4 Assets4 808,582 1,056,310 1,019,618 1,056,310 1,082,653 1,116,784 1,154,445 1,178,663 1,219,863 1,253,476 5 Cash5 60,292 73,999 80,247 73,999 76,764 79,763 81,536 87,140 85,677 84,419 6 Other 748,290 982,311 939,371 982,311 1,005,889 1,037,021 1,072,910 1,091,523 1,134,186 1,169,051 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 asset positions exclude 5. Includes all U.S. Treasury securities and other short-term debt securities. both money market mutual funds and limited-maturity municipal bond funds. SOURCE. Investment Company Institute. Data based on reports of membership, 2. Includes reinvestment of net income dividends. Excludes reinvestment of which comprises substantially all open-end investment companies registered with capital gains distributions and share issue of conversions from one fund to another the Securities and Exchange Commission. Data reflect underwritings of new in the same group. companies. 3. Excludes sales and redemptions resulting from transfers of shares into or out of money market mutual funds within the same fund family. 1.48 CORPORATE PROFITS AND THEIR DISTRIBUTION Billions of dollars; quarterly data at seasonally adjusted annual rates 1991 1992 1993 AAccccoouunntt 11999900 11999911 11999922 Q3 Q4 Q1 Q2 Q3 Q4 Ql Q2 1 Profits with inventory valuation and capital consumption adjustment 361.7 346.3 393.8 341.2 347.1 384.0 388.4 374.1 428.5 424.2 n.a. 2 Profits before taxes 355.4 334.7 371.6 336.7 332.3 366.1 376.8 354.1 389.4 393.0 n.a. 3 Profits tax liability 136.7 124.0 140.2 127.0 125.0 136.4 144.1 131.8 148.5 147.2 n.a. 4 Profits after taxes 218.7 210.7 231.4 209.6 207.4 229.7 232.7 222.2 241.0 245.7 n.a. 5 Dividends 149.3 146.5 149.3 145.1 143.9 143.6 146.6 151.1 155.9 160.2 161.1 6 Undistributed profits 69.4 64.2 82.1 64.5 63.4 86.2 86.1 71.1 85.0 85.5 n.a. 7 Inventory valuation -14.2 3.1 -7.4 -4.8 .7 -5.4 -15.5 -9.7 1.0 -9.4 -16.6 8 Capital consumption adjustment 20.5 8.4 29.5 9.3 14.1 23.3 27.0 29.7 38.1 40.6 42.6 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 74.19 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 8.87 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 other 246.32 268.54 294.32 251.11 262.17 263.80 269.86 278.32 284.99 292.72 299.96 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 • October 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 Ql Q2 Q3 Q4 Qlr ASSETS 1 Accounts receivable, gross2 492.3 480.6 482.1 485.2 480.6 475.6 476.7 473.9 482.1 469.6 2 Consumer 133.3 121.9 117.1 125.3 121.9 118.4 116.7 116.7 117.1 111.9 3 Business 293.6 292.9 296.5 293.7 292.9 290.8 293.2 288.5 296.5 289.6 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 47.4 6 Reserves for losses 9.6 12.9 15.8 13.1 12.9 13.0 12.3 12.0 15.8 15.5 7 Accounts receivable, net 425.1 412.6 415.5 414.6 412.6 409.0 413.2 411.1 415.5 406.6 8 All other 113.9 149.0 150.6 136.4 149.0 145.5 139.4 146.5 150.6 155.0 9 Total assets 539.0 561.6 566.1 551.1 561.6 554.5 552.6 557.6 566.1 561.6 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 16 All other liabilities 63.9 69.0 71.2 68.8 69.0 72.0 73.4 73.7 71.2 74.2 17 Capital, surplus, and undivided profits 63.7 64.8 67.8 63.8 64.8 66.0 67.1 68.1 67.8 66.6 18 Total liabilities and capital 539.6 561.2 566.1 550.5 561.2 554.6 552.7 559.4 566.1 561.7 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, as 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 1993 TTyyppee ooff ccrreeddiitt 11999900 11999911 11999922 Jan. Feb. Mar. Apr. May June Seasonally adjusted 11 TToottaall 522,474 519,910 534,845 529,256 531,398 528,046r 529,552r 523,111 522,981 22 CCoonnssuummeerr 160,468 154,822 157,707 156,551 157,733 156,257r 156,441r 153,275 152,979 33 RReeaall eessttaattee22 65,147 65,383 68,011 68,942 70,016 68,726 69,803 66,396 67,223 44 BBuussiinneessss 296,858 299,705 309,127 303,763 303,649 303,062r 303,308r 303,440 302,778 Not seasonally adjusted 5 Total 525,888 523,192 538,158 528,847 528,490 528,172r 531,380' 524,180 6 Consumer 161,360 155,713 158,631 156,430 155,929 154,913r 155,440r 152,708 7 Motor vehicles 75,045 63,415 57,605 57,165 54,036 53,508 53,977 53,878 8 Other consumer 58,213 58,522 59,522 58,844 58,651 58,346 58,546 55,433 9 Securitized motor vehicles4 19,837 23,166 29,775 28,894 32,860 32,904r 32,527r 33,174 10 Securitized other consumer4 8,265 10,610 11,729 11,527 10,383 10,155r 10,390r 10,223 11 Real estate2 65,509 65,760 68.410 68,889 69,216 68,135 69,356 66,150 12 Business 299,019 301,719 311,118 303,527 303,345 305,123r 306,584r 305,322 13 Motor vehicles 92,125 90,613 87,456 86,491 86,412 87,542r 88,692r 89,317 14 Retail5..., 26,454 22,957 19,303 19,124 17,881 16,961 17,228 16,513 15 Wholesale6 33,573 31,216 29,962 28,727 30,059 31,788r 32,064r 32,242 16 Leasing 32,098 36,440 38,191 38,640 38,472 38,792 39,400 40,562 17 Equipment 137,654 141,399 151,607 146,820 145,886 145,878 145,877 145,237 18 Retail 31,968 30,962 32,212 32,458 32,430 32,560 32,170 32,384 19 Wholesale6 11,101 9,671 8,669 8,582 8,318 8,656 8,642 8,556 20 Leasing 94,585 100,766 110,726 105,780 105,138 104,662 105,066 104,297 2 2 1 2 O Se th cu er r it b i u z s ed in e b s u s s 7 iness assets4 63 5 , , 7 4 7 6 3 7 60 8 , , 9 8 0 0 0 7 5 1 7 4 , , 4 5 6 9 4 0 5 1 5 4 , , 7 4 6 5 0 7 5 1 5 5 , , 9 0 6 8 2 5 5 1 6 5 , , 1 5 5 5 3 1 r 5 1 6 5 , , 1 8 4 7 4 0 5 1 4 6 , , 4 2 8 8 7 1 23 Retail 667 576 1,118 1,036 973 904 1,434 1,375 2 2 5 4 L W e h a o si l n e g sa le 3 1 , , 2 5 8 1 1 9 2 5 , , 9 2 4 8 6 5 4 8 , , 7 7 1 5 6 6 4 8 , , 8 5 3 8 9 2 4 9 , , 7 4 0 0 4 8 4 9 , , 8 8 2 24 3 r 4 9 , , 6 7 9 4 1 5 9 5, , 3 5 1 9 6 0 1. Includes finance company subsidiaries of bank holding companies but not of 5. Passenger car fleets and commercial land vehicles for which licenses are retailers and banks. Data are before deductions for unearned income and losses. required. Data in this table also appear in the Board's G.20 (422) monthly statistical release. 6. Credit arising from transactions between manufacturers and dealers, that is, For ordering address, see inside front cover. floor plan financing. 2. Includes all loans secured by liens on any type of real estate, for example, 7. Includes loans on commercial accounts receivable, factored commercial first and junior mortgages and home equity loans. accounts, and receivable dealer capital; small loans used primarily for business or 3. Includes personal cash loans, mobile home loans, and loans to purchase other farm purposes; and wholesale and lease paper for mobile homes, campers, and types of consumer goods such as appliances, apparel, general merchandise, and travel trailers. recreation vehicles. Digitized for F4R. OAuStsEtanRd ing balances of pools upon which securities have been issued; these balances are no longer carried on the balance sheets of the loan originator. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate A37 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 1993 1990 1991 Apr. May Terms and yields in primary and secondary markets PRIMARY MARKETS Terms1 1 Purchase price (thousands of dollars) 153.2 155.0 158.1 158.6 159.7 156.2 150.9 153.1 185.6 168.7 2 Amount of loan (thousands of dollars) 112.4 114.0 118.1 119.5 114.5 121.5 115.0 118.8 125.3 127.4 3 Loan-to-price ratio (percent) 74.8 75.0 76.6 76.8 75.4 79.3 78.5 79.5 75.3 77.8 4 Maturity (years) 27.3 26.8 25.6 25.7 23.8 26.9 24.9 26.9 25.4 26.2 5 Fees and charges (percent of loan amount)' 1.93 1.71 1.60 1.49 1.43 1.50 1.23 1.43 1.32 1.28 Yield (percent per year) 6 Contract rate1 , 9.68 9.02 7.98 7.57 7.52 7.22 7.26 7.14 7.02 6.99 7 Effective rate1'3 10.01 9.30 8.25 7.82 7.77 7.46 7.46 7.37 7.23 7.20 8 Contract rate (HUD series)4 10.08 9.20 8.43 7.93 7.63 7.59 7.51 7.59 7.33r 7.31 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (Section 203)5 10.17 9.25 8.46 8.04 7.55 7.57 7.56 7.59 7.52r 7.51 10 GNMA securities6 9.51 8.59 7.77 7.39 7.02 6.79 6.77 6.79 6.75 6.55 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 113,329 122,837 142,833 159,204 159,766 161,147 163,719 166,849 171,232 174,674 12 FHA/VA insured ' 21,028 21,702 22,168 22,640 22,573 22,700 22,682 22,691 22,656 22,761 13 Conventional 92,302 101,135 120,664 136,564 137,193 138,447 141,037 144,158 148,576 151,913 Mortgage transactions (during period) 14 Purchases 23,959 37,202 75,905 4,993 4,118 4,730 6,761 7,526 9,131 7,854 Mortgage commitments (during period) 15 Issued7, 23,689 40,010 74,970 4,189 4,177 6,644 7,764 7,791 8,697 7,760 16 To sell8 5,270 7,608 10,493 1,159 221 0 112 30 323 458 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)* 17 Total 20,419 24,131 29,959 32,370 32,454 35,421 38,361 39,960 42,477 43,119 18 FHA/VA insured 547 484 408 347 343 337 330 325 319 314 19 Conventional 19,871 23,283 29,552 32,023 32,112 35,084 38,031 39,635 42,158 42,805 Mortgage transactions (during period) 20 Purchases 75,517 99,965r 191,125 15,512 12,063 12,587 15,885 18,842 21,529 19,700 21 Sales 73,817 92,478 179,208 16,536 12,105 10,286 13,807 17,532 18,968r 18,631 Mortgage commitments (during period)9 22 Contracted 102,401 114,031 261,637 17,591 23,366 21,103 20,731 18,908 28,831 21,722 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 NonfinancialS tatistics • October 1993 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1992 1993 TTyyppee ooff hhoollddeerr aanndd pprrooppeerrttyy 11998899 11999900 11999911 Ql Q2 Q3 Q4 Qlp 1 All holders 3,537,301 3,751,476 3,890,830 3,933,754 3,967,017 4,003,714 4,035,405 4,059,391 By type of property 2 One- to four-family residences 22,,339922,,774422 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 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 389,632 455,931 486,572 492,910 496,518 506,658 511,976 508,4% 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 197,778 239,003 266,146 278,396 278,091 277,485 285,965 288,199 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 Administration 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 4,961 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 26,696 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 5,796 5,796 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 97,896 96,129 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 6. Other holders include mortgage companies, real estate investment trusts, for some quarters estimated in part by the Federal Reserve. Multifamily debt state and local credit agencies, state and local retirement funds, noninsured refers to loans on structures of five or more units. pension funds, credit unions, and finance companies. 2. Includes loans held by nondeposit trust companies but not loans held by SOURCES. Based on data from various institutional and government sources, bank trust departments. with figures for some quarters estimated in part by the Federal Reserve in 3. Includes savings banks and savings and loan associations. conjunction with the Federal Home Loan Bank Board and the U.S. Department 4. FmHA-guaranteed securities sold to the Federal Financing Bank were of Commerce. Separation of nonfarm mortgage debt by type of property, if not reallocated from FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4 reported directly, and interpolations and extrapolations, when required, are because of accounting changes by the Farmers Home Administration. estimated mainly by the Federal Reserve. Line 64, from Inside Mortgage Securi- 5. Outstanding principal balances of mortgage-backed securities insured or ties. guaranteed by the agency indicated. 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 1993 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11999900 11999911 11999922 Jan. Feb. Mar. Apr. Mayr June Seasonally adjusted 1 Total 738,765 733,510 741,093 743,584r 747,228r 750,151" 751,619r 750,867 758,537 2 Automobile 284,739 260,898 259,627 258,737" 261,434" 262,324" 261,826 264,008 266,209 3 Revolving 222,552 243,564 254,299 255,984" 258,384" 259,661" 260,968" 261,520 264,379 4 Other 231,474 229,048 227,167 228,863" 227,410" 228,166" 228,824" 225,338 227,949 Not seasonally adjusted 5 Total 752,883 749,052 756,944 748,530r 745,374" 743,153" 745,882" 745,356 754,907 By major holder 6 Commercial banks 347,087 340,713 331,869 330,355 330,060 329,764 331,649 333,314 339,215 7 Finance companies 133,258 121,937 117,127 116,009 112,686 111,854 112,523 109,311 111,330 8 Credit unions 93,057 92,681 97,641 98,261 98,785 99,778 101,534 103,019 104,766 9 Retailers 43,464 39,832 42,079 40,057 38,462 38,030 38,218 38,681 38,813 10 Savings institutions 52,164 45,965 43,461 42,805" 41,976" 41,695" 40,378" 40,079 39,864 11 Gasoline companies 4,822 4,362 4,365 4,366 4,148 4,080 4,280 4,486 4,614 12 Pools of securitized assets 79,030 103,562 120,402 116,677 119,257 117,952 117,300 116,466 116,305 By major type of credit3 13 Automobile 284,903 261,219 259,964 258,017" 259,830" 259,956" 260,224 262,861 266,166 14 Commercial banks 124,913 112,666 109,743 109,671 111,005 111,287 111,351 113,322 116,006 15 Finance companies 75,045 63,415 57,605 57,165 54,036 53,508 53,977 53,878 55,592 16 Pools of securitized assets2 24,620 28,915 33,878 32,388 36,031 36,096 36,178 36,431 34,701 17 Revolving 234,801 256,876 267,949 260,758" 257,440" 256,233" 257,308" 258,410 262,024 18 Commercial banks 133,385 138,005 132,582 129,567 127,877 128,079 129,464 130,531 131,824 19 Retailers 38,448 34,712 36,629 34,666 33,110 32,681 32,838 33,254 33,328 20 Gasoline companies 4,822 4,362 4,365 4,366 4,148 4,080 4,280 4,486 4,614 21 Pools of securitized assets2 45,637 63,595 74,243 71,927 72,024 70,890 69,919 69,054 70,842 22 Other 233,178 230,957 229,031 229,755" 228,105" 226,964" 228,350" 224,085 226,716 23 Commercial banks 88,789 90,042 89,544 91,117 91,178 90,398 90,834 89,461 91,385 24 Finance companies 58,213 58,522 59,522 58,844 58,651 58,346 58,546 55,433 55,737 25 Retailers 5,016 5,120 5,450 5,391 5,352 5,349 5,380 5,427 5,485 26 Pools of securitized assets2 8,773 11,052 12,281 12,362 11,202 10,966 11,203 10,981 10,762 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 Dec. Jan. Feb. Mar. Apr. May June INTEREST RATES Commercial banks2 1 48-month new car 11.78 11.14 9.29 n.a. n.a. 8.57 n.a. n.a. 8.17 n.a. 2 24-month personal 15.46 15.18 14.04 n.a. n.a. 13.57 n.a. n.a. 13.63 n.a. 3 120-month mobile home 14.02 13.70 12.67 n.a. n.a. 12.38 n.a. n.a. 12.00 n.a. 4 Credit card 18.17 18.23 17.78 n.a. n.a. 17.26 n.a. n.a. 17.15 n.a. Auto finance companies 5 New car 12.54 12.41 9.93 9.65 10.08 10.32 9.95 9.61 9.51 99..4455 6 Used car 15.99 15.60 13.80 13.66 13.72 13.90 13.21 12.74 12.61 12.55 OTHER TERMS3 Maturity (months) 7 New car 54.6 55.1 54.0 53.6 53.9 54.3 54.6 54.5 54.4 5544..66 8 Used car 46.0 47.2 47.9 47.7 49.2 49.0 49.0 48.9 48.9 49.0 Loan-to-value ratio 9 New car 87 88 89 90 90 91 90 90 91 91 10 Used car 95 96 97 97 97 98 98 98 98 98 Amount financed (dollars) 11 New car 12,071 12,494 13,584 14,315 13,975 13,849 14,013 14,021 14,146 1144,,229966 12 Used car 8,289 8,884 9,119 9,464 9,472 9,457 9,641 • 9,731 9,829 9,912 1. The Board's series on amounts of credit covers most short- and intermedi- 2. Data are available for only the second month of each quarter, ate-term credit extended to individuals that is scheduled to be repaid (or has the 3. At auto finance companies, option of repayment) in two or more installments. Data in this table also appear in the Board's G.19 (421) monthly statistical release. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • October 1993 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 1991 1992 1993 Transarfinn rafppnrv nr sprtnr 11998888 Q3 Q4 Q1 Q2 Q3 Q4 Q1 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 11 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 Q1 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 Nonfinancial Statistics • October 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 -13.0 7.4 -9.5 22 Credit unions 16.3 7.7 8.5 11.5 16.4 10.3 22.3 17.2 18.5 11.0 18.9 27.3 23 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 28 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 42 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 Q1 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 nonfiiiancial 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 Financial Statistics • October 1993 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 1991 1992 1993 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11998899 11999900 11999911 11999922 Q3 Q4 Q1 Q2 Q3 Q4 Q1 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 7 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 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 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 It 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 N 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 2.0 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 71 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 77 Credit unions 154.9 163.4 174.9 191.3 170.2 174.9 177.3 182.7 187.4 191.3 196.2 73 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 74 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 2244..55 2244..66 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 1,003.6 935.3 940.9 939.8 944.9 987.7 1,003.6 993.6 51 Taxes payable 81.8 81.4 72.3 80.1 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 Nov. Dec. Jan. Feb. Mar. Apr. Mayr Juner July 1 Industrial production1 106.0 104.1 106.5 108.4 108.9 109.3 109.9 110.1 110.4 110.2 110.2 110.6 Market groupings ? 105.5 103.1 105.6 107.8 108.2 108.5 109.2 109.5 109.6r 110099..44 110099..11 110099..55 3 Final, total 107.0 105.3 108.2 111.0 111.5 111.9 112.4 112.7 112.8 112.5 112.3 112.5 4 Consumer goods 103.4 102.8 105.2 107.1 107.5 107.6 108.5 108.6 108. r 107.5 107.1 107.4 5 Equipment 112.1 108.9 112.7 116.7 117.2 118.1 118.0 118.7 119.7r 119.8 119.7 119.9 6 Intermediate 101.2 96.5 97.6 98.1 98.3 98.2 99.3 99.6 100.0* 99.6 99.2 100.1 7 Materials 106.8 105.5 107.9 109.3 110.0 110.4 110.9 110.9 111.5r 111.5 111.8 112.3 Industry groupings 8 Manufacturing 106.1 103.7 106.9 108.9 109.2 109.9 110.5 110.8 111111..44rr 111111..11 111111..00 111111..11 9 Capacity utilization, manufacturing (percent)2 81.1 77.8 78.8 79.7 79.8 80.3 8800..55 8800..66 8800..99 8800..66 8800..44 8800..44 10 Construction contracts3 95.3 89.7 95. lr 92.0 90.0 100.0 95.0 94.0 94.0 91.0 104.0 98.0 11 Nonagricultural employment, total4 107.3r 106.2 106.4 106.8 107.0 107.1 107.4 107.5 107.7 107.9 108.0 108.2 1? Goods-producing, total 101.2 96.6 94.9 93.2 93.2 93.2 93.5 93.3 93.1 93.2 93.0 93.0 13 Manufacturing, total 100.6 97.1 95.8 94.3 94.3 94.4 94.5 94.4 94.0 93.8 93.5 93.5 14 Manufacturing, production workers ... 100.2 96.3 95.3 94.0 94.1 94.3 94.5 94.4 94.0 93.8 93.6 93.5 15 Service-producing 109.8 109.3 110.0 111.2 111.4 111.6 111.9 112.0 112.4 112.6 112.8 113.0 16 Personal income, total 122.7 127.0 133.0 135.3 136.6 137.4 137.5 138.4 138.6r 139.4 139.3 n.a. 17 Wages and salary disbursements 121.3 124.4 129.0 131.2 132.3 133.1 132.9 132.8 133.4r 134.7 134.5 n.a. 18 Manufacturing , 113.5 113.6 115.4 116.0 118.0 117.2 117.8 117.8 118.3r 118.2 118.1 n.a. 19 Disposable personal income5 122.9 128.0 134.7 136.8 138.2 138.8 139.0 140.0 140.2r 140.8 140.7 n.a. 20 Retail sales6 120.2 121.3 127.2r 130.5 131.9 132.0 131.9 130.5 133.0 133.9 134.2 134.4 Prices7 71 Consumer (1982-84=100) 130.7 136.2 140.3 142.0 141.9 142.6 143.1 143.6 144.0 144.2 114444..44 114444..44 22 Producer finished goods (1982=100) 119.2 121.7 123.2 124.0 123.8 124.2 124.5 124.7r 125.3 125.7 125.6 125.3 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 Company, 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. See also "Industrial Production Capacity 5. Based on data from U.S. Department of Commerce, Survey of Current and Capacity Utilization since 1987," Federal Reserve Bulletin, vol. 79, (June Business. 1993), pp. 590-605. 2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data seasonally adjusted except as noted 1992 1993 CCaatteeggoorryy 11999900 11999911 11999922 Dec. Jan. Feb. Mar. Apr. May June July HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 189,686 191,329 193,142 194,026 194,159 194,298 194,456 194,618 194,767 194,933 195,104 ? 126,424 126,867 128,548 129,108 128,598 128,839 128,926 128,833 129,615 129,604 129,541 3 Civilian labor force 124,787 125,303 126,982 127,591 127,083 127,327 127,429 127,341 128,131 128,127 128,070 4 Nonagricultural industries 114,728 114,644 114,391 115,049 114,879 115,335 115,483 115,356 116,203 116,195 116,262 5 Agriculture 3,186 3,233 3,207 3,262 3,191 3,116 3,082 3,060 3,070 3,024 3,039 Unemployment 6 Number 6,874 8,426 9,384 9,280 9,013 8,876 8,864 8,925 88,,885588 8,908 88,,776699 7 Rate (percent of civilian labor force) — 5.5 6.7 7.4 7.3 7.1 7.0 7.0 7.0 6.9 7.0 6.8 8 Not in labor force 63,262 64,462 64,594 64,918 65,561 65,459 65,530 65,785 65,152 65,329 65,563 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 109,419r 108,256r 108,519* 109,079 109,235 109,539 109,565 109,820 110,058* 110,102 110,264 10 Manufacturing 19,117 18,455 18,192 17,913 17,936 17,954 17,935 17,863 17,827* 17,772 17,759 11 709r 689* 631* 613 611 600 600 600 602 596 594 1? Contract construction 5,120r 4,650* 4,471* 4,459 4,454 4,515 4,481 4,517 4,577* 4,570 4,594 N Transportation and public utilities 5,793r 5,762r 5,709* 5,707 5,719 5,725 5,724 5,720 5,719* 5,709 5,717 14 Trade 25,774r 25,365r 25,391* 25,522 25,609 25,726 25,707 25,758 25,827* 25,857 25,907 15 6,709* 6,646r 6,571* . 6,575 6,578 6,577 6,574 6,585 6,588* 6,588 6,600 16 27,934r 28,336* 29,053* 29,524 29,573 29,665 29,756 29,977 30,099* 30,173 30,252 17 Government 4,305r 4,355* 4,403* 18,766 18,755 18,777 18,788 18,800 18,819* 18,837 18,841 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. Digitized for FR2 3 A. . SI I n n Ec c l l Ru u d d e e s s s a e ll l f f - u e l m l- p a l n o d y e p d a , rt u - n ti p m ai e d e f m am pl i o ly y , e a es n d w d h o o m w e o st r i k c e d s e d rv u i r c i e n g w , o o r r k r e e r c s. e ived Ea S rn O i U ng R s C . E. Based on data from U.S. Department of Labor, Employment and http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • October 1993 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1992 1993 1992 1993 1992 1993 SSeerriieess Q3 Q4 Q1 Q2r Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2r Output (1 987=100) Capacity (percent of 1987 output) Capacity utilization rate (percent)2 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 81.5 2 Manufacturing 107.0 108.7 110.4 111.2 136.0 136.6 137.2 137.8 78.7 79.6 80.5 80.7 3 Primary processing3., 103.7 104.7 106.4 107.0 126.4 126.6 126.8 127.1 82.1 82.7 83.9 84.2 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 108.3 110.8 113.6 114.7 141.9 142.6 143.4 144.1 76.3 77.7 79.2 79.6 6 Lumber and products 96.0 98.5 99.7 97.2 112.4 112.5 112.6 112.7 85.4 87.6 88.5 86.2 7 Primary metals 99.7 101.5 105.0 104.9 125.3 125.0 124.9 124.9 79.6 81.2 84.1 84.0 8 Iron and steel 103.5 105.0 109.1 109.4 130.4 129.9 129.8 130.0 79.4 80.8 84.1 84.2 9 Nonferrous 94.5 96.7 99.3 98.8 118.3 118.2 118.1 117.9 79.8 81.8 84.1 83.8 10 Nonelectrical machinery 126.8 132.4 137.1 143.5 160.6 162.1 163.7 165.5 79.0 81.7 83.8 86.7 11 Electrical machinery 120.9 124.0 127.1 129.5 151.3 152.6 154.1 155.7 80.0 81.2 82.5 83.2 12 Motor vehicles and parts 103.6 111.4 120.6 117.9 152.9 154.5 155.8 156.8 67.7 72.1 77.4 75.2 13 Aerospace and miscellaneous transportation equipment . 99.5 97.7 95.7 93.4 135.7 135.8 135.7 135.5 73.3 72.0 70.5 68.9 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 105.2 105.2 106.2 106.1 116.6 116.7 116.9 117.1 90.3 90.1 90.8 90.6 16 Paper and products 108.6 107.9 110.0 111.6 121.7 122.1 122.5 122.9 89.2 88.4 89.8 90.8 17 Chemicals and products 114.7 116.9 116.9 118.2 142.6 143.5 144.4 145.4 80.4 81.4 80.9 81.3 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 100.2 104.2 104.2 103.8 116.6 116.2 115.9 115.7 85.9 89.7 89.9 89.8 20 Mining 97.5 97.9 96.5 96.5 112.3 112.0 111.7 111.5 86.9 87.4 86.3 86.5 21 Utilities 110.9 114.7 116.0 114.9 131.4 131.8 132.2 132.5 84.5 87.1 87.8 86.7 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 cycle2 Latest cycle3 1992 1993 High Low High Low High Low July Feb. Mar. Apr.r Mayr Juner July" Capacity utilization rate (percent)2 1 Total industry 99.0 82.7 87.3 71.8 84.8 78.3 80.0 81.5 81.6 81.7 81.5 81.3 81.5 2 Manufacturing 99.0 82.7 87.3 70.0 85.1 76.6 78.9 80.5 80.6 80.9 80.6 80.4 80.4 3 Primary processing3 99.0 82.7 89.7 66.8 89.1 77.9 82.6 84.3 83.8 84.3 84.1 84.2 84.2 4 Advanced processing 99.0 82.7 86.3 71.4 83.3 76.1 77.3 79.0 79.3 79.5 79.2 78.8 78.8 5 Durable goods 99.0 82.7 86.9 65.0 83.9 73.8 76.4 79.4 79.5 79.9 79.7 79.2 79.3 6 Lumber and products 99.0 82.7 87.6 60.9 93.3 76.8 86.0 90.4 87.0 87.1 86.6 84.9 85.7 7 Primary metals 99.0 82.7 102.4 46.8 92.9 74.3 80.2 86.5 83.4 83.6 83.3 85.2 85.1 8 Iron and steel 99.0 82.7 110.4 38.3 95.7 72.3 80.2 87.0 82.9 83.4 83.2 86.0 86.2 9 Nonferrous 99.0 82.7 90.5 62.2 88.9 75.9 80.3 85.9 84.3 83.9 83.6 84.0 83.4 10 Nonelectrical machinery 99.0 82.7 92.1 64.9 83.7 73.0 78.5 83.5 85.0 86.6 86.9 86.7 87.7 11 Electrical machinery 99.0 82.7 89.4 71.1 84.9 76.8 80.0 82.5 83.1 83.1 83.3 83.0 84.2 12 Motor vehicles and parts 99.0 82.7 93.0 44.5 84.5 57.9 67.7 77.5 76.9 77.0 75.3 73.3 70.4 13 Aerospace and miscellaneous transportation equipment. 99.0 82.7 81.1 66.9 88.3 78.1 73.5 70.6 69.8 69.5 69.1 68.1 68.0 14 Nondurable goods 99.0 82.7 87.0 76.9 86.8 80.4 82.2 82.1 82.2 82.3 81.9 82.0 81.9 15 Textile mill products 99.0 82.7 91.7 73.8 92.1 78.7 91.8 90.8 90.1 89.0 91.2 91.6 91.0 16 Paper and products 99.0 82.7 94.2 82.0 94.9 86.0 89.7 90.1 90.6 92.2 90.3 90.0 89.9 17 Chemicals and products 99.0 82.7 85.1 70.1 85.9 78.5 80.5 80.4 81.3 81.2 81.3 81.5 81.8 18 Plastics materials 99.0 82.7 90.9 63.4 97.0 75.5 87.6 85.3 87.4 87.7 85.7 85.9 86.5 19 Petroleum products 99.0 82.7 89.5 68.2 88.5 84.2 86.9 90.3 90.4 90.1 89.6 89.6 89.0 20 Mining 99.0 82.7 96.6 80.6 87.0 86.8 87.6 85.8 85.3 86.4 86.9 86.3 86.1 21 Utilities 99.0 82.7 88.3 76.2 92.6 83.4 84.8 88.9 89.0 86.4 86.3 87.5 90.3 22 Electric 99.0 82.7 88.3 78.7 94.8 87.4 86.7 90.3 90.0 88.6 88.3 89.8 93.3 1. Data in this table also appear in the Board's G.17 (419) monthly statistical 3. Primary processing includes textiles; lumber; paper; industrial chemicals; release. For ordering address, see inside front cover. For a detailed description of petroleum refining; rubber and plastics; stone, clay, and glass; and primary and the series, see "Recent Developments in Industrial Capacity and Utilization," fabricated metals. Federal Reserve Bulletin, vol. 76 (June 1990), pp. 411-35. See also "Industrial 4. Advanced processing includes food, tobacco, apparel, furniture, printing, Production Capacity and Capacity Utilization Since 1987," Federal Reserve chemical products such as drugs and toiletries, leather and products, machinery, Bulletin, vol. 79, (June 1993), pp. 590-605. transportation equipment, instruments, miscellaneous manufacturing, and ord- 2. Capacity utilization is calculated as the ratio of the Federal Reserve's nance. seasonally adjusted index of industrial production to the corresponding index of 5. Monthly highs, 1978 through 1980; monthly lows, 1982. capacity. 6. 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 pro- 1992 Group por- avg. tion July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr.r Mayr Juner July" Index (1987 = 100) MAJOR MARKETS 1 Total index 100.0 106.5 106.8 106.6 106.2 107.5 108.4 108.9 109.3 109.9 110.1 110.4 110.2 110.2 110.6 2 Products 60.8 105.6 110055..77 105.9 105.3 107.1 107.8 108.2 108.5 109.2 109.5 109.6 109.4 109.1 109.5 4 6 5 8 9 3 7 Fin C a o l D n p s u A r u r o a m u d A b t u e o l u e T r A c m t t o r g c u s o u s o o t t c o o i n a k v s d s n , e s u s d , , c m p c o t t r r e o o n o u r n t s d c a s u g u l k u m o s c m o t e s d e r s r 4 2 5 2 6 6 1 . . . . . . . 5 6 0 0 9 6 5 1 1 1 1 9 7 9 0 0 0 2 9 9 6 8 5 2 7 . . . . . . . 4 0 2 9 5 9 2 11 1 1 11 99 8 9 00 00 0 1 88 1 5 22 88 4 9 .. . . .. .. . . 88 2 3 88 11 9 8 1 1 1 1 7 9 9 0 0 0 2 9 7 6 5 8 1 8 . . . . . . . 5 0 0 1 9 9 8 1 1 1 1 9 7 9 0 2 0 0 7 7 3 8 0 4 0 . . . . . . . 3 9 5 1 4 4 9 1 1 1 1 1 1 7 0 0 0 4 1 0 8 4 3 6 1 0 1 . . . . . . . 5 1 1 4 3 1 5 1 1 1 1 1 1 7 0 0 0 1 4 0 9 7 5 4 1 3 2 . . . . . . . 6 1 7 1 0 3 9 1 1 1 1 1 1 8 0 0 1 0 5 1 6 7 8 1 7 4 1 . . . . . . . 9 9 7 5 5 6 7 1 1 1 1 1 1 8 1 1 6 0 1 1 6 0 2 9 7 1 6 . . . . . . . 6 9 7 1 6 9 8 1 1 1 1 1 1 9 1 1 0 5 1 1 0 1 1 8 6 2 4 . . . . . . . 2 9 3 5 9 4 6 1 1 1 1 1 1 9 5 1 1 1 1 0 0 3 1 1 2 3 8 . . . . . . . 5 1 5 2 7 4 6 1 1 1 1 1 1 9 1 1 5 1 1 0 0 2 2 5 4 2 8 . . . . . . . 2 1 2 9 3 8 1 1 1 1 1 1 1 8 0 5 1 1 1 0 6 9 0 0 0 2 7 . . . . . . . 5 7 9 9 1 5 5 1 1 1 1 1 1 8 0 4 0 0 1 0 3 5 2 8 5 2 7 . . . . . . . 5 9 3 0 0 3 1 1 1 1 1 1 1 7 0 3 0 1 0 0 8 8 8 3 2 0 7 . . . . . . . 1 0 6 6 5 2 4 10 Auto parts and allied goods.. 1.0 103.7 104.6 105.3 103.7 105.9 106.0 103.8 105.8 107.4 107.5 108.5 109.1 107.3 109.3 11 Other 3.1 105.2 106.3 104.0 104.1 104.9 107.1 107.2 109.3 110.7 111.7 112.3 111.9 109.9 111.8 12 Appliances, A/C, and TV.... .8 110.4 109.7 111.0 112.9 110.8 110.8 110.5 116.0 117.6 125.0 124.3 121.9 116.1 122.3 13 Carpeting and furniture .9 99.9 101.7 97.7 98.2 98.5 103.7 105.4 105.5 106.7 104.5 106.2 108.8 108.1 108.6 14 Miscellaneous home goods .. 1.4 105.6 107.4 104.1 102.9 105.8 107.1 106.6 108.0 109.5 108.9 109.6 108.3 107.6 107.9 15 Nondurable consumer goods 20.4 105.9 105.5 106.0 105.3 107.1 107.5 107.4 106.7 107.7 107.7 106.9 106.6 106.9 107.3 16 Foods and tobacco 9.1 104.7 105.0 107.0 104.9 105.9 105.2 104.8 104.6 105.5 104.3 103.9 103.6 104.1 104.3 17 Clothing 2.6 95.0 95.1 94.0 94.3 94.5 95.9 96.0 95.7 95.0 94.6 94.9 94.4 94.2 93.7 18 Chemical products 3.5 118.7 117.3 116.5 118.5 121.1 123.3 121.7 122.4 121.1 123.7 123.1 123.0 122.8 124.3 19 Paper products 2.5 100.8 100.1 100.2 100.4 100.1 100.9 100.9 100.2 101.8 102.1 101.7 101.8 102.2 100.5 20 Energy 2.7 108.3 106.3 105.6 104.6 111.1 112.0 114.4 109.5 115.5 116.0 111.5 110.9 111.9 114.3 21 Fuels .7 104.7 104.1 98.9 103.5 109.8 107.7 106.1 106.5 108.9 107.1 106.6 106.5 105.8 105.6 22 Residential utilities 2.0 109.6 107.2 108.2 105.1 111.6 113.6 117.5 110.7 118.0 119.5 113.4 112.6 114.2 117.7 23 Equipment 20.0 112.7 112.7 114.3 113.5 115.4 116.7 117.2 118.1 118.0 118.7 119.7 119.8 119.7 119.9 24 Business equipment 13.9 123.2 123.7 126.1 125.0 127.5 129.0 129.6 131.2 131.7 133.4 134.8 135.2 135.1 135.4 25 Information processing and related . 5.6 134.7 137.4 138.5 138.2 142.2 142.9 143.2 144.4 146.1 149.1 150.6 152.9 154.2 156.2 26 Office and computing 1.9 168.3 171.8 173.7 178.3 183.1 184.5 186.4 192.0 198.0 203.3 209.5 214.7 219.0 222.7 27 Industrial 4.0 108.5 109.1 109.2 109.6 110.1 112.0 112.3 113.1 112.2 113.7 115.0 115.0 114.9 115.7 28 Transit 2.5 137.1 135.3 143.3 134.5 137.4 140.4 144.1 146.7 146.5 145.0 145.0 142.5 137.9 133.1 29 Autos and trucks 1.2 117.9 114.2 117.3 114.7 121.7 123.9 131.4 136.7 136.8 135.8 136.2 133.1 127.2 118.8 30 Other 1.9 104.7 100.2 105.6 107.3 108.8 110.7 109.2 112.6 113.4 114.9 117.5 116.2 116.9 116.2 31 Defense and space equipment 5.4 85.9 85.1 84.5 84.4 83.5 83.2 82.5 82.0 81.5 80.7 80.5 79.7 78.6 78.4 32 Oil and gas well drilling .6 78.3 73.8 75.6 76.3 82.7 86.4 91.2 89.0 77.9 71.1 72.4 75.1 82.4 81.0 33 Manufactured homes .2 99.7 101.3 96.9 100.9 110.4 118.5 128.6 129.4 127.1 116.2 114.9 112.1 113.6 34 Intermediate products, total 14.7 97.6 98.6 97.0 96.9 97.8 98.1 98.3 98.2 99.3 99.6 100.0 99.6 99.2 100.1 35 Construction supplies 6.0 93.8 94.3 94.1 93.0 94.7 95.1 94.5 94.8 97.5 96.4 96.4 97.7 96.4 97.1 36 Business supplies 8.7 100.1 101.4 99.0 99.5 99.9 100.0 100.8 100.5 100.5 101.8 102.5 100.9 101.1 102.1 37 Materials 39.2 107.9 108.5 107.6 107.4 108.1 109.3 110.0 110.4 110.9 110.9 111.5 111.5 111.8 112.3 38 Durable goods materials 19.4 108.9 109.3 108.9 107.6 109.7 111.1 111.9 113.3 114.2 114.1 114.9 114.8 115.1 115.4 39 Durable consumer parts 4.2 101.5 100.6 101.4 98.5 101.8 104.3 107.5 110.8 111.8 112.2 112.6 111.6 111.7 110.4 40 Equipment parts 7.3 116.5 117.7 117.1 116.2 118.3 119.3 119.7 120.4 121.0 121.3 122.7 123.3 124.2 125.5 41 Other 7.9 106.0 106.3 105.5 104.6 106.2 107.4 107.5 108.6 109.7 108.9 109.5 109.3 109.1 109.4 42 Basic metal materials 2.8 108.3 108.7 107.7 105.8 108.3 109.8 108.8 110.4 113.2 109.9 110.3 110.9 111.8 111.9 43 Nondurable goods materials 9.0 110.9 111.5 110.7 111.7 110.7 112.0 111.5 112.4 112.1 112.8 113.8 113.5 114.2 114.1 44 Textile materials 1.2 102.8 107.7 101.6 103.3 102.7 103.4 102.9 104.2 103.2 104.2 102.7 104.3 105.7 104.4 45 Pulp and paper materials 1.9 109.9 110.3 108.7 112.3 109.1 110.2 110.7 110.7 111.9 112.8 115.3 112.4 112.2 112.1 46 Chemical materials 3.8 114.2 114.1 114.5 114.5 114.4 115.6 114.6 114.9 114.6 115.6 116.1 116.8 118.2 118.5 4 4 7 8 En O er t g h y e r materials 1 2 0 . . 1 9 1 1 1 0 0 3 . . 4 4 1 10 1 4 0 . . 4 0 1 1 1 0 0 2 . . 5 5 1 1 1 0 0 3 . . 5 6 1 1 0 0 9 3 . . 7 0 1 1 1 0 2 3 . . 0 9 1 10 1 5 1 . . 1 3 1 1 1 0 4 3 . . 1 4 1 1 1 0 2 3 . . 5 8 1 1 1 0 2 3 . . 6 5 1 1 1 0 4 3 . . 2 4 1 10 1 3 3 . . 5 7 1 1 1 0 3 3 . . 3 6 1 1 1 0 3 4 . . 2 9 49 Primary energy 7.2 99.7 100.4 99.4 99.6 99.4 100.2 101.3 100.4 98.3 97.4 99.9 101.2 100.7 101.4 50 Converted fuel materials 3.7 110.6 112.3 108.7 111.4 110.0 111.1 112.4 109.1 114.6 115.4 110.3 108.2 109.2 111.8 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.3 106.6 107.0 106.7 106.3 107.4 108.4 108.6 108.9 109.5 109.7 110.1 110.0 110.1 110.7 52 Total excluding motor vehicles and parts .. 95.3 106.6 107.0 106.7 106.4 107.5 108.4 108.6 108.7 109.3 109.6 109.9 109.8 109.9 110.6 53 Total excluding office and computing machines 105.0 105.3 105.0 104.5 105.7 106.6 107.1 107.3 107.8 107.8 108.0 107.7 107.5 107.9 54 Consumer goods excluding autos and trucks 24.5 105.7 105.5 105.7 105.1 106.8 107.4 107.3 107.0 108.1 108.2 107.6 107.4 107.3 108.0 55 Consumer goods excluding energy 23.3 104.8 104.7 105.0 104.3 105.9 106.6 106.8 107.4 107.7 107.7 107.6 107.1 106.6 106.7 56 Business equipment excluding autos and trucks 12.7 123.7 124.5 126.9 125.9 128.0 129.5 129.5 130.7 131.3 133.2 134.6 135.3 135.8 136.8 57 Business equipment excluding office and computing equipment 12.0 115.7 115.6 118.1 116.1 118.1 119.7 120.1 121.0 120.6 121.6 122.2 121.8 121.0 120.7 58 Materials excluding energy 28.4 109.5 110.0 109.4 108.8 110.0 111.4 111.8 113.0 113.6 113.7 114.6 114.4 114.8 115.0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • October 1993 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued 1987 1992 1993 GGrroouupp c S o I d C e 2 p p o ro r- - a 1 v 99 g 2 . tion July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr.r Mayr Juner July" Index (1987 = 100) MAJOR INDUSTRIES 59 Total index 100.0 106.5 106.8 106.6 106.2 107.5 108.4 108.9 109.3 109.9 110.1 110.4 110.2 110.2 110.6 60 Manufacturing 84.3 106.9 107.1 107.0 106.8 108.0 108.9 109.2 109.9 110.5 110.8 111.4 111.1 111.0 111.1 61 Primary processing 27.1 103.8 104.3 103.5 103.3 104.1 105.1 105.0 105.8 106.9 106.4 107.1 106.9 107.1 107.2 62 Advanced processing 57.1 108.3 108.4 108.7 108.4 109.9 110.7 111.3 111.9 112.2 112.9 113.4 113.1 112.8 113.0 63 Durable goods 46.5 108.1 108.2 108.5 108.1 109.8 110.9 111.8 112.9 113.8 114.1 115.0 114.8 114.4 114.7 64 Lumber and products... "24 2.1 96.4 96.6 96.6 94.7 97.8 99.8 98.0 99.3 101.8 98.0 98.1 97.7 95.7 96.7 65 Furniture and fixtures... 25 1.5 99.0 97.5 99.2 100.5 100.4 102.3 103.9 105.2 106.0 107.3 108.8 108.4 108.2 108.9 66 Gay, glass, and stone products 32 2.4 96.0 96.8 95.7 96.5 96.8 97.6 98.0 97.0 98.9 98.6 99.8 100.1 100.4 100.4 67 Primary metals 33 3.3 101.1 100.6 100.5 98.0 100.5 101.6 102.4 102.8 108.0 104.2 104.4 104.1 106.4 106.2 68 Iron and steel 331,2 1.9 104.7 104.7 103.8 102.0 104.1 103.6 107.4 107.0 112.9 107.6 108.4 108.1 111.8 112.1 69 Raw steel .1 101.2 101.7 99.1 98.9 99.8 102.8 104.6 103.4 105.9 102.0 102.6 105.1 106.8 70 Nonferrous 333333--66,,99 1.4 96.1 95.0 96.1 92.4 95.6 98.7 95.7 97.1 101.4 99.4 98.9 98.5 99.0 98^2 71 Fabricated metal products 34 5.4 96.7 97.0 97.0 96.5 97.5 97.6 97.8 99.8 99.7 100.3 101.4 100.6 100.2 100.2 72 Industrial and commercial machinery and computer equipment . 35 8.5 124.8 125.7 126.9 127.9 130.6 132.8 133.8 135.0 136.7 139.6 142.8 143.8 144.0 146.1 73 Office and computing machines 357 2.3 168.3 171.8 173.7 178.3 183.1 184.5 186.4 192.0 198.0 203.3 209.5 214.7 219.0 222.7 74 Electrical machinery 36 6.9 119.8 120.7 120.6 121.5 122.6 124.4 124.8 125.8 127.1 128.5 129.0 129.7 129.7 131.9 75 Transportation equipment 37 9.9 102.6 101.4 102.4 100.5 103.0 103.6 106.3 108.4 107.8 106.9 106.9 105.5 103.3 101.2 76 Motor vehicles and parts 371 4.8 104.8 103.1 105.0 102.6 108.0 109.9 116.2 120.9 120.7 120.1 120.4 118.1 115.1 110.9 77 Autos and light trucks 2.2 101.4 100.8 99.7 97.9 104.1 105.4 114.4 118.2 117.8 116.9 117.5 113.1 108.2 102.7 78 Aerospace and miscellaneous transportation equipment... 372-6,9 5.1 100.6 99.8 100.0 98.6 98.3 97.7 97.1 96.7 95.8 94.6 94.2 93.6 92.3 92.0 79 Instruments 38 5.1 104.2 104.9 104.3 103.7 103.7 103.6 103.3 103.0 102.2 103.3 102.6 102.6 102.3 102.1 80 Miscellaneous 39 1.3 109.7 111.6 109.1 108.7 110.5 111.4 111.8 110.9 111.9 112.6 114.3 113.1 111.9 112.2 81 Nondurable goods 37.8 105.4 105.7 105.2 105.2 105.8 106.4 106.0 106.4 106.4 106.6 106.9 106.6 106.8 106.8 82 Foods "20 8.8 106.0 105.9 106.3 105.6 106.8 106.4 106.2 105.9 106.9 106.7 106.7 106.0 106.4 106.4 83 Tobacco products 21 1.0 99.2 101.5 115.5 101.7 102.4 101.9 96.1 100.5 99.3 92.4 90.2 91.7 92.3 90.9 84 Textile mill products 22 1.8 104.7 107.0 103.5 105.1 103.5 106.0 106.0 106.9 106.2 105.4 104.2 106.8 107.4 106.7 85 Apparel products 23 2.3 92.3 92.7 91.3 91.5 91.7 92.9 92.7 93.1 92.5 92.1 92.0 91.3 91.1 91.0 86 Paper and products 26 3.6 108.2 109.1 107.1 109.5 107.3 108.2 108.3 108.6 110.4 111.1 113.1 111.0 110.8 110.8 87 Printing and publishing.. 27 6.5 95.0 95.7 93.5 94.1 94.5 94.2 94.7 94.7 94.0 94.7 95.6 94.5 94.7 94.2 88 Chemicals and products. 28 8.8 115.0 114.6 114.4 115.2 116.2 117.7 116.7 116.8 116.2 117.6 117.8 118.1 118.7 119.4 89 Petroleum products 29 1.3 102.0 101.5 98.0 101.1 105.3 103.9 103.4 103.2 104.7 104.7 104.3 103.6 103.6 102.8 90 Rubber and plastic products 30 3.2 109.7 110.7 110.7 108.5 109.9 111.3 111.3 113.6 112.7 112.9 113.6 113.8 113.1 114.0 91 Leather and products ... 31 .3 92.6 93.6 92.0 93.8 95.1 96.6 96.7 97.1 99.0 99.1 100.1 98.2 96.9 96.6 92 Mining 8.0 97.6 98.5 97.0 97.1 97.6 97.8 98.2 98.3 95.9 95.3 96.4 96.9 96.2 95.9 93 Metal "lO .3 161.7 156.5 165.5 159.8 168.1 171.6 158.1 167.7 163.0 158.2 162.5 169.2 163.0 164.0 94 Coal 11,12 1.2 105.5 108.0 103.9 103.6 103.8 103.5 107.9 108.2 101.7 102.3 108.2 106.6 103.6 101.6 95 Oil and gas extraction 13 5.8 92.6 93.6 91.9 92.7 92.7 92.8 93.4 92.7 90.9 90.4 90.5 90.9 91.3 91.2 % Stone and earth minerals .. 14 .7 93.8 94.1 93.8 91.9 93.6 94.4 92.6 93.8 95.2 93.4 92.3 94.0 91.8 92.7 97 Utilities 7.7 112.0 111.2 110.4 111.2 112.7 114.7 116.8 112.8 117.5 117.8 114.4 114.3 116.0 119.8 98 Electric 491,3PT 6.1 111.6 110.8 110.0 110.9 112.6 114.1 116.4 112.9 116.5 116.3 114.5 114.3 116.4 121.1 99 Gas 492,3PT 1.6 113.2 112.8 112.1 112.0 113.2 117.3 118.2 112.4 121.4 123.3 113.9 114.3 114.7 115.2 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 79.5 107.0 107.4 107.2 107.1 108.0 108.8 108.8 109.3 109.8 110.2 110.8 110.7 110.7 111.2 101 Manufacturing excluding office and computing machines 81.9 105.1 105.3 105.1 104.8 105.9 106.7 107.0 107.6 108.0 108.1 108.6 108.2 107.9 108.0 Gross value (billions of 1987 dollars, annual rates) MAJOR MARKETS 102 Products, total 1,707.0 1,806.4 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 1,882.8 1,874.8 1,870.0 1,870.2 103 Final 1,314.6 1,420.1 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 1,485.6 1,479.8 1,475.3 1,472.9 104 Consumer goods 866.6 913.0 912.6 908.1 905.1 928.4 931.6 936.3 940.0 949.4 946.1 943.6 938.6 936.2 935.6 105 Equipment 448.0 507.1 504.1 509.7 510.6 519.7 525.5 530.5 536.5 536.3 538.2 541.9 541.2 539.1 537.3 106 Intermediate 392.5 386.4 390.1 385.0 384.2 387.4 389.6 390.7 388.4 394.5 396.0 397.3 395.0 394.6 397.3 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 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr." May June Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 1,111 949 1,095 1,120 1,141 1,136 1,1% 1,157 1,141 1,034 1,101 1,121 1,115 7 One-family 794 754 911 918 954 963 1,037 972 957 871 925 919 925 3 Two-or-more-family 317 195 184 202 187 173 159 185 184 163 176 202 190 4 Started 1,193 1,014 1,200 1,218 1,226 1,226 1,286 1,171 1,180 1,124 1,206 1,248 1,246 5 One-family 895 840 1,030 1,045 1,079 1,089 1,133 1,051 1,036 987 1,059 1,107 1,078 6 Two-or-more-family 298 174 169 173 147 137 153 120 144 137 147 141 168 7 Under construction at end of period1.. 711 606 612 637 645 641 644 641 641 635 637 644 648 8 One-family 449 434 473 485 493 498 501 506 508 502 506 513 517 9 Two-or-more-family 262 173 140 152 152 143 143 135 133 133 131 131 131 10 Completed 1,308 1,091 1,158 1,128 1,137 1,229 1,227 1,136 1,241 1,108 1,222 1,136 1,145 II One-family 966 838 964 942 964 1,002 1,016 980 1,049 995 1,075 998 976 1? Two-or-more-family 342 253 194 186 173 227 211 156 192 113 147 138 169 13 Mobile homes shipped 188 171 210 217 228 244 266 267 262 247 241 230 237 Merchant builder activity in one-family units 14 Number sold 535 507 610 672 637 615 662 603 597 602r 698 611 667788 15 Number for sale at end of period1 ... 321 284 265 267 264 262 265 266 268 270" 271 276 278 Price of units sold (thousands 16 Median 122.3 120.0 121.3 119.5 125.0 128.9 126.0 118.0 129.4 125.0 127.0 129.0 122.3 17 Average 149.0 147.0 144.9 142.2 148.4 147.2 146.2 138.9 149.4 146.6" 148.1 153.2 145.7 EXISTING UNITS (one-family) 18 Number sold 3,211 3,219 3,520 3,380 3,710 3,860 4,040 3,780 3,460 3,370 3,450 3,620 3,680 Price of units sold (thousands 19 Median 95.2 99.7 103.6 103.5 103.4 102.7 104.2 103.1 103.6 105.1 105.8 106.5 109.3 20 Average 118.3 127.4 130.8 131.0 129.3 128.8 131.0 129.4 129.6 131.5 133.0 132.8 137.4 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 442,142 403,439 436,043 433,545 442,565 449,269 455,239 451,271 453,820 454,465 449,733 454,609 460,055 7? Private 334,681 293,536 317,256 317,448 324,842 328,1% 335,354 335,484 334,801 336,972 329,014 333,388 334,504 73 Residential 182,856 157,837 187,820 189,221 194,578 199,304 206,417 207,214 205,730 205,519 197,833 198,852 200,564 74 Nonresidential 151,825 135,699 129,436 128,227 130,264 128,892 128,937 128,270 129,071 131,453 131,181 134,536 133,940 75 Industrial buildings 23,849 22,281 20,720 19,277 19,400 19,246 19,961 19,600 20,484 22,152 19,498 20,150 19,549 76 Commercial buildings 62,866 48,482 41,523 40,398 41,691 41,143 39,602 41,414 42,317 41,323 42,302 42,466 42,062 77 Other buildings 21,591 20,797 21,494 21,978 21,418 21,517 20,900 21,123 21,564 21,484 22,508 23,189 23,235 28 Public utilities and other 43,519 44,139 45,699 46,574 47,755 46,986 48,474 46,133 44,706 46,494 46,873 48,731 49,094 79 Public 107,461 109,900 118,784 116,097 117,723 121,073 119,885 115,786 119,019 117,493 120,719 121,221 125,551 30 Military 2,664 1,837 2,502 2,503 3,032 2,557 2,394 2,621 2,703 2,586 2,399 2,327 2,209 31 Highway 32,108 32,026 34,929 35,545 33,408 37,698 33,411 30,648 33,009 33,413 34,534 34,418 37,649 V Conservation and development... 4,557 4,861 5,918 6,148 5,790 6,441 8,144 5,732 6,688 7,112 5,944 6,118 6,221 33 Other 68,132 71,176 75,435 71,901 75,493 74,377 75,936 76,785 76,619 74,382 77,842 78,358 79,472 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 Bureau of the Census in authorizations are those reported to the Census Bureau from 17,000 jurisdictions its 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. Bureau of the Census 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 • October 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 JJJuuulllyyy... 11999922 11999933 111999999333111 JJuullyy JJuullyy Sept.r Dec/ Mar.r Juner Mar. Apr. May June July CONSUMER PRICES2 (1982-84=100) 1 AU items 3.2 2.8 2.6 3.2 4.0 2.2 .1 .4 .1 .0 .1 144.4 7 Food .5 2.3 3.2 1.4 2.6 1.4 .1 .4 .4 -.4 .0 140.3 3 Energy items 3.2 -.2 1.2 1.9 3.1 -3.8 .7 .2 -1.0 -.2 .0 105.8 4 All items less food and energy 3.7 3.2 2.5 3.8 4.3 2.9 .1 .4 .2 .1 .1 152.0 5 Commodities 3.0 1.8 1.8 1.5 4.6 .6 .1 .3 .0 -.1 .0 134.4 6 Services 4.0 3.9 2.9 4.7 4.4 4.1 .2 .4 .3 .2 .2 162.2 PRODUCER PRICES (1982=100) 7 Finished goods 1.7 1.3 1.3 -.3 4.3 .6 ,3r ,5R .0 -.3 -.2 125.3 8 Consumer foods -1.4 1.8 4.3 3.3 -1.6 1.3 ,2r 1.3r -.1 -.9 -.1 125.0 9 Consumer energy 3.7 -1.2 -3.5 -10.2 16.6 -3.5 I.R ,3r -.6 -.5 -1.0 79.4 10 Other consumer goods 2.8 1.6 1.5 1.2 3.2 1.2 .1 .4 .2 -.3 .1 139.7 11 Capital equipment 1.7 1.9 1.2 .6 4.4 1.2 ,2r -,lr .2 .2 .1 131.2 Intermediate materials 12 Excluding foods and feeds 1.3 .9 .7 -2.1 5.7 .3 ,4r .(F -.2 .3 -.2 116.7 13 Excluding energy .8 1.2 1.3 -.3 4.7 -.3 .2 ,lr -.2 .1 .1 123.6 Crude materials 1 1 1 5 4 6 F O E o n th o e e r d r g s y - 3 3 . . 1 . 4 3 -4 9 2 . . . 7 4 6 - 1 4 2 9 . . . 8 2 8 -17 5 1 . . . 8 1 9 -1 2 0 4 1 . . . 1 3 9 - 1 1 1 9 0 . . . 5 3 9 . . y Y - 2 2 , . . 5 3 0 R r r 4. . . 5 8 4 -3. . 1 . 2 2 -4 1 . . . 9 2 6 1 1 7 0 4 7 7 2 . . . 2 7 2 1. Not seasonally adjusted. SOURCE. U.S. Department of Labor, 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 AAccccoouunntt 11999900 11999911 11999922 Q2 Q3 Q4 Ql Q2 GROSS DOMESTIC PRODUCT 1 Total 5,522.2 5,677.5 5,950.7 5,902.2 5,978.5 6,081.8 6,145.8 6,206.9 By source 2 Personal consumption expenditures 3,748.4 3,887.7 4,095.8 4,057.1 4,108.7 4,194.8 4,234.7 4,301.0 3 Durable goods 464.3 446.1 480.4 470.6 482.5 499.1 498.8 519.3 4 Nondurable goods 1,224.5 1,251.5 1,290.7 1,277.5 1,292.8 1,318.6 1,320.8 1,329.7 5 Services 2,059.7 2,190.1 2,324.7 2,309.0 2,333.3 2,377.1 2,415.1 2,452.0 6 Gross private domestic investment 799.5 721.1 770.4 773.2 781.6 804.3 844.0 831.3 7 Fixed investment 793.2 731.3 766.0 765.1 766.6 794.0 809.0 825.0 8 Nonresidential 577.6 541.1 548.2 550.3 549.6 562.1 573.8 593.1 9 Structures 201.1 180.1 168.4 170.3 166.1 167.0 168.0 171.9 10 Producers' durable equipment 376.5 360.9 379.9 380.0 383.5 395.1 405.8 421.3 11 Residential structures 215.6 190.3 217.7 214.8 217.0 231.9 235.2 231.9 12 Change in business inventories 6.3 -10.2 4.4 8.1 15.0 10.3 34.9 6.3 13 Nonfarm 3.3 -10.3 2.2 6.4 9.7 6.2 32.6 8.6 14 Net exports of goods and services -68.9 -21.8 -30.4 -37.1 -36.0 -40.5 -49.4 -49.9 15 Exports 557.0 598.2 636.3 625.4 639.0 652.7 649.4 662.1 16 Imports 625.9 620.0 666.7 662.5 675.0 693.2 698.9 712.0 17 Government purchases of goods and services 1,043.2 1,090.5 1,114.9 1,109.1 1,124.2 1,123.3 1,116.6 1,124.4 18 Federal 426.4 447.3 449.1 444.8 455.2 451.6 441.1 440.6 19 State and local 616.8 643.2 665.8 664.3 669.0 671.7 675.4 683.8 By major type of product 7,0 Final sales, total 5,515.9 5,687.7 5,946.3 5,894.1 5,963.5 6,071.5 6,110.8 6,200.5 71 Goods 2,160.1 2,192.8 2,260.3 2,233.2 2,258.4 2,316.1 2,309.2 2,350.7 ?? Durable 920.6 907.6 943.9 932.3 943.8 975.8 968.8 1,008.2 23 Nondurable 1,239.5 1,285.1 1,316.4 1,300.8 1,314.6 1,340.3 1,340.4 1,342.5 74 Services 2,846.4 3,030.3 3,197.1 3,173.4 3,217.8 3,255.1 3,299.4 3,343.5 25 Structures 509.4 464.7 488.8 487.6 487.3 500.3 502.3 506.3 7,6 Change in business inventories 6.3 -10.2 4.4 8.1 15.0 10.3 34.9 6.3 27 Durable goods -.9 -19.3 -3.5 9.5 2.7 -6.9 17.8 -5.6 28 Nondurable goods 7.2 9.0 7.9 -1.4 12.3 17.2 17.2 11.9 MEMO 29 Total GDP in 1987 dollars 4,877.5 4,821.0 4,922.6 4,892.4 4,933.7 4,990.8 4,999.9 5,019.5 NATIONAL INCOME 30 4,468.3 4,544.2 4,743.4 4,716.5 4,719.6 4,858.0 4,914.2 n.a. 31 Compensation of employees 3,291.2 3,390.8 3,525.2 3,506.3 3,534.3 3,583.7 3,628.4 3,669.4 32 Wages and salaries 2,742.9 2,812.2 2,916.6 2,901.3 2,923.5 2,963.9 2,999.8 3,034.8 33 Government and government enterprises 514.8 543.5 562.5 561.4 564.3 569.6 578.2 580.3 34 Other 2,228.0 2,268.7 2,354.1 2,339.9 2,359.1 2,394.3 2,421.6 2,454.5 35 Supplement to wages and salaries 548.4 578.7 608.6 605.0 610.8 619.8 628.6 634.5 36 Employer contributions for social insurance 277.4 290.4 302.9 301.5 302.9 307.6 312.0 313.7 37 Other labor income 271.0 288.3 305.7 303.6 307.9 312.2 316.5 320.8 38 Proprietors' income1 366.9 368.0 404.5 398.4 397.4 428.4 441.9 442.7 39 Business and professional 325.2 332.2 364.9 359.9 365.9 380.4 389.0 394.4 40 Farm1 41.7 35.8 39.5 38.5 31.5 48.1 52.9 48.4 41 Rental income of persons2 -12.3 -10.4 4.7 3.3 6.4 13.6 17.7 24.6 42 Corporate profits1 361.7 346.3 393.8 388.4 374.1 428.5 424.2 n.a. 43 Profits before tax3 355.4 334.7 371.6 376.8 354.1 389.4 393.0 n.a. 44 Inventory valuation adjustment -14.2 3.1 -7.4 -15.5 -9.7 1.0 -9.4 -16.6 45 Capital consumption adjustment 20.5 8.4 29.5 27.0 29.7 38.1 40.6 42.6 46 Net interest 460.7 449.5 415.2 420.0 407.3 403.6 402.0 n.a. 1. With inventory valuation and capital consumption adjustments. 3. For after-tax profits, dividends, and the like, see table 1.48. 2. With capital consumption adjustment. SOURCE. U.S. Department of Commerce, Survey of Current Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 Domestic Nonfinancial Statistics • October 1993 2.17 PERSONAL INCOME AND SAVING Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1992 1993 AAccccoouunntt 11999900 11999911 11999922 Q2 Q3 Q4 Q1 Q2 PERSONAL INCOME AND SAVING 1 Total personal income 4,664.2 4,828.3 5,058.1 5,028.9 5,062.0 5,160.9 5,237.6 5,288.6 2 Wage and salary disbursements 2,742.8 2,812.2 2,918.1 2,901.3 2,923.5 2,969.9 3,005.8 3,034.8 3 Commodity-producing industries 745.6 737.4 743.2 743.1 742.4 750.6 754.4 760.2 556.1 556.9 565.7 564.7 565.5 572.8 576.5 579.3 5 Distributive industries 634.6 647.4 666.8 662.9 667.7 675.8 685.0 691.0 6 Service industries 847.8 883.9 945.5 933.9 949.1 973.9 988.2 1,003.3 7 Government and government enterprises 514.8 543.6 562.5 561.4 564.3 569.6 578.2 580.3 8 Other labor income 271.0 288.3 305.7 303.6 307.9 312.2 316.5 320.8 9 proprietors' income1 366.9 368.0 404.5 398.4 397.4 428.4 441.9 442.7 10 Business and professional1 325.2 332.2 364.9 359.9 365.9 380.4 389.0 394.4 11 Farm1 41.7 35.8 39.5 38.5 31.5 48.1 52.9 48.4 12 Rental income of persons2 -12.3 -10.4 4.7 3.3 6.4 13.6 17.7 24.6 13 Dividends 140.3 137.0 139.3 136.6 141.0 145.8 149.9 150.7 14 Personal interest income 694.5 700.6 670.2 675.2 663.2 657.8 656.4 654.9 15 Transfer payments 685.8 771.1 866.1 859.7 874.1 888.0 909.9 922.0 16 Old-age survivors, disability, and health insurance benefits ... 352.0 382.0 414.1 412.1 417.1 421.6 434.1 436.9 17 LESS: Personal contributions for social insurance 224.8 238.4 250.6 249.3 251.5 254.8 260.4 261.9 18 EQUALS: Personal income 4,664.2 4,828.3 5,058.1 5,028.9 5,062.0 5,160.9 5,237.6 5,288.6 19 LESS: Personal tax and nontax payments 621.3 618.7 627.3 617.1 628.8 643.6 656.0 664.2 20 EQUALS: Disposable personal income 4,042.9 4,209.6 4,430.8 4,411.8 4,433.2 4,517.3 4,581.7 4,624.5 21 LESS: Personal outlays 3,867.3 4,009.9 4,218.1 4,179.5 4,229.9 4,316.9 4,358.8 4,424.7 22 EQUALS: Personal saving 175.6 199.6 212.6 232.3 203.3 200.4 222.9 199.8 MEMO Per capita (1987 dollars) 19,513.0 19,077.1 19,271.4 19,181.8 19,288.4 19,456.3 19,444.3 1199,,446699..33 24 Personal consumption expenditures 13,043.6 12,824.1 12,973.9 12,893.3 12,973.3 13,098.4 13,092.1 13,180.3 25 Disposable personal income 14,068.0 13,886.0 14,035.0 14,021.0 13,998.0 14,105.0 14,165.0 14,172.0 26 Saving rate (percent) 4.3 4.7 4.8 5.3 4.6 4.4 4.9 4.3 GROSS SAVING 27 Gross saving 718.0 708.2 686.3 682.9 696.9 687.9 732.8 n.a. 28 Gross private saving 854.1 901.5 968.8 968.1 992.1 965.0 994.8 n.a. 29 Personal saving 175.6 199.6 212.6 232.3 203.3 200.4 222.9 199.8 30 Undistributed corporate profits' 75.7 75.8 104.3 97.7 91.2 124.1 116.8 n.a. 31 Corporate inventory valuation adjustment -14.2 3.1 -7.4 -15.5 -9.7 1.0 -9.4 -16.6 Capital consumption allowances 32 Corporate 368.3 383.0 394.8 339911..22 440077..22 339944..77 440000..00 440033..33 33 Noncorporate 234.6 243.1 258.6 247.0 290.4 251.8 261.2 258.4 34 Government surplus, or deficit (-), national income and product accounts -136.1 -193.3 -282.5 -285.2 -295.2 --227777..22 --226622..00 n.a. 35 Federal -166.2 -210.4 -298.0 -302.9 -304.4 -295.5 -272.1 n.a. 36 State and local 30.1 17.1 15.5 17.7 9.2 18.3 10.1 n.a. 723.4 730.1 720.4 713.8 732.0 729.5 776.3 758.5 38 Gross private domestic 799.5 721.1 770.4 773.2 781.6 804.3 844.0 831.3 39 Net foreign -76.1 9.0 -49.9 -59.4 -49.6 -74.7 -67.7 n.a. 40 Statistical discrepancy 5.4 21.9 34.1 30.9 35.1 41.7 43.4 n.a. 1. With inventory valuation and capital consumption adjustments. SOURCE. U.S. Department of Commerce, Survey of Current Business. 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A53 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data seasonally adjusted except as noted1 1992 1993 Item credits or debits 11999900 11999911 11999922 Q1 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 5,763 3,901 -1,057 1,464 1,952 1,542 -983 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -192 -177 2,316 -172 -168 -173 2,829 -140 15 Reserve position in International Monetary Fund 731 -367 -2,692 111 1 -118 -2,685 -228 16 Foreign currencies -2,697 6,307 4,277 -996 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 liabilities4 2,156 1,542 2,542 58 678 864 943 -210 26 Other U.S. liabilities reported by U.S. banks3 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 -688 113 -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 34 Allocation of special drawing rights 0 0 0 0 0 0 0 0 35 Discrepancy -12,120 -17,502 2,123 15,280 5,973 36 Due to seasonal adjustment 30,820 -15,140 -12,218 4,878 653 -6,754 1,222 5,726 37 Before seasonal adjustment -16,998 -18,155 8,877 14,058 247 30,820 -15,140 -12,218 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 -4,882 5,857 2,583 -2,113 3,051 2,336 639 1. Seasonal factors are 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 5. 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, Bureau of Economic Analysis, brokers and dealers. Survey of Current Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics • October 1993 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data seasonally adjusted 1992 1993 IItteemm 11999900 11999911 11999922 Dec. Jan. Feb. Mar. Apr. Mayr Junep 1 Exports of domestic and foreign merchandise, excluding grant-aid shipments 393,592 421,730 448,164 39,178 3377,,550055 3366,,992288 3388,,889955 3388,,447799 3388,,993300 3377,,664488 2 General imports including merchandise for immediate consumption plus entries into bonded warehouses 495,311 488,453 532,665 46,143 45,176 44,832 49,347 48,660 47,306 49,710 3 Trade balance -101,718 -66,723 -84,501 —6,965 -7,672 -7,904 -10,453 -10,182 -8,376 -12,062 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 1990 1991 1992 Feb. Apr. May June 1 Total 77,719 71,323 71,962 72,847 74,378 75,644 76,711 73,968 2 Gold stock, including Exchange Stabilization Fund 11,058 11,057 11,056 11,055 11,055 11,054 11,054 11,053 11,057 3 Special drawing rights ' 10,989 11,240 8,503 8,546 8,651 8,787 8,947 9,147 8,987 4 Reserve position in International Monetary Fund 9,076 9,488 11,759 12,079 12,021 12,184 12,317 12,195 11,926 5 Foreign currencies4 52,193 45,934 40,005 40,282 41,120 42,353 43,326 44,316 41,998 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 1993 AAsssseett 11999900 11999911 11999922 Jan. Feb. Mar. Apr. May June July" 1 Deposits 369 968 205 325 296 317 221 193 286 284 Held in custody 2 U.S. Treasury securities 278,499 281,107 314,481 324,356 329,183 326,486 339,396 345,060 343,672 343,378 3 Earmarked gold 13,387 13,303 13,686 13,077 13,074 12,989 12,924 12,854 12,829 12,756 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 Dec. Jan. Feb. Mar. Apr. May June ASSETS All foreign countries 1 Total payable in any currency 545,366 556,925 548,999 542,545 543,624 554,280 546,941 543,833 548,340 562,355 7 Claims on United States 198,835 188,4% 176,487 166,798 169,278 172,304 171,648 164,142 161,888 175,758 Parent bank 157,092 148,837 137,695 132,275 134,218 139,170 138,532 128,611 126,659 140,757 4 Other banks in United States 17,042 13,296 12,884 9,703 9,570 9,249 9,073 10,830 9,169 9,498 5 Nonbanks 24,701 26,363 25,908 24,820 25,490 23,885 24,043 24,701 26,060 25,503 6 Claims on foreigners 300,575 312,449 303,934 318,071 314,736 317,868 314,912 315,428 320,980* 316,503 7 Other branches of parent bank 113,810 135,003 111,729 123,256 116,325 115,323 112,598 110,189 111,314 111,708 8 90,703 72,602 81,970 82,190 81,812 84,439 84,909 87,225 88,103 85,775 9 Public borrowers 16,456 17,555 18,652 20,756 19,984 19,822 18,915 18,694 18,251 18,183 10 Nonbank foreigners 79,606 87,289 91,583 91,869 %,615 98,284 98,490 99,320 103,312r 100,837 11 Other assets 45,956 55,980 68,578 57,676 59,610 64,108 60,381 64,263 65,472r 70,094 12 Total payable in U.S. dollars 382,498 379,479 364,078 365,824 353,643 361,251 353,315 344,319 344,373 355,063 N Claims on United States 191,184 180,174 169,848 162,125 164,681 167,773 167,051 159,541 155,951 169,237 14 Parent bank 152,294 142,962 133,662 129,329 131,554 136,650 135,939 126,181 123,490 137,446 15 Other banks in United States 16,386 12,513 12,025 9,266 9,213 8,704 8,336 10,168 8,209 8,638 16 22,504 24,699 24,161 23,530 23,914 22,419 22,776 23,192 24,252 23,153 17 Claims on foreigners 169,690 174,451 167,010 183,527 171,120 174,726 170,338 169,206 170,390r 168,795 18 Other branches of parent bank 82,949 95,298 78,114 83,117 77,606 77,681 75,871 73,049 73,068 73,015 19 48,396 36,440 41,635 47,250 41,616 43,067 41,266 43,566 44,835 43,633 70 Public borrowers 10,961 12,298 13,685 14,313 13,883 13,710 13,068 12,537 12,244 12,049 71 Nonbank foreigners 27,384 30,415 33,576 38,847 38,015 40,268 40,133 40,054 40,243r 40,098 22 Other assets 21,624 24,854 27,220 20,172 17,842 18,752 15,926 15,572 18,032r 17,031 United Kingdom 23 Total payable in any currency 161,947 184,818 175,599 165,850 164,360 165,132 162,122 163,194 165,044 173,158 74 Claims on United States 39,212 45,560 35,257 36,403 37,609 34,919 34,989 33,353 31,239 37,038 75 Parent bank 35,847 42,413 31,931 33,460 34,290 32,779 31,719 29,605 27,523 33,059 76 Other banks in United States 1,058 792 1,267 1,298 886 783 892 757 747 1,006 77 Nonbanks 2,307 2,355 2,059 1,645 2,433 1,357 2,378 2,991 2,969 2,973 78 Claims on foreigners 107,657 115,536 109,692 111,623 108,362 110,420 106,944 109,428 111,830" 109,528 79 Other branches of parent bank 37,728 46,367 35,735 46,165 42,894 41,317 39,466 39,673 41,458 40,130 30 36,159 31,604 36,394 33,399 33,513 36,601 34,914 38,138 37,282 36,681 31 Public borrowers 3,293 3,860 3,306 3,329 3,059 2,542 2,531 2,755 2,420 2,342 3 3 ? 3 Ot N he o r n a b s a s n e k t s f oreigners 3 1 0 5 , , 4 0 7 7 7 8 3 23 3 , , 7 7 2 0 2 5 3 3 4 0 , , 2 6 5 5 7 0 2 1 8 7 , , 7 8 3 2 0 4 2 1 8 8 , , 8 3 9 8 6 9 2 1 9 9 , , 9 7 6 9 0 3 3 20 0 , , 1 0 8 3 9 3 2 2 8 0 , , 8 4 6 1 2 3 3 2 0 1 , , 6 9 7 7 0 5 " r 3 2 0 6 , , 3 5 7 9 5 2 34 Total payable in U.S. dollars 103,208 116,762 105,974 109,493 101,375 99,755 94,870 95,612 97,431 100,422 35 Claims on United States 36,404 41,259 32,418 34,508 35,481 32,929 32,783 31,233 28,634 34,110 36 Parent bank 34,329 39,609 30,370 32,186 33,070 31,559 30,443 28,420 25,996 31,265 37 Other banks in United States 843 334 822 1,022 684 428 413 393 326 533 38 Nonbanks 1,232 1,316 1,226 1,300 1,727 942 1,927 2,420 2,312 2,312 39 Claims on foreigners 59,062 63,701 58,791 66,335 59,505 60,695 57,530 60,180 61,742r 60,479 40 Other branches of parent bank 29,872 37,142 28,667 34,124 30,823 28,856 30,017 29,388 30,753 30,287 41 Banks 16,579 13,135 15,219 17,089 14,316 16,800 13,422 16,903 17,073 16,647 4~> Public borrowers 2,371 3,143 2,853 2,349 2,154 1,883 1,949 1,888 1,808 1,804 4 4 3 4 Ot N he o r n a b s a s n e k t s f oreigners 1 7 0 , , 7 2 4 4 2 0 1 1 0 1 , , 2 8 8 0 1 2 1 1 4 2 , , 7 0 6 5 5 2 1 8 2 , , 6 7 5 7 0 3 1 6 2 , , 3 2 8 1 9 2 1 6 3 , , 1 1 3 5 1 6 1 4 2 , , 5 1 5 4 7 2 1 4 2 , , 6 0 3 0 7 1 1 7 2 , , 0 1 5 0 5 8 r r 1 5 1 , , 8 7 3 4 3 1 Bahamas and Cayman Islands 45 Total payable in any currency 176,006 162,316 168,512 147,422 144,894 151,175 148,867 143,859 142,184 148,422 46 Claims on United States 124,205 112,989 115,430 %,280 96,916 102,836 100,687 %,829 94,292 101,580 47 Parent bank 87,882 77,873 81,706 66,608 67,219 73,825 72,841 67,190 65,568 73,494 48 Other banks in United States 15,071 11,869 10,907 7,828 7,962 7,892 7,424 9,279 7,184 7,651 49 21,252 23,247 22,817 21,844 21,795 21,119 20,422 20,360 21,540 20,435 50 Claims on foreigners 44,168 41,356 45,229 44,509 41,185 40,821 41,314 40,442 41,293 40,407 51 Other branches of parent bank 11,309 13,416 11,098 7,293 7,041 7,311 6,650 6,873 6,999 7,009 5? 22,611 16,310 20,174 21,212 18,464 17,440 18,797 17,662 18,442 18,087 53 Public borrowers 5,217 5,807 7,161 7,786 7,564 7,422 7,188 6,690 6,527 6,334 54 Nonbank foreigners 5,031 5,823 6,796 8,218 8,116 8,648 8,679 9,217 9,325 8,977 55 Other assets 7,633 7,971 7,853 6,633 6,733 7,518 6,866 6,588 6,599 6,435 56 Total payable in U.S. dollars 170,780 158,390 163,957 142,861 140,332 146,809 144,627 139,351 137,514 143,340 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 • October 1993 3.14 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data1—Continued 1992 1993 AAccccoouunntt 11998899 11999900 11999911 Dec. Jan. Feb. Mar. Apr. May June LIABILITIES All foreign countries 57 Total payable in any currency 545,366 556,925 548,999 542,545 543,624 554,280 546,941 543,833 548,340 562,355 58 Negotiable certificates of deposit (CDs) 23,500 18,060 16,284 10,032 12,320 11,872 11,5% 13,748 14,348 14,154 59 To United States 197,239 189,412 198,307 189,444 175,978 184,155 187,088 176,082 174,889 186,139 60 Parent bank 138,412 138,748 136,431 134,339 122,627 124,123 125,650 114,965 116,691 129,291 61 Other banks in United States 11,704 7,463 13,260 12,182 12,829 12,373 13,306 11,952 14,062 13,514 62 Nonbanks 47,123 43,201 48,616 42,923 40,522 47,659 48,132 49,165 44,136 43,334 63 To foreigners 296,850 311,668 288,254 309,704 321,297 319,638 312,417 316,661 322,140 318,%2 64 Other branches of parent bank ... 119,591 139,113 112,033 125,160 120,179 119,601 115,535 113,845 115,189 115,725 65 Banks 76,452 58,986 63,097 62,189 67,843 70,056 68,411 68,381 69,323 67,249 66 Official institutions 16,750 14,791 15,596 19,731 23,654 21,469 18,312 21,326 22,271 22,466 67 Nonbank foreigners 84,057 98,778 97,528 102,624 109,621 108,512 110,159 113,109 115,357 113,522 68 Other liabilities 27,777 37,785 46,154 33,365 34,029 38,615 35,840 37,342 36,%3 43,100 69 Total payable in U.S. dollars 396,613 383,522 370,710 368,773 353,725 363,285 353,431 343,867 343,766 356,781 70 Negotiable CDs 19,619 14,094 11,909 6,238 7,102 6,640 6,519 7,062 7,248 8,138 71 To United States 187,286 175,654 185,472 178,674 164,634 172,223 175,354 163,715 161,775 172,373 72 Parent bank 132,563 130,510 129,669 127,948 116,008 117,228 119,040 107,949 109,645 121,631 73 Other banks in United States .... 10,519 6,052 11,707 11,512 11,710 11,418 12,467 11,282 13,126 12,862 74 Nonbanks 44,204 39,092 44,096 39,214 36,916 43,577 43,847 44,484 39,004 37,880 75 To foreigners 176,460 179,002 158,993 172,189 169,595 170,756 160,774 163,149 165,162 166,136 76 Other branches of parent bank ... 87,636 98,128 76,601 83,700 79,144 79,594 77,685 75,682 75,313 75,783 77 Banks 30,537 20,251 24,156 26,118 23,281 25,571 21,227 22,150 22,%9 23,446 78 Official institutions 9,873 7,921 10,304 12,430 14,067 14,034 10,762 12,627 12,653 12,951 79 Nonbank foreigners 48,414 52,702 47,932 49,941 53,103 51,557 51,100 52,690 54,227 53,956 80 Other liabilities 13,248 14,772 14,336 11,672 12,394 13,666 10,784 9,941 9,581 10,134 United Kingdom 81 Total payable in any currency .. 161,947 184,818 175,599 165,850 164,360 165,132 162,122 163,194 165,044 173,158 82 Negotiable CDs 20,056 14,256 11,333 4,517 5,774 5,597 4,753 5,414 5,644 6,566 83 To United States 36,036 39,928 37,720 39,174 32,780 33,092 38,011 34,661 37,272 39,514 84 Parent bank 29,726 31,806 29,834 31,100 25,099 24,250 29,759 22,611 28,095 30,410 85 Other banks in United States 1,256 1,505 1,438 1,065 1,742 1,633 1,192 1,110 1,652 1,097 86 Nonbanks 5,054 6,617 6,448 7,009 5,939 7,209 7,060 10,940 7,525 8,007 87 To foreigners 92,307 108,531 98,167 107,176 111,351 110,514 104,356 108,670 106,834 106,731 88 Other branches of parent bank 27,397 36,709 30,054 35,983 35,376 35,143 33,424 33,545 31,437 32,275 89 Banks 29,780 25,126 25,541 25,231 25,965 27,227 23,985 26,082 27,184 25,854 90 Official institutions 8,551 8,361 9,670 12,090 14,188 12,938 10,531 12,342 11,752 12,139 91 Nonbank foreigners 26,579 38,335 32,902 33,872 35,822 35,206 36,416 36,701 36,461 36,463 92 Other liabilities 13,548 22,103 28,379 14,983 14,455 15,929 15,002 14,449 15,294 20,347 93 Total payable in U.S. dollars 108,178 116,094 108,755 108,214 100,731 101,342 95,892 94,159 96,152 98,465 94 Negotiable CDs 18,143 12,710 10,076 3,894 4,770 4,444 3,765 4,214 4,392 5,462 95 To United States 33,056 34,697 33,003 35,417 28,545 28,874 33,552 30,170 32,457 34,523 96 Parent bank 28,812 29,955 28,260 29,957 23,767 23,097 28,405 21,145 26,631 28,747 97 Other banks in United States 1,065 1,156 1,177 709 1,063 1,097 707 676 1,311 847 98 Nonbanks 3,179 3,586 3,566 4,751 3,715 4,680 4,440 8,349 4,515 4,929 99 To foreigners 50,517 60,014 56,626 62,048 60,107 59,643 51,850 54,407 54,576 53,288 100 Other branches of parent bank 18,384 25,957 20,800 22,026 20,807 20,516 19,516 18,958 17,449 17,691 101 Banks 12,244 9,488 11,069 12,540 9,740 10,359 6,702 8,327 9,065 8,311 102 Official institutions 5,454 4,692 7,156 8,847 10,114 9,967 7,008 8,803 8,210 8,812 103 Nonbank foreigners 14,435 19,877 17,601 18,635 19,446 18,801 18,624 18,319 19,852 18,474 104 Other liabilities 6,462 8,673 9,050 6,855 7,309 8,381 6,725 5,368 4,727 5,192 Bahamas and Cayman Islands 105 Total payable in any currency ... 176,006 162,316 168,512 147,422 144,894 151,175 148,867 143,859 142,184 148,422 106 Negotiable CDs 678 646 1,173 1,350 1,355 1,142 1,713 1,692 1,812 1,535 107 To United States 124,859 114,738 130,058 111,861 108,150 110,729 110,391 105,895 102,211 108,736 108 Parent bank 75,188 74,941 79,394 67,347 65,122 62,336 59,668 59,416 56,566 64,156 109 Other banks in United States . 8,883 4,526 10,231 10,445 10,265 10,059 11,492 10,291 11,220 11,567 110 Nonbanks 40,788 35,271 40,433 34,069 32,763 38,334 39,231 36,188 34,425 33,013 111 To foreigners 47,382 44,444 35,200 32,556 33,766 37,690 35,369 34,773 36,146 36,563 112 Other branches of parent bank 23,414 24,715 17,388 15,169 15,411 18,056 18,015 17,462 18,626 18,927 113 Banks 8,823 5,588 5,662 6,422 6,350 7,967 6,476 6,219 6,123 6,382 114 Official institutions 1,097 622 572 805 932 1,036 858 905 1,052 1,025 115 Nonbank foreigners 14,048 13,519 11,578 10,160 11,073 10,631 10,020 10,187 10,345 10,229 116 Other liabilities 3,087 2,488 2,081 1,655 1,623 1,614 1,394 1,499 2,015 1,588 117 Total payable in U.S. dollars 171,250 157,132 163,789 143,150 140,734 146,875 144,291 138,741 137,159 143,450 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 Dec. Jan. Feb. Mar. Apr/ Mayr 1 Total1 344,529 360,530 398,672 411,802 413,220 409,997r 413,459 424,366 By type 2 Liabilities reported by banks in the United States . 39,880 38,396 54,823 63,792 66,454 62,994r 62,608 68,293 3 U.S. Treasury bills and certificates 79,424 92,692 104,596 111,540 113,594 113,547 113,293 120,785 U.S. Treasury bonds and notes 4 Marketable 202,487 203,677 210,553 207,573 203,209 202,552 205,262 202,216 5 Nonmarketable 4,491 4,858 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 24,168 24,334 25,371 26,282 26,865 27,655 By area 7 Western Europe1 167,191 168,365 188,700 196,232 199,651 187,394 184,938 191,243 8 Canada 8,671 7,460 7,920 8,411 7,886 9,326 8,302 8,899 9 Latin America and Caribbean 21,184 33,554 40,015 41,388 42,502 44,509 49,070 48,056 10 Asia 138,096 139,465 152,142 156,205 154,009 157,932r 159,775 164,732 11 Africa 1,434 2,092 3,565 3,705 3,866 3,919 3,782 3,782 12 Other countries 7,955 9,592 6,328 5,859 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 70,969 84,162 72,796 82,995 2 Banks' claims 65,127 66,796 73,195 58,354 72,164 62,789 64,077 3 Deposits 20,491 29,672 26,192 23,468 28,074 24,240 24,948 4 Other claims 44,636 37,124 47,003 34,886 44,090 38,549 39,129 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 • October 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 Dec. Jan. Feb. Mar. Apr. Mayr June" HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 759,634 756,066 810,025 810,025 802,216 814,725 798,447r 791,382r 793,068 820,712 2 Banks' own liabilities 577,229 575,374 606,210 606,210 592,754 606,005 586,505R 581,554R 574,306 597,393 3 Demand deposits 21,723 20,321 21,823 21,823 21,106 22,310 21,582 22,239 22,140 21,455 4 Time deposits 168,017 159,649 160,374 160,374 150,062 147,284 143,999* 147,948R 147,734 151,813 5 Other3 65,822 66,305 93,840 93,840 103,910 106,262 97,064R 101,099R 104,469 108,545 6 Own foreign offices4 321,667 329,099 330,173 330,173 317,676 330,149 323, MF 310,268R 299,963 315,580 7 Banks' custodial liabilities5 182,405 180,692 203,815 203,815 209,462 208,720 211,942 209,828 218,762 223,319 8 U.S. Treasury bills and certificates6 96,796 110,734 127,649 127,649 113333,,779999 113355,,330000 113377,,006622 113388,,001166 114444,,772255 114444,,006666 9 Other negotiable and readily transferable instruments7 17,578 18,664 21,982 21,982 22,969 20,735 22,309 21,550 23,931 30,061 10 Other 68,031 51,294 54,184 54,184 52,694 52,685 52,571 50,262 50,106 49,192 11 Nonmonetary international and regional organizations8 5,918 8,981 9,350 9,350 11,099 11,538 9,295R 10,731 8,934 9,130 12 Banks' own liabilities 4,540 6,827 6,951 6,951 7,837 8,884 6,037R 5,834 6,481 6,070 13 Demand deposits 36 43 46 46 39 47 196 33 35 19 14 Time deposits 1,050 2,714 3,214 3,214 2,702 2,311 2,722R 1,687 2,989 3,407 15 Other3 3,455 4,070 3,691 3,691 5,096 6,526 3,119R 4,114 3,457 2,644 16 Banks' custodial liabilities5 1,378 2,154 2,399 2,399 3,262 2,654 3,258 4,897 2,453 3,060 17 U.S. Treasury bills and certificates6 364 1,730 1,908 1,908 2,774 2,348 22,,887766 44,,446611 11,,888833 2,320 18 Other negotiable and readily transferable instruments 1,014 424 486 486 488 306 382 433 564 740 19 Other 0 0 5 5 0 0 0 3 6 0 20 Official institutions9 119,303 131,088 159,419 159,419 175,332 180,048 176,541R 175,901r 189,078 192,279 21 Banks' own liabilities 34,910 34,411 51,058 51,058 59,577 62,687 59,491r 59,187r 63,410 62,677 22 Demand deposits 1,924 2,626 1,274 1,274 1,397 1,764 1,457 1,358 1,385 2,203 23 Time deposits 14,359 16,504 17,823 17,823 18,685 18,996 18,747r 18,98LR 21,516 19,232 24 Other3 18,628 15,281 31,961 31,961 39,495 41,927 39,287 38,848 40,509 41,242 25 Banks' custodial liabilities5 84,393 96,677 108,361 108,361 115,755 117,361 117,050 116,714 125,668 129,602 26 U.S. Treasury bills and certificates6 79,424 92,692 104,596 104,596 111,540 113,594 111133,,554477 113,293 112200,,778855 119,860 27 Other negotiable and readily transferable instruments7 4,766 3,879 3,726 3,726 4,054 3,648 3,411 3,284 4,739 9,602 28 Other 203 106 39 39 161 119 92 137 144 140 29 Banks10 540,805 522,265 546,556 546,556 522,700 530,365 520,891r 51 L,808r 503,131 524,472 30 Banks' own liabilities 458,470 459,335 475,340 475,340 453,849 462,769 451,813r 445,570* 436,242 458,562 31 Unaffiliated foreign banks 136,802 130,236 145,167 145,167 136,173 132,620 127,953r 135,302r 136,279 142,982 32 Demand deposits 10,053 8,648 10,168 10,168 9,903 10,974 10,495 10,883 11,386 9,910 33 Time deposits 88,541 82,857 90,175 90,175 80,351 77,823 74,446r 79,707r 76,459 83,174 34 Other3 38,208 38,731 44,824 44,824 45,919 43,823 43,012R 44,712r 48,434 49,898 35 Own foreign offices4 321,667 329,099 330,173 330,173 317,676 330,149 323,860" 310,268r 299,963 315,580 36 Banks' custodial liabilities5 82,335 62,930 71,216 71,216 68,851 67,596 69,078 66,238 66,889 65,910 37 U.S. Treasury bills and certificates6 10,669 7,471 11,087 11,087 9,685 9,296 99,,997766 99,,990088 1100,,883377 1100,,554466 38 Other negotiable and readily transferable instruments7 5,341 5,694 7,568 7,568 7,708 6,692 7,957 7,360 7,412 7,755 39 Other 66,325 49,765 52,561 52,561 51,458 51,608 51,145 48,970 48,640 47,609 40 Other foreigners 93,608 93,732 94,700 94,700 93,085 92,774 91,720" 92,942r 91,925 94,831 41 Banks' own liabilities 79,309 74,801 72,861 72,861 71,491 71,665 69,164r 70,963r 68,173 70,084 42 Demand deposits 9,711 9,004 10,335 10,335 9,767 9,525 9,434 9,965 9,334 9,323 43 Time deposits 64,067 57,574 49,162 49,162 48,324 48,154 48,084r 47,573r 46,770 46,000 44 Other3 5,530 8,223 13,364 13,364 13,400 13,986 11,646r 13,425r 12,069 14,761 45 Banks' custodial liabilities5 14,299 18,931 21,839 21,839 21,594 21,109 22,556 21,979 23,752 24,747 46 U.S. Treasury bills and certificates 6,339 8,841 10,058 10,058 9,800 10,062 1100,,666633 1100,,335544 1111,,222200 11,340 47 Other negotiable and readily transferable instruments7 6,457 8,667 10,202 10,202 10,719 10,089 10,559 10,473 11,216 11,964 48 Other 1,503 1,423 1,579 1,579 1,075 958 1,334 1,152 1,316 1,443 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 7,073 7,456 9,114 9,114 9,724 9,499 9,548 9,412r 9,585 10,389 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 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1—Continued 1992 1993 IItteemm 11999900 11999911 11999922 Dec. Jan. Feb. Mar. Apr. May June" AREA 1 Total, all foreigners 759,634 756,066 810,025 810,025 802,216 814,725 798,447r 791,382r 793,068r 820,712 2 Foreign countries 753,716 747,085 800,675 800,675 791,117 803,187 789,152r 780,651r 784,134r 811,582 3 Europe 254,452 249,097 308,418 308,418 303,751 304,752 293,412r 298,984r 313,834r 325,001 4 Austria 1,229 1,193 1,611 1,611 1,158 1,942 1,256 1,497 l,525r 1,496 5 Belgium and Luxembourg 12,382 13,337 20,572 20,572 21,255 19,729 19,475 19,775 21,099r 21,817 6 Denmark 1,399 937 3,060 3,060 1,885 2,835 1,536 1,229 2,464 3,088 7 Finland 602 1,341 1,299 1,299 1,862 2,049 2,297 2,265 2,185 2,580 8 France 30,946 31,808 41,459 41,459 34,285 32,457 31,712 31,087 33,825r 33,736 9 Germany 7,485 8,619 18,631 18,631 20,685 18,934 16,107 19,912r 23,959 22,752 10 Greece 934 765 910 910 815 758 763 742 859 819 11 Italy 17,735 13,541 10,041 10,041 8,759 10,701 8,889 8,094 9,089r 10,402 1? Netherlands 5,350 7,161 7,372 7,372 8,722 11,702 11,409 11,502 13,903 11,271 13 Norway 2,357 1,866 3,319 3,319 3,550 2,521 2,350 2,355 2,690 2,840 14 Portugal 2,958 2,184 2,465 2,465 2,518 2,508 2,489 2,476 2,674 2,764 15 Spain 7,544 11,391 9,796 9,796 14,904 17,233 15,735 14,055 13,588r 15,484 16 Sweden 1,837 2,222 2,986 2,986 2,962 1,902 1,619 3,149 2,140 2,336 17 Switzerland 36,690 37,238 39,440 39,440 41,533 40,227 39,596 39,703 41,880 40,558 18 Turkey 1,169 1,598 2,666 2,666 2,533 2,862 2,520 2,664 2,761r 2,496 19 United Kingdom 109,555 100,292 112,454 112,454 106,739 105,510 106,394r 109,553 106,638r 116,035 70 Yugoslavia" 928 622 504 504 506 512 523 507 510 512 71 Others in Western Europe 11,689 9,274 25,834 25,834 25,926 27,491 25,748 24,521 28,292r 30,051 77 Russia 119 241 577 577 436 497 535 726 847 1,129 23 Other Eastern Europe 1,545 3,467 3,422 3,422 2,718 2,382 2,459 3,172r 2,906r 2,835 24 Canada 20,349 21,605 22,746 22,746 21,467 22,898 25,040 22,302 21,331 20,017 75 Latin America and Caribbean 332,997 345,529 316,020 316,020 313,754 321,062 318,718r 316,594r 303,209r 311,543 76 Argentina 7,365 7,753 9,477 9,477 10,792 10,608 11,568 10,956r 11,229r 11,199 77 Bahamas 107,386 100,622 82,222 82,222 84,777 87,812 83,607r 81,737 80,063r 80,673 78 Bermuda 2,822 3,178 7,079 7,079 6,319 6,508 6,269 6,135 5,297r 6,064 79 Brazil 5,834 5,704 5,584 5,584 5,321 5,304 5,462 5,463 5,335r 4,934 30 British West Indies 147,321 163,620 151,886 151,886 147,375 150,063 151,243r 147,408r 138,866r 146,674 31 Chile 3,145 3,283 3,035 3,035 3,638 3,420 3,325 3,479 3,524 3,550 37 Colombia 4,492 4,661 4,580 4,580 4,438 4,417 4,183 4,359 4,337r 4,379 33 Cuba 11 2 3 3 2 3 3 2 2r 3 34 Ecuador 1,379 1,232 993 993 945 886 928 919 951 915 35 Guatemala 1,541 1,594 1,377 1,377 1,311 1,311 1,382 1,352 l,323r 1,397 36 Jamaica 257 231 371 371 294 279 309 293 289 341 37 Mexico 16,650 19,957 19,456 19,456 20,023 21,196 21,762 24,896 23,35lr 22,295 38 Netherlands Antilles 7,357 5,592 5,205 5,205 4,352 4,869 4,221 4,537 3,812 4,057 39 Panama 4,574 4,695 4,177 4,177 4,013 4,214 3,924r 4,147r 4,067r 3,732 40 Peru 1,294 1,249 1,080 1,080 1,052 1,045 995 1,070 977 979 41 Uruguay 2,520 2,096 1,955 1,955 1,898 2,061 1,815 1,767 1,733 1,767 47 Venezuela 12,271 13,181 11,387 11,387 11,106 10,984 11,446 11,511 11,644 12,237 43 Other 6,779 6,879 6,153 6,153 6,098 6,082 6,276r 6,563r 6,409r 6,347 44 136,844 120,462 143,436 114433,,443366 141,633 143,636 140,427r 131,025r 133,940r 143,464 China 45 People's Republic of China 2,421 2,626 3,202 3,202 3,114 3,007 2,957 3,527 3,008 2,885 46 Republic of China (Taiwan) 11,246 11,491 8,379 8,379 8,929 9,102 9,042r 8,884r 8,790 9,638 47 Hong Kong 12,754 14,269 18,509 18,509 17,588 19,543 17,041 16,353 15,832r 16,212 48 India 1,233 2,418 1,396 1,396 1,323 1,377 1,399 989 1,341 1,312 49 Indonesia 1,238 1,463 1,480 1,480 1,392 1,460 1,871 1,464 1,861 2,132 5 •> 1 0 J Is a r p a a e n l 67 2, , 7 0 6 7 7 6 47 2, , 0 0 1 6 5 9 58 3 , , 3 7 4 7 2 5 58 3 , , 3 77 4 5 2 56 3 , , 0 3 0 8 9 9 57 3 , ,3 9 7 9 1 3 5 3 6 , , 9 9 3 1 0 7 r 51 3 , , 1 7 0 63 7 r 54 3 , ,1 3 6 6 1 5 r 62 2 , , 6 7 8 6 7 4 57 Korea (South) 2,287 2,587 3,336 3,336 3,444 3,488 3,337 3,591 3,929r 3,840 53 Philippines 1,585 2,449 2,275 2,275 2,350 2,746 2,774 2,785 2,458 2,933 54 Thailand 1,443 2,252 5,582 5,582 5,722 5,375 5,342 4,967 5,377 5,233 55 Middle Eastern oil-exporting countries14 15,829 15,752 21,446 21,446 19,877 19,897 19,718 19,687 19,272r 20,325 56 Other 16,965 16,071 15,714 15,714 18,496 16,277 16,099 13,908 14,546r 13,503 57 Africa 4,630 4,825 5,884 5,884 5,913 6,364 6,508 6,438 6,474r 6,529 58 Egypt 1,425 1,621 2,472 2,472 2,756 3,077 3,084 2,938 2,922 2,784 59 Morocco 104 79 76 76 88 92 87 151 144 181 60 South Africa 228 228 190 190 158 319 243 246 198r 265 61 Zaire 53 31 19 19 25 17 13 14 16 15 67 Oil-exporting countries 1,110 1,082 1,346 1,346 1,125 1,135 1,239 1,294 1,368 1,332 63 Other 1,710 1,784 1,781 1,781 1,761 1,724 1,842 1,795 1,826 1,952 64 Other 4,444 5,567 4,171 4,171 4,599 4,475 5,047 5,308 5,346 5,028 65 Australia 3,807 4,464 3,047 3,047 3,502 3,388 4,013 4,056 4,449 4,078 66 Other 637 1,103 1,124 1,124 1,097 1,087 1,034 1,252 897 950 67 Nonmonetary international and regional organizations 5,918 8,981 9,350 9,350 11,099 11,538 9,295r 10,731 8,934r 9,130 68 International16 4,390 6,485 7,434 7,434 7,864 8,857 6,25 lr 7,590 5,388r 5,612 69 Latin American regional 1,048 1,181 1,415 1,415 2,327 1,738 2,021 2,223 2,412 2,318 70 Other regional18 479 1,315 501 501 908 943 1,023 918 1,134 1,200 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 • October 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 Dec. Jan. Feb. Mar. Apr." May" June" 1 Total, all foreigners 511,543 514,339 495,761 495,761 484,670 495,033 475,969' 469,454 459,319 482,058 2 Foreign countries 506,750 508,056 490,679 490,679 481,570 490,925 472,647r 467,037 457,637 480,044 3 Europe 113,093 114,310 124,130 124,130 117,355 124,763 122,490r 120,309 118,174 121,817 4 Austria 362 327 341 341 366 530 894r 1,013 941 1,080 5 Belgium and Luxembourg 5,473 6,158 6,404 6,404 6,473 5,886 6,273r 6,177 5,513 5,955 6 Denmark 497 686 707 707 705 785 682 645 628 731 7 Finland 1,047 1,907 1,419 1,419 1,275 1,226 1,010 998 885 1,238 8 France 14,468 15,112 14,847 14,847 14,012 14,670 13,235r 13,141 11,614 11,809 9 Germany 3,343 3,371 4,229 4,229 5,544 5,370 5,725r 5,322 6,089 6,223 10 Greece 727 553 718 718 670 668 583 618 596 568 11 Italy 6,052 8,242 9,048 9,048 8.716 8,466 8,418r 8,724 8,218 9,229 1? Netherlands 1,761 2,546 2,497 2,497 2,927 3,279 2,676 2,607 3,278 2,750 n Norway 782 669 356 356 649 750 645 714 676 788 14 Portugal 292 344 325 325 390 494 454 513 593 670 15 Spain 2,668 1,881 2,772 2,772 2,593 4,158 3,859r 3,642 3,441 3,604 16 Sweden 2,094 2,335 4,929 4,929 5,340 5,155 4.809 4,509 4,229 4,065 17 Switzerland 4,202 4,540 4,722 4,722 4,493 4,971 4,348r 4,355 4,729 4,167 18 Turkey 1,405 1,063 962 962 1,071 1,041 943 1,285 1,508 1,585 19 United Kingdom 65,151 60,395 63,980 63,980 56,308 61,433 62,227r 60,721 59,664 62,025 20 Yugoslavia2 1,142 825 569 569 571 567 553 551 550 548 21 Others in Western Europe3 597 789 1,706 1,706 1,607 1,607 1,780 1,316 1,455 1,190 22 Russia 530 1,970 3,147 3,147 3,154 3,154 2,906 2,889 3,080 3,046 23 Other Eastern Europe4 499 597 452 452 491 553 470 569 487 546 24 Canada 16,091 15,113 14,185 14,185 16,465 14,972 18,287r 16,977 16,393 16,688 25 Latin America and Caribbean 231,506 246,137 213,772 213,772 219,079 212,204 204,144r 200,437 195,315 212,401 26 Argentina 6,967 5,869 4,882 4,882 4,804 4,859 4,844r 3,931 3,942 4,065 27 Bahamas 76,525 87,138 59,532 59,532 62,831 63,898 57,593r 57,909 54,456 59,185 28 Bermuda 4,056 2,270 5,934 5,934 6,797 2,851 3,910 5,609 3,089 4,319 29 Brazil • 17,995 11,894 10,733 10,733 10,924 10,507 10,871r 10,806 10,705 12,312 30 British West Indies 88,565 107,846 98,738 98,738 101,614 96,324 93,856" 88,964 90,023 97,269 31 Chile 3,271 2,805 3,397 3,397 3,690 3,795 3,638 3,551 3,717 3,632 32 Colombia 2,587 2,425 2,750 2,750 2,752 2,819 2,807 2,786 2,875 2,825 33 Cuba 0 0 0 0 0 0 0 0 0 1 34 Ecuador 1,387 1,053 884 884 853 835 819" 807 770 771 35 Guatemala 191 228 262 262 240 257 274 269 256 506 36 Jamaica 238 158 167 167 170 164 168 161 165 184 37 Mexico 14,851 16,567 15,049 15,049 15,216 15,988 15,115" 15,534 14,967 15,422 38 Netherlands Antilles 7,998 1,207 1,379 1,379 1,735 1,938 2,098" 1,971 2,354 3,011 39 Panama 1,471 1,560 4,474 4,474 2,024 2,307 2,541" 2,311 2,260 2,384 40 Peru 663 739 730 730 735 708 650 691 675 657 41 Uruguay 786 599 936 936 895 844 846 787 778 904 42 Venezuela 2,571 2,516 2,525 2,525 2,409 2,485 2,558 2,495 2,542 2,803 43 Other 1,384 1,263 1,400 1,400 1,390 1,625 1,556" 1,855 1,741 2,151 44 Asia 138,722 125,262 131,296 131,2% 121,777 131,494 120,066" 122,296 120,886 122,020 China 45 People's Republic of China 620 747 906 906 774 892 939 1,388 881 1,880 46 Republic of China (Taiwan) 1,952 2,087 2,046 2,046 1,683 1,585 1,630 1,670 1,562 1,835 47 Hong Kong 10,648 9,617 9,673 9,673 9,145 10,298 10,563" 9,215 10,419 9,706 48 India 655 441 529 529 532 549 443 549 489 475 49 Indonesia 933 952 1,189 1,189 1,323 1,292 1,469 1,432 1,386 1,526 50 Israel 774 860 820 820 877 809 896 1,057 814 777 51 Japan 90,699 84,807 78,647 78,647 74,631 79,791 67,761" 71,584 71,811 71,220 5? Korea (South) 5,766 6,048 6,180 6,180 6,073 6,753 6,938 7,048 7,152 7,421 53 Philippines 1,247 1,910 2,145 2,145 1,871 1,842 1,713 1,645 1,521 1,402 54 Thailand 1,573 1,713 1,867 1,867 1,7% 1,737 1,678 1,794 1,763 1,865 55 Middle Eastern oil-exporting countries5 10,749 8,284 18,559 18,559 17,083 17,775 19,048 17,909 17,937 17,437 56 Other 13,106 7,796 8,735 8,735 5,989 8,171 6,988 7,005 5,151 6,476 57 Africa 5,445 4,928 4,289 4,289 4,262 4,147 3,907" 3,767 3,661 3,809 58 Egypt 380 294 194 194 171 291 192 151 151 178 59 Morocco 513 575 441 441 421 403 396 396 420 416 60 South Africa 1,525 1,235 1,041 1,041 1,069 1,030 1,011 924 803 746 61 Zaire 16 4 4 4 3 3 3 3 3 3 62 Oil-exporting countries6 1,486 1,298 1,004 1,004 1,067 1,108 1,140 1,128 1,134 1,166 63 Other 1,525 1,522 1,605 1,605 1,531 1,312 1,165" 1,165 1,150 1,300 64 Other 1,892 2,306 3,007 3,007 2,632 3,345 3,753 3,251 3,208 3,309 65 Australia 1,413 1,665 2,263 2,263 1,8% 2,552 3,1P 2,635 2,534 2,574 66 Other 479 641 744 744 736 793 636 616 674 735 67 Nonmonetary international and regional organizations7 4,793 6,283 5,082 5,082 3,100 4,108 3,322 2,417 1,682 2,014 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 1992 1993 Claim 1990 1991 Dec. Feb. Mar.r Apr.r Mayr 1 Total 579,044 579,683 555,799 555,799 527,858 2 Banks' claims 511,543 514,339 495,761 495,761 484,670 495,033 475,969 469,454 459,319 3 Foreign public borrowers 41,900 37,126 31,245 31,245 32,972 30,349 33,631 30,266 29,579 4 Own foreign offices 304,315 318,800 299,916 299,916 291,819 305,438 292,938 285,497 280,950 5 Unaffiliated foreign banks 117,272 116,602 109,788 109,788 101,868 102,737 97,073 97,837 94,719 6 Deposits 65,253 69,018 60,949 60,949 52,707 50,634 48,778 47,808 47,339 7 Other 52,019 47,584 48,839 48,839 49,161 52,103 48,295 50,029 47,380 8 All other foreigners 48,056 41,811 54,812 54,812 58,011 56,509 52,327 55,854 54,071 9 Claims of banks' domestic customers^ 67,501 65,344 60,038 60,038 51,889 10 Deposits 14,375 15,280 15,452 15,452 12,000 11 Negotiable and readily transferable instruments4 41,333 37,125 31,454 31,454 27,283 12 Outstanding collections and other claims 11,792 12,939 13,132 13,132 12,606 MEMO 13 Customer liability on acceptances 13,628 8,974 8,700 8,700 7,959 14 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States . 44,638 40,297 33,604 33,604 36,127 36,801 36,425 32,962 33,816 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 1992 1993 MMaattuurriittyy,, bbyy bboorrrroowweerr aanndd aarreeaa22 11998899 11999900 11999911 June Sept. Dec. Mar.r 1 Total 238,123 206,903 195,302 196,776 187,272 195,517 182,703 By borrower 2 Maturity of one year or less 178,346 165,985 162,573 162,382 155,072 163,873 152,704 3 Foreign public borrowers 23,916 19,305 21,050 20,400 17,739 17,689 21,140 4 All other foreigners 154,430 146,680 141,523 141,982 137,333 146,184 131,564 5 Maturity of more than one year 59,776 40,918 32,729 34,394 32,200 31,644 29,999 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 17,800 By area Maturity of one year or less 8 Europe 53,913 49,184 51,835 55,123 55,964 53,865 55,295 9 Canada 5,910 5,450 6,444 7,986 5,949 6,118 7,890 10 Latin America and Caribbean 53,003 49,782 43,597 48,983 45,241 50,316 45,154 11 Asia 57,755 53,258 51.059 41,343 40,664 45,726 37,910 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 4,8% 15 Canada 2,353 3,290 3,595 3,158 3,227 3,290 3,117 16 Latin America and Caribbean 45,816 25,774 18,277 16,847 15,111 15,159 14,387 17 Asia 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 2,130 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 • October 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 June Sept. Dec. Mar. June Sept. Dec. Mar. Junep 1 Total 340.9 320.1 322.3 338.4 343.6 349.8 357.4 343.9 345.6 361.8r 378.5 2 G-10 countries and Switzerland 152.9 132.2 130.3 135.0 137.6 131.1 136.3 137.5 134.0 143.8r 151.3 3 Belgium and Luxembourg 6.3 5.9 6.1 5.8 6.0 5.3 6.2 6.2 5.6 6.1r 7.0 4 France 11.7 10.4 10.5 11.1 11.0 10.0 12.0 15.5 15.4 13.6r 13.8 5 Germany 10.5 10.6 8.3 9.7 8.3 8.4 8.8 10.9 9.3 9.9r 10.8 6 Italy 7.4 5.0 3.6 4.5 5.6 5.4 8.0 6.4 6.5 6.7r 7.6 7 Netherlands 3.1 3.0 3.3 3.0 4.7 4.3 3.3 3.7 2.8 3.7 3.7 8 Sweden 2.0 2.2 2.5 2.1 1.9 2.0 1.9 2.2 2.3 3.0 2.5 9 Switzerland 7.1 4.4 3.3 3.9 3.4 3.2 4.6 5.2 4.8 5.3r 4.8 10 United Kingdom 67.2 60.9 59.5 65.6 68.5 64.8 65.9 61.9 61.4 66.5 75.3 11 Canada 5.4 5.9 8.2 5.8 5.8 6.6 6.7 6.7 6.6 8.6 8.1 12 Japan 32.3 24.0 25.1 23.5 22.6 21.1 18.7 18.9 19.2 20.4r 17.8 13 Other industrialized countries 21.0 22.9 21.3 22.1 22.8 21.5 25.5 25.1 24.1 25.5r 27.2 14 Austria 1.5 1.4 1.1 1.0 .6 .8 .8 .8 1.2 1.2r 1.3 15 Denmark 1.1 1.1 1.2 .9 .9 .8 1.3 1.5 .9 .8 1.0 16 Finland 1.0 .7 .8 .6 .7 .8 .8 1.0 .7 .7 .9 17 Greece 2.5 2.7 2.4 2.3 2.6 2.3 2.8 3.0 3.0 2.8 3.1 18 Norway 1.4 1.6 1.5 1.4 1.4 1.5 1.7 1.6 1.2 1.8 1.8 19 Portugal .4 .6 .6 .5 .6 .5 .5 .5 .4 .7 .9 20 Spain 7.1 8.3 7.1 8.3 8.3 7.7 10.1 9.8 9.0 9.5r 10.5 21 Turkey 1.2 1.7 1.9 1.6 1.4 1.2 1.5 1.5 1.3 1.4 2.2 22 Other Western Europe 1.0 1.2 1.1 1.3 1.8 1.5 2.0 1.5 1.7 2.0 1.8 23 South Africa 2.0 1.8 1.8 1.6 1.9 1.8 1.7 1.7 1.7 1.6 1.3 24 Australia 1.6 1.8 2.0 2.4 2.7 2.3 2.3 2.3 2.9 1.9 2.5 25 OPEC2 17.1 12.8 14.0 15.6 14.5 15.8 16.2 15.9 16.1 16.91 15.9 26 Ecuador 1.3 1.0 .9 .8 .7 .7 .7 .7 .6 .6 .6 27 Venezuela 7.0 5.0 5.3 5.6 5.4 5.4 5.3 5.4 5.2 5.3 5.6 28 Indonesia 2.0 2.7 2.6 2.8 2.7 3.0 3.0 3.0 3.0 3.1 3.1 29 Middle East countries 5.0 2.5 3.7 5.0 4.2 5.3 5.9 5.4 6.2 6.7 5.4 30 African countries 1.7 1.7 1.5 1.5 1.5 1.4 1.4 1.4 1.1 i.r 1.2 31 Non-OPEC developing countries 77.5 65.4 64.4 64.7 63.9 69.7 68.1 72.9 72.2 74.2r 77.3 Latin America 32 Argentina 6.3 5.0 4.6 4.5 4.8 5.0 5.1 6.2 6.6 7.0 6.6 33 Brazil 19.0 14.4 11.6 10.5 9.6 10.8 10.6 10.8 10.8 11.6 12.5 34 Chile 4.6 3.5 3.6 3.7 3.6 3.9 4.0 4.2 4.4 4.6 4.3 35 Colombia 1.8 1.8 1.6 1.6 1.7 1.6 1.6 1.7 1.8 1.9 1.9 36 Mexico 17.7 13.0 14.3 16.2 15.5 17.7 16.3 17.1 16.0 16.8 16.9 37 Peru .6 .5 .5 .4 .4 .4 .4 .5 .5 .4 .4 38 Other 2.8 2.3 2.0 1.9 2.1 2.2 2.2 2.5 2.6 2.6 3.4 Asia China 39 Peoples Republic of China .3 .2 .6 .4 .3 .3 .3 .3 .7 .6 1.6 40 Republic of China (Taiwan) 4.5 3.5 4.1 4.1 4.1 4.8 4.6 5.0 5.2 5.3 5.9 41 India 3.1 3.3 3.0 2.8 3.0 3.6 3.8 3.6 3.2 3.1 3.1 42 Israel .7 .5 .5 .5 .5 .4 .4 .4 .4 .5 .4 43 Korea (South) 5.9 6.2 6.9 6.5 6.8 6.9 6.9 7.4 6.6 6.5 6.9 44 Malaysia 1.7 1.9 2.1 2.3 2.3 2.5 2.7 3.0 3.0 3.3 3.7 45 Philippines 4.1 3.8 3.7 3.6 3.7 3.6 3.1 3.6 3.6 3.4 2.9 46 Thailand 1.3 1.5 1.7 1.9 1.7 1.7 1.9 2.2 2.2 2.2 2.4 47 Other Asia3 1.0 1.7 1.8 2.0 2.0 2.3 2.5 2.7 2.7 2.7 2.6 Africa 48 Egypt .4 .4 .4 .4 .4 .3 .5 .3 .2 .2 .2 49 Morocco .9 .8 .7 .7 .7 .7 .7 .6 .6 .5 .6 50 Zaire .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 51 Other Africa3 1.0 1.0 .8 .8 .7 .7 .6 .9 1.0 ,8r .9 52 Eastern Europe 3.5 2.3 2.1 1.8 2.4 2.9 3.0 3.1 3.1 2.9 3.3 53 Russia .7 .2 .4 .4 .9 1.4 1.7 1.8 1.9 1.7 1.9 54 Yugoslavia 1.6 1.2 1.0 .8 .9 .8 .7 .7 .6 .6 .6 55 Other 1.3 .9 .7 .7 .7 .6 .6 .7 .6 .7 .8 56 Offshore banking centers 38.4 44.7 50.2 54.6 54.2 60.9 59.4 52.3 55.0 59.0r 58.0 57 Bahamas 5.5 2.9 6.8 6.7 11.9 14.5 12.2 8.1 5.6 8.7r 6.9 58 Bermuda 1.7 4.4 4.2 7.1 2.3 3.9 5.1 3.8 6.2 4.1 4.5 59 Cayman Islands and other British West Indies 9.0 11.7 14.9 13.8 15.8 17.4 18.1 15.7 19.9 17.6r 16.1 60 Netherlands Antilles 2.3 7.9 1.4 3.9 1.2 1.0 .8 .7 1.1 1.6 2.5 61 Panama4 1.4 1.4 1.3 1.3 1.4 1.4 1.7 1.8 1.7 1.9 1.9 62 Lebanon .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 63 Hong Kong 11.3 9.7 14.3 14.0 14.4 14.0 15.0 15.2 13.8 16.7 16.8 64 Singapore 7.0 6.6 7.2 7.7 7.1 8.5 6.4 6.8 6.5 8.4 9.2 65 Other .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 66 Miscellaneous and unallocated6 30.5 39.9 40.0 44.4 48.0 47.8 48.6 36.8 41.0 39.3 45.5 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 11999911 Dec. Mar. June Sept. Dec. Mar. 1 38,764 46,043 43,453 43,453 44,193 44,109 45,184 43,144 43,966 7 Payable in dollars 33,973 40,786 38,061 38,061 38,735 37,616 36,792 35,739 36,015 3 Payable in foreign currencies 4,791 5,257 5,392 5,392 5,458 6,493 8,392 7,405 7,951 By type 4 Financial liabilities 17,879 21,066 21,872 21,872 22,185 21,756 23,281 22,047 22,674 5 Payable in dollars 14,035 16,979 17,760 17,760 17,957 16,714 16,546 15,700 16,109 6 Payable in foreign currencies 3,844 4,087 4,112 4,112 4,228 5,042 6,735 6,347 6,565 7 Commercial liabilities 20,885 24,977 21,581 21,581 22,008 22,353 21,903 21,097 21,292 8 Trade payables 8,070 10,683 8,662 8,662 9,125 9,715 9,586 9,046 9,873 9 Advance receipts and other liabilities 12,815 14,294 12,919 12,919 12,883 12,638 12,317 12,051 11,419 10 Payable in dollars 19,938 23,807 20,301 20,301 20,778 20,902 20,246 20,039 19,906 11 Payable in foreign currencies 947 1,170 1,280 1,280 1,230 1,451 1,657 1,058 1,386 By area or country Financial liabilities 1? Europe 11,660 10,978 11,805 11,805 12,349 12,728 13,767 1122,,553300 1122,,999955 13 Belgium and Luxembourg 340 394 217 217 174 194 256 434 299 14 France 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 6,329 7,238 7,244 7,580 7,910 8,632 19 Canada 610 229 267 267 283 337 320 491 551 70 Latin America and Caribbean 1,357 4,153 4,404 4,404 4,092 3,373 3,462 3,515 3,544 71 Bahamas 157 371 537 537 396 343 220 349 594 7? 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 2,960 2,232 2,408 2,342 2,142 75 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 5,534 78 Japan 3,299 4,065 4,102 4,102 4,107 4,136 4,609 4,451 4,562 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 countries 0 0 4 4 6 0 0 0 0 32 Allother4 100 409 52 52 88 89 85 28 44 Commercial liabilities 33 Europe 9,071 10,310 8,126 8,126 7,666 7,309 6,879 6,704 66,,666611 34 Belgium and Luxembourg 175 275 248 248 256 240 173 287 143 35 France 877 1,218 957 957 678 659 688 663 669 36 Germany 1,392 1,270 944 944 880 702 744 621 613 37 Netherlands 710 844 709 709 574 605 601 556 666 18 Switzerland 693 775 575 575 543 461 430 398 532 39 United Kingdom 2,620 2,792 2,310 2,310 2,445 2,404 2,262 2,250 2,156 40 Canada 1,124 1,261 990 990 1,095 1,077 1,085 892 929 41 Latin America and Caribbean 1,224 1,672 1,352 1,352 1,701 1,803 1,496 1,586 1,620 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 Mexico 323 475 304 304 375 475 322 444 385 47 Venezuela 164 130 94 94 168 279 125 130 167 48 7,550 9,483 9,330 9,330 9,890 10,439 11,006 10,787 10,840 49 Japan 2,914 3,651 3,720 3,720 3,549 3,537 3,909 3,994 4,007 50 Middle Eastern oil-exporting countries2, 1,632 2,016 1,498 1,498 1,591 1,778 1,813 1,792 1,723 51 Africa 886 844 713 713 644 775 675 556 574 52 Oil-exporting countries 339 422 327 327 253 389 335 295 236 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 • October 1993 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1991 1992 1993 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11998899 11999900 11999911 Dec. Mar. June Sept. Dec. Mar. 1 Total 33,173 35,348 42,233 42,233 40,899 41,037 38,345 38,039 41,016r 2 Payable in dollars 30,773 32,760 39,688 39,688 38,281 38,071 35,460 35,562 38,291r 3 Payable in foreign currencies 2,400 2,589 2,545 2,545 2,618 2,966 2,885 2,477 2,725r By type 4 Financial claims 19,297 19,874 25,264 25,264 24,289 24,037 21,311 21,041 22,05lr 5 Deposits 12,353 13,577 17,290 17,290 16,262 15,056 12,436 12,615 12,714r 6 Payable in dollars 11,364 12,552 16,415 16,415 15,076 13,717 11,353 11,826 ll,658r 7 Payable in foreign currencies 989 1,025 875 875 1,186 1,339 1,083 789 1,056r S Other financial claims 6,944 6,297 7,974 7,974 8,027 8,981 8,875 8,426 9,337r 9 Payable in dollars 6,190 5,280 7,094 7,094 7,305 8,277 7,868 7,688 8,611r 10 Payable in foreign currencies 754 1,017 880 880 722 704 1,007 738 726 11 Commercial claims 13,876 15,475 16,%9 16,969 16,610 17,000 17,034 16,998 18,%5r 12 Trade receivables 12,253 13,657 14,244 14,244 14,044 14,538 14,330 14,711 16,901r 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 18,022r 15 Payable in foreign currencies 657 548 790 790 710 923 795 950 943r By area or country Financial claims 16 Europe 8,463 9,645 13,724 13,724 14,243 13,225 11,433 9,514 10,218r 17 Belgium and Luxembourg 28 76 13 13 12 25 16 8 6r 18 France 153 371 314 314 279 788 811 776 905r 19 Germany 152 367 335 335 285 377 319 399 378r 20 Netherlands 238 265 385 385 727 732 767 537 566r 21 Switzerland 153 357 591 591 682 780 602 507 493 22 United Kingdom 7,4% 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 2,095r 24 Latin America and Caribbean 8,020 6,201 7,689 7,689 6,200 6,849 6,452 8,326 5,72<F 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 68 144 144 143 134 396 496 592 28 British West Indies 5,486 4,635 6,304 6,304 5,124 5,759 4,449 6,530 4,286r 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 3,066 33 Middle East oil-exporting countries2 8 8 5 5 3 4 4 3 8 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 8,269r 38 Belgium and Luxembourg 242 212 192 192 181 255 172 184 167r 39 France 964 1,240 1,542 1,542 1,560 1,561 1,739 1,392 l,3%r 40 Germany 6% 807 940 940 933 905 870 880 939* 41 Netherlands 479 555 643 643 646 666 588 541 724r 42 Switzerland 313 301 295 295 323 394 294 260 426r 43 United Kingdom 1,575 1,775 2,084 2,084 2,082 2,169 1,973 1,799 2,277r 44 Canada 1,091 1,074 1,109 1,109 1,115 1,058 1,105 1,192 l,185r 45 Latin America and Caribbean 2,184 2,375 2,562 2,562 2,544 2,653 3,113 2,827 3,375r 46 Bahamas 58 14 11 11 11 9 7 18 18r 47 Bermuda 323 246 263 263 272 291 245 237 195r 48 Brazil 297 326 418 418 364 438 395 336 818r 49 British West Indies 36 40 41 41 45 32 43 39 17 50 Mexico 508 661 801 801 865 829 942 837 %2r 51 Venezuela 147 192 202 '202 206 251 302 317 336r 52 Asia 3,570 4,127 4,558 4,558 4,343 4,456 4,300 4,649 5,281r 53 Japan 1,199 1,460 1,878 1,878 1,782 1,786 1,793 1,850 2,146r 54 Middle Eastern oil-exporting countries 518 460 621 621 635 609 511 677 766r 55 Africa 429 488 418 418 418 422 430 540 45 r 56 Oil-exporting countries 108 67 95 95 75 73 60 78 75 57 Other4 393 367 387 387 348 324 344 348 404r 1. For a description of the changes in the international statistics tables, see 3. Comprises Algeria, Gabon, Libya, and Nigeria. Federal Reserve Bulletin, vol. 65, (July 1979), p. 550. 4. Includes nonmonetary international and regional organizations. 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Holdings and Transactions A65 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1993 1992 1993 Transaction and area or country 1991 1992 J J a u n n . e - Dec. Jan. Feb. Mar. Apr.r Mayr June" U.S. corporate securities STOCKS 1 Foreign purchases 211,207 221,307 147,373 22,725 19,170 28,753 27,013 25,090 23,083 24,264 2 Foreign sales 200,116 226,428 141,034 20,382 19,353 25,980 24,548 25,417 22,299 23,437 3 Net purchases or sales (-) 11,091 -5,121 6,339 2,343 -183 2,773 2,465 -327 784 827 4 Foreign countries 10,522 -5,154 6,065 2,319 -178 2,683 2,308 -335 788 799 5 Europe 53 -4,912 2,430 1,505 52 2,271 975 -646 -621 399 France 9 -1,350 -291 -154 -25 223 -183 -154 -86 -66 7 Germany -63 -65 518 162 91 97 103 141 4 82 8 Netherlands -227 -262 97 190 64 -11 68 32 35 -91 9 Switzerland -131 168 1,570 221 205 501 356 280 50 178 10 United Kingdom -352 -3,301 -372 705 -350 1,135 476 -1,140 -689 196 11 Canada 3,845 1,407 -681 176 -341 57 176 91 -132 -532 12 Latin America and Caribbean 2,177 2,203 1,307 422 305 -235 410 246 509 72 13 Middle East1 -134 -88 -129 70 -92 -65 -13 7 56 -22 14 Other Asia 4,255 -3,943 3,218 122 -123 593 763 2 910 1,073 15 Japan 1,179 -3,598 -194 215 28 -624 250 -530 452 230 16 Africa 153 10 15 -7 4 27 2 -48 10 20 17 Other countries 174 169 -95 31 17 35 -5 13 56 -211 18 Nonmonetary international and regional organizations 568 33 274 24 -5 90 157 8 -4 28 BONDS2 19 Foreign purchases 153,096 215,041 128,742 19,264 17,220 21,934 25,223 20,850 19,336 24,179 20 Foreign sales 125,637 175,560 105,872 15,391 15,454 18,896 23,275 15,802 15,286 17,159 21 Net purchases or sales (—) 27,459 39,481 22,870 3,873 1,766 3,038 1,948 5,048 4,050 7,020 22 Foreign countries 27,590 38,365 23,244 3,328 1,862 3,164 2,084 5,069 4,082 6,983 23 Europe 13,112 17,836 7,941 2,118 1,090 2,143 27 1,612 599 2,470 24 France 847 1,203 1,578 217 101 311 75 508 595 -12 25 Germany 1,577 2,486 725 857 91 52 -57 811 230 -402 26 Netherlands 482 540 -463 48 -119 -133 -178 108 -7 -134 27 Switzerland 656 -579 -419 105 122 -38 11 -239 -219 -56 28 United Kingdom 8,931 12,836 6,425 962 334 2,376 -229 975 -66 3,035 29 Canada 1,623 237 554 -38 -437 145 138 291 20 397 30 Latin America and Caribbean 2,672 9,300 5,049 513 419 482 490 632 1,262 1,764 31 Middle East1 1,787 3,166 1,591 360 300 248 263 463 115 202 32 Other Asia 8,459 7,545 7,903 119 305 149 1,216 2,082 2,062 2,089 33 Japan 5,767 -450 3,640 9 190 61 595 991 940 863 34 Africa 52 354 208 302 168 27 -10 0 21 2 35 Other countries -116 -73 -2 -46 17 -30 -40 -11 3 59 36 Nonmonetary international and regional organizations -131 1,116 -374 545 -96 -126 -136 -21 -32 37 Foreign securities 37 Stocks, net purchases or sales (-)3 -31,967 -32,268 -21,720 -4,376 -2,351 -1,571 -4,565 -4,022 -3,768 -5,443 38 Foreign purchases 120,598 150,022 99,298 12,782 12,732 15,055 17,447 19,292 16,404 18,368 39 Foreign sales3 152,565 182,290 121,018 17,158 15,083 16,626 22,012 23,314 20,172 23,811 40 Bonds, net purchases or sales (-) -14,828 -18,277 -27,271 -2,866 -5,107 -9,528 -4,629 -1,268 -420 -6,319 41 Foreign purchases 330,311 486,238 349,570 39,617 38,545 56,046 70,126 55,768 58,795 70,290 42 Foreign sales 345,139 504,515 376,841 42,483 43,652 65,574 74,755 57,036 59,215 76,609 43 Net purchases or sales (-), of stocks and bonds -46,795 -50,545 -48,991 -7,242 -7,458 -11,099 -9,194 -5,290 -4,188 -11,762 44 Foreign countries -46,711 -53,881 -48,527 -7,196 -6,451 -11,237 -8,925 -5,569 -4,521 -11,824 45 Europe -34,452 -37,557 -34,906 -4,507 -6,486 -6,669 -3,084 -3,255 -5,273 -10,139 46 Canada -7,004 -6,635 -10,297 -1,167 -161 -5,028 -3,034 -816 19 -1,277 47 Latin America and Caribbean 759 -2,298 1,011 511 195 25 68 -903 1,122 504 48 -7,350 -6,629 -3,419 -1,678 -394 539 -2,477 -528 -182 -377 49 Africa -9 -2 -217 -11 -7 3 -18 -18 -186 9 50 Other countries 1,345 -760 -699 -344 402 -107 -380 -49 -21 -544 51 Nonmonetary international and regional organizations -84 3,336 -464 -46 -1,007 138 -269 279 333 62 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 • October 1993 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1993 1992 1993 Country or area 1991 1992 J J a u n n . e - Dec. Jan. Feb. Mar. Apr.r Mayr Junep Transactions, net purchases or sales (-) during period1 1 Estimated total 19,865 39,288 3,238 14 439 -1,273 6,129 4,255 -761 -5,551 2 Foreign countries 19,687 37,935 1,403 -188 -144 -2,166 5,577 4,416 -479 -5,801 3 Europe 8,663 19,625 -1,548 3,173 -600 -382 -3,826 1,517 188 1,555 4 Belgium and Luxembourg 523 1,985 954 -28 -59 45 622 -387 647 86 5 Germany -4,725 2,076 -9,570 898 697 -1,632 -2,757 -1,382 -3,396 -1,100 6 Netherlands -3,735 -2,959 -142 -804 -1,238 206 66 731 486 -393 7 Sweden -663 -804 886 -344 -54 258 -540 -100 649 673 8 Switzerland 1,007 488 -1,946 213 -199 -455 -1,569 -719 108 888 9 United Kingdom 6,218 24,184 10,633 2,833 2,025 183 672 2,659 2,948 2,146 10 Other Western Europe 10,024 -5,995 -2,808 405 -1,774 975 -509 576 -1,355 -721 11 Eastern Europe 13 650 445 0 2 38 189 139 101 -24 12 Canada -3,019 562 7,915 -99 3,302 82 2,490 1,386 522 133 13 Latin America and Caribbean 10,285 -3,222 -8,893 -4,519 -1,495 445 -537 -2,020 -3,880 -1,406 14 Venezuela 10 539 389 11 -175 179 154 74 152 5 15 Other Latin America and Caribbean 4,179 -1,956 -5,479 415 -3,309 -1,656 -471 1,096 -1,863 724 16 Netherlands Antilles 6,097 -1,805 -3,803 -4,945 1,989 1,922 -220 -3,190 -2,169 -2,135 17 Asia 3,367 23,517 6,270 1,184 -1,136 -1,032 7,215 3,837 3,014 -5,628 18 Japan -4,081 9,817 9,813 2,201 -743 804 3,457 3,348 3,311 -364 19 Africa 689 1,103 -92 0 -33 -139 -66 67 -2 81 20 Other -298 -3,650 -2,249 73 -182 -1,140 301 -371 -321 -536 21 Nonmonetary international and regional organizations 178 1,353 1,835 202 583 893 552 -161 -282 250 7 7 International -358 1,018 726 76 228 581 56 -228 -318 407 23 Latin American regional -72 533 611 97 270 235 1 16 -17 106 MEMO 24 Foreign countries 19,687 37,935 1,403 -188 -144 -2,166 5,577 4,416 -479 -5,801 25 Official institutions 1,190 6,876 -9,102 -715 -2,980 -4,364 -657 2,710 -3,046 -765 26 Other foreign 18,496 31,059 10,505 527 2,836 2,198 6,234 1,706 2,567 -5,036 Oil-exporting countries 77 Middle East2 -6,822 4,317 -4,681 505 -238 -1,855 811 114 -1,070 -2,443 28 Africa3 239 11 2 0 8 0 0 -6 0 0 1. Official and private transactions in marketable U.S. Treasury securities 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and having an original maturity of more than one year. Data are based on monthly United Arab Emirates (Trucial States), transactions reports. Excludes nonmarketable U.S. Treasury bonds and notes 3. Comprises Algeria, Gabon, Libya, and Nigeria, held by official institutions of foreign countries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Interest and Exchange Rates A67 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS1 Percent per year Rate on Aug. 31, 1993 Rate on Aug. 31, 1993 Rate on Aug. 31, 1993 Country Country CCoouunnttrryy 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.. 4.99 Aug. 1993 Japan 2.5 July 1992 United Kingdom 12.0 Sept. 1992 Denmark 9.25 July 1993 Netherlands 5.75 July 1993 France .. 6.75 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 Type or country 1990 1991 1992 Feb. Apr. May June July Aug. 1 4 5 6 7 8 9 3 2 0 1 J B N G F C S U I E t a w r e a a u e e n p a l l n r t r i i g a y n h m t o t a n i e z c e d u d d a e e r m o a n r l l l a K y l a n a n i d r n d s s g dom 1 1 1 1 8 8 8 8 9 7 2 3 4 0 . . . . . . . . . . 7 7 5 4 7 1 1 0 7 2 6 1 5 7 1 0 1 0 3 0 1 1 9 5 9 9 8 9 9 7 1 2 . . . . . . . . . . 1 3 0 3 1 8 4 0 4 0 9 3 1 0 5 6 9 7 7 4 1 1 9 9 4 3 6 9 7 9 0 3 . . . . . . . . . . 2 3 6 3 7 5 4 7 1 9 5 9 7 1 0 6 2 6 4 1 1 1 3 6 6 8 5 7 8 3 1 1 . . . . . . . . . . 1 2 3 9 3 7 2 1 4 7 0 2 7 8 8 4 5 9 3 0 1 1 7 8 3 3 5 5 7 5 1 0 . . . . . . . . . . 4 1 2 9 8 0 2 5 8 2 7 1 7 1 5 5 6 9 9 6 1 4 7 3 5 5 7 8 7 3 1 . . . . . . . . . . 9 4 2 8 9 1 4 7 9 4 7 3 2 1 4 0 3 3 0 1 1 3 4 6 7 7 3 5 5 7 0 . . . . . . . . . . 1 9 9 2 4 9 4 1 2 7 2 7 8 4 8 1 1 6 9 4 1 3 4 4 5 7 6 7 6 3 0 . . . . . . . . . . 2 9 9 5 6 8 8 2 1 1 1 1 9 1 4 7 3 3 9 8 3 5 4 7 4 6 7 9 7 3 . . . . . . . . . . 1 8 1 6 4 4 7 1 2 4 7 8 2 2 8 5 2 2 2 2 3 5 4 6 4 6 7 9 8 3 . . . . . . . . . . 1 5 7 4 2 4 5 2 0 9 4 6 9 9 7 7 6 0 3 5 1. Rates are for three-month interbank loans, with the following exceptions: Canada, finance company paper; Belgium, three-month Treasury bills; and Japan, CD rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 International Statistics • October 1993 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar except as noted 1993 CCoouunnttrryy//ccuurrrreennccyy uunniitt 11999900 11999911 11999922 Mar. Apr. May June July Aug. 1 Australia/dollar^ 78.069 77.872 73.521 70.775 71.155 69.859 67.492 67.788 67.767 2 Austria/schilling 11.331 11.686 10.992 11.586 11.234 11.305 11.637 12.071 11.926 3 Belgium/franc 33.424 34.195 32.148 33.919 32.857 33.044 34.009 35.483 35.997 4 Canada/dollar 1.1668 1.1460 1.2085 1.2471 1.2621 1.2698 1.2789 1.2820 1.3074 5 China, P.R./yuan 4.7921 5.3337 5.5206 5.7455 5.7202 5.7392 5.7504 5.7756 5.7899 6 Denmark/krone 6.1899 6.4038 6.0372 6.3242 6.1339 6.1751 6.3380 6.6531 6.8984 7 Finland/markka 3.8300 4.0521 4.4865 5.9767 5.6190 5.4847 5.5674 5.7852 5.8289 8 France/franc 5.4467 5.6468 5.2935 5.5944 5.3984 5.4180 5.5700 5.8464 5.9329 9 Germany/deutsche mark 1.6166 1.6610 1.5618 1.6466 1.5964 1.6071 1.6547 1.7157 1.6951 10 Greece/drachma 158.59 182.63 190.81 223.57 217.90 218.12 225.45 234.77 237.73 11 Hong Kong/dollar 7.7899 7.7712 7.7402 7.7332 7.7306 7.7290 7.7362 7.7556 7.7517 12 India/rupee 17.492 22.712 28.156 31.939 31.610 31.613 31.668 31.600 31.611 13 Ireland/pound 165.76 161.39 170.42 147.58 152.75 151.65 147.47 140.83 139.05 14 Italy/lira 1,198.27 1,241.28 1,232.17 1,591.35 1,536.14 1,475.66 1,505.05 1,586.02 1,603.87 15 Japan/yen 145.00 134.59 126.78 117.02 112.41 110.34 107.41 107.69 103.72 16 Malaysia/ringgit 2.7057 2.7503 2.5463 2.6051 2.5777 2.5661 2.5696 2.5672 2.5516 17 Netherlands/guilder 1.8215 1.8720 1.7587 1.8507 1.7942 1.8026 1.8559 1.9299 1.9073 18 New Zealand/dollar2 59.619 57.832 53.792 53.026 53.904 54.290 53.949 54.900 55.264 19 Norway/krone 6.2541 6.4912 6.2142 6.9989 6.7399 6.8027 6.9986 7.3179 7.3611 20 Portugal/escudo 142.70 144.77 135.07 152.17 148.25 151.89 157.63 167.87 173.36 21 Singapore/dollar 1.8134 1.7283 1.6294 1.6446 1.6228 1.6136 1.6175 1.6206 1.6102 77 South Africa/rand 2.5885 2.7633 2.8524 3.1790 3.1718 3.1787 3.2408 3.3518 3.3654 23 South Korea/won 710.64 736.73 784.58 796.42 798.61 803.19 805.91 809.58 811.96 24 Spain/peseta 101.96 104.01 102.38 117.71 115.64 121.30 127.11 134.93 138.67 25 Sri Lanka/rupee 40.078 41.200 44.013 47.069 47.712 47.965 48.073 48.643 48.750 76 Sweden/krona 5.9231 6.0521 5.8258 7.7362 7.4500 7.3271 7.4541 7.9802 8.0405 77 Switzerland/franc 1.3901 1.4356 1.4064 1.5206 1.4599 1.4504 1.4769 1.5147 1.4973 28 Taiwan/dollar 26.918 26.759 25.160 26.026 25.987 25.978 26.267 26.682 26.951 79 Thailand/baht 25.609 25.528 25.411 25.425 25.251 25.234 25.214 25.331 25.192 30 United Kingdom/pound2 178.41 176.74 176.63 146.17 154.47 154.77 150.82 149.55 149.16 MEMO 31 United States/dollar3 89.09 89.84 86.61 93.65 90.62 90.24 91.81 94.59 94.33 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 Consumer installment credit, 39 Finance companies Consumer prices, 45, 46 Assets and liabilities, 36 Consumption expenditures, 52, 53 Business credit, 36 Corporations Loans, 39 Nonfinancial, assets and liabilities, 35 Paper, 25, 26 Profits and their distribution, 35 Financial institutions, loans to, 22, 23, 24 Security issues, 34, 65 Float, 51 Cost of living (See Consumer prices) Flow of funds, 40, 42, 43,44 Credit unions, 39 Foreign banks, assets and liabilities of U.S. branches and Currency in circulation, 5, 14 agencies, 23, 24 Customer credit, stock market, 27 Foreign currency operations, 11 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 Foreign central banks and foreign countries, 67 Savings and loan associations, 38, 39, 40. (See also SAIF-insured 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 III, Assistant Director DIANE E. WERNEKE, Special Assistant to the Board KAREN H. JOHNSON, Assistant Director RALPH W. SMITH, JR., Assistant Director LEGAL DIVISION DIVISION OF RESEARCH AND STATISTICS J. VIRGIL MATTINGLY, JR., General Counsel SCOTT G. ALVAREZ, Associate General Counsel MICHAEL J. PRELL, Director RICHARD M. ASHTON, Associate General Counsel EDWARD C. ETTIN, Deputy Director OLIVER IRELAND, Associate General Counsel WILLIAM R. JONES, Associate Director KATHLEEN M. O'DAY, Associate General Counsel THOMAS D. SIMPSON, Associate Director LAWRENCE SLIFMAN, Associate Director OFFICE OF THE SECRETARY DAVID J. STOCKTON, Associate Director WILLIAM W. WILES, Secretary MARTHA BETHEA, Deputy Associate Director JENNIFER J. JOHNSON, Associate Secretary PETER A. TINSLEY, Deputy Associate Director MYRON L. KWAST, Assistant Director BARBARA R. LOWREY, Associate Secretary PATRICK M. PARKINSON, Assistant Director ELLEN MALAND, Assistant Secretary MARTHA S. SCANLON, Assistant Director DIVISION OF BANKING JOYCE K. ZICKLER, Assistant Director JOHN J. MINGO, Adviser SUPERVISION AND REGULATION LEVON H. GARABEDIAN, Assistant Director RICHARD SPILLENKOTHEN, Director (Administration) STEPHEN C. SCHEMERING, Deputy Director DON E. KLINE, Associate Director DIVISION OF MONETARY AFFAIRS WILLIAM A. RYBACK, Associate Director FREDERICK M. STRUBLE, Associate Director DONALD L. KOHN, Director HERBERT A. BIERN, Deputy Associate Director DAVID E. LINDSEY, Deputy Director' ROGER T. COLE, Deputy Associate Director BRIAN F. MADIGAN, Associate Director JAMES I. GARNER, Deputy Associate Director RICHARD D. PORTER, Deputy Associate Director HOWARD A. AMER, Assistant Director DEBORAH DANKER, Assistant Director GERALD A. EDWARDS, JR., Assistant Director NORMAND R.V. BERNARD, Special Assistant to the Board JAMES D. GOETZINGER, Assistant Director DIVISION OF CONSUMER STEPHEN M. HOFFMAN, JR., Assistant Director LAURA M. HOMER, Assistant Director AND COMMUNITY AFFAIRS JAMES V. HOUPT, Assistant Director GRIFFITH L. GARWOOD, Director JACK P. JENNINGS, Assistant Director GLENN E. LONEY, Associate Director MICHAEL G. MARTINSON, Assistant Director DOLORES S. SMITH, Associate Director RHOGER H PUGH, Assistant Director MAUREEN P. ENGLISH, Assistant Director SIDNEY M. SUSSAN, Assistant Director IRENE SHAWN MCNULTY, 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 LOUISE L. ROSEMAN, Assistant Director DAVID L. SHANNON, 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 • October 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, III, Eighth District ANTHONY P. TERRACCIANO, Third District JOHN F. GRUNDHOFER, Ninth District JOHN B. MCCOY, Fourth District DAVID A. RISMILLER, Tenth District EDWARD E. CRUTCHFIELD, JR., Fifth District CHARLES R. HRDLICKA, Eleventh District E.B. ROBINSON, JR., Sixth District RICHARD M. ROSENBERG, Twelfth District HERBERT V. PROCHNOW, Secretary WILLIAM J. KORSVIK, Associate Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A75 CONSUMER ADVISORY COUNCIL DENNY D. DUMLER, Denver, Colorado, Chairman JEAN POGGE, Chicago, Illinois, Vice Chairman BARRY A. ABBOTT, San Francisco, California BONNIE GUITON, Charlottesville, Virginia JOHN R. ADAMS, Philadelphia, Pennsylvania JOYCE HARRIS, Madison, Wisconsin JOHN A. BAKER, Atlanta, Georgia GARY S. HATTEM, New York, New York VERONICA E. BARELA, Denver, Colorado JULIA E. HILER, Marietta, Georgia MULUGETTA BIRRU, Pittsburgh, Pennsylvania RONALD HOMER, Boston, Massachusetts DOUGLAS D. BLANKE, St. Paul, Minnesota THOMAS L. HOUSTON, Dallas, Texas GENEVIEVE BROOKS, Bronx, New York HENRY JARAMILLO, Belen, New Mexico TOYE L. BROWN, Boston, Massachusetts EDMUND MIERZWINSKI, Washington, D.C. CATHY CLOUD, Washington, D.C. JOHN V. SKINNER, Irving, Texas MICHAEL D. EDWARDS, Yelm, Washington LOWELL N. SWANSON, Portland, Oregon MICHAEL FERRY, St. Louis, Missouri MICHAEL W. TIERNEY, Washington, D.C. NORMA L. FREIBERG, New Orleans, Louisiana GRACE W. WEINSTEIN, Englewood, New Jersey LORI GAY, LOS Angeles, California JAMES L. WEST, Tijeras, New Mexico DONALD A. GLAS, Hutchinson, Minnesota ROBERT O. ZDENEK, Washington, D.C. THRIFT INSTITUTIONS ADVISORY COUNCIL DANIEL C. ARNOLD, Houston, 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. WELCOME TO THE FEDERAL RESERVE. March 1989. 14 pp. number of pages, and price. INDUSTRIAL PRODUCTION—1986 EDITION. December 1986. 1981 October 1982 239 pp. $ 6.50 440 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 How 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- 165. THE DEMAND FOR TRADE CREDIT: AN INVESTIGATION OF DEXES OF THE MONETARY AGGREGATES, by Helen T. Farr MOTIVES FOR TRADE CREDIT USE BY SMALL BUSINESSES, and Deborah Johnson. December 1985. 42 pp. by Gregory E. Elliehausen and John D. Wolken. Septem- 148. THE MACROECONOMIC AND SECTORAL EFFECTS OF THE ber 1993. 18 pp. ECONOMIC RECOVERY TAX ACT: SOME SIMULATION RESULTS, by Flint Brayton and Peter B. Clark. December 1985. 17 pp. REPRINTS OF SELECTED Bulletin ARTICLES 149. THE OPERATING PERFORMANCE OF ACQUIRED FIRMS IN BANKING BEFORE AND AFTER ACQUISITION, by Stephen Some Bulletin articles are reprinted. The articles listed below A. Rhoades. April 1986. 32 pp. are those for which reprints are available. Most of the articles 150. STATISTICAL COST ACCOUNTING MODELS IN BANKING: reprinted do not exceed twelve pages. Limit of ten copies A REEXAMINATION AND AN APPLICATION, by John T. Rose and John D. Wolken. May 1986. 13 pp. Recent Developments in the Bankers Acceptance Market. 1/86. 151. RESPONSES TO DEREGULATION: RETAIL DEPOSIT PRICING The Use of Cash and Transaction Accounts by American FROM 1983 THROUGH 1985, by Patrick I. Mahoney, Alice Families. 2/86. P. White, Paul F. O'Brien, and Mary M. McLaughlin. Financial Characteristics of High-Income Families. 3/86. January 1987. 30 pp. Prices, Profit Margins, and Exchange Rates. 6/86. 152. DETERMINANTS OF CORPORATE MERGER ACTIVITY: A Agricultural Banks under Stress. 7/86. REVIEW OF THE LITERATURE, by Mark J. Warshawsky. Foreign Lending by Banks: A Guide to International and U.S. April 1987. 18 pp. Statistics. 10/86. 153. STOCK MARKET VOLATILITY, by Carolyn D. Davis and Recent Developments in Corporate Finance. 11/86. Alice P. White. September 1987. 14 pp. Measuring the Foreign-Exchange Value of the Dollar. 6/87. 154. THE EFFECTS ON CONSUMERS AND CREDITORS OF Changes in Consumer Installment Debt: Evidence from the PROPOSED CEILINGS ON CREDIT CARD INTEREST RATES, 1983 and 1986 Surveys of Consumer Finances. 10/87. by Glenn B. Canner and James T. Fergus. October 1987. Home Equity Lines of Credit. 6/88. 26 pp. Mutual Recognition: Integration of the Financial Sector in the 155. THE FUNDING OF PRIVATE PENSION PLANS, by Mark J. European Community. 9/89. Warshawsky. November 1987. 25 pp. The Activities of Japanese Banks in the United Kingdom and in 156. INTERNATIONAL TRENDS FOR U.S. BANKS AND BANKING the United States, 1980-88. 2/90. MARKETS, by James V. Houpt. May 1988. 47 pp. Industrial Production: 1989 Developments and Historical 157. M2 PER UNIT OF POTENTIAL GNP AS AN ANCHOR FOR Revision. 4/90. THE PRICE LEVEL, by Jeffrey J. Hallman, Richard D. Recent Developments in Industrial Capacity and Utilization. Porter, and David H. Small. April 1989. 28 pp. 6/90. 158. THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIRE- Developments Affecting the Profitability of Commercial Banks. MENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE 7/90. PRODUCTS, by Mark J. Warshawsky with the assistance of Recent Developments in Corporate Finance. 8/90. Dietrich Earnhart. September 1989. 23 pp. U.S. Exchange Rate Policy: Bretton Woods to Present. 11/90. 159. NEW DATA ON THE PERFORMANCE OF NONBANK SUBSID- The Transmission Channels of Monetary Policy: How Have IARIES OF BANK HOLDING COMPANIES, by Nellie Liang They Changed? 12/90. and Donald Savage. February 1990. 12 pp. Changes in Family Finances from 1983 to 1989: Evidence from 160. BANKING MARKETS AND THE USE OF FINANCIAL SER- the Survey of Consumer Finances. 1/92. VICES BY SMALL AND MEDIUM-SIZED BUSINESSES, by U.S. International Transactions in 1991. 5/92. 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 • NEW YORK HILADELPHIA M H HH B H Hr mm LEGEND Both pages Facing page • Federal Reserve Bank city • Federal Reserve Branch city • Board of Governors of the Federal — Branch boundary Reserve System, Washington, D.C. NOTE The Federal Reserve officially identifies Districts Commonwealth of Puerto Rico and the U.S. Virgin by number and Reserve Bank city (shown on both Islands; the San Francisco Bank serves American pages) and by letter (shown on the facing page). Samoa, Guam, and the Commonwealth of the In the 12th District, the Seattle Branch serves Northern Mariana Islands. The Board of Governors Alaska, and the San Francisco Bank serves Hawaii. revised the branch boundaries of the System most The System serves commonwealths and terri- recently in December 1991. tories as follows: the New York Bank serves the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A79 1-A 2-B 3-C 4-D 5-E Baltimore^ Pittsburgh i< / • Cincinnati MAH Buffalo • ^ CT NJ NY BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F 7-G 8-H • Nashville TN « Birmingham AL \ _ W1 Ml MS ^ // \ GGAA 1A Detroit • Louisville ^^ LA m '' JJaacckkssoonnvviillllee iL • IN AR T M N emphis New Orleans „ Littl?' J Rock Miami ATLANTA • CHICAGO ST. LOUIS 9-1 • Helena MN •''litisTM&WTIMM' MI I so • MINNEAPOLIS 10-J 12-L I NE CO Omaha* • } MO ALASKA Denver • NM Oklahoma City • OK KANSAS CITY 11-K Salt iSke City • Los Angeles 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 FR1A. SSeEnRio r 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. A guide to Business A Consumer's Credit Guide to Mortgage Lock-Ins TP^P' Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis