Federal Reserve Bulletin, 1994-04

VOLUME 80 • NUMBER 4 • APRIL 1994 FEDERAL RESERVE BULLETIN BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D.C. t'V 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 269 BUSINESS-TO-BUSINESS PAYMENTS AND after a gain of 0.5 percent in January. The THE ROLE OF FINANCIAL ELECTRONIC utilization of total industrial capacity edged up DATA INTERCHANGE 0.1 percentage point, to 83.4 percent, which is 2.2 percentage points above the year-ago level Today, the majority of businesses pay their but 1.4 percentage points below the 1988-89 suppliers and service providers with paper peak. checks despite business managers' emphasis on improving productivity through automation. Moreover, electronic data interchange 285 STATEMENTS TO THE CONGRESS (EDI) now permits businesses to send busi- John P. LaWare, member, Board of Governess information to other businesses electroninors, presents the views of the Federal cally, and financial electronic data interchange Reserve Board on the proposed legislation on (financial EDI) permits businesses to send Fair Trade in Financial Services (H.R.3248) payments with remittance data electronically and says that the Federal Reserve opposes this through the banking system to pay suppliers legislation because it believes that the policy and service providers. This article examines of national treatment has served the country the ways business-to-business payments are well and because the upcoming negotiations made today and describes the methods for of the Uruguay Round are the best hope for making financial EDI payments. It also exachieving further progress in opening foreign plores the reasons that businesses have chosen financial markets for U.S. financial firms, to use various payment instruments, the benebefore the Subcommittee on Financial Institufits of financial EDI, and the impediments to tions, Supervision, Regulation, and Deposit its use. Insurance of the House Committee on Banking, Finance and Urban Affairs, February 1, 279 TREASURY AND FEDERAL RESERVE 1994. FOREIGN EXCHANGE OPERATIONS 286 Lawrence B. Lindsey, member, Board of Gov- The dollar appreciated modestly against most ernors, discusses Community Reinvestment major currencies during the November- Act (CRA) reform and says that the Federal January period. It rose 2.9 percent against the Reserve has been highly aggressive in its German mark, 0.1 percent against the Japaapproach to proposing comprehensive regunese yen, and 0.5 percent on a trade-weighted latory reform of the CRA and that it has basis. The U.S. monetary authorities did not attempted to balance the competing concerns undertake any intervention operations during of providing greater specificity on what is the period. expected on the one hand without dictating credit decisions on the other, before the Sub- 282 INDUSTRIAL PRODUCTION AND committee on General Oversight, Investiga- CAPACITY UTILIZATION FOR tions, and the Resolution of Failed Financial FEBRUARY 1994 Institutions of the House Committee on Bank- Industrial production rose 0.4 percent in Feb- ing, Finance and Urban Affairs, February 1, ruary to 115.1 percent of its 1987 average, 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

291 Governor Lindsey reviews the efforts to 307 ANNOUNCEMENTS reform the CRA by amending the regulations Increase in pressure on reserve positions of the federal financial institution regulatory announced by Chairman Greenspan. agencies and says that the Federal Reserve developed proposed changes to its CRA Statement by Chairman Greenspan on the regulations in conjunction with the other resignation of President Syron of the Federal agencies and that he is paying particular atten- Reserve Bank of Boston. tion to comments about the details of imple- Meeting of the Consumer Advisory Council. mentation and unintended consequences from how the proposal will work in practice, before Approval of a final rule regarding a change in the Subcommittee on Consumer Credit and the Federal Deposit Insurance Corporation Insurance of the House Committee on Bank- Improvement Act. ing, Finance and Urban Affairs, February 8, 1994. Amendments to Regulation E. Amendments to Regulation O. 296 The Board of Governors comments on the credit and charge card legislation being con- Delay in the distribution of a new criminal sidered in H.R.I842 and H.R.2175 and says referral form for use by financial institutions. that it believes that existing law supplies con- Proposal to revise the risk-based capital stansumers with adequate information about the dards; proposal to simplify and update Regukey costs associated with credit and charge lation E. card accounts and that a provision of the proposed legislation that would allow gov- Publication of a consumer affairs brochure, ernment agencies to pass the costs of credit Making Sense of Savings. transactions directly on to consumers could increase public use of a more convenient pay- Revisions to the money stock data. ment option but would also create different rules for the private and public sectors, in a 315 MINUTES OF THE FEDERAL OPEN statement submitted to the Subcommittee on MARKET COMMITTEE MEETING Consumer Credit and Insurance of the House Committee on Banking, Finance and Urban At its meeting on December 21, 1993, the Affairs, February 9, 1994. Committee adopted a directive that called for maintaining the existing degree of pressure on 301 Alan Greenspan, Chairman, Board of Gover- reserve positions and that did not include a nors, presents the Federal Reserve's semian- presumption about the likely direction of any nual monetary policy report to the Congress adjustment to policy during the intermeeting and says that the performance of the U.S. period. The directive stated that, in the context economy has improved appreciably and that of the Committee's long-run objectives for the projections of the Federal Open Market price stability and sustainable economic Committee members suggest a continuation of growth, and giving careful consideration to good economic performance in 1994, with economic, financial, and monetary develreasonable growth and subdued inflation, opments, slightly greater or slightly lesser although there are considerable risks to this reserve restraint might be acceptable during generally favorable outlook, before the Sub- the intermeeting period. The reserve condicommittee on Economic Growth and Credit tions associated with this directive were Formation of the House Committee on Bank- expected to be consistent with modering, Finance and Urban Affairs, February 22, ate growth in M2 and M3 over the months 1994. ahead. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

325 LEGAL DEVELOPMENTS A70 INDEX TO STATISTICAL TABLES Various bank holding company, bank service A72 BOARD OF GOVERNORS AND STAFF corporation, and bank merger orders; and pending cases. A74 FEDERAL OPEN MARKET COMMITTEE AND STAFF; ADVISORY COUNCILS A1 FINANCIAL AND BUSINESS STATISTICS These tables reflect data available as of A76 FEDERAL RESERVE BOARD February 24, 1994. PUBLICATIONS A3 GUIDE TO TABULAR PRESENTATION A78 MAPS OF THE FEDERAL RESERVE SYSTEM A4 Domestic Financial Statistics A45 Domestic Nonfinancial Statistics A80 FEDERAL RESERVE BANKS, BRANCHES, A53 International Statistics AND OFFICES A69 GUIDE TO STATISTICAL RELEASES AND SPECIAL TABLES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Business-to-Business Payments and the Role of Financial Electronic Data Interchange Scott E. Knudson, Jack K. Walton II, and exchanged between trading partners, including pur- Florence M. Young, of the Board's Division of chase orders, invoices, shipping notices, payment Reserve Bank Operations and Payment Systems, orders, and remittance advices. prepared this article. To permit businesses to automate payment processing fully, the banking industry has combined Over the past three decades, businesses have impleelectronic payment formats with EDI formats for mented a vast array of automated systems to remittance data. When electronic transfers of funds improve their productivity. Nevertheless, most conand electronic remittance data are combined to tinue to bill their customers with paper invoices make payments, the transactions are called finanand to mail their suppliers paper checks with remitcial electronic data interchange (financial EDI). tance information. Generating and processing these Using financial EDI to make payments allows busipaper documents consumes significant amounts of nesses to replace the labor-intensive activities assoreal resources, such as labor and transportation. ciated with issuing, mailing, and collecting checks The purchasing company must manually enter data through the banking system with automated initiafrom invoices into its automated accounts payable tion, transmission, and processing of payment system, track the receipt of supplies, print remitinstructions. Thus, it eliminates the delays inherent tance documents, and issue and mail checks. After in processing checks. Financial EDI also improves receiving payment, the supplier must manually the certainty of the payment flows between corpoenter payment data into its automated accounts rations' bank accounts because the payee's bank receivable system and deposit the check with its can credit its account on the scheduled payment bank for collection. date and the payor's bank can debit its account on To collect payment for its customer, the suppli- the same day. ers' bank (the collecting bank) must typically trans- Despite the potentially significant benefits of port the check to the bank on which the purchaser financial EDI to businesses and the banking drew it (the payor bank).1 Collecting banks freindustry, businesses continue to use traditional quently route checks through intermediaries, such methods to make most of their business-to-business as correspondent banks or Federal Reserve Banks, payments. which ultimately deliver the checks to the payor This article examines the ways business-tobanks. Thus, the transportation of checks through business payments are made today and describes the collection chain and the repetitive handling of the methods for making financial EDI payments. It them at each bank in the chain contribute signifialso explores the reasons that businesses have cantly to the cost of processing checks. chosen to use various payment instruments, the Today, electronic data interchange (EDI) permits benefits of financial EDI, and the impediments to businesses to replace paper documents with the its use. electronic transmission of a wide variety of business data. Specifically, EDI consists of the electronic transmission of data in standard formats HOW BUSINESS-TO-BUSINESS developed by businesses for documents typically PAYMENTS ARE MADE 1. The term "bank" in this article refers to all depository institu- The three principal types of noncash payment tions, such as savings and loan associations, mutual savings banks, credit unions, and so forth. instruments currently used for business-to-business Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

270 Federal Reserve Bulletin • April 1994 payments are checks, large-dollar funds transfers, to the timely collection of checks. These practices and automated clearing house (ACH) transfers. add to the transportation expenses incurred in collecting checks as well as delay recipients' access to funds. The value of this float benefit, however, Checks varies significantly depending on the level of interest rates and the costs businesses incur to manage Checks are debit transfers, that is, payees must float. collect funds from payors. Funds made available by banks to depositors of checks are provisional Large-Dollar Funds Transfers and may be reversed if the payor does not have sufficient funds in its account to pay the check Large-dollar funds transfers are credit transfers, when it is received by the payor's bank. In 1993, that is, funds flow directly from the payor's bank to more than 96 percent of all noncash payments the payee's bank. They are typically same-day paymade in the United States were made by paper ments and can be made almost instantaneously. checks (table 1). Consumers issued about 55 per- The two large-dollar funds transfer services in cent of these checks, businesses issued about the United States are the Federal Reserve's system, 40 percent, and the federal government issued about 5 percent.2 Fedwire, and the Clearing House Interbank Payments System (CHIPS) of the New York Clearing Because businesses issue checks to individuals House. The Federal Reserve guarantees Fedwire as well as to other businesses, the number of funds transfers. Thus, they cannot be revoked after business-to-business checks is difficult to estimate the receiving bank is advised that a Reserve Bank with any degree of accuracy, but the number is has credited its account. The members of CHIPS certainly large. Moreover, because the value of pledge collateral to ensure settlement of CHIPS payments made between businesses is likely to be transfers, and payments become final at the close of much larger than the value of those made by busibusiness when all members of CHIPS settle their nesses to individuals, the value of business-tonet positions using Fedwire transfers. business checks probably accounts for a large share of the value of all checks written. Large-dollar funds transfers account for an extremely small portion of the number of noncash Businesses use checks to make payments for payments. In 1993, for example, they accounted for basically two reasons. First, they are a familiar about 0.2 percent of all noncash payments in the instrument, and they are a readily accepted form of United States. At the same time, however, they payment despite some uncertainty about receiving accounted for nearly 86 percent of the value of all final payment. Second, some businesses benefit noncash payments (table 1). from the float created by the delays in the check- Businesses use large-dollar funds transfers when collection process. Float is created when a delay timeliness and certainty of payment are the most occurs between the initiation of a payment and the important considerations. For example, they generavailability of the funds to the recipient. As previally settle domestic financial transactions, such as ously noted, delays occur because checks are typirepurchase agreements and commercial paper, and cally delivered through the mail, require physical fund zero balance accounts with Fedwire funds handling, and must be transported among banks in transfers.3 They use CHIPS transfers to settle the the collection chain. Businesses find float valuable dollar side of foreign exchange as well as Eurodolbecause they can use or invest funds for several lar transactions. Businesses rarely use large-dollar days after they have issued a check. Although discouraged by the Federal Reserve, some companies attempt to increase the float bene- 3. When a business uses a zero balance account for disbursefit of checks by drawing checks on banks located in ment purposes, the bank maintaining the account advises the business each morning of the value of checks that have been presented remote locations or by otherwise imposing barriers for payment. The business then transfers funds to the account to cover the value of those checks. The use of zero balance accounts permits businesses to earn a return on funds through short-term 2. "Special Issue: Displacing the Check," Federal Reserve Bank investments, rather than maintaining non-interest-earning balances of Atlanta, Economic Review, vol. 68 (August 1983), p. 36. in demand deposit accounts at banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Business-to-Business Payments and the Role of Financial Electronic Data Interchange 271 1. Noncash payments, 1993 2. ACH transactions, 1991 and 19931 Volume in millions of items; value in trillions of dollars Millions of items except as indicated 1993 Volume AAvveerraaggee TTyyppee ooff aannnnuuaall nnoonnccaasshh Percent of Percent of IItteemm ggrroowwtthh rraattee,, ppaayymmeenntt Volume total Value total 1991 1993 11999911--9933 volume1 value ((ppeerrcceenntt)) Checks2 ... 59.400.0 96.3 68.3 12.5 ACH 11,,664400..00 22,,009999..00 1144..00 Fedwire3 .. 69.7 .1 207.6 37.9 Intercompany ACH .. 88..22 1111..88 2222..00 CHIPS3 ... 42.4 .1 262.3 47.9 ACH4 2,200.0 3.6 9.3 1.7 1. Based on an examination of total commercial and government ACH payments processed by the Federal Reserve Banks. Total 61.712.1 100.0 547.5 100.0 1. Components may not sum to totals because of rounding. 2. Estimates of total checks issued, developed by staff at the Federal ments. Businesses initiate the majority of ACH Reserve Board. transfers, but in 1993 less than 1 percent of those 3. Actual interbank payments processed, based on data from the Federal Reserve Banks and the Clearing House Interbank Payments System (CHIPS). transfers were business-to-business payments. Use 4. Actual interbank payments processed, based on data from the Federal of the ACH for business-to-business payments, Reserve Banks and, for transfers processed by private ACH operators, from the National Automated Clearing House Association (NACHA). however, is growing rapidly. Based on an examination of the types of ACH payments processed funds transfers to pay suppliers for goods and by the Federal Reserve System, ACH business-toservices.4 business payments grew at an average annual rate of 22 percent from 1991 through 1993. (The Fed- Automated Clearing House Transfers eral Reserve processes about 95 percent of all interbank ACH transfers.) This rate of growth was The ACH system is a value-dated electronic funds considerably higher than the growth in overall transfer system that is typically used to process ACH use (table 2). high volumes of relatively small-dollar payments Businesses typically use ACH credit transfers to for settlement one or two business days after they pay for goods or services and to make tax payare processed. Two types of ACH transfers may be ments to state and local governments. They use used—credit transfers or debit transfers. ACH ACH debit transfers to concentrate funds from the credit transfers are similar to large-dollar funds bank accounts of widely dispersed affiliates and transfers in that funds flow from the payor's bank subsidiaries to the company's primary bank to the payee's bank. The funds received by the account. Some businesses also use ACH debit payee's bank are generally provisional until the transfers to collect funds from businesses that dismorning of the business day following the settle- tribute their products. Many businesses, however, ment day. The Reserve Banks may revoke the are concerned about permitting other companies to payments if the sending bank does not have suffi- initiate debits on their accounts. Thus, ACH debit cient funds in its account to fund them on the transfers are used less often than ACH credit transsettlement day. When ACH debit transfers are used, fers for business-to-business payments. the bank initiating the transfer (the payee's bank) receives funds from the payor's bank. As with checks, funds made available by banks to collect- HOW FINANCIAL EDI PAYMENTS ARE MADE ing businesses are provisional and may be revoked if there are not sufficient funds in the payor's Corporations use various approaches to implement account to cover the transfer on the scheduled financial EDI. The most fundamental decision a settlement day. business must make when implementing financial ACH transactions account for a small fraction of EDI is whether payment instructions and remitthe total volume and value of all interbank pay- tance data should flow together through the banking system or whether payment instructions should flow through the banking system and remittance 4. Federal Reserve Bank of New York, "A Study of Large data should be transmitted over a direct data com- Dollar Payment Flows through CHIPS and Fedwire" (FRBNY, munications link with a trading partner or a value- December 1987). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

272 Federal Reserve Bulletin • April 1994 added network (VAN). A VAN is a third-party and remittance information, the ACH operator edits service provider that manages data communica- the payment instructions, extracts accounting data tions networks for businesses that exchange elec- from them, and transmits the payment instructions tronic data with other businesses. VANs facilitate and remittance data to the seller's bank (bank B). the exchange of electronic data by accepting data Bank B then transmits a payment advice and the in various formats and by converting the incoming remittance data to the selling company (comdata to a format usable by the receiver of the pany B), which is the payee. information. VANs also manage transmission When ACH credit transfers are processed by the schedules and hold data until receivers are ready to Federal Reserve, on the scheduled payment date accept them. the Reserve Banks maintaining the accounts of The choices businesses make are based on differ- banks A and B debit and credit the reserve or ences in electronic transmission costs, the extent to clearing accounts of banks A and B respectively, which the two trading partners exchange business for the total value of transfers sent or received. If a documents electronically, and the types of elec- private sector ACH operator processed the ACH tronic payment services offered by the two busi- transfers, the value of all ACH transfers processed nesses' banks. The following discussion provides for the banks using that operator would be netted, illustrations of payment instructions and remit- and each participant would settle its net position tance information flowing together and flowing through its account maintained on the books of a separately. Federal Reserve Bank. (Banks that do not have a In chart 1, the purchasing company (company reserve or clearing account settle ACH transfers A), which is the payor, transmits remittance data to through correspondent banks' reserve or clearing instruct its bank (bank A) to pay its supplier. Bank accounts.) Bank A and bank B then debit and credit A creates an ACH credit transfer instruction, indi- their respective customers' accounts. cating the specified payment date, and attaches the In chart 2, the payor transmits payment instrucappropriate electronic remittance data to that pay- tions to its bank (bank A) and remittance informament instruction. (See appendix A for a discussion tion to the payee through a VAN. The payment of ACH payment formats.) Bank A transmits the instructions are processed through the banking syspayment instruction with the remittance data to an tem and settled as described above, with the excep- ACH operator. At present, there are two national tion that remittance data are not attached. ACH operators—the Federal Reserve and Visa, U.S.A.—and two regional ACH operators—the New York Automated Clearing House Association 2. Payment instructions and remittance information flow Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Business-to-Business Payments and the Role of Financial Electronic Data Interchange 273 To facilitate the use of financial EDI, some banks made 700,000 ACH credit payments valued at provide VAN-like services with payment services $38 billion to suppliers.6 to their corporate customers. Some of these banks The federal government began using ACH transhave developed their own networks for communi- fers to make payments to businesses, state and cating data to their corporate customers, and some local governments, and educational institutions in of them also contract with VANs to transmit remit- 1987. The program, called Vendor Express, is mantance information to their corporate customers' aged by the Treasury Department's Financial Mantrading partners. agement Service (FMS). Although vendors con- The following examples illustrate how financial tinue to submit paper invoices to federal agencies, EDI payments are made using ACH credit and the agencies make payments using ACH credit debit transfers. Sears Roebuck and Company's transfers. To permit vendors to identify payments, Merchandise Group began using ACH credit trans- one ACH transfer, accompanied by an addendum fers to pay its suppliers in 1983. Sears uses EDI record that contains information referencing the format standards to transmit payment instructions vendor's invoice, is sent for each invoice received. and remittance information to its banks. The banks Depending on the capabilities of the vendors' convert the data to ACH payment formats, which banks, the remittance information may be delivered are then processed as shown in chart 1. If Sears's in electronic or paper form. In 1993, more than 100 supplier requests that remittance data be sent sepa- federal agencies participated in the program and rately, rather than with the payment, Sears trans- made approximately 5.3 million payments, valued mits the remittance data to the trading partner at $326.8 billion.7 The program has improved the through the same network used for exchanging timeliness of government payments and has sigother business data with that trading partner. The nificantly reduced the government's transaction ACH transfer is then processed by Sears's bank as costs.8 shown in chart 2. General Motors Corporation began using ACH debit transfers to collect payments from its dealers BENEFITS AND COSTS OF FINANCIAL EDI through their bank accounts in 1982. General FOR BUSINESSES Motors sends ACH formatted payment instructions, with information identifying the vehicles At present, neither EDI nor financial EDI are for which payment is being requested, to one of widely used. Approximately 44,000 companies, out its banks.5 The ACH debit transfers are processed of millions of businesses in the United States, in the same way that ACH credit transfers are, exchange business data electronically.9 Only about except that, on the settlement day General Motors's 10 percent of these companies also use financial banks credit General Motors's accounts and the EDI.10 Moreover, no more than fifty banks have the dealers' banks debit the dealers' accounts. In 1993, capability of providing complete financial EDI serusing this method, General Motors collected vices to their corporate customers.11 600,000 payments from its dealers, with a value of $12 billion. General Motors also uses ACH credit transfers to make payments to suppliers. Besides transmitting remittance information to suppliers through the 6. Data in this discussion were provided by General Motors banking system or a VAN, General Motors will Corporation. mail it directly to a supplier if the supplier's bank 7. Data provided by the Financial Management Service, U.S. Department of the Treasury. cannot receive EDI data. In 1993, General Motors 8. George W. Henderson and Anthony R. Torrice, "Vendor Express: A New Era in Government," EDI Forum, vol. 4 (1991), p. 40. 9. EDI Yellow Pages, Phillips Business Information. Similar data were also provided by EDI, spread the word!. 5. The Bankers EDI Council, a part of the NACHA, developed 10. The estimate of the number of financial EDI users was an electronic dealer drafting convention to replace the paper drafts provided by the NACHA. with which vehicle manufacturers had obtained payments from 11. Treasury Manager's Report, vol. 2 (February 18, 1994), dealers. p. 3. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

274 Federal Reserve Bulletin • April 1994 Incentives for Using Financial EDI Thus, financial EDI has the potential of eliminating the costs banks incur to capture daily informa- Several factors influence a company's decision to tion about check payments and of reducing the use financial EDI. For companies that have imple- charges companies pay for these services. It may mented EDI, the principal benefits of extending also improve a company's earnings on its cash EDI capabilities to the initiation of payments are balances. lower transaction costs and increased control over According to the EDI Group's survey, compathe timing of payments. nies using financial EDI found several benefits According to a survey conducted by the EDI besides reducing costs and improving control over Group, Ltd., a research and consulting firm, 23 per- the payment process. First, the electronic payment cent of the 370 respondents saw potential cost information exchanged between trading partners is savings as the most important reason for using more accurate than that on paper documents financial EDI.12 For example, businesses can because the information is not manually entered reduce personnel expenses by eliminating manual into accounting systems by each trading partner. processing, eliminate postage costs, and, in some Second, businesses can respond more quickly to cases, benefit from lower bank service charges. customer requests, such as verifying discrepancies The use of financial EDI and electronic pay- in purchase orders and invoices or identifying ments in general also permits corporate cash man- erroneous payment amounts or terms, because data agers to control the timing of payments. When a are readily accessible through automated systems. corporation uses ACH credit transfers to make pay- Third, large companies indicated that financial EDI ments, the settlement date for the payment is sched- allows them to form technologically based alliuled when the corporation sends payment instruc- ances with their suppliers, which may lead to longtions to its bank. Thus, the timing of payment term trading relationships. obligations is known with certainty, and corporate Societal cost savings could also result from cash managers can plan their funding needs in greater use of electronic payments. David Humadvance. Similarly, corporations receiving ACH phrey and Allen Berger calculated that the social credit transfers know the scheduled payment date costs of making payments using ACH transfers and can plan on receiving payments with a high in 1987 was substantially less than issuing, collectdegree of certainty. Businesses using ACH debit ing, and settling checks.13 Since 1987, however, transfers can also schedule payment dates with changes have occurred in the processes used each other so that the company whose bank account to issue and collect checks, and technological is being debited can fund the payment on a specific advances have been introduced in ACH processing. date. As a result, the cost savings that might be realized Conversely, when payments are made with by converting business-to-business payments to checks, the day on which a check will be delivered financial EDI cannot reliably be based on earlier to a corporation's bank for payment cannot be calculations. predicted. As a result, many companies purchase cash management services from their banks to Impediments to the Use of Electronic obtain information about the value of checks that Payments have been delivered for payment each day. Obtaining this information is labor intensive and costly While the potential cost savings associated with for the company and its banks. In addition, the using electronic payments may be substantial, the uncertainty associated with check payments may prevent a corporation from investing its cash balances in the most optimal way. 13. David B. Humphrey and Allen N. Berger, "Market Failure and Resource Use: Economic Incentives to Use Different Payment Instruments," in David B. Humphrey, ed., The U.S. Payment System: Efficiency, Risk and the Role of the Federal Reserve (Norwell, Mass.: Kluwer Academic Publishers, 1990), p. 49. 12. The EDI Group Ltd., "The State of Financial EDI, 1992," Humphrey and Berger's calculations indicated that approxipresented at the 1993 Financial EDI Conference, in Financial EDI mately $0.50 per payment could be saved by replacing paper Resources and Speaker Materials, sect. 2, p. 14. checks with ACH transfers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Business-to-Business Payments and the Role of Financial Electronic Data Interchange 275 impediments to their use are substantial as well. sonnel expenses, is about $750, ranging from a few First, the float benefit associated with check pay- hundred dollars to more than $20,000.17 Corporaments affects businesses' choice of payment instru- tions that have installed EDI systems estimate that ments. About 15 percent of the respondents to the they are able to recover their investment in about EDI Group's survey cited concerns about the loss two years, on average. Many firms, however, find of float as the reason that their companies had the initial costs prohibitively high. chosen not to participate in financial EDI.14 Fourth, even for businesses that have imple- Although the costs of managing float and current mented EDI to communicate with their trading low interest rates are reducing float benefits, the partners, the additional costs of implementing value of check float to businesses, on average, is financial EDI can be high. A business must estabstill substantial.15 lish a relationship with a bank that can support its To compensate for the loss of check float, some financial EDI requirements. It must also establish corporations adjust payment terms when convert- data communications links with the bank and may ing to electronic payments. For example, General need to modify the formats used in internal auto- Motors found that, on average, the checks it wrote mated accounting systems to send payment instrucwere paid 3.6 days after they were issued. When tions to the bank. it began making electronic payments, General Finally, because relatively few businesses par- Motors reached agreements with its suppliers to ticipate in financial EDI, most businesses must be make electronic payments three days later than able to issue and receive checks as well as make when it had been issuing check payments. This electronic payments. Maintaining both paper-based agreement improved funds availability for its sup- and electronic payment systems reduces the potenpliers by six-tenths of a day on average.16 tial benefits of financial EDI. To simplify the pay- Second, most companies that implement EDI ment process for their business customers, some systems focus initially on achieving internal operat- banks are beginning to accept instructions for all ing efficiencies rather than on improving their pay- their business customers' payments. Based on inment operations. Thus, the small percentage of formation about the form of payment requested by businesses using EDI that also use financial EDI the company's suppliers and service providers, probably reflects the initial emphasis of businesses these banks initiate either electronic payments or on re-engineering primary business functions. checks on behalf of their customers. While these After businesses take these steps, they may pursue services simplify payment processing for busiimprovements in payment operations. nesses, the banks must maintain dual processing Third, for corporations planning to install EDI systems. systems, start-up costs can be significant. The EDI Group's survey data indicated that the median cost for a corporation to install an EDI system is about CONCLUSIONS $7,500. The costs range from about $5,000 for smaller companies to more than $10 million for Despite the potential of financial EDI to reduce the large corporations. For companies to add a new costs of the resources consumed in making paytrading partner, the survey results indicated that the ments in the United States, a significant conversion median cost, including all out-of-pocket and per- of business-to-business payments to electronic form may not occur for some time. First, before a company can consider using financial EDI, it must install EDI systems to communicate with its trad- 14. See "The State of Financial EDI, 1992," p. 14. 15. Using 1987 data, Humphrey and Berger calculated the value ing partners. Because installing such systems may of check float to businesses to be about $1.88 per check. Using the require a company to make significant modificasame methods, we calculate that the value of check float to busitions to its internal automated systems as well as to nesses in 1993 ranges from about $0.86 to $1.12 per check. The decline is due mostly to lower interest rates. See appendix B for a develop the capability to transmit business data to discussion of the methods used to calculate the value of float. 16. Charles E. Golden, "Making General Motors and America More Competitive through Financial EDI and EFT," EDI Forum, vol. 3 (1990), p. 26. 17. Data provided by The EDI Group, Ltd. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

276 Federal Reserve Bulletin • April 1994 its trading partners, implementation costs are high. is needed before determinations can be made about As a result, many companies may not yet be able to its potential for increasing the efficiency of the justify the investment in EDI systems. payments system in the United States. Thus, the Second, even for companies that have imple- types of payment services used by businesses in the mented EDI systems to communicate with their future will ultimately be based on the collective trading partners, using financial EDI to make pay- results of individual businesses' cost-benefit ments to those trading partners is complex. The analyses and their demands for specific payment company must find a bank capable of processing services. financial EDI transfers, determine whether each trading partner's bank can receive the payments and provide the remittance data, and consider rene- APPENDIX A: EDI FORMATS gotiating payment terms with each trading partner. To many business managers, these undertakings The American National Standards Institute (ANSI) are daunting. is the coordinating organization in the United States Third, many businesses continue to benefit from for the development of national standards for EDI. the float created by the check collection system. ANSI members establish standards used to meet Even though current low interest rates have this country's business needs. In 1979, ANSI reduced this benefit, check float continues to act as formed the Accredited Standards Committee (ASC) a disincentive to increased use of financial EDI. X12 to set inter-industry standards for electronic Finally, for both businesses and banks, the need data interchange for business transactions. It is to maintain systems to process checks as well as currently supported by more than 300 organizaelectronic payments is complicated and costly. tions representing corporations, financial institu- While issuing and collecting checks currently tions, government agencies, trade associations, consumes significant resources, the total costs and vendors, and consultants. potential benefits of converting the nation's payment system to an electronic one are difficult to quantify. Similarly, the costs and benefits associ- Transaction Data Sets ated with financial EDI are difficult to quantify. Several factors, however, indicate that the use of ANSI ASC X12 standards are cross-industry, pubfinancial EDI will grow. The cost of technology lic standards that may be used by any company, in continues to decline, and even small businesses are any industry, for the exchange of information. The using automated systems to track inventories and to format standards, called transaction data sets, have maintain their accounting systems. Gaining access been developed for many business documents. to value-added networks, which simplify electronic Each ANSI transaction data set is identified by a communications between trading partners, is three-digit number. For example, a payment orderbecoming easier. remittance advice is an ANSI 820 transaction, and In addition, several large companies that have a purchase order is an ANSI 850 transaction. installed EDI systems are interested in expanding The payment order-remittance advice (ANSI those systems to their payment processing. The 820) is the most common transaction data set used interest of these companies is providing the impe- for financial EDI. A payment order instructs a bank tus for some banks to offer financial EDI services to take funds out of the payor's account and send or expand the services they currently offer. More- the funds to the bank maintaining the account of a over, the federal government's plans to improve its trading partner. A remittance advice provides speefficiency through automation, including expansion cific information about the payment. For example, of its Vendor Express program, will require banks a $500 payment might be made to pay $100 for to develop the capability of processing financial invoice number 1, $200 for invoice number 2, and EDI payments for the businesses providing goods $200 for invoice number 3. The ANSI 820 format and services to the government. permits a company to transmit a variable amount of remittance information, depending on the require- At the same time, a considerably greater underments of each transaction. standing of the costs and benefits of financial EDI Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Business-to-Business Payments and the Role of Financial Electronic Data Interchange 277 ACH Format Standards APPENDIX B: FLOAT BENEFITS OF CHECKS The National Automated Clearing House Associa- In their 1987 study, Humphrey and Berger calcution (NACHA) is a national trade association whose lated that the average value of float to businesses members are local ACH associations. Since its issuing checks amounted to about $1.88 per formation in 1974, the NACHA has promulgated check.18 This appendix explains Humphrey and the formats used for ACH transfers. To support Berger's calculations and updates them for 1993. business-to-business payments, the NACHA has developed the following four ACH formats: 1987 Calculations. Humphrey and Berger used (1) cash concentration and disbursement (CCD), the following formula to calculate the value of float (2) cash concentration and disbursement plus per business check: (CCD+), (3) corporate trade exchange (CTX), and (4) corporate trade payment (CTP). Average value The cash concentration and disbursement of float = (average value of business check) (CCD) format is the simplest of the four. It consists x (average number of float days) of a payment record in which a reference number may be included to assist in identifying the pay- x (average ninety-day Treasuryment. No other explanatory data may accom- bill rate/365), or pany the payment record, however. If a company wishes to transmit more extensive remittance data $1.88 = ($2,636) x (4.5) x (0.05775/365). to its trading partner, the company must use a different ACH format or transmit the information The values used in the formula were calculated separately. as follows: The cash concentration and disbursement plus (CCD+) format uses the CCD payment record and 1. To calculate the average value of a business is accompanied by one additional record, called an check, the following assumptions were made: addendum record, which provides information a. Consumers write 55 percent of checks; explaining the purpose of the payment. Data businesses, 40 percent; and the federal governincluded in the addendum record may be sent in ment, 5 percent.19 ANSI ASC X12 payment order-remittance advice b. The average value of all checks written and the health care claim payment-advice formats was $1,188, based on staff estimates that 47 billion or NACHA-endorsed banking conventions, includchecks were written in 1987, with a value of ing formats for electronic dealer drafting, child $55.8 trillion. support payments, and tax payments. c. The average value of a consumer check The corporate trade exchange (CTX) format was $145.20 consists of a payment record, which may be d. The average value of a federal government accompanied by as many as 9,999 addenda reccheck was $1,074. (In 1987, the Federal Reserve ords. Data included in the addenda records may Banks processed 568 million government checks, be sent in the ANSI ASC X12 formats or NACHAwith a value of $610.7 billion.) endorsed banking conventions. The corporate trade payment (CTP) was the first corporate format developed by the NACHA and may be accompanied by as many as 9,999 18. See "Market Failure and Resource Use," pp. 45-86. addenda records. The data formats of the addenda 19. See "Displacing the Check," pp. 36-7. records were designed to be compatible with 20. Robert Avery, Gregory Elliehausen, Arthur Kennickell, and most corporate accounting and receivable sys- Paul Spindt, "Changes in the Use of Transaction Accounts and Cash from 1984 to 1986," Federal Reserve Bulletin, vol. 73 (March tems. Because ANSI ASC XI2 standards are 1987), table 3, p. 182. replacing the formats used in the CTP addenda That study estimated that the average value of a consumer check records, use of the format will be discontinued in in 1986 was $130. Humphrey and Berger applied a 4 percent inflation factor to the 1986 figure, resulting in a 1987 average value April 1996. of $145. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

278 Federal Reserve Bulletin • April 1994 e. The average value of a business check was 2. The average number of float days was asestimated to equal $2,636, or sumed to be the same as that used by Humphrey and Berger. (Although the Federal Reserve System {$1,188 - [(0.55 x $145) + (0.05 x $1,074)]} / 0.40. and others have improved the check collection process since 1987, mail float is the largest single 2. The average number of float days, 4.5, was factor in business check float, and it was assumed the researchers' best estimate, based on conversa- that mail time has not decreased significantly.) tions with industry and Federal Reserve experts. 3. In 1993, the average ninety-day Treasury bill 3. In 1987, the average ninety-day Treasury bill rate was 3.6 percent. rate was 5.775 percent. 4. The equation then becomes 1993 Calculation. To update the value of float to $1.10 = ($2,484 x 4.5) x (0.036/365). businesses, Humphrey and Berger's formula was used, and the values used in the formula were Finally, two assumptions were changed to test calculated as follows: their effect on the calculated float value. First, the value of a consumer check was assumed not to 1. To calculate the average value of a business have increased between 1987 and 1993. (The avercheck, the following assumptions were made: age value of a consumer check may not have risen a. The distribution of checks written by con- because electronic payments, such as automated sumers, businesses, and the federal government bill payments and automated teller machine transwas assumed to be the same as in 1987. actions, have replaced some checks.) Given this b. The average value of all checks was assumption, the average value of a business check $1,150, based on staff estimates that 59.4 billion would equal $2,536, or checks were written in 1993, with a value of $68.3 trillion. {$1,150- [(0.55 x $145) + (0.05 x $1,113)]} / 0.40, c. The average value of a consumer check was estimated to be $183 by applying a 4 percent and the value of float per business check would annual inflation factor to Humphrey and Berger's equal $1.12, that is, estimate of $145. d. The average value of a federal government [($2,536 x 4.5) x (0.036/365)]. check was $1,113. (In 1993, the Federal Reserve Banks processed 480 million government checks, Second, it was assumed that the average number with a value of $534.2 billion.) of float days has declined from 4.5 to 3.5. With this e. The average value of a business check was assumption, the average value of float equals $0.86 estimated to equal $2,484, or per business check, or {$1,150 - [(0.55 x $183) + (0.05 x $1,113)]} / 0.40. [($2,536 x 3.5) x (0.036/365)]. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Treasury and Federal Reserve Foreign Exchange Operations This quarterly report describes Treasury and Sys- nearly 17 percent over the course of the month— tem foreign exchange operations for the period and remained volatile throughout December. from November through January 1994. It was Growing pessimism over the economic outlook for presented by Peter R. Fisher, Senior Vice President Japan, as well as the uncertain prospects for the and Manager for Operations for the Federal Hosokawa government's long-awaited fiscal stimu- Reserve Bank of New York. Nicholas Pifer lus package, helped fuel expectations of an addiwas primarily responsible for preparation of the tional cut in the Bank of Japan's Official Discount report.1 Rate (ODR). Over the course of December, trading activity in the dollar-yen exchange market started to ebb as The dollar appreciated modestly against most major first corporate and then interbank participants currencies during the November-January period. It pulled back from the market ahead of the year-end rose 2.9 percent against the German mark, 0.1 perholidays. Japanese exporters, who regularly sell cent against the Japanese yen, and 0.5 percent on a trade-weighted basis.2 The U.S. monetary authori- dollars to the market to hedge their foreign currency receivables, were notably absent toward the ties did not undertake any intervention operations end of the month. In this environment, market during the period. conditions were increasingly characterized by the dominance of technically oriented traders who bought up the U.S. currency in anticipation of THE DOLLAR ENDS THE PERIOD VIRTUALLY further dollar gains, and the dollar rose gradually UNCHANGED AGAINST THE YEN through December from a low of ¥107.37 to a high of ¥112.05. After opening at ¥108.64 on November 1, the dol- In late December, Treasury Secretary Bentsen lar rose against the yen in thin year-end markets, was asked whether he saw a need to intervene in reaching a high of ¥113.55 before coming down to the foreign exchange market to stem the yen's end the period unchanged. Initially, the dollar rose decline. He responded that he did not think interas market participants turned their attention to vention would be necessary but rather thought Japan's lingering recession and to the prospect of that the foreign exchange market would focus on interest rate differentials moving in favor of the Japan's substantial trade surplus when determining dollar. This shift in focus was prompted by contin- the relative value of the dollar and the yen. Secued weakness in Japanese money supply growth, retary Bentsen expressed concern that Japan was employment, industrial production, and retail sales. not meeting its commitment to achieve domestic Moreover, Japanese equity prices dropped sharply demand-led growth and a significant reduction in in November—with the Nikkei stock index falling its external surplus. He expanded on this view in early January when he said that the proper way for Japan to address its economic imbalances was through a combination of effective fiscal stimulus 1. The charts for the report are available from Publications and market-opening measures, not through a depre- Services, Board of Governors of the Federal Reserve System, Mail Stop 127, Washington, DC 20551. ciation of the yen. 2. The dollar's movements on a trade-weighted basis are mea- The dollar reached its period high of ¥113.55 on sured using an index developed by the staff at the Board of January 5 but soon drifted lower when expected Governors of the Federal Reserve System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

280 Federal Reserve Bulletin • April 1994 1. Federal Reserve reciprocal currency arrangements DOLLAR APPRECIATES MODESTLY Millions of dollars AGAINST THE MARK Amount of Institution facility, During November and most of December, the dol- January 31, 1994 lar was relatively stable against the German mark, Austrian National Bank 250 trading in a narrow range around the DM1.70 level. National Bank of Belgium 1,000 Bank of Canada 2,000 Market sentiment toward the dollar was generally National Bank of Denmark 250 positive, however, with dealers taking note of the Bank of England 3,000 Bank of France 2,000 increasingly divergent paths of the U.S. and Ger- Deutsche Bundesbank 6,000 Bank of Italy 3,000 man economies. In this environment, market partic- Bank of Japan 5,000 ipants began to anticipate a fairly rapid conver- Bank of Mexico 700 gence of short-term German and U.S. interest rates. Netherlands Bank 500 Bank of Norway 250 The Bundesbank, which had surprised the foreign Bank of Sweden 300 Swiss National Bank 4,000 exchange market in late October, when it cut its discount and Lombard rates 50 basis points, Bank for International Settlements Dollars against Swiss francs 600 trimmed its key money market repurchase rate Dollars against other authorized European currencies 1,250 from 6.40 percent at the start of the period to 6.25 percent on December 1. At its December 2 Total 3300,,110000 council meeting, the Bundesbank announced a prefixed rate of 6.0 percent for the next five weekly movements in interest rates failed to materialize. auctions of fourteen-day repurchase agreements. Market participants turned their attention to the Market participants generally interpreted this move shifting fortunes of Japanese political reform and to as an effort to nudge short-term interest rates lower bilateral trade talks with the United States, but they while also dampening speculation of further monewere unable to develop a lasting view on how the tary easing. success or failure of these two initiatives would The dollar broke out of its trading range in late affect exchange rates. Reflecting the market's December, jumping four pfennigs higher in the last uncertainty about the near-term direction of the three days of the month. Dealers expressed initial dollar against the yen, the implied one-month skepticism over the rise, which occurred in thin option volatility for the dollar-yen exchange rate year-end markets. Nonetheless, the dollar subsespiked higher in the second half of January. At the quently extended its gains to reach a twenty-eightsame time, foreign investors purchased the equiva- month high of DM1.7562 on January 14. As the lent of $10.5 billion in Japanese equities during dollar moved higher, it gained broad support from a January; these flows contributed to a sharp rebound series of U.S. and German statistical releases— in Japanese stock prices and helped support the notably retail sales, factory orders, and the purchasyen. ing managers index for the United States, and The upper house of the Japanese Diet passed industrial production, unemployment, and real Prime Minister Hosokawa's political reform bill on gross domestic product for Germany—that further January 29, permitting the government to turn its contrasted economic conditions in the two counattention to other policy issues. As the period came tries. Well-publicized financial setbacks at two to a close, U.S.-Japanese trade talks were continu- large German companies, along with a modest ing and the Japanese government was reportedly at selloff in German bonds and equities, added to work on a record stimulus package for the econ- the market's perception of a still fragile German omy. Reflecting the positive implications of such a recovery. package for Japanese domestic demand growth, the During the latter part of January, the dollar set- Nikkei surged nearly 8 percent on the last day of tled into a new trading range against the mark. the period, and expectations of additional interest Expectations of near-term volatility in the dollarrate cuts in Japan receded even further. These fac- mark exchange rate dropped off sharply, as the tors helped strengthen the yen, and the dollar closed implied one-month option volatility fell from at ¥108.65 on January 31. nearly 12 percent in early January to less than Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Treasury and Federal Reserve Foreign Exchange Operations 281 2. Net profits or losses (-) on U.S. Treasury differentials in three-month Eurodeposit rates, as and Federal Reserve foreign exchange operations1 well as those in the expected three-month deposit Millions of dollars rates implied by futures prices, moved in the U.S. Treasury mark's favor. The dollar closed the period on Janu- Period and item Federal Exchange ary 31 at DM1.7338. Reserve Stabilization Fund Valuation profits and losses on outstanding assets and liabilities as of October 31, 1993 3,368.5 2,839.0 OTHER OPERATIONS Realized profits and losses, November 1, 1993- January 31, 1994 0.0 0.0 As of the end of January, cumulative valuation Valuation profits and losses on gains on outstanding foreign currency balances outstanding assets and liabilities as of January 31, 1994 2,868.4 2,513.0 were $2,868.4 million for the Federal Reserve and 1. Data are on a value-date basis. $2,513.0 million for the Treasury's Exchange Stabilization Fund (ESF). There were no realized 9 percent at month-end. While market rumors of profits or losses for the quarter. central bank sales helped cap the dollar's rise, The Federal Reserve and the ESF regularly movements in actual and expected interest rate invest their foreign currency balances in a variety differentials also weighed on the U.S. currency. At of instruments that yield market-related rates of its two January meetings, the Bundesbank Council return and have a high degree of liquidity and kept its repurchase rate fixed at 6.0 percent, as it credit quality. A portion of the balances is invested disappointed the market and further deflated expec- in securities issued by foreign governments. As of tations about the pace of German interest rate cuts. the end of January, the Federal Reserve and the Similarly, a perceived lack of inflationary pressures ESF held either directly or under repurchase agreein the United States led dealers to rethink their ments $10,740.5 million and $10,436.2 million expectations of a near-term hike in short-term U.S. respectively in foreign government securities interest rates. During most of January, therefore, valued at end-of-period exchange rates. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

282 Industrial Production and Capacity Utilization for February 1994 Released for publication March 15 while cold snaps boosted production at electric and gas utilities. The temperature, however, was not as Industrial production rose 0.4 percent in February abnormally cold in February as in January; as a after a gain of 0.5 percent in January. The Califor- result, the output at utilities fell back somewhat nia earthquake and bad weather slowed growth in from its elevated January level. At 115.1 percent of both months in many manufacturing industries, its 1987 average, industrial production was 4.8 per- Industrial production indexes Twelve-month percent change Twelve-month percent change 1988 1989 1990 1991 1992 1993 1994 1988 1989 1990 1991 1992 1993 1994 Capacity and industrial production Ratio scale, 1987 production = 100 Ratio scale, 1987 production = 100 — Total industry 140 — Manufacturing — —: 140 Capacity Capacity 120 120 ^ _ _____ V ' _ 100 100 Production Production 80 80 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Percent of capacity Percent of capacity Total industry Manufacturing 90 Utilization Utilization 80 70 I I I I I I J I L J I I L J I I I I L 1980 1982 1984 1986 1988 1990 1992 1994 1980 1982 1984 1986 1988 1990 1992 1994 All series are seasonally adjusted. Latest series, February. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

283 Industrial production and capacity utilization, February 19941 Industrial production, index, 1987= 100 Percentage change CCaatteeggoorryy 11999933 11999944 19932 19942 FFeebb.. 11999933 ttoo Nov.r Dec.r Jan.r Feb.p Nov.r Dec.r Jan.r Feb.p FFeebb.. 11999944 Total 112.8 114.0 114.6 115.1 .8 1.0 .5 .4 4.8 Previous estimate 112.8 113.9 114.4 .8 .9 .5 Major market groups Products, total3 112.1 113.0 113.6 114.0 .8 .8 .5 .4 4.3 Consumer goods 109.7 110.1 110.5 110.0 .4 .4 .4 .4 1.9 Business equipment 139.7 141.9 143.4 144.7 1.4 1.6 1.0 1.0 11.3 Construction supplies 99.5 101.3 101.0 100.3 .9 1.8 -.3 -.8 4.4 Materials 113.9 115.5 116.1 116.7 1.0 1.4 .6 .5 5.5 Major industry groups Manufacturing 114.0 115.4 115.6 116.3 1.0 1.2 .2 .6 5.4 Durable 118.0 120.1 120.7 121.8 1.5 1.8 .5 .9 8.6 Nondurable 109.1 109.5 109.4 109.6 .3 .3 -.1 .2 1.3 Mining 96.9 97.2 98.1 98.9 -1.1 .3 .9 .8 1.8 Utilities 116.1 116.5 120.7 119.1 1.0 .3 3.6 -1.3 1.4 Capacity utilization, percent 1993 1994 Average, Low, High, 1967-92 1982 1988-89 Feb. Nov.1 Dec.r Jan.r Feb.p Total 81.9 71.8 84.8 81.2 82.2 83.0 83.3 83.4 2.0 Manufacturing 81.2 70.0 85.1 80.2 81.5 82.3 82.3 82.6 2.3 Advanced processing 80.6 71.4 83.3 78.8 79.8 80.5 80.7 81.1 2.8 Primary processing . 82.2 66.8 89.1 83.4 85.5 86.4 86.0 86.1 1.1 Mining 87.4 80.6 87.0 86.9 87.5 87.8 88.6 89.4 -1.0 Utilities 86.7 76.2 92.6 88.1 86.4 86.7 89.7 88.4 1.1 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. cent higher in February than it was a year earlier. rapid. In contrast, the growth in the output of The utilization of total industrial capacity edged up industrial and other equipment has flattened so far 0.1 percentage point, to 83.4 percent, which is this year; the production of commercial aircraft has 2.2 percentage points above the year-ago level but continued to decline, as has the output of defense 1.4 percentage points below the 1988-89 peak. and space equipment. When analyzed by market group, the data show The output of construction supplies fell for a that the output of consumer goods advanced an- second month; construction activity continued to other 0.4 percent in February. Once again the gain be affected by weather conditions. The production was concentrated in the output of automotive prod- of industrial materials rose 0.5 percent, with ucts, which rose 5.3 percent. The production of strength most evident in durable materials, particuother durable consumer goods declined 0.6 percent, larly semiconductors and other parts used to and the output of nondurable consumer goods make motor vehicles and computers. The output of edged down 0.2 percent as residential use of elec- energy materials edged down after a 1.9 percent tricity declined. surge in January. The output of business equipment increased When analyzed by industry group, the data show I.0 percent for the second month in a row and was that manufacturing output expanded 0.6 percent in II.3 percent higher than a year earlier. The growth February after a 0.2 percent increase in January. in the production of information processing equip- Production by manufacturers of durable goods ment and motor vehicles continued to be quite grew 0.9 percent, boosted by the continued strong Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

284 Federal Reserve Bulletin • April 1994 growth in motor vehicles, computers, and related in primary-processing industries inched up 0.1 perparts. Production by manufacturers of nondurable centage point. At 86.1 percent, the utilization rate goods increased only 0.2 percent as rebounds in the for primary-processing industries is nearly 4 perpaper and food processing industries were mostly centage points above its 1967-93 average but offset by declines in textiles, apparel, leather goods, 3 percentage points below its 1988-89 high; the and chemicals and related products. The output at rate for the advanced-processing group is closer to utilities, which had surged 3.6 percent in January, its longer-run average. Among the products that eased 1.3 percent because the weather in the latter have contributed to the above-average rates are half of February was more temperate than it was in motor vehicles and parts, lumber, steel sheet, and January. The output at mines increased 0.8 percent, computer parts. Rates remain noticeably below in part because of a strong gain in coal production. average for aluminum, aerospace and miscella- The utilization rate in manufacturing rose to neous transportation equipment, foods, apparel, and 82.6 percent; the rate in advanced-processing printing and publishing. • industries increased 0.4 percentage point, and that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

285 Statements to the Congress Statement by John P. LaWare, Member, Board the world. Consumers of financial services in the of Governors of the Federal Reserve System, United States are provided with access to a deep, before the Subcommittee on Financial Institu- varied, competitive, and efficient banking market tions, Supervision, Regulation, and Deposit In- in which they can satisfy their financial needs on surance of the Committee on Banking, Finance the best possible terms. Foreign banks, by their and Urban Affairs, U.S. House of Representa- presence in the United States and with the retives, February 1, 1994 sources they bring from their parents, make a significant contribution to our market and to our I appreciate the opportunity to present the economic growth; they enhance the availability views of the Federal Reserve Board on the and reduce the cost of financial services to U.S. proposed legislation on Fair Trade in Financial firms and individuals as well as to U.S. public Services (H.R.3248). Given its role, as the sector entities. central bank, in ensuring a healthy and efficient For these reasons, we simply do not consider environment for the provision of financial ser- legislation like H.R.3248 to be in our own selfvices, the Federal Reserve has a special interest interest. If we adopt such legislation, we must be in this legislation. prepared to forgo the considerable benefits of On several previous occasions, before other foreign banks' participation in our market if U.S. committees, I have presented the views of the banks are not allowed to compete fully and Federal Reserve on various proposals for legis- equitably abroad. lation on Fair Trade in Financial Services. I will, Second, I note that the multilateral negotiatherefore, keep my testimony brief and confine tions on trade in financial services will continue myself to those key points we consider to be of over the next two years, as agreed in the justcritical importance. concluded Uruguay Round. We believe that As I have emphasized before, the Federal these negotiations offer the best hope for achiev- Reserve shares the objectives of the proposed ing further progress in opening foreign financial legislation. These objectives are important and markets for U.S. financial firms, and we strongly their achievement desirable. U.S. financial firms support the Treasury in its efforts in those negodeserve to have the same opportunities to con- tiations. duct operations in foreign financial markets as We believe that the upcoming negotiations are domestic firms have in those markets. They do at a critical juncture. It is incumbent upon the not now have those opportunities in all markets. United States to continue to provide leadership According U.S. firms such treatment would ben- by example in this area for the rest of the world efit not only them but also the host foreign in order to preserve the principle of free, rather countries themselves and the world financial than reciprocal, trade. Free trade must continue system in general. to be our ultimate goal. Therefore, we do not However, while sharing these important objec- agree with those who assert that the proposed tives, the Federal Reserve continues to oppose Fair Trade in Financial Services legislation is this kind of legislation. We oppose it for essen- desirable or necessary in the context of those tially two reasons. First, the existing U.S. policy negotiations. Indeed, it is our view, based upon of national treatment has served our country experience, that market forces and the desire of well. The U.S. banking market, and U.S. finan- foreign officials to enhance the functioning of cial markets more generally, are the most effi- domestic financial markets are often the most cient, most innovative, and most sophisticated in potent forces for financial market liberalization; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

286 Federal Reserve Bulletin • April 1994 the negotiations provide a valuable framework system or the least-cost resolution of a failed for guiding that liberalization. bank. That said, however, if other views prevail on Fourth, the proposed legislation excepts from the need for Fair Trade in Financial Services its procedures countries that have provided to legislation, we would prefer the current proposal the United States a binding commitment to sub- (H.R.3248) over other proposals because it clar- stantially full market access and national treatifies the possible sanctions authority and proce- ment in financial services. This language seems dures in several important respects. to make clear that the legislation is intended to be First, we believe that, as between financial an adjunct to the ongoing negotiations with counand trade policy officials, it is more appropriate tries that have not yet made such commitments that the Secretary of the Treasury have author- and is not a rejection of the principles of free ity to make determinations regarding whether trade and national treatment. denial of national treatment to U.S. banking Finally, we believe that it is appropriate and organizations by a foreign country has a sig- important that no provision is included in nificant adverse effect on such organizations, H.R.3248 for retaliation across financial services as well as recommendations regarding sanc- sectors. As a consequence, even if, for example, tions in appropriate cases. The Department of U.S. securities or mutual funds might be having the Treasury is better positioned to make such problems in other countries, U.S. banks and determinations, in view of the information banking markets should not be jeopardized. available to the Treasury regarding the needs In conclusion, the desirability of market liberof both providers and consumers of financial alization as an objective in the financial sector, as services. in other sectors, is virtually universally accepted. Second, the requirement that the secretary The United States has the opportunity to conconsult with other relevant officials, including tinue to exercise leadership in this area. I sinappropriate banking officials, before making such cerely hope we take that opportunity. If not, any determinations helps to ensure that broader per- Fair Trade in Financial Services legislation spectives are incorporated in the decisionmaking should include the important improvements process. noted above in the current proposal. I would also Third, the proposed legislation recognizes, in like to echo the hope, recently expressed in a the residual discretion granted to the banking joint statement by the Bankers' Association for agencies, that imposition of sanctions in some Foreign Trade, the Bankers Roundtable, and the circumstances, even if otherwise warranted, American Bankers Association, that the retaliamight be inconsistent with other objectives, such tory mechanism of any Fair Trade in Financial as the safe and sound operation of the financial Services Act will never have to be used. • Statement by Lawrence B. Lindsey, Member, quate credit to help meet their needs. We at the Board of Governors of the Federal Reserve Sys- Federal Reserve Board believe that the law has tem, before the Subcommittee on General Over- produced substantial benefits, even though it has sight, Investigations, and the Resolution of not—nor should it be expected to have—cured Failed Financial Institutions of the Committee all the problems that still plague many of our on Banking, Finance and Urban Affairs, U.S. cities. House of Representatives, February 1, 1994 As you know, however, the federal financial institution regulatory agencies are actively en- I appreciate the opportunity to appear before this gaged in an effort to reform the CRA by amendsubcommittee to discuss Community Reinvest- ing our regulations. We hope to make them more ment Act (CRA) reform. The Community Rein- objective and the ratings under them more univestment Act is vitally important to ensuring that form while, at the same time, imposing less of a all segments of communities have access to ade- paperwork burden. This effort is a challenging Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 287 one; it involves a substantial commitment by the ing and closing branches and providing services, agencies and encompasses many difficult issues. participation in local community development We are also very conscious of the fact that what projects, and the financial and legal capability of we do could significantly affect financial institu- the institution. In determining how well an institions and the public alike and that care must be tution ascertains the credit needs of its commuexercised for such an important project. Because nity, examiners have taken into account such we are midway in the process and are still matters as the institution's community outreach receiving comments from the public, our report and credit marketing. to you will necessarily be somewhat preliminary. In the course of our review of the CRA, we have heard from many consumer and community groups about how valuable the law has been in HISTORY OF THE CRA AND THE CURRENT getting credit extended in low- and moderate- REFORM EFFORT income areas. Some groups put the success of the CRA at $30 billion, which they estimate to be Before discussing the proposal to reform the the level of CRA commitments for new credit. I CRA, I would like to briefly review the law and a suspect that the total impact of the CRA considlittle of its history because that history is very erably exceeds the $30 billion estimate. And, to relevant to the reform project. The Community date, this impact has occurred with a compara- Reinvestment Act calls for the financial regula- tively light hand from Washington. Indeed, one tory agencies to use their examination authority of the strengths of the present system is that it to encourage institutions to help meet the credit allows great flexibility in fashioning programs to needs of their communities, including low- and meet the different and changing credit needs of moderate-income areas, consistent with safe and this country's diverse communities. sound business practices. The agencies are re- Despite the significant benefits that communiquired to assess the community lending records ties have seen from the CRA, the approach taken of the institutions they supervise as part of their in the regulations, together with the agencies' examinations and to take into account those implementation of that approach, has generated a records in considering applications. The law, good deal of criticism. Financial institutions have however, gives no other indication how the agen- frequently complained that they are burdened by cies are to accomplish these tasks and does not imprecise rules and inconsistent evaluations on define key concepts, such as how an institution's the one hand and overly prescriptive documencommunity is defined or what constitutes satis- tation requirements on the other hand. Small factory performance. A considerable responsibil- institutions, in particular, complain about the ity, therefore, was placed by the Congress on the costs of compliance and contend that the law is agencies. unnecessary because they must serve their entire The regulations adopted in 1978 by the finan- community to succeed. Further, it appears to cial regulatory agencies focused, at least in part, some that there is little incentive for institutions on factors related to the process used by institu- to try to achieve an outstanding rating, especially tions to determine the credit needs of their com- when applications filed by institutions with outmunity and how they responded to those needs. standing CRA ratings may still be protested by To avoid credit allocation, and to allow for the the public. maximum amount of creativity by institutions in Community representatives have complained meeting the varying credit needs of their locali- that the regulators emphasize documentation of ties, these regulations did not attempt to pre- CRA activities in their examinations of financial scribe any particular level of lending. Instead, institutions instead of actually measuring the the evaluation of a financial institution's perfor- degree to which they are meeting community mance has been based on the application of credit needs. They point to the fact that almost twelve assessment factors, including how com- 90 percent of institutions receive "passing" ratmunity credit needs are ascertained, the geo- ings and to the fact that the agencies rarely deny graphic distribution of loans, the record of open- applications for CRA reasons alone as evidence Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

288 Federal Reserve Bulletin • April 1994 that regulatory enforcement of the law has been graphic distribution of loans so that they would weak. They also wish to have a more formal role be better able to evaluate an institution's CRA in the evaluation process. performance. Although we have tried to respond to these Representatives of smaller institutions, on the various concerns through modifying our process other hand, generally criticized the burden and and providing official guidance, it has become expense they bear from existing documentation clear that CRA enforcement needs a broad-based requirements. Other witnesses recommended review to see whether improvements are in order that institutions be allowed to develop their own and if so what they should be. Consequently, the CRA plans against which their performance President requested that the Board, the Office of would be rated, with these plans reviewed by the the Comptroller of the Currency, the Federal agencies. Finally, most witnesses, other than Deposit Insurance Corporation, and the Office of those fromf inancial institutions, opposed provid- Thrift Supervision reexamine the regulations. ing a safe harbor from CRA protests to institu- The President asked the agencies to improve tions rated satisfactory or outstanding. them by addressing several areas of concern. The After these meetings, we developed the proobjectives outlined by the President, which we posed changes to our CRA regulations in conalso believe are important to the ultimate reform junction with the other agencies and published of the CRA, include the following: them on December 21, 1993. Comment on the • Replacing paperwork and process-related re- proposal has been requested by March 24. We quirements with clear, objective criteria that have extended our comment period to that date measure actual performance to accommodate the numerous requests for time • Working together to improve uniformity in to do a complete analysis of a very complex evaluations and instituting more effective sanc- proposal. We do not know how many comments tions for consistently poor CRA performance. will ultimately be received and whether fundamental changes in our proposed approach will be The ultimate goal, according to the President's called for. Although I cannot state when a final request, is to "replace paperwork and uncer- rule will be adopted, we do intend to move the tainty with greater performance, clarity and ob- process along as quickly as is appropriate. And I jectivity." We are in full accord with this objec- want to emphasize that I would not expect any tive. final rule to become mandatory until after an The agencies held a series of seven public adequate lead time—particularly if the proposed hearings throughout the United States to gather data collection requirements, or something simiinformation on the best way to amend our CRA lar, are retained. regulations and enhance our enforcement. More Most important, I am committed to making than 250 witnesses testified, and many raised sure that our final rule will work. We will do no common concerns. We were strongly encour- one any favors by promulgating a rule that is aged to revise our regulations so that CRA per- operationally untenable. During this comment formance would be evaluated as objectively as period, I am paying particular attention to quespossible and to give better guidance on how tions and or complaints about the details of different types and levels of performance will be implementation and of unintended consequences rated. from how the proposal will work in practice. While witnesses stressed that the CRA should continue to focus on lending, many also recommended that greater weight be given to invest- BALANCING COMPETING OBJECTIVES ments (such as in community development projects) and the provision of banking services With this proposal, we have attempted to achieve (such as through locating branches and providing the difficult and important goal of balancing the low-cost accounts or noncustomer check cash- competing concerns of providing greater speciing). Many witnesses requested that institutions ficity on what is expected on the one hand be required to collect more data on the geo- without dictating credit decisions on the other. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 289 The proposal attempts to clarify our expecta- does exist; how well we have done this will be tions for CRA performance by (1) creating a judged in the public comment process. new, more numerically driven system for assessing CRA performance in three critical elements: first and foremost, lending and second- ISSUES RAISED BY THE PROPOSAL arily, services and investments; (2) requiring the collection of data on the number, amount, Given Comptroller Ludwig's description of the and geographic location of small business, small proposal for the subcommittee, I will not also farm, and some consumer loans to use in the review the details. As is well known, however, assessments; (3) providing for streamlined re- although the Board joined with the other agenview of small institutions; (4) permitting insti- cies in seeking public comment on the proposal, tutions to submit their CRA plan in advance to Board members have a variety of concerns about their regulator for approval as an alternative to the proposal. For example: being evaluated under the general assessment • The proposal is intended to provide greater scheme; and (5) specifying the regulatory sanc- certainty to institutions in the type of evaluation tions that are possible from noncompliance with they might expect to receive, primarily based on the regulations. their performance relative to others. Yet, mea- You asked how we balanced the competing suring an institution's performance against other interests of financial institutions and commu- lenders in the service area at year-end means that nity developers in developing the CRA reform the standard necessarily will be fluid from year to proposal. I would like to think that in most year. respects the interests of banks and community Moreover, the terms used to describe different representatives are consistent rather than at levels of performance include "roughly compaodds. Both want local lending institutions to be rable," "significant amount," and similar words strong and viable so that they will have the that are anything but precise. These general capacity to effectively serve their communities standards have been proposed, in part, to avoid over the long term. Both want to ensure that giving specific numbers that could result in the funded projects make economic sense for government's seeming to specify allocation of lender and borrower alike. Both also have a the amount, type, or terms of credit an institution common interest in a fair and consistent CRA must provide for a specific purpose. evaluation system that avoids unnecessary pa- Institutions will have to speculate about the perwork. To be sure, community groups may activities of their competitors, and examiners favor more data collection, greater public par- will be forced to interpret these terms on a ticipation, and more stringent accountability case-by-case basis, when evaluating individual than some lenders, but, on balance, I believe institutions. Thus, an institution may have some there is greater commonality of interest among of the same uncertainty about how its perforthe groups in the goals of reform than is often mance will be evaluated that it has now. To some assumed. extent therefore, we remain plagued by the di- Having said that, however, there are some lemma of how to provide better guidance and specific points in the proposal where views may certainty in the CRA area without reducing differ somewhat—for example, on the appropri- needed flexibility. Our proposal, ambitious as it ate cut-oflf level for the more streamlined review is, may have deferred, rather than answered, procedures for "small banks." Such points of some of the hard questions. Resolving these difference seem unavoidable in a proposal as issues undoubtedly will take place over an excomprehensive and complicated as ours, and I tended period of time, and this will certainly am sure the public comment will help us resolve prove frustrating to both financial institutions some of the disagreements about the right ap- and community groups. proach. I can assure you that we have struggled • Other problems may be associated with the throughout this process to achieve an appropri- "market share" test. The market share for other ate balance to the competing interests when it than mortgage loans will be computed only in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

290 Federal Reserve Bulletin • April 1994 comparison with other depository institutions important issues will also receive considerable that must report data. Leaving out small depos- attention by us and, I hope, by the public. itories (generally less than $250 million in assets) and nondepositories, the percentage of those who are subject to the CRA and included in the LEGISLATIVE AMENDMENTS market share comparison will be low. In some localities, a very few institutions or even a single Last fall, when asked about legislative reform, I one may be included in the "market." This testified that because we were in the middle of a inclusion could cause practical problems and comprehensive agency review of the CRA, we anomalous results. did not favor proceeding with the legislation that • The new requirement for summary report- was being considered by this subcommittee. ing of the number, amount, and geographic Some other issues not directly tied to CRA distribution of small business, mortgage, and legislation, such as community development acsome consumer loans is a significant one. It is tivities, and investments and services pursuant to important to the goal of making the CRA pro- the Bank Enterprise Act, will be affected by what cess more quantifiable; yet it could be very we do in the regulatory area, of course, given the costly. For covered commercial banks, the an- proposed service and investment rating componual cost for the small business portion of the nents. But I would counsel against pursuing data collection alone could approach $21 mil- legislative amendments to the CRA until we see lion. In all, about 3,400 institutions will be how well our regulatory solution responds to the required to gather new data. public concerns that I outlined earlier. Ulti- It is therefore a fair question whether it is mately, there may be need for changes to the desirable to impose the burden of the new data law, but it seems too early to make that judgment collection system because so much subjectivity at this time. necessarily is also a key part of the new system. Because of these concerns, we have also asked for a discussion of burdens and benefits of this CONCLUSION requirement in the public comments. • The appropriateness of the streamlined re- Through our internal review of the CRA and the view procedure for small institutions with less public hearings on CRA reform, we have been than $250 million in assets will surely be ques- afforded a unique opportunity to step back and tioned in the comments—as well as the impact of take a fresh look at the enforcement of one of the the presumption that such small institutions have most important and promising, yet controversial, a "reasonable" loan-to-deposit ratio if it is 60 laws affecting financial institutions. In proposing percent. We have heard from the small banks comprehensive regulatory reform of the CRA, that have commented on the proposal thus far we have been highly aggressive in our approach. that this ratio is an unrealistically high loan-to- Our efforts are bound to generate a good deal of deposit one for them, especially for good quality concern—for example, that we are demanding loans, and we have some concerns that small too much or not enough, that we have been too institutions who want to benefit from the stream- specific or too vague, and that we have been too lined CRA review might be forced to imprudently sensitive to small banks' concerns about paperchange their lending standards to meet this pre- work burden or not sensitive enough. sumption. As I said during the Board's public delibera- • There are other controversial and possibly tions on the proposed amendments to our CRA problematic aspects to our proposal, such as regulation, although I take a natural pride of whether the alternative evaluation for banks with authorship given the time I have invested with preapproved plans is workable, and whether we, my colleagues, I am not unalterably wedded to in fact, should be treating institutions receiving this specific proposal. If the public comment low ratings as being in violation of the regulation points out serious flaws, particularly in the areas and subject to our enforcement authority. These of operations or implementation, or if better Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 291 ideas emerge, I am perfectly willing to recom- ing board. We should not hesitate to do so if that mend to my fellow regulators and members of the is the only way to assure the public that we have Board of Governors that we return to the draw- done the best job possible. • Statement by Lawrence B. Lindsey, Member, cies to use their examination authority to encour- Board of Governors of the Federal Reserve Sys- age institutions to help meet the credit needs of tem, before the Subcommittee on Consumer their communities, including low- and moderate- Credit and Insurance of the Committee on Bank- income areas, consistent with safe and sound ing, Finance and Urban Affairs, U.S. House of business practices. The agencies are required to Representatives, February 8, 1994 assess the community lending records of the institutions they supervise as part of their exam- I appreciate the opportunity to appear before this inations and to take into account those records in subcommittee to discuss Community Reinvest- considering applications. The law, however, ment Act (CRA) reform. The Community Rein- gives no other indication how the agencies are to vestment Act is intended to ensure that every accomplish these tasks and does not define key community has access to adequate credit to help concepts, such as how an institution's commumeet its needs. We at the Federal Reserve Board nity is defined or what constitutes satisfactory believe that the law has produced substantial performance. A considerable responsibility, benefits. However, the CRA has not—nor should therefore, was placed on the agencies by the Congress. it be expected to have—cured all the problems that plague our cities. The regulations that were adopted in 1978 by As you know, the federal financial institution the financial regulatory agencies focused, at least regulatory agencies are actively engaged in an in part, on factors related to the process used by effort to reform the CRA by amending our regu- institutions to determine the credit needs of their lations. This effort results from the President's community and how they responded to those request to make the CRA more objective, the needs. To avoid credit allocation, and to allow ratings more uniform, and the paperwork less for the maximum amount of creativity by instiburdensome. This effort is a challenging one, tutions in meeting the varying credit needs of which involves a substantial commitment by the their localities, these regulations did not attempt agencies and encompasses many difficult issues. to prescribe any particular level of lending. In- We are very conscious of the fact that what we stead, the evaluation of a financial institution's do could significantly affect financial institutions performance has been based on the application of and the public alike and that we must exercise twelve assessment factors, including how comcare when we undertake such an important proj- munity credit needs are ascertained, the geoect. Because we are midway in the process and graphic distribution of loans, the record of openare still receiving comments from the public, our ing and closing branches and providing services, report to you will necessarily be somewhat pre- participation in local community development liminary. projects, and the financial and legal capability of the institution. In determining how well an institution ascertains the credit needs of its community, examiners have taken into account such HISTORY OF THE CRA AND THE CURRENT matters as the institution's community outreach REFORM EFFORT and credit marketing. Before I discuss the proposal to reform the CRA, In the course of our review of the CRA, we I would like to briefly review the law and a little have heard from many consumer and community of its history because that history is very relevant groups about how valuable the law has been in to the reform project. The Community Reinvest- getting credit extended in low- and moderatement Act calls for the financial regulatory agen- income areas. Some groups put the success of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

292 Federal Reserve Bulletin • April 1994 the CRA at $30 billion, which they estimate to be examine the regulations. The President asked the the level of the CRA commitments for new agencies to improve them by addressing several credit. I suspect the total impact of CRA consid- areas of concern. The objectives that the Presierably exceeds the $30 billion estimate. And, to dent outlined, which we also believe are impordate, this has occurred with a comparatively light tant to the ultimate reform of the CRA, include hand from Washington. Indeed, one strength of the following: the present system is that it allows great flexibil- • Replacing paperwork and process-related ity in fashioning programs to meet the diiferent requirements with clear objective criteria that and changing credit needs of this country's di- measure actual performance verse communities. • Working together to improve uniformity in Despite the significant benefits that communi- evaluations and instituting more effective sancties have seen from the CRA, the approach taken tions for consistently poor CRA performance. in the regulations and the agencies' implementation of that approach have generated a good deal The ultimate goal, according to the President's of criticism. Financial institutions have fre- request, is to "replace paperwork and uncerquently complained that they are burdened by tainty with greater performance, clarity and obimprecise rules and inconsistent evaluations on jectivity." We are in full accord with this objecthe one hand and overly prescriptive documen- tive. tation requirements on the other hand. Small The agencies held a series of seven public institutions, in particular, complain about the hearings throughout the United States to gather costs of compliance and contend that the law is information on the best way to amend our CRA unnecessary because they must serve their entire regulations and enhance our enforcement. More community to succeed. Further, it appears to than 250 witnesses testified, and many raised some that there is little incentive for institutions common concerns. We were strongly encourto try to achieve an outstanding rating, especially aged to revise our regulations so that CRA perwhen applications filed by institutions with out- formance would be evaluated in as objective a standing CRA ratings may still be protested by manner as possible and to give better guidance the public. on how different types and levels of performance will be rated. Community representatives have complained that the regulators emphasize documentation of Although witnesses stressed that the CRA CRA activities in their examinations of financial should continue to focus on lending, many also institutions, instead of actually measuring the recommended that greater weight be given to degree to which they are meeting community investments (such as in community development credit needs. They point to the fact that almost 90 projects) and the provision of banking services percent of institutions receive "passing" ratings (such as through locating branches and providing and the agencies rarely deny applications for low-cost accounts or noncustomer check cash- CRA reasons alone as evidence that regulatory ing). Many witnesses requested that institutions enforcement of the law has been weak. They also be required to collect more data on the geowish to have a more formal role in the evaluation graphic distribution of loans so that they may be process. better able to evaluate an institution's CRA per- Although we have tried to respond to these formance. various concerns through modifying our process Representatives of smaller institutions, on the and providing official guidance, it has become other hand, generally criticized the burden and clear that CRA enforcement needs a broad-based expense they bear from existing documentation review to see whether improvements are in order requirements. Other witnesses recommended and, if so, what they should be. Consequently, that institutions be allowed to develop their own the President requested that the Federal Reserve CRA plans against which their performance Board, the Office of the Comptroller of the would be rated, with these plans reviewed by the Currency, the Federal Deposit Insurance Corpo- agencies. Finally, most witnesses, other than ration, and the Office of Thrift Supervision re- those from financial institutions, opposed provid- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 293 ing a safe harbor from CRA protests to institu- proval and public comment as an alternative to tions rated satisfactory or outstanding. being evaluated under the general assessment After these meetings, we developed the pro- scheme; and (5) specifying the regulatory sancposed changes to our CRA regulations in con- tions that are possible from noncompliance with junction with the other agencies and published the regulations. them on December 21, 1993. Comment on the In part, the balance we seek to achieve in the proposal has been requested by March 24. We proposal is intended to respond to those most have extended our comment period to that date concerned by the CRA—banks and representato accommodate the numerous requests for time tives of communities. Despite the different perto do a complete analysis of a very complex spectives on CRA reform by bank and commuproposal. We do not know how many comments nity representatives, I think that in many will ultimately be received and whether funda- respects their interests are consistent rather than mental changes in our proposed approach will be at odds. Both banks and community representacalled for. Although I cannot state when a final tives want local lending institutions to be strong rule will be adopted, we do intend to move the and viable so that they will have the capacity to process along as quickly as is appropriate. And I effectively serve their communities over the long want to emphasize that I would not expect that term. Both want to ensure that funded projects any final rule would become mandatory until make economic sense for lender and borrower after an adequate lead time—particularly if the alike. Both also have a common interest in a proposed data collection requirements, or some- CRA evaluation system that is fair and consistent and that avoids unnecessary paperwork. To be thing similar, are retained. sure, community groups may favor more data Most important, I am committed to making collection, greater public participation, and more sure that our final rule will work. We will do no stringent accountability than lenders, but, on one any favors by promulgating a rule that is balance, I believe there is greater commonality of operationally untenable. During this comment interest among the groups in the goals of reform period, I am paying particular attention to questhan is often assumed. tions or complaints about the details of implementation and of unintended consequences from Having said that, however, I am sure there are how the proposal will work in practice. some specific points in the proposal on which views may differ—for example, on the appropriate cut-off level for the more streamlined review BALANCING COMPETING OBJECTIVES procedures for "small banks." Such points of difference seem unavoidable in a proposal as With this proposal, we have attempted to achieve comprehensive and complicated as ours, and the the difficult and important goal of balancing the public comment should help us resolve some of competing concerns of providing greater speci- the disagreements about the right approach. I can ficity on what is expected on the one hand assure you that we have struggled throughout without dictating credit decisions on the other. this process to achieve an appropriate balance to The proposal attempts to clarify our expectations the competing interests when it does exist; how for CRA performance by (1) creating a new, well we have achieved this balance will be judged more numerically driven system for assessing in the public comment process. CRA performance in three critical elements: first and foremost, lending, and secondarily, services and investments; (2) requiring the collection of ISSUES RAISED BY THE PROPOSAL data on the number, amount, and geographic location of small business, small farm, and some Given Comptroller Ludwig's description of the consumer loans to use in the assessments; (3) proposal for the subcommittee, I will not also providing for streamlined review of small institu- review the details. As is well known, however, tions; (4) permitting institutions to submit their although the Board joined with the other agen- CRA plan in advance to their regulator for ap- cies in seeking public comment on the proposal, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

294 Federal Reserve Bulletin • April 1994 Board members have a variety of concerns about goal of making the CRA process more quantifithe proposal. For example: able; yet it could be costly. For covered commer- • The proposal is intended to provide greater cial banks, the annual cost for the small business certainty to institutions in the type of evaluation portion of the data collection alone has been they might expect to receive, primarily based on estimated by our staff members to approach $21 their performance relative to that of others. Yet, million. In all, about 3,400 institutions will be measuring an institution's performance against required to gather new data. other lenders in the service area at year-end Because of these concerns, we have also asked means that the standard will necessarily be fluid for a discussion of burdens and benefits of this from year to year. requirement in the public comments. Moreover, the terms used to describe different • The appropriateness of the streamlined relevels of performance include "roughly compa- view procedure for small institutions having less rable," "significant amount," and similar words than $250 million in assets will surely be questhat are anything but precise. These general tioned in the comments—as well as the impact of standards have been proposed, in part, to avoid the presumption that such small institutions have giving specific numbers that would risk resulting a "reasonable" loan-to-deposit ratio if it is 60 in the specific allocation of the amount, type, or percent. We have heard from the small banks terms of credit that institutions must provide. that have commented on the proposal thus far Institutions will have to speculate about the that this loan-to-deposit ratio is unrealistically activities of their competitors, and examiners high for them, especially for good-quality loans, will be forced to interpret these terms on a and we have some concerns that small institucase-by-case basis when evaluating individual tions that want to benefit from the streamlined institutions. Thus, an institution may have some CRA review might be forced to imprudently of the same uncertainty about how its perfor- change their lending standards to meet this presumption. mance will be evaluated that it has now. To some extent we will always be plagued by the dilemma • There are other potentially controversial of how to provide better guidance and certainty aspects to our proposal, such as whether the in the CRA area without reducing needed flexi- alternative evaluation for banks with prebility. But we expect that these issues will be approved plans is workable, whether the role of resolved over time, although ultimately the expe- the public and community groups in development rience may prove frustrating to both financial of the plans is adequate, and whether we, in fact, institutions and community groups. should be treating institutions receiving low rat- • There may be problems associated with the ings as being in violation of the regulation and "market share" test. One such problem may subject to our enforcement authority. These imresult from the fact that the market share for portant issues will also receive considerable atother than mortgage loans will be computed only tention by us and, I hope, by the public. in comparison with that of other depository institutions that must report data. Leaving out small depositories (generally less than $250 mil- DISCUSSION OF SPECIFIC ISSUES RAISED IN lion in assets) and nondepositories, the percent- LETTER OF INVITATION age of those that are subject to the CRA and are included in the market share comparison will be Besides many of the issues I have already adlow. In some localities, a very few institutions or dressed in my statement, I would like to respond even a single one may be included in the "mar- to some of the questions raised in your letter of ket." This approach could cause practical prob- invitation: lems and anomalous results. • The appeals process. Financial institutions • The new requirement for summary reporting have always been able to request supervisory of the number, amount, and geographic distribu- personnel at Reserve Banks to review the ratings tion of small business, mortgage, and some con- issued by examiners—whether involving the sumer loans is significant. It is important to the CRA or other supervisory issues—but we do not Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 295 consider this review a formal appeals process. more explicit than our current regulation about We anticipate that our informal system for ap- the effect that different ratings will have on the peals would complement the opportunities for Board's consideration of an application. For exinput in CRA evaluations. The proposal would ample, under the proposal, an "outstanding" permit institutions to rebut presumptive ratings rating would be looked on very favorably, and a under the lending, service, and investment tests. "substantial noncompliance" rating generally But the proposal also provides that the agencies would result in the denial of the application. We would announce upcoming examinations to get are aware of the concern of community groups public comment on an institution's performance. that there may be an implicit "safe harbor" in the These comments, and those in the institution's proposal. A "safe harbor" was not intended, and public file, would be taken into account in our to the extent that there is any misuderstanding, it assessment of their performance. will be clarified in the final version. • Frequency of examinations for institutions rated "outstanding." The proposal does not address examination frequency. Our current pol- CONCLUSION icy, however, does allow evaluations to be conducted less frequently for institutions rated out- Through our internal review of the CRA and the standing. Currently, state member banks rated public hearings on CRA reform, we have been outstanding, with at least satisfactory ratings in afforded a unique opportunity to step back and consumer compliance in general, are examined take a fresh look at the enforcement of one of the once every eighteen to twenty-four months, com- most important, yet controversial, laws affecting pared with once every six to twelve months for financial institutions. In proposing our comprepoor performers. At this point, I would assume hensive regulatory reform of the CRA, we have that we would maintain our current policy even been highly aggressive in approach. Our efforts with regulatory changes. are bound to generate a good deal of debate and • Effect of investment credits and indirect concern—for example, that we are demanding lending on ratings. Under the proposal, invest- too much or not enough, that we have been too ment activity by retail banks could help to in- specific or too vague, and that we have been too crease their base rating in the lending test, up to sensitive or not sensitive enough to small banks' two levels if the investment performance is out- concerns about paperwork burden. standing. Investments will be the sole criteria for As I said during the Board's public deliberameasuring the performance of wholesale and tions on the proposed amendments to our CRA limited-purpose banks, however. Indirect lend- regulation, although I take a natural pride of ing activity may be taken into account under authorship given the time I have invested with either the lending or investment tests. These my colleagues, I am not unalterably wedded to aspects of the proposal are controversial and of this specific proposal. If the public comment particular concern to community groups. We will points out serious flaws, particularly in the areas be evaluating their comments very carefully as of operations or implementation, or if better we consider what the appropriate treatment of ideas emerge, I am perfectly willing to recominvestments and indirect lending should be. mend to my fellow regulators and members of the • Effect of ratings and public involvement on Board of Governors that we return to the drawapplications. CRA ratings, as well as public ing board. We should not hesitate to do so if that comments on applications, can and do influence is the way to ensure that we have done the best significantly the Board's consideration of an in- job possible. To give the public anything less stitution's application. This has been made clear than the best is a goal that no one involved in this in earlier CRA policy statements. The proposal is process would condone. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

296 Federal Reserve Bulletin • April 1994 Statement submitted by the Board of Governors centage of total lending costs compared with of the Federal Reserve System to the Subcom- other types of bank lending. Because funding mittee on Consumer Credit and Insurance of the costs are a smaller component of total costs for Committee on Banking, Finance and Urban credit card lending, changes in the cost of funds Affairs, U.S. House of Representatives, are more likely to be offset by movements in February 9, 1994 other cost components. A third major factor that differentiates credit card lending from other The Board of Governors of the Federal Reserve types of bank lending is that the interest earned System appreciates the opportunity to comment on credit card balances is substantially less than on the credit and charge card legislation being the stated rate might suggest because conveconsidered in H.R.1842 and H.R.2175. Because nience users (those who pay their balances in full this legislation is driven, in part, by concerns each month) generate little or no revenue from about the level of credit card rates, we thought it finance charges. would be useful to the subcommittee to have After many years of relative stability, credit some current background on this issue. card interest rates recently have fallen sharply. An unusually steep and sustained decline in the cost of funds to issuers and the lingering effects RECENT DEVELOPMENTS IN CREDIT CARD of the last recession, which saw outstanding PRICING balances on credit cards grow at a much reduced pace, have exerted downward pressure on credit Credit card lending is a competitive market that card interest rates. In addition, the elevated consists of many thousands of card issuers, all default rates and substantial credit losses stemfree to establish their own prices and other ming from the past recession appear to have lending terms. The credit card market has fundamentally influenced the pricing behavior of changed significantly over the past few years. many card issuers, including a number of the Competition, which was keen during the 1980s, largest issuers in the country. Although credit has grown more intense as new firms have en- card issuers in the past tended to offer a basic tered the market and challenged established card plan with one rate for all customers regardless of issuers by aggressively pricing their credit card risk and account activity level, some of the products. While competition in the 1980s focused largest issuers have now lowered rates for card on efforts to broaden customer bases by increas- holders who have good payment records and ing the availability of cards to higher risk groups charge large amounts. Higher interest rates are and by offering additional product enhance- still applied, however, to higher-risk customers: ments, this focus has shifted to efforts to retain those who have a record of not paying their bills and broaden customer bases by offering more on time. favorable interest rates, waivers of annual fees, Contributing to the growing interest rate comand, in some larger programs, rebates of various petition may be an increasing sensitivity by contypes. sumers to credit card rates, perhaps because of To better understand credit card pricing be- the difficult times that many encountered during havior, it is useful to compare credit card lending the last recession and the heightened publicity with other types of bank loans. Generally, credit about the high rates of interest on credit cards. card lending is riskier than other types of bank Another factor that may be causing a decrease in lending because it is unsecured and card holders credit card rates is the increased difficulty card may choose to use their cards when they are issuers have encountered in acquiring new cusunder the most financial distress. Consequently, tomers in a relatively mature market. The high a relatively large "risk premium" is built into the cost of attracting new customers in a competipricing structure of credit card plans. A second tive, mature market places a premium on retainprominent feature of credit card lending is that ing existing customers, particularly on those who the cost of funds, while an important component charge large volumes and revolve substantial of total costs, makes up a relatively small per- balances. Reducing rates and waiving annual fees Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 297 is one way to curtail attrition. A further indica- CREDIT CARD PROFITABILITY tion of growing interest rate competition is the aggressive marketing of rollover balance pro- The Fair Credit and Charge Card Disclosure Act grams that offer attractive rates to card holders directs the Federal Reserve to report to the who roll their outstanding debt into a new card Congress annually about the profitability of issuer's plan. credit card operations of depository institutions. Evidence of the changing nature of competi- The most recent report was submitted in Septemtion in the credit card market can be found in the ber 1993. Information for this report is drawn Federal Reserve's series on credit card interest from two surveys: the Functional Cost Analysis rates published in its G. 19 statistical release. This conducted by the Federal Reserve Banks and the data series shows the average rate charged by a Report of Condition and Income. The report sample of credit card issuers for their largest indicates that in recent years credit card profitcredit card plans. From the end of 1981 through ability has generally been higher than returns on the beginning of 1991 this average credit card other major bank product lines, although net interest rate varied only a little and averaged earnings as a percentage of outstanding balances more than 18 percent. Beginning in early 1991, for credit card banks in 1992 were not as high as however, it began a steady decline that has they were in the mid-1980s. The most recent data continued to date. In February 1991, the average from the Report of Condition and Income coninterest rate on credit cards as measured by our tinue to indicate that credit card earnings are survey was 18.28 percent. Our latest survey, for strong. November 1993, indicates the average rate had With this as background, we have the followfallen to 16.30 percent. ing comments on the specific legislation. A second survey of credit card interest rates conducted by the Federal Reserve also reveals the decline in interest rates. Twice a year, the H.R.1842 Board produces a report entitled Report on the Terms of Credit Card Plans, which shows the H.R. 1842 would amend the Truth in Lending Act terms offered by about 150 of the largest credit to provide for additional disclosures relating to card issuers for their largest credit card plan. credit and charge card accounts. For example, This report is made available to the public with- the bill would expand disclosure requirements out charge as a tool to assist them in comparing for applications and solicitations mailed to conthe various features and costs of alternative sumers and for card account advertisements. The credit card programs. bill would also provide consumers with substan- This report on credit card terms was first made tive rights, along with additional disclosures, available in March 1990. At that time, 10 percent when card issuers initiate certain changes in of the issuers offered plans with interest rates of terms of card accounts. H.R.1842 would also less than 16 percent, and only two issuers had impose limitations on card issuers' ability to use plans with rates of less than 14 percent. Our most information about customers for direct marketing recent survey, released in September 1993, re- purposes and restrict their ability to assess fiveals a dramatic change; 41 percent of the issuers nance charges before credit extensions are offered a rate of less than 16 percent on their posted to the account. Finally, the bill would largest plan, and 14 percent had rates of less than require that the Comptroller General of the 14 percent. Eight of the 153 issuers charged a rate United States, in consultation with the Board, of 12 percent or less on their largest plan. A copy conduct a study of competitiveness of the credit of the report is attached to this statement.1 card market. Disclosures 1. The attachment to this statement is available from The Board believes consumers benefit substan- Publications Services, Board of Governors of the Federal Reserve System, Washington, DC 20551. tially from Truth in Lending disclosures that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

298 Federal Reserve Bulletin • April 1994 permit them to compare and evaluate credit card the application form. The Board believes a secplans. For example, early disclosures already ond table on the envelope is unnecessary. required by the Fair Credit and Charge Card Disclosure Act enable consumers to consider Additional Disclosures in the Table rate and other cost information before they apply for a credit card account. Taken individually, The Board believes that caution should be exereach of the bill's required disclosures, set forth in cised in mandating additional disclosures in the a standardized tabular format, may additionally table. For example, information about the terms assist consumers in their comparison shopping and conditions for forfeiting a grace period may before they become obligated or in their evalua- be lengthy and detailed and could complicate the tion of an existing account. Consumers, how- box and detract from its current "clean" appearever, already receive many of the disclosures ance. On the other hand, adding the annual required by the bill—such as basic cost informa- percentage rate for cash advances could be very tion in the table and notices of changed terms— useful for consumers.2 under the current Truth in Lending scheme. The Board believes that existing law supplies con- Changes in Terms sumers with adequate information about the key The Board is also concerned about the potential costs associated with credit and charge card for consumer "information overload" when card accounts. We are concerned that by "layering" issuers change certain account terms and about essentially identical disclosures the effectiveness excessive cost and regulation. Currently, card of the current scheme may be diluted if consumissuers initiating changes adverse to consumers ers find the duplicate disclosures to be confusing. are generally required to send notices that highlight the changes at least fifteen days in advance Disclosures on Envelopes of the change. The bill would require that the new terms to be set forth in a tabular format on at For example, H.R.1842 would require that the least one periodic billing statement before the disclosure table appear on envelopes containing effective date of the change. The bill would also card applications or preapproved solicitations require that a description of certain changed mailed to consumers in addition to the discloterms be provided in a tabular format on a sures already required with the application or separate piece of paper that is enclosed with a solicitation inside. We are also aware that conperiodic statement sent at least thirty days before sumers receive in the mail offers for card acthe change. Finally, the envelope containing the counts enclosed in envelopes that may boldly separate description and periodic statement must display a term such as an introductory low andisplay a statement alerting the consumer to the nual fee or annual percentage rate. Nonetheless, fact that contract terms have been changed and the Board believes that the proposed requirethat details are available inside. ment would not offer enough benefit to consum- The Board recognizes that a brief notice on an ers to further complicate the rules. The consumer envelope stating that changes in contract terms who is intrigued by a card issuer's offer to open are contained inside may be meaningful to conan account will of necessity have to open the sumers in the same way an envelope bearing the envelope to act on the offer and at that time will notice "Tax information enclosed" distinguishes encounter the current disclosure table. The consumer who chooses not to open the envelope is not interested enough to consider the offer (and see the disclosure table) and has not been misled by the card issuer's marketing. The table cur- 2. Indeed, when originally promulgating rules for the Fair Credit and Charge Card Disclosure Act, the Board proposed rently required plays an effective role in connecto add such a disclosure. Upon further analysis, after a tion with applications or preapproved solicita- review of comments that objected overwhelmingly to any tions by providing basic information in a user- additional required disclosures in the table, particularly to one that did not relate to purchases, the Board withdrew the friendly format to consumers as they complete proposal because it was not required by the statute. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 299 for taxpayers the significance of the contents of promotes card accounts. The disclosure requirethat correspondence from others. ments would differ, depending on the medium in The Board is concerned, however, about the which the card advertisement is promoted (radio, potential for consumer confusion if the bill's television, or print). proposed disclosure scheme were added to the The Board appreciates the concern that genexisting law regarding changed terms for card eral advertisements may not provide full discloaccounts. Read as a whole, the bill provides that sure of important credit terms. However, the consumers whose credit card plan is about to Board believes that mandating cost information change would receive a periodic statement that for all advertisements may, in fact, create a reflects the terms in effect for the billing period disincentive for advertising rather than an incencovered by the statement. The same statement tive for more disclosure. The Board believes that would also contain the prospective terms set the current disclosure scheme for advertising forth in a table along with the other disclosures accounts provides adequate information to conthat remain unchanged, although the bill does not sumers who are shopping for credit cards. If require that the new terms be distinguished from specific cost information is advertised, a uniform others not affected by the change. The consumer disclosure of credit terms is required. Card issuwould also receive a separate document that ers that aggressively market through direct mail describes in tabular format the changed term. or telephone campaigns must already comply The Board believes the current disclosure with the more detailed disclosure requirements scheme—requiring changed terms to be high- of the Fair Credit and Charge Card Disclosure lighted in some way—is adequate and straight- Act. In addition, consumers are provided with forward. Requiring a periodic statement reflect- complete Truth in Lending disclosures before ing the terms in effect for the previous billing they become obligated on the plan, and the period as well as a disclosure table applicable to Board by regulation has provided that if consumfuture periods seems potentially confusing, and ers are not given full disclosures beforehand, a the inclusion of a tabular description of the new consumer may reject the plan once disclosures term—while highlighting the change—seems re- are received (and any membership fee paid must petitive in combination with the disclosure table be refunded). contained on the accompanying periodic state- Finally, although the clear and straightforward ment. approach of the proposed table may be more easily comprehensible on a television screen than Advertising lengthy narrative disclosures, the Board notes the difficulties in assuring meaningful disclosures H.R.1482 would expand the Truth in Lending in electronic media such as television. disclosures required for credit and charge card If the Congress determines to go forward with advertising. Currently, mentioning specific costs legislation to amend the advertising rules for in advertisements for credit card plans triggers a credit card plans, the Board notes that the procard issuer's duty to disclose other cost informa- posed bill contains an exception for advertisetion. For example, a card issuer that advertises ments that are "solely promotional and do not its annual percentage rate must also disclose any solicit business." The distinction seems vague, minimum finance charge, transaction fee, or and we urge the Congress to clarify the intended other charge. The Board by regulation also re- scope of the exception to the disclosure requirequires that annual fees be disclosed. Advertising ments for credit card advertisements. "low" annual percentage rates or "no transaction fees" does not trigger the requirement to Other Disclosures state additional cost information about the card account. H.R.1482 would also require that card issuers The bill would mandate that the table disclo- disclose information not currently mandated by sures now required for applications and solicita- law. For example, card issuers would be required tions be disclosed on any advertisement that to provide on each periodic statement cumulative Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

300 Federal Reserve Bulletin • April 1994 year-to-date data on the total amount of pay- Regarding the provision that gives consumers ments made and finance charges paid. The bill the right to pay off existing balances on the terms would also require that card issuers include on in effect at the time of a change in terms, the the first three statements provided in a year the Board notes that some states have in fact legisinformation—set forth in a tabular format—that lated in this area. identifies various fees and charges paid during The Truth in Lending Act requires that card the previous year. While the disclosures would issuers identify on periodic statements credit provide figures that some consumers may not transactions occurring during the statement peotherwise calculate, the Board remains con- riod, and the Board by regulation authorizes card cerned about the need for repetitive disclosures. issuers to identify credit extensions by the date Also, the Board questions the need to mandate of the transaction or the date the transaction is year-end figures because it is aware, for example, posted to the consumer's account. The policy that card issuers frequently provide consumers reason for mandating a delay in the imposition of with information about the total finance charges finance charges from the date of the credit extenpaid during the previous year. sion to the date of posting is unclear because the The bill would also require that periodic state- consumer received the benefit of the credit exments disclose a date that reflects when the tension on the earlier date. current outstanding balance would be paid off if the consumer choses to pay only the minimum Other Provisions periodic payment required under the plan. A H.R. 1842 would require that the Board maintain a "snapshot" view of the potential length of the toll-free number for consumers to call for inforconsumer's obligation is information that unmation on the availability of low-rate credit cards. doubtedly could be interesting to some consum- Although the Board endorses the desire to eners and would provide useful information that hance consumer awareness about credit card inconsumers might use in evaluating their credit terest rates, it does not believe that it is appropripractices. However, the Board would note that ate for the Board to endorse any particular card to reduce the potential length of the obligation, program for consumers. Currently, the Board card issuers might raise minimum payment produces a credit card shoppers guide that is amounts or reduce credit limits, which may be made readily available to consumers free of detrimental to consumers. charge. In addition to rate and fee information, the guide includes the telephone number of card issu- Substantive Rights ers for consumers to call to apply for a card; many of those numbers are toll-free. The Board main- H.R.1842 would provide three substantive rights tains a mailing list and distributes the guide to to consumers by amending the Truth in Lending libraries nationwide. In addition, lists of rates and law. The bill would permit consumers to cancel a other fees offered by card issuers are now readily card account and pay off any outstanding balance available to consumers from groups such as Bankunder existing terms when certain changes in card Holders of America and from commercial terms occur (for example, an annual percentage sources. rate increase). The bill would also permit a H.R.1842 calls for a study of the credit card consumer to limit a card issuer's ability to use market by the Comptroller General of the United information about the consumer for direct mar- States (GAO), in consultation with the Federal keting purposes. Finally, the bill would provide Reserve Board. Such a study has already been that finance charges for extensions of credit can conducted by the GAO and has recently been begin only from the date the extension is posted submitted to the Board for comment. to the account. Although the Truth in Lending Act includes some substantive provisions, it re- H.R.2175 mains primarily a disclosure statute. The Board continues to believe that substantive laws should The major credit card issuers generally impose a generally be left to the realm of state law. fee on merchants that honor credit cards and at Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 301 the same time prohibit merchants from directly adjusting the pricing of goods or services. To passing that charge on to cardholders. This pro- recover costs, government agencies would have hibition currently applies as well to government to increase fees or raise taxes. And some state and agencies that honor credit cards for payment of local laws may prohibit or restrict public agencies such items as auto registration fees and state from absorbing this cost. By allowing government property taxes. H.R.2175 would bar card issuers agencies to pass the costs of credit transactions from applying this prohibition to government directly on to consumers, H.R.2175 could inagencies and thus would enable the agencies to crease public use of a more convenient payment directly pass on the fee to consumers. option. On the other hand, it would also create Merchants may absorb the costs of the fee by different rules for the private and public sectors.• Statement by Alan Greenspan, Chairman, Board ployment rate fell further, bringing its decrease of Governors of the Federal Reserve System, over the full year to nearly 1 percentage point. before the Subcommittee on Economic Growth The unemployment rate in January apparently and Credit Formation of the Committee on Bank- declined again on both the old and new survey ing, Finance and Urban Affairs, U.S. House of bases. Representatives, February 22, 1994 On the inflation front, the deterioration evident in some indicators in the first half of 1993 proved I am pleased to appear today to present the transitory. For the year as a whole, the consumer Federal Reserve's semiannual monetary policy price index (CPI) rose 23A percent, the smallest report to the Congress. increase since the big drop in oil prices in 1986. In the seven months since I gave the previous Broader inflation measures covering purchases Humphrey-Hawkins testimony, the performance by businesses as well as consumers rose even of the U.S. economy has improved appreciably. less. While declining oil prices contributed to last Private sector spending has surged, boosted in year's good readings, inflation measured by the large part by very favorable financial conditions. CPI excluding food and energy also diminished With mortgage rates at the lowest level in a slightly further, to just more than a 3 percent rate quarter century, housing construction soared in for the whole year. In January the CPI remained the latter part of 1993. Consumer spending, es- quite well behaved on the whole. Not all signs pecially on autos and other durables, has exhib- have been equally favorable, however. For exited considerable strength. Business fixed invest- ample, several commodity prices have firmed ment has maintained its previous rapid growth. noticeably in recent months. And indications that Important components of growth in gross domes- such increases may be broadening engendered a tic product during the second half of last year backup in long-term interest rates in recent days. represented one-time upward adjustments to the In particular, the Federal Reserve Bank of Phillevel of activity in certain key sectors, and with adelphia's survey showing a marked increase in output in these areas unlikely to continue to prices paid by manufacturers early this year was climb as steeply, significant slowing in the rate of taken as evidence of a more general emergence growth this year is widely expected. In addition, of inflation pressures. the southern California earthquake and severe It is important to note, however, that in the winter weather may have dulled the force of the past such price data have often been an indicafavorable trends in spending in January and tion more of strength in new orders and activity February. Nonetheless, as best we can judge, the than a precursor of rising inflation throughout the economy's forward momentum remains intact. economy. In the current period, overall cost and The strengthening of demand has been accom- price pressures still appear to remain damped. panied by favorable developments in labor mar- Wages do not seem to be accelerating despite kets. In the second half of the year, employment scattered reports of some skilled-worker shortcontinued to post moderate gains, and the unem- ages, and advances in productivity early this year Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

302 Federal Reserve Bulletin • April 1994 are holding down unit labor costs. Moreover, But the experience of the past three decades although private borrowing has picked up, broad has demonstrated that what appears to be a money—to be sure a highly imperfect indicator tradeoff between unemployment and inflation is of inflation in recent years—has continued to quite ephemeral and misleading. Attempts to grow slowly. force-feed the economy beyond its potential have Nonetheless, markets appear to be concerned led in the past to rising inflation, as expectations that a strengthening economy is sowing the seeds ratcheted higher, and, ultimately, not to lower of an acceleration of prices later this year by unemployment but to higher unemployment, as rapidly eliminating the remaining slack in re- destabilizing forces and uncertainties associated source utilization. Such concerns were rein- with accelerating inflation induced economic forced by forecasts that recent data suggest that contraction. Over the longer run, no tradeoff is revised estimates of fourth-quarter gross domes- evident between inflation and unemployment. tic product to be released next week will show Experience both here and abroad suggests that upward revisions from the preliminary annual lower levels of inflation are conducive to the rate of growth of 5.9 percent. Rapid expansion achievement of greater productivity and effilate last year, it is apparently feared, may carry ciency and, therefore, higher standards of living. over into a much smaller deceleration of activity In fact, lower inflation historically has been in 1994 than many had previously expected. associated not just with higher levels of produc- But it is too early to judge the degree of tivity but with faster growth of productivity as underlying economic strength in the early well. Why inflation and productivity growth are months of 1994. Anecdotal evidence does indi- linked this way empirically is not clear. To some cate continued underlying strength in manufac- extent higher productivity growth may help to turers' new orders and production, but we will damp inflation for a time by lessening increases have a better reading on new orders on Thursday in unit labor costs. But the process of cause and when preliminary data for January are released. effect in all likelihood runs the other way as well. The labor markets are signaling a somewhat less Lower inflation and inflation expectations reduce buoyant degree of activity as initial claims for uncertainty in economic planning and diminish unemployment insurance in recent weeks have risk premiums for capital investment. They also moved up a notch. Clearly, the Federal Reserve clarify the signals from movements in relative will have to carefully monitor ongoing develop- prices, and they encourage effort and resources ments for indications of potential inflation or a to be devoted to wealth creation rather than to strengthening in inflation expectations. As I have wealth preservation. Many people do not have often noted, if the Federal Reserve is to promote the knowledge of, or access to, ways of preservlong-term growth, we must contribute, as best ing wealth against inflation; for them, low inflawe can, to keeping inflation pressures contained. tion avoids an inequitable erosion of living stan- In this regard, a clear lesson we have learned dards. over the decades since World War II is the key The reduced inflation expectations of recent role of inflation expectations in the inflation years have been accompanied by lower bond and process and in the overall performance of the mortgage interest rates, slower actual inflation, macroeconomy. As I indicated in my testimony falling unemployment, and faster trend producbefore the Joint Economic Committee last tivity growth. The implication is clear: When it month, until the late 1960s economists often paid comes to inflation expectations, the nearer zero, inadequate attention to expectations as a key the better. determinant of inflation. Unemployment and in- It follows that price stability, with inflation flation were considered simple tradeoffs. A lower expectations essentially negligible, should be a rate of unemployment was thought to be associ- long-run goal of macroeconomic policy. We will ated with a higher, though constant, rate of be at price stability when households and busiinflation; conversely, a higher rate of unemploy- nesses need not factor expectations of changes in ment was thought to be associated with a lower the average level of prices into their decisions. rate of inflation. How those expectations form is not always easy Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 303 to discern, and they can for periods of time subject to transitory special factors. More imporappear to be at variance with underlying eco- tant, monetary policy affects inflation only with a nomic forces. But history tells us that it is significant lag. That a policy stance is overly economic and financial forces and their conse- stimulative will not become clear in the price quences for realized inflation that ultimately indexes for perhaps a year or more. Accordingly, shape inflation expectations. if the Federal Reserve waits until actual inflation Fiscal and monetary policy are important worsens before taking countermeasures, it would among those forces and, along with decreases in have waited far too long. At that point, modest long-term interest rates, have contributed to the corrective steps would no longer be enough to decline in inflation expectations in recent years. contain emerging economic imbalances and to The actions taken last year to reduce the federal avoid a buildup of inflation expectations and a budget deficit have been instrumental in this significant backup of long-term interest rates. regard. Although we may not all agree on the Instead, more wrenching measures would be specifics of the deficit reduction measures, the needed, with unavoidable adverse side effects on financial markets are apparently inferring that, near-term economic activity. on balance, the federal government will be com- Inflation expectations likely have more of a peting less vigorously for private saving in the forward-looking character than do measures of years ahead. Concerns that the deficit is out of inflation itself and, in principle, could be used as control have diminished. In the extreme, explo- a direct guide to policy. But available surveys sive growth in the federal debt makes an eventual have limited coverage and are subject to samresort to the printing press and inflationary pling error. As I have testified previously, pricefinance difficult to resist. By shrinking any per- indexed bonds of various maturities, which ceived risk of this outcome, the deficit reduction would indicate underlying market inflation expackage apparently had a salutary effect on pectations, would be a useful adjunct to our longer-term inflation expectations. information base for making monetary policy, The Federal Reserve's policies in recent years providing there were a sufficiently broad and also have helped to damp inflation and inflation active market for them. In addition, the price of expectations. We were able to do so, even while gold, which has been especially sensitive to adopting an increasingly accommodative policy inflation concerns, the exchange rate, and the stance. By placing our actions in the context of a term structure of interest rates can give importhorough analysis of the prevailing situation and tant clues about changing expectations. of a longer-term underlying strategy, our move to Of course, several factors besides inflation greater accommodation could be seen as what it expectations affect all of these indicators to a was—a deliberate effort to counter the various degree. Short- and long-term rates, for example, "headwinds" that were retarding the advance of tend to be highly correlated through time, in part the economy rather than a series of short-term because they are responding to the same busiactions taken without consideration for potential ness cycle pressures. Thus, when the Federal inflation consequences over time. Reserve tightens reserve market conditions, it is As I discussed with this subcommittee last not surprising to see some upward movement in July, this longer-run strategy implies that the long-term rates, as an aspect of the process that Federal Reserve must take care not to overstay counters the imbalances tending to surface in the an accommodative stance as the headwinds expansionary phase of the business cycle. The abate. But determining when a policy stance is test of successful monetary policy in such a becoming too accommodative is not an easy business cycle phase is our ability to limit the matter. Unfortunately, although subdued infla- upward movement of long-term rates from what tion is the hallmark of a successful monetary it would otherwise have been with less effective policy, current broad inflation readings are actu- policy. Moderate to low long-term rates, with ally of limited use as a guide to the appropriate- rare exceptions, are an essential ingredient of ness of current instrument settings. Patently, sustainable long-term economic growth. When price measurements over short time spans are we take credible steps to head off inflation before Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

304 Federal Reserve Bulletin • April 1994 it can begin to intensify, the effects on long-term bined with reductions in net worth from impairrates are muted. By contrast, when Federal ments to asset quality, through, for example, Reserve action is seen as lagging behind the need falling values of commercial real estate. Corpoto counter a buildup of inflation pressures, long rate restructuring and defense cutbacks comrates have tended to move sharply higher, as pounded the problems of the economy by reduceventually happened in the late 1970s. This sug- ing job opportunities and fostering a more gests an important conclusion: Failure to tighten general sense of insecurity about employment in a timely manner will lead to higher than prospects. necessary nominal long-term rates as inflation The deliberate maintenance of low short-term expectations intensify. Ultimately, short-term rates for a considerable period was intended to rates will be higher as well if policy initiatives lag decrease the drag on the economy created by behind inflation pressures. The higher short-term these headwinds. Households and businesses rates are required not only to take account of could refinance outstanding debt at much rerising inflation expectations but also to provide duced interest cost. In addition, lower rates and the additional restraint on real rates necessary to improved performance by borrowers would take reverse the destabilizing inflation process. the pressure off depository institutions, helping For decades, the monetary aggregates, espe- them recapitalize. Low interest rates, along with cially M2, provided generally reliable early warn- reduced financial strains, would encourage priing signals of emerging inflationary imbalances. vate spending to pick up the slack left by defense But, as I have discussed in detail in previous cutbacks. Once financial positions were well on testimonies and will touch on later in this state- the road to recovery, and employment and conment, the signals they have sent in recent years fidence began to recover, it was believed that the have been effectively jammed by structural economic expansion would gain self-sustaining changes in financial markets and the unusual momentum. At that point abnormally low real nature of the current business cycle. short-term rates should no longer be needed. Our monetary policy strategy must continue to As the Federal Open Market Committee rest, then, on ongoing assessments of the totality (FOMC) surveyed the evidence at its February 4 of incoming information and appraisals of the meeting, a consensus developed that the balance probable outcomes and risks associated with of risks had, in fact, shifted. Debt repayment alternative policies. Our purpose over the longer burdens had been lowered enough to unleash run is to help the economy grow at its greatest strong aggregate demand in the economy. Real potential over time. To do so, we must move short rates close to zero appeared to pose an toward a posture of policy neutrality—that is, a unacceptable risk of engendering future problevel of real short-term rates consistent with lems. We concluded that our policy stance could sustained economic growth at the economy's be made slightly less accommodative without potential. That level, of course, is difficult to threatening either the continued improvement in discern and, obviously, is not a fixed number but balance sheet structures or, ultimately, the moves with developments within the economy achievement of solid economic growth. Indeed, and financial markets. the firming in reserve market pressures was Over a period of several years starting in 1989, undertaken to preserve and protect the ongoing the Federal Reserve progressively eased its pol- economic expansion by forestalling a future deicy stance, in the process reducing real short- stabilizing buildup of inflationary pressures, term interest rates to about zero by autumn 1992. which in our judgment would eventually surface We undertook those easing actions in response to if the level of policy accommodation that preevidence of a variety of unusual restraints on vailed throughout 1993 were continued indefispending. Households and nonfinancial busi- nitely. We viewed our move as low-cost insurnesses on the borrowing side and many lenders, ance. including depository institutions, were suffering The projections of the FOMC members sugfrom balance sheet strains. These difficulties gest a continuation of good economic perforstemmed from previous overleveraging com- mance in 1994, with reasonable growth and sub- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 305 dued inflation. The central tendencies of the funds rate put real short rates below a "neutral" economic forecasts made by governors and Re- level, we cannot tell this subcommittee, with serve Bank presidents imply expectations that assurance, precisely where the level of neutrality economic growth this year likely will be 3 per- currently resides. To promote sustainable cent or slightly higher. With this kind of growth, growth, history suggests that real short-term a further edging down of the unemployment rate rates are more likely to have to rise than fall from from its January reading is viewed as a distinct here. I cannot, however, tell you at this time possibility. Inflation, as measured by the overall when any such rise would occur; I would hope CPI, is seen as rising only a little compared with that part of any increase in real short-term rates 1993, even though last year's benefit from falling ultimately would be accomplished through furoil and tobacco prices may not be repeated and ther declines in inflation expectations rather than last year's crop losses could buoy food prices in through higher nominal short-term rates. 1994. In assessing our policy stance, we will con- There are, of course, considerable risks to this tinue to monitor developments in money and generally favorable outlook. Some observers credit, but in 1994, as in 1993, the FOMC is have pointed to downside risks to economic unlikely to be able to put a great deal of weight on activity associated with fiscal restraint and weak the behavior of these aggregates relative to their foreign economies; I believe that these factors ranges. We have set the ranges as best we can in will have some effects, but they are likely to be an evolving financial situation to be consistent less than feared. As for fiscal restraint, a good with our objectives for sustained growth and low portion of the negative impact of last year's inflation. budget bill may already be behind us, as some Based on our experience in 1993 and expectahouseholds and businesses have adjusted their tions about financial relationships for 1994, the behavior to the new structure of taxes and to FOMC judges that the growth of money and curtailments in defense and other budget pro- credit this year will stay within the annual ranges grams. set provisionally last July, which were reaffirmed The concern about weak foreign economies at its meeting early this month. Specifically, relates to the strength of foreign demand for U.S. these ranges call for growth of 1 percent to 5 exports going forward. Many of our major trad- percent for M2, 0 percent to 4 percent for M3, ing partners have been experiencing economic and 4 percent to 8 percent for domestic nonfinandifficulties. But some already appear to be pulling cial sector debt. The ranges are the same as the out of recession, and several others seem to have final specifications established last July for 1993. improved prospects. Moreover, containing infla- The final specifications for last year had gone tion will keep increases in production costs of through two rounds of technical downward adtraded goods made in the United States subdued justment after they were first set provisionally in so that our products will remain competitive in July 1992. These downward revisions reflected world markets. With competitive goods and an the FOMC's recognition that the relationship improving world economy, the growth of U.S. between spending and money holdings was deexports should strengthen this year and lessen parting markedly from historical norms. Finanthe drag from the external sector on our output cial intermediation was moving away from past growth. patterns, as flows of funds were increasingly There are upside risks as well. Inventories being rechanneled away from banks toward sehave reached a low level relative to sales and curities markets, notably via bond and stock suggest the possibility of a boost to production mutual funds. Also, banks were relying more from inventory rebuilding beyond that currently heavily on nondeposit funding sources, such as anticipated. In addition, with both borrowers and equity and subordinated debt, as they strengthlenders in stronger financial condition, low inter- ened their capital position. est rates have proven a powerful stimulant to In the event, growth of M2 and M3 last year spending. While we were reasonably convinced came in above the lower bounds of their reduced at the last FOMC meeting that a zero real federal ranges with only Vi percentage point to spare. M2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

306 Federal Reserve Bulletin • April 1994 grew at V/2 percent and M3 at V2 percent over the advance of nominal GDP moderated to a similar year as a whole. Even so, nominal GDP ad- pace. But this steady debt growth incorporated vanced more than 5 percent over the year, ex- an upturn in private borrowing, as the borrowing tending rapid increases in the velocities of broad of the federal government slackened. Housemoney through another year. The discrepancy holds, in particular, showed a heightened willingbetween the growth rates of nominal GDP and ness to take on debt to help finance strong broad money diminished some from that of 1992 purchases of homes and consumer durables. At but was still unusual in the face of steady short- the same time, massive mortgage refinancings at term interest rates. much reduced interest rates contributed to fur- Somewhat faster growth of M2 and M3 this ther reductions in household debt-service buryear than last year may be in prospect. The dens relative to income to a level last seen in the governors' and presidents' outlook calls for a mid-1980s. For businesses as well, the bite taken small step-up in nominal spending, and the fac- out of cash flow by interest payments was shrunk tors depressing growth of the broader aggregates to a size last observed in the mid-1980s, partly relative to the expansion of spending could well through the refinancing of higher-cost debt and abate to some degree. In particular, the diversion continued equity issuance. Although business of savings from retail deposits and money funds borrowing firmed a little, it remained subdued, as toward bond and stock mutual funds may lessen, enough internal funds were available to finance as household portfolios more fully complete the the bulk of hefty capital expenditures. adjustment to the latter's heightened availability. Looking ahead, federal borrowing is scheduled Now that banks have achieved healthier capital- to diminish further this year, partly reflecting ization, they may more readily issue large time deficit reduction measures. Borrowing by nondeposits instead of equity and subordinated debt federal sectors should continue to strengthen, to support stepped-up loan growth. Just how far prodded by the anticipated pickup in nominal these developments will go, however, is difficult GDP and the healthier financial condition already to predict so the prospective relationship be- attained by households and businesses. tween spending and broad money remains highly In conclusion, the Federal Reserve has weluncertain. The FOMC will continue to monitor comed both the strengthening in activity and the behavior of money supply measures for evi- the generally subdued price trends because the dence about underlying economic and financial intent of our monetary policy in recent years developments more generally, but it will still has been to foster precisely this kind of healthy have to base its assessments regarding appropri- economic performance. Looking forward, our ate policy actions on a wide variety of economic policy approach will be to endeavor to select on indicators. a continuing basis the monetary instrument Among those indicators, the Federal Reserve settings that will minimize economic instabiliwill again pay attention to credit market devel- ties and maximize living standards over time. opments, especially for any light it can shed on The outlook, as a result of subdued inflation and the strength of household and corporate balance still low long-term interest rates, is the best we sheets and spending propensities. The overall have seen in decades. It is important that we do debt aggregate put in a repeat performance last everything we can to turn that favorable outyear and again grew about 5 percent, even as the look into reality. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

307 Announcements INCREASE IN PRESSURE ON RESERVE March 24. The council's function is to advise the POSITIONS ANNOUNCED BY CHAIRMAN Board on the exercise of the Board's responsibili- GREENSPAN ties under the Consumer Credit Protection Act and on other matters on which the Board seeks its Alan Greenspan, Chairman, Board of Governors of advice. the Federal Reserve System, announced on February 4, 1994, that the Federal Open Market Committee had decided to increase slightly the degree APPROVAL OF FINAL RULE REGARDING of pressure on reserve positions. The action was A CHANGE IN THE FEDERAL DEPOSIT expected to be associated with a small increase in INSURANCE CORPORATION short-term money market interest rates. IMPROVEMENT ACT The decision was taken to move toward a less accommodative stance in monetary policy to sus- The Federal Reserve Board on February 1, 1994, tain and enhance the economic expansion. announced approval of a final rule to expand the Chairman Greenspan decided to announce this definition of "financial institution" in section 402 action immediately so as to avoid any misunder- of the Federal Deposit Insurance Corporation standing of the Committee's purposes, given the Improvement Act (FDICIA). The FDICIA valifact that this is the first firming of reserve market dates netting contracts among financial institutions. conditions by the Committee since early 1989. The rule was effective March 7, 1994. The FDICIA defines "financial institution" to include a securities broker or dealer, a depository STATEMENT BY CHAIRMAN GREENSPAN institution, a futures commission merchant, or any ON THE RESIGNATION OF PRESIDENT SYRON other institution as determined by the Board. The rule establishes a category of entities consid- Chairman Alan Greenspan of the Federal Reserve ered financial institutions under the act, while Board said that the decision of President Syron to reserving the ability to expand that category further accept the chairmanship of the American Stock through individual determinations. Exchange and leave the Federal Reserve Bank of Parties to a netting contract agree that they will Boston is a major loss for the central bank. pay or receive the net, rather than the gross, "President Syron has made significant contribu- payment due under the netting contract. The act tions to the entire Federal Reserve System during provides certainty that netting contracts will be his many years of service," Dr. Greenspan said. enforced, even in the event of the insolvency of one "He will be sorely missed. We will miss especially of the parties. his thoughtful insights to monetary policy during meetings of the Federal Open Market Committee. We wish him well in his new endeavor." REGULATION E: AMENDMENTS The Federal Reserve Board on February 24, 1994, MEETING OF CONSUMER ADVISORY issued final amendments to Regulation E (Elec- COUNCIL tronic Fund Transfers) to cover the electronic benefit transfer (EBT) programs. Adoption of the The Federal Reserve Board announced that the Board's rule means that benefit recipients will be Consumer Advisory Council met on Thursday, accorded much the same protections that are Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

308 Federal Reserve Bulletin • April 1994 available to other users of electronic payment EXPANSION OF ON-LINE OPERATING HOURS mechanisms. FOR FEDWIRE FUNDS TRANSFER SERVICES EBT programs involve the issuance of plastic access cards and personal identification numbers to The Federal Reserve Board announced on Febrecipients of government benefits, such as food ruary 16, 1994, approval of the expansion of stamps, Aid to Families with Dependent Children, on-line operating hours for Fedwire funds transfer and Supplemental Security Income. Access to services to eighteen hours a day, from 12:30 a.m. to benefits can be obtained through automated teller 6:30 p.m. Eastern Time (ET), five days a week, machines (ATMs) and point-of-sale terminals. The beginning in early 1997. A specific implementation EBT amendments to Regulation E call for general date will be announced about one year in advance application of the rules on liability for unauthorized of the effective date. transfers, error resolution, and most other provi- Intraday credit from the Federal Reserve will be sions, except for periodic statement requirements. available during expanded hours on the same terms This rulemaking directly affects government agenthat it would be provided from 8:30 a.m. ET to cies that administer EBT programs and indirectly 6:30 p.m. ET. Further expansion of the funds transaffects depository institutions and other private fer operating day could be considered after several sector entities. years of experience with the new schedule. Mandatory compliance was set for March 1, Also, the Board announced that current operat- 1997, as requested by a federal EBT task force rep- ing hours for Fedwire securities transfer services resenting all the major federal agencies with benefit will not be expanded until after the implementation programs. The task force is working to establish a of new service capabilities that permit receivers of nationwide system for electronic delivery of gov- securities to control the use of securities-related ernment benefits and asked for the three-year delay intraday Federal Reserve credit. so that the agencies could implement these EBT Public comment will be sought later this year on programs in compliance with Regulation E. new service capabilities that permit users the option to participate in expanded operating hours for securities transfer services and to control the receipt REGULATION O: AMENDMENTS of securities that are delivered to them during expanded hours. The Federal Reserve Board announced on February 18, 1994, approval of a final rule amending several provisions of Regulation O (Loans to Executive Officers, Directors, and Principal Shareholders of DELAY IN DISTRIBUTION OF A NEW Member Banks). The rule is effective February 18, CRIMINAL REFERRAL FORM 1994. The first amendment makes permanent an Distribution of a new criminal referral form for use interim rule increasing Regulation O's aggregate by financial insitutions will be delayed for at least lending limit for small, adequately capitalized three months pending development of computer banks from 100 percent of a bank's unimpaired software. capital and surplus to 200 percent. In the interim, financial institutions should con- The second set of amendments is designed to tinue to use existing forms to report suspected reduce the burden and complexity of the regula- criminal offenses. The use of existing forms will tion. These amendments clarify the "tangible eco- satisfy compliance with the banking agencies' regnomic benefit" rule, provide certain exceptions to ulations until distribution of the new forms and the lending limit for insiders, permit banks to fol- computer software are completed. low alternative recordkeeping procedures, and nar- The delay was announced on February 8, 1994, row the definition of "extension of credit." by the Federal Reserve Board, the Federal Deposit The final rule also implements technical amend- Insurance Corporation, the National Credit Union ments to Regulation O to make it more readily Administration, the Office of the Comptroller of understandable and somewhat shorter. the Currency, and the Resolution Trust Corpora- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 309 tion, which jointly developed the new form in REVISIONS TO THE MONEY STOCK DATA 1993. Distribution of the new form without the com- Measures of the money stock were revised in Febputer software would create a potential burden ruary of this year as a result of the annual benchfor many institutions. Thus, distribution has been mark and seasonal factor review. Data in tables delayed until development of the computer soft- 1.10 and 1.21 in the statistical appendix to the ware is completed. Bulletin reflect these changes beginning with this issue. Data for the monetary aggregates were bench- PROPOSED ACTIONS marked using data from Call Reports through September 1993 and from other sources. The The Federal Reserve Board on February 17, 1994, benchmark and seasonal review did not affect the requested public comment on a notice revising annual growth rates of Ml, M2, or M3 over 1993, risk-based capital standards to implement section and for earlier years annual growth rates of these 305 of the Federal Deposit Insurance Corporation aggregates were revised by no more than 0.2 per- Improvement Act (FDICIA) regarding concentra- centage point. tion of credit risk and the risks of nontraditional The benchmark folded in historical data for sevactivities. Section 305 of the FDICIA directs each eral money market mutual funds that began reportfederal banking agency to revise its risk-based ing for the first time during 1993 and, based on capital standards to ensure that the standards take new information from the Investment Company adequate account of these risks. Comments should Institute, also reclassified some institutional money be received by March 24, 1994. funds as retail money funds, moving them from The Federal Reserve published for public com- non-M2 components of M3 into M2. These reviment on February 24, 1994, a proposal to simplify sions were distributed over several years: By the and update its Regulation E (Electronic Funds fourth quarter of 1993, they raised the level of M2 Transfer). Comments are requested by May 31, $14 billion and the level of M3 $11 billion. The 1994. benchmark also incorporated new estimates of money funds' holdings of overnight repurchase agreements, which are netted out of the aggregates PUBLICATION OF CONSUMER AFFAIRS at both the M2 and M3 levels. These revisions, BROCHURE: MAKING SENSE OF SAVINGS which extend back to 1975, shifted up the level of M2 as much as $5 billion and the level of M3 as The Federal Reserve Board announced on Feb- much as $8 billion over the past decade. Numerous ruary 14, 1994, the publication of a brochure to other smaller revisions were also made to the help consumers understand their options and to aggregates. make better decisions about how and where to save The scope of the annual benchmark was sometheir money. what smaller this year than in past years. Beginning The brochure, entitled Making Sense of Savings, in 1993, certain data series from Call Reports have describes the various savings instruments that are begun to be incorporated into the aggregates as available and their features, as well as fees and soon as these reports become available. In previous interest rates. The brochure also describes the years, these data were folded in only at the time of major features of the Truth in Savings Act. the annual benchmark. Free copies of the brochure may be obtained Seasonal factors for the monetary aggregates through the Board's Publications Services, Mail have been revised using the X-11-ARIMA proce- Stop 127, Board of Governors of the Federal dure that was applied to the benchmarked data Reserve System, Washington, DC 20551, or phone through December 1993. The seasonal adjustment (202) 452-3244. Multiple copies for classroom use procedure used this year is identical to that are also available free of charge. Interested parties employed for the past few years. may also contact the Federal Reserve Bank in their Complete historical data are available from the area for this brochure. Money and Reserves Projections Section, Division Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

310 Federal Reserve Bulletin • April 1994 of Monetary Affairs, Mail Stop 72, Board of Gov- (202) 452-3245. Revised monthly historical data ernors of the Federal Reserve System, Washington, for Ml, M2, M3, and total nonfinancial data DC 20551, or phone (202) 452-3062. The historical are also available from the Economic Bulletin data are also available on floppy diskette for a fee Board of the U.S. Department of Commerce. Call of $25 per diskette from Publications Services, (202) 482-1986 for information on how to obtain Mail Stop 127, Board of Governors of the Federal a subscription to the Economic Bulletin Board. Reserve System, Washington, DC 20551, or phone 1. Monthly seasonal factors used to construct Ml, M2, and M3, January 1993-March 1995 NNoonnbbaannkk Other checkable deposits1 Nontransaction components DDeemmaanndd YYeeaarr aanndd mmoonntthh CCuurrrreennccyy ttrraavveelleerrss ddeeppoossiittss cchheecckkss Total Held at banks In M2 In M3 only 1993—January .9965 .9657 1.0119 1.0135 1.0207 .9990 .9925 February .9943 .9673 .9754 .9948 1.0013 1.0010 1.0050 March .9950 .9657 .9772 1.0027 1.0056 1.0039 1.0026 April .9985 .9581 1.0042 1.0282 1.0273 1.0023 .9971 1.0000 May .9727 .9811 .9934 .9904 .9980 1.0082 June 1.0004 1.0203 .9929 .9971 .9938 .9997 1.0009 July 1.0041 1.0666 .9987 .9915 .9866 .9993 .9951 August 1.0012 1.0742 .9918 .9890 .9871 .9998 1.0058 September .9981 1.0494 .9939 .9913 .9908 .9982 .9994 October .9992 1.0173 1.0072 .9897 .9881 .9998 .9946 November 1.0008 .9780 1.0207 .9980 .9959 1.0006 1.0044 December 1.0110 .9639 1.0463 1.0105 1.0123 .9989 .9951 1994—January .9963 .9676 1.0124 1.0143 1.0211 .9989 .9912 February .9943 .9675 .9752 .9950 1.0014 1.0007 1.0045 March .9948 .9658 .9760 1.0023 1.0054 1.0036 1.0025 April .9989 .9585 1.0035 1.0277 1.0268 1.0022 .9974 May .9991 .9732 .9819 .9939 .9910 .9981 1.0090 June 1.0009 1.0201 .9921 .9970 .9938 .9999 1.0011 July 1.0048 1.0656 .9982 .9913 .9865 .9993 .9949 August 1.0009 1.0721 .9913 .9888 .9870 .9997 1.0058 September .9993 1.0481 .9939 .9910 .9905 .9981 .9997 October .9990 1.0178 1.0080 .9901 .9884 .9998 .9943 November 1.0012 .9791 1.0216 .9980 .9958 1.0008 1.0050 December 1.0117 .9650 1.0465 1.0106 1.0122 .9990 .9957 1995—January .9957 .9682 1.0128 1.0149 1.0214 .9990 .9904 February .9943 .9675 .9749 .9949 1.0013 1.0006 1.0038 March .9960 .9658 .9750 1.0018 1.0051 1.0034 1.0024 1. Seasonally adjusted other checkable deposits at thrift institutions are adjusted, and seasonally adjusted other checkable deposits at commercial derived as the difference between total other checkable deposits, seasonally banks. Additional tables on seasonal factors follow. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 311 2. Monthly seasonal factors for selected components of the monetary aggregates, January 1993-March 1995 Deposits1 Money market mutual funds Year and month Savings Small- Largeand denomination denomination In M2 IInn MM33 oonnllyy MMDAs time time 1993—January .9948 1.0005 .9897 1.0007 1.0201 February .9958 .9998 .9945 1.0169 1.0526 March 1.0017 .9991 .9999 1.0257 1.0172 April 1.0032 .9990 .9970 1.0160 .9965 May 1.0006 .9977 1.0079 .9975 1.0089 June 1.0034 .9990 1.0066 .9933 .9811 July 1.0024 1.0020 .9991 .9899 .9795 August 1.0008 1.0021 1.0064 .9927 .9997 September .9983 1.0027 1.0035 .9878 .9825 October .9991 1.0018 .9991 .9893 .9739 1.0011 November 1.0021 .9986 .9942 .9957 December .9981 .9979 .9958 .9953 .9937 1994—January .9949 1.0002 .9892 1.0010 1.0181 February .9957 .9996 .9938 1.0166 1.0522 March 1.0014 .9991 .9993 1.0257 1.0171 April 1.0030 .9990 .9974 1.0157 .9957 May 1.0008 .9978 1.0085 .9985 1.0097 June 1.0035 .9992 1.0068 .9941 .9812 July 1.0023 1.0021 .9989 .9904 .9797 August 1.0007 1.0022 1.0065 .9926 1.0009 September .9983 1.0029 1.0037 .9869 .9835 October .9991 1.0019 .9991 .9887 .9730 November 1.0022 .9984 1.0014 .9942 .9965 December .9984 .9977 .9959 .9956 .9935 1.0000 1995—January .9951 .9891 1.0013 1.0171 February .9956 .9995 .9933 1.0163 1.0512 1.0011 March .9991 .9989 1.0257 1.0176 1. These seasonal factors are applied to deposits data at both commercial banks and thrift institutions. 3. Weekly seasonal factors used to construct Ml, M2, and M3, December 6, 1993-April 3, 1995 NNoonnbbaannkk Other checkable deposits1 Nontransaction components DDeemmaanndd WWeeeekk eennddiinngg CCuurrrreennccyy ttrraavveelleerrss ddeeppoossiittss cchheecckkss Total Held at banks In M2 In M3 only 1993—December 6 1.0027 .9578 1.0389 1.0205 1.0152 1.0038 .9940 13 1.0069 .9610 1.0387 1.0114 1.0104 1.0032 1.0070 20 1.0124 .9643 1.0434 1.0074 1.0121 .9981 .9960 27 1.0212 .9675 1.0456 .9996 1.0054 .9929 .9991 1994—January 3 1.0089 .9707 1.0823 1.0232 1.0279 .9955 .9676 10 1.0038 .9693 1.0501 1.0471 1.0480 1.0007 .9820 1.0000 17 .9976 .9680 1.0218 1.0243 1.0326 .9971 24 .9915 .9666 .9781 .9967 1.0093 .9985 .9943 31 .9858 .9653 .9677 .9804 .9918 .9977 1.0014 February 7 .9970 .9655 .9869 1.0107 1.0157 .9998 .9983 14 .9967 .9668 .9785 .9963 1.0033 1.0007 1.0081 21 .9959 .9682 .9700 .9876 .9946 1.0014 1.0021 28 .9878 .9695 .9654 .9853 .9920 1.0010 1.0095 Marrch 7 .9979 .9690 .9873 1.0180 1.0205 1.0029 1.0006 14 .9967 .9672 .9838 1.0064 1.0102 1.0050 1.0079 21 .9954 .9653 .9677 .9983 1.0023 1.0033 1.0038 28 .9904 .9634 .9554 .9837 .9900 1.0027 1.0029 April 4 1.0003 .9616 1.0053 1.0215 1.0145 1.0047 .9901 11 1.0041 .9601 1.0122 1.0411 1.0392 1.0073 1.0000 18 .9994 .9586 1.0220 1.0456 1.0457 1.0031 .9960 25 .9942 .9570 .9820 1.0155 1.0190 .9984 .9984 1.0000 May 2 .9924 .9555 .9931 .9985 .9969 1.0004 9 1.0041 .9620 .9914 1.0134 1.0080 .9979 1.0058 16 .9997 .9698 .9952 .9967 .9936 .9985 1.0081 23 .9969 .9776 .9581 .9835 .9824 .9980 1.0123 30 .9973 .9854 .9733 .9763 .9746 .9979 1.0133 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

312 Federal Reserve Bulletin • April 1994 3. Continued NNoonnbbaannkk Other checkable deposits1 Nontransaction components DDeemmaanndd WWeeeekk eennddiinngg CCuurrrreennccyy ttrraavveelleerrss ddeeppoossiittss cchheecckkss Total Held at banks In M2 In M3 only 1994—June 6 1.0041 .9957 1.0091 1.0189 1.0118 1.0010 1.0040 13 1.0038 1.0093 .9996 1.0122 1.0077 1.0028 1.0078 20 1.0009 1.0229 .9845 .9963 .9923 .9999 .9997 27 .9950 1.0364 .9680 .9667 .9696 .9970 .9990 1.0000 July 4 1.0070 1.0491 1.0199 .9948 .9975 .9875 11 1.0108 1.0569 1.0220 1.0120 1.0031 1.0015 .9896 18 1.0051 1.0646 1.0031 .9917 .9855 1.0004 .9965 25 1.0003 1.0723 .9663 .9708 .9705 .9981 .9964 AAuugguusstt 11 .9971 1.0800 .9855 .9791 .9756 .9982 1.0023 88 1.0089 1.0791 1.0067 1.0083 1.0017 1.0006 1.0038 15 1.0049 1.0748 1.0091 .9958 .9929 1.0008 1.0078 22 1.0002 1.0705 .9782 .9822 .9832 .9999 1.0046 29 .9923 1.0662 .9712 .9698 .9712 .9980 1.0091 September 5 1.0035 1.0611 1.0016 1.0041 1.0018 .9990 1.0000 12 1.0039 1.0544 1.0071 1.0114 1.0077 1.0009 1.0041 19 .9990 1.0477 .9982 .9953 .9925 .9975 1.0019 26 .9933 1.0409 .9656 .9641 .9691 .9956 .9992 October 3 .9958 1.0341 1.0051 .9784 .9807 .9976 .9884 10 1.0074 1.0269 1.0132 1.0069 1.0009 1.0018 .9936 1.0011 17 1.0196 1.0247 .9983 .9963 1.0008 .9931 24 .9966 1.0124 .9875 .9771 .9815 .9988 .9995 31 .9906 1.0051 1.0043 .9794 .9749 .9987 .9937 November 7 1.0030 .9960 1.0240 1.0139 1.0068 1.0012 .9973 14 1.0030 .9857 1.0344 1.0057 1.0024 1.0019 1.0056 21 1.0004 .9753 1.0100 .9931 .9909 1.0013 1.0038 28 1.0010 .9650 1.0146 .9784 .9829 .9982 1.0145 December 5 1.0015 .9585 1.0403 1.0143 1.0098 1.0023 1.0003 12 1.0084 .9618 1.0380 1.0131 1.0071 1.0032 1.0053 19 1.0114 .9650 1.0439 1.0070 1.0091 .9998 .9969 26 1.0228 .9683 1.0385 .9999 1.0068 .9940 .9962 1995—January 2 1.0081 .9715 1.0791 1.0199 1.0302 .9955 .9751 9 1.0037 .9705 1.0643 1.0517 1.0542 1.0009 .9829 16 .9982 .9689 1.0269 1.0269 1.0344 1.0005 .9920 23 .9927 .9672 .9802 1.0021 1.0102 .9981 .9925 30 .9855 .9656 .9628 .9778 .9853 .9972 .9976 February 6 .9952 .9652 .9873 1.0096 1.0130 .9998 .9977 13 .9972 .9666 .9810 .9995 1.0049 1.0007 1.0068 20 .9968 .9680 .9692 .9884 .9966 1.0010 1.0024 27 .9878 .9694 .9618 .9816 .9903 1.0005 1.0073 March 6 .9965 .9694 .9883 1.0133 1.0175 1.0024 1.0055 13 .9989 .9675 .9810 1.0087 1.0115 1.0045 1.0038 20 .9969 .9655 .9723 .9985 1.0020 1.0034 1.0042 27 .9919 .9636 .9529 .9857 .9911 1.0027 1.0050 April 3 .9967 .9617 .9939 1.0114 1.0099 1.0045 .9875 1. Seasonally adjusted other checkable deposits at thrift institutions are adjusted, and seasonally adjusted other checkable deposits at commercial derived as the difference between total other checkable deposits, seasonally banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 313 4. Weekly seasonal factors for selected components of the monetary aggregates, December 6, 1993-April 3, 1995 Deposits1 Money market mutual funds Week ending Savings Small- Largeand denomination denomination In M2 In M3 only MMDAs time time 1993—December 6 1.0030 .9982 .9981 .9970 .9916 13 1.0048 .9978 .9989 1.0028 1.0065 20 .9964 .9972 .9943 .9989 1.0003 27 .9915 .9975 .9948 .9914 .9996 1994—January 3 .9938 .9995 .9914 .9803 .9528 10 1.0007 1.0007 .9923 .9917 .9829 17 .9971 1.0003 .9908 1.0039 1.0260 24 .9920 1.0000 .9875 1.0090 1.0323 31 .9895 .9998 .9848 1.0082 1.0588 February 7 .9962 1.0001 .9888 1.0095 1.0428 14 .9975 .9999 .9943 1.0152 1.0649 21 .9956 .9995 .9956 1.0199 1.0391 28 .9935 .9989 .9966 1.0215 1.0619 March 7 .9996 .9992 .9988 1.0232 1.0127 14 1.0023 .9990 1.0011 1.0246 1.0378 21 1.0010 .9985 .9975 1.0276 1.0177 28 1.0004 .9991 .9996 1.0297 1.0217 April 4 1.0066 1.0004 .9996 1.0207 .9678 11 1.0117 .9995 .9984 1.0240 1.0086 18 1.0030 .9988 .9955 1.0172 .9868 25 .9973 .9986 .9963 1.0112 1.0056 May 2 .9958 .9982 .9985 1.0042 .9986 9 1.0025 .9980 1.0043 .9974 1.0182 16 1.0037 .9977 1.0063 .9952 1.0091 23 .9998 .9975 1.0108 .9997 1.0270 30 .9979 .9977 1.0152 1.0000 .9910 June 6 1.0063 .9981 1.0094 .9983 .9883 13 1.0091 .9986 1.0117 1.0004 .9909 20 1.0016 .9988 1.0067 .9952 .9884 27 .9979 .9996 1.0029 .9895 .9778 July 4 1.0020 1.0024 .9994 .9787 .9359 11 1.0068 1.0026 1.0005 .9917 .9645 18 1.0039 1.0023 .9956 .9919 .9920 25 .9996 1.0017 .9978 .9926 .9879 AAuugguusstt 11 .9988 1.0017 1.0020 .9924 1.0026 88 1.0045 1.0022 1.0011 .9892 .9863 15 1.0042 1.0021 1.0051 .9903 1.0043 22 .9990 1.0021 1.0083 .9950 .9993 29 .9952 1.0020 1.0112 .9968 1.0176 September 5 1.0008 1.0031 1.0094 .9889 .9870 12 1.0031 1.0029 1.0099 .9895 1.0083 19 .9982 1.0025 1.0040 .9858 .9864 26 .9933 1.0024 .9967 .9864 .9750 October 3 .9958 1.0039 .9976 .9825 .9460 10 1.0023 1.0042 1.0028 .9878 .9633 17 1.0012 1.0021 .9981 .9894 .9632 24 .9966 1.0007 .9975 .9904 .9934 31 .9975 .9996 .9987 .9898 .9832 November 7 1.0055 .9994 .9998 .9891 .9871 14 1.0057 .9988 1.0016 .9928 .9871 21 .9998 .9980 1.0018 .9929 1.0057 28 .9975 .9978 1.0028 1.0005 1.0079 December 5 1.0032 .9979 1.0006 .9990 .9894 12 1.0048 .9977 .9998 1.0031 1.0070 19 .9972 .9970 .9944 1.0001 1.0012 26 .9925 .9973 .9933 .9904 .9965 1995—January 2 .9945 .9992 .9912 .9828 .9638 9 1.0016 1.0002 .9888 .9921 .9806 16 .9978 1.0006 .9903 1.0025 1.0182 23 .9917 .9999 .9883 1.0071 1.0317 30 .9893 .9996 .9883 1.0075 1.0492 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

314 Federal Reserve Bulletin • April 1994 4. Continued Deposits1 Money market mutual funds Week ending Savings Small- Largeand denomination denomination In M2 IInn MM33 oonnllyy MMDAs time time 1995—February 6 .9959 .9999 .9892 1.0089 1.0411 13 .9972 .9998 .9935 1.0140 1.0612 20 .9955 .9995 .9942 1.0179 1.0469 27 .9933 .9989 .9951 1.0222 1.0587 March 6 .9995 .9995 .9972 1.0248 1.0195 13 1.0020 .9993 1.0004 1.0262 1.0335 1.0001 20 .9988 .9974 1.0271 1.0203 27 .9997 .9986 1.0003 1.0275 1.0207 April 3 1.0061 .9997 .9992 1.0205 .9774 1. These seasonal factors are applied to deposits data at both commercial banks and thrift institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

315 Minutes of the Federal Open Market Committee Meeting of December 21, 1993 A meeting of the Federal Open Market Committee Mr. Winn, Assistant to the Board, Office of Board was held in the offices of the Board of Gov- Members, Board of Governors1 Mr. Ettin, Deputy Director, Division of Research ernors of the Federal Reserve System in Washingand Statistics, Board of Governors ton, D.C., on Tuesday, December 21, 1993, at Mr. Madigan, Associate Director, Division of 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. Low, Open Market Secretariat Assistant, Mr. McDonough, Vice Chairman Division of Monetary Affairs, Board of Mr. Angell Governors Mr. Boehne Mr. Keehn Ms. Pianalto, First Vice President, Federal Reserve Mr. Kelley Bank of Cleveland Mr. LaWare Mr. Lindsey Messrs. Beebe, T. Davis, Goodfriend, and Mr. McTeer Ms. Tschinkel, Senior Vice Presidents, Mr. Mullins Federal Reserve Banks of San Francisco, Ms. Phillips Kansas City, Richmond, and Atlanta Mr. Stern respectively Mr. McNees, Vice President, Federal Reserve Bank Messrs. Broaddus, Jordan, Forrestal, and Parry, of Boston Alternate Members of the Federal Open Market Committee Ms. Meulendyke and Mr. Thornton, Assistant Vice Presidents, Federal Reserve Banks of Messrs. Hoenig, Melzer, and Syron, Presidents New York and St. Louis respectively of the Federal Reserve Banks of Kansas City, St. Louis, and Boston respectively By unanimous vote, the minutes for the meeting Mr. Kohn, Secretary and Economist of the Federal Open Market Committee held on Mr. Bernard, Deputy Secretary November 16, 1993, were approved. Mr. Coyne, Assistant Secretary By unanimous vote, responsibility for making Mr. Gillum, Assistant Secretary decisions on appeals of denials by the Secretary of Mr. Mattingly, General Counsel the Committee for access to Committee records Mr. Patrikis, Deputy General Counsel Mr. Prell, Economist was delegated under the provisions of 271.4(d) of Mr. Truman, Economist the Committee's Rules Regarding Availability of Information to Mr. Mullins and, in his absence, to Messrs. R. Davis, Lang, Lindsey, Promisel, Ms. Phillips. Rolnick, Rosenblum, Scheld, Siegman, The Manager for Foreign Operations reported on Simpson, and Slifman, Associate Economists developments in foreign exchange markets during Ms. Lovett, Manager for Domestic Operations, the period since the November meeting. There were System Open Market Account Mr. Fisher, Manager for Foreign Operations, System Open Market Account 1. Attended part of the meeting. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

316 Federal Reserve Bulletin • April 1994 no System open market transactions in foreign partly reflecting a continuing rebound in the procurrencies during this period, and thus no vote was duction of motor vehicles and parts. Elsewhere in required of the Committee. manufacturing, strong advances were recorded in The Manager for Domestic Operations reported the output of computers and non-auto durable conon developments in domestic financial markets and sumer goods. The sharp expansion in production on System open market transactions in government was associated with substantial increases in the rate securities and federal agency obligations during the of utilization of industrial capacity in October and period November 16, 1993, through December 20, November. 1993. By unanimous vote, the Committee ratified Retail sales were up moderately in November these transactions. after a large advance in October. Motor vehicle The Committee then turned to a discussion of the sales surged in October and remained at the higher economic and financial outlook and the implemen- level in November, apparently reflecting in part tation of monetary policy over the intermeeting favorable financing terms, small price increases— period ahead. A summary of the economic and adjusted for quality improvements—on 1994 modfinancial information available at the time of the els, and generous incentives on pickup trucks from meeting and of the Committee's discussion is some manufacturers. Sales of apparel, furniture provided below, followed by the domestic policy and appliances, and other durable goods also were directive that was approved by the Committee and strong on balance over October and November. issued to the Federal Reserve Bank of New York. Housing starts rose substantially in November; The information reviewed at this meeting sug- starts of single-family units reached their highest gested that economic activity had recorded a strong level since early 1987, but starts of multifamily advance in recent months. Consumer spending had units edged lower. Sales of both new and existing picked up, and business purchases of durable homes remained robust in October. equipment had remained on a marked upward Business spending for durable equipment appartrend. Residential construction was rising rapidly, ently continued to rise rapidly. Among nondefense and nonresidential construction had turned up from capital goods other than aircraft, shipments of comdepressed levels. Industrial production had been puters and other durable equipment were signifiboosted by developments in the motor vehicle cantly higher in October than in the third quarter. In industry, and employment had continued to post addition, the demand for heavy trucks remained solid gains. Most indexes of prices pointed to little strong, and the brisk sales of light vehicles in change in inflation trends despite the recent acceler- October and November likely were the result in ation of economic activity. part of a step-up in spending by businesses. Non- Total nonfarm payroll employment rose appre- residential construction activity increased again in ciably further in November. Another substantial October: Office building declined further and increase in jobs was recorded in the services indus- industrial construction retraced part of a sizable tries, notably in health and business services. Con- September gain, but outlays for institutional, public struction employment was up significantly further utilities, and non-office commercial structures conafter registering modest gains on balance over the tinued to move higher. first three quarters of 1993. In manufacturing, there Business inventories were little changed in Octowere back-to-back increases in jobs in October and ber, with reductions in manufacturing and whole- November following seven consecutive monthly sale stocks nearly offsetting increases at the retail declines, and both overtime hours and the average level. A moderate further decline in manufacturers' workweek remained at a high level. Most of the inventories in October was concentrated among November expansion in factory jobs occurred in producers of aircraft and parts, where stocks have the motor vehicle and capital goods industries. The been contracting for more than two years; the civilian unemployment rate fell considerably in stocks-to-shipments ratio for manufacturing as a November, to 6.4 percent. whole fell to its lowest level in recent years. In the Industrial production increased sharply in Octo- wholesale sector, inventories declined in October ber and November. Manufacturing accounted for after changing little in September, and the ratio of all the gain over the two months, with the rise inventories to sales remained in the middle of its Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee Meeting 317 range over the past several years. At the retail reserve restraint might be acceptable during the level, stocks increased considerably further; with intermeeting period. The reserve conditions associsales expanding vigorously, however, the ratio of ated with this directive were expected to be consisstocks to sales edged lower, and this ratio also was tent with modest growth of M2 and M3 over comin the middle of its range over the past several ing months. years. Open market operations during the intermeeting The nominal U.S. merchandise trade deficit for period were directed toward maintaining the exist- October was about unchanged from its September ing degree of pressure on reserve positions. Adjustlevel and its average rate for the third quarter. The ment plus seasonal borrowing averaged somewhat value of both exports and imports increased in less than anticipated levels, reflecting very light October. Exports of automotive products rose amounts of adjustment borrowing over most of the strongly, and exports of aircraft rebounded from a period, and the federal funds rate remained close to September downturn. The advance in imports 3 percent. was spread across all major categories. Economic While most short-term interest rates changed activity in the major foreign industrial countries little over the intermeeting period, signs of stronger expanded moderately in the third quarter; however, economic growth and the firming of some comavailable data suggested that output in Japan and modity prices tended to push up longer-term inter- Germany might decline in the current quarter, with est rates, although that pressure was offset to some a depressing effect on growth for these industrial extent by declines in oil prices. Taken as a whole, countries as a group. incoming economic data were seen by market par- Broad indexes of consumer and producer prices ticipants as increasing the odds of a tightening of pointed to little change in inflation trends, although monetary policy at some point but not necessarily prices of some commodities and industrial materi- in the very near term. Most indexes of stock prices als had firmed recently. Producer prices of finished fell slightly over the intermeeting period, but the goods were unchanged in November after declin- strong performance of a few firmsb oosted the Dow ing in October and over the third quarter. In Jones Industrial Average to a new high near the end November, a large drop in the prices of finished of the period. energy goods offset a rebound in the prices of other In foreign exchange markets, the trade-weighted finished goods. Producer prices for nonfood, non- value of the dollar in terms of the other G-10 energy finished goods were about unchanged over currencies was about unchanged on balance over the twelve months ended in November. At the the intermeeting period. The dollar appreciated consumer level, prices of items other than food and against the yen in response to incoming data sugenergy advanced moderately in November; the gesting weakness in the Japanese economy and twelve-month increase in this price measure was a heightened prospects for further monetary easing little smaller than the rise over the comparable by the Bank of Japan. Even though interest rates period ended in November 1992. Average hourly eased in Europe as central banks lowered their earnings edged up in November; for the twelve money-market intervention rates, the dollar was months ended in November, these earnings were up little changed against the German mark and a smaller amount than over the preceding year. declined somewhat against other European At its meeting on November 16, 1993, the Com- currencies. mittee adopted a directive that called for maintain- Growth of M2 and M3 strengthened appreciably ing the existing degree of pressure on reserve posi- in November; both aggregates had risen at sometions and that did not include a presumption about what faster rates since late summer than earlier in the likely direction of any adjustment to policy the year. Ml growth remained brisk in November, during the intermeeting period. Accordingly, the and money funds included in M2 apparently benedirective indicated that in the context of the Com- fited from a slowdown in inflows to bond funds in mittee's long-run objectives for price stability and the wake of the earlier decline in bond prices. The sustainable economic growth, and giving careful pickup in M3 growth reflected a surge in term consideration to economic, financial, and monetary Eurodollar deposits as well as faster growth of M2. developments, slightly greater or slightly lesser For the year through November, M2 and M3 were Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

318 Federal Reserve Bulletin • April 1994 estimated to have grown at rates somewhat above theless, views varied somewhat with regard to the the lower end of the Committee's ranges for the outlook and ranged from expectations of some year. Total domestic nonfinancial debt had modest further decline in the core rate of inflation expanded moderately in recent months, and for the to concerns about the possibility of some accelerayear through November it was estimated to have tion in the context of diminishing margins of unemincreased at a rate in the lower half of the Commit- ployed production resources and an accomtee's monitoring range. modative monetary policy as reflected in low real The staff forecast prepared for this meeting sug- short-term interest rates and continued rapid growth gested that, after a strong fourth-quarter advance, in narrow measures of money and reserves. the economy would expand at a more moderate In their comments about developments across rate in 1994. Consumer spending was projected to the nation, members observed that economic condidecelerate to a rate more in line with the growth of tions clearly had strengthened in many regions and disposable income. Business fixed investment was that the better conditions had fostered appreciable expected to advance briskly, although not quite as improvement in business and consumer sentiment rapidly as in 1993, and further gains in homebuild- in most parts of the country. The members recoging activity likely would be concentrated in the first nized that the economic expansion was still quite half of the year. Exports were projected to subdued in many local areas and that economic strengthen somewhat, bolstered by a modest pickup activity remained depressed in some parts of the in foreign economic growth. Fiscal restraint was country such as southern California. The overall expected to exert a substantial drag on spending, strength of the economy was fueled to an important through both falling government defense purchases extent by interest-sensitive spending on producer and higher taxes. In light of the limited margins of and consumer durables and housing and tended to slack in labor and product markets, the ongoing confirm the durability of the expansion. Gains in expansion was projected to be associated with only such spending were not likely to be sustained at a slight further reduction in inflation. their recent rates, but the cash flow and income that In the Committee's discussion of current and such expenditures had generated were likely to prospective economic developments, members foster further economic growth, especially in the referred to widespread indications, both statistical context of generally supportive conditions in finanand anecdotal, of a marked strengthening in eco- cial and credit markets. The members acknowlnomic activity and much improved business and edged that a number of factors continued to conconsumer confidence in recent months. The rate of strain the expansion, including ongoing though economic growth could be expected to moderate less pervasive balance-sheet rebuilding, business during the early months of 1994 from what cur- restructuring and downsizing activities, and the rently appeared to be an unsustainable pace, but the downtrend in defense spending. On balance, howmembers viewed the extent of such moderation as ever, current developments did not point to a a key uncertainty in the outlook. A number of marked deviation from the moderate growth trend members observed that a sharp slowing of the in economic activity that had been experienced expansion early next year, similar to the slowdown over the past two years, though in the view of a after the surge in activity during the closing months number of members, the odds on somewhat of 1992, could not be ruled out. However, most saw stronger growth were greater than they had been the gains in the economy as more solidly based earlier in the expansion. than earlier in the expansion, and they generally With regard to the outlook for key sectors of the expected the economy to settle into a pattern of economy, consumer expenditures were seen as moderate growth over coming quarters at a trend likely to continue to provide vital support to the rate close to or somewhat above the economy's expansion even though increases in consumer long-run potential. With regard to the outlook for spending were not likely to be maintained at recent inflation, the members saw little evidence in avail- rates. Members noted that the improved consumer able measures of prices and wages or in other confidence and increased spending were reflected indicators that any significant change might already in a somewhat greater willingness to incur debt, at have occurred in underlying inflation trends. None- least in the context of reduced interest rates. Some Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee Meeting 319 members cautioned, however, that growth in con- that the increases in housing starts experienced sumer expenditures had exceeded gains in incomes over the closing months of this year might not be for an extended period, insofar as could be judged sustainable; even so, housing construction, espefrom available data, and an already low saving cially in the single-family sector, should be relarate seemed likely to limit the potential growth in tively well maintained given the likelihood that such spending. Moreover, the negative impact of homeownership would remain comparatively increased tax rates on high incomes seemed likely affordable in the context of growing incomes, to be felt especially during the first half of 1994, favorable mortgage rates, and limited pressures on though the extent of that impact on consumer the prices of new homes. spending remained uncertain. On the positive side, With respect to fiscal policy, members referred members cited a number of developments that to the prospects for further cutbacks in defense would tend to bolster overall consumer expendi- spending that probably would continue to be offset tures, including lower energy costs, reduced only in part by growth in federal government purincome taxes for many individuals stemming from chases of other goods and services. However, net indexing, and lower interest charges on various reductions in government purchases were expected kinds of debt. More generally, the rise in consumer to diminish over the projection horizon. Likewise, confidence seemed to be related to perceptions of adverse effects on spending of the rise in tax rates improving employment opportunities despite con- on higher incomes would tend to be concentrated tinuing announcements of sizable workforce reduc- in the first half of 1994, and the impact on spending tions by some large firms. over the months ahead might well be relatively The members expected growth in real business limited because many taxpayers probably had investment to remain robust in 1994 but to deceler- anticipated the higher taxes and had taken meaate somewhat from the rapid rate of expansion over sures to mitigate or spread out their effects or the past year. Continuing increases in business would meet new tax obligations partly out of savsales and low financing costs along with ongoing ings. Proposed health care reform legislation would efforts to improve productivity were likely to exert a restraining effect on the economy, should it remain conducive to substantial further growth in be enacted, owing to mandated cost increases on overall spending for business equipment despite employers. If this form of financing were adopted, persisting weakness in aerospace and defense- however, the legislation might have little, or perrelated industries. Nonresidential construction haps even a favorable, effect on the federal deficit. activity, including commercial and industrial build- The external sector of the economy also aping and infrastructure construction, displayed signs peared likely to have a moderating effect on of considerable strength in some parts of the coun- domestic economic activity over the year ahead. try; and declining vacancy rates pointed to a level- The economies of key foreign industrial nations ing out or even a pickup in nonresidential building and thus U.S. exports to those nations were construction in a number of other areas. Some projected to grow only gradually, while the expansion in inventories seemed likely over the expansion of U.S. imports was likely to remain forecast horizon to accommodate the continuing relatively robust on the basis of current expecgrowth in overall demands. In this connection, tations for domestic economic activity. In the view members noted that a rise in inventories probably of at least some members, however, stimulative contributed to the expansion in production in recent economic policies in a number of foreign counmonths since the latter could not be explained tries might well lead to stronger economic perforentirely by the strength of final demand, and a mances and to greater demand for U.S. goods and buildup of motor vehicle stocks in late 1993 was services than many observers currently anticipated. likely to continue into the early part of 1994. In any event, the members generally agreed that The housing sector was expected to remain a the outlook for developments abroad remained a source of considerable economic stimulus during source of particular uncertainty for the domestic the early months of 1994, both directly and indi- economy. rectly in terms of the favorable effects on purchases Members commented that there were few indicaof home furnishings. Some members commented tions of any change in inflationary trends in broad Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

320 Federal Reserve Bulletin • April 1994 measures of prices and wages despite the surge in care over the period ahead, especially in light of the economic activity in recent months and associated considerable lags between monetary policy actions increases in capacity utilization rates. One impor- and their effects on prices. tant sign of growing inflationary pressures, rising In the Committee's discussion of monetary pollead times for deliveries of materials, had not icy for the period until the next scheduled meeting emerged. Some members noted that although in early February, a majority of the members capacity usage rates were approaching or had endorsed a proposal to maintain unchanged condireached levels that in the past had tended to signal tions in reserve markets and to retain the currently the onset of rising inflation, the growth of competi- unbiased instruction in the directive concerning tion stemming from the internationalization of nu- possible intermeeting adjustments to policy. Lookmerous markets suggested that old capacity bench- ing forward, many of the members commented that marks might no longer apply and, especially in the the Committee probably would have to firm reserve context of excess capacity in many foreign econo- conditions at some point to adjust monetary policy mies, the potential inflationary effects of strong from its currently quite accommodative stance to a domestic demand pressures might remain subdued more neutral position, and that such a policy move for some period of time. In keeping with these might have to be made sooner rather than later to assessments, members again reported on the contain inflation and continue to provide a sound absence of inflationary cost pressures in local areas basis for sustained economic expansion. Monetary across the country and on persisting comments by conditions had been eased to their current degree business contacts regarding their inability to raise of accommodation in the 1990-92 period in the prices to achieve more satisfactory or customary context of balance sheet restructuring and other profit margins. Business executives continued to unusual forces that were holding down spending. look to improvements in productivity to maintain Since the latter part of 1992, however, downside or increase their margins, and there were numerous risks to the expansion had diminished considerably reports of considerable success in implementing as financial conditions became more supportive of productivity gains. Price developments in commod- economic activity. Borrowers and lenders had ity markets presented a mixed picture; higher food strengthened their financial positions substantially prices stemming from weather conditions earlier in and were less reluctant to use and extend credit. the year had had an adverse effect on broad mea- Moreover, the low level of real short-term interest sures of prices, but the drop in energy prices had rates and in the view of some members the continfavorable implications for the near-term inflation ued rapid growth of reserves or increases in a outlook. variety of commodity prices provided evidence of a quite accommodative monetary policy. Overstay- It also was noted that rising inflationary presing such a policy would incur an increasing risk of sures often were accompanied by a pickup in credit fostering greater inflationary pressures that in turn demands, and there was no evidence of any surge would undermine the sustainability of the expanin such demands. However, the expansion of oversion. For now, however, a majority believed that all nonfinancial debt had strengthened to a degree. the risks remained at an acceptable level, given the Moreover, in the view of some members, the rise in remaining slack in the economy and the lack of long-term interest rates and in gold prices might near-term inflation pressures. Waiting for further well have been caused in part by heightened infladevelopments before making any policy move was tion concerns. Members also cited scattered examwarranted in light of the uncertainties surrounding ples of greater price pressures, notably the prices of the outlook, notably with regard to the extent of the lumber and some other building materials and of moderation in economic growth expected early related efforts to pass on the added costs through next year. If the economy settled into a pattern of higher prices on new homes in some areas. Despite growth about in line with its potential, the chances the absence of any general indication of rising of greater inflation pressures down the road would inflation, a number of members expressed concern be reduced and the need for a near-term policy about the potential for increasing inflationary presadjustment would be less pressing, though it would sures in the economy and saw a need to monitor still be required at some point. possible future sources of inflation with special Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee Meeting 321 Two members expressed a strong preference for reserve restraint might be acceptable during the a prompt move toward a firmer policy stance to intermeeting period. According to a staff analysis, forestall inflation pressures. A number of others the reserve conditions contemplated at this meeting commented that the decision was a close call, would be consistent with moderate growth in M2 including two who had a marginal preference for and M3 over the months ahead. tightening policy at this time but who could accept At the conclusion of the meeting, the Federal a delay in light of the uncertainties that were Reserve Bank of New York was authorized and involved. directed, until instructed otherwise by the Commit- Members who could support an unchanged pol- tee, to execute transactions in the System Account icy stance also indicated their acceptance of a in accordance with the following domestic policy directive that was not biased in either direction directive: with regard to possible adjustments in the degree of reserve pressure during the intermeeting period. The information reviewed at this meeting suggests a Some observed that while the flow of economic strong advance in economic activity in recent months. reports during this period was likely to underscore Total nonfarm payroll employment rose appreciably furthe marked strengthening of the economy, those ther in November, and the civilian unemployment rate reports mainly would cover developments in the fell considerably to 6.4 percent. Industrial production increased sharply in October and November, partly fourth quarter, and from a monetary policy perspecreflecting a continuing rebound in the output of motor tive the members were more interested in knowing vehicles. Retail sales were up moderately in November something about the extent of the follow-through after a large increase in October. Housing starts adstrength early in the new year. Moreover, the mem- vanced substantially in November. Business equipment bers recognized that any tightening move would expenditures have been rising rapidly, and nonresidential construction has turned up from depressed levels. The represent a turn in policy that might well have a nominal U.S. merchandise trade deficit in October was greater-than-usual effect on financial markets. This about unchanged from its average rate in the third prospect argued for taking such an action at a quarter. Broad indexes of consumer and producer prices meeting, with the benefit of a full Committee suggest little change in inflation trends, although prices review of the implications for future growth and of some raw materials have increased recently. inflation pressures of a wide variety of emerging Short-term interest rates have changed little, while intermediate- and long-term rates have risen slightly developments—including those in money, credit, since the Committee meeting on November 16. In forand financial markets—rather than an intermeeting eign exchange markets, the trade-weighted value of the action based on an asymmetric directive. In the dollar in terms of the other G-10 currencies is about view of one member, a tightening action over the unchanged on balance over the intermeeting period. coming intermeeting period would incur an undue Growth of M2 and M3 strengthened in November, and both aggregates have risen at somewhat faster rates since risk of an exaggerated response in financial marlate summer than earlier in the year. For the year through kets, given the likelihood of thin trading markets November, M2 and M3 are estimated to have grown at around year-end; and since a policy move should rates somewhat above the lower end of the Committee's be postponed, a symmetrical directive seemed ranges for the year. Total domestic nonfinancial debt has appropriate. expanded at a moderate rate in recent months, and for the year through November it is estimated to have At the conclusion of the Committee's discussion, increased at a rate in the lower half of the Committee's all but two members indicated that they could monitoring range. support a directive that called for maintaining the The Federal Open Market Committee seeks monetary existing degree of pressure on reserve positions and and financial conditions that will foster price stability and promote sustainable growth in output. In furtherance that did not include a presumption about the likely of these objectives, the Committee at its meeting in July direction of any adjustment to policy during the lowered the ranges it had established in February for intermeeting period. Accordingly, in the context of growth of M2 and M3 to ranges of 1 to 5 percent and the Committee's long-run objectives for price 0 to 4 percent respectively, measured from the fourth stability and sustainable economic growth, and quarter of 1992 to the fourth quarter of 1993. The Committee anticipated that developments contributing to giving careful consideration to economic, financial, unusual velocity increases would persist over the baland monetary developments, the Committee ance of the year and that money growth within these decided that slightly greater or slightly lesser lower ranges would be consistent with its broad policy Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

322 Federal Reserve Bulletin • April 1994 objectives. The monitoring range for growth of total believed that if bond market participants concluded domestic nonfinancial debt also was lowered to 4 to that the Committee was using the price of gold to 8 percent for the year. For 1994, the Committee agreed target the price level, five-year and ten-year interest on tentative ranges for monetary growth, measured from rates would then be significantly lower than if the the fourth quarter of 1993 to the fourth quarter of 1994, Committee's tightening was a belated response to a of 1 to 5 percent for M2 and 0 to 4 percent for M3. The Committee provisionally set the monitoring range for worsening outlook for inflation. He emphasized growth of total domestic nonfinancial debt at 4 to 8 per- that the objective of monetary policy clearly should cent for 1994. The behavior of the monetary aggregates be stable money, which produces stable prices and will continue to be evaluated in the light of progress an ongoing optimal and stable economic growth toward price level stability, movements in their velocipath. ties, and developments in the economy and financial markets. Mr. Lindsey commented further that a modest In the implementation of policy for the immediate policy move now would appropriately signal the future, the Committee seeks to maintain the existing Committee's concern about the potential for infladegree of pressure on reserve positions. In the context of tion. Such an action would begin the process of the Committee's long-run objectives for price stability moving policy away from what he perceived as an and sustainable economic growth, and giving careful consideration to economic, financial, and monetary unsustainable stance. He also noted that foreign developments, slightly greater reserve restraint or competition had been restraining pressures on slightly lesser reserve restraint might be acceptable in domestic prices, and the policy course he had in the intermeeting period. The contemplated reserve conmind would continue to help in that regard by ditions are expected to be consistent with moderate supporting the foreign exchange value of the dollar. growth in M2 and M3 over coming months. Votes for this action: Messrs. Greenspan, McDonough, Boehne, Keehn, Kelley, LaWare, McTeer, REQUEST FOR ACCESS TO CONFERENCE Mullins, Ms. Phillips, and Mr. Stern. Votes against CALL RECORD this action: Messrs. Angell and Lindsey. Messrs. Angell and Lindsey dissented because At this meeting the Committee considered a they believed that monetary policy was overly ac- request from Mr. Henry B. Gonzalez, Chairman of commodative and needed to be adjusted promptly the House Committee on Banking, Finance, and toward a more neutral stance to counter potential Urban Affairs, for access by his staff to the tape inflationary pressures in the economy. They re- recording and transcript of the Committee's teleferred to the long lags with which monetary policy phone conference on October 15, 1993. The main exerts its effects on inflation and the consequent purpose of the conference call was to discuss what need to adjust monetary policy on a timely basis to position the Committee should take on the release foster the Committee's long-run objective of stable of material about its deliberations that are conprices. They understood the difficulty of finding the tained in historical files of meeting transcripts; the appropriate circumstances for tightening actions so issue undoubtedly would be raised in the near as to avoid unintended interpretations and repercus- future, probably during upcoming testimony before sions in financial markets. In their judgment, eco- Chairman Gonzalez' Committee scheduled for nomic and financial conditions were unlikely to be October 19, 1993. more favorable later and waiting risked undesirable Chairman Gonzalez had indicated that he was inflationary consequences. investigating the possibility that Committee mem- Mr. Angell also stressed that the Committee bers had conspired during the conference call to should focus more directly on forward-looking hide information from the House Banking Commitindicators such as the price of gold and the estimate tee. The accusation was wholly without merit, but of the natural rate of interest provided by the yield at this stage the Committee could fully vindicate on five-year Treasury notes. He favored an immedi- itself only by making the tape and transcript availate increase of 50 basis points in the federal funds able to congressional staff for their review. rate, which would enable the Committee to observe Such a step would be taken with considerable how the market adjusted the price of gold to the reluctance. The recording in question did not conchanged opportunity cost of holding gold. He tain a discussion of monetary policy, but it did Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee Meeting 323 involve Committee deliberations, which are pro- tion to be made available to them. The members tected from public disclosure by the Freedom of indicated that it should be made clear that access to Information Act. Some members expressed con- the tape in question was being undertaken solely to cern that granting access to this material could be dispel the unfounded allegations regarding the viewed as setting a precedent for the premature Committee's actions. The Committee already had release of other tapes and transcripts, with adverse decided to make public, with a five-year lag, lightly effects on the Committee's deliberations. However, edited versions of all the transcripts currently in the the Committee's General Counsel expressed the possession of the FOMC Secretariat. These tranopinion that the Committee could make an excep- scripts as edited will include all the deliberative tion for this transcript without prejudicing its abil- materials except for highly sensitive information ity to withhold deliberative or other privileged that can continue to be withheld under the provimaterials in other transcripts under the Freedom of sions of the Freedom of Information Act. Information Act. The members agreed with a pro- It was agreed that the next meeting of the Composal from the Chairman that the staff of Chairman mittee would be held on Thursday-Friday, Febru- Gonzalez and of certain other Banking Committee ary 3-4, 1994. members be allowed to listen to the tape recording The meeting adjourned at 1:30 p.m. of the October 15 conference call. The review would be conducted at the offices of the Board of Donald L. Kohn Governors, and the congressional staff members Secretary would be asked to keep confidential the informa- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

325 Legal Developments FINAL RULE—AMENDMENT TO REGULATION E agency for distributing government benefits to a consumer electronically, such as through The Board of Governors is amending 12 C.F.R. Part automated teller machines or point-of-sale 205, its Regulation E (Electronic Fund Transfers), to terminals. cover electronic benefit transfer (EBT) programs es- (b) Issuance of access devices. For purposes of this tablished by federal, state, or local government agen- section, a consumer is deemed to request an access cies. EBT programs involve the issuance of access device when the consumer applies for government cards and personal identification numbers to recipients benefits that the agency disburses or will disburse by of government benefits so that they can obtain their means of an electronic fund transfer. The agency shall benefits through automated teller machines and point- verify the identity of the consumer receiving the of-sale terminals. The final rule applies Regulation E to device by reasonable means before the device is EBT programs but sets forth certain limited modifica- activated. tions under authority granted to the Board by section (c) Alternative to periodic statement. A government 904(c) of the act. In particular, periodic account state- agency need not furnish the periodic statement rements are not required if account balance information quired by section 205.9(b) if the agency makes availand written account histories are made available to able to the consumer: benefit recipients by other specified means. This rule- (1) The consumer's account balance, through a making directly affects government agencies that ad- readily available telephone line and at a terminal minister EBT programs and indirectly affects deposi- (which may include providing balance information tory institutions and other private-sector entities. at a balance-inquiry terminal or providing it, rou- Effective February 28, 1994, 12 C.F.R. Part 205 is tinely or upon request, on a terminal receipt at the amended as follows: time of an electronic fund transfer); and (2) A written history of the consumer's account Part 205—Electronic Fund Transfers transactions for at least 60 days preceding the date (Regulation E) of a request by the consumer. The account history shall be provided promptly in response to an oral or 1. The authority citation for Part 205 is revised to read written request. as follows: (d) Modified requirements. A government agency that does not furnish periodic statements, pursuant to Authority: 15 U.S.C. 1693. paragraph (c) of this section, shall comply with the following requirements: 2. Section 205.15 is added to read as follows: (1) Initial disclosures. The agency shall modify the disclosures under section 205.7(a) by providing: Section 205.15—Electronic fund transfer of (i) Account balance information. The means by government benefits. which the consumer may obtain information concerning the account balance, including a tele- (a) Government agency subject to regulation. (1) A phone number. This disclosure may be made by government agency is deemed to be a financial providing a notice substantially similar to the institution for purposes of the act and regulation if notice contained in section A(12) of appendix A of directly or indirectly it issues an access device to a this part. consumer for use in initiating an electronic fund (ii) Written account history. A summary of the transfer of government benefits from an account. consumer's right to receive a written account The agency shall comply with all applicable require- history upon request, in substitution for the periments of the act and regulation, except as provided odic statement disclosure required by section in this section. 205.7(a)(6), and a telephone number that can be (2) For purposes of this section, the term account used to request an account history. This disclomeans an account established by a government sure may be made by providing a notice substan- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

326 Federal Reserve Bulletin • April 1994 tially similar to the notice contained in section Section A(13)—Disclosure of Error Resolution A(12) of appendix A of this part, Procedures for Government Agencies That Do (iii) Error resolution notice. A notice concerning Not Provide Periodic Statements error resolution that is substantially similar to the notice contained in section A(13) of appendix A of (Section 205.15(d)(l)(iii) and (d)(2)) this part, in substitution for the notice required by section 205.7(a)(10). In Case of Errors or Questions About Your (2) Annual error resolution notice. The agency shall Electronic Transfers provide an annual notice concerning error resolution that is substantially similar to the notice contained in Telephone us at [telephone number] section A(13) of appendix A of this part, in substi- or tution for the notice required by section 205.8(b). Write us at [address] (3) Limitations on liability. For purposes of section 205.6(b)(2) and (3), in regard to a consumer's report- as soon as you can, if you think an error has occurred ing within 60 days any unauthorized transfer that in your [EBT] [agency's name for program] account. appears on a periodic statement, the 60-day period We must hear from you no later than 60 days after you shall begin with the transmittal of a written account learn of the error. You will need to tell us: history or other account information provided to the • Your name and [case] [file] number. consumer under paragraph (c) of this section. • Why you believe there is an error, and the dollar (4) Error resolution. The agency shall comply with amount involved. the requirements of section 205.11 in response to an • Approximately when the error took place. oral or written notice of an error from the consumer that is received no later than 60 days after the If you tell us orally, we may require that you send us consumer obtains the written account history or your complaint or question in writing within 10 busiother account information, under paragraph (c) of ness days. We will generally complete our investigathis section, in which the error is first reflected. tion within 10 business days and correct any error promptly. In some cases, an investigation may take longer, but you will have the use of the funds in 3. Appendix A to part 205 is revised by adding sections question after the 10 business days. If we ask you to A(12) and A(13) to read as follows: put your complaint or question in writing and we do not receive it within 10 business days, we may not Appendix A to Part 205—Model Disclosure credit your account during the investigation. Clauses For errors involving transactions at point-of-sale terminals in food stores, the periods referred to above are 20 business days instead of 10 business days. If we decide that there was no error, we will send you a written explanation within three business days after Section A(12)—Disclosure by Government we finish our investigation. You may ask for copies of Agencies of Information About Obtaining the documents that we used in our investigation. Account Balances and Account Histories If you need more information about our error resolution procedures, call us at [telephone number] [the telephone number shown above]. (Section 205.15(d)(l)(i) and (ii)) You may obtain information about the amount of benefits you have remaining by calling [telephone FINAL RULE—AMENDMENT TO REGULATION O number]. That information is also available [on the receipt you get when you make a transfer with your The Board of Governors is amending 12 C.F.R. Part card at (an ATM) (a POS terminal)] [when you make a 215, its Regulation O (Loans to Executive Officers, balance inquiry at an ATM] [when you make a balance Directors, and Principal Shareholders of Member inquiry at specified locations]. Banks; Loans to Holding Companies and Affiliates) to You also have the right to receive a written sum- permit the aggregate limit on lending to insiders by mary of transactions for the 60 days preceding your eligible, adequately capitalized small banks to be inrequest by calling [telephone number]. [Optional: Or creased from 100 percent of unimpaired capital and you may request the summary by contacting your surplus to 200. The Board also is revising Regulation O caseworker.] to permit banks to follow alternative recordkeeping Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 327 procedures on loans to insiders of affiliates, to narrow Section 215.2—Definitions. the definition of "extension of credit," and to adopt certain exceptions to the general restrictions on lend- For the purposes of this Subpart A, the following ing to insiders and the special restrictions on lending to definitions apply unless otherwise specified: executive officers. Other minor revisions clarifying (a) Affiliate means any company of which a member certain exemptions and conforming certain provisions bank is a subsidiary or any other subsidiary of that to the enabling statutes are included as well. company. Effective February 18, 1994, 12 C.F.R. Part 215 is (b) Company means any corporation, partnership, amended as follows: trust (business or otherwise), association, joint venture, pool syndicate, sole proprietorship, unincorpo- Part 215—Loans to Executive Officers, rated organization, or any other form of business Directors, and Principal Shareholders of entity not specifically listed herein. However, the term Member Banks (Regulation O) does not include: (1) An insured depository institution (as defined in 12 U.S.C. 1813); or 1. The authority citation for part 215 is revised to read (2) A corporation the majority of the shares of which as follows: are owned by the United States or by any State. (c) (1) Control of a company or bank means that a Authority: 12 U.S.C. 248(i), 375a(10), 375b(9) and (10), person directly or indirectly, or acting through or in 1817(k) and 1972(2)(G)(ii); Pub. L. 102-242, 105 Stat. concert with one or more persons: 2236. (i) Owns, controls, or has the power to vote 25 percent or more of any class of voting securities of Subpart A—Loans by Member Banks to Their the company or bank; Executive Officers, Directors, and Principal (ii) Controls in any manner the election of a Shareholders majority of the directors of the company or bank; or 2. 12 C.F.R. Part 215, Subpart A, is amended by (iii) Has the power to exercise a controlling influrevising sections 215.1 through 215.13, to read as ence over the management or policies of the follows: company or bank. (2) A person is presumed to have control, including the power to exercise a controlling influence over Section 215.1—Authority, purpose, and scope. the management or policies, of a company or bank if: (a) Authority. This subpart is issued pursuant to sec- (i) The person is: tions ll(i), 22(g), and 22(h) of the Federal Reserve Act (A) An executive officer or director of the (12 U.S.C. 248(i), 375a, and 375b), 12 U.S.C. 1817(k), company or bank; and and section 306 of the Federal Deposit Insurance (B) Directly or indirectly owns, controls, or has Corporation Improvement Act of 1991 (Pub. L. 102— the power to vote more than 10 percent of any 242, 105 Stat. 2236 (1991)). class of voting securities of the company or (b) Purpose and scope. This subpart A governs any bank; or extension of credit by a member bank to an executive (ii) (A) The person directly or indirectly owns, officer, director, or principal shareholder of: The mem- controls, or has the power to vote more than 10 ber bank; a bank holding company of which the percent of any class of voting securities of the member bank is a subsidiary; and any other subsidiary company or bank; and of that bank holding company. It also applies to any (B) No other person owns, controls, or has the extension of credit by a member bank to: a company power to vote a greater percentage of that class controlled by such a person; and a political or cam- of voting securities. paign committee that benefits or is controlled by such (3) An individual is not considered to have control, a person. This subpart A also implements the reporting including the power to exercise a controlling influrequirements of 12 U.S.C. 375a concerning extensions ence over the management or policies, of a company of credit by a member bank to its executive officers or bank solely by virtue of the individual's position and of 12 U.S.C. 1817(k) concerning extensions of as an officer or director of the company or bank. credit by a member bank to its executive officers or (4) A person may rebut a presumption established principal shareholders, or the related interests of such by paragraph (b)(2) of this section by submitting to persons. the appropriate Federal banking agency (as defined Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

328 Federal Reserve Bulletin • April 1994 in 12 U.S.C. 1813(q)) written materials that, in the (g) Immediate family means the spouse of an individagency's judgment, demonstrate an absence of con- ual, the individual's minor children, and any of the trol. individual's children (including adults) residing in the (d) Director of a member bank means any director of a individual's home. member bank, whether or not receiving compensation. (h) Insider means an executive officer, director, or An advisory director is not considered a director if the principal shareholder, and includes any related interadvisory director: est of such a person. (1) Is not elected by the shareholders of the com- (i) Lending limit. The lending limit for a member bank pany or bank; is an amount equal to the limit of loans to a single (2) Is not authorized to vote on matters before the borrower established by section 5200 of the Revised board of directors; and Statutes,2 12 U.S.C. 84. This amount is 15 percent of (3) Provides solely general policy advice to the the bank's unimpaired capital and unimpaired surplus board of directors. in the case of loans that are not fully secured, and an (e) (1) Executive officer of a company or bank means a additional 10 percent of the bank's unimpaired capital person who participates or has authority to partici- and unimpaired surplus in the case of loans that are pate (other than in the capacity of a director) in fully secured by readily marketable collateral having a major policymaking functions of the company or market value, as determined by reliable and continubank, whether or not: the officer has an official title; ously available price quotations, at least equal to the the title designates the officer an assistant; or the amount of the loan. The lending limit also includes any officer is serving without salary or other compensa- higher amounts that are permitted by section 5200 of tion.1 The chairman of the board, the president, the Revised Statutes for the types of obligations listed every vice president, the cashier, the secretary, and therein as exceptions to the limit. A member bank's the treasurer of a company or bank are considered unimpaired capital and unimpaired surplus equals the executive officers, unless the officer is excluded, by sum of: resolution of the board of directors or by the bylaws (1) The "total equity capital" of the member bank of the bank or company, from participation (other reported on its most recent consolidated report of than in the capacity of a director) in major policy- condition filed under 12 U.S.C. 1817(a)(3); making functions of the bank or company, and the (2) Any subordinated notes and debentures that officer does not actually participate therein. comply with requirements of the appropriate Fed- (2) Extensions of credit to an executive officer of an eral banking agency for addition to the member affiliate of a member bank (other than a company bank's capital structure and are reported on its most that controls the bank) shall not be subject to recent consolidated report of condition filed under sections 215.4, 215.6, and 215.8 of this part, pro- 12 U.S.C. 1817(a)(3); and vided that: (3) Any valuation reserves created by charges to the (i) The executive officer of the affiliate is excluded member bank's income reported on its most recent (by name or by title) from participation in major consolidated report of condition filed under policymaking functions of the member bank by 12 U.S.C. 1817(a)(3). resolutions of the boards of directors of both the (j) Member bank means any banking institution that is affiliate and the member bank, and does not a member of the Federal Reserve System, including actually participate in such major policymaking any subsidiary of a member bank. The term does not functions; and include any foreign bank that maintains a branch in the (ii) The executive officer is not otherwise subject United States, whether or not the branch is insured to such requirements as a director or principal (within the meaning of 12 U.S.C. 1813(s)) and regardshareholder. less of the operation of 12 U.S.C. 1813(h) and (f) Foreign bank has the meaning given in 12 U.S.C. 12 U.S.C. 1828(j)(3)(B). 3101(7). (k) Pay an overdraft on an account means to pay an amount upon the order of an account holder in excess of funds on deposit in the account. 1. The term is not intended to include persons who may have official (1) Person means an individual or a company. titles and may exercise a certain measure of discretion in the performance of their duties, including discretion in the making of loans, but who do not participate in the determination of major policies of the bank or company and whose decisions are limited by policy standards fixed by the senior management of the bank or company. For example, the term does not include a manager or assistant manager of 2. Where State law establishes a lending limit for a State member a branch of a bank unless that individual participates, or is authorized bank that is lower than the amount permitted in section 5200 of the to participate, in major policymaking functions of the bank or com- Revised Statutes, the lending limit established by applicable State pany. laws shall be the lending limit for the State member bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 329 (m) (1) Principal shareholder means a person (other ment of authorized travel or other expenses incurred than an insured bank) that directly or indirectly, or or to be incurred on behalf of the bank; acting through or in concert with one or more (2) A receipt by a bank of a check deposited in or persons, owns, controls, or has the power to vote delivered to the bank in the usual course of business more than 10 percent of any class of voting securi- unless it results in the carrying of a cash item for or ties of a member bank or company. Shares owned or the granting of an overdraft (other than an inadvertcontrolled by a member of an individual's immediate ent overdraft in a limited amount that is promptly family are considered to be held by the individual. repaid, as described in section 215(4)(e) of this part); (2) A principal shareholder of a member bank does (3) An acquisition of a note, draft, bill of exchange, not include a company of which a member bank is a or other evidence of indebtedness through: subsidiary, (i) A merger or consolidation of banks or a similar (n) Related interest of a person means: transaction by which a bank acquires assets and (1) A company that is controlled by that person; or assumes liabilities of another bank or similar (2) A political or campaign committee that is con- organization; or trolled by that person or the funds or services of (ii) Foreclosure on collateral or similar proceeding which will benefit that person. for the protection of the bank, provided that such (o) Subsidiary has the meaning given in 12 U.S.C. indebtedness is not held for a period of more than 1841(d), but does not include a subsidiary of a member three years from the date of the acquisition, bank. subject to extension by the appropriate Federal banking agency for good cause; Section 215.3—Extension of credit. (4) (i) An endorsement or guarantee for the protection of a bank of any loan or other asset previ- (a) An extension of credit is a making or renewal of ously acquired by the bank in good faith; or any loan, a granting of a line of credit, or an extending (ii) Any indebtedness to a bank for the purpose of of credit in any manner whatsoever, and includes: protecting the bank against loss or of giving (1) A purchase under repurchase agreement of se- financial assistance to it; curities, other assets, or obligations; (5) Indebtedness of $15,000 or less arising by reason (2) An advance by means of an overdraft, cash item, of any general arrangement by which a bank: or otherwise; (i) Acquires charge or time credit accounts; or (3) Issuance of a standby letter of credit (or other (ii) Makes payments to or on behalf of participants similar arrangement regardless of name or descrip- in a bank credit card plan, check credit plan, or tion) or an ineligible acceptance, as those terms are similar open-end credit plan, provided: defined in section 208.8(d) of this chapter; (A) The indebtedness does not involve prior (4) An acquisition by discount, purchase, exchange, individual clearance or approval by the bank or otherwise of any note, draft, bill of exchange, or other than for the purposes of determining other evidence of indebtedness upon which an in- authority to participate in the arrangement and sider may be liable as maker, drawer, endorser, compliance with any dollar limit under the guarantor, or surety; arrangement; and (5) An increase of an existing indebtedness, but not (B) The indebtedness is incurred under terms if the additional funds are advanced by the bank for that are not more favorable than those offered its own protection for: to the general public; (i) Accrued interest; or (6) Indebtedness of $5,000 or less arising by reason (ii) Taxes, insurance, or other expenses incidental of an interest-bearing overdraft credit plan of the to the existing indebtedness; type specified in section 215.4(e) of this part; or (6) An advance of unearned salary or other unearned (7) A discount of promissory notes, bills of excompensation for a period in excess of 30 days; and change, conditional sales contracts, or similar pa- (7) Any other similar transaction as a result of which per, without recourse. a person becomes obligated to pay money (or its (c) Non-interest-bearing deposits to the credit of a equivalent) to a bank, whether the obligation arises bank are not considered loans, advances, or extendirectly or indirectly, or because of an endorsement sions of credit to the bank of deposit; nor is the giving on an obligation or otherwise, or by any means of immediate credit to a bank upon uncollected items whatsoever. received in the ordinary course of business considered (b) An extension of credit does not include: to be a loan, advance or extension of credit to the (1) An advance against accrued salary or other depositing bank. accrued compensation, or an advance for the pay- (d) For purposes of section 215.4 of this part, an Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

330 Federal Reserve Bulletin • April 1994 extension of credit by a member bank is considered to (3) Approval by the board of directors under parahave been made at the time the bank enters into a graphs (b)(1) and (b)(2) of this section is not required binding commitment to make the extension of credit. for an extension of credit that is made pursuant to a (e) A participation without recourse is considered to line of credit that was approved under paragraph be an extension of credit by the participating bank, not (b)(1) of this section within 14 months of the date of by the originating bank. the extension of credit. The extension of credit must (f) Tangible economic benefit rule—(1) In general. An also be in compliance with the requirements of extension of credit is considered made to an insider section 215.4(a) of this part. to the extent that the proceeds are transferred to the (4) Participation in the discussion, or any attempt to insider or are used for the tangible economic benefit influence the voting, by the board of directors of the insider. regarding an extension of credit constitutes indirect (2) Exception. An extension of credit is not consid- participation in the voting by the board of directors ered made to an insider under paragraph (f)(1) of this on an extension of credit. section if: (c) Individual lending limit. No member bank may (i) The credit is extended on terms that would extend credit to any insider of the bank or insider of its satisfy the standard set forth in section 215.4(a) of affiliates in an amount that, when aggregated with the this part for extensions of credit to insiders; and amount of all other extensions of credit by the member (ii) The proceeds of the extension of credit are bank to that person and to all related interests of that used in a bona fide transaction to acquire prop- person, exceeds the lending limit of the member bank erty, goods, or services from the insider. specified in section 215.2(i) of this part. This prohibition does not apply to an extension of credit by a Section 215.4—General prohibitions. member bank to a company of which the member bank is a subsidiary or to any other subsidiary of that (a) Terms and Creditworthiness. No member bank company. may extend credit to any insider of the bank or insider (d) Aggregate lending limit—(1) General limit. A of its affiliates unless the extension of credit: member bank may not extend credit to any insider (1) Is made on substantially the same terms (includ- of the bank or insider of its affiliates unless the ing interest rates and collateral) as, and following extension of credit is in an amount that, when credit underwriting procedures that are not less aggregated with the amount of all outstanding extenstringent than, those prevailing at the time for com- sions of credit by that bank to all such insiders, does parable transactions by the bank with other persons not exceed the bank's unimpaired capital and unimthat are not covered by this part and who are not paired surplus (as defined in section 215.2(i) of this employed by the bank; and part). (2) Does not involve more than the normal risk of (2) Member banks with deposits of less than repayment or present other unfavorable features. $100,000,000. (b) Prior approval. (1) No member bank may extend (i) A member bank with deposits of less than credit (which term includes granting a line of credit) $100,000,000 may by an annual resolution of its to any insider of the bank or insider of its affiliates in board of directors increase the general limit specan amount that, when aggregated with the amount of ified in paragraph (d)(1) of this section to a level all other extensions of credit to that person and to all not to exceed two times the bank's unimpaired related interests of that person, exceeds the higher capital and unimpaired surplus, if: of $25,000 or 5 percent of the member bank's (A) The board of directors determines that such unimpaired capital and unimpaired surplus, unless: higher limit is consistent with prudent, safe, and (i) The extension of credit has been approved in sound banking practices in light of the bank's advance by a majority of the entire board of experience in lending to its insiders and is directors of that bank; and necessary to attract or retain directors or to (ii) The interested party has abstained from par- prevent restricting the availability of credit in ticipating directly or indirectly in the voting. small communities; (2) In no event may a member bank extend credit (B) The resolution sets forth the facts and to any insider of the bank or insider of its affiliates reasoning on which the board of directors bases in an amount that, when aggregated with all other the finding, including the amount of the bank's extensions of credit to that person, and all related lending to its insiders as a percentage of the interests of that person, exceeds $500,000, except bank's unimpaired capital and unimpaired surby complying with the requirements of this para- plus as of the date of the resolution; graph (b). (C) The bank meets or exceeds, on a fully- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 331 phased in basis, all applicable capital require- the amounts of such extensions of credit that are ments established by the appropriate Federal secured in the manner described therein, banking agency; and (e) Overdrafts. (1) No member bank may pay an (D) The bank received a satisfactory composite overdraft of an executive officer or director of the rating in its most recent report of examination, bank3 on an account at the bank, unless the payment (ii) If a member bank has adopted a resolution of funds is made in accordance with: authorizing a higher limit pursuant to paragraph (i) A written, preauthorized, interest-bearing ex- (d)(2)(i) of this section and subsequently fails to tension of credit plan that specifies a method of meet the requirements of paragraphs (d)(2)(i)(C) repayment; or or (d)(2)(i)(D) of this section, the member bank (ii) A written, preauthorized transfer of funds shall not extend any additional credit (including from another account of the account holder at the a renewal of any existing extension of credit) to bank. any insider of the bank or its affiliates unless (2) The prohibition in paragraph (e)(1) of this section such extension or renewal is consistent with does not apply to payment of inadvertent overdrafts the general limit in paragraph (d)(1) of this on an account in an aggregate amount of $1,000 or section. less, provided: (3) Exceptions, (i) The general limit specified in (i) The account is not overdrawn for more than 5 paragraph (d)(1) of this section does not apply to business days; and the following: (ii) The member bank charges the executive of- (A) Extensions of credit secured by a perfected ficer or director the same fee charged any other security interest in bonds, notes, certificates of customer of the bank in similar circumstances. indebtedness, or Treasury bills of the United States or in other such obligations fully guaran- Section 215.5—Additional restrictions on loans teed as to principal and interest by the United to executive officers of member banks. States; (B) Extensions of credit to or secured by un- The following restrictions on extensions of credit by a conditional takeout commitments or guarantees member bank to any of its executive officers apply in of any department, agency, bureau, board, addition to any restrictions on extensions of credit by commission or establishment of the United a member bank to insiders of itself or its affiliates set States or any corporation wholly owned di- forth elsewhere in this part. The restrictions of this rectly or indirectly by the United States; section apply only to executive officers of the member (C) Extensions of credit secured by a perfected bank and not to executive officers of its affiliates. security interest in a segregated deposit account (a) No member bank may extend credit to any of its in the lending bank; or executive officers, and no executive officer of a mem- (D) Extensions of credit arising from the dis- ber bank shall borrow from or otherwise become count of negotiable or nonnegotiable install- indebted to the bank, except in the amounts, for the ment consumer paper that is acquired from an purposes, and upon the conditions specified in parainsider and carries a full or partial recourse graphs (c) and (d) of this section. endorsement or guarantee by the insider, pro- (b) No member bank may extend credit in an aggregate vided that: amount greater than the amount permitted in para- (/) The financial condition of each maker of graph (c)(3) of this section to a partnership in which such consumer paper is reasonably docu- one or more of the bank's executive officers are mented in the bank's files or known to its partners and, either individually or together, hold a officers; majority interest. For the purposes of paragraph (c)(3) (2) An officer of the bank designated for that of this section, the total amount of credit extended by purpose by the board of directors of the bank a member bank to such partnership is considered to be extended to each executive officer of the member bank certifies in writing that the bank is relying who is a member of the partnership. primarily upon the responsibility of each maker for payment of the obligation and not upon any endorsement or guarantee by the insider; and 3. This prohibition does not apply to the payment by a member bank (5) The maker of the instrument is not an of an overdraft of a principal shareholder of the member bank, unless insider. the principal shareholder is also an executive officer or director. This prohibition also does not apply to the payment by a member bank of (ii) The exceptions in paragraphs (d)(3)(i)(A) an overdraft of a related interest of an executive officer, director, or through (d)(3)(i)(C) of this section apply only to principal shareholder of the member bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

332 Federal Reserve Bulletin • April 1994 (c) A member bank is authorized to extend credit to Section 215.7—Extensions of credit outstanding any executive officer of the bank: on March 10, 1979. (1) In any amount to finance the education of the executive officer's children; (a) Any extension of credit that was outstanding on (2) With the specific prior approval of the board of March 10, 1979, and that would, if made on or after directors, in any amount to finance or refinance the March 10, 1979, violate section 215.4(c) of this part, purchase, construction, maintenance, or improve- shall be reduced in amount by March 10, 1980, to be in ment of a residence of the executive officer, pro- compliance with the lending limit in section 215.4(c) of vided: this part. Any renewal or extension of such an exten- (i) The extension of credit is secured by a first lien sion of credit on or after March 10, 1979, shall be made on the residence and the residence is owned (or only on terms that will bring the extension of credit expected to be owned after the extension of into compliance with the lending limit of section credit) by the executive officer; and 215.4(c) of this part by March 10, 1980. However, any (ii) In the case of a refinancing, that only the extension of credit made before March 10, 1979, that amount thereof used to repay the original exten- bears a specific maturity date of March 10, 1980, or sion of credit, together with the closing costs of later, shall be repaid in accordance with its repayment the refinancing, and any additional amount schedule in existence on or before March 10, 1979. thereof used for any of the purposes enumerated (b) If a member bank is unable to bring all extensions in this paragraph (c)(2), are included within this of credit outstanding on March 10, 1979, into complicategory of credit ; ance as required by paragraph (a) of this section, the (3) In any amount, if the extension of credit is member bank shall promptly report that fact to the secured in a manner described in section Comptroller of the Currency, in the case of a national 215.4(d)(3)(i)(A) through (d)(3)(i)(C) of this part; and bank, or to the appropriate Federal Reserve Bank, in (4) For any other purpose not specified in para- the case of a State member bank, and explain the graphs (c)(1) through (c)(3) of this section, if the reasons why all the extensions of credit cannot be aggregate amount of extensions of credit to that brought into compliance. The Comptroller or the Reexecutive officer under this paragraph does not serve Bank, as the case may be, is authorized, on the exceed at any one time the higher of 2.5 percent of basis of good cause shown, to extend the March 10, the bank's capital and unimpaired surplus or 1980, date for compliance for any extension of credit $25,000, but in no event more than $100,000. for not more than two additional one-year periods. (d) Any extension of credit by a member bank to any of its executive officers shall be: Section 215.8—Records of member banks. (1) Promptly reported to the member bank's board of directors; (a) In general. Each member bank shall maintain (2) In compliance with the requirements of section records necessary for compliance with the require- 215.4(a) of this part; ments of this part. (3) Preceded by the submission of a detailed current (b) Recordkeeping for insiders of the member bank. financial statement of the executive officer; and Any recordkeeping method adopted by a member (4) Made subject to the condition in writing that the bank shall: extension of credit will, at the option of the member (1) Identify, through an annual survey, all insiders of bank, become due and payable at any time that the the bank itself; and officer is indebted to any other bank or banks in an (2) Maintain records of all extensions of credit to aggregate amount greater than the amount specified insiders of the bank itself, including the amount and for a category of credit in paragraph (c) of this terms of each such extension of credit. section. (c) Recordkeeping for insiders of the member bank's affiliates. Any recordkeeping method adopted by a Section 215.6—Prohibition on knowingly member bank shall maintain records of extensions of receiving unauthorized extension of credit. credit to insiders of the member bank's affiliates by: (1) Survey method, (i) Identifying, through an annual No executive officer, director, or principal shareholder survey, each insider of the member bank's affiliof a member bank or any of its affiliates shall know- ates; and ingly receive (or knowingly permit any of that person's (ii) Maintaining records of the amount and terms related interests to receive) from a member bank, of each extension of credit by the member bank to directly or indirectly, any extension of credit not such insiders; or authorized under this part. (2) Borrower inquiry method, (i) Requiring as part of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 333 each extension of credit that the borrower indi- (1) Principal shareholder of a member bank means cate whether the borrower is an insider of an any person4 other than an insured bank, or a foreign affiliate of the member bank; and bank as defined in 12 U.S.C. 3101(7), that, directly (ii) Maintaining records that identify the amount or indirectly, owns, controls, or has power to vote and terms of each extension of credit by the more than 10 percent of any class of voting securimember bank to borrowers so identifying them- ties of the member bank. The term includes a person selves. that controls a principal shareholder {e.g., a person (3) Alternative recordkeeping methods for insiders that controls a bank holding company). Shares of a of affiliates. A member bank may employ a record- bank (including a foreign bank), bank holding comkeeping method other than those identified in para- pany, or other company owned or controlled by a graphs (c)(1) and (c)(2) of this section if the appro- member of an individual's immediate family are priate Federal banking agency determines that the presumed to be owned or controlled by the individbank's method is at least as effective as the identi- ual for the purposes of determining principal sharefied methods. holder status. (d) Special rule for non-commercial lenders. A mem- (2) Related interest means: ber bank that is prohibited by law or by an express (i) Any company controlled by a person; or resolution of the board of directors of the bank from (ii) Any political or campaign committee the funds making an extension of credit to any company or other or services of which will benefit a person or that is entity that is covered by this part as a company is not controlled by a person. For the purpose of this required to maintain any records of the related inter- section and Subpart B of this part, a related ests of the insiders of the bank or its affiliates or to interest does not include a bank or a foreign bank inquire of borrowers whether they are related interests (as defined in 12 U.S.C. 3101(7)). of the insiders of the bank or its affiliates. (b) Public disclosure. (1) Upon receipt of a written request from the public, a member bank shall make Section 215.9—Reports by executive officers. available the names of each of its executive officers and each of its principal shareholders to whom, or to whose related interests, the member bank had out- Each executive officer of a member bank who bestanding as of the end of the latest previous quarter comes indebted to any other bank or banks in an of the year, an extension of credit that, when aggregate amount greater than the amount specified aggregated with all other outstanding extensions of for a category of credit in section 215.5(c) of this part, credit at such time from the member bank to such shall, within 10 days of the date the indebtedness person and to all related interests of such person, reaches such a level, make a written report to the equaled or exceeded 5 percent of the member bank's board of directors of the officer's bank. The report capital and unimpaired surplus of $500,000, whichshall state the lender's name, the date and amount of ever amount is less. No disclosure under this paraeach extension of credit, any security for it, and the graph is required if the aggregate amount of all purposes for which the proceeds have been or are to extensions of credit outstanding at such time from be used. the member bank to the executive officer or principal shareholder of the member bank and to all Section 215.10—Reports on credit to executive related interests of such a person does not exceed officers. $25,000. (2) A member bank is not required to disclose the Each member bank shall include with (but not as part specific amounts of individual extensions of credit. of) each report of condition (and copy thereof) filed (c) Maintaining records. Each member bank shall pursuant to 12 U.S.C. 1817(a)(3) a report of all exten- maintain records of all requests for the information sions of credit made by the member bank to its described in paragraph (b) of this section and the executive officers since the date of the bank's previous disposition of such requests. These records may be report of condition. disposed of after two years from the date of the request. Section 215.11—Disclosure of credit from member banks to executive officers and principal shareholders. (a) Definitions. For the purposes of this section, the 4. The term "stockholder of record" appearing in 12 U.S.C. following definitions apply: 1972(2)(G) is synonymous with the term "person." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

334 Federal Reserve Bulletin • April 1994 Section 215.12—Reporting requirement for time for filing comments has expired, and the Board credit secured by certain bank stock. has considered the application and all comments received in light of the factors set forth in section 3(c) of Each executive officer or director of a member bank the BHC Act. the shares of which are not publicly traded shall report Community First, with total consolidated assets of annually to the board of directors of the member bank approximately $1.2 billion, operates 21 banks in South the outstanding amount of any credit that was ex- Dakota, North Dakota, Minnesota, and Colorado.1 tended to the executive officer or director and that is Community First is the seventh largest commercial secured by shares of the member bank. banking organization in Minnesota, controlling approximately $449.9 million in deposits, representing Section 215.13—Civil penalties. approximately 1 percent of total deposits in commercial banks in the state. Ada BHC is the 343d largest Any member bank, or any officer, director, employee, commercial banking organization in Minnesota, conagent, or other person participating in the conduct of trolling deposits of approximately $14.9 million, repthe affairs of the bank, that violates any provision of resenting less than 1 percent of total deposits in this part (other than section 215.11 of this part) is commercial banks in the state. Upon consummation of subject to civil penalties as specified in section 29 of the proposed transactions, Community First would the Federal Reserve Act (12 U.S.C. 504). remain the seventh largest commercial banking organization in Minnesota, controlling approximately Subpart B—{AmendedJ $464.8 million in deposits, representing approximately 1 percent of total deposits in commercial banks in the state. 3. Section 215.21 is amended by removing "1841(c)" where it appears in paragraph (a) and adding in its Section 3(d) of the BHC Act ("Douglas Amendplace "1971 and 1972" and by removing footnote 9 and ment"), prohibits the Board from approving an appliredesignating footnotes 10 and 11 as footnotes 9 cation by a bank holding company to acquire control and 10. of a bank located outside of the home state of the bank holding company2 "unless the acquisition of . .. a 4. Section 215.22 is amended by removing "12 C.F.R. State bank by an out-of-State bank holding company is 226.2(p)" where it appears in paragraph (c)(l)(ii) and specifically authorized by the statute laws of the State adding in its place "12 C.F.R. 226.2(a)(12)". in which such bank is located, by language to that effect and not merely by implication."3 For purposes of the Douglas Amendment, the home state of Com- ORDERS ISSUED UNDER BANK HOLDING munity First is South Dakota. COMPANY ACT In considering this proposal, the Board has analyzed the interstate banking statutes of Minnesota, and has Orders Issued Under Section 3 of the Bank concluded that Community First is authorized under Holding Company Act the laws of Minnesota to acquire Ada BHC and Ada Bank.4 Accordingly, the Board's approval of this Community First Bankshares, Inc. Fargo, North Dakota 1. All asset, deposit, and market data are as of September 30, 1993. Order Approving Acquisition of a Bank Holding 2. The home state of a bank holding company is the state in which Company the operations of the bank holding company's banking subsidiaries were principally conducted on July 1, 1966, or the date on which the company became a bank holding company, whichever is later. The Community First Bankshares, Inc., Fargo, North Da- operations of a bank holding company are considered principally conducted in the state in which the total deposits of its banking kota ("Community First"), a bank holding company subsidiaries were largest on the date in question. The operations of within the meaning of the Bank Holding Company Act Community First were principally conducted in South Dakota on ("BHC Act"), has applied under section 3(a)(5) of the September 30, 1987, the date on which it became a bank holding company. BHC Act (12 U.S.C. § 1842(a)(5)) to acquire all of the 3. 12 U.S.C. § 1842(d). voting shares of Ada BancShares, Inc. ("Ada BHC"), 4. See Minn. Stat. Ann. § 48.93; S.D. Codified Laws Ann. and thereby indirectly acquire The Ada National Bank § 51A-2-38. Minnesota's interstate banking statute permits an out-ofstate bank holding company located in one of a few states, including ("Ada Bank"), both of Ada, Minnesota. South Dakota, to acquire a bank in Minnesota, provided that the Notice of the application, affording interested per- applicant's home state authorizes the acquisition of banks in that state by a Minnesota bank holding company under conditions substantially sons an opportunity to submit comments, has been similar to the conditions imposed by the law of Minnesota, as published (58 Federal Register 68,911 (1993)). The determined by the Minnesota Commissioner of Commerce. The Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 335 proposal is not prohibited by the Douglas Amendment. Based on the foregoing and other facts of record, the The Minnesota Commissioner of Commerce has pre- Board has determined that this application should be, liminarily indicated that this proposal is permissible and hereby is, approved. The Board's approval of this under Minnesota law. Approval of the proposed trans- application is specifically conditioned upon compliaction is conditioned upon Community First receiving ance with all of the commitments made in connection the necessary approval from the Minnesota Commis- with this application. For purposes of this action, sioner of Commerce. these commitments will be considered conditions im- Community First competes directly with Ada Bank posed in writing by the Board in connection with the in the Fargo-Moorhead banking market.5 Upon con- Board's findings and decision and, as such, may be summation of this proposal, the market would remain enforced in proceedings under applicable laws. The moderately concentrated as measured by the transaction approved in this order shall not be con- Herfindahl-Hirschman Index ("HHI"),6 and 29 com- summated before the thirtieth calendar day following mercial banks and thrift institutions ("depository in- the effective date of this order, or later than three stitutions") would remain as competitors in the mar- months after the effective date of this order, unless ket.7 Based on these and all other facts of record, the such period is extended for good cause by the Board or Board concludes that consummation of First Commu- by the Federal Reserve Bank of Minneapolis, acting nity's proposal would not result in any significantly pursuant to delegated authority. adverse effect on competition in the Fargo-Moorhead By order of the Board of Governors, effective Febbanking market or any other relevant banking mar- ruary 22, 1994. kets. Considerations relating to the financial and manage- This action was taken pursuant to the Board's Rules rial resources and future prospects of Community Regarding Delegation of Authority (12 C.F.R. 265.4(b)(1)) by First, Ada BHC, and Ada Bank, the convenience and a committee of Board members. Voting for this action: Governors LaWare, Lindsey, and Phillips. needs of the communities to be served, and other supervisory factors the Board is required to consider JENNIFER J. JOHNSON under section 3 of the BHC Act, also are consistent Associate Secretary of the Board with approval of this application. Community First Bankshares, Inc. Fargo, North Dakota Minnesota Commissioner of Commerce has previously concluded that Order Approving Acquisition of a Bank the interstate banking statutes of Minnesota and South Dakota are reciprocal. See Cooperation Agreement between the State of South Dakota and the State of Minnesota, dated June 2, 1989. Community First Bankshares, Inc., Fargo, North Da- 5. The Fargo-Moorhead banking market is composed of Cass and kota ("Community First"), a bank holding company Ransom Counties and portions of Richland, Steele, and Traill Counties in North Dakota and Norman and Clay Counties in Minnesota. within the meaning of the Bank Holding Company Act 6. Under the revised Department of Justice Merger Guidelines, 49 ("BHC Act"), has applied under section 3(a)(3) of the Federal Register 26,823 (June 29, 1984), a market in which the BHC Act (12 U.S.C. § 1842(a)(3)) to acquire approxipost-merger HHI is between 1000 and 1800 is considered moderately concentrated. The Justice Department has informed the Board that a mately 99 percent of the voting shares of Bank of bank merger or acquisition generally will not challenged (in the Spooner, Spooner, Wisconsin ("Spooner Bank"). absence of other factors indicating anticompetitive effects) unless the Notice of the application, affording interested perpost-merger HHI is at least 1800 and the merger increases the HHI by more than 200 points. The Justice Department has stated that the sons an opportunity to submit comments, has been higher than normal HHI thresholds for screening bank mergers for published (58 Federal Register 63,165 (1993)). The anticompetitive effects implicitly recognize the competitive effects of limited-purpose lenders and other non-depository financial institu- time for filing comments has expired, and the Board tions. Upon consummation of this proposal, the HHI would increase has considered the application and all comments reby 11 points to 1154. ceived in light of the factors set forth in section 3(c) of 7. Market data are as of June 30, 1992. Market share data are based on calculations in which the deposits of thrift institutions are included the BHC Act. at 50 percent. The Board previously has indicated that thrift institu- Community First, with total consolidated assets of tions have become, or have the potential to become, significant competitors of commercial banks. See Midwest Financial Group, 75 approximately $1.2 billion, operates 21 banks in South Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Dakota, North Dakota, Minnesota, and Colorado.1 Federal Reserve Bulletin 743 (1984). Thus, the Board has regularly Spooner Bank is the 75th largest commercial bank in included thrift deposits in the calculation of market share on a 50-percent weighted basis. See, e.g., First Hawaiian, Inc., 77 Federal Wisconsin, controlling deposits of approximately Reserve Bulletin 52 (1991). Upon consummation of this proposal, $73.5 million, representing less than 1 percent of total Community First would remain the fifth largest depository institution in the Fargo-Moorhead banking market, controlling deposits of approximately $137.7 million, representing 7.3 percent of market deposits. 1. All asset, deposit, and market data are as of September 30, 1993. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

336 Federal Reserve Bulletin • April 1994 deposits in commercial banks in the state. Upon Commissioner of Banking has preliminarily indicated consummation of the acquisition of Spooner Bank, that this proposal is authorized under Wisconsin law. Community First would become the 75th largest com- In light of the foregoing, the Board has determined mercial banking organization in Wisconsin, controlling that its approval of this proposal is not prohibited by approximately $73.5 million in deposits, representing the Douglas Amendment. Approval of this proposal is less than 1 percent of total deposits in commercial specifically conditioned upon Community First receivbanks in the state. ing all required state regulatory approvals. Section 3(d) of the BHC Act ("Douglas Amend- Considerations relating to the financial and management"), prohibits the Board from approving an appli- rial resources and future prospects of Community cation by a bank holding company to acquire control First and Spooner Bank; the convenience and needs of of a bank "located outside of the state in which the the communities to be served; and other supervisory operations of such bank holding company's banking factors the Board is required to consider under section subsidiaries were principally conducted on July 1, 3 of the BHC Act also are consistent with approval of 1966, or the date on which such company became a these applications.5 bank holding company, whichever, is later, unless the Based on the foregoing and other facts of record, the acquisition of... a State bank by an out-of-State bank Board has determined that these applications should holding company is specifically authorized by the be, and hereby are, approved. The Board's approval statute laws of the State in which such bank is located, of this application is specifically conditioned upon by language to that effect and not merely by implica- compliance with all of the commitments made in tion."2 For purposes of the Douglas Amendment, the connection with these applications. For purposes of banking operations of Community First were princi- this action, these commitments will be considered pally conducted, on the relevant date, in South Da- conditions imposed in writing by the Board in conneckota. Thus, in reviewing whether Community First tion with the Board's findings and decision and, as may acquire a bank located in a state other than South such, may be enforced in proceedings under applicable Dakota, the Board must consider whether the laws of laws. The transaction approved in this order shall not the state in which the bank is located specifically be consummated before the thirtieth calendar day authorize the acquisition. following the effective date of this order, or later than In this case, Spooner Bank is located in Wisconsin. three months after the effective date of this order, Wisconsin's interstate banking statute expressly authorizes the acquisition of a Wisconsin banking organization by an out-of-state bank holding company, if Dakota, to acquire a bank in Minnesota, provided that the applicant's the state in which the largest amount of the deposits home state authorizes the acquisition of banks in that state by a Minnesota bank holding company under conditions substantially controlled by the out-of-state bank holding company is similar to the conditions imposed by the law of Minnesota, as part of a region defined by the Wisconsin law and that determined by the Minnesota Commissioner of Commerce. The state permits bank acquisitions by Wisconsin bank Wisconsin Commissioner of Banking and the Minnesota Commissioner of Commerce have concluded that the statute laws of Minneholding companies on a reciprocal basis.3 For pursota and Wisconsin permit bank holding companies located in these poses of Wisconsin law, Community First is deemed states to acquire financial institutions on a reciprocal basis. See to be located in Minnesota because, as of the date of Cooperation Agreement between the State of Wisconsin and the State of Minnesota, dated February 6, 1987. See also Norwest Corporation, the last quarterly report of condition of its subsidiary 76 Federal Reserve Bulletin 386 (1990); Houston Bancorporation, banks, the largest amount of the deposits controlled by Inc., 73 Federal Reserve Bulletin 723 (1987). 5. The Board has carefully reviewed comments from a venture Community First were at its Minnesota banks. Minnecapital firm in South Dakota ("Protestant") alleging that Community sota is within Wisconsin's defined interstate banking First's dividend policy has diminished the amount of credit available region, and the interstate banking laws of Minnesota at its banks in South Dakota to meet the credit needs of communities in the state, including a need for loans to start-up business ventures. authorize bank acquisitions by Wisconsin bank hold- Community First disputes this contention by noting that since it ing companies on a reciprocal basis.4 The Wisconsin acquired its South Dakota banks in 1987, their average loan-to-deposit ratio has increased from 32 percent to 61 percent, which is comparable to the statewide aggregate loan-to-deposit ratio. The Board also notes that four of Community First's six banks in South Dakota were rated 2. 12 U.S.C. § 1842(d). Under the Douglas Amendment, the "outstanding" for community development activities, and the remainoperations of a bank holding company are considered principally ing two banks were rated "satisfactory." The South Dakota banks' conducted in the state in which the total deposits of its banking record of CRA performance also includes a variety of lending activisubsidiaries were largest on the date in question. The operations of ties designed to assist in meeting the credit needs of their entire Community First were principally conducted in South Dakota on communities, including low- and moderate-income areas in South September 30, 1987, the date on which it became a bank holding Dakota. Community First's banks offer several government-sponcompany. sored loan programs, including programs under the Small Business Act and the Farmers Home Administration. In light of all the facts of 3. See Wis. Stat. Ann. § 221.58. record, including Protestant's comments, Community First's re- 4. See Wis. Stat. Ann. 221.58(l)(h). See also Minn. Stat. Ann. sponses, and relevant reports of examination, the Board does not § 48.93. Minnesota's interstate banking statute permits an out-of-state believe that Protestant's comments warrant denial of this application. bank holding company located in one of a few states, including South Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 337 unless such period is extended for good cause by the total deposits in commercial banking organizations in Board or by the Federal Reserve Bank of Minneapolis, the state. acting pursuant to delegated authority. First Colonial, GNP, and Hi-Bancorp compete di- By order of the Board of Governors, effective Feb- rectly in the Chicago banking market.2 Upon consumruary 22, 1994. mation of this proposal, First Colonial would become the 11th largest commercial or thrift organization This action was taken pursuant to the Board's Rules ("depository institution") in the market, controlling Regarding Delegation of Authority (12 C.F.R. 265.4(b)(1)) by deposits of $1.4 billion representing 1.2 percent of total a committee of Board members. Voting for this action: deposits in the market ("market deposits"),3 and this Governors La Ware, Lindsey, and Phillips. market would remain unconcentrated as measured by the Herfindahl-Hirschman Index ("HHI").4 After JENNIFER J. JOHNSON considering First Colonial's resulting market share, Associate Secretary of the Board the number of competitors remaining in the market, the relatively small increase in concentration as measured by the HHI, and all other facts of record, the First Colonial Bankshares Corporation Board concludes that consummation of the proposal Chicago, Illinois would not result in a significantly adverse effect on competition in the Chicago banking market or any Order Approving the Acquisition of Bank Holding other relevant banking market. Companies Convenience and Needs Considerations First Colonial Bankshares Corporation, Chicago, Illinois ("First Colonial"), a bank holding company Section 3 of the BHC Act requires the Board, in every within the meaning of the Bank Holding Company Act case involving the acquisition by a bank holding com- ("BHC Act"), has applied under section 3 of the BHC pany of a bank or bank holding company, to consider Act (12 U.S.C. § 1842) to acquire all of the voting the effects of the proposal on the convenience and shares of: needs of the communities to be served. The Board has (1) Hi-Bancorp, Inc. ("Hi-Bancorp"), and thereby long held that this analysis includes a review of the indirectly acquire Hi-Bancorp's subsidiary bank, performance under the Community Reinvestment Act the Bank of Highwood, both of Highwood, Illinois; (12 U.S.C. § 2109 et seq.) ("CRA"). The CRA reand quires federal financial supervisory agencies to en- (2) GNP Bancorp, Inc., ("GNP"), and thereby courage financial institutions to help meet the credit indirectly acquire GNP's subsidiary bank, New needs of the local communities in which they operate Century Bank, both of Mundelein, Illinois. consistent with the safe and sound operation of such institutions. To accomplish this end, the CRA requires Notice of the applications, affording interested perthe appropriate supervisory authority to "assess the sons an opportunity to submit comments, has been institution's record of meeting the credit needs of its published (58 Federal Register 52,109 (1993)). The time for filing comments has expired, and the Board has considered the application and all comments re- 2. The Chicago banking market is approximated by Cook, DuPage, ceived in light of the factors set forth in section 3 of the and Lake Counties, Illinois. BHC Act. 3. Market share deposit data are based on calculations in which the deposits of thrift institutions are included at 50 percent. The Board First Colonial is the 15th largest commercial banking previously has indicated that thrift institutions have become, or have organization in Illinois, controlling deposits of the potential to become, significant competitors of commercial banks. $1.2 billion, representing 1 percent of the total deposits See Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). in commercial banking organizations in the state.1 Bank market deposit data are as of June 30, 1991. Thrift market Hi-Bancorp is the 236th largest commercial banking deposit data are as of March 31, 1991. organization in Illinois, controlling deposits of 4. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in which the $79.4 million, representing less than 1 percent of the post-merger HHI is below 1000 is considered unconcentrated. The total deposits in commercial banking organizations in Justice Department has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other the state. GNP is the 281st largest commercial banking factors indicating anti-competitive effects) unless the post-merger organization in Illinois, controlling deposits of HHI is at least 1800 and the merger increases the HHI by 200 points. $66.5 million, representing less than 1 percent of the The Justice Department has stated that the higher than normal HHI thresholds for screening bank mergers for anti-competitive effects implicitly recognize the competitive effect of limited purpose lenders and other non-depository financial entities. The HHI in the Chicago banking market would not increase and would remain at 551 points. 1. Deposit data are as of June 30, 1992. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

338 Federal Reserve Bulletin • April 1994 entire community, including low- and moderate- Avenue Bank's CRA record of performance was in income neighborhoods, consistent with the safe and place and that its policies and programs were working sound operation of such institution," and to take this well.8 record into account in its evaluation of bank holding The First Colonial Order outlined specific aspects of company applications.5 Avenue Bank's CRA performance that the Board In connection with these applications, the Board has believed should be addressed, including Avenue received comments in favor of and opposing First Bank's low levels of lending in minority and low- to Colonial's proposal. Several community groups, in- moderate-income areas, and its ascertainment and cluding groups representing residents in the Austin marketing efforts with respect to the minority and lowcommunity of Chicago who were initially opposed to to moderate-income areas of its community. In this the proposal, have submitted comments in support of regard, the Board noted that, in 1992, of all the Home the acquisition after discussing First Colonial's plans Mortgage Disclosure Act ("HMDA") related loans to increase its lending in this community. The Illinois that were made in Avenue Bank's delineated commu- Banking Commissioner also has commented in favor nity, none of these loans were made in minority or of the proposal. low- to moderate-income areas. The First Colonial Other community groups ("Protestants") have crit- Order also stated that Avenue Bank had not fully icized First Colonial's CRA record of performance in implemented a program to ascertain the credit needs of the Austin community. Specifically, these commenters and market its banking products to its entire delineated maintain that First Colonial's subsidiary bank that community as of the January 1993 examination, deserves this community, The Avenue Bank of Oak spite criticisms noted in the 1991 examination. While recognizing the steps that First Colonial had under- Park, Oak Park, Illinois ("Avenue Bank"), does not taken to improve its CRA record, the First Colonial meet the housing-related credit needs of low- to Order concluded that Avenue Bank did not have a moderate-income residents and has been unresponsive satisfactory record of performance in place and had to their complaints. Protestants also allege that numerfailed to address deficiencies in its CRA performance ous members of the Austin community have comfor some time. On this basis, the Board concluded that plained about Avenue Bank's lack of loan applications considerations relating to the convenience and needs and misinformation regarding application procedures. factor were not consistent with approval. The Board has carefully reviewed the CRA performance of First Colonial, Hi-Bancorp, GNP, and their subsidiary banks, in light of the CRA, the Board's Record of Performance Under the CRA regulations and the jointly issued Statement of the Federal Financial Supervisory Agencies Regarding the The Board believes that the ability of First Colonial Community Reinvestment Act ("Agency CRA State- and Avenue Bank to demonstrate that its CRA record ment"). of performance is in place and that its programs and In May 1993, the Board denied similar applications policies are working well is an important consideration by First Colonial to acquire these banking organiza- in light of the Board's findings in the First Colonial tions on the basis of the record of performance under Order. The record of this application reflects a number the CRA of Avenue Bank.6 In denying the applica- of affirmative steps taken by First Colonial and Avetions, the Board found deficiencies in Avenue Bank's nue Bank to address the deficiencies noted in the First record of meeting the credit needs of its community, Colonial Order. particularly in minority and low- to moderate areas, had continued through two consecutive CRA perfor- A. CRA Performance Examinations mance examinations by the Federal Deposit Insurance Corporation ("FDIC").7 The Board also found that The Agency Policy Statement provides that a CRA First Colonial had not taken sufficient steps to address examination is an important and often controlling these deficiencies. The First Colonial Order noted that factor in determining whether convenience and needs the denial of First Colonial's application was without factors are consistent with approval of an expansionprejudice to future applications by First Colonial when ary proposal. The Board notes that Avenue Bank has improved its CRA performance rating since the January 1993 examination and its overall record of performance under the CRA is now rated "satisfactory" by 5. 12 U.S.C. § 2903. 6. First Colonial Bankshares Corporation, 79 Federal Reserve Bulletin 706 (1993) ("First Colonial Order"). 7. Avenue Bank's CRA performance was rated "needs to improve" as of December 31, 1991 ("the 1991 examination"), and again as of January 15, 1993 ("the January 1993 examination"). 8. First Colonial Order at p. 708. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 339 its primary federal supervisor, the FDIC.9 Moreover, examination noted that Avenue Bank supports local First Colonial's remaining 14 subsidiary banks all community development projects. It has, for example, received at least a "satisfactory" rating from their extended a line of credit to the Neighborhood Housing primary federal supervisors in their most recent CRA Services of Chicago, Inc. and has become a member of performance examinations. Both subsidiary banks of other nonprofit neighborhood improvement groups. Hi-Bancorp and GNP also received "satisfactory" Avenue Bank also has initiated a number of steps ratings from their primary federal supervisors in their designed to continue its progress in meeting the credit most recent examinations. needs of low- and moderate-income borrowers. For example, Avenue Bank has implemented a tracking B. CRA Performance Record of Avenue Bank system to assist in assessing the effectiveness of the geographic distribution of its loans. In addition, Ave- Lending Activities. Avenue Bank has made progress in nue Bank has initiated a second review process for improving its lending to low- to moderate-income and denied loans, and amended the compensation strucminority portions of its delineated service area. For ture for lending officers based on numbers of loans example, 1992 data showed that Avenue Bank origi- generated instead of the dollar amounts of loans. The nated no HMDA-related loans in low- to moderate- August 1993 examination also noted a number of income or minority neighborhoods within its service innovative products offered by Avenue Bank to priarea. HMDA data for 1993, however, indicate that marily low- and moderate-income residents. These Avenue Bank originated 15 loans totalling $1.3 million loan products include the Illinois Smart Money Proin low- and moderate-income neighborhoods in this gram, which provides low cost checking accounts for area,10 including 10 loans totalling approximately public aid recipients, and secured installment loans to $1 million to housing organizations serving primarily assist customers in establishing and reestablishing minority and low- to moderate-income areas. The credit. August 1993 examination notes that Avenue Bank now In addition, First Colonial has committed to lend makes more than half of its loans within its delineated $40 million over the next five years in the Austin, service community. Garfield and Oak Park areas.13 First Colonial has also Two new lending programs have been developed by established a full-service branch at a temporary loca- Avenue Bank to address the housing-related credit tion in the Austin community and has committed to needs of low- and moderate-income borrowers. The maintain this branch when a permanent location can "Money Sale" program, introduced this year, features be found in this community. low-cost mortgages (with a 15 percent down payment) The Board notes that First Colonial has put in place and home improvement loans. In addition, First Colo- policies and programs to increase Avenue Bank's nial's mortgage subsidiary, First Colonial Mortgage housing-related lending to low- and moderate-income Corporation ("First Colonial Mortgage"), provides areas within its service area. While these programs loans under the Illinois Community Home Buyers have improved the bank's lending record, they have so Program.11 Government-sponsored loan programs, far resulted in a small number of housing-related loans such as the Federal Housing Administration ("FHA") to low- and moderate-income individuals. The Board loans, are also offered by First Colonial Mortgage believes that First Colonial's ability to continue to through an agency relationship with an unaffiliated demonstrate increased lending to these residents of its state member bank.12 In addition, the August 1993 service community is an important aspect of the bank's CRA performance, and the Board expects First Colonial to implement fully all of its programs in order 9. In this regard, at its most recent examination for CRA perforto sustain and improve the progress demonstrated to mance as of August 16, 1993 (the "August 1993 examination"), the FDIC upgraded Avenue Bank's rating from "needs to improve" to date in its lending record. "satisfactory". See also 54 Federal Register 13,743 (1989). Ascertainment and Marketing. The August 1993 10. This amount also includes five loans totaling $282,000 to examination concluded that Avenue Bank's ascertainminority borrowers. Avenue Bank also originated eight additional HMDA-related loans totalling $200,000 in the Austin area, but not ment efforts now appear to be reaching all segments of located in its delineated community. its delineated community. For example, Avenue Bank 11. This program provides mortgages with down payments as low as 5 percent at terms often more favorable than those offered by FHA loans. During 1993, Avenue Bank originated at least 19 Community Home Buyer loans. results of on-site inspections conducted by the Federal Reserve Bank 12. In this regard, the Board has carefully reviewed comments from of Chicago of both First Colonial Mortgage and the state member a denied mortgage applicant maintaining that First Colonial Mort- bank. Based on these and all facts of record, the Board concludes that gage's practice of referring FHA loan applications to an unaffiliated these comments do not warrant denial of these applications. bank is misleading. First Colonial formalized its agency relationship 13. Other commitments made by First Colonial for assisting these with the unaffiliated FHA-lender bank and has modified its advertise- communities are detailed in an agreement between First Colonial and ments to reflect this relationship. The Board has also considered the a community group representing residents in this area. 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340 Federal Reserve Bulletin • April 1994 has begun to host focus groups and use information given in connection with these applications. In this gathered at these meetings to plan strategies to meet regard, First Colonial is required to report quarterly to perceived community credit needs. Avenue Bank also the Federal Reserve Bank of Chicago on the progress uses its officer call program to communicate with made in improving its CRA performance. The Board community leaders and businesspersons in all areas of will also closely review Avenue Bank's record in the bank's delineated community and to determine future applications by First Colonial that require conunmet credit needs. Ongoing contacts with govern- sideration of its CRA performance record. ment officials, realtors, and neighborhood housing organizations are maintained to discuss the financial Other Considerations needs of individuals and businesses within the bank's delineated community.14 The Board has concluded that the financial and man- The August 1993 examination found the advertising agerial resources and future prospects of First Colomedia used by Avenue Bank encompasses all areas nial, Hi-Bancorp, and GNP Bancorp, and their respecwithin the bank's delineated community, the advertive subsidiaries, and all other supervisory factors the tisements are racially neutral, and all areas of the Board must consider under section 3 of the BHC Act, bank's delineated community have been made aware are consistent with approval of this proposal. of Avenue Bank's current loan products. The various Based on the foregoing and other facts of record, the media used to promote the Avenue Bank's lending Board has determined that the application should be, products include statement stuffers, window signs, and hereby is, approved. This approval is specifically newspaper advertisements, and customer newsletters, conditioned upon compliance by First Colonial with such as "Banknotes," which is mailed to all current the commitments made in connection with these apcustomers, and "Financial Forum," which is distribplications. For purposes of this action, all of the uted to residents within Avenue Bank's delineated commitments and conditions are deemed to be condiarea. tions imposed in writing and, as such, may be enforced in proceedings under applicable law. Conclusions Regarding the Convenience and Needs These transactions shall not be consummated before Factor the thirtieth calendar day following the effective date of this order, or later than three months after the On the basis on these and other facts of record, effective date of this order, unless such period is including the demonstrated improvement in the CRA extended for good cause by the Federal Reserve Bank areas in which deficiencies were originally noted by of Chicago acting pursuant to delegated authority. the FDIC and the Board last year, as well as informa- By order of the Board of Governors, effective Febtion provided by all the commenters and First Coloruary 17, 1994. nial, and relevant examination reports, the Board concludes that the CRA performance record of First Voting for this action: Chairman Greenspan, and Gover- Colonial is, on balance, now consistent with approval. nors Kelley, Lindsey, and Phillips. Absent and not voting: In reaching this conclusion, the Board has relied to a Governor LaWare. significant extent on the recent "satisfactory" CRA performance rating for Avenue Bank by the FDIC and JENNIFER J. JOHNSON the "satisfactory" or better CRA performance ratings Associate Secretary of the Board of First Colonial's remaining subsidiary banks as well as the programs that have been initiated by First Vermont Financial Services Corp. Colonial to improve the lending record of Avenue Brattleboro, Vermont Bank. The Board expects First Colonial to continue to Order Approving the Merger of Bank Holding improve Avenue Bank's lending performance in its Companies communities, particularly with respect to low- to moderate-income and minority areas, and to comply with all commitments regarding its CRA activities Vermont Financial Services Corp., Brattleboro, Vermont ("Vermont Financial"), a bank holding company within the meaning of the Bank Holding Company Act 14. In this regard, Avenue Bank has established a "community ("BHC Act"), has applied for the Board's approval review committee" which includes four officers of the bank and four under section 3 of the BHC Act (12 U.S.C. § 1842) to members of the Garfield Austin Interfaith Network ("GAIN") in an merge with West Mass Bankshares, Inc., Greenfield, effort to better ascertain and serve the credit needs of the Austin, West Garfield, and Oak Park neighborhoods. Massachusetts ("West Mass"), and thereby indirectly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 341 acquire United Savings Bank, Conway, Massachu- Massachusetts and Vermont have enacted banking setts.1 statutes that permit out-of-state bank holding compa- Notice of the application, affording interested per- nies to acquire banks in these states provided that the sons an opportunity to submit comments, has been home state of the acquiring bank holding company published (58 Federal Register 60,858 (1993)). The permits the acquisition of banks in that state on a time for filing comments has expired, and the Board reciprocal basis.4 The Massachusetts and Vermont has considered the application and all comments re- state banking supervisors have preliminarily indicated ceived in light of the factors set forth in section 3(c) of that the reciprocity requirements under their respecthe BHC Act. tive statutes are satisfied in this case. In light of the Vermont Financial is the third largest commercial foregoing, and based on an analysis of the interstate banking organization in Vermont, controlling one banking statutes involved, the Board has determined banking subsidiary with $749.6 million in deposits, that its approval of this proposal is not prohibited by representing 14.8 percent of the total deposits in the Douglas Amendment. Approval of this proposal is commercial bank organizations in the state.2 West conditioned upon Vermont Financial receiving all re- Mass is the 84th largest bank or thrift organization quired state regulatory approvals. ("depository institution") in Massachusetts, controlling $192.3 million in deposits, representing less than Other Considerations 1 percent of the total deposits in depository institutions in the state. Upon consummation of this trans- The financial and managerial resources, and future action, Vermont Financial would become the 84th prospects of Vermont Financial, West Mass, and their largest depository institution in Massachusetts, con- subsidiaries, are consistent with approval of this protrolling $192.3 million in deposits, representing less posal.5 Considerations relating to the convenience and than 1 percent of the total deposits in depository needs of the communities to be served and other institutions in the state. supervisory factors the Board must consider under Vermont Financial and West Mass do not compete directly in any relevant banking market. Based on all the facts of record, the Board concludes that Vermont 4. See Mass. Gen. L. ch. 167A § 2 (1990); Vt. Stat. Ann. tit. 8 § 1052 Financial's acquisition of West Mass and its subsidiary (1987). Massachusetts's interstate banking statute permits an out-ofbank would not result in any significantly adverse state bank holding company to acquire a bank in Massachusetts if the effects on competition in any relevant banking market. applicant's home state authorizes the acquisition of banks in that state by a Massachusetts bank or bank holding company under conditions that are no more restrictive than those imposed by the laws of Douglas Amendment Analysis Massachusetts as determined by the Massachusetts Commissioner of Banks. Vermont's interstate banking statute authorizes an out-of-state bank holding company to acquire a bank in Vermont if the applicant's Section 3(d) of the BHC Act, the Douglas Amend- home state authorizes the acquisition of banks in that state by a Vermont bank or bank holding company under conditions not subment, prohibits a bank holding company from acquirstantially more restrictive than those imposed by the laws of Vermont. ing a bank outside of its home state "unless the Massachusetts law also prohibits an out-of-state bank holding comacquisition of... a State bank by an out-of-State bank pany from controlling more than 15 percent of deposits held by all state and federally chartered banks in Massachusetts. Mass. Gen. L. holding company is specifically authorized by the ch. 167A § 2 (1990). In this case, Vermont Financial would acquire less statute laws of the State in which such bank is located, than one percent of the deposits held by Massachusetts banks. by language to that effect and not merely by implica- 5. The Board has carefully considered comments filed by an tion."3 For purposes of the Douglas Amendment, the individual ("Protestant") alleging that Vermont Financial and its subsidiary bank, Vermont National Bank, Brattleboro, Vermont home state of Vermont Financial is Vermont. ("Bank"), engaged in a variety of improper banking practices in connection with the extension of, and subsequent foreclosure on, several commercial loans made by Bank to business associates of the Protestant. In addition, Protestant believes that Bank's financial condition will be adversely affected by the bank's potential civil liability for these actions, and by the bank's potential exposure in 1. In connection with Vermont Financial's proposed acquisition of another commercial loan to a business that Protestant alleges is in West Mass, Vermont Financial has requested Board approval under violation of environmental laws. Protestant also alleges that Vermont section 3 of the BHC Act to acquire an option to purchase up to Financial has failed to adequately disclose these matters in this 19.9 percent of the voting shares of West Mass. This option would application. Vermont Financial generally has denied Protestant's become moot upon consummation of the proposal. allegations and notes that Protestant has dismissed his civil action 2. Deposit data are as of December 31, 1992. against Bank. 3. 12 U.S.C. § 1842(d). A bank holding company's home state is The Board has carefully reviewed these allegations in light of that state in which the operations of the bank holding company's examination information relating to the bank's financial and managebanking subsidiaries were principally conducted on July 1, 1966, or rial resources provided by Bank's primary federal regulator, the Office the date on which the company became a bank holding company, of the Comptroller of the Currency ("OCC"), and information from whichever is later. The operations of a bank holding company are state environmental agencies. Based on this review and all facts of considered principally conducted in that state in which the total record, the Board believes that these matters do not warrant denial of deposits of such banking subsidiaries are largest. these applications. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

342 Federal Reserve Bulletin • April 1994 section 3 of the BHC Act also are consistent with within the meaning of the Bank Holding Company Act approval of this proposal. ("BHC Act"), has applied for the Board's approval Based on the foregoing and all the facts of record, under section 4(c)(8) of the BHC Act (12 U.S.C. the Board has determined that the application should § 1843(c)(8)) and section 225.23 of the Board's Regube, and hereby is, approved.6 The Board's approval of lation Y (12 C.F.R. 225.23) to acquire all the voting this proposal is expressly conditioned on compliance shares of Mid America Financial Corporation ("Midwith the commitments made by Vermont Financial in America") and thereby indirectly acquire MidAmericonnection with this application and the conditions ca's savings association subsidiary, MidAmerica Savdiscussed in this order. The commitments and condi- ings Bank, F.S.B. ("MidAmerica Savings"), both of tions relied on by the Board in reaching this decision Waterloo, Iowa.1 Iowa National also has applied unboth are deemed to be conditions imposed in writing der section 4(c)(8) of the BHC Act and section 225.23 by the Board in connection with its findings and of the Board's Regulation Y to indirectly acquire the decision, and, as such, may be enforced in proceed- following other nonbanking subsidiaries of MidAmerings under applicable law. ica: This transaction shall not be consummated before (1) MidAmerica Student Loan Company, West Des the thirtieth calendar day following the effective date Moines, Iowa ("MidAmerica Loan"), and thereby of this order, or later than three months after the engage in the origination, servicing, and sale of effective date of this order, unless such period is student loans pursuant to § 225.25(b)(1) of the extended for good cause by the Board or by the Board's Regulation Y; and Federal Reserve Bank of Boston, acting pursuant to (2) MidAmerica Trust Company, West Des Moines, delegated authority. Iowa, and thereby engage in trust company activi- By order of the Board of Governors, effective Feb- ties pursuant to § 225.25(b)(3) of the Board's Reguruary 22, 1994. lation Y. This action was taken pursuant to the Board's Rules Notice of the application, affording interested per- Regarding Delegation of Authority (12 C.F.R. 265.4(b)(1)) by sons an opportunity to submit comments, has been a committee of Board members. Voting for this action: published (58 Federal Register 66,000 (1993)). The Governors La Ware, Lindsey, and Phillips. time for filing comments has expired, and the Board has considered the application and all comments re- JENNIFER J. JOHNSON ceived in light of the factors set forth in section 4(c)(8) Associate Secretary of the Board of the BHC Act. Orders Issued Under Section 4 of the Bank The Board has determined that the operation of a Holding Company Act savings association by a bank holding company is closely related to banking for purposes of section Iowa National Bankshares Corporation 4(c)(8) of the BHC Act.2 In making this determination, Waterloo, Iowa the Board requires that savings associations acquired by bank holding companies conform their direct and indirect activities to those permissible for bank holding Order Approving Application to Acquire a Savings companies under section 4(c)(8) of the BHC Act and Association and Other Nonbanking Companies Regulation Y. Iowa National has committed to conform all activities of MidAmerica Savings to these Iowa National Bankshares Corporation, Waterloo, requirements.3 Iowa ("Iowa National"), a bank holding company Iowa National, with consolidated assets of approximately $853 million, controls four subsidiary banks in 6. Protestant has requested a suspension of the processing period for applications under section 3 of the Bank Holding Company Act and the Board's Regulation Y (12 C.F.R. 225.14) to give him time to 1. Iowa National will acquire MidAmerica by merger with Iowa present additional information. The Board notes that Protestant has National's wholly owned subsidiary, MFC Corporation, and will had ample opportunity to present written submissions, and has, in operate MidAmerica Savings as a separate subsidiary. fact, submitted substantial written comments that have been consid- 2. See 12 C.F.R. 225.25(b)(9). ered by the Board. Protestant also has indicated that he may in the 3. MidAmerica Savings engages in insurance agency activities that future obtain additional information regarding Vermont Financial. In are not permissible for bank holding companies under the BHC Act. this regard, Protestant would have the opportunity to present this Iowa National has committed to divest or terminate all impermissible information in future applications filed by Vermont Financial, and insurance activities within two years of consummation of the prothese comments would be made a part of the record considered by the posal. Iowa National also has committed that, during this two-year Board at that time. In light of these facts, the Board does not believe period, it will limit MidAmerica Savings's insurance activities to that a suspension of the processing period is warranted in this case and renewals of existing policies and to insurance activities permissible for Protestant's request is denied. a bank holding company under the BHC Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 343 Iowa.4 It is the sixth largest commercial banking ("HHI"),8 and Iowa National would control approxiorganization in the state, controlling deposits of ap- mately 41 percent of market deposits. proximately $718 million, representing approximately In order to mitigate the adverse competitive effects 2.3 percent of total deposits in commercial banking that otherwise would result from consummation of this organizations in the state. Mid America Savings is the proposal, Iowa National has committed to divest one fourth largest thrift organization in Iowa, controlling or more offices of MidAmerica Savings in the Waterdeposits of approximately $304 million, representing loo banking market with deposits of not less than $30.2 approximately 7.5 percent of total deposits in thrift million as of June 30, 1993, to an out-of-market deposorganizations in the state. Upon consummation of this itory institution.9 Upon consummation of the proposal transaction, Iowa National would become the fifth and the divestiture of these deposits to an out-oflargest commercial banking organization in Iowa, con- market thrift institution, the HHI in the Waterloo trolling deposits of approximately $1 billion, repre- banking market would increase by 388 points to 2744. senting approximately 3.3 percent of total deposits in A number of considerations indicate that the incommercial banking organizations in the state. crease in concentration level in the Waterloo banking market as measured by the HHI after the planned Competitive Considerations divestiture tends to overstate the competitive effects of this proposal. For example, upon consummation of Under section 4(c)(8) of the BHC Act, the Board must this proposal, the number of competitors would not be consider the competitive aspects of each proposal.5 In reduced, and ten depository institutions would remain this regard, Iowa National and Mid America Savings in the market. The three largest depository institutions compete directly in the Waterloo banking market.6 in the market, after Iowa National, are all multi-state Iowa National is the largest depository institution7 in bank holding companies that each have total assets the market, controlling approximately $358.5 million exceeding $5 billion. Several factors also indicate that in deposits, representing approximately 31 percent of the market is attractive for entry. The Waterloo banktotal deposits in depository institutions in the market ing market's ratio of population per bank office ex- ("market deposits"). MidAmerica Savings is the fifth ceeds the average for all MSA's in Iowa, and the largest depository institution in the market, controlling growth rate of deposits in the market since 1988 has approximately $143.8 million in deposits, representing been the highest of any Iowa MSA. Four commercial approximately 6 percent of market deposits. Upon banking organizations have entered the Waterloo consummation of this proposal, Iowa National would banking market by acquisition since 1991, including remain the largest depository institution in the market, the acquisition in 1993 of the second largest depository controlling deposits of approximately $502.3 million. institution in the market. Out-of-state bank holding This market would remain highly concentrated as measured by the Herfindahl-Hirschman Index 8. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in which the post-merger HHI is over 1800 is considered to be highly concentrated. 4. State and market data are as of June 30, 1993. In such highly concentrated markets, the Justice Department is likely 5. Section 4(c)(8) of the BHC Act requires the Board to determine to challenge a merger that increases the HHI by more than 50 points. that the acquisition of MidAmerica Savings "can reasonably be The Justice Department has informed the Board that a bank merger or expected to produce benefits to the public . . . that outweigh possible acquisition generally will not be challenged (in the absence of other adverse effects, such as undue concentration of resources, decreased factors indicating anticompetitive effects) unless the post-merger HHI or unfair competition, conflicts of interest, or unsound banking is at least 1800 and the merger increases the HHI by more than 200 practices." See First Hawaiian, Inc., 79 Federal Reserve Bulletin 966 points. The Justice Department has stated that the higher than normal (1993). HHI thresholds for screening bank mergers for anticompetitive effects 6. The Waterloo banking market consists of Black Hawk County, implicitly recognize the competitive effect of limited-purpose lenders Jefferson and Jackson townships in Bremer County, and Beaver and other non-depository financial entities. Upon consummation of township in Butler County, all in Iowa. the proposal, the HHI in the Waterloo banking market would increase 7. In this context, depository institutions include commercial banks, by 512 points to 2868. savings banks, and savings associations. Market share data before 9. Iowa National has committed to submit to the Board, prior to consummation are based on calculations in which the deposits of thrift consummation of its acquisition of MidAmerica, a binding contract institutions are included at 50 percent. The Board previously has acceptable to the Board for the sale of an office or offices within six indicated that thrift institutions have become, or have the potential to months of consummation of this proposal. Iowa National also has become, significant competitors of commercial banks. See WM Ban- committed, should any divestiture not be consummated within this corp, 76 Federal Reserve Bulletin 788 (1990); National City Corpora- time, to assign the assets and liabilities of the office or offices to an tion, 70 Federal Reserve Bulletin 743 (1984). Because the deposits of independent trustee, who will be instructed and authorized to MidAmerica Savings would be controlled by a commercial banking promptly find a suitable buyer. Furthermore, Iowa National has organization upon consummation of this proposal, these deposits are committed to submit to the Board, prior to consummation of the included at 100 percent in the calculation of Iowa National's post- acquisition, an executed trust agreement acceptable to the Board consummation share of market deposits. See Norwest Corporation, 78 stating the terms of this divestiture. The Board's action on the Federal Reserve Bulletin 452 (1992); First Banks, Inc., 76 Federal application is expressly conditioned upon compliance with these Reserve Bulletin 669, 670 n.9 (1990). commitments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

344 Federal Reserve Bulletin • April 1994 companies within a defined region are authorized to In this regard, the Board has received comments acquire Iowa commercial banking organizations. from an individual ("Protestant") contending that The Board also has considered the competitive Iowa National's subsidiary bank, National Bank of effects of credit unions, which account for approxi- Waterloo ("Waterloo Bank") and MidAmerica Savings mately 22 percent of combined bank, thrift, and credit have generally failed to ascertain and meet the credit union deposits in the Waterloo banking market.10 With needs of minority and low- and moderate-income indicredit union deposits accorded 50 percent weight, one viduals and small businesses.13 In particular, Protestant credit union in particular, with membership open to alleges that Waterloo Bank has discriminated against nearly all individuals or companies in the market, minorities and low- and moderate-income borrowers in controls approximately 10 percent of the deposits held violation of federal civil rights statutes on the basis of by depository institutions and credit unions competing data filed under the Home Mortgage Disclosure Act in the market. This credit union also aggressively ("HMDA"). competes with depository institutions in the provision In its consideration of the convenience and needs of banking services and products.11 factor, the Board has carefully reviewed the entire Based on all the facts of record, including the record of CRA performance of Iowa National, Midproposed divestiture, the number of competitors that America, and their subsidiaries; all comments rewould remain in the market after consummation, the ceived on these applications, including Iowa Nationrecent entry of new competitors into the market, and al's responses; and all other relevant facts of record, in the role of credit unions in the market, the Board light of the CRA, the Board's regulations, and the concludes that consummation of this proposal would Statement of the Federal Financial Supervisory Agennot have a significantly adverse effect on competition cies Regarding the Community Reinvestment Act or the concentration of banking resources in the Wa- ("Agency CRA Statement").14 terloo banking market or any other relevant banking markets. Record of Performance Under the CRA Convenience and Needs Considerations A. CRA Performance Examinations In acting on an application to acquire a depository The Agency CRA Statement provides that a CRA institution as proposed in this application, the Board examination is an important, and often controlling, must consider the convenience and needs of the com- factor in the consideration of an institution's CRA munities to be served and take into account the record and that these reports will be given great weight records of the relevant depository institutions under in the applications process.15 In this regard, the Board the Community Reinvestment Act (12 U.S.C. § 2901 notes that all of Iowa National's subsidiary banks, et seq.) ("CRA"). The CRA requires the federal including Waterloo Bank, received "satisfactory" ratfinancial supervisory agencies to encourage financial ings from their primary regulators in their most recent institutions to help meet the credit needs of the local examinations for CRA performance, and that Midcommunities in which they operate, consistent with America Savings received an "outstanding" rating the safe and sound operation of such institutions. To from its primary regulator in each of its two most accomplish this end, the CRA requires the appropriate recent examinations. The Board also notes that Iowa federal supervisory authority to "assess the institu- National plans to retain all personnel (with the possition's record of meeting the credit needs of its entire ble exception of personnel employed at the divested community, including low- and moderate-income neighborhoods, consistent with the safe and sound operations of such institution," and to take that record 13. Protestant also maintains that the substantial lessening of into account in its evaluation of bank holding company competition resulting from this proposal will further reduce the applications.12 services available to meet these credit needs. For the reasons previously discussed, the Board has concluded that consummation of this proposal would not have a significantly adverse effect on competition in the Waterloo banking market. In addition, Protestant believes that certain individuals who may be involved in this proposal have a 10. Eighteen credit unions, with liberal membership requirements, conflict of interest due to their former employment by the Federal compete in the market. The national average of deposits controlled by Home Loan Bank of Atlanta. These allegations have been brought to credit unions is 5.6 percent. the attention of the Office of Thrift Supervision, the successor to the 11. Sixty-eight percent of households in Black Hawk County, Iowa, Federal Home Loan Bank Board, which is also required to approve which includes a substantial portion of the Waterloo banking market, this acquisition. The Board has carefully considered these comments are members of this credit union. This credit union operates 6 in light of all facts of record, and does not believe that they warrant stand-alone offices, 3 extended-hours offices in supermarkets, and 3 denial of this application. drive-through facilities. 14. 54 Federal Register 13,742 (1989). 12. 12 U.S.C. § 2903. 15. 54 Federal Register 13,745 (1989). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 345 branch), and all CRA-related policies and procedures ucts specifically designed to assist in meeting the at MidAmerica Savings in light of its CRA perfor- credit needs of low- and moderate-income borrowers. mance record. For example, the bank offers the Community Improvement Program ("CIP"), an adjustable rate home mort- B. Waterloo Bank's Record of Performance gage targeted to low-income borrowers.17 In addition, Waterloo Bank participates in government-sponsored Lending Activities. The Board has carefully reviewed lending programs,18 and has invested approximately the 1991 and 1992 data filed under the HMDA in light $8 million in local industrial development revenue of Protestant's allegations of disparities in lending to bonds. The bank also has provided financing for the minorities and low- and moderate-income residents in purchase and improvement of distressed properties in its service area. These data show that Waterloo Bank downtown Waterloo under a city-sponsored program. made a higher percentage of its home mortgage loans Ascertainment and Marketing. Waterloo Bank asto blacks and to borrowers in low- and moderate- certains credit needs is a variety of ways. The bank income census tracts than did lenders reporting maintains regular contact with community and govern- HMDA data in the market in the aggregate. In addi- ment organizations, including local community develtion, between 1991 and 1992 the denial rate was opment organizations, government officials, minority reduced and the origination rate for home mortgage organizations, and realtors. Surveys are also conloans to blacks and to borrowers in low- and moderate- ducted and reviewed by the bank's CRA committee income census tracts increased at Waterloo Bank, and the CRA compliance officer. The compliance while these rates deteriorated or improved more officer reports to the Board of Directors on a regular slowly among reporting lenders in the aggregate. How- basis, and CRA-related issues are routinely considered ever, these data also indicate disparities in approvals as part of the board's planning process. and denials of loan applications according to racial and Marketing and advertising are approved and moniethnic group and income status. Because all banks are tored by the bank's board of directors, and these obligated to adopt and implement lending practices programs serve to inform all segments of the commuthat ensure not only safe and sound lending, but also nity of the bank's products and services. Waterloo equal access to credit by creditworthy applicants Bank uses a variety of media to advertise its products regardless of race, the Board is concerned when the and services, including radio, television, newspapers, record of an institution indicates disparities in lending direct mail, and outdoor advertising. Direct mail marto applicants in low- and moderate-income and minor- keting is also used to promote products specially ity communities. The Board also recognizes that developed for low- and moderate-income borrowers HMDA data have limitations that make the data an such as the CIP loan program. The bank also adverinadequate basis, absent other information, for con- tises in a newspaper targeted to minority members of clusively determining whether an institution has en- the community. gaged in illegal discrimination in making lending decisions. C. Conclusion Regarding Convenience and Waterloo Bank's 1993 CRA performance examina- Needs Factors tion found no evidence of any pattern or practice of discriminatory credit practices, or other practices de- In considering the overall CRA performance records signed to discourage credit applications.16 The Board of Iowa National and MidAmerica, the Board has has also reviewed additional relevant examination carefully evaluated the entire record, including the materials from the bank's primary regulator, the Office public comments in this case. Based on a review of the of the Comptroller of the Currency. entire record, including Protestant's comments and Regarding Waterloo Bank's lending activities, ex- Iowa National's responses thereto, and relevant reaminers found that lending levels reflected a general ports of examinations, the Board concludes that conresponsiveness to the most pressing community credit venience and needs considerations, including CRA needs and that the geographic distribution of the performance records of Iowa National, MidAmerica, bank's credit extensions and denials demonstrated a reasonable penetration of all segments of its local community. Waterloo Bank also offers several prod- 17. In order to increase acceptance of this program, the bank's CRA committee has revised CIP to offer fixed rate mortgages that are below market rates, without application fees or discount points, and with 16. The examination noted technical and procedural violations of fixed closing costs. the HMDA and the Fair Housing Home Loan Data System regulation. 18. Waterloo Bank had outstanding Small Business Administration Management has agreed to initiate steps, including training and loans aggregating $725,000 and Federal Housing Administration loans systems review, to prevent recurrence of these problems. aggregating $675,000 at year-end 1993. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

346 Federal Reserve Bulletin • April 1994 and their subsidiary depository institutions, are con- conditioned upon compliance with all the commitsistent with approval of this application.19 ments made by Iowa National in connection with this application and the conditions referred to in this Other Considerations Order. The Board's determination also is subject to all the conditions set forth in Regulation Y, including The financial and managerial resources of Iowa Na- those in sections 225.4(d) and 225.23(b) of Regulational, MidAmerica, and their respective subsidiaries tion Y, and to the Board's authority to require such are consistent with approval. Iowa National also has modification or termination of the activities of a bank applied, pursuant to section 4 of the BHC Act, for holding company or any of its subsidiaries as the approval to engage indirectly through the acquisition Board finds necessary to ensure compliance with, and of nonbanking subsidiaries of MidAmerica in loan to prevent evasion of, the provisions of the BHC Act origination, servicing, and sales and in trust company and the Board's regulations and orders issued thereactivities. The Board previously has determined that under. For purposes of this action, these commitments these activities are permissible under section 4(c)(8) of and conditions are deemed to be conditions imposed in the BHC Act and the Board's Regulation Y,20 and writing by the Board in connection with its findings Iowa National proposes to conduct these activities in and decision, and, as such, may be enforced in proaccordance with the Board's regulations. The record ceedings under applicable law. in this case indicates that there are numerous provid- This transaction shall not be consummated later ers of these nonbanking services, and there is no than three months after the effective date of this order, evidence in the record to indicate that consummation unless such period is extended for good cause by the of this proposal is likely to result in any significantly Board or by the Federal Reserve Bank of Chicago, adverse effects, such as undue concentration of re- acting pursuant to delegated authority. sources, decreased or unfair competition, conflicts of By order of the Board of Governors, effective interest, or unsound banking practices that would February 28, 1994. outweigh the public benefits of this proposal. Accordingly, the Board has determined that the balance of Voting for this action: Chairman Greenspan and Governors public interest factors it must consider under section Kelley, La Ware, Lindsey, and Phillips. 4(c)(8) of the BHC Act is favorable and consistent with approval of the acquisition of the additional nonbank- JENNIFER J. JOHNSON ing subsidiaries of MidAmerica. Associate Secretary of the Board National City Corporation Conclusion Cleveland, Ohio Based on all the facts of record, the Board has Order Approving an Application to Engage De Novo determined that the application should be, and hereby in Underwriting and Dealing in Certain is, approved.21 The Board's approval is specifically Bank-Ineligible Securities on a Limited Basis, and Other Securities-Related Activities National City Corporation, Cleveland, Ohio ("Appli- 19. Protestant has requested that the Board hold a public hearing or cant"), has applied, pursuant to section 4(c)(8) of the meeting on this application. The Board's rules provide that a hearing is required under section 4 of the BHC Act only if there are disputed Bank Holding Company Act (12 U.S.C. § 1843(c)(8)) issues of material fact that cannot be resolved in some other manner. ("BHC Act") and section 225.23 of the Board's Reg- In addition, the Board may, in its discretion, hold a public hearing or ulation Y (12 C.F.R. 225.23), to acquire National City meeting on an application to clarify factual issues related to the application and to provide an opportunity for testimony, if appropri- Investments Corporation, Cleveland, Ohio ("Compaate. 12 C.F.R. 262.3(e) and 262.25(d). The Board has carefully con- ny"), through a corporate reorganization,1 and engage sidered this request. In the Board's view, interested parties have had de novo in the following activities: a sufficient opportunity to present written submissions, and have submitted substantial written comments that have been considered by the Board. Moreover, Protestant's allegations state conclusions about the institutions's CRA records without disputing any of the material savings bonds and notes, it is required by Treasury Department facts in this case. On the basis of all the facts of record, the Board has regulations to: determined that a public meeting or hearing is not necessary to clarify (1) File annual reports with the Equal Employment Opportunity the factual record in this application, or otherwise warranted in this Commission; and case. Accordingly, the request for a public meeting or hearing on this (2) Have in place a written affirmative action compliance program application is hereby denied. which states its efforts and plans to achieve equal opportunity in the 20. See 12 C.F.R. 225.25(b)(1) and 225.25(b)(3). employment, hiring, promotion, and separation of personnel. 21. Protestant also has commented on the absence of minority members of the community in upper level positions at Waterloo Bank. 1. Company is currently a wholly owned subsidiary of National City In this regard, the Board notes that because Waterloo Bank employs Bank, Cleveland, Ohio ("NCB"). In order to effect this reorganizamore than 50 people and acts as an agent to sell or redeem U.S. tion, NCB will transfer 100 percent of the outstanding stock of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 347 (1) Underwriting and dealing in municipal revenue subsidiaries in Ohio, Indiana, and Kentucky and enbonds, residential mortgage-related securities, con- gages in nonbanking activities through 25 nonbanking sumer- receivable-related securities, and commer- subsidiaries. cial paper (hereinafter "bank-ineligible securities"); As noted, all the proposed activities except under- (2) Acting as agent in the private placement of all writing and dealing in bank-ineligible securities, contypes of securities, including providing related ad- ducting private placement and "riskless principal" visory services, and buying and selling securities on activities, and dealing in precious metal have been the order of investors as a "riskless principal"; determined by regulation to be activities that are (3) Acting as agent in the purchase and sale of gold closely related to banking for purposes of section and silver bullion, bars, rounds, and coins, and 4(c)(8) of the BHC Act.3 Applicant proposes to conplatinum coins that function as legal tender, for the duct these activities through Company in accordance accounts of customers; with the Board's regulations. (4) Making and servicing loans pursuant to section 225.25(b)(1) of the Board's Regulation Y (12 C.F.R. Underwriting and Dealing in Bank-Ineligible 225.25(b)(1)); Securities (5) Engaging in investment advisory activities pursuant to section 225.25(b)(4) of the Board's Regula- Applicant proposes to underwrite and deal in municition Y (12 C.F.R. 225.25(b)(4)); pal revenue bonds, residential mortgage-related secu- (6) Providing management consulting services to rities, consumer receivable-related-securities, and depository institutions pursuant to section commercial paper. The Board previously has deter- 225.25(b)(ll) of the Board's Regulation Y mined that, subject to the prudential framework of (12 C.F.R. 225.25(b)(ll)); limitations established in previous decisions to address (7) Providing discount and full service brokerage potential conflicts of interests, unsound banking pracservices pursuant to section 225.25(b)( 15)(i) and tices, or other adverse effects, the proposed under- (ii) of the Board's Regulation Y (12 C.F.R. writing and dealing activities are so closely related to 225.25(b)( 15)(i) and (ii)); banking as to be proper incidents thereto within the (8) Underwriting United States government, meaning of section 4(c)(8) of the BHC Act. The Board agency, state, and municipal securities pursuant to also has determined that the conduct of these securisection 225.25(b)(16) of the Board's Regulation Y ties underwriting and dealing activities is consistent (12 C.F.R. 225.25(b)(16)); with section 20 of the Glass-Steagall Act, provided (9) Providing foreign exchange advisory and trans- that the underwriting and dealing subsidiary derives no actional services pursuant to section 225.25(b)(17) of more than 10 percent of its total gross revenue over the Board's Regulation Y (12 C.F.R. 225.25(b)(17)); any two-year period from underwriting and dealing in securities that a bank may not underwrite or deal in (10) Engaging in futures commission merchant acdirectly.4 Applicant has committed that Company will tivities pursuant to section 225.25(b)(18) of the conduct its underwriting and dealing activities with Board's Regulation Y (12 C.F.R. 225.25(b)(18)); respect to bank-ineligible securities subject to the (11) Providing investment advice on financial futures 10 percent revenue test established by the Board in and options on futures pursuant to section previous Orders.5 225.25(b)(19) of the Board's Regulation Y (12 C.F.R. 225.25(b)(19)). Notice of the application, affording interested persons an opportunity to submit comments, has been published (59 Federal Register 1947 (1994)). The time 3. See 12 C.F.R. 225.25(b)(1), (b)(4), (b)(ll), (b)(15), (b)(16), (b)(17), for filing comments has expired, and the Board has (b)(18), and (b)(19). 4. See Citicorp, J.P. Morgan & Company Incorporated, and considered the application and all comments received Bankers Trust New York Corporation, 73 Federal Reserve Bulletin 473 in light of the public interest factors set forth in section (1987) ("Citicorp/Morgan/Bankers Trust Order"), ajfd sub nom. 4(c)(8) of the BHC Act. Securities Industry Association v. Board of Governors of the Federal Reserve System, 839 F.2d 47 (2d Cir. 1988), cert, denied, 486 U.S. Applicant, with total consolidated assets of 1059 (1988), as modified by Order Approving Modifications to Section $31.1 billion, is the second largest commercial banking 20 Orders, 75 Federal Reserve Bulletin 751 (1989) ("Modification organization in Ohio.2 Applicant operates banking Order"). 5. Company will calculate compliance with the 10 percent revenue limitation in accordance with the original method set forth in J.P. Morgan & Company Incorporated, The Chase Manhattan Corpora- Company to Applicant, which will take the form of a dividend to tion, Bankers Trust New York Corporation, Citicorp, and Security Applicant as the sole shareholder of NCB. Pacific Corporation, 75 Federal Reserve Bulletin 192, 196 (1989), as 2. Data are as of December 31, 1993. opposed to the alternative indexed method set forth in Order Approv- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

348 Federal Reserve Bulletin • April 1994 Private Placement and "Riskless Principal" ject to the 10 percent revenue limitation on bank- Activities ineligible securities underwriting and dealing.8 Applicant has committed that Company will conduct its Private placement involves the placement of new private placement and "riskless principal" activities securities with a limited number of sophisticated pur- using the same methods and procedures, and subject chasers in a nonpublic offering. A financial intermedi- to the same prudential limitations established by the ary in a private placement transaction acts solely as an Board in the Bankers Trust Order and the J.P. Morgan agent for the issuer in soliciting purchasers, and does Order, including the comprehensive framework of not purchase the securities and attempt to resell them. restrictions designed to avoid potential conflicts of Securities that are privately placed are not subject to interests, unsound banking practices, and other adthe registration requirements of the Securities Act of verse effects imposed by the Board in connection with 1933, and are offered only to financially sophisticated underwriting and dealing in securities.9 institutions and individuals and not the public. Applicant will not privately place registered securities and Dealing in Precious Metals will only place securities with customers who qualify as accredited investors. Applicant proposes that Company purchase and sell "Riskless principal" is the term used in the securi- gold and silver bullion, bars, rounds, and coins, and ties business to refer to a transaction in which a platinum coins that function as legal tender, for the broker-dealer, after receiving an order to buy (or sell) accounts of customers. The Board previously has a security from a customer, purchases (or sells) the approved these activities for bank holding compasecurity for its own account to offset a contemporane- nies.10 Applicant proposes to conduct these activities ous sale to (or purchase from) the customer.6 "Risk- in accordance with the commitments listed in the less principal" transactions are understood in the Board's previous orders. industry to include only transactions in the secondary market. Thus, Applicant proposes that Company Interlocks would not act as a "riskless principal" in selling securities at the order of a customer that is the issuer Applicant has requested that the Board permit limited of the securities to be sold or in any transaction where director interlocks between Company and its affiliated Company has a contractual agreement to place the banks. Applicant proposes to have two director intersecurities as agent of the issuer. Company also would locks between Company and affiliated banks.11 These not act as a "riskless principal" in any transaction directors would not be officers of the affiliated banks, involving a security for which it makes a market. The Board previously has determined by Order that, subject to prudential limitations that address the po- 8. See Bankers Trust Order. 9. See J.P. Morgan Order; Bankers Trust Order, 75 Federal Reserve tential for conflicts of interests, unsound banking Bulletin at 829. Among the prudential limitations detailed more fully in practices, or other adverse effects, the proposed pri- those Orders are that Company will maintain specific records that will clearly identify all "riskless principal" transactions, and Company vate placement and riskless principal activities are so will not engage in any "riskless principal" transactions for any closely related to banking as to be a proper incident securities carried in its inventory. When acting as a "riskless princithereto within the meaning of section 4(c)(8) of the pal," Company will engage only in transactions in the secondary market, and not at the order of a customer that is the issuer of the BHC Act.7 The Board also previously has determined securities to be sold, will not act as "riskless principal" in any that acting as agent in the private placement of secu- transaction involving a security for which it makes a market, nor hold itself out as making a market in the securities that it buys and sells as rities, and purchasing and selling securities on the a "riskless principal." Moreover, Company will not engage in "riskorder of investors as a "riskless principal", do not less principal" transactions on behalf of any foreign affiliates that constitute underwriting and dealing in securities for engage in securities dealing activities outside the United States, and will not act as "riskless principal" for registered investment company purposes of section 20 of the Glass-Steagall Act, and securities. In addition, Company will not act as a "riskless principal" that revenue derived from these activities is not sub- with respect to any securities of investment companies that are advised by Applicant or any of its affiliates. With respect to private placement activities, Applicant has committed that Company will not privately place registered investment company securities or securities of investment companies that are advised by Applicant or any of its ing Modifications to Section 20 Orders, 79 Federal Reserve Bulletin affiliates. 226 (1993). 6. See Securities and Exchange Commission Rule 10b-10. 17 C.F.R. 10. See Midland Bank, PLC, 76 Federal Reserve Bulletin 860 (1990); 249.10b-10(a)(8)(i). Standard Chartered, 16 Federal Reserve Bulletin 681 (1990); Westpac 7. See Bankers Trust New York Corporation, 75 Federal Reserve Banking Corporation, 13 Federal Reserve Bulletin 61 (1987); First Bulletin 829 (1989) ("Bankers Trust Order"); J.P. Morgan & Com- Interstate Bancorp, 71 Federal Reserve Bulletin 467 (1985). pany Incorporated, 76 Federal Reserve Bulletin 26 (1990) ("J.P. 11. These interlocks would represent less than a majority of the Morgan Order"). boards of Company and the affiliated banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 349 nor would they have the authority to conduct the facts of this case, the Board concludes that financial day-to-day business of the banks or handle individual considerations are consistent with approval of this bank transactions. application. The managerial resources of Applicant Applicant also has requested that the Board permit also are consistent with approval. one officer interlock between Company and an affili- In order to approve this application, the Board is ated bank—an attorney of an affiliated bank who required to determine that the performance of the would serve as assistant secretary of Company. The proposed activities by Applicant can reasonably be primary purpose of the proposed interlock is to permit expected to produce public benefits that outweigh the attorney to perform corporate recordkeeping func- adverse effects under the proper incident to banking tions.12 The employee would not be involved in the standard of section (4)(c)(8) of the BHC Act. Under day-to-day management of or have any policy making the framework established in this order and prior position with Company, would not have any contact decisions, consummation of this proposal is not with the public, and would not participate in any sales likely to result in any significant adverse effects, such activities of Company. as undue concentration of resources, decreased or The Board previously has permitted limited inter- unfair competition, conflicts of interests, or unsound locks between a banking organization and an affiliated banking practices. Moreover, the Board expects that section 20 company.13 The addition of the interlocks the de novo entry of Applicant into the market for the proposed by Applicant would not, in view of the proposed activities would provide added convelimited duties and responsibilities of the interlocking nience to Company's customers, and would increase officer with Company, appear to give the affiliated the level of competition among existing providers of banks managerial control over Company or otherwise these services. Accordingly, the Board has deterraise any conflicts of interest. Accordingly, the Board mined that the performance of the proposed activifinds that these limited interlocks should be permitted, ties by Applicant can reasonably be expected to since it appears that Company would be operationally produce public benefits that would outweigh possible distinct from its affiliated banks. The Board expects adverse effects under the proper incident to banking that Applicant will ensure that the framework estab- standard of section 4(c)(8) of the BHC Act. lished pursuant to Citicorp!Morgan!Bankers Trust will Based on all the facts of record, and subject to the be maintained in all other respects.14 commitments made by Applicant, as well as all the terms and conditions set forth in this order and in the Financial Factors, Managerial Resources, and Other above-noted Board Orders, the Board has determined Considerations that the application should be, and hereby is, approved. Approval of this proposal is specifically con- In every application under section 4 of the BHC Act, ditioned on compliance by Applicant and Company the Board considers the financial condition and re- with the commitments made in connection with its sources of Applicant and its subsidiaries and the effect application and with the conditions referenced in this of the transaction on these resources.15 Based on the order and the other referenced orders. The Board's determination also is subject to all of the conditions set forth in Regulation Y, including those in sections 225.4(d) and 225.23(b), and to the Board's authority to 12. In that capacity, the attorney would perform functions such as require modification or termination of the activities of keeping minutes of meetings of Company's board of directors and stockholders. The attorney also would perform legal services for a bank holding company or any of its subsidiaries as Company. The attorney's duties at the bank are limited to working in the Board finds necessary to assure compliance with, the corporate law department. 13. Synovus Financial Corp., 11 Federal Reserve Bulletin 954, 955 and to prevent evasion of, the provisions of the BHC (1991); Banc One Corporation, 76 Federal Reserve Bulletin 756, 758 Act and the Board's regulations and orders issued (1990); Canadian Imperial Bank of Commerce, The Royal Bank of thereunder. In approving this transaction, the Board Canada, Barclays PLC and Barclays Bank PLC, 76 Federal Reserve Bulletin 158 (1990). The Board has requested comment on modifying has relied upon all the facts of record, and all the the section 20 prudential framework to permit interlocks with affiliated representations and commitments made by Applicant. banks so long as a majority of the board of directors is not comprised of bank officers or directors. For the purpose of this action, these commitments and 14. The Board's approval of the proposed underwriting and dealing conditions shall be deemed conditions imposed in activities extends only to Company. These activities may not be writing and, as such, may be enforced in proceedings conducted by Applicant in any other subsidiary without prior Board review. Pursuant to Regulation Y, no corporate reorganization of under applicable law. Company, such as the establishment of subsidiaries of Company to This transaction shall not be consummated later conduct the activities, may be consummated without prior Board than three months after the effective date of this order, approval. 15. See 12 C.F.R. 225.24. unless such period is extended for good cause by the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

350 Federal Reserve Bulletin • April 1994 Board or by the Federal Reserve Bank of Cleveland Illinois, with deposits of approximately $29.4 million, pursuant to delegated authority. representing less than 1 percent of total deposits in By order of the Board of Governors, effective commercial banking organizations in the state.3 Pio- February 10, 1994. neer, which operates only in Illinois, is the 62d largest commercial banking organization in the state, control- Voting for this action: Chairman Greenspan and Governors ling approximately $293.7 million in deposits, repre- Angell, LaWare, Lindsey, and Phillips. Absent and not senting less than 1 percent of the total deposits in voting: Vice Chairman Mullins and Governor Kelley. commercial banking organizations in the state. Upon consummation of this proposal, BanPonce would be- JENNIFER J. JOHNSON come the 54th largest commercial banking organiza- Associate Secretary of the Board tion in Illinois, controlling less than 1 percent of total deposits in commercial banking organizations in the Orders Issued Under Sections 3 and 4 of the state. Bank Holding Company Act Douglas Amendment Analysis BanPonce Corporation Hato Rey, Puerto Rico BanPonce, through its ownership of Banco Popular, is subject to the provisions of the International Banking Order Approving Acquisition of a Bank Holding Act of 1978 ("IBA"). Under section 5(a) of the IBA Company (12 U.S.C. § 3103(a)), BanPonce may not acquire a bank outside of its home state if the acquisition would BanPonce Corporation, Hato Rey, Puerto Rico ("Banbe prohibited by the Douglas Amendment (section 3(d) Ponce"), a bank holding company within the meaning of the BHC Act) for a bank holding company located of the Bank Holding Company Act ("BHC Act"), has in the foreign bank's home state. BanPonce has seapplied for the Board's approval under section 3 of the lected New York as its home state for purposes of BHC Act (12 U.S.C. § 1842) to acquire Pioneer section 5 of the IBA.4 Bancorp, Inc., ("Pioneer") and its wholly owned The Douglas Amendment prohibits the Board from subsidiary, River Associates Bancorp, Inc., both of approving an application by a bank holding company Chicago, Illinois, and thereby indirectly acquire Pioto acquire control of any bank located outside its home neer's subsidiary bank, Pioneer Bank & Trust Comstate, unless such acquisition is "specifically authopany, River Grove, Illinois.1 rized by the statute laws of the State in which such Notice of the applications, affording interested perbank is located, by language to that effect and not sons an opportunity to submit comments, has been merely by implication." published (58 Federal Register 60,024 and 62,128 The statute laws of Illinois expressly authorize the (1993)). The time for filing comments has expired, and acquisition of a bank located in Illinois by an out-ofthe Board has considered the applications and all state bank holding company, if that state authorizes comments received in light of the factors set forth in the acquisition of a bank on a reciprocal basis by an sections 3 and 4 of the BHC Act. Illinois bank holding company.5 New York has also BanPonce, with total consolidated assets of enacted a banking statute that permits out-of-state $11.5 billion,2 operates branches in Puerto Rico, New bank holding companies to acquire banks in New York York, California, Illinois, and the United States and provided that the home state of the acquiring bank British Virgin Islands through its subsidiary, Banco holding company permits the acquisition of banks in Popular de Puerto Rico ("Banco Popular"). BanPonce that state by New York bank holding companies on a is the 461st largest commercial banking organization in 1. BanPonce will acquire Pioneer through the merger of Popular Financial Incorporated ("Merger Subsidiary") into Pioneer Bancorp. 3. Deposit data are as of June 30, 1993. Merger Subsidiary is a wholly owned subsidiary of BanPonce Finan- 4. BanPonce retained that selection when it acquired Banco Popular cial Corp., Mount Laurel, New Jersey ("BanPonce Financial"), in 1990. BanPonce Corporation, 77 Federal Reserve Bulletin 43 which is a wholly owned subsidiary of Popular International Bank, (1991). Inc., Hato Rey, Puerto Rico ("PIB"), a wholly owned subsidiary of 5. 111. Rev. Stat. ch. 17 para. 2510.01. The Illinois statute considers BanPonce. In connection with this proposal, PIB and BanPonce another state's law as reciprocal if it permits an Illinois bank holding Financial have applied under section 3(a)(1) of the BHC Act to company to acquire a bank in the other state under conditions that are become bank holding companies and to retain Spring Financial not unduly restrictive when compared to those imposed by Illinois on Services, which engages in permissible nonbanking activities pursuant out-of-state acquirors. Illinois law also requires a bank chartered after to paragraphs (b)(1) and (b)(8) of section 225.25 of the Board's January 1, 1982, to have been engaged in the banking business for at Regulation Y (12 C.F.R. 225.25(b)(1) and (b)(8)). least 10 years before being acquired by an out-of-state bank holding 2. Asset data are as of December 31, 1993. company. In this case, Bank was chartered before January 1, 1982. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 351 reciprocal basis.6 Both the Illinois Commissioner of under section 4(c)(8) of the BHC Act is favorable and Banks and Trust Companies and the New York Super- consistent with approval of PIB's and BanPonce Fiintendent of Banking have concluded that the banking nancial's applications. statutes of Illinois and New York are reciprocal.7 Based on the foregoing, including the commitments Based on the foregoing and a review of the relevant made to the Board by BanPonce in these applications statutes, the Board has determined that the proposed and in related correspondence, and in light of all the acquisition is specifically authorized by the statute facts of record, the Board has determined that these laws of Illinois. This determination is conditioned on applications should be, and hereby are, approved. The BanPonce obtaining the required state regulatory ap- Board's approval is specifically conditioned upon provals for this transaction. compliance by BanPonce with all commitments made BanPonce and Pioneer compete directly in the Chi- in connection with these applications and the condicago, Illinois, banking market.8 Each organization tions discussed in this order. The Board's determinacontrols deposits representing less than 1 percent of tions as to the nonbanking activities to be conducted total deposits in commercial banking organizations in by BanPonce are also subject to all the conditions in the market. Upon consummation of this proposal, the the Board's Regulation Y, including those in sections Chicago banking market would remain unconcentrated 225.4(d) and 225.23(b)(3) (12 C.F.R. 225.4(d) and 225.23(b)(3)), and to the Board's authority to require as measured by the Herfindahl-Hirschman Index ("HHI").9 such modification or termination of the activities of a holding company or any of its subsidiaries as the The Board also concludes that the financial and Board finds necessary to assure compliance with, or to managerial and future prospects of BanPonce and prevent evasion of, the provisions and purposes of the Pioneer and their respective subsidiaries and the other BHC Act and the Board's regulations and orders supervisory factors that the Board must consider issued thereunder. The commitments and conditions under section 3 of the BHC Act are consistent with relied on by the Board in reaching this decision are approval. deemed to be conditions imposed in writing by the PIB and BanPonce Financial have applied to engage Board in connection with its findings and decision, and in certain nonbanking activities that the Board has as such may be enforced in proceedings under applidetermined are closely related to banking and a proper cable law. incident thereto within the meaning of section 4 of the BHC Act.10 Furthermore, there is no evidence in the The banking acquisition shall not be consummated record to indicate that this proposal is likely to result before the thirtieth calendar day following the effective in any significantly adverse effects, such as undue date of this order, or later than three months following concentration of resources, decreased or unfair com- the effective date of this order, unless such period is petition, conflicts of interests, or unsound banking extended for good cause by the Board or the Federal practices. Accordingly, the Board has determined that Reserve Bank of New York, acting pursuant to delethe balance of public interest factors it must consider gated authority. By order of the Board of Governors, effective February 14, 1994. 6. See N.Y. Banking Law § 142-b (McKinney 1990), permitting acquisitions in a state with reciprocal laws that do not impose conditions or restrictions materially limiting the ability of a New York Voting for this action: Chairman Greenspan and Governors banking organization to acquire a banking organization in a state that Kelley, Lindsey, and Phillips. Absent and not voting: Vice are not applicable to an in-state bank holding company. Chairman Mullins and Governor La Ware. 7. See Interpretive Letter No. 93-022 dated November 5, 1993, from Patrick Andre, Senior Attorney, Commissioner of Banks and Trust Companies of Illinois, to Ray Greenblatt; and letter dated JENNIFER J. JOHNSON December 2, 1993, from State of New York Banking Department to Associate Secretary of the Board Donald Toumey. 8. The Chicago banking market consists of Cook, DuPage, and Lake Counties, all in Illinois. First Interstate Bancorp 9. Under the revised Department of Justice Merger Guidelines, 49 Los Angeles, California Federal Register 26,823 (June 29, 1984), a market in which the post-merger HHI is below 1000 is considered unconcentrated. The Justice Department has informed the Board that a bank merger or Order Approving the Merger of Bank Holding acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI Companies and the Merger of Banks is at least 1800 and the merger increases the HHI by more than 200 points. The Justice Department has stated that the higher than normal HHI thresholds for screening bank mergers for anticompetitive effects First Interstate Bancorp, Los Angeles, California implicitly recognize the competitive effect of limited-purpose lenders ("First Interstate"), a bank holding company within and other non-depository financial entities. The HHI for this market the meaning of the Bank Holding Company Act would remain at 550 points upon consummation of this proposal. 10. See 12 C.F.R. 225.25(b)(1) and (b)(8). ("BHC Act"), has applied under section 3 of the BHC Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

352 Federal Reserve Bulletin • April 1994 Act (12 U.S.C. § 1842) to merge with San Diego deposits in commercial banking organizations in the Financial Corporation ("San Diego Financial"), and state. Upon consummation of the proposed transacthereby indirectly acquire San Diego Financial's bank- tion, First Interstate would remain the third largest ing subsidiary, San Diego Trust & Savings Bank ("San commercial banking organization in California, con- Diego Trust"), both of San Diego, California. First trolling deposits of $19.8 billion, representing approx- Interstate also has applied pursuant to section 4(c)(8) imately 8.4 percent of total deposits in commercial of the BHC Act (12 U.S.C. § 1843(c)(8)) to acquire banking organizations in the state. San Diego Life Insurance Company, San Diego, Cal- First Interstate and San Diego Financial compete ifornia, and thereby engage in the underwriting and directly in the San Diego, Oceanside, and Perris sale of credit-related insurance pursuant to section banking markets.4 Upon consummation of this pro- 225.25(b)(8)(i) of the Board's Regulation Y; and San posal, all three banking markets would remain moder- Diego Trust Securities, San Diego, California, and ately concentrated as measured by the Herfindahlthereby engage in discount brokerage activities pursu- Hirschman Index ("HHI").5 After considering the ant to section 225.25(b)(15) of the Board's Regula- competition offered by other depository institutions in tion Y.1 the market,6 the number of competitors remaining in First Interstate Bank of California, Los Angeles, the market, the relatively small increase in concentra- California ("First Interstate-California"), a state tion as measured by the HHI,7 and all other facts of member bank, also has applied pursuant to section record, the Board concludes that consummation of the 18(c) of the Federal Deposit Insurance Act (12 U.S.C. proposal would not result in a significantly adverse § 1828(c)) ("Bank Merger Act") to acquire San Diego effect on competition in any relevant banking market. Trust by merger and thereby establish branches under section 9 of the Federal Reserve Act (12 U.S.C. § 321) Convenience and Needs Considerations at locations set forth in the Appendix. Notice of these applications, affording interested In acting on an application to acquire a depository persons an opportunity to submit comments, has been institution as proposed in these applications, the published (58 Federal Register 51,082 (1993)). As Board must consider the convenience and needs of the required by the Bank Merger Act, reports on the communities to be served and take into account the competitive effects of the merger were requested from records of the relevant depository institutions under the United States Attorney General, the Office of the the Community Reinvestment Act (12 U.S.C. § 2901 Comptroller of the Currency, and the Federal Deposit et seq.) ("CRA"). The CRA requires the federal Insurance Corporation. The time for filing comments financial supervisory agencies to encourage financial has expired, and the Board has considered the appli- institutions to help meet the credit needs of the local cation and all comments received in light of the factors set forth in sections 3(c) and 4(c)(8) of the BHC Act, the Bank Merger Act, and the Federal Reserve Act. 4. The San Diego banking market is approximated by the San Diego First Interstate, with consolidated assets of Metropolitan Statistical Area ("MSA"). The Oceanside banking mar- $50.1 billion,2 controls banking subsidiaries in Califor- ket is approximated by the Oceanside MSA and the towns of Bonsall and Fallbrook, California. The Perris banking market is approximated nia, Alaska, Arizona, Colorado, Idaho, Texas, Monby cities and towns of Canyon Lake, Lake Elsinore, Murietta, Nuevo, tana, Nevada, New Mexico, Oregon, Utah, Washing- Perris, Rancho California, Sun City, and Temecula, California. ton, and Wyoming. First Interstate is the third largest 5. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in which the commercial banking organization in California, con- post-merger HHI is between 1000 and 1800 is moderately concentrolling deposits of $18 billion, representing approxi- trated. The Justice Department has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence mately 7.6 percent of total deposits in commercial of other factors indicating anti-competitive effects) unless the postbanking organizations in the state.3 San Diego Finan- merger HHI is at least 1800 and the merger increases the HHI by 200 cial is the eleventh largest commercial banking orga- points. The Justice Department has stated that the higher than normal HHI thresholds for screening bank mergers for anti-competitive nization in California, controlling deposits of effects implicitly recognize the competitive effect of limited purpose $1.8 billion, representing less than 1 percent of total lenders and other non-depository financial entities. 6. In this context, depository institutions include commercial banks, savings banks, and savings associations. Market deposit data are based on calculations in which the deposits of thrift institutions are 1. First Interstate has committed to divest San Diego Financial's included at 50 percent. The Board previously has indicated that thrift current investments in third party mutual funds upon consummation institutions have become, or have the potential to become, significant of this proposal. competitors of commercial banks. See WM Bancorp, 76 Federal 2. Asset and deposit data are as of September 30, 1993, and have Reserve Bulletin 788 (1990); National City Corporation, 70 Federal been adjusted to reflect the recently approved acquisitions of Cal Rep Reserve Bulletin 743 (1984). Bancorp, Inc., Bakersfield, and First State Bank of the Oaks, Thou- 7. The HHI would increase in these banking markets as follows: San sand Oaks, both in California. Diego (38 points to 1126); Oceanside (17 points to 1290); and Perris 3. State asset and deposit data are as of September 30, 1993. (7 points to 1499). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 353 communities in which they operate, consistent with Interstate's response to those comments; and all other the safe and sound operation of such institutions. To relevant facts of record, in light of the CRA, the accomplish this end, the CRA requires the appropriate Board's regulations, and the Statement of the Federal federal supervisory authority to "assess the institu- Financial Supervisory Agencies Regarding the Comtion's record of meeting the credit needs of its entire munity Reinvestment Act ("Agency CRA Statecommunity, including low- and moderate-income ment").11 neighborhoods, consistent with the safe and sound operations of such institution," and to take that record Record of Performance Under the CRA into account in its evaluation of bank holding company applications.8 A. CRA Performance Examinations In this regard, the Board has received comments from an organization in California ("Protestant") crit- The Agency CRA Statement provides that a CRA ical of First Interstate's mortgage lending activities in examination is an important, and often controlling, California.9 Protestant also generally alleges that First factor in the consideration of an institution's CRA Interstate-California and San Diego Trust have not record and that these reports will be given great weight met the credit needs of minorities and low- and mod- in the applications process.12 In this regard, the Board erate-income individuals, particularly in the San Diego notes that all of First Interstate's subsidiary banks area, and believes that this proposal will reduce the evaluated for CRA performance have received "outcredit products available for the San Diego commu- standing" or "satisfactory" ratings from their primary nity.10 regulators during their most recent examinations.13 In its consideration of the convenience and needs First Interstate-California received a "satisfactory" factor, the Board has carefully reviewed the entire rating from its primary federal regulator, the Federal record of CRA performance of First Interstate, San Reserve Bank of San Francisco, at its most recent Diego Financial, and their subsidiary banks; all com- examination for CRA performance as of August 10, ments received on these applications, including First 1992.14 San Diego Trust received a "satisfactory" rating for CRA performance at its most recent examination from the Federal Deposit Insurance Corporation ("FDIC") as of July 12, 1993. 8. 12 U.S.C. § 2903. 9. The Board has also carefully considered a protest from an individual representing 11 complainants alleging violations of The B. Previous Review of First Expedited Funds Availability Act (12 U.S.C. §§ 4001 et seq.) and the Board's implementing regulation, Regulation CC (12 C.F.R. Part 229), Interstate-California's CRA Record by First Interstate's subsidiary bank in Arizona, First Interstate Bank of Arizona, N.A., Phoenix, Arizona ("First Interstate-Arizona"). This protestant also alleges that the bank violated the Board's The Board recently reviewed the CRA performance Regulation B (12 C.F.R. Part 202) by failing to give proper notice of record of First Interstate-California in connection with adverse action in a loan application. First Interstate has generally applications to acquire Cal Rep Bancorp, Inc., and denied any wrongdoing in mak'ng funds available to the complainants under Regulation CC and has maintained that bank provided appro- First State Bank of The Oaks (collectively, the "First priate adverse action notice in the identified loan transaction. First Interstate Orders").15 These reviews included consid- Interstate has provided copies of its Regulation CC policies and eration of First Interstate-California's record of lendprograms as part of the record, including its efforts to ensure that funds are made available in accordance with Regulation CC. The ing in low- and moderate-income and minority areas Board has carefully reviewed these comments in light of all facts of record, including relevant examination information. The Board has also forwarded the Protestant's allegations to the bank's primary federal regulator, the Office of the Comptroller of the Currency 11. 54 Federal Register 13,742 (1989). ("OCC"). This protestant has sought review of this issue directly in 12. 54 Federal Register 13,745 (1989). court, and this litigation is in its early stages of discovery. The court 13. First Interstate Bancard Company, N.A. ("Bancard"), a speis empowered to provide this Protestant with a remedy, if his cialty bank chartered solely for the purpose of issuing credit cards, allegations are proved and a remedy is appropriate. Based on these received a "needs to improve" rating for CRA performance from its and all facts of record, the Board believes that these matters do not primary regulator, the OCC, in November 1991. Bancard ceased warrant denial of these applications. operations in mid-1992, and was dissolved on September 20, 1993. 10. The Board also received comments from another organization in 14. In considering the comments from the Arizona Protestant as San Diego. These comments were subsequently withdrawn in light of they relate to the bank's CRA performance the Board notes that First certain commitments made by First Interstate to increase its CRA Interstate-Arizona received a "satisfactory" rating from its primary activities in the San Diego area. In addition, the Board received regulator, the OCC, at its most recent examination for CRA perforcomments from a Texas organization objecting to First Interstate's mance dated June 5,1992. In this regard, the examination report states acquisition of Cal Rep Bancorp, Inc., and this proposal. These that the bank is in compliance with substantive provisions of antidiscomments were extensively reviewed by the Board in the Cal Rep crimination laws and regulations. The exam noted isolated technical Bancorp Order (See First Interstate Bancorp, 80 Federal Reserve violations of Regulation B regarding required loan documentation, and Bulletin 40 (1994)). Based on all the facts of record, including the the bank has taken specific steps to address these matters. reasons more fully stated in that order, the Board concludes that the 15. See First Interstate Bancorp (Cal Rep Bancorp, Inc.), supra; comments from the Texas protestant do not warrant denial of these and First Interstate Bancorp, 80 Federal Reserve Bulletin 168 (1994) applications. (First State Bank of the Oaks). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

354 Federal Reserve Bulletin • April 1994 (especially housing-related loans), community devel- income borrowers who may not otherwise meet the opment activities, and other CRA programs and poli- bank's credit standards. First Interstate-California has cies in light of comments received from several com- also established a Community Advancement Program menters, including Protestant. For reasons more fully targeted at low-income or minority census tracts. By set forth in First Interstate Orders, the Board con- offering a down payment requirement of 5 percent for cluded that the overall CRA performance record of any qualified borrower, this program is designed to First Interstate-California was generally consistent encourage individuals who do not fit the low- or with approval of acquisitions by First Interstate. moderate-income profile, but who still cannot meet the usual 10 to 20 percent down payment requirement, to C. First Interstate-California's Record of invest in homes in low-income census tracts. Each of Performance these three programs offers favorable financing terms and flexible underwriting criteria.16 The bank also Lending Activities. The Board has carefully reviewed participates in government-insured and publicly sponthe 1992 data filed under the Home Mortgage Disclo- sored programs, including Federal Housing Adminissure Act (12 U.S.C. § 2801 et seq.) ("HMDA") in tration mortgage loans, California guaranteed business light of Protestant's allegations of disparities in lending loans, Small Business Administration ("SBA") loans, to low- to moderate-income and minority residents in and federally insured and state guaranteed student the San Diego MSA. These data show that First loans. Interstate-California denied applications from minor- In responding to Protestant's allegations regarding ity and non-minority applicants at approximately the mortgage lending in the San Diego MSA, First Intersame rate in 1992, and that this rate was generally state-California notes that historically it has not emlower than the aggregate denial disparity ratio for all phasized home mortgage lending in this area, but that lenders in the area. However, these data also indicate it has assisted in meeting the housing needs of low- and that the percentage of applications received from moderate-income residents in this area. For example, minority and low-income census tracts is low in light First Interstate-California committed $7.8 million in of the number of these tracts in the San Diego MSA. construction and permanent financing for a 53 unit As noted in First Interstate Orders, First Interstate- single-family residential housing project located in a California's 1992 CRA performance examination predominately minority, low- and moderate-income found no evidence of any pattern or practice of illegal area of San Diego. In addition, the bank has supported discriminatory credit practices, or other practices de- the California Community Reinvestment Corporation signed to discourage credit applications. In this regard, in financing the construction of a rent-controlled single examiners noted that the bank continually assesses its room occupancy housing project in San Diego, and lending activity for HMDA-reportable loans. The 1993 provided construction financing for two other low- to examination of San Diego Trust conducted by the moderate-income housing projects in the area.17 FDIC also found no evidence of any pattern or prac- First Interstate has committed to take a variety of tice of illegal discriminatory credit practices, or other steps to increase the number of housing-related loans practices designed to discourage credit applications. made to minority and low- and moderate-income areas First Interstate-California offers a variety of loan in San Diego. For example, First Interstate has comproducts to assist in meeting the ascertained credit mitted to establish a loan production office ("LPO") in needs of the bank's community, including low- and an area identified as underserved by financial institumoderate-income neighborhoods. For example, the tions by the City-County Reinvestment Task Force of bank introduced a new line of mortgage products in San Diego. This LPO will primarily service housing- 1992 to make home ownership more affordable for related loans. First Interstate has also committed to low- and moderate-income borrowers. These pro- hire a full-time CRA officer for the San Diego area, grams include the Down Payment Assistance Pro- who will coordinate housing-related lending efforts gram, which reduces the homebuyer's out-of-pocket with residential real estate lending officers and a down payment cost to 3 percent of the purchase price. residential sales support manager. First Interstate- First Interstate-California lends the remaining 2 per- California will financially support the establishment of cent in the form of a second mortgage with below a proposed Neighborhood Bank to be located in southmarket rates and interest-only payments for the life of the loan. In addition, the Home Buyers Assistance Program has a down payment requirement of 5 per- 16. These programs offer reduced closing costs and higher debt/ cent, with an option permitting the down payment to income ratio requirements. come from a gift or grant to the borrower. Both of 17. First Interstate-California also provided a $1.5 million letter of credit for bonds used to construct low- to moderate-income housing in these programs are targeted to low- and moderate- San Diego County. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 355 east San Diego, and if these efforts are unsuccessful, Ascertainment and Outreach. First Interstate- First Interstate-California will initiate the process of California ascertains credit needs in a variety of ways, establishing a branch in this area by the end of 1995. including calling programs and meetings with civic and First Interstate-California is also enhancing its mort- community groups. In addition, a CRA Task Force gage processing systems in order to introduce new regularly reviews data compiled from semiannual mortgage programs such as the Mortgage Credit Cer- Community Reinvestment Act Questionnaires comtificate program and the related Shared Equity Pro- pleted by branch managers. gram offered though the San Diego Housing Commis- First Interstate-California's marketing programs are sion. Finally, First Interstate will allocate a portion of designed to ensure that all segments of the community, its $2 billion/10 year statewide loan commitment to including low- and moderate-income areas, are inlow- and moderate-income communities to the San formed of the bank's products and services. In San Diego Trust branches acquired in this proposal.18 Diego, branch managers conduct extensive calling In 1992, First Interstate-California established a programs that are reviewed by the district manager.21 centralized Small Business Loan Center to provide In addition, the bank conducts meetings with a variety small businesses with access to a variety of credit of civic and community groups. First Interstateproducts and loan programs. First Interstate- California's marketing plans for the San Diego area California also participates in loan programs spon- will also include the use of both English and Spanish sored by the SB A, and made loans totalling approxi- language media. Ascertainment and outreach efforts mately $8.8 million under the SB A section 504 are also coordinated through a full-time CRA officer in program in 1991. In 1991, the bank also extended loans San Diego after the acquisition with the assistance of totalling approximately $1 million in a special SB A the residential sales support manager and the small program designed to finance the export of products by business loan officer. California businesses. HMDA Data Reporting. The 1992 examination First Interstate-California expects to significantly found a significant number of errors in the HMDA data increase its small business lending through govern- filed by First Interstate-California for 1991. The Board ment-sponsored lending programs such as those of- believes that all banks have an important legal responfered by the Small Business Administration sibility to ensure that data filed under the HMDA is ("SBA"), including the SBA 7(a) and SBA 504 accurate at the time it is reported. The Board notes programs. In this regard, the bank will hire a Small that First Interstate-California has initiated a number Business Government Guaranteed Loan Officer for of corrective measures to improve the accuracy of the San Diego area and is developing expedited these data and the Board expects First Interstate fully approval procedures for small business loans.19 The implement these steps as soon as possible. In this bank recently introduced a small business line of regard, the Federal Reserve Bank of San Francisco credit for amounts under $50,000 and is instituting a will actively monitor the bank's implementation of its "second review" process for small business loan corrective measures and test for improved accuracy in applicants in low- and moderate-income areas. First the data. The Board will also review the bank's Interstate also maintains that it assists in meeting the progress in addressing these weaknesses in future consumer credit needs of low- and moderate-income applications by First Interstate, and will consider and minority residents in San Diego.20 insufficient progress to be an adverse factor in these applications. D. Conclusions Regarding Convenience and Needs Factor 18. First Interstate has committed to report its progress in the San Diego area to the City-County Reinvestment Task Force semiannually. On the basis of all the facts of record, including the 19. The San Diego small business loan department will have lending information provided by the commenters and First authority for up to $20 million. First Interstate-California will also support the Bankers Small Business Community Development Cor- Interstate, relevant reports of examination, and the poration, an organization designed to meet the credit needs of small information and commitments referenced in the First businesses, particularly businesses owned by women and minorities. Interstate Orders, the Board concludes that the con- 20. First Interstate-California made approximately $80 million in consumer loans (personal, home equity and credit card loans) in 1992 venience and needs considerations, including the recin the San Diego area. In census tracts where the majority of residents ords of performance of the CRA of First Interstateare minorities, First Interstate represents that it extended $1 in consumer credit for every $1.25 received in deposits compared to $1 in consumer credit for every $1.64 received in deposits in nonminority census tracts. First Interstate also maintains that this ratio of 21. First Interstate estimates that the San Diego branch managers loans made to deposits received in low- and moderate-income census made 1348 CRA-related calls during the six-month reporting period in tracts was comparable to that ratio for upper income census tracts. 1993. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

356 Federal Reserve Bulletin • April 1994 California and San Diego Trust, are consistent with of this proposal is specifically conditioned on First approval of these applications. The Board expects Interstate's compliance with all the commitments First Interstate to implement all commitments made in made in connection with these applications and the connection with this proposal, including its proposed conditions discussed in this order and in the First CRA initiatives for the San Diego area, and to comply Interstate Orders, including First Interstate's compliwith all the conditions and commitments discussed in ance with the Reserve Bank's monitoring program for the First Interstate Orders. First Interstate must also its HMDA reporting. This approval is further subject comply with all requests made by the Reserve Bank in to First Interstate obtaining the approval of the Caliconnection with its monitoring of First Interstate's fornia Superintendent of Bank for the proposed transcorrective program for HMDA data reporting. action under applicable state law. The Board's determination also is subject to all the conditions set forth in Other Considerations Regulation Y, including those in sections 225.4(d) and 225.23(b)(3), and to the Board's authority to require The financial and managerial resources and future modification or termination of the activities of a bank prospects of First Interstate, San Diego Financial, and holding company or any of its subsidiaries as the their respective subsidiaries and the other supervisory Board finds necessary to assure compliance with, and factors the Board must consider under section 3 of the to prevent evasion of, the provisions and purposes of Bank Holding Company Act and under the Bank the BHC Act and the Board's regulations and orders Merger Act, are consistent with approval of this pro- issued thereunder. For purposes of this transaction, posal. In addition, the Board finds that the factors it is the commitments and conditions relied on by the required to consider under the Federal Reserve Act Board in reaching this decision are both deemed to be also are consistent with approval. conditions imposed in writing by the Board in connec- First Interstate also has applied, pursuant to section tion with its findings and decision, and as such, may be 4 of the BHC Act, to acquire the nonbanking subsid- enforced in proceedings under applicable law. iaries of San Diego that engage in the sale of credit- The acquisition and merger of the subsidiary bank related insurance in connection with extensions of shall not be consummated before the thirtieth calendar credit by affiliated banks, and discount brokerage day following the effective date of this order, and the activities. The Board previously has determined that acquisition of the banks and nonbanking companies these activities are permissible for bank holding com- shall not be consummated later than three months panies under section 4(c)(8) of the BHC Act and the after the effective date of this order, unless such period Board's Regulation Y,22 and First Interstate proposes is extended for good cause by the Board or by the to conduct these activities in accordance with the Federal Reserve Bank of San Francisco, acting pursu- Board's regulations. The record in this case indicates ant to delegated authority. that there are numerous providers of these nonbanking By order of the Board of Governors, effective services, and there is no evidence in the record to February 16, 1994. indicate that consummation of this proposal is likely to result in any significantly adverse effects, such as Voting for this action: Chairman Greenspan and Governors undue concentration of resources, decreased or unfair Kelley, Lindsey, and Phillips. Absent and not voting: Governor La Ware. competition, conflicts of interests, or unsound banking practices that would outweigh the public benefits of JENNIFER J. JOHNSON this proposal. Accordingly, the Board has determined Associate Secretary of the Board that the balance of public interest factors it must consider under section 4(c)(8) of the BHC Act are favorable and consistent with approval of First Interstate's application to acquire San Diego Trust's non- timely written recommendation of denial of the application. In this case, the Board has not received such a recommendation. banking subsidiaries. Generally, under the Board's rules, the Board may, in its discretion, Based on the foregoing and all the facts of record, hold a public hearing or meeting on an application to clarify factual the Board has determined that the applications should issues related to the application and to provide an opportunity for testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). The be, and hereby are, approved.23 The Board's approval Board has carefully considered this request. In the Board's view, the protestant has had ample opportunity to present written submissions, and the protestant has submitted substantial written comments that have been considered by the Board. In light of these facts, and the 22. See 12 C.F.R. 225.25(b)(8)® and (15). Board's decision on this application, the Board has determined that a 23. A protestant has requested a public hearing or meeting on the public hearing or meeting is not necessary to clarify the factual record issues it raised. Section 3(b) of the BHC Act does not require the in this application, or otherwise warranted in this case. Accordingly, Board to hold a hearing or meeting on an application unless the the protestant's request for a public hearing or meeting on this appropriate supervisory authority of the bank to be acquired makes a application is denied. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 357 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 Acquiring Approval Bank Holding Company Thrift Bank(s) Date Carolina First Corporation, Bay Savings Bank, Carolina First Bank, February 18, 1994 Greenville, South Carolina F.S.B., Greenville, South Newport News, Carolina Virginia 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 First Commercial Corporation, State First Financial Corporation, February 8, 1994 Little Rock, Arkansas Texarkana, Arkansas First National Bank of Ashdown, Ashdown, Arkansas Atlanta National Bank, Atlanta, Texas Union Planters Corporation, Tennessee Bancorp, Inc., February 18, 1994 Memphis, Tennessee Columbia, Tennessee Tennessee National Bank, Columbia, Tennessee Section 4 Applicant(s) Bank(s) Effective Date First Bank System, Inc., FBS Information Services Corporation, February 24, 1994 Minneapolis, Minnesota St. Paul, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

358 Federal Reserve Bulletin • April 1994 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 Bradford Bankshares, Inc., CNB, Inc., Atlanta February 15, 1994 Starke, Florida Lake City, Florida Central National Bank First Mercantile National Atlanta February 18, 1994 Corporation, Bank, Winter Park, Florida Long wood, Florida Comerica Incorporated, Pacific Western Chicago February 14, 1994 Detroit, Michigan Bancshares, Inc., Comerica California San Jose, California Incorporated, San Jose, California Community First Financial Peoples Trust Bank St. Louis February 18, 1994 Group, Inc., Company, English, Indiana Cory don, Indiana Community Banks of Kansas, First Kansas Holding Kansas City February 17, 1994 Inc., Company, Prairie Village, Kansas Junction City, Kansas Chapman Bancshares, Inc., Chapman, Kansas D/W Bankshares, Inc., Dalton/Whitfield Bank & Atlanta February 16, 1994 Dalton, Georgia Trust, Dalton, Georgia Employees' Stock Ownership Hoosier Hills Financial Chicago February 17, 1994 Plan of Hoosier Hills Financial Corporation, Corporation, Osgood, Indiana Osgood, Indiana First Brownstown Bancorp, Inc., First National Bank of St. Louis February 18, 1994 Brownstown, Illinois Brownstown, Brownstown, Illinois First Missouri Bancshares, Inc., First Missouri Federal Kansas City February 23, 1994 Brookfield, Missouri Savings and Loan Association, Brookfield, Missouri First Missouri National Bank, Brookfield, Missouri First Virginia Banks, Inc., FNB Financial Richmond February 18, 1994 Falls Church, Virginia Corporation, Knoxville, Tennessee Fourth Financial Corporation, Bank IV Missouri, N.A., Kansas City February 9, 1994 Wichita, Kansas Springfield, Missouri Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 359 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank Date Independent Bank Corporation, KSB Financial, Inc., Chicago February 1, 1994 Ionia, Michigan Kingston, Michigan Leader First Bancorp, Inc., First National Bank in Kansas City February 18, 1994 Mariow, Oklahoma Mario w, Marlow, Oklahoma Lincolnland Bancshares, Inc., Westfield State Bank, Chicago February 9, 1994 Casey, Illinois Westfield, Illinois Mission-Heights Management Independent Bancorp, Dallas February 24, 1994 Company, Ltd., Inc., Houston, Texas Channel view, Texas Murphy-Wall Bancorp, Murphy-Wall State Bank St. Louis February 18, 1994 Pinckneyville, Illinois & Trust Co., Pinckneyville, Illinois Synovus Financial Corp., PNB Bankshares, Inc., Atlanta February 22, 1994 Columbus, Georgia Peachtree City, Georgia TB&C Bancshares, Inc., Columbus, Georgia Section 4 Nonbanking Reserve Effective Applicant(s) Activity/Company Bank Date Mahaska Investment Company, Mahaska State Bank, Chicago February 4, 1994 Oskaloosa, Iowa Oskaloosa, Iowa National Commerce Brooks, Montague & St. Louis February 1, 1994 Bancorporation, Associates, Inc., Memphis, Tennessee Chattanooga, Tennessee Norwest Corporation, Allied Business Systems, Minneapolis February 23, 1994 Minneapolis, Minnesota Inc., Norwest Financial Services, Inc., Macon, Georgia Des Moines, Iowa Norwest Financial, Inc., Des Moines, Iowa Wachovia Corporation, Southeast Switch, Inc., Richmond February 1, 1994 Winston-Salem, North Carolina Maitland, Florida Woodforest Bancshares, Inc., to engage de novo in tax Dallas February 11, 1994 Houston, Texas planning and preparation services for individuals and small businesses Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

360 Federal Reserve Bulletin • April 1994 PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits Bennett v. Greenspan, No. 93-1813 (D. D.C., filed against the Federal Reserve Banks in which the Board April 20, 1993). Employment discrimination action. of Governors is not named a party. Amann v. Prudential Home Mortgage Co., et al., No. 93-10320 WD (D. Massachusetts, filed February 12, DLG Financial Corp. v. Board of Governors, No. 1993). Action for fraud and breach of contract 94-10078 (5th Cir., filed January 20, 1994). Appeal arising out of a home mortgage. On April 17, 1993, of district court dismissal of appellants' action to the Board filed a motion to dismiss. enjoin the Board and the Federal Reserve Bank of Adams v. Greenspan, No. 93-0167 (D. D.C., filed Dallas from taking certain enforcement actions, and January 27,1993). Action by former employee under for money damages on a variety of tort and contract the Civil Rights Act of 1964 and the Rehabilitation theories. Act of 1973 concerning termination of employment. Board of Governors v. DLG Financial Corp., Nos. The Board's motion for partial summary judgment 93-2944 and 94-20013 (5th Cir., filed December 14, was filed on January 4, 1994. 1993 and December 31, 1993). Appeal of a temporary restraining order and a preliminary injunction CBC, Inc. v. Board of Governors, No. 92-9572 (10th obtained by the Board freezing assets of a corpora- Cir., filed December 2, 1992). Petition for review of tion and an individual pending administrative adju- civil money penalty assessment against a bank holddication of civil money penalty assessments by the ing company and three of its officers and directors Board. for failure to comply with reporting requirements. Petition for review denied November 30, 1993. Board of Governors v. Oppegard, No. 93-3706 (8th Cir., filed November 1, 1993). Appeal of district Zemel v. Board of Governors, No. 92-1056 (D. D.C., court order ordering appellant Oppegard to comply filed May 4, 1992). Age Discrimination in Employwith prior order requiring compliance with Board ment Act case. The parties' cross-motions for sumremoval, prohibition, and civil money penalty order. mary judgment are pending. The Board's brief was filed on January 20, 1994. Board of Governors v. Ghaith R. Pharaon, No. 91- Scott v. Board of Governors, No. 930905843CV (Dist. CIV-6250 (S.D. New York, filed September 17, Ct., Salt Lake County, Utah, filed October 8, 1993). 1991). Action to freeze assets of individual pending Action against Board and others for damages and administrative adjudication of civil money penalty injunctive relief for alleged constitutional and statuassessment by the Board. On September 17, 1991, tory violations caused by issuance of Federal Rethe court issued an order temporarily restraining the serve notes. transfer or disposition of the individual's assets. Richardson v. Board of Governors, et al., No. 93-C 836A (D. Utah, filed August 30, 1993). Action against Board and others for damages and injunctive FINAL ENFORCEMENT DECISION ISSUED BY THE relief for alleged constitutional and statutory viola- BOARD OF GOVERNORS tions caused by issuance of Federal Reserve notes. On December 16, 1993, the District Court granted In the Matter of the Board's motion to dismiss. On January 14, 1994, plaintiff filed a notice of appeal. Bruno Zbinden First National Bank ofBellaire v. Board of Governors, An Institution-Affiliated Party of No. H-93-1708 (S.D. Texas, filed June 8, 1993). Action to enjoin possible enforcement actions by Swiss Bank Corporation Board of Governors and other bank regulatory agen- New York, New York cies. On September 23, 1993, the agencies filed a and motion to dismiss. Swiss Volksbank Kubany v. Board of Governors, et al., No. 93-1428 (D. New York, New York D.C., filed July 9, 1993). Action challenging Board determination under the Freedom of Information Docket No. 93-023-E-I Act. The Board's motion to dismiss was filed on October 15, 1993. Determination on Request for Private Hearing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 361 Background Board advised Respondent that any hearing held in this matter would be public, unless the Board deter- This is an enforcement proceeding brought by the mines that an open hearing would be contrary to the Board of Governors of the Federal Reserve System public interest. The Notice also informed Respondent (the "Board") against Bruno Zbinden (the "Respon- that he could submit a statement detailing any reasons dent"), pursuant to the Federal Deposit Insurance Act why the hearing should not be public. ("FDI Act"). Respondent is a former Manager of the Subsequently, Respondent did request that the hear- New York branch of Swiss Bank Corporation, Basle, ing in this matter be private, that the Notice, as well as Switzerland ("SBC"). Respondent later became As- all other documents and proceedings in this matter, sistant Treasurer of the New York branch of Swiss not be published and that they be maintained in Volksbank, Berne, Switzerland ("Volksbank"). confidence. The primary reason cited by Respondent In April, 1993, the Board initiated this action by is the purported effect that public disclosure would serving upon Respondent a "Notice of Intention to have on Respondent's privacy and employment pros- Remove from Office and of Prohibition Issued Pursu- pects. Respondent contends that disclosure of this ant to Section 8(e) of the Federal Deposit Insurance matter will cause irreparable harm to his reputation Act, as Amended, and Notice of Charges and of and career, making it impossible for him to obtain Hearing Pursuant to Section 8(b) of the Federal De- future employment even if the matters alleged in the posit Insurance Act, as Amended" (the "Notice"). Notice are ultimately resolved in his favor. Respon- The Notice alleges that in connection with his position dent also expressed the view that granting his request as an officer and employee of SBC, Respondent en- for confidentiality will facilitate a quicker resolution of gaged in unsafe and unsound banking practices and the matter without the need for a protracted hearing. also engaged in conduct that breached his fiduciary Board Enforcement Counsel opposes Respondent's duty to SBC. The Notice further alleges that by reason request, and asserts that even though Respondent has of these practices and breaches, Respondent received asserted a potential harm to his personal interests, financial gain at the expense of SBC, which suffered Respondent has failed to cite any public interest reafinancial loss. sons to justify a private hearing. Board Enforcement The purpose of this proceeding is to determine Counsel also disputes Respondent's claim that a priwhether an appropriate order should be issued pursu- vate hearing will facilitate the settlement process, and ant to Sections 8(b) and 8(e) of the FDI Act that would: notes that a settlement will, in any event, result in a (1) Remove Respondent from his position at Volks- final order that must be published pursuant to bank and permanently prohibit him from participat- 12 U.S.C. § 1818(u)(l)(B). ing in the affairs of any insured depository institution or other entity specified in Section 8(e)(7)(A) of Discussion the FDI Act; and (2) Require Respondent to cease and desist from the In this case, the Board is unable to find that an open unsafe and unsound banking practices and breaches hearing is contrary to the public interest. Enforcement of fiduciary duty and take affirmative actions to proceedings, by their nature, involve allegations that, correct the conditions resulting from those practices if made public, could adversely affect a respondent's and breaches, including making restitution or pro- reputation or career. Nevertheless, in establishing a viding reimbursement to SBC. statutory presumption in favor of open hearings, Congress implicitly determined that the public benefit from In 1990, the FDI Act was amended to provide that conducting proceedings in the open outweighs the all hearings held on the record in such cases "shall be privacy interests of the individuals involved. Congress open to the public, unless the agency, in its discretion, underscored this presumption in favor of public heardetermines that holding an open hearing would be ings by requiring that a written report be filed with contrary to the public interest."1 The FDI Act also Congress in each instance where a decision is made to directs the Board to prepare a transcript of each conduct a private hearing.3 hearing, including all testimony and documentary ev- Respondent essentially focuses on the impact that a idence, which must be made available to the public public hearing will have on him as an individual. The pursuant to the Freedom of Information Act (the Board does not believe that the disruptions cited by "FOIA").2 Accordingly, the Notice issued by the Respondent, which are a normal consequence of such proceedings, are sufficient to overcome the statutory 1. 12 U.S.C. § 1818(u)(2). The Board's rule implementing this provision is located at 12 C.F.R. 263.33. 2. See 12 U.S.C. § 1818(u)(4). 3. See 12 U.S.C. § 1818(u)(3). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

362 Federal Reserve Bulletin • April 1994 presumption favoring public hearings. There has been tially limits any expectations of privacy that Responno showing by Respondent concerning any potential dent might have concerning this proceeding. As a harm to others or to the public generally, nor does the practical matter, however, in order to keep all docurecord reflect any such dangers. ments concerning this matter confidential it would also Respondent contends that by keeping this matter be necessary to close the hearing and for the reasons confidential, the Board will facilitate a resolution of explained above, the Board has determined that a the case without the need for protracted proceedings. private hearing is not warranted in this case. Respondent's assertion is not sufficient in this case to The FDI Act does provide that the Board may file a overcome the statutory presumption favoring open particular document or part of a document under seal in hearings. Because this case has remained confidential any enforcement hearing, "if disclosure of the docusince the Notice was issued in April, 1993, there has ment would be contrary to the public interest."5 Puralready been ample opportunity for the parties to suant to the Board's Rules of Practice for Hearings, this resolve this matter. Nevertheless, it appears that the authority has been delegated to Board Enforcement parties have not reached any agreement that would Counsel, who has the discretion to determine which eliminate the need for a hearing. The Board finds that documents, if any, should be filed under seal.6 Under continued confidentiality is unlikely to facilitate a the Board's Rules, the presiding administrative law resolution of the case prior to the hearing, which is judge is also directed to close portions of the hearing, if scheduled to commence within a few weeks.4 necessary, in order to preserve the confidentiality of Respondent also suggests that, even if there is no any documents that are filed under seal.7 settlement and a hearing is necessary, a private pro- Where a document contains information that would ceeding is likely to be resolved more efficiently than a not normally be disclosed to the public, such as in the public hearing. That argument could be used to justify a case of bank examination reports or other privileged private hearing in most enforcement cases, a result that information, filing the document under seal may inwould not be consistent with the intent of the statute. deed be appropriate to protect the public interest.8 As In sum, because Respondent has not shown that an the language of the FDI Act suggests, however, that open hearing is contrary to the public interest, as decision should be made with respect to specific distinguished from Respondent's own personal inter- documents rather than an entire enforcement proceedests, and the record does not reflect any substantial ing, as Respondent seeks in this case.9 public interests to support Respondent's request, the Respondent further claims that the Freedom of request for a private hearing in this matter must be Information Act exempts the entire record of this denied. proceeding from public disclosure. The fact that a Respondent also requests that the Notice and all document is exempt from disclosure under the Freeother documents related to this proceeding be kept dom of Information Act does not mandate that it be confidential. Respondent states that disclosure of the withheld from the public or filed under seal in an documents would constitute an invasion of his per- enforcement proceeding. Under that Act, an agency sonal privacy and he contends that the entire record of may use its discretion to disclose exempt materials, this proceeding is, therefore, exempt from the FDI provided that disclosure is not otherwise prohibited by Act's public disclosure requirement. For the reasons law.10 Thus, in order to implement the FDI Act's stated below, Respondent's request to keep the entire policy favoring public disclosure, Enforcement Counrecord confidential must be denied. sel or the Board may decide to include as part of the Respondent's claim, that his general interest in pri- public record of an enforcement case, documents that vacy warrants confidentiality for the complete record of are exempt from disclosure under the Freedom of this proceeding, is inconsistent with the language and Information Act. intent of the FDI Act, which creates a presumption in favor of public hearings and expressly provides that all 5. 12 U.S.C. § 1818(u)(6) (emphasis added). testimony and documentary evidence shall be made 6. See 12 C.F.R. 263.33(b). available to the public pursuant to the Freedom of 7. Id. Accordingly, a document that is filed under seal would not be Information Act. Consequently, the FDI Act substan- available as part of a hearing transcript that is made available to the public under the Freedom of Information Act. See 12 U.S.C. § 1818(u)(4). Enforcement Counsel's decision to file a document under seal in connection with the hearing does not, however, foreclose the Board from making a subsequent determination to publicly disclose 4. The record presently before the Board does not reflect whether the document. keeping this matter confidential during the past few months has been 8. See 5 U.S.C. § 552(b). beneficial to the parties' attempts to settle the case. Because the Board 9. Although Respondent asserts a general privacy interest in keepnow decides that the hearing scheduled to commence on February 28, ing the entire record under seal, he has not provided a rationale for 1994, will be open to the public and there is no further need for maintaining the confidentiality of any particular document. confidentiality, this Order will be published. 10. See e.g., Chrysler Corp. v. Brown, 441 U.S. 281, 292-94 (1979). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 363 Respondent's request to keep the entire record in Federal Reserve Bank of Cleveland, the Superintenthis proceeding confidential is, therefore, denied. As dent of Banks for the State of Ohio, and The Citizens provided in the Board's Rules, Board Enforcement Savings Bank Company, Pemberville, Ohio. Counsel has been delegated the authority to determine which documents, if any, should be filed under seal in this case. Accordingly, Respondent may address any concerns he has regarding specific documents to the Merchants Bancshares, Inc. Board's Enforcement Counsel. Burlington, Vermont By Order of the Board of Governors, this ninth day of February, 1994. The Federal Reserve Board announced on February 28, 1994, the execution of a Written Agreement Board of Governors of the between the Federal Reserve Bank of Boston and Federal Reserve System Merchants Bancshares, Inc., Burlington, Vermont. WILLIAM W. WILES Secretary of the Board PT Bank Niaga Jakarta, Indonesia WRITTEN AGREEMENTS APPROVED BY FEDERAL RESERVE BANKS The Federal Reserve Board announced on Febru- The Citizens Savings Bank Company ary 10, 1994, the execution of an Amendment to the Pemberville, Ohio Written Agreement, dated January 8, 1993, involving the Federal Reserve Bank of San Francisco, the PT The Federal Reserve Board announced on February 8, Bank Niaga, Jakarta, Indonesia and its Los Angeles 1994, the execution of a Written Agreement among the Agency. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 Financial and Business Statistics CONTENTS WEEKLY REPORTING COMMERCIAL BANKS Assets and liabilities A3 Guide to Tabular Presentation A22 Large reporting banks A24 Branches and agencies of foreign banks Domestic Financial Statistics 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 A33 Federal and federally sponsored credit holdings agencies—Debt outstanding MONETARY AND CREDIT AGGREGATES SECURITIES MARKETS AND A13 Aggregate reserves of depository institutions CORPORATE FINANCE and monetary base A14 Money stock, liquid assets, and debt measures A34 New security issues—Tax-exempt state and local A16 Deposit interest rates and amounts outstanding— governments and corporations commercial and BIF-insured banks A35 Open-end investment companies—Net sales A17 Bank debits and deposit turnover and assets A18 Loans and securities—All commercial banks A35 Corporate profits and their distribution A35 Nonfarm business expenditures on new COMMERCIAL BANKING INSTITUTIONS plant and equipment A36 Domestic finance companies—Assets and A19 Major nondeposit funds liabilities, and consumer, real estate, and business A20 Assets and liabilities, Wednesday figures credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • April 1994 Domestic Financial Statistics—Continued A54 U.S. reserve assets A54 Foreign official assets held at Federal Reserve REAL ESTATE Banks A55 Foreign branches of U.S. banks—Balance A37 Mortgage markets sheet data A3 8 Mortgage debt outstanding A57 Selected U.S. liabilities to foreign official institutions CONSUMER INSTALLMENT CREDIT REPORTED BY BANKS A39 Total outstanding IN THE UNITED STATES A39 Terms A57 Liabilities to and claims on foreigners A58 Liabilities to foreigners FLOW OF FUNDS A60 Banks' own claims on foreigners A61 Banks' own and domestic customers' claims on A40 Funds raised in U.S. credit markets foreigners A42 Summary of financial transactions A61 Banks' own claims on unaffiliated foreigners A43 Summary of credit market debt outstanding A62 Claims on foreign countries—Combined A44 Summary of financial assets and liabilities domestic offices and foreign branches Domestic Nonfinancial Statistics REPORTED BYNONBANKING 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 A65 Foreign transactions in securities A49 Housing and construction A66 Marketable U.S. Treasury bonds and A50 Consumer and producer prices notes—Foreign transactions A51 Gross domestic product and income A52 Personal income and saving INTEREST AND EXCHANGE RATES International Statistics A67 Discount rates of foreign central banks A67 Foreign short-term interest rates SUMMARY STATISTICS A68 Foreign exchange rates A53 U.S. international transactions—Summary A69 Guide to Statistical Releases and A54 U.S. foreign trade 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 Department of Veterans Affairs 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 DomesticN onfinancialS tatistics • April 1994 1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 1993R 1993R 1994 MMoonneettaarryy oorr ccrreeddiitt aaggggrreeggaattee QL Q2 Q3 Q4 Sept. Oct. Nov. Dec. Jan. Reserves of depository institutions2 1 Total 9.3 10.8 12.4 14.6 16.6 20.0 12.8 1.5 .4 2 Required 8.7 12.4 12.3 14.6 14.0 20.4 12.9 2.3 -7.4 3 Nonborrowed 9.5 10.6 10.9 16.0 15.2 23.1 16.9 1.7 .5 4 Monetary base3 9.5 10.2 10.6 9.9 11.9 10.6 8.5 5.5 11.4 Concepts of money, liquid assets, and debt4 5 Ml 8.3 10.7 12.0 9.4 10.7 9.0 9.7 6.5 5.4 6 M2 -1.3 2.2 2.6 2.1 2.8 .6 3.9 2.4 2.2 7 M3 -3.2 2.1 1.1 2.4 2.7 1.7 3.7 3.4 1.1 8 L -1.7 3.1 .9 1.7 -1.7 1.8 2.7 5.4 n.a. 9 Debt 4.0 4.5 5.7 5.2 5.3 3.5 6.1 7.6 n.a. Nontrqnsaction components 10 In M2 -5.3 -1.4 -1.5 -1.2 -.7 -3.1 1.2 .4 .7 11 In M3 only6 -12.9 1.6 -6.6 3.9 1.5 7.5 2.6 9.1 -5.4 Time and savings deposits Commercial banks 12 Savings, including MMDAs 3.0 5.1 4.9 3.6 4.0 .6 6.2 4.4 7.3 13 Small time -8.3 -9.2 -10.6 -7.4 -8.0 -7.6 -7.4 -2.3 -7.7 14 Large time8' -18.1 -.6 -7.5 -.2 -5.2 6.1 -8.2 5.2 9.1 Thrift institutions 15 Savings, including MMDAs -.2 .7 2.3 -.4 -.3 .0 -2.5 2.0 .0 16 Small time -20.0 -11.9 -13.0 -11.1 -11.3 -11.0 -9.3 -15.7 -8.0 17 Large time8, -14.2 -8.5 -4.5 -6.9 -1.9 -1.9 -3.8 -34.0 3.9 Money market mutual funds 18 General purpose and broker-dealer -7.8 .2 -1.8 2.1 -1.7 -.7 10.4 7.2 -3.4 19 Institution-only -17.6 -2.2 -10.5 8.8 4.4 22.0 3.1 13.6 -26.2 Debt components4 20 Federal 7.6 10.4 9.1 5.6 7.1 -1.5 9.1 13.3 n.a. 21 Nonfederal 2.7 2.4 4.4 5.0 4.6 5.4 5.0 5.5 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 1994 1993 1994 Nov. Dec. Jan. Dec. 15 Dec. 22 Dec. 29 Jan. 5 Jan. 12 Jan. 19 Jan. 26 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 367,056 374,694 374,433 370,574 377,295 380,109" 381,190 372,716 373,899 371,042 U.S. government securities2 2 Bought outright—System account 326,769 332,413 332,463 333,227 332,605 331,751 332,602 333,022 332,673 332,094 3 Held under repurchase agreements ... 2,535 4,060 2,429 0 6,231 8,725 8,415 1,487 1,577 0 Federal agency obligations 4 Bought outright 4,732 4,706 4,510 4,719 4,719 4,685 4,588 4,522 4,522 4,497 5 Held under repurchase agreements ... 206 265 267 0 100 803 851 186 186 0 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 19 22 86 21 30 24 226 9 115 19 8 Seasonal credit 72 30 14 37 30 21 11 9 13 20 9 Extended credit 0 0 0 0 0 0 0 0 0 0 10 Float 722 829 1,963 671 866 1,027r 1,532 1,106 2,223 1,683 11 Other Federal Reserve assets 32,001 32,369 32,702 31,897 32,714 33,073 32,964 32,376 32,591 32,729 12 Gold stock 11,054 11,054 11,053 11,054 11,054 11,054 11,053 11,053 11,053 11,053 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 21,980r 22,060r 22,130 22,05 lr 22,067r 22,084r 22,101 22,116 22,130 22,145 ABSORBING RESERVE FUNDS 15 Currency in circulation 356,710* 362,551r 362,849 360,544r 363,547r 366,042r 365,610 363,762 362,758 361,780 16 Treasury cash holdings 371 375 401 373 373 376 378 470 383 383 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 5,607 6,469 7,523 5,165 8,264 7,116 9,813 4,035 5,647 8,778 18 Foreign 434 238 252 221 252 258 303 191 368 204 19 Service-related balances and adjustments 6,340 6,630" 6,859 6,862 6,628 6,598r 6,571 6,957 7,095 6,844 20 Other 2% 293 288 306 303 258 343 239 297 290 21 Other Federal Reserve liabilities and capital 9,340 9,628 9,629 9,628 9,771 9,786 9,386 9,552 9,737 9,742 22 Reserve balances with Federal Reserve Banks 29,010 29,644r 27,834 28,598 29,2% 30,830" 29,957 28,697 28,815 24,237 End-of-month figures Wednesday figures Nov. Dec. Jan. Dec. 15 Dec. 22 Dec. 29 Jan. 5 Jan. 12 Jan. 19 Jan. 26 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 372,593 384,226r 382,176 372,203 382,976 383,662r 377,743 370,834 385,967 375,519 U.S. government securities 2 Bought outright—System account 326,804 332,015 331,995 334,522 331,236 332,903 334,304 332,913 332,301 334,706 3 Held under repurchase agreements ... 8,013 12,187 8,657 0 11,675 11,418 3,310 0 7,790 0 Federal agency obligations 4 Bought outright 4,719 4,638 4,437 4,719 4,719 4,638 4,522 4,522 4,522 4,437 5 Held under repurchase agreements ... 429 1,025 519 0 359 885 639 0 859 0 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 16 84 109 127 51 29 1,225 3 19 9 8 Seasonal credit 40 10 12 37 23 18 8 11 17 19 9 Extended credit 0 0 0 0 0 0 0 0 0 0 10 Float 1,290 909r 2,453 823 1,775 170" 1,440 942 7,450 3,504 11 Other Federal Reserve assets 31,282 33,358 33,993 31,975 33,136 33,602 32,296 32,444 33,010 32,843 12 Gold stock 11,054 11,053 11,053 11,054 11,054 11,053 11,054 11,053 11,053 11,053 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 22,017r 22,101r 22,160 22,05lr 22,067r 22,084r 22,101 22,116 22,130 22,145 ABSORBING RESERVE FUNDS 15 Currency in circulation 359,732r 365,277r 360,919 361,406r 366,042r 367,226r 365,574 363,703 363,219 361,558 16 Treasury cash holdings 370 377 378 373 376 377 381 384 377 378 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 6,334 14,809 21,541 5,832 8,823 5,407 6,736 4,093 7,450 9,184 18 Foreign 596 386 257 278 288 286 263 171 235 327 19 Service-related balances and adjustments 6,460 6,571r 6,697 6,862 6,628 6,598r 6,571 6,957 7,095 6,844 20 Other 297 397 255 314 269 245 224 299 297 287 21 Other Federal Reserve liabilities and capital 9,561 9,292 9,759 9,482 9,670 9,617 9,406 9,459 9,752 9,597 22 Reserve balances with Federal Reserve Banks3 30,334 28,289" 23,602 28,778 32,017 35,060" 29,760 26,955 38,744 28,560 1. For amounts of cash held as reserves, see table 1.12. 3. Excludes required clearing balances and adjustments to compensate for 2. Includes securities loaned—fully guaranteed by U.S. government securities float, pledged with Federal Reserve Banks—and excludes securities sold and scheduled to be bought back under matched sale-purchase transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Nonfinancial Statistics • April 1994 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RReesseerrvvee ccllaassssiiffiiccaattiioonn 1991 1992 1993 1993 1994 Dec. Dec. Dec. July Aug. Sept. Oct. Nov. Dec. Jan. 1 Reserve balances with Reserve Banks2 26,659 25,368 29,374r 26,562 26,564 27,274 28,297 29,018 29,374r 27,818 2 Total vault cash3 32,509* 34,542r 36,812 34,536r 34,516 35,220* 35,184 35,655 36,812 37,906 3 Applied vault cash 28,872 31,172 33,484 31,189 31,203 31,863 31,739 32,278 33,484 34,254 4 Surplus vault cash 3,637r 3,37c 3,328 3,347 3,313 3,357r 3,445 3,377r 3,328 3,653 5 Total reserves6 55,532 56,540 62,858r 57,750 57,767 59,136 60,036 61,2% 62,858r 62,072 6 7 R Ex eq c u es ir s e d re s r e e r s v e e rv b e a s lances at Reserve Banks i.. . . . . 54,5 9 5 7 3 9 55 1 , , 3 1 8 5 5 5 61 l, , 0 7 6 9 3 5 r r 56 1 , , 6 0 6 8 1 9 56,8 9 1 5 5 2 58 1 , , 0 0 4 9 6 0 58 1 , , 9 0 4 8 7 9 60 1 , , 1 1 9 0 5 1 61 l, , 0 7 6 9 3 5 r r 60 1 , , 6 4 2 4 4 8 8 Total borrowings at Reserve Banks 192 124 82 244 352 428 285 89 82 73 9 Seasonal borrowings 38 18 31 210 234 236 192 75 31 15 10 Extended credit9 1 1 0 0 0 0 0 0 0 0 Biweekly averages of daily figures for weeks ending on date indicated 1993 1994 Sept. 29 Oct. 13 Oct. 27 Nov. 10 Nov. 24 Dec. 8 Dec. 22 Jan. 5 Jan. 19 Feb. 2 1 Reserve balances with Reserve Banks2 26,837 27,843 28,798 28,017 29,742 28,999 28,950 30,367* 28,745 25,675 2 Total vault cash* 35,159* 35,806* 34,313 36,217* 34,894 36,494 37,202 36,489 38,241 38,107 3 Applied vault cash , 31,781 32,278 30,946 32,767 31,566 33,125 33,821 33,279 34,691 34,151 4 Surplus vault cash 3,379* 3,528* 3,368 3,450* 3,328 3,369 3,381 3,210 3,550 3,957 5 Total reserves 58,618 60,121 59,744 60,784 61,308 62,124 62,771 63,646* 63,435 59,826 6 Required reserves 57,318 58,985 58,692 59,722 60,205 60,962 61,880 62,405* 61,759 58,557 7 Excess reserve balances at Reserve Banks ... 1,300 1,137 1,052 1,062 1,102 1,162 891 1,241* 1,676 1,269 8 Total borrowings at Reserve Banks8 321 420 205 132 74 56 59 142 74 45 9 Seasonal borrowings 247 222 189 105 68 43 34 16 11 18 10 Extended credit9 0 0 0 0 0 0 0 0 0 0 1. Data in this table also appear in the Board's H.3 (502) weekly statistical 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 1994, week ending Monday SSoouurrccee aanndd mmaattuurriittyy Dec. 6 Dec. 13 Dec. 20 Dec. 27 Jan. 3 Jan. 10 Jan. 17 Jan. 24 Jan. 31 Federal funds purchased, repurchase agreements, and other selected borrowings From commercial banks in the United States 1 For one day or under continuing contract 75,691 76,163 72,673 68,417 71,013 72,206 69,412 69,901 68,093 2 For all other maturities 14,280 15,005 14,583 16,880 1144,,668899 1133,,115599 1133,,333399 14,008 13,283 From other depository institutions, foreign banks and official institutions, and U.S. government agencies 3 For one day or under continuing contract 16,875 17,942 17,699 16,918 15,197 14,680 15,997 22,299 18,438 4 For all other maturities 24,839 25,404 26,238 26,977 22,670 21,054 20,203 19,423 17,826 Repurchase agreements on U.S. government and federal agency securities Brokers and nonbank dealers in securities 5 For one day or under continuing contract 18,896 17,411 15,779 13,248 18,065 18,506 17,572 18,277 16,634 6 For all other maturities 39,409 41,429 39,933r 37,217r 3333,,333344 34,745 33,997 32,358 32,764 All other customers 7 For one day or under continuing contract 32,719 31,242 29,603r 26,422r 30,785 30,371 30,158 31,539 33,268 8 For all other maturities 13,246 14,431 14,644 22,013 17,948 15,758 16,372 16,307 16,856 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 44,822 42,230 43,399 39,727 47,233 44,243 42,538 46,578 46,844 10 To all other specified customers2 28,140 26,980 26,438 22,123 26,497 24,657 26,425 28,110 28,735 1. Banks with assets of $4 billion or more as of Dec. 31, 1988. 2. Brokers and nonbank dealers in securities, other depository institutions, Data in this table also appear in the Board's H.5 (507) weekly statistical release. foreign banks and official institutions, and U.S. government agencies. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Nonfinancial Statistics • April 1994 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels Adjustment credit1 Seasonal credit2 Extended credit3 FFeeddeerraall RReesseerrvvee BBaannkk 3/ O 4/ n 9 4 Effective date Previous rate 3/ O 4/ n 9 4 Effective date Previous rate 3/ O 4/ n 9 4 Effective date Previous rate Boston 3 7/2/92 3.5 3.45 3/3/94 3.30 3.95 3/3/94 3.80 New York 7/2/92 3/3/94 3/3/94 Philadelphia 7/2/92 3/3/94 3/3/94 Cleveland 7/6/92 3/3/94 3/3/94 Richmond 7/2/92 3/3/94 3/3/94 Atlanta 7/2/92 3/3/94 3/3/94 Chicago 7/2/92 3/3/94 3/3/94 St. Louis 7/7/92 3/3/94 3/3/94 Minneapolis 7/2/92 3/3/94 3/3/94 Kansas City 7/2/92 3/3/94 3/3/94 Dallas 7/2/92 3/3/94 3/3/94 San Francisco ... 3 7/2/92 3.5 3.45 3/3/94 3.30 3.95 3/3/94 3.80 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 A le l v l e F l) . — R. B o an f k Effective date A le l v l e F l) . — R. B o an f k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1977 6 6 1981-—May 5 13-14 14 1986—Aug. 21 5.5-6 5.5 14 14 22 5.5 5.5 1978—Jan. 9 6-6.5 6.5 Nov. 7 13-14 13 20 6.5 6.5 6 13 13 1987—Sept. 4 5.5-6 6 May 11 6.5-7 7 Dec. 4 12 12 11 6 6 12 7 7 July 3 7-7.25 7.25 1982---JJuullyy 70 11.5-12 11.5 1988—Aug. 9 6-6.5 6.5 10 7.25 7.25 73 11.5 11.5 11 6.5 6.5 Aug. 21 7.75 7.75 Aug. 7 11-11.5 11 Sept. 22 8 8 3 11 11 1989—Feb. 24 6.5-7 7 Oct. 16 8-8.5 8.5 16 10.5 10.5 27 7 7 20 8.5 8.5 77 10-10.5 10 Nov. 1 8.5-9.5 9.5 30 10 10 1990—Dec. 19 6.5 6.5 3 9.5 9.5 Oct. 17 9.5-10 9.5 13 9.5 9.5 1991—Feb. 1 6-6.5 6 1979—July 20 10 10 Nov. 77 9-9.5 9 4 6 6 Aug. 17 10-10.5 10.5 76 9 9 Apr. 30 5.5-6 5.5 20 10.5 10.5 Dec. 14 8.5-9 9 May 2 5.5 5.5 Sept. 19 10.5-11 11 15 8.5-9 8.5 Sept. 13 5-5.5 5 21 11 11 17 8.5 8.5 17 5 5 Oct. 8 11-12 12 Nov. 6 4.5-5 4.5 10 12 12 1984-——AApprr.. 9 8.5-9 9 7 4.5 4.5 13 9 9 Dec. 20 3.5-4.5 3.5 1980—Feb. 15 12-13 13 Nov. 71 8.5-9 8.5 24 3.5 3.5 19 13 13 76 8.5 8.5 May 29 12-13 13 Dec. 74 8 8 1992—July 2 3-3.5 3 30 12 12 7 3 3 June 13 11-12 11 1985-——MMaayy 70 7.5-8 7.5 16 11 11 74 7.5 7.5 29 10 10 IInn eeffffeecctt MMaarr.. 33,, 11999944 3 3 July 28 10-11 10 1986-—Mar. 7 7-7.5 7 Sept. 26 11 11 10 7 7 Nov. 17 12 12 Apr. 71 6.5-7 6.5 Dec. 5 12-13 13 July 11 6 6 1. Available on a short-term basis to help depository institutions meet tempo- ordinarily is charged on extended-credit loans outstanding less than thirty days; rary needs for funds that cannot be met through reasonable alternative sources. however, at the discretion of the Federal Reserve Bank, this time period may be The highest rate established for loans to depository institutions may be charged on shortened. Beyond this initial period, a flexible rate somewhat above rates on adjustment-credit loans of unusual size that result from a major operating problem market sources of funds is charged. The rate ordinarily is reestablished on the first at the borrower's facility. business day of each two-week reserve maintenance period, but it is never less 2. Available to help relatively small depository institutions meet regular than the discount rate applicable to adjustment credit plus 50 basis points. seasonal needs for funds that arise from a clear pattern of intrayearly movements 4. For earlier data, see the following publications of the Board of Governors: in their deposits and loans and that cannot be met through special industry Banking and Monetary Statistics, 1914-1941, and 1941-1970; and the Annual lenders. The discount rate on seasonal credit takes into account rates on market Statistical Digest, 1970-1979. sources of funds and ordinarily is reestablished on the first business day of each In 1980 and 1981, the Federal Reserve applied a surcharge to short-term two-week reserve maintenance period; however, it is never less than the discount adjustment-credit borrowings by institutions with deposits of $500 million or more rate applicable to adjustment credit. that had borrowed in successive weeks or in more than four weeks in a calendar 3. May be made available to depository institutions when similar assistance is quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7, not reasonably available from other sources, including special industry lenders. 1980. A surcharge of 2 percent was reimposed on Nov. 17, 1980; the surcharge Such credit may be provided when exceptional circumstances (including sus- was subsequently raised to 3 percent on Dec. 5, 1980, and to 4 percent on May 5, tained deposit drains, impaired access to money market funds, or sudden 1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981, and to 2 deterioration in loan repayment performance) or practices involve only a partic- percent effective Oct. 12, 1981. As of Oct. 1, 1981, the formula for applying the ular institution, or to meet the needs of institutions experiencing difficulties surcharge was changed from a calendar quarter to a moving thirteen-week period. adjusting to changing market conditions over a longer period (particularly at times The surcharge was eliminated on Nov. 17, 1981. of deposit disintermediation). The discount rate applicable to adjustment credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Requirement TTyyppee ooff ddeeppoossiitt22 Percentage of Effective date deposits Net transaction accounts3 1 $0 million-$51.9 million 33333 1111122222/////2222211111/////9999933333 2 More than $51.9 million4 1111100000 1111122222/////2222211111/////9999933333 00000 1111122222/////2222277777/////9999900000 00000 1111122222/////2222277777/////9999900000 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. 21, foreign banks, and Edge Act corporations. 1993, for institutions reporting quarterly and weekly, the amount was increased 2. The Garn-St Germain Depository Institutions Act of 1982 (Public Law from $46.8 million to $51.9 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 institution be subject to a zero percent reserve requirement. The Board is to adjust Apr. 2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for the amount of reservable liabilities subject to this zero percent reserve require- institutions that report quarterly. ment each year for the succeeding calendar year by 80 percent of the percentage 5. For institutions that report weekly, the reserve requirement on nonpersonal increase in the total reservable liabilities of all depository institutions, measured time deposits with an original maturity of less than 1V2 years was reduced from 3 on an annual basis as of June 30. No corresponding adjustment is to be made in percent to \Vi percent for the maintenance period that began Dec. 13, 1990, and the event of a decrease. On Dec. 21, 1993, the exemption was raised from $3.8 to zero for the maintenance period that began Dec. 27, 1990. The reserve million to $4.0 million. The exemption applies in the following order: (1) net requirement on nonpersonal time deposits with an original maturity of 1 Vi years negotiable order of withdrawal (NOW) accounts (NOW accounts less allowable or more has been zero since Oct. 6, 1983. deductions); and (2) net other transaction accounts. The exemption applies only to For institutions that report quarterly, the reserve requirement on nonpersonal accounts that would be subject to a 3 percent reserve requirement. time deposits with an original maturity of less than 1 Vi years was reduced from 3 3. Include all deposits against which the account holder is permitted to make percent to zero on Jan. 17, 1991. withdrawals by negotiable or transferable instruments, payment orders of with- 6. The reserve requirement on Eurocurrency liabilities was reduced from 3 drawal, and telephone and preauthorized transfers in excess of three per month percent to zero in the same manner and on the same dates as 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 IV2 years (see note 4). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Nonfinancial Statistics • April 1994 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 1993 TTyyppee ooff ttrraannssaaccttiioonn aanndd mmaattuurriittyy 11999911 11999922 11999933 June July Aug. Sept. Oct. Nov. Dec. U.S. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 20,158 14,714 17,737 7,280 0 902 366 1,396 5,931 1,394 2 Gross sales 120 1,628 0 0 0 0 0 0 0 0 3 Exchanges 277,314 308,699 328,829 24,821 35,943 27,775 31,128 25,783 27,641 30,836 4 Redemptions 1,000 1,600 468 0 0 0 0 468 0 0 Others within one year 5 Gross purchases 3,043 1,096 1,223 0 0 100 411 0 0 189 6 Gross sales 0 0 0 0 0 0 0 0 0 0 7 Maturity shifts 24,454 36,662 0 4,002 0 1,497 3,074 913 5,158 2,910 8 Exchanges -28,090 -30,543 0 -2,152 0 -5,491 -1,861 -1,566 -7,641 -2,910 9 Redemptions 1,000 0 0 0 0 0 0 0 0 0 One to five years 10 Gross purchases 6,583 13,118 10,350 0 200 1,100 2,400 0 100 2,619 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shifts -21,211 -34,478 -27,140 -4,002 .666 -834 -3,074 -31 -4,689 -2,910 13 Exchanges 24,594 25,811 0 2,152 0 3,866 1,861 1,566 5,341 2,910 Five to ten years 14 Gross purchases 1,280 2,818 4,168 0 0 500 797 0 0 1,008 15 Gross sales 0 0 0 0 0 0 0 0 0 0 16 Maturity shifts -2,037 -1,915 0 0 -666 -432 0 -882 -272 0 17 Exchanges 2,894 3,532 0 0 0 1,100 0 0 2,300 0 More than ten years 18 Gross purchases 375 2,333 3,457 0 0 100 717 0 0 826 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shifts -1,209 -269 0 0 0 -231 0 0 -197 0 21 Exchanges 600 1,200 0 0 0 525 0 0 0 0 All maturities 22 Gross purchases 31,439 34,079 36,935 7,280 200 2,702 4,691 1,396 6,031 6,035 23 Gross sales 120 1,628 0 0 0 0 0 0 0 0 24 Redemptions 1,000 1,600 468 0 0 0 0 468 0 0 Matched transactions 25 Gross sales 1,570,456 1,482,467 1,475,085 111,726 115,504 136,037 124,898 115,160 109,941 137,645 26 Gross purchases 1,571,534 1,480,140 1,475,941 113,095 117,074 135,705 122,578 112,837 112,772 136,821 Repurchase agreements 27 Gross purchases 310,084 378,374 475,447 53,051 41,190 53,053 62,905 27,693 38,493 33,751 28 Gross sales 311,752 386,257 470,723 43,342 56,246 48,263 61,399 30,397 34,072 29,577 29 Net change in U.S. Treasury securities 29,729 20,642 42,047 18,357 -13,286 7,160 3,878 -4,099 13,283 9,386 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 0 0 0 0 0 0 0 0 0 0 31 Gross sales 5 0 0 0 0 0 0 0 0 0 32 Redemptions 292 632 1,072 22 366 125 35 70 15 81 Repurchase agreements 33 Gross purchases 22,807 14,565 35,063 2,968 3,479 2,485 9,810 3,812 2,841 2,211 34 Gross sales 23,595 14,486 34,669 2,019 4,428 2,415 7,734 5,509 2,861 1,615 35 Net change in federal agency obligations -1,085 -554 -678 927 -1,315 -55 2,041 -1,767 -35 515 36 Total net change in System Open Market Account 28,644 20,089 41,368 19,284 -14,601 7,105 5,919 -5,866 13,248 9,901 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 1994 1993 1994 Dec. 29 Jan. 5 Jan. 12 Jan. 19 Jan. 26 Nov. 30 Dec. 31 Jan. 31 Consolidated condition statement ASSETS 1 Gold certificate account 11,053 11,054 11,053 11,053 11,053 11,054 11,053 11,053 2 Special drawing rights certificate account 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 3 Coin 358 358 380 400 418 372 372 439 Loans 4 To depository institutions 47 1,233 14 36 28 55 94 122 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 4,638 4,522 4,522 4,522 4,437 4,719 4,638 4,437 8 Held under repurchase agreements 885 639 0 859 0 429 1,025 519 9 Total U.S. Treasury securities 344,321 337,614 332,913 340,091 334,706 334,817 344,202 340,652 10 Bought outright2 332,903 334,304 332,913 332,301 334,706 326,804 332,015 331,995 11 Bills 161,255 162,657 161,265 161,269 163,674 159,798 160,368 160,963 12 Notes 132,076 132,076 132,076 131,460 131,460 128,453 132,076 131,460 13 Bonds 39,572 39,572 39,572 39,572 39,572 38,553 39,572 39,572 14 Held under repurchase agreements 11,418 3,310 0 7,790 0 8,013 12,187 8,657 15 Total loans and securities 349,891 344,008 337,449 345,508 339,171 340,020 349,960 345,729 16 Items in process of collection 5,607 7,594 6,356 16,115 8,593 7,808 6,454 4,326 17 Bank premises 1,054 1,055 1,056 1,055 1,054 1,050 1,055 1,054 Other assets 18 Denominated in foreign currencies 22,550 22,345 22,362 22,372 22,391 22,443 22,340 22,336 19 All other4 10,048 8,963 9,057 9,642 9,360 7,692 9,999 10,550 20 Total assets 408,578 403,395 395,730 414,163 400,059 398,458 409,251 403,505 LIABILITIES 21 Federal Reserve notes 345,878 344,213 342,351 341,865 340,209 338,456 343,925 339,575 22 Total deposits 48,036 43,857 38,561 54,337 45,010 43,277 50,543 52,284 23 Depository institutions 42,097 36,633 33,997 46,354 35,210 36,050 34,951 30,232 24 U.S. Treasury—General account 5,407 6,736 4,093 7,450 9,184 6,334 14,809 21,541 25 Foreign—Official accounts 286 263 171 235 327 5% 386 257 26 Other 245 224 299 297 287 297 397 255 27 Deferred credit items 5,048 5,919 5,359 8,209 5,243 7,165 5,491 1,887 28 Other liabilities and accrued dividends 2,533 2,389 2,353 2,621 2,450 2,514 2,489 2,462 29 Total liabilities 401,495 396,377 388,625 407,031 392,912 391,411 402,449 396,208 CAPITAL ACCOUNTS 30 Capital paid in 3,377 3,402 3,402 3,402 3,403 3,367 3,401 3,404 31 Surplus 3,054 3,388 3,401 3,401 3,401 3,054 3,401 3,401 32 Other capital accounts 652 228 302 329 342 626 0 492 33 Total liabilities and capital accounts 408,578 403,395 395,730 414,163 400,059 398,458 409,251 403,505 MEMO 34 Marketable U.S. Treasury securities held in custody for foreign and international accounts 348,827 351,034 350,916 356,291 356,660 346,718 350,906 358,003 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to Banks) 409,832 408,921 409,691 410,424 410,524 405,827 409,265 410,368 36 LESS: Held by Federal Reserve Banks 63,954 64,708 67,339 68,559 70,316 67,371 65,339 70,793 37 Federal Reserve notes, net 345,878 344,213 342,351 341,865 340,209 338,456 343,925 339,575 Collateral held against notes, net: 38 Gold certificate account 11,053 11,054 11,053 11,053 11,053 11,054 11,053 11,053 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 326,806 325,141 323,280 322,793 321,138 319,384 324,854 320,504 42 Total collateral 345,878 344,213 342,351 341,865 340,209 338,456 343,925 339,575 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 • April 1994 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holding Millions of dollars Wednesday End of month TTTyyypppeee ooofff hhhooollldddiiinnnggg aaannnddd mmmaaatttuuurrriiitttyyy 1993 1994 1993 1994 Dec. 29 Jan. 5 Jan. 12 Jan. 19 Jan. 26 Nov. 30 Dec. 31 Jan. 31 1 Total loans 47 1,232 14 36 28 56 94 122 2 Within fifteen days' 47 1,228 8 36 28 31 93 121 3 Sixteen days to ninety days 0 4 6 0 0 25 11 11 4 Ninety-one days to one year 0 0 0 0 0 0 00 00 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 344,321 337,614 332,913 340,091 334,706 326,804 332,015 331,995 10 Within fifteen days' 30,068 21,329 16,802 20,949 19,139 6,211 9,262 12,028 11 Sixteen days to ninety days 72,356 74,877 78,140 77,784 74,237 84,677 81,344 79,687 12 Ninety-one days to one year 106,153 105,184 101,746 105,644 105,617 104,601 105,184 104,666 13 One year to five years 79,346 79,826 79,826 80,091 80,091 76,750 79,826 79,992 14 Five years to ten years 24,659 24,659 24,659 23,884 23,884 23,651 24,659 23,884 15 More than ten years 31,739 31,739 31,739 31,739 31,739 30,913 31,739 31,739 16 Total federal agency obligations 5,523 5,161 4,522 5,381 4,437 4,719 4,638 4,437 17 Within fifteen days' 1,065 639 85 1,049 105 290 180 105 18 Sixteen days to ninety days 565 775 805 700 754 498 565 754 19 Ninety-one days to one year 1,078 1,048 960 960 969 1,127 1,078 969 20 One year to five years 2,105 2,105 2,078 2,078 2,016 2,074 2,105 2,016 21 Five years to ten years 569 569 569 569 567 589 569 567 22 More than ten years 142 25 25 25 25 142 142 25 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 1993 1994 11999900 11999911 11999922 11999933 IItteemm DDeecc.. DDeecc.. DDeecc.. DDeecc..rr June July Aug. Sept. Oct. Nov. Dec.r Jan. Seasonally adjusted AADDJJUUSSTTEEDD FFOORR CCHHAANNGGEESS IINN RREESSEERRVVEE RREEQQUUIIRREEMMEENNTTSS22 11 TToottaall rreesseerrvveess33 41.77 45.53 54.35 60.54 57.12 57.57 58.03 58.84 59.82 60.46 60.54 60.56 22 NNoonnbboorrrroowweedd rreesseerrvveess 41.44 45.34 54.23 60.45 56.94 57.32 57.68 58.41 59.53 60.37 60.45 60.48 33 NNoonnbboorrrroowweedd rreesseerrvveess pplluuss eexxtteennddeedd ccrreeddiitt 41.46 45.34 54.23 60.45 56.94 57.32 57.68 58.41 59.53 60.37 60.45 60.48 44 RReeqquuiirreedd rreesseerrvveess 40.10 44.56 53.20 59.47 56.21 56.48 57.08 57.75 58.73 59.36 59.47 59.11 55 MMoonneettaarryy bbaassee 293.16r 317.12r 350.63r 385.90 368.27r 371.32r 374.37r 378.08r 381.44r 384.16r 385.90 389.57 Not seasonally adjusted 6 Total reserves 43.07 46.98 56.06 62.41 56.96 57.42 57.38 58.69 59.53 60.73 62.41 62.03 7 Nonborrowed reserves 42.74 46.78 55.93 62.33 56.78 57.17 57.03 58.26 59.24 60.64 62.33 61.96 8 Nonborrowed reserves plus extended credit . 42.77 46.78 55.93 62.33 56.78 57.17 57.03 58.26 59.24 60.64 62.33 61.96 9 Required reserves 41.40 46.00 54.90 61.35 56.05 56.33 56.43 57.60 58.44 59.62 61.35 60.59 10 Monetary base 296.68 321.07 354.55 390.62 368.73 372.02 374.10 377.75 380.83r 384.32r 390.62 391.00 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS" 11 Total reserves11 59.12 55.53 56.54 62.86 57.24 57.75 57.77 59.14 60.04 61.30 62.86 62.07 12 Nonborrowed reserves 58.80 55.34 56.42 62.78 57.06 57.51 57.42 58.71 59.75 61.21 62.78 62.00 13 Nonborrowed reserves plus extended credit . 58.82 55.34 56.42 62.78 57.06 57.51 57.42 58.71 59.75 61.21 62.78 62.00 14 Required reserves 57.46 54.55 55.39 61.80 56.33 56.66 56.82 58.05 58.95 60.20 61.80 60.62 15 Monetary base 313.70 333.61 360.90 397.62 375.19 378.48 380.53 384.25 387.51 391.14r 397.62 397.89 16 Excess reserves 1.66 .98 1.16 1.06 .91 1.09 .95 1.09 1.09 1.10 1.06 1.45 17 Borrowings from the Federal Reserve .33 .19 .12 .18 .24 .35 .43 .29 .09 .08 .07 1. Latest monthly and biweekly figures are available from the Board's H.3 (502) what required reserves would have been in past periods had current reserve weekly statistical release. Historical data and estimates of the impact on required requirements been in effect. Break-adjusted required reserves include required reserves of changes in reserve requirements are available from the Monetary and reserves against transactions deposits and nonpersonal time and savings deposits Reserves Projections Section, Division of Monetary Affairs, Board of Governors (but not reservable nondeposit liabilities). of the Federal Reserve System, Washington, DC 20551. 9. The break-adjusted monetary base equals (1) break-adjusted total reserves 2. Figures reflect adjustments for discontinuities, or "breaks," associated with (line 6), plus (2) the (unadjusted) currency component of the money stock, plus (3) regulatory changes in reserve requirements. (See also table 1.10) (for all quarterly reporters on the "Report of Transaction Accounts, Other 3. Seasonally adjusted, break-adjusted total reserves equal seasonally Deposits and Vault Cash" and for all 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 • April 1994 1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES1 Billions of dollars, averages of daily figures 1993r 1994 IItteemm D 19 e 9 c 0 .r D 19 e 9 c 1 .r D 19 e 9 c 2 .r D 19 e 9 c 3 .r Oct. Nov. Dec. Jan. Seasonally adjusted Measures2 1 Ml 826.4 897.7 1,024.8 1,128.5 1,113.4 1,122.4 1,128.5 1,133.6 2 M2 3,353.0 3,455.3 3,509.0 3,565.8 3,547.3 3,558.8 3,565.8 3,572.4 i M3 4,125.7 4,180.4 4,183.0 4,228.1 4,203.2 4,216.1 4,228.1 4,231.8 4 L 4,974.8 4,992.9 5,057.1 5,130.6 5,095.9 5,107.5 5,130.6 n.a. 5 Debt 10,670.1 11,145.5 11,721.1 12,316.8 12,177.4 12,239.5 12,316.8 n.a. Ml components 6 Currency 246.7 267.1 292.2 321.4 317.6 319.5 321.4 325.3 7 Travelers checks 7.8 7.7 8.1 7.9 7.8 7.9 7.9 7.9 8 Demand deposits 277.9 290.0 339.6 384.9 378.4 383.2 384.9 388.5 9 Other checkable deposits 294.0 332.8 384.9 414.3 409.5 411.8 414.3 412.0 Nontransaction components 10 In M2 2,526.6 2,557.6 2,484.3 2,437.3 2,433.9 2,436.4 2,437.3 2,438.8 11 In M3 772.7 725.2 674.0 662.3 655.9 657.3 662.3 659.3 Commercial banks 12 Savings deposits, iincluding MMDAs 582.1 665.5 754.6 785.3 778.4 782.4 785.3 790.1 13 Small time deposits 611.3 602.9 508.7 468.6 472.4 469.5 468.6 465.6 14 Large time deposits 1 368.6 342.4 292.8 277.5 278.2 276.3 277.5 279.6 Thrift institutions 15 Savings deposits, including MMDAs 338.3 375.6 429.0 430.2 430.4 429.5 430.2 430.2 16 Small time deposits 563.2 464.5 361.8 316.1 322.8 320.3 316.1 314.0 17 Large time deposits 120.9 83.4 67.5 61.7 63.7 63.5 61.7 61.9 Money market mutual funds 18 General purpose and broker-dealer 355.5 370.4 352.0 349.9 344.8 347.8 349.9 348.9 19 Institution-only 135.0 181.0 201.5 197.0 194.3 194.8 197.0 192.7 Debt components 20 Federal debt 2,490.7 2,763.8 3,068.4 3,327.6 3,266.3 3,291.2 3,327.6 n.a. 21 Nonfederal debt 8,179.4 8,381.7 8,652.7 8,989.2 8,911.1 8,948.3 8,989.2 n.a. Not seasonally adjusted Measures2 22 Ml 843.8 916.7 1,046.7 1,153.9 1,111.8 1.129.6 1,153.9 1,142.9 23 M2 3,366.0 3,470.4 3,527.6 3.588.4 3.545.3 3,567.5 3.588.4 3,579.1 24 M3 4,135.5 4,191.9 4,198.2 4.247.5 4,197.7 4.227.7 4.247.5 4,232.6 25 L 4,997.2 5,018.0 5,087.6 5.165.6 5.088.4 5,128.7 5.165.6 n.a. 26 Debt 10,667.7 11,144.6 11,722.0 12,317.3 12,150.4 12,229.8 12,317.3 n.a. Ml components 27 Currency3 249.5 269.9 295.0 324.9 317.3 319.8 324.9 324.0 28 Travelers checks4 7.4 7.4 7.8 7.6 8.0 7.7 7.6 7.7 29 Demand deposits 289.9 303.1 355.1 402.7 381.2 391.2 402.7 393.3 30 Other checkable deposits 297.0 336.3 388.9 418.6 405.3 410.9 418.6 417.9 Nontransaction components 31 In M2 2,522.3 2,553.7 2,480.9 2,434.5 2,433.5 2,437.8 2,434.5 2,436.2 32 In M38 769.5 721.6 670.5 659.1 652.3 660.2 659.1 653.5 Commercial banks 33 Savings deposits, including MMDAs 580.8 ' 664.0 752.9 783.8 777.7 784.0 783.8 786.1 34 Small time deposits9.. 610.5 601.9 507.8 467.6 473.3 468.8 467.6 465.7 35 Large time deposits 1 367.7 341.3 291.7 276.4 277.9 276.6 276.4 276.6 Thrift institutions 36 Savings deposits, including MMDAs 337.6 374.8 428.1 429.3 430.0 430.4 429.3 428.0 37 Small time deposits 562.4 463.8 361.2 315.4 323.4 319.8 315.4 314.0 38 Large time deposits 120.6 83.1 67.2 61.4 63.7 63.5 61.4 61.2 Money market mutual funds 39 General purpose and broker-dealer 353.8 368.5 350.2 348.3 341.1 345.8 348.3 349.3 40 Institution-only 134.7 180.4 200.4 195.8 189.2 194.0 195.8 196.2 Repurchase agreements and Eurodollars 41 Overnight 77.3 80.6 80.7 90.1 88.1 89.1 90.1 93.1 42 Term 158.3 130.1 126.7 141.2 139.2 142.8 141.2 134.8 Debt components 43 Federal debt 2,491.3 2,765.0 3,069.8 3,329.5 3,249.4 3,287.0 3,329.5 n.a. 44 Nonfederal debt 8,176.3 8,379.7 8,652.2 8,987.8 8,901.0 8,942.8 8,987.8 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 nonflnancial 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) nonflnancial sectors. Private debt consists of corporate bonds, mortgages, condemand deposits at all commercial banks other than those owed to depository sumer credit (including bank loans), other bank loans, commercial paper, bankers institutions, the U.S. government, and foreign banks and official institutions, less acceptances, and other debt instruments. Data are derived from the Federal cash items in the process of collection and Federal Reserve float, and (4), other Reserve Board's flow of funds accounts. Debt data are based on monthly checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW) averages. This sum is seasonally adjusted as a whole. and automatic transfer service (ATS) accounts at depository institutions, credit 3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of union share draft accounts, and demand deposits at thrift institutions. Seasonally depository institutions. adjusted Ml is computed by summing currency, travelers checks, demand 4. Outstanding amount of U.S. dollar-denominated travelers checks of nondeposits, and OCDs, each seasonally adjusted separately. bank issuers. Travelers checks issued by depository institutions are included in M2: Ml plus (1) overnight (and continuing-contract) repurchase agreements demand deposits. (RPs) issued by all depository institutions and overnight Eurodollars issued to 5. Demand deposits at commercial banks and foreign-related institutions other U.S. residents by foreign branches of U.S. banks worldwide, (2) savings (includ- than those owed to depository institutions, the U.S. government, and foreign ing MMDAs) and small time deposits (time deposits—including retail RPs—in banks and official institutions, less cash items in the process of collection and amounts of less than $100,000), and (3) balances in both taxable and tax-exempt Federal Reserve float. general-purpose and broker-dealer money market funds. Excludes individual 6. Consists of NOW and ATS account balances at all depository institutions, retirement accounts (IRAs) and Keogh balances at depository institutions and credit union share draft account balances, and demand deposits at thrift institumoney market funds. Also excludes all balances held by U.S. commercial banks, tions. money market funds (general purpose and broker-deader), foreign governments 7. Sum of (1) overnight RPs and overnight Eurodollars, (2) money market fund and commercial banks, and the U.S. government. Seasonally adjusted M2 is balances (general purpose and broker-dealer), (3) savings deposits (including computed by adjusting its non-Mi component as a whole and then adding this MMDAs), and (4) small time deposits. result to seasonally adjusted Ml. 8. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S. M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of residents, and (4) money market fund balances (institution-only), less (5) a $100,000 or more) issued by all depository institutions, (2) term Eurodollars held consolidation adjustment that represents the estimated amount of overnight RPs by U.S. residents at foreign branches of U.S. banks worldwide and at all banking and Eurodollars held by institution-only money market funds. offices in the United Kingdom and Canada, and (3) balances in both taxable and 9. Small time deposits—including retail RPs—are those issued in amounts of tax-exempt, institution-only money market funds. Excludes amounts held by less than $100,000. All IRAs and Keogh accounts at commercial banks and thrift depository institutions, the U.S. government, money market funds, and foreign institutions are subtracted from small time deposits. banks and official institutions. Also excluded is the estimated amount of overnight 10. Large time deposits are those issued in amounts of $100,000 or more, RPs and Eurodollars held by institution-only money market funds. Seasonally excluding those booked at international banking facilities. adjusted M3 is computed by adjusting its non-M2 component as a whole and then 11. Large time deposits at commercial banks less those held by money market adding this result to seasonally adjusted M2. funds, depository institutions, U.S. government, and foreign banks and official L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term institutions. Treasury securities, commercial paper, and bankers acceptances, net of money Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic NonfinancialS tatistics • April 1994 1.22 DEPOSIT INTEREST RATES AND AMOUNTS OUTSTANDING Commercial and BIF-insured saving banks1 1993 1994 1991 1992 Dec. Dec. May June July Aug. Sept. Oct. Nov. Dec.r Jan. Interest rates (annual effective yields) INSURED COMMERCIAL BANKS 1 Negotiable order of withdrawal accounts ... 3.76 2.33 2.12 2.09 2.06 2.01 1.96 1.92 1.89 1.86 1.85 2 Savings deposits 4.30 2.88 2.65 2.61 2.59 2.55 2.51 2.49 2.48 2.46 2.46 Interest-bearing time deposits with balances of less than $100,000, by maturity 3 7 to 91 days 4.18 2.90 2.70 2.68 2.67 2.66 2.63 2.63 2.64 2.65 2.65 4 92 to 182 days 4.41 3.16 2.97 2.97 2.97 2.% 2.92 2.91 2.92 2.91 2.91 5 183 days to 1 year 4.59 3.37 3.18 3.19 3.18 3.17 3.13 3.11 3.13 3.13 3.15 6 More than 1 year to 2 Vi years 4.95 3.88 3.64 3.65 3.64 3.63 3.55 3.54 3.54 3.55 3.57 7 More than 2Vi years 5.52 4.77 4.47 4.44 4.43 4.40 4.28 4.27 4.28 4.29 4.31 BIF-INSURED SAVINGS BANKS3 8 Negotiable order of withdrawal accounts ... 4.44 2.45 2.20 2.13 2.09 2.07 2.01 1.98 1.95 1.87 1.89 9 Savings deposits 4.97 3.20 2.93 2.88 2.83 2.80 2.73 2.68 2.65 2.63 2.62 Interest-bearing time deposits with balances of less than $100,000, by maturity 10 7 to 91 days 4.68 3.13 2.87 2.86 2.80 2.79 2.76 2.75 2.73 2.70 2.69 11 92 to 182 days 4.92 3.44 3.19 3.17 3.15 3.12 3.05 3.05 3.03 3.02 3.03 12 183 days to 1 year 4.99 3.61 3.45 3.44 3.40 3.37 3.33 3.34 3.32 3.31 3.33 13 More than 1 year to 2Vl years 5.23 4.02 3.76 3.79 3.72 3.73 3.69 3.68 3.69 3.66 3.73 14 More than 2 Vi years 5.98 5.00 4.79 4.75 4.73 4.73 4.62 4.57 4.60 4.62 4.61 Amounts outstanding (millions of dollars) INSURED COMMERCIAL BANKS 15 Negotiable order of withdrawal accounts ... 244,637 286,541 283,860 287,555 284,4% 287,675 286,056 289,813 297,329 305,223 293,816 16 Savings deposits 652,058 738,253 753,452 754,790 757,716 761,919 758,835 765,372 770,609 766,413 771,592 17 Personal 508,191 578,757 591,231 592,545 593,448 593,318 592,028 595,715 598,200 597,838 605,718 18 Nonpersonal 143,867 159,496 162,221 162,245 164,268 168,601 166,807 169,657 172,408 168,575 165,873 Interest-bearing time deposits with balances of less than $100,000, by maturity 19 7 to 91 days 47,094 38,474 33,213 31,743 30,803 30,017 30,384 30,022 29,730 29,455 29,441 20 92 to 182 days 158,605 127,831 119,096 114,846 112,497 109,603 108,574 108,504 109,228 110,069 108,200 21 183 days to 1 year 209,672 163,098 157,559 156,549 156,431 155,074 152,501 149,758 147,334 146,565 143,567 22 More than 1 year to 2Vi years 171,721 152,977 144,330 144,804 143,605 141,377 139,406 139,042 139,315 141,223 142,422 23 More than 2 Vl years 158,078 169,708 179,761 179,297 180,983 181,762 184,414 183,790 180,972 181,528 182,183 24 IRA/Keogh Plan deposits 147,266 147,350 146,450 146,523 146,196 145,955 145,636 144,776 145,002 143,985 143,791 BIF-INSURED SAVINGS BANKS3 25 Negotiable order of withdrawal accounts 9,624 10,871 10,000 10,313 10,457 10,468 10,471 10,548 10,852 11,151 10,803 26 Savings deposits 71,215 81,786 77,352 77,495 78,390 78,387 78,182 77,995 77,948 80,115 78,657 27 Personal 68,638 78,695 74,376 74,569 75,049 75,153 74,978 74,737 74,664 77,035 75,442 28 Nonpersonal 2,577 3,091 2,976 2,926 3,341 3,234 3,204 3,258 3,284 3,079 3,215 Interest-bearing time deposits with balances of less than $100,000, by maturity 29 7 to 91 days 4,146 3,867 3,103 3,022 2,871 2,928 2,886 2,839 2,778 2,793 2,736 30 92 to 182 days 21,686 17,345 14,129 13,808 13,773 13,525 13,261 13,131 12,926 12,946 13,090 31 183 days to 1 year 29,715 21,780 18,520 18,427 18,454 18,143 17,798 17,441 17,178 17,426 17,413 32 More than 1 year to 2Vi years 25,379 18,442 16,155 15,972 16,250 16,200 16,161 16,124 15,995 16,546 16,279 33 More than 2Vi years 18,665 18,845 18,725 18,989 19,229 19,331 19,610 19,657 19,645 20,464 20,625 34 IRA/Keogh Plan accounts 23,007 21,713 19,861 19,855 19,920 19,802 19,766 19,601 19,382 19,356 19,244 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 1993 June July* Aug.* Sept.* Oct.* Nov. DEBITS Seasonally adjusted Demand deposits3 1 All insured banks 277,151.7r 277,763.7r 315,812.2* 335,338.0* 330,668.5 333,750.6 360,304.3 327,497.9 360,492.1 2 Major New York City banks 131,695.5r 137,352.9* 165,573.5* 170,268.7* 166,663.8 169,093.8 185,675.0 166,671.1 187,185.5 3 Other banks 145,456.2r 140,410.8* 150,238.7* 165,069.3* 164,004.7 164,656.8 174,629.3 160,826.8 173,306.7 4 Other checkable deposits4 3,348.8r 3,645.5 3,788.1 3,616.4* 3,365.4 3,441.4 3,490.8 3,302.4 3,590.9 5 Savings deposits (including MMDAs)5 3,483.4r 3,266.1 3,331.5* 3,633.9* 3,634.3 3,500.3 3,734.0 3,398.3 3,782.3 DEPOSIT TURNOVER Demand deposits3 6 All insured banks 797.9r 803.5 832.4 791.8* 777.7 769.0 824.3 729.8 796.3 7 Major New York City banks 3,819.6r 4,270.7* 4,797.6* 4,195.6* 4,293.9 4,040.3 4,254.4 3,907.6 4,249.4 8 Other banks 464.9 447.9 435.9 431.1 424.5 419.9 443.8 396.0 424.1 9 Other checkable deposits4 16.5 16.2 14.4 12.3 11.4 11.6 11.7 11.0 11.9 10 Savings deposits (including MMDAs) 6.2 5.3 4.7 4.7 4.7 4.5 4.8 4.4 4.9 DEBITS Not seasonally adjusted Demand deposits3 11 All insured banks 277,290.5 277,715.4 315,808.2 345,368.7 332,888.4 342,539.4 347,849.8 335,861.9 344,003.5 12 Major New York City banks 131,784.7 137,307.2 165,595.0 176,874.8 168,018.4 174,674.7 179,869.7 172,675.6 180,990.2 13 Other banks 145,505.8 140,408.3 150,213.3 168,493.9 164,870.1 167,864.7 167,980.2 163,186.3 163,013.3 14 Other checkable deposits4 3,346.7 3,645.6 3,788.1 3,645.9 3,290.8 3,369.1 3,493.3 3,293.5 3,335.8 15 Savings deposits (including MMDAs) 3,483.0 3,267.7 3,329.0 3,758.1 3,643.7 3,529.6 3,536.4 3,328.6 3,497.3 DEPOSIT TURNOVER Demand deposits3 16 All insured banks 798.2 803.4 832.5 818.3 778.0 802.5 798.5 748.5 753.2 17 Major New York City banks 3,825.9 4,274.3 4,803.5 4,412.6 4,280.6 4,307.8 4,196.6 4,059.2 4,129.6 18 Other banks 465.0 447.9 436.0 441.1 424.3 434.6 427.7 401.8 394.8 19 Other checkable deposits4 16.4 16.2 14.4 12.5 11.3 11.5 11.8 11.1 11.1 20 Savings deposits (including MMDAs) 6.2 5.3 4.7 4.9 4.8 4.6 4.6 4.3 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 • April 1994 1.24 LOANS AND SECURITIES All Commercial Banks1 Billions of dollars, averages of Wednesday figures 1993 1994 IItteemm Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Seasonally adjusted 1 Total loans, leases, and securities2 . 2,943.9 2,960.2 2,970.9 2,991.2 3,014.1 3,037.4 3,046.6 3,057.3r 3,056.9* 3,072.9* 3,087.7* 3,095.5 2 U.S. government securities 666.2 680.2 691.0 693.5 704.3 708.2 714.8 720.7r 718.9* 720.5* 727.9* 726.1 3 Other securities 176.4 179.0 181.0 181.2 179.6 181.5 182.4 182.6 180.3* 180.5* 181.4* 187.0 4 Total loans and leases2 2,101.3 2,101.0 2,098.9 2,116.5 2,130.3 2,147.8 2,149.5r 2,153.9 2,157.7* 2,171.9* 2,178.5* 2,182.4 5 Commercial and industrial ..... 596.7 593.1 587.5 589.9 590.9 590.2 589.6 586.2 585.7 585.5* 584.2 590.6 6 Bankers acceptances held ... 8.4 8.5 8.5 9.0 8.8 9.2 9.6 8.8 9.5 9.0 8.8 9.2 7 Other commercial and industrial 588.3 584.6 579.0 580.9 582.1 581.0 580.0 577.3* 576.2 576.5 575.3* 581.4 8 U.S. addressees4. 578.8 574.9 569.7 571.2 572.8 571.5 570.4 567.4 566.5 566.4* 565.6* 571.4 9 Non-U.S. addressees 9.5 9.7 9.3 9.7 9.4 9.6 9.6 9.9 9.7 10.2 9.7 10.0 10 Real estate 890.1 891.9 892.2 898.0 903.9* 907.7 910.8 914.7r 918.2* 921.8 927.4* 926.5 11 Individual 361.9 362.3 364.4 367.5 368.8 372.5 374.7 376.0 380.3 383.2 385.6 388.8 12 Security 62.8 64.2 62.3 68.6 71.4 81.6 79.9 82.7 79.5 87.0 86.0 78.1 13 Nonbank financial institutions 44.6 44.2 45.0 45.9 46.0 46.5 46.8 46.1 44.9 44.2 43.2 42.2 14 Agricultural 34.3 34.0 34.1 34.3 34.3 34.7 34.8 34.8 35.0 35.5 35.4 35.8 15 State and political subdivisions 23.8 23.6 23.1 23.0 22.8 22.8 22.7 22.4 22.2 21.8 21.6 21.3 16 Foreign banks 8.8 8.5 8.4 8.4 8.6 9.0 9.5 8.7 8.9 8.1 7.7 7.5 17 Foreign official institutions 3.2 3.2 3.2 3.1 3.2 3.2 3.1 3.4 3.5 3.3 3.3 3.8 18 Lease-financing receivables 30.6 30.6 30.7 30.9 31.3 31.6 31.7 31.8 32.1 32.5 32.8 33.0 19 All other loans 44.5 45.3 48.0 46.8 49.0 47.9 46.0 47.3 47.3 49.1 51.2* 54.8 Not seasonally adjusted 20 Total loans, leases, and securities2 . 2,946.7 2,963.9 2,972.5 2,986.2 3,013.9 3,025.6 3,038.3 3,054.1* 3,056.2* 3,080.2* 3,097.3* 3,098.1 21 U.S. government securities 669.8 685.9 692.8 692.5 702.0 703.5 713.1 718.3 716.6* 723.8* 726.5* 727.0 22 Other securities 176.6 178.7 180.4 180.7 179.1 180.4 182.2 182.2 180.6* 181.5* 181.5* 187.6 23 Total loans and leases2 2,100.3 2,099.3 2,099.3 2,113.0 2,132.8 2,141.8 2,142.9 2,153.6* 2,158.9* 2,174.9* 2,189.3* 2,183.5 24 Commercial and industrial ..... 595.9 596.3 590.4 591.6 592.7 589.2 585.9 582.6* 583.5* 585.8 586.9 589.0 25 Bankers acceptances held ... 8.8 8.6 8.3 8.9 8.6 8.9 9.3 8.6 9.3 9.3 9.2 9.4 26 Other commercial and industrial 587.1 587.7 582.1 582.7 584.1 580.3 576.6 574.0 574.2* 576.6* 577.7* 579.6 27 U.S. addressees4 577.5 578.2 572.7 573.0 573.9 570.4 566.8 564.2 564.7 567.0* 568.2 569.7 28 Non-U.S. addressees4 9.5 9.5 9.4 9.7 10.2 9.9 9.8 9.8 9.4 9.6 9.5 9.9 29 Real estate 888.3 889.3 891.1 898.0 904.3 908.0 911.6* 915.5 919.2* 923.3 928.7* 926.1 30 Individual 361.9 359.8 361.7 365.7 367.0 370.2 374.1 377.7* 380.7 384.1 390.4 393.2 31 Security 65.8 66.4 65.7 65.5 70.8 77.5 76.9 80.7 79.2 86.1 87.1 80.0 32 Nonbank financial institutions 44.5 43.9 44.4 45.3 46.6 46.2 46.6 45.4 44.5 44.5 45.1 42.4 33 Agricultural 32.9 32.7 33.3 34.0 34.8 35.6 35.9 36.2 36.0 35.6 35.2 34.9 34 State and political subdivisions 23.7 23.7 23.2 23.0 22.8 22.7 22.7 22.5 22.4 21.8 21.6 21.1 35 Foreign banks 8.6 8.2 8.1 8.2 8.4 9.1 9.2 8.8 9.2 8.5 8.2 7.5 36 Foreign official institutions 3.2 3.2 3.2 3.1 3.2 3.2 3.1 3.4 3.5 3.3 3.3 3.8 37 Lease-financing receivables .... 30.8 30.8 30.8 30.9 31.3 31.3 31.5 31.6 32.1 32.4* 32.7* 33.3 38 All other loans 44.6 45.0 47.5 47.6 51.0 48.8 45.4 49.0* 48.8 49.6 50.0* 52.1 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 banks, 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 1993 1994 SSoouurrccee ooff ffuunnddss Feb. Mar. Apr. May June Julyr Aug.r Sept/ Oct/ Nov/ Dec/ Jan. Seasonally adjusted 11111 TTTTToooootttttaaaaalllll nnnnnooooonnnnndddddeeeeepppppooooosssssiiiiittttt fffffuuuuunnnnndddddsssss22222 309.8 320.2 329.7 325.1 335.9 357.4 366.3 375.8 379.4 372.5 372.6 372.6 22222 NNNNNeeeeettttt bbbbbaaaaalllllaaaaannnnnccccceeeeesssss ooooowwwwweeeeeddddd tttttooooo rrrrreeeeelllllaaaaattttteeeeeddddd fffffooooorrrrreeeeeiiiiigggggnnnnn oooooffffffffffiiiiiccccceeeeesssss33333.......... 72.5 77.8 87.5 81.9 85.0 99.9 114.0 117.7 121.7 120.6 119.6 123.6 33333 BBBBBooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss fffffrrrrrooooommmmm ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn cccccooooommmmmmmmmmeeeeerrrrrccccciiiiiaaaaalllll bbbbbaaaaannnnnkkkkksssss iiiiinnnnn UUUUUnnnnniiiiittttteeeeeddddd SSSSStttttaaaaattttteeeeesssss44444 237.3 242.4 242.2 243.3 250.8 257.5 252.2 258.2 257.7 251.9 253.1 249.0 44444 DDDDDooooommmmmeeeeessssstttttiiiiicccccaaaaallllllllllyyyyy ccccchhhhhaaaaarrrrrttttteeeeerrrrreeeeeddddd bbbbbaaaaannnnnkkkkksssss 157.1 161.9 167.2 166.2 173.9 181.1 176.9 180.8 182.7 178.5 178.0 176.7 55555 FFFFFooooorrrrreeeeeiiiiigggggnnnnn-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaannnnnkkkkksssss 80.2 80.5 75.0 77.1 77.0 76.4 75.4 77.4 75.0 73.4 75.0 72.3 Not seasonally adjusted 66666 TTTTToooootttttaaaaalllll nnnnnooooonnnnndddddeeeeepppppooooosssssiiiiittttt fffffuuuuunnnnndddddsssss22222 314.1 325.1 325.8 329.8 334.9 351.1 361.1 370.5 382.0 378.7 372.8 371.2 77777 NNNNNeeeeettttt bbbbbaaaaalllllaaaaannnnnccccceeeeesssss ooooowwwwweeeeeddddd tttttooooo rrrrreeeeelllllaaaaattttteeeeeddddd fffffooooorrrrreeeeeiiiiigggggnnnnn oooooffffffffffiiiiiccccceeeeesssss .......... 74.4 78.5 84.6 84.0 83.1 96.6 110.3 115.3 122.9 122.3 123.7 126.2 88888 DDDDDooooommmmmeeeeessssstttttiiiiicccccaaaaallllllllllyyyyy ccccchhhhhaaaaarrrrrttttteeeeerrrrreeeeeddddd bbbbbaaaaannnnnkkkkksssss -10.6 -7.0 -9.4 -9.7 -15.3 -15.2 -13.7 -12.2 -7.0 -4.9 -2.8 3.2 99999 FFFFFooooorrrrreeeeeiiiiigggggnnnnn-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaannnnnkkkkksssss 84.9 85.5 94.0 93.7 98.4 111.9 123.9 127.6 129.8 127.3 126.5 123.0 1111100000 BBBBBooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss fffffrrrrrooooommmmm ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn cccccooooommmmmmmmmmeeeeerrrrrccccciiiiiaaaaalllll bbbbbaaaaannnnnkkkkksssss iiiiinnnnn UUUUUnnnnniiiiittttteeeeeddddd SSSSStttttaaaaattttteeeeesssss 239.7 246.5 241.3 245.8 251.8 254.4 250.9 255.2 259.1 256.4 249.1 245.0 1111111111 DDDDDooooommmmmeeeeessssstttttiiiiicccccaaaaallllllllllyyyyy ccccchhhhhaaaaarrrrrttttteeeeerrrrreeeeeddddd bbbbbaaaaannnnnkkkkksssss 158.8 164.8 165.1 167.8 173.6 177.3 175.6 179.4 184.1 183.6 176.9 173.3 1111122222 FFFFFeeeeedddddeeeeerrrrraaaaalllll fffffuuuuunnnnndddddsssss aaaaannnnnddddd ssssseeeeecccccuuuuurrrrriiiiitttttyyyyy RRRRRPPPPP bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss 155.6 161.4 161.6 164.0 169.8 173.1 171.5 175.1 179.6 178.9 172.3 168.3 1111133333 OOOOOttttthhhhheeeeerrrrr66666 3.2 3.3 3.5 3.8 3.8 4.3 4.0 4.4 4.5 4.7 4.6 5.0 1111144444 FFFFFooooorrrrreeeeeiiiiigggggnnnnn-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaannnnnkkkkksssss 80.9 81.8 76.2 78.0 78.2 77.1 75.3 75.7 75.0 72.8 72.2 71.7 MMMMMEEEEEMMMMMOOOOO GGGGGrrrrrooooossssssssss lllllaaaaarrrrrgggggeeeee tttttiiiiimmmmmeeeee dddddeeeeepppppooooosssssiiiiitttttsssss 1111155555 SSSSSeeeeeaaaaasssssooooonnnnnaaaaallllllllllyyyyy aaaaadddddjjjjjuuuuusssssttttteeeeeddddd 362.8r 359.7r 357.6r 358.3r 355.0" 347.8 341.9 337.4 337.8 339.2 343.6 345.1 1111166666 NNNNNooooottttt ssssseeeeeaaaaasssssooooonnnnnaaaaallllllllllyyyyy aaaaadddddjjjjjuuuuusssssttttteeeeeddddd 361.3r 359.7r 356.7r 360.6r 356.9* 347.5 343.7 338.3 337.5 339.5 342.4 342.1 UUUUU.....SSSSS..... TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy dddddeeeeemmmmmaaaaannnnnddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaattttt cccccooooommmmmmmmmmeeeeerrrrrccccciiiiiaaaaalllll bbbbbaaaaannnnnkkkkksssss 1111177777 SSSSSeeeeeaaaaasssssooooonnnnnaaaaallllllllllyyyyy aaaaadddddjjjjjuuuuusssssttttteeeeeddddd 23.7r 19.8r 24.0r 21.4r 24.8r 27.6 26.1 23.3 17.9 17.8 22.5 23.5 1111188888 NNNNNooooottttt ssssseeeeeaaaaasssssooooonnnnnaaaaallllllllllyyyyy aaaaadddddjjjjjuuuuusssssttttteeeeeddddd 29.5 17.4 20.3 20.3 26.5 25.6 23.8 28.6 17.1 12.9 21.4 31.0 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 DomesticN onfinancial Statistics • April 1994 1.26 ASSETS AND LIABILITIES OF COMMERCIAL BANKS1 Wednesday figures Millions of dollars 1993r 1994 AAccccoouunntt Dec. 1 Dec. 8 Dec. 15 Dec. 22 Dec. 29 Jan. 5 Jan. 12 Jan. 19 Jan. 26 ALL COMMERCIAL BANKING INSTITUTIONS2 Assets 1 Loans and securities 3,253,057 3,262,639 3,270,333 3,247,697 3,262,193 3,272,024 3,259,817 3,266,294 3,228,637 7 Investment securities 861,933 868,966 866,917 867,007 865,658 873,769 872,858 866,599 860,549 U.S. government securities 695,353 702,557 700,454 700,880 700,236 704,500 704,212 698,497 692,917 4 Other 166,580 166,409 166,463 166,127 165,423 169,269 168,646 168,101 167,633 5 Trading account assets 45,066 40,529 41,287 39,662 39,044 45,157 44,119 47,372 45,114 6 U.S. government securities 30,070 25,168 26,459 25,123 23,860 26,391 26,787 30,578 27,102 7 Other securities 2,145 2,120 1,991 2,036 2,114 2,289 2,200 2,055 1,970 8 Other trading account assets 12,851 13,241 12,837 12,503 13,071 16,477 15,132 14,738 16,043 9 Total loans 2,346,058 2,353,144 2,362,129 2,341,027 2,357,490 2,353,098 2,342,840 2,352,324 2,322,973 10 Interbank loans 161,337 170,123 168,087 155,471 161,992 164,855 156,550 167,027 151,880 11 Loans excluding interbank 2,184,721 2,183,021 2,194,042 2,185,556 2,195,499 2,188,244 2,186,290 2,185,297 2,171,093 1? Commercial and industrial 585,867 582,664 586,598 588,712 588,868 589,973 588,386 589,266 587,8% N Real estate 927,797 929,826 931,091 924,973 929,079 928,071 929,516 925,086 922,451 14 Revolving home equity 73,641 73,508 73,477 73,350 73,210 73,114 72,975 72,947 72,895 15 Other 854,156 856,319 857,615 851,624 855,869 854,957 856,541 852,139 849,556 16 Individual 387,490 385,194 389,602 392,098 394,149 394,513 393,201 392,884 392,460 17 All other 283,567 285,337 286,751 279,773 283,403 275,687 275,187 278,061 268,286 18 Total cash assets 253,838 210,792 245,975 233,338 233,204 226,770 214,747 247,309 210,433 19 Balances with Federal Reserve Banks 29,103 26,473 31,841 33,917 37,646 32,118 29,905 41,336 31,652 70 Cash in vault 35,818 34,282 34,826 34,420 37,743 35,605 35,965 35,641 34,895 71 Demand balances at U.S. depository institutions .. 35,177 30,675 36,176 33,239 32,158 32,836 30,061 36,641 30,348 77 Cash items 114,058 79,513 102,838 92,277 85,610 86,068 78,808 94,858 74,940 73 Other cash assets 39,682 39,849 40,293 39,485 40,046 40,142 40,009 38,834 38,214 24 Other assets 281,319 278,150 279,768 277,220 278,015 285,182 284,688 272,332 267,849 25 Total assets 3,788,214 3,751,581 3,796,075 3,758,254 3,773,411 3,783,976 3,759,251 3,785,935 3,706,918 Liabilities 76 Total deposits 2,582,055 2,547,266 2,599,399 2,547,641 2,550,952 2,569,502 2,543,867 2,550,223 2,494,508 77 Transaction accounts 871,163 826,004 886,254 846,322 852,260 860,451 823,146 842,232 790,068 28 Demand, U.S. government 5,764 3,025 28,434 4,161 4,706 4,573 3,732 6,129 3,712 7.9 Demand, depository institutions 47,496 39,080 47,577 43,015 40,097 40,525 37,516 46,369 39,284 30 Other demand and all checkable deposits 817,903 783,899 810,243 799,147 807,457 815,353 781,898 789,734 747,072 31 Savings deposits (excluding checkable) 780,622 786,880 780,493 772,630 772,758 782,047 791,370 781,015 777,138 37 Small time deposits 599,170 598,394 597,592 595,972 595,013 595,959 594,347 593,804 592,358 33 Time deposits over $100,000 331,100 335,988 335,060 332,716 330,921 331,046 335,004 333,173 334,943 34 Borrowings 523,868 516,995 513,094 530,346 539,193 529,263 528,407 546,807 528,493 35 Treasury tax and loan notes 15,856 1,350 2,442 21,322 34,660 18,855 23,105 27,422 32,898 36 Other 508,012 515,645 510,652 509,024 504,533 510,408 505,302 519,385 495,595 37 Other liabilities 383,473 384,485 382,843 381,658 383,182 382,349 382,799 385,544 377,448 38 Total liabilities 3,489,396 3,448,746 3,495,336 3,459,645 3,473,326 3,481,114 3,455,074 3,482,575 3,400,449 39 Residual (assets less liabilities)3 298,818 302,835 300,739 298,609 300,085 302,862 304,177 303,361 306,470 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 1993r Dec. 1 Dec. 8 Dec. 15 Dec. 22 Dec. 29 Jan. 5 Jan. 12 Jan. 19 Jan. 26 DOMESTICALLY CHARTERED COMMERCIAL BANKS Assets 4 4 4 4 4 4 4 4 5 4 4 5 5 5 5 5 5 5 5 5 6 6 6 6 0 1 2 3 4 5 8 9 1 6 7 0 3 4 5 6 7 2 8 9 0 1 2 3 L T O o o t T T I B C D C O h t a n a r o e n a a a e t v l O a I U O U O L r h t s s l s m n d a e a h h c e o t t t . . a t l s i C A I n a R h h a h S S a r e a n s n t n i i c n e s l e e . . o m r n e l s g n t c d o h R d O l r e d r b r e a e m s g g a i a s e m a o l e t a v v t s t s o o a n s s b n m e h n r v c t h a i e w e e s v v s s a h x t a d k e c o u c s s c e e e d l c i e r u o a l l t u e s r u a t r r t i r l v a l a h s u c e t r n n n u n r o s t i s l i i c n i e g m m d n c a t a e F t u t i e i g i n l t e e e e e n r a s s s a s i d s n a n g c h t s n a t e i t c o s e t i d r o e m s s n s a u U t e e t l i s e e n c c n . R r u u t S d e b r r e u . q a a i i s s t u s t n d i i e t s i e e k r e r t e i s s y p v a t s e o l s B it a o n ry k s i nstitutions 2 2 1 , , , 8 0 4 7 6 8 8 3 2 2 9 1 1 1 1 9 6 4 3 8 3 7 2 3 2 8 0 2 8 2 3 3 4 1 3 8 1 1 2 4 5 3 3 9 0 3 8 2 8 0 7 3 7 5 3 5 3 2 9 4 1 8 , , , , , , , , , , , , , , , , , , , , , , , , 6 4 0 7 1 4 0 4 0 6 6 6 0 1 1 4 6 7 6 4 8 0 5 8 9 4 6 6 6 6 7 8 4 4 0 6 4 0 9 9 4 8 8 1 7 5 4 6 2 1 6 0 6 7 0 2 7 8 8 8 1 5 0 9 5 4 2 3 4 1 8 3 2 2 1 , , , 0 8 4 2 7 6 9 8 8 3 1 1 1 1 4 6 9 3 2 2 4 8 7 2 2 7 2 0 8 8 3 4 8 4 1 1 8 0 4 2 1 5 2 0 3 7 9 7 3 5 0 9 2 5 4 3 5 4 8 3 3 , , , , , , , , , , , , , , , , , , , , , , , , 5 3 7 1 4 9 1 1 1 2 0 2 2 3 6 1 5 7 4 2 2 9 2 6 2 8 6 1 6 4 5 7 8 2 9 6 8 8 9 6 9 0 9 6 1 4 5 4 9 8 1 9 8 7 0 7 3 0 0 6 5 4 4 9 9 8 8 0 1 1 5 6 2 2 1 , , , 9 0 6 4 7 2 2 9 8 8 3 1 1 1 1 4 0 7 4 3 2 7 8 2 2 3 3 2 1 8 8 3 4 4 8 1 1 0 1 3 6 6 1 4 3 5 1 0 4 9 1 0 9 4 4 7 3 1 1 2 8 0 , , , , , , , , , , , , , , , , , , , , , , , , 2 4 4 9 4 9 2 4 2 3 7 7 9 6 4 3 1 8 9 8 3 9 8 6 8 6 5 5 2 6 3 6 7 1 6 9 4 8 0 7 3 6 3 2 2 9 1 0 7 1 9 8 9 9 0 4 7 6 9 1 7 7 2 2 7 8 9 9 1 1 7 0 2 2 1 , , , 8 0 7 6 4 2 2 9 8 8 3 1 1 1 7 5 3 2 1 4 8 3 0 7 3 8 2 9 0 7 3 3 4 1 1 3 8 8 3 9 5 3 2 5 6 8 1 3 9 1 2 2 6 9 4 3 3 1 8 2 0 , , , , , , , , , , , , , , , , , , , , , , , , 8 6 1 7 5 1 4 9 0 1 3 9 0 0 7 1 3 1 4 7 4 9 9 5 3 6 5 5 3 2 7 9 9 3 9 5 1 3 4 6 9 8 1 2 9 4 1 0 8 2 2 7 7 3 8 8 1 0 8 0 6 6 7 2 8 2 9 0 6 1 5 3 2 2 1 , , , 8 0 7 6 4 8 8 3 2 2 9 1 1 1 8 6 2 4 8 3 3 7 8 2 1 1 0 9 8 3 3 3 4 1 1 8 3 5 2 3 0 9 4 5 3 2 3 8 5 0 7 4 3 7 0 7 3 8 3 2 3 , , , , , , , , , , , , , , , , , , , , , , , , 9 8 6 0 8 2 6 2 1 7 1 0 6 0 1 8 3 7 6 0 9 4 0 9 6 6 4 8 9 3 7 3 1 4 1 4 5 2 4 6 4 8 0 6 7 4 7 4 2 0 4 0 3 8 0 1 0 5 4 5 6 6 9 7 3 2 7 3 3 1 1 9 2 2 1 , , , 0 9 4 7 6 2 2 9 8 8 3 1 1 1 4 7 0 3 2 4 9 1 0 7 8 3 9 8 1 3 3 3 4 1 4 9 1 5 6 2 8 6 5 0 5 1 3 3 2 0 4 3 0 1 5 1 4 6 1 3 9 , , , , , , , , , , , , , , , , , , , , , , , , 1 7 6 3 0 5 9 3 1 8 3 2 7 5 8 5 4 3 5 4 5 4 1 6 5 9 3 3 2 8 1 0 7 9 7 9 8 9 1 7 5 8 3 6 7 8 8 8 7 7 7 4 2 4 5 2 6 7 3 1 9 8 3 0 6 4 9 9 7 4 3 6 2 2 1 , , , 0 8 4 7 6 3 2 9 8 8 1 1 1 1 6 4 2 3 9 1 9 4 8 7 2 3 2 7 2 1 8 8 4 4 1 1 8 4 6 4 4 8 1 3 5 6 9 2 5 8 9 2 3 1 4 9 4 0 9 5 8 , , , , , , , , , , . , , , , , , , . , , , , , 7 4 3 2 4 0 1 7 2 3 9 9 6 6 4 7 7 2 6 6 7 2 1 4 5 0 8 1 3 4 4 1 8 7 2 5 5 6 6 2 1 8 5 0 1 3 1 3 8 1 7 3 2 7 7 9 4 5 5 5 9 0 6 5 2 5 9 0 5 0 0 2 2 2 1 , , , 4 0 8 2 2 7 6 8 8 3 9 1 1 1 4 3 6 2 1 7 4 9 9 9 0 8 3 8 3 3 3 2 1 8 4 4 1 7 6 1 5 3 0 2 2 6 2 7 3 3 8 0 5 2 5 0 8 3 2 4 4 , , , , , , , , , , , , , , , , , , , , , , , , 9 3 5 3 0 9 8 3 8 1 6 7 8 5 9 1 0 5 5 4 6 5 9 7 4 7 9 2 8 4 5 5 1 3 9 7 8 1 4 5 9 8 7 1 9 2 2 3 7 2 2 5 4 7 6 3 8 8 4 5 5 6 1 5 9 2 8 3 8 0 9 8 2 2 1 , , , 4 0 8 8 8 3 2 7 6 9 1 1 1 1 7 7 3 4 0 0 3 3 2 4 2 7 9 6 7 3 1 8 8 1 3 4 1 2 2 5 7 4 4 8 4 7 1 5 7 2 7 7 3 3 1 6 8 1 3 6 1 , , , , , , , , , , , , , , , , , , , , , , , , 3 8 8 3 8 8 8 7 4 1 1 8 1 0 3 4 4 4 5 7 4 9 0 9 4 5 9 9 6 6 3 9 5 6 6 3 1 0 1 9 5 8 6 3 4 6 4 7 2 1 5 5 1 7 9 2 7 3 0 1 4 2 6 5 6 5 6 0 0 6 3 0 64 Total assets 3,305,248 3,261,323 3,305,796 3,267,908 3,275,969 3,303,135 3,276,294 3,302,342 3,234,918 Liabilities 65 Total deposits 2,434,803 2,397,548 2,447,895 2,395,861 2,398,130 2,419,339 2,393,703 2,401,878 2,342,406 66 Transaction accounts 858,922 815,245 874,423 834,944 839,834 849,212 811,892 830,921 778,081 67 Demand, U.S. government 5,762 3,024 28,432 4,160 4,705 4,571 3,731 6,128 3,712 68 Demand, depository institutions 44,715 36,607 44,935 40,271 37,336 38,050 35,101 43,840 36,559 69 Other demand and all checkable deposits 808,445 775,614 801,057 790,513 797,793 806,591 773,060 780,952 737,810 70 Savings deposits (excluding checkable) 776,267 782,440 776,123 768,276 768,333 777,679 786,978 776,678 772,734 71 Small time deposits 596,937 5%, 166 595,346 593,727 592,758 593,679 592,105 591,563 590,099 72 Time deposits over $100,000 202.677 203,697 202,003 198,914 197,205 198,769 202,728 202,717 201,493 73 Borrowings 422,534 413,122 410,262 430,266 434,202 430,007 426,412 442,037 432,960 74 Treasury tax and loan notes 15,856 1,350 2,442 21,322 34,660 18,855 23,105 27,422 32,898 75 Other 406.678 411,772 407,820 408,944 399,542 411,152 403,307 414,615 400,062 76 Other liabilities 152,094 150,819 149,902 146,173 146,553 153,928 155,003 158,067 156,083 77 Total liabilities 3,009,431 2,961,490 3,008,059 2,972,300 2,978,886 3,003,274 2,975,118 3,001,982 2,931,449 78 Residual (assets less liabilities)3 295,817 299,834 297,738 295,608 297,084 299,861 301,176 300,359 303,468 1. Excludes assets and liabilities of international banking facilities. 3. This balancing item is not intended as a measure of equity capital for use in 2. Includes insured domestically chartered commercial banks, agencies and capital-adequacy analysis. branches of foreign banks, Edge Act and agreement corporations, and New York 4. Includes all member banks and insured nonmember banks. Loans and State investment corporations majority owned by foreign banks. Data are estimates securities data are estimates for the last Wednesday of the month based on a for the last Wednesday of the month based on a sample of weekly reporting sample of weekly reporting banks and quarter-end condition reports. foreign-related and domestic institutions and quarter-end condition reports. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Nonfinancial Statistics • April 1994 1.27 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS Millions of dollars, Wednesday figures 1993 1994 AAccccoouunntt Dec. 1 Dec. 8 Dec. 15 Dec. 22 Dec. 29 Jan. 5 Jan. 12 Jan. 19 Jan. 26 ASSETS 1 Cash and balances due from depository institutions 142,070 107,158 136,856 124,500 124,063 119,432 114,048 139,460 114,163 2 U.S. Treasury and government securities 303,131r 302,530* 300,450* 299,794* 296,557* 307,716 307,025 305,208 299,105 3 Trading account 26,759* 22,611* 23,866* 22,761* 20,943* 24,041 23,425 27,403 24,527 4 Investment account 276,372 279,919 276,584 277,032 275,614 283,675 283,600 277,805 274,578 5 Mortgage-backed securities1 88,537 88,625 87,022 87,170 87,863 89,172 89,132 87,858 86,965 All others, by maturity 6 One year or less 48,834 51,085 51,994 51,996 52,000 52,870 51,248 50,733 49,949 7 One year through five years 71,932 72,856 71,928 71,971 70,925 73,679 74,568 72,449 72,167 8 More than five years 67,069 67,353 65,640 65,895 64,826 67,953 68,653 66,766 65,497 9 Other securities 56,490 56,303 55,951 56,017 55,570 58,796 58,700 58,950 58,556 10 Trading account 1,935 1,911 1,782 1,828 1,883 1,949 1,860 1,767 1,707 11 Investment account 54,555 54,392 54,169 54,189 53,687 56,847 56,840 57,183 56,849 12 State and political subdivisions, by maturity 20,172 20,132 20,183 20,369 20,517 21,048 21,129 21,091 21,115 13 One year or less 4,062 3,945 4,003 4,034 4,054 3,926 3,868 3,902 3,946 14 More than one year 16,110 16,188 16,180 16,335 16,463 17,122 17,260 17,189 17,169 15 Other bonds, corporate stocks, and securities 34,384 34,260 33,986 33,821 33,170 35,799 35,711 36,092 35,734 16 Other trading account assets 12,740* 13,130* 12,724* 12,392* 12,960* 16,368 15,024 14,630 15,938 17 Federal funds sold2 93,857 97,197 102,728 80,864 86,051 93,389 92,714 100,295 90,455 18 To commercial banks in the United States 56,011 57,352 63,290 49,169 53,240 59,710 59,149 64,772 57,632 19 To nonbank brokers and dealers 33,432 34,965 34,720 28,657 29,504 28,340 28,887 29,062 26,787 20 To others3 4,414 4,881 4,717 3,039 3,306 5,339 4,677 6,461 6,036 21 Other loans and leases, gross 1,015,053 1,008,577 1,016,635 1,017,572* 1,019,713* 1,046,109 1,041,161 1,039,531 1,033,398 22 Commercial and industrial 272,904 270,666 272,724 273,969* 273,256* 278,869 277,074 278,783 278,811 23 Bankers acceptances and commercial paper 3,492 3,122 2,984 2,969 3,102 2,883 2,922 2,903 3,220 24 All other 269,411 267,544 269,741 271,000* 270,154* 275,986 274,153 275,880 275,592 25 U.S. addressees 267,975 266,092 268,295 269,485* 268,658* 274,434 272,465 274,225 273,942 26 Non-U.S. addressees 1,437 1,451 1,446 1,515 1,496 1,552 1,688 1,655 1,650 27 Real estate loans 410,662 412,737 412,583 407,976 409,656* 421,793 423,576 419,387 417,415 28 Revolving, home equity 42,950 42,809 42,796 42,685 42,650* 43,880 43,786 43,777 43,791 29 All other 367,713 369,928 369,787 365,291 367,006 377,912 379,789 375,610 373,624 30 To individuals for personal expenditures 198,793 197,529 200,218 202,293 203,948* 211,174 210,404 210,157 209,683 31 To financial institutions 41,338 40,774 41,950 43,081 42,800* 44,209 42,106 41,127 39,096 32 Commercial banks in the United States 15,518 14,996 16,737 18,208 18,016* 18,615 18,214 18,456 17,168 33 Banks in foreign countries 2,964 2,922 2,524 3,246 2,373 3,397 2,649 2,660 2,652 34 Nonbank financial institutions 22,856 22,856 22,689 21,627 22,411* 22,197 21,244 20,012 19,276 35 For purchasing and carrying securities 18,204 18,060 18,519 19,537 19,109 18,288 18,315 18,172 17,631 36 To finance agricultural production 5,624 5,664 5,628 5,661 5,705 6,117 5,970 5,916 5,922 37 To states and political subdivisions 12,513 12,336 12,353 12,497 12,308 12,329 12,222 12,232 12,218 38 To foreign governments and official institutions 1,156 1,113 1,158 1,141 1,381 1,179 1,149 1,231 1,080 39 All other loans 28,070 23,900 25,626 25,477* 25,595* 25,682 23,767 25,948 24,988 40 Lease-financing receivables 25,789 25,797 25,876 25,940 25,954 26,470 26,578 26,580 26,554 41 LESS: Unearned income 1,947 1,930 1,916 1,912 1,906 1,918 1,919 1,916 1,898 42 Loan and lease reserve 35,420 35,570 35,563 35,363 34,881 35,010 34,874 34,849 34,887 43 Other loans and leases, net 977,686 971,077 979,155 980,297* 982,926* 1,009,182 1,004,368 1,002,766 996,612 44 Other assets 170,929 170,669* 169,416* 168,651* 168,124* 178,822 176,436 171,521 168,290 45 Total assets 1,756,902 1,718,064* 1,757,280"" 1,722,515* 1,726,249* 1,783,703 1,768,315 1,792,831 1,743,118 Footnotes appear on the following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Commercial Banks A23 1.27 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued Millions of dollars, Wednesday figures 1993 1994 Dec. 1 Dec. 8 Dec. 15 Dec. 22 Dec. 29 Jan. 5 Jan. 12 Jan. 19 Jan. 26 LIABILITIES 46 Deposits 1,156,471 1,125,695 l,169,542r 1,125,468* 1,127,040 1,170,528 1,157,263 1,165,260 1,125,425 47 Demand deposits 332,852 297,628 346,148 312,373* 315,836 316,913 303,087 320,102 289,472 48 Individuals, partnerships, and corporations 270,947 246,398 268,224 254,843* 260,103* 263,331 254,420 260,335 238,009 49 Other holders 61,905 51,230 77,925 57,529* 55,733* 53,581 48,667 59,767 51,463 50 States and political subdivisions 10,970r 8,524 10,152 9,843 10,234 10,006 8,656 9,796 9,651 51 U.S. government 3,705r 1,847 21,878 2,456 2,955 2,782 2,531 4,671 2,522 52 Depository institutions in the United States ... 29,458 22,568 29,366 23,438* 22,860* 22,531 21,194 27,874 22,741 53 Banks in foreign countries 5,745 5,144 6,258 7,815 5,589 5,991 5,705 5,748 5,191 54 Foreign governments and official institutions .. 716 663 720 617 853 881 605 796 637 55 Certified and officers' checks 11,312 12,484 9,550 13,360 13,242 11,390 9,975 10,882 10,721 56 Transaction balances other than demand deposits . 125,035 124,737 126,518 126,749 126,438 136,834 126,607 126,182 120,916 57 Nontransaction balances 698,584 703,330 696,876r 686,346 684,766 716,781 727,569 718,976 715,037 58 Individuals, partnerships, and corporations 677,632 682,298 676,043r 665,775 664,819 697,089 705,387 6%,618 692,511 59 Other holders 20,952 21,033 20,833 20,572 19,947 19,692 22,182 22,358 22,526 60 States and political subdivisions 16,911 16,895 16,789 16,540 16,198 17,279 18,196 18,292 18,470 61 U.S. government 2,230 2,223 2,134 2,157 1,845 464 2,024 2,063 2,056 62 Depository institutions in the United States ... 1,515 1,618 1,608 1,573 1,603 1,623 1,653 1,695 1,691 63 Foreign governments, official institutions, and banks . 296 297 302 302 301 326 309 309 308 64 Liabilities for borrowed money5 323,076r 315,423r 311,881r 326,957* 329,071* 327,231 323,079 336,960 328,573 65 Borrowings from Federal Reserve Banks 0 0 125 0 0 1,220 0 0 0 66 Treasury tax and loan notes 14,076 73r 1,645 18,536* 29,559* 15,993 19,530 23,302 28,843 67 Other liabilities for borrowed money6 308,999* 315,350*" 310,11 lr 308,421* 299,512* 310,017 303,548 313,658 299,730 68 Other liabilities (including subordinated notes and debentures) 120,822r 119,299* 118,712* 114,839* 115,008* 123,664 124,843 128,026 125,791 69 Total liabilities 1,600,369 1,560,417 1,600,136 1,567,264* 1,571,119 1,621,423 1,605,184 1,630,246 1,579,789 70 Residual (total assets less total liabilities)7 156,533 157,647r 157,145* 155,251* 155,130* 162,280 163,131 162,585 163,329 MEMO 7 7 2 1 T T i o m ta e l d lo e a p n o s s i a ts n d in l e a a m se o s u , n g ts r o o s f s , $ a 1 d 0 j 0 u ,0 s 0 te 0 d o , r p l m us o r s e e curities 1,4 9 0 5 9 , ,7 8 4 2 2 8 r 1,4 9 0 6 5 , , 7 3 8 9 0 0 1,4 9 0 5 8 , , 3 4 4 6 1 0 1,3 9 99 2 , , 2 4 6 3 2 0 * 1,39 9 9 0 , , 5 9 9 6 4 8 * 1,4 9 4 5 4 , , 0 0 7 5 4 2 1,4 9 3 8 7 , , 9 2 0 6 7 0 1,4 9 3 8 5 , , 8 3 3 8 0 6 1,4 9 2 7 2 , , 5 6 1 5 7 2 73 Loans sold outright to affiliates 850 849 846 819 795 793 785 774 770 74 Commercial and industrial 391 391 388 395 391 389 389 384 383 7 7 7 5 6 7 N Fo e O r t e t o i h g w e n r e b d r a to n c r h e la c t r e e d d i i t n e s x ti t t e u n ti d o e n d s t a o b r U o . a S d . residents1"... - 2 5 1 , , 7 3 4 3 4 5 3 4 9 r r - 2 6 1 , , 7 8 4 6 2 5 8 7 8 r r - 2 2 1 ,6 ,6 4 2 5 5 9 3 8 * * - 2 6 1 , , 3 4 4 2 8 2 9 5 4 * * - 2 5 1 ,0 ,7 4 6 8 0 2 5 4 * * -1 2 1 1 , , 5 9 4 6 0 0 6 5 4 - 2 3 1 , , 9 9 3 8 9 9 8 9 6 2 4 2, , 0 8 3 4 1 9 2 0 0 2 4 1, , 7 7 3 8 5 8 4 8 7 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 • April 1994 1.28 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS Assets and Liabilities1 Millions of dollars, Wednesday figures 1993 1993 AAccccoouunntt Dec. 1 Dec. 8 Dec. 15 Dec. 22 Dec. 29 Jan. 5 Jan. 12 Jan. 19 Jan. 26 ASSETS 1 Cash and balances due from depository institutions 16,983 16,919 17,066 16,850 17,544 17,203 16,728 16,920 16,038 2 U.S. Treasury and government agency securities 36,009 37,924 37,182 37,181 38,062 36,390 36,338 36,749 36,629 3 Other securities 8,229 8,293 8,306 8,147 7,916 8,805 8,629 8,346 8,535 4 Federal funds sold1 25,456 32,268 28,968 29,323 31,712 23,862 23,467 29,344 25,529 5 To commercial banks in the United States ... 6,334 7,967 5,678 6,728 8,717 6,2% 2,513 6,753 5,184 6 To others 19,123 24,301 23,291 22,595 22,994 17,566 20,954 22,591 20,345 7 Other loans and leases, gross 158,046r 156,028* 157,457* 158,104* 160,008 157,761 157,339 155,978 154,374 8 Commercial and industrial 95,450* 94,785* 95,262* 95,466* 95,936* %,260 %%,,225544 %%,,005588 95,346 9 Bankers acceptances and commercial paper 2,940 2,870 2,975 3,222 3,134 3,353 3,282 3,304 3,154 10 All other 92,509* 91,916* 92,287* 92,244* 92,802* 92,907 92,972 92,754 92,192 11 U.S. addressees 89,299* 88,746* 89,109* 89,029* 89,620* 89,688 89,745 89,504 88,858 12 Non-U.S. addressees 3,211 3,170 3,178 3,215 3,182 3,219 3,227 3,250 3,334 13 Loans secured by real estate 30,952* 30,929* 30,561* 29,825* 29,686 29,356 29,359 29,317 29,466 14 To financial institutions 22,286 22,263 22,465 22,581 23,113 22,807 22,354 22,039 21,109 15 Commercial banks in the United States.. 4,975 4,975 5,007 5,249 5,363 5,436 5,575 5,483 5,099 16 Banks in foreign countries 1,865 1,845 1,793 1,694 1,644 1,539 1,538 1,510 1,451 17 Nonbank financial institutions 15,446 15,442 15,665 15,637 16,106 15,832 15,241 15,046 14,558 18 For purchasing and carrying securities .... 5,432 4,148 5,163 6,066 6,863* 5,163 5,105 4,157 4,030 19 To foreign governments and official institutions 437 443 489 462 468 529 525 585 634 20 All other 3,489 3,460 3,517 3,705 3,943 3,646 3,742 3,820 3,790 21 Other assets (claims on nonrelated parties) .. 31,918* 32,935* 30,979* 30,969* 30,093 33,337 33,400 31,827 32,539 22 Total assets3 305,591 310,778 309,949 309,655 314,422 304,398 305,527 305,496 297,933 LIABILITIES 23 Deposits or credit balances owed to other than directly-related institutions 95,646 97,459 98,784 98,969 99,470 97,946 97,429 %,047 98,113 24 Demand deposits 4,924 4,239 4,713 4,442 5,125 4,567 44,,449988 44,,664444 4,889 25 Individuals, partnerships, and corporations 3,485 3,324 3,448 3,204 3,963 3,722 3,515 3,770 3,636 26 Other 1,439 915 1,265 1,239 1,162 846 983 874 1,253 27 Nontransaction accounts 90,722 93,220 94,071 94,526 94,345 9933,,337799 9922,,993311 9911,,440033 9933,,222244 28 Individuals, partnerships, and corporations 62,968 64,633 65,401 65,595 65,181 63,928 64,235 63,339 65,748 29 Other 27,754 28,587 28,670 28,932 2299,,116644 2299,,445500 2288,,669966 2288,,006644 2277,,447766 30 Borrowings from other than directlyrelated institutions 76,895 79,281 77,100 75,139 78,684 72,808 75,186 78,008 70,659 31 Federal funds purchased 38,772 40,238 41,228 39,255 43,179 3377,,553377 4400,,555566 4422,,884488 3388,,333399 32 From commercial banks in the United States 11,628 12,238 14,415 10,177 14,121 10,152 10,889 10,415 10,002 33 From others 27,144 28,000 26,812 29,078 29,058 27,385 29,667 32,433 28,337 34 Other liabilities for borrowed money 38,123 39,043 35,873 35,884 3355,,550055 3355,,227711 3344,,663311 3355,,116600 3322,,332200 35 To commercial banks in the United States 5,535 5,715 6,171 6,012 6,003 6,437 6,172 6,346 5,816 36 To others 32,589 33,327 29,702 29,873 29,502 28,834 28,458 28,814 26,504 37 Other liabilities to nonrelated parties 28,710 28,662 27,084 27,293 27,470 29,864 30,191 28,671 30,239 38 Total liabilities6 305,591 310,778 309,949 309,655 314,422 304,398 305,527 305,496 297,933 MEMO 39 Total loans (gross) and securities, adjusted .. 216,431* 221,570* 221,229* 220,777* 223,618 215,087 217,684 218,180 214,784 40 Net owed to related institutions abroad 75,390 78,965 76,990 79,172 79,711 76,740 73,093 76,439 74,632 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 1989 1990 1991 1992 1993 July Aug. Sept. Oct. Nov. Dec. Commercial paper (seasonally adjusted unless noted otherwise) 11 AAllll iissssuueerrss 525,831 562,656 531,724 549,433 539,149 545,527 541,285 550,463 550,108 FFiinnaanncciiaall ccoommppaanniieess'' DDeeaalleerr--ppllaacceedd ppaappeerr 22 TToottaall 183,622 214,706 213,823 228,260 210,224 216,245 215,077 222,981 218,077 33 BBaannkk--rreellaatteedd ((nnoott sseeaassoonnaallllyy aaddjjuusstteedd)) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. DDiirreeccttllyy ppllaacceedd ppaappeerr 44 TToottaall 210,930 200,036 183,379 172,813 170,192 172,093 169,431 170,965 177,123 55 BBaannkk--rreellaatteedd ((nnoott sseeaassoonnaallllyy aaddjjuusstteedd)) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 66 NNoonnffiinnaanncciiaall ccoommppaanniieess55 131,279 147,914 134,522 148,360 158,733 157,189 156,777 156,517 154,908 Bankers dollar acceptances (not seasonally adjusted)6 7 Total 62,972 54,771 43,770 38,194 32,348 33,120 32,572 33,041 33,069 31,997 32,348 By holder 8 Accepting banks 9,433 9,017 11,017 10,555 12,325 11,422 12,416 12,522 12,332 12,475r 12,325 9 Own bills 8,510 7,930 9,347 9,097 10,611 10,140 10,709 10,679 10,886 10,853r 10,611 10 Bills bought from other banks 924 1,087 1,670 1,458 1,714 1,282 1,707 1,843 1,446 1,622 1,714 Federal Reserve Banks 11 Foreign correspondents 1,066 918 1,739 1,276 725 582 635 637 582 650 725 12 Others 52,473 44,836 31,014 26,364 19,298 21,116 19,521 19,882 20,155 18,872r 19,298 By basis 13 Imports into United States 15,651 13,095 12,843 12,209 10,217 10,149 10,422 10,773 10,810 10,368 10,217 14 Exports from United States 13,683 12,703 10,351 8,0% 7,293 7,673 7,534 7,460 7,101 7,054 7,293 15 All other 33,638 28,973 20,577 17,890 14,838 15,299 14,616 14,808 15,158 14,575 14,838 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 Average Average Rate Period rate Period rate Period 10.00 1991 8.46 1992—Jan. ... 6.50 1993— Jan. .. 9.50 1992 6.25 Feb. .. 6.50 Feb. . 9.00 1993 6.00 Mar. .. 6.50 Mar. . 8.50 Apr. .. 6.50 Apr. . 8.00 1991- 9.52 May ... 6.50 May .. 7.50 Feb. 9.05 June .. 6.50 June . 6.50 Mar. 9.00 July ... 6.02 July .. Apr. 9.00 Aug. .. 6.00 Aug. . 6.00 May . 8.50 Sept. .. 6.00 Sept. .. June 8.50 Oct. ... 6.00 Oct. ... July . 8.50 Nov. .. 6.00 Nov. .. Aug. 8.50 Dec. .. 6.00 Dec. .. Sept. 8.20 Oct. . 8.00 1994— Jan. ... Nov. 7.58 Feb. Dec. 7.21 1. The prime rate is one of several base rates that banks use to price short-term size, based on the most recent Call Report. Data in this table also appear in the business loans. The table shows the date on which a new rate came to be the Board's H.15 (519) weekly and G.13 (415) monthly statistical releases. For predominant one quoted by a majority of the twenty-five largest banks by asset ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Nonfinancial Statistics • April 1994 1.35 INTEREST RATES Money and Capital Markets Averages, percent per year; figures are averages of business day data unless otherwise noted 1993, 1993 1994 week 1994, week ending ending 1991 1992 1993 Oct. Nov. Dec. Jan. Dec. 31 Jan. 7 Jan. 14 Jan. 21 Jan. 2 MONEY MARKET INSTRUMENTS 1 Federal funds1,2,3 . 5.69 3.52 3.02 2.99 3.02 2.96 3.05 2.99 3.00 2.98 3.13 2.97 2 Discount window borrowing2,4 5.45 3.25 3.00 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 5.89 3.71 3.17 3.14 3.15 3.35 3.14 3.35 3.21 3.12 3.13 3.11 4 3-month 5.87 3.75 3.22 3.26 3.40 3.36 3.19 3.32 3.26 3.18 3.18 3.15 5 6-month 5.85 3.80 3.30 3.27 3.43 3.40 3.30 3.38 3.37 3.29 3.28 3.26 Finance paper, directly placed3,5,7 6 1-month 5.73 3.62 3.12 3.08 3.08 3.21 3.07 3.20 3.13 3.05 3.06 3.03 7 3-month 5.71 3.65 3.16 3.16 3.25 3.19 3.11 3.18 3.18 3.09 3.11 3.07 8 6-month 5.60 3.63 3.15 3.13 3.19 3.18 3.15 3.18 3.20 3.15 3.13 3.13 Bankers acceptances3,5,8 9 3-month 5.70 3.62 3.13 3.19 3.29 3.23 3.10 3.21 3.16 3.09 3.07 3.07 10 6-month 5.67 3.67 3.21 3.19 3.32 3.30 3.21 3.29 3.28 3.20 3.19 3.17 Certificates of deposit, secondary marker9 11 1-month 5.82 3.64 3.11 3.09 3.11 3.26 3.08 3.22 3.15 3.07 3.06 3.06 12 3-month 5.83 3.68 3.17 3.24 3.35 3.26 3.15 3.24 3.22 3.13 3.12 3.12 13 6-month 5.91 3.76 3.28 3.25 3.39 3.35 3.29 3.33 3.37 3.27 3.27 3.26 14 Eurodollar deposits, 3-month3,10 5.86 3.70 3.18 3.26 3.36 3.26 3.15 3.23 3.23 3.13 3.13 3.13 U.S. Treasury bills Secondary market • 15 3-month 5.38 3.43 3.00 3.02 3.10 3.06 2.98 3.02 3.05 2.97 2.% 2.93 16 6-month 5.44 3.54 3.12 3.12 3.26 3.23 3.15 3.21 3.23 3.14 3.12 3.13 17 1-year ,. 5.52 3.71 3.29 3.25 3.42 3.45 3.39 3.45 3.46 3.38 3.36 3.35 Auction average , ,u 18 3-month 5.42 3.45 3.02 3.04 3.12 3.08 3.02 3.06 3.10 3.02 2.99 2.96 19 6-month 5.49 3.57 3.14 3.13 3.27 3.25 3.19 3.21 3.29 3.18 3.15 3.14 20 1-year 5.54 3.75 3.33 3.25 3.43 3.47 3.52 n.a. n.a. 3.52 n.a. n.a. U.S. TREASURY NOTES AND BONDS Constant maturities12 21 1-year 5.86 3.89 3.43 3.39 3.58 3.61 3.54 3.61 3.63 3.52 3.51 3.51 22 2-year 6.49 4.77 4.05 3.87 4.16 4.21 4.14 4.22 4.25 4.10 4.11 4.10 23 3-year 6.82 5.30 4.44 4.18 4.50 4.54 4.48 4.53 4.59 4.43 4.45 4.44 24 5-year 7.37 6.19 5.14 4.71 5.06 5.15 5.09 5.14 5.21 5.03 5.06 5.05 25 7-year 7.68 6.63 5.54 5.05 5.45 5.48 5.43 5.47 5.58 5.37 5.41 5.38 26 10-year 7.86 7.01 5.87 5.33 5.72 5.77 5.75 5.77 5.85 5.69 5.74 5.74 27 20-year n.a. n.a. 6.29 6.07 6.38 6.40 6.39 6.41 6.48 6.34 6.38 6.35 28 30-year 8.14 7.67 6.59 5.94 6.21 6.25 6.29 6.28 6.36 6.24 6.29 6.29 Composite 8.16 7.52 6.45 5.90 6.25 6.27 6.24 6.27 6.35 6.20 6.22 6.21 29 More than 10 years (long-term) STATE AND LOCAL NOTES AND BONDS Moody's series13 6.56 6.09 5.38 5.13 5.10 5.18 5.14 5.18 5.15 5.15 5.15 5.10 30 Aaa 6.99 6.48 5.82 5.63 5.61 5.69 5.60 5.68 5.64 5.62 5.60 5.53 31 Baa 6.92 6.44 5.60 5.25 5.47 5.35 5.31 5.28 5.34 5.31 5.29 5.28 32 Bond Buyer series14 CORPORATE BONDS 9.23 8.55 7.54 6.97 7.25 7.26 7.25 7.28 7.34 7.20 7.24 7.23 33 Seasoned issues, all industries15 Rating group 8.77 8.14 7.22 6.67 6.93 6.93 6.92 6.94 7.01 6.87 6.92 6.91 34 Aaa 9.05 8.46 7.40 6.87 7.12 7.12 7.12 7.15 7.21 7.08 7.12 7.11 35 Aa 9.30 8.62 7.58 7.04 7.29 7.31 7.30 7.33 7.38 7.25 7.30 7.29 36 A 9.80 8.98 7.93 7.31 7.66 7.69 7.65 7.71 7.75 7.61 7.64 7.62 37 Baa 9.32 8.52 7.46 6.91 7.25 7.28 7.24 7.34 7.21 7.28 7.25 7.16 38 A-rated, recently offered utility bonds16 .. MEMO Dividend-price ratio17 39 Preferred stocks 8.17 7.46 n.a. 6.71 6.87 7.01 6.97 6.91 7.00 6.95 6.94 6.97 40 Common stocks 3.24 2.99 n.a. 2.72 2.72 2.72 2.69 2.71 2.72 2.68 2.68 2.69 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 11:00 a.m. London time. Data are for NOTE. Some of the data in this table also appear in the Board's H.15 (519) indication purposes only. weekly and G.13 (415) monthly statistical releases. For ordering address, see 11. Auction date for daily data; weekly and monthly averages computed on an inside front cover. Digitized for FRisAsuSe-EdaRte basis. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets All 1.36 STOCK MARKET Selected Statistics 1993 1994 IInnddiiccaattoorr 11999911 11999922 11999933 May June July Aug. Sept. Oct. Nov. Dec. Jan. Prices and trading volume (averages of daily figures) Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 206.35 229.00 249.71 246.02 247.16 247.85 251.93 254.86 257.53 255.93 257.73 262.11 2 Industrial 258.16 284.26 300.10 297.83 298.78 295.34 298.83 300.92 306.61 310.84 313.22 320.92 3 Transportation 173.97 201.02 242.68 237.80 234.30 238.30 250.82 247.74 254.04 262.96 268.11 278.29 4 Utility 92.64 99.48 114.55 111.21 113.27 116.27 118.72 122.32 120.49 115.08 114.97 112.67 5 Finance 150.84 179.29 216.55 209.40 209.75 218.89 224.96 229.35 228.18 214.08 216.00 218.71 6 Standard & Poor's Corporation (1941-43 = 10)' 376.20 415.75 451.63 445.25 448.06 447.29 454.13 459.24 463.90 462.89 465.95 472.99 7 American Stock Exchange (Aug. 31, 1973 = 50? 360.32 391.28 438.77 429.72 436.13 434.99 444.75 454.91 472.73 472.41 465.95 481.14 Volume of trading (thousands of shares) 8 New York Stock Exchange 179,411 202,558 263,374 255,843 250,230 247,574 247,324 261,770 280,503 277,886 259,457 313,223 9 American Stock Exchange 12,486 14,171 n.a. 20,433 17,753 17,744 19,352 18,889 21,279 18,436 17,461 19,211 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers3 36,660 43,990 60,310 48,630 49,550 49,080 52,760 53,700 56,690 59,760 60,310 61,250 Free credit balances at brokers4 11 Margin accounts 8,290 8,970 12,360 9,560 9,820 9,585 9,480 10,030 10,270 10,940 12,360 12,125 12 Cash accounts 19,255 22,510 27,715 21,610 22,625 21,475 21,915 23,170 22,450 23,560 27,715 26,020 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 13 Margin stocks 70 80 65 55 65 50 14 Convertible bonds 50 60 50 50 50 50 15 Short sales 70 80 65 55 65 50 1. Effective July 1976, includes a new financial group, banks and insurance on securities other than options are the difference between the market value (100 companies. With this change the index includes 400 industrial stocks (formerly percent) and the maximum loan value of collateral as prescribed by the Board. 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 Regulation T was adopted effective Oct. 15, 1934; Regulation U, effective May 1, financial. 1936; Regulation G, effective Mar. 11, 1968; and Regulation X, effective Nov. 1, 2. On July 5,1983, the American Stock Exchange rebased its index, effectively 1971. cutting previous readings in half. On Jan. 1, 1977, the Board of Governors for the first time established in 3. Since July 1983, under the revised Regulation T, margin credit at broker- Regulation T the initial margin required for writing options on securities, setting dealers has included credit extended against stocks, convertible bonds, stocks it at 30 percent of the current market value of the stock underlying the option. On acquired through the exercise of subscription rights, corporate bonds, and Sept. 30,1985, the Board changed the required initial margin, allowing it to be the government securities. Separate reporting of data for margin stocks, convertible same as the option maintenance margin required by the appropriate exchange or bonds, and subscription issues was discontinued in April 1984. self-regulatory organization; such maintenance margin rules must be approved by 4. Free credit balances are amounts in accounts with no unfulfilled commit- the Securities and Exchange Commission. Effective Jan. 31, 1986, the SEC ments to brokers and are subject to withdrawal by customers on demand. approved new maintenance margin rules, permitting margins to be the price of the 5. New series since June 1984. option plus 15 percent of the market value of the stock underlying the option. 6. These requirements, stated in regulations adopted by the Board of Gover- Effective June 8, 1988, margins were set to be the price of the option plus 20 nors pursuant to the Securities Exchange Act of 1934, limit the amount of credit percent of the market value of the stock underlying the option (or 15 percent in the that can be used to purchase and carry "margin securities" (as defined in the case of stock-index options). regulations) when such credit is collateralized by securities. Margin requirements Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Financial Statistics • April 1994 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Fiscal year Calendar year TTTyyypppeee ooofff aaaccccccooouuunnnttt ooorrr ooopppeeerrraaatttiiiooonnn 1993 1994 11999911 11999922 11999933 Aug. Sept. Oct. Nov. Dec. Jan. U.S. budget1 1 Receipts, total 1,054,264 1,090,453 1,153,147 86,734 127,469 78,668 83,107 125,416 122,968 2 On-budget 760,380 788,027 841,213 62,053 98,609 55,864 58,700 99,722 94,398 3 Off-budget 293,885 302,426 311,934 24,681 28,860 22,804 24,407 25,694 28,570 4 Outlays, total 1,323,785 1,380,794 1,407,831 109,812 118,904 124,090 121,488 133,667 107,355 5 On-budget 1,082,098 1,128,455 1,141,819 84,946 90,774 100,568 96,724 121,985 83,164 6 Off-budget 241,687 252,339 266,012 24,867 28,130 23,523 24,764 11,682 24,191 7 Surplus or deficit (-), total -269,521 -290,340 -254,684 -23,078 8,565 -45,422 -38,381 -8,252 15,613 8 On-budget -321,719 -340,428 -300,605 -22,893 7,835 -44,704 -38,024 -22,263 11,234 9 Off-budget 52,198 50,087 45,922 -186 730 -719 -357 14,012 4,379 Source of financing (total) 10 Borrowing from the public 276,802 310,918 248,619 54,301 -9,346 4,255 71,028 13,995 -6,933 11 Operating cash (decrease, or increase (-)) ... -1,329 -17,305 6,283 -12,652 -11,713 33,646 -13,450 -17,413 -8,089 12 Other -5,952 -3,273 -218 -18,571 12,494 7,521 -19,197 11,670 -591 MEMO 13 Treasury operating balance (level, end of period) 41,484 58,789 52,506 40,793 52,506 18,860 32,310 49,723 57,812 14 Federal Reserve Banks 7,928 24,586 17,289 7,975 17,289 6,032 6,334 14,809 21,541 15 Tax and loan accounts 33,556 34,203 35,217 32,818 35,217 12,828 25,977 34,914 36,271 1. In accordance with the Balanced Budget and Emergency Deficit Control Act monetary assets; accrued interest payable to the public; allocations of SDRs; of 1985, all former off-budget entries are now presented on-budget. Federal deposit funds; miscellaneous liability (including checks outstanding) and asset Financing Bank (FFB) activities are now shown as separate accounts under the accounts; seigniorage; increment on gold; net gain or loss for U.S. currency agencies that use the FFB to finance their programs. The act 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) off-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. BUDGET RECEIPTS AND OUTLAYS1 Millions of dollars Fiscal year Calendar year SSSooouuurrrccceee ooorrr tttyyypppeee 1992 1993 1993 1994 11999922 11999933 HI H2 HI H2 Nov. Dec. Jan. RECEIPTS 1 All sources 1,090,453 1,153,147 560,318 540,472 593,187 582,020 83,107 125,416 122,968 7 Individual income taxes, net 475,964 509,680 236,576 246,938 255,556 262,073 37,634 54,183 74,167 3 Withheld 408,352 430,427 198,868 215,584 210,066 228,429 37,823 51,184 36,838 4 Presidential Election Campaign Fund 30 28 20 10 25 2 -27 0 11 Nonwithheld 149,342 154,772 110,995 39,288 113,482 41,765 1,945 3,501 3377,,779988 6 Refunds 81,760 75,546 73,308 7,942 67,468 8,114 2,107 502 470 Corporation income taxes 7 Gross receipts 117,951 131,548 61,682 58,022 69,044 68,266 2,855 2288,,%%33 44,,776611 8 Refunds 17,680 14,027 9,403 7,219 7,198 6,514 647 725 844 9 Social insurance taxes and contributions, net 413,689 428,300 224,569 192,599 227,177 206,174 34,683 3333,,995544 3366,,998833 10 Employment taxes and contributions2 385,491 396,939 208,110 180,758 208,776 192,749 31,525 3333,,227733 3355,,883311 11 Self-employment taxes and contributions3 24,421 20,604 20,434 3,988 16,270 4,335 0 00 --11,,558899 1? Unemployment insurance 23,410 26,556 14,070 9,397 16,074 11,010 2,773 259 794 13 Other net receipts4 4,788 4,805 2,389 2,445 2,326 2,417 385 423 358 14 Excise taxes 45,569 48,057 22,389 23,456 23,398 25,994 4,808 4,695 4,011 15 Customs deposits 17,359 18,802 8,146 9,497 8,860 10,215 1,688 1,584 1,526 16 Estate and gift taxes 11,143 12,577 5,701 5,733 6,494 6,617 1,305 1,179 1,105 17 Miscellaneous receipts5 26,459 18,211 10,658 11,446 9,854 9,192 781 1,582 1,260 OUTLAYS 18 All types 1,380,856 1,407,831 704,266 723,515 673,315 728,165 121,488 133,667 107,355 19 National defense 298,350 290,590 147,065 155,231 140,535 146,177 22,990 26,809 18,861 70 International affairs 16,107 17,175 8,540 9,916 6,565 10,534 1,964 548 1,103 ?1 General science, space, and technology .... 16,409 17,055 7,951 8,521 7,9% 8,904 1,522 1,4% 1,299 7 7 7 3 E N n a e tu rg ra y l resources and environment 2 4 0 , , 4 0 9 2 9 5 2 4 0 , , 4 0 4 8 5 8 8 1 , , 5 4 9 4 4 2 1 3 1 , , 1 4 0 6 9 7 2 8 , , 4 5 6 8 2 8 1 1 1 , ,0 6 7 4 7 1 2,7 5 8 1 4 0 1,5 3 6 8 7 5 1, 4 44 6 7 5 24 Agriculture 15,205 20,257 7,526 8,852 11,824 7,335 2,237 3,074 1,122 75 Commerce and housing credit 10,118 -23,532 15,615 -7,697 -15,112 -1,724 -1,361 1,126 -1,124 76 Transportation 33,333 35,238 15,651 18,425 16,077 20,375 3,248 3,714 2,503 27 Community and regional development 6,838 10,395 3,903 4,464 4,935 5,606 930 772 906 28 Education, training, employment, and social services 45,250 48,872 23,767 21,241 24,057r 25,515 55,,009988 44,,445555 22,,669933 79 Health 89,497 99,249 44,164 47,232 49,882 52,631 8,675 8,906 7,665 30 Social security and Medicare 406,569 435,137 205,500 232,109 195,933 223,735 37,047 39,720 36,009 31 Income security 196,891 207,933 104,537 98,382 108,484r 103,163 16,764 19,771 16,1% 37 Veterans benefits and services 34,133 35,715 15,597 18,561 16,385 19,848 3,198 4,469 2,151 33 Administration of justice 14,426 14,983 7,435 7,238 7,463 7,448 1,306 1,244 1,210 34 General government 12,945 13,039 5,050 8,223 5,205 6,565 1,317 1,708 669 35 Net interest6 199,439 198,870 100,161 98,692 99,635 99,%3 16,171 16,638 17,095 36 Undistributed offsetting receipts -39,280 -37,386 -18,229 -20,628 -17,035 -20,407 -2,910 -2,737 -2,914 1. Functional details do not sum to total outlays for calendar year data because 5. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts. revisions to monthly totals have not been distributed among functions. Fiscal year 6. Includes interest received by trust funds. total for outlays does not correspond to calendar year data because revisions from 7. Consists of rents and royalties for the outer continental shelf and U.S. the Budget have not been fully distributed across months. government contributions for employee retirement. 2. Old-age, disability, and hospital insurance, and railroad retirement accounts. SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of 3. Old-age, disability, and hospital insurance. Receipts and Outlays of the U.S. Government, and the U.S. Office of Manage- 4. Federal employee retirement contributions and civil service retirement and ment and Budget, Budget of the U.S. Government, Fiscal Year 1994. disability fund. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic NonfinancialS tatistics • April 1994 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1991 1992 1993 IItteemm Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 1 Federal debt outstanding 3,820 3,897 4,001 4,083 4,196 4,250 4,373 4,436 n.a. 2 Public debt securities 3,802 3,881 3,985 4,065 4,177 4,231 4,352 4,412 4,536 3 Held by public 2,833 2,918 2,977 3,048 3,129 3,188 3,252 3,295 n.a. 4 Held by agencies 969 964 1,008 1,016 1,048 1,043 1,100 1,117 n.a. 5 Agency securities 19 16 16 18 19 20 21 25 n.a. 6 Held by public 19 16 16 18 19 20 21 25 n.a. 7 Held by agencies 0 0 0 0 0 0 0 0 n.a. 8 Debt subject to statutory limit 3,707 3,784 3,891 3,973 4,086 4,140 4,256 4,316 4,446 9 Public debt securities 3,706 3,783 3,890 3,972 4,085 4,139 4,256 4,315 4,445 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 4,370 4,900 4,900 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 1993 TTyyppee aanndd hhoollddeerr 11999900 11999911 11999922 11999933 Q1 Q2 Q3 04 1 Total gross public debt 3,364.8 3,801.7 4,177.0 4,535.7 4,230.6 4,352.0 4,411.5 4,535.7 By type 2 Interest-bearing 3,362.0 3,798.9 4,173.9 4,532.3 4,227.6 4,349.0 4,408.6 4,532.3 3 Marketable 2,195.8 2,471.6 2,754.1 2,989.5 2,807.1 2,860.6 2,904.9 2,989.5 4 Bills 527.4 590.4 657.7 714.6 659.9 659.3 658.4 714.6 5 Notes 1,265.2 1,430.8 1,608.9 1,764.0 1,652.1 1,698.7 1,734.2 1,764.0 6 Bonds 388.2 435.5 472.5 495.9 480.2 487.6 497.4 495.9 7 Nonmarketable1 1,166.2 1,327.2 1,419.8 1,542.9 1,420.5 1,488.4 1,503.7 1,542.9 8 State and local government series 160.8 159.7 153.5 149.5 151.6 152.8 149.5 149.5 9 Foreign issues 43.5 41.9 37.4 43.5 37.0 43.0 42.5 43.5 10 Government 43.5 41.9 37.4 43.5 37.0 43.0 42.5 43.5 11 Public .0 .0 .0 .0 .0 .0 .0 .0 12 Savings bonds and notes 124.1 135.9 155.0 169.4 161.4 164.4 167.0 169.4 13 Government account series3 813.8 959.2 1,043.5 1,150.0 1,040.0 1,097.8 1,114.3 1,150.0 14 Non-interest-bearing 2.8 2.8 3.1 3.4 3.0 2.9 2.9 3.4 By holder4 15 U.S. Treasury and other federal agencies and trust funds 828.3 968.7 1,047.8 1,043.2 1,099.8 1,116.7 16 Federal Reserve Banks 259.8 281.8 302.5 305.2 328.2 325.7 17 Private investors 2,288.3 2,563.2 2,839.9 2,895.0 2,938.4 2,983.0 18 Commercial banks 171.5 233.4 294.0 310.0 305.9 306.0 19 Money market funds 45.4 80.0 79.4 77.7 76.2 75.2 20 Insurance companies 142.0 168.7 197.5 205.0 208.1 210.0 21 Other companies 108.9 150.8 192.5 n.a. 199.3 206.1 215.6 n.a. 22 State and local treasuries 490.4 520.3 534.8 541.0 553.9 558.0 Individuals 23 Savings bonds 126.2 138.1 157.3 163.6 166.5 169.1 24 Other securities 107.6 125.8 131.9 134.1 136.4 136.7 25 Foreign and international 458.4 491.8 549.7 565.5 568.2 592.3 26 Other miscellaneous investors6 637.7 651.3 702.4 698.8 717.0 720.0 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 1994, week ending IItteemm Oct. Nov. Dec. Dec. 1 Dec. 8 Dec. 15 Dec. 22 Dec. 29 Jan. 5 Jan. 12 Jan. 19 Jan. 26 IMMEDIATE TRANSACTIONS2 By type of security U.S. Treasury securities 1 Bills 39,670 47,256 42,139* 40,470 45,673 45,239 44,246 31,220 43,782 56,342 5511,,440088 4499,,556699 Coupon securities, by maturity 2 Less than 3.5 years 44,600 52,959 37,291 42,476 42,231 40,198 40,743 22,716 33,911 5566,,770022 5500,,445566 5599,,223344 3 3.5 to 7.5 years 43,354 45,242 29,891r 33,781 34,110 33,731 32,879 16,731 23,403 47,976 42,734 43,117 4 7.5 to 15 years 25,444 26,974r 16,803r 21,366r 22,327 19,007 14,369 9,275 15,890 28,728 27,412 25,100 5 15 years or more 19,347 17,995 13,255 14,026 16,112 16,105 11,926 7,553 13,410 23,445 15,884 18,133 Federal agency securities Debt, by maturity 6 Less than 3.5 years 9,959 9,971 9,999 9,505 9,858 9,438 10,390 10,248 11,056 11,091 10,539 12,554 7 3.5 to 7.5 years 734 718 53 lr 398 785 583 474 303 326 1,359 552 635 8 7.5 years or more 567 396 466 273 572 706 365 212 447 530 650 635 Mortgage-backed 9 Pass-throughs 20,766 22,489 19,388 18,113 21,419 24,269 17,601 12,630 22,071 33,767 2266,,880077 2222,,660077 10 All others 2,853 3,064 2,771r 3,006 3,133 3,218 2,890 1,523 2,878 4,423 2,735 4,508 By type of counterparty Pnmary dealers and brokers 11 U.S. Treasury securities 106,341 120,636 84,926 93,917 99,035 95,238 87,382 50,896 77,673 130,373 111155,,881188 112222,,441199 Federal agency securities 12 Debt 1,487 1,623 1,308 1,585 1,518 1,508 1,032 915 1,939 1,675 11,,449977 22,,009966 13 Mortgage-backed 10,194 10,965 9,067 9,436 8,942 11,425 8,413 6,509 11,032 16,333 12,308 13,552 Customers 14 U.S. Treasury securities 66,073 69,791r 54,454r 58,202r 61,417 59,043 56,782 36,599 52,724 82,819 7722,,007755 7722,,773344 Federal agency securities 15 Debt 9,773 9,461 9,688r 8,592 9,698 9,219 10,197 9,848 9,890 11,304 1100,,224444 1111,,772288 16 Mortgage-backed 13,427 14,589 13,091 11,683 15,610 16,061 12,078 7,644 13,917 21,857 17,234 13,562 FUTURES AND FORWARD TRANSACTIONS4 By type of deliverable security U.S. Treasury securities 17 Bills 2,445 2,746 1,740 2,543 2,616 1,592 1,474 792 2,414 2,611 11,,334488 11,,332277 Coupon securities, by maturity 18 Less than 3.5 years 1,603 2,276 1,756 1,976 1,785 1,648 2,262 1,200 1,626 2,800 11,,995599 22,,119977 19 3.5 to 7.5 years 1,530 2,158 1,809 2,259 1,763 1,751 2,673 858 1,373 2,184 1,466 2,562 20 7.5 to 15 years 3,153 4,192 2,930 3,879 4,020 2,725 3,034 1,540 2,590 3,509 3,395 2,990 21 15 years or more 11,266 12,704 8,686r 10,260 11,751 9,968 7,336 4,355 9,460 13,298 10,953 11,822 Federal agency securities Debt, by maturity 22 Less than 3.5 years 47 77 29 31 14 22 13 49 113399 8844 110055 114488 23 3.5 to 7.5 years 107 93 49 52 57 64 13 66 33 98 93 77 24 7.5 years or more 33 29 83 37 73 136 71 9 269 9 30 73 Mortgage-backed 25 Pass-throughs 26,416 26,164 17,858 16,068 19,839 28,154 14,250 7,268 18,660 35,613 2266,,224466 2211,,880055 26 Others3 2,283 1,916 1,745 819 1,079 1,116 3,142 1,893 1,573 1,454 1,457 2,365 OPTIONS TRANSACTIONS5 By type of underlying security U.S. Treasury, coupon securities, by maturity 27 Less than 3.5 years 1,956 2,121 1,633 1,452 2,154 1,821 1,208 1,258 1,900 3,004 11,,999911 11,,775511 28 3.5 to 7.5 years 699 618 327 208 277 315 266 487 417 1,338 767 460 29 7.5 to 15 years 610 770 636 560 737 561 587 663 710 1,257 2,097 821 30 15 years or more 1,782 2,121r l,212r l,371r 1,100* 1,388 1,306 616 2,642 2,265 1,799 2,158 Federal agency, mortgagebacked securities 31 Pass-throughs 888 941r 548 936r 774 748 247 199 923 1,510 773355 776611 1. Transactions are market purchases and sales of securities as reported to the 4. Futures transactions are standardized agreements arranged on an exchange. Federal Reserve Bank of New York by the U.S. government securities dealers on Forward transactions are agreements made in the over-the-counter market that its published list of primary dealers. Averages are based on the number of trading specify delayed delivery. All futures transactions are included regardless of time days in the period. Immediate, forward, and futures transactions are reported at to delivery. Forward contracts for U.S. Treasury securities and federal agency principal value, which does not include accrued interest; options transactions are debt securities are included when the time to delivery is more than five business reported at the face value of the underlying securities. days. Forward contracts for mortgage-backed agency securities are included Dealers report cumulative transactions for each week ending Wednesday. when the time to delivery is more than thirty business days. 2. Transactions for immediate delivery include purchases or sales of securities 5. Options transactions are purchases or sales of put-and-call options, whether (other than mortgage-backed agency securities) for which delivery is scheduled in arranged on an organized exchange or in the over-the-counter market, and include five business days or less and "when-issued" securities that settle on the issue options on futures contracts on U.S. Treasury and federal agency securities. date of offering. Transactions for immediate delivery of mortgage-backed agency NOTE. In tables 1.42 and 1.43, "n.a." indicates that data are not published securities include purchases and sales for which delivery is scheduled in thirty business because of insufficient activity. days or less. Stripped securities are reported at market value by maturity of coupon or Data for several types of options transactions—U.S. Treasury securities, bills; corpus. Federal agency securities, debt; and federal agency securities, mortgage-backed, 3. Includes such securities as collateralized mortgage obligations (CMOs), real other than pass-throughs—are no longer available because activity is insufficient. estate mortgage investment conduits (REMICs), interest-only securities (IOs), and principal-only securities (POs). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic NonfinancialS tatistics • April 1994 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 1993 1993, week ending 1994, week ending item Oct.r Nov. Dec. Dec. 1 Dec. 8 Dec. 15 Dec. 22 Dec. 29 Jan. 5 Jan. 12 Jan. 19 Positions2 NET IMMEDIATE POSITIONS3 By type of security U.S. Treasury securities 1 Bills 2,563 16,062 15,015 13,370 13,655 21,762 16,961 99,,665577 88,,992222 8,475 10,200 Coupon securities, by maturity 2 Less than 3.5 years -2,892 -3,830 -7,939 -7,960 -11,761 -10,823 -4,585 -4,592 -7,904 -3,562 -7,940 3 3.5 to 7.5 years -22,475 -24,582 -18,634 -22,120 -22,873 -20,969 -15,272 -16,051 -14,691 -16,990 -17,198 4 7.5 to 15 years -6,600 -890 -1,907 -2,009 -331 -1,680 -3,332 -1,895 -3,227 -2,241 -2,803 5 15 years or more 6,353 3,050 777 1,019 2,053 -1,987 -31 33,,442211 -560 1,090 -817 Federal agency securities Debt, by maturity 6 Less than 3.5 years 11,012 9,381 8,277 8,028 6,542 9,113 10,756 6,9% 7,348 7,648 9,206 7 3.5 to 7.5 years 3,374 3,189 3,368 3,295 3,546 3,398 3,516 3,197 2,763 3,247 2,684 8 7.5 years or more 4,497 4,089 4,550 4,206 4,354 4,371 44,,775544 44,,773388 44,,665577 55,,336655 55,,668833 Mortgage-backed 9 Pass-throughs 52,587 44,808r 39,223 27,645 37,094 39,944 42,441 39,905 36,295 51,597 51,938 10 All others 37,476 34,467r 29,892 33,054 31,333 30,959 27,805 2288,,110088 3333,,008833 32,235 3311,,224411 Other money market instruments 11 Certificates of deposit 3,363 3,428 3,490 3,879 2,939 3,210 4,003 3,557 4,167 3,028 4,216 12 Commercial paper 6,456 7,595 7,584 9,522 5,806 10,059 7,984 6,758 5,667 4,591 6,612 13 Bankers acceptances 1,287 1,432 1,186 1,490 1,383 1,200 1,054 1,132 944 918 1,241 FUTURES AND FORWARD POSITIONS5 By type of deliverable security U.S. Treasury securities 14 Bills 4,571 4,475 205 1,855 -1,999 -1,708 11,,551144 22,,114499 2,409 -3,743 --33,,442299 Coupon securities, by maturity 15 Less than 3.5 years -618 -952 -1,448 -901 -2,150 -1,965 -1,461 -802 328 -1,709 -2,041 16 3.5 to 7.5 years 2,548 1,646 556 307 1,380 982 -156 -446 2,298 1,248 1,933 17 7.5 to 15 years 10,412 10,952 8,422 9,931 8,750 9,083 7,424 7,855 9,690 5,906 6,081 18 15 years or more -3,029 -1,670 -3,984 -2,496 -3,941 -2,877 -4,551 --55,,774455 -607 -5,716 --44,,558844 Federal agency securities Debt, by maturity 19 Less than 3.5 years 26 15 34 23 13 -25 18 41 358 291 419 20 3.5 to 7.5 years -111 68 90 18 -32 -7 -6 354 309 245 541 21 7.5 years or more 26 -8 48 -47 -17 158 -5 80 6 29 -549 Mortgage-backed 22 Pass-throughs -37,665 -21,894r -10,903 -2,456 -13,310 -10,046 -12,517 -8,%5 -10,830 -29,710 -29,595 23 All others4^ 6,104 2,508r 1,636 -240 248 321 3,241 3,526 -198 770 354 24 Certificates of deposit -226,017 -226,180 -227,414 -225,477 -232,840 -229,415 -223,011 -228,009 -215,709 -216,323 -205,719 Financing6 Reverse repurchase agreements 25 Overnight and continuing 237,187 228,941r 226,529 231,715r 226,668 239,877 222,401 214,327 233,887 253,989 255,207 26 Term 412,711 409,166r 392,778 366,248 392,063 399,619 401,470 389,%9 364,009 406,009 407,166 Repurchase agreements 27 Overnight and continuing 439,475 435,256r 441,518 458,032 429,671 478,417 439,708 416,722 438,703 449,875 478,024 28 Term 372,947 380,453r 368,885 313,364 355,118 362,142 399,841 382,285 313,183 372,708 378,689 Securities borrowed 29 Overnight and continuing 136,213 135,679r 139,232r 140,054r 138,784 142,946 141,172 133,929 139,167 140,740 143,646 30 Term 43,336 47,1 Iff 47,034 46,266 48,687 47,007 46,527 46,039 46,990 49,881 49,870 Securities loaned 31 Overnight and continuing 6,001 6,075 5,564r 6,341 5,225 5,384 4,877 6,623 5,694 5,904 6,608 32 1,988 2,556 2,386 2,488 2,717 2,993 2,390 1,701 1,428 1,349 1,392 Collateralized loans 33 Overnight and continuing 16,408 13,409* 16,326r ll,818r 15,896 15,134 15,436 18,403 20,109 19,519 14,661 MEMO: Matched book7 Reverse repurchase agreements 34 Overnight and continuing 158,878 158,777 153,280 159,402 157,012 158,680 152,487 141,053 163,828 175,255 176,176 35 359,496 361,099r 345,268 325,273 345,235 352,688 352,448 339,550 324,300 365,598 368,183 Repurchase agreements 36 Overnight and continuing 233,495 223,461r 210,901 223300,,557799** 221,064 218,183 200,899 195,575 228,655 236,862 243,076 37 Term 281,344 285,451 275,439 238,359 265,942 270,309 299,486 282,924 234,808 285,927 284,351 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 specify delayed delivery. All futures positions are included regardless of time to activity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A33 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1993 AAggeennccyy 11998899 11999900 11999911 11999922 July Aug. Sept. Oct. Nov. 1 Federal and federally sponsored agencies 411,805 434,668 442,772 483,970 522,494 544,642 0 0 0 2 Federal agencies 35,664 42,159 41,035 41,829 44,656 44,816 43,753 43,796 44,055 3 Defense Department1 7 7 7 7 7 7 7 7 7 4 Export-Import Bank ' 10,985 11,376 9,809 7,208 6,258 6,258 5,801 5,801 5,801 5 Federal Housing Administration 328 393 397 374 97 154 213 243r 255 6 Government National Mortgage Association certificates of participation 0 0 0 0 0 0 0 0 0 7 Postal Service6 6,445 6,948 8,421 10,660 10,182 10,182 9,732 9,732 9,732 8 Tennessee Valley Authority 17,899 23,435 22,401 23,580 28,112 28,215 28,000 28,016 28,260 9 United States Railway Association6 0 0 0 0 0 0 0 0 0 10 Federally sponsored agencies7 375,428 392,509 401,737 442,141 477,838 499,826 0 0 0 11 Federal Home Loan Banks 136,108 117,895 107,543 114,733 125,448 129,808 132,651 133,365 0 12 Federal Home Loan Mortgage Corporation 26,148 30,941 30,262 29,631 42,291 55,421 52,702 63,427 56,809 n Federal National Mortgage Association 116,064 123,403 133,937 166,300 180,730 184,924 195,786 193,925 195,165 14 Farm Credit Banks8 54,864 53,590 52,199 51,910 51,698 51,406 51,636 51,759 51,861 15 Student Loan Marketing Association 28,705 34,194 38,319 39,650 37,801 38,397 38,795 0 0 16 Financing Corporation 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 17 Farm Credit Financial Assistance Corporation 847 1,261 1,261 1,261 1,261 1,261 1,261 1,261 1,261 18 Resolution Funding Corporation 4,522 23,055 29,9% 29,9% 29,996 29,9% 29,9% 29,9% 29,9% MEMO 19 Federal Financing Bank debt 3 134,873 179,083 185,576 154,994 132,307 128,616 129,329 127,348 126,490 Lending to federal and federally sponsored agencies 20 Export-Import Bank3 10,979 11,370 9,803 7,202 6,252 6,252 5,795 55,,779955 55,,779955 21 Postal Service6 6,195 6,698 8,201 10,440 10,182 10,182 9,732 9,732 9,732 77 Student Loan Marketing Association 4,880 4,850 4,820 4,790 4,790 4,790 4,790 4,760 4,760 23 Tennessee Valley Authority 16,519 14,055 10,725 6,975 6,575 6,325 6,325 6,325 6,325 24 United States Railway Association6 0 0 0 0 0 0 0 0 0 Other lending14 75 Farmers Home Administration 53,311 52,324 48,534 42,979 39,129 38,619 38,619 38,619 38,619 7,6 Rural Electrification Administration 19,265 18,890 18,562 18,172 17,883 17,897 17,653 17,561 17,561 27 23,724 70,896 84,931 64,436 47,4% 44,551 46,415 44,556 43,698 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 • April 1994 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1993 1994 TTyyppee ooff iissssuuee oorr iissssuueerr,, oorr uussee 11999911 11999922 11999933 June July Aug. Sept. Oct. Nov. Dec. Jan. 1 All issues, new and refunding1 154,402 215,191 279,945 29,276 24,087 24,438 23,504 21,900 18,094 24,520 15,622 By type of issue 2 General obligation 55,100 78,611 90,599 9,614 8,537 6,414 5,884 7,495 6,422 6,542 4,622 3 Revenue 99,302 136,580 189,346 19,662 15,550 18,024 17,620 14,405 11,672 17,978 11,000 By type of issuer 4 State 24,939 25,295 n.a. 3,562 2,944 2,319 2,758 3,216 885 n.a. 1,235 5 Special district or statutory authority2 80,614 129,686 n.a. 18,821 12,398 13,769 13,113 9,875 10,992 n.a. 10,025 6 Municipality, county, or township 48,849 60,210 n.a. 6,835 8,616 8,307 7,476 8,418 4,528 n.a. 4,362 7 Issues for new capital 116,953 120,272 91,434 9,502 8,751 8,001 8,759 7,261 6,734 9,543 5,442 By use of proceeds 8 Education 21,121 22,071 17,098 2,208 1,723 1,883 1,886 547 1,416 1,227 1,634 9 Transportation 13,395 17,334 9,571 772 653 1,062 789 304 979 429 305 10 Utilities and conservation 21,039 20,058 11,802 1,629 922 1,646 1,255 593 687 1,454 325 11 Social welfare 25,648 21,796 n.a. 2,073 1,555 681 2,199 1,764 n.a. 2,171 n.a. 12 Industrial aid 8,376 5,424 6,381 1,042 429 212 329 518 673 1,272 488 13 Other purposes 30,275 33,589 29,519 1,634 3,453 2,544 2,362 3,737 1,820 2,990 1,637 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 1993 TTyyppee ooff iissssuuee,, ooffffeerriinngg,, oorr iissssuueerr 11999911 11999922 11999933 May June July Aug. Sept. Oct/ Nov.r Dec. 1 All issues1 465,246r 559,729"" n.a. 43,181r 66,164r 47,828r 52,745r 64,545r 56,143 54,813 44,115 2 Bonds2 389,822 471,404r n.a. 34,483r 56, yiff 38,032r 43,478r 53,887r 45,608 43,214 33,584 By type of offering 3 Public, domestic 286,930 337777,,996600'' 486,463 31,154r 51,693r 37,392r 40,237 49,182r 42,645 39,525 32,002 4 Private placement, domestic3 74,930 65,853 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5 Sold abroad 27,962 27,591 39,401 3,329 4,677r 640r 3,241r 4,705r 2,%3 3,689 1,582 By industry group 6 Manufacturing 86,628 82,058r 67,152 3,75c 8,607r 2,498r 6,132 4,036r 3,203 3,334 3,068 7 Commercial and miscellaneous 36,666 43,043r 37,257 3,015 2,630"^ 4,735r 2,331 2,378r 6,376 3,078 2,348 8 Transportation 13,598 9,979 8,046 685 948 611 723 288 1,416 648 895 9 Public utility 23,944r 48,055 52,532 3,017 5,874 5,797r 3,264 5,163 2,585 1,763 2,336 10 Communication 9,431 15,394 29,040 1,820 2,473 2,331 2,979 2,237 2,991 1,015 2,001 11 Real estate and financial 219,555r 272,875r 331,838 22,1% 35,838r 22,060"^ 28,049r 39,785r 29,039 33,376 22,936 12 Stocks2 75,424 88,325 111,262 8,698 9,794 9,596 9,267 10,658r 10,535 11,599 10,531 By type of offering 13 Public preferred 17,085 21,339 20,533 3,124 876 1,913 3,319 1,358 2,549 1,385 650 14 Common 48,230 57,118 90,559 5,574 8,918 7,683 5,948 9,336r 7,987 10,209 9,881 15 Private placement3 10,109 9,867 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. By industry group 16 Manufacturing 24,111 22,723 22,471 1,413 1,982 1,618 1,961 2,274 2,121 2,169 2,267 17 Commercial and miscellaneous 19,418 20,231 26,041 2,836 2,025 2,525 1,457 2,242 1,842 3,061 1,975 18 Transportation 2,439 2,595 2,237 111 168 114 466 153 128 221 162 19 Public utility 3,474 6,532 7,015 753 893 495 582 873 1,103 371 129 20 Communication 475 2,366 3,439 279 65 n.a. 115 248 18 1,074 1,603 21 Real estate and financial 25,507 33,879 49,889 3,307 4,660 4,844 4,675 4,666r 5,323 4,486 4,380 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 1993 IItteemm 11999922 11999933 May June July Aug. Sept. Oct. Nov/ Dec. 1 Sales of own shares2 647,055 60,504 68,373 72,503 73,032 69,938 74,490 72,865 89,535 F 2 Redemptions of own shares 447,140 38,752 46,923 44,922 46,382 49,270 47,168 51,306 62,722 3 Net sales3 199,915 1 21,759 21,650 27,581 26,650 20,667 27,322 21,559 26,813 4 Assets4 1,056,310 1 1,219,863 1,255,377 1,284,842 1,343,920 1,370,654 1,411,628 1,416,841 1,452,101 1 5 Cash5 73,999 85,677 84,177 93,345 92,771 96,848 104,301 103,352 99,371 6 Other 982,311 1,134,186 1,171,200 1,191,497 1,251,149 1,273,807 1,307,327 1,303,489 1,352,730 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 1992 1993 AAccccoouunntt 11999911 11999922 11999933 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 Profits with inventory valuation and capital consumption adjustment 369.5 407.2 n.a. 409.9 411.7 367.5 439.5 432.1 458.1 468.5 n.a. 2 Profits before taxes 362.3 395.4 n.a. 404.3 409.5 357.9 409.9 419.8 445.6 443.8 n.a. 3 Profits tax liability 129.8 146.3 n.a. 147.0 153.0 130.1 155.0 160.9 173.3 169.5 n.a. 4 Profits after taxes 232.5 249.1 n.a. 257.3 256.5 227.8 254.9 258.9 272.3 274.3 n.a. 5 Dividends 137.4 150.5 169.0 138.0 146.1 155.2 162.9 167.5 168.5 169.7 170.4 6 Undistributed profits 95.2 98.6 n.a. 119.3 110.4 72.7 92.0 91.4 103.9 104.6 n.a. 7 Inventory valuation 4.9 -5.3 -7.8 -4.6 -13.7 -7.8 4.9 -12.7 -12.2 1.0 -7.2 8 Capital consumption adjustment 2.2 17.1 24.3 10.2 16.0 17.4 24.7 25.1 24.7 23.8 23.6 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 1992 1993 1994 IInndduussttrryy 11999922 11999933 1199994411 Q2 Q3 Q4 Ql Q2 Q3 Q41 Ql1 1 Total nonfarm business 546.60 584.64 616.50 541.41 547.40 559.24 564.13 579.79 594.11 600.53 616.38 Manufacturing 2 Durable goods industries 73.32 81.49 84.93 74.07 72.09 73.30 79.11 80.88 81.99 83.99 87.50 3 Nondurable goods industries 100.69 97.97 101.34 97.91 100.77 103.56 95.94 96.21 100.18 99.53 98.72 Nonmanufacturing 4 Mining 8.88 10.13 10.84 9.20 8.98 8.47 8.89 9.10 11.14 11.37 10.83 Transportation 5 Railroad 6.67 6.20 6.21 6.32 6.70 7.04 6.00 6.00 5.91 6.90 6.32 6 Air 8.93 6.83 4.45 9.65 9.69 7.60 7.30 6.54 6.92 6.57 4.64 7 Other 7.04 9.34 10.25 7.19 7.52 6.97 9.17 9.04 8.88 10.26 10.53 Public utilities 8 Electric 48.22 51.82 57.00 48.35 48.17 49.57 49.92 50.51 52.74 54.11 54.16 9 Gas and other 23.99 23.17 24.42 24.29 24.01 24.50 23.59 24.04 22.88 22.19 23.62 10 Commercial and other2 268.84 297.69 317.05 264.46 269.46 278.24 284.21 297.46 303.47 305.61 320.06 1. Figures are amounts anticipated by business. SOURCE. U.S. Department of Commerce, Survey of Current Business. 2. "Other" consists of construction, wholesale and retail trade, finance and insurance, personal and business services, and communication. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic NonfinancialS tatistics • April 1994 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1 Billions of dollars, end of period; not seasonally adjusted 1992 1993 AAccccoouunntt 11999900 11999911 11999922 QL Q2 Q3 Q4 QL Q2 Q3r ASSETS 1 Accounts receivable, gross2 492.3 480.6 482.1 475.6 476.7 473.9 482.1 469.6 469.3 467.6 2 Consumer 133.3 121.9 117.1 118.4 116.7 116.7 117.1 111.9 111.3 112.6 3 Business 293.6 292.9 296.5 290.8 293.2 288.5 296.5 289.6 290.7 287.8 4 Real estate 65.5 65.8 68.4 66.4 66.8 68.8 68.4 68.1 67.2 67.2 5 LESS: Reserves for unearned income 57.6 55.1 50.8 53.6 51.2 50.8 50.8 47.4 47.5 47.9 6 Reserves for losses 9.6 12.9 15.8 13.0 12.3 12.0 15.8 15.5 13.8 11.1 7 Accounts receivable, net 425.1 412.6 415.5 409.0 413.2 411.1 415.5 406.6 408.0 408.6 8 All other 113.9 149.0 150.6 145.5 139.4 146.5 150.6 155.0 156.6 169.7 9 Total assets 539.0 561.6 566.1 554.5 552.6 557.6 566.1 561.6 564.6 578.3 LIABILITIES AND CAPITAL 10 Bank loans 31.0 42.3 37.6 38.0 37.8 38.1 37.6 34.1 29.5 25.8 11 Commercial paper 165.3 159.5 156.4 154.4 147.7 153.2 156.4 149.8 144.5 149.9 Debt 12 Other short-term n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 13 Long-term n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 14 Owed to parent 37.5 34.5 37.8 34.5 34.8 34.9 37.8 41.9 46.4 47.9 15 Not elsewhere classified 178.2 191.3 195.3 189.8 191.9 191.4 195.3 195.1 195.8 198.1 16 All other liabilities 63.9 69.0 71.2 72.0 73.4 73.7 71.2 74.2 81.3 87.6 17 Capital, surplus, and undivided profits 63.7 64.8 67.8 66.0 67.1 68.1 67.8 66.6 67.1 68.9 18 Total liabilities and capital 539.6 561.2 566.1 554.6 552.7 559.4 566.1 561.7 564.6 578.3 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 11999911 11999922 11999933 July Aug. Sept. Oct. Nov. Dec. Seasonally adjusted 11 TToottaall 519,910 534,845 532,616 523,539 525,744 527,819 529,310 532,687r 532,616 22 CCoonnssuummeerr 154,822 157,707 159,359 153,228 153,420 154,707 155,700 157,438r 159,359 33 RReeaall eessttaattee22 65,383 68,011 68,781 67,426 67,216 66,871 67,983 68,540 68,781 44 BBuussiinneessss 299,705 309,127 304,475 302,885 305,108 306,241 305,627 306,709* 304,475 Not seasonally adjusted 5 Total 523,192 538,158 535,910 523,389 521,094 524,937 528,869 532,354r 535,910 6 Consumer 155,713 158,631 160,300 153,733 154,218 155,496 156,712 157,848r 160,300 7 Motor vehicles 63,415 57,605 55,280 56,817 55,247 55,057 54,324 55,337 55,280 8 Other consumer 58,522 59,522 61,749 56,259 56,616 57,588 58,278 59,463 61,749 9 Securitized motor vehicles4 23,166 29,775 34,659 30,787 32,856 33,549 3355,,221122 34,301r 34,659 10 Securitized other consumer4 10,610 11,729 8,611 9,870 9,498 9,302 88,,889988 8,747 8,611 11 Real estate2 65,760 68,410 69,187 67,649 67,565 67,212 68,425 68,718 69,187 12 Business 301,719 311,118 306,424 302,007 299,311 302,229 303,732 305,788r 306,424 13 Motor vehicles 90,613 87,456 90,147 87,745 84,920 86,019 86,129 88,510 90,147 14 Retail5 22,957 19,303 16,024 17,561 17,264 18,365 16,599 16,723 16,024 15 Wholesale6 31,216 29,962 31,067 27,442 25,136 25,458 27,144 29,260 31,067 16 Leasing 36,440 38,191 43,056 42,743 42,520 42,196 42,386 42,526 43,056 17 Equipment 141,399 151,607 149,083 146,408 146,404 147,905 148,357 146,703r 149,083 18 Retail...., 30,962 32,212 33,246 33,209 33,676 33,789 33,357 32,360r 33,246 19 Wholesale6 9,671 8,669 8,003 8,224 8,059 8,113 8,091 7,802 8,003 20 Leasing 100,766 110,726 107,835 104,975 104,669 106,004 106,909 106,541 107,835 21 Other business 60,900 57,464 50,464 53,243 53,536 53,861 53,969 53,886 50,464 22 Securitized business assets 8,807 14,590 16,730 14,611 14,451 14,444 15,277 16,690r 16,730 23 Retail 576 1,118 1,830 1,268 1,220 1,168 1,690 l,953r 1,830 24 Wholesale 5,285 8,756 9,697 8,318 8,329 8,529 8,785 9,407 9,697 25 Leasing 2,946 4,716 5,203 5,025 4,902 4,747 4,802 5,330 5,203 1. Includes finance company subsidiaries of bank holding companies but not of 5. Passenger car fleets and commercial land vehicles for which licenses are retailers and banks. Data are before deductions for unearned income and losses. required. Data in this table also appear in the Board's G.20 (422) monthly statistical release. 6. Credit arising from transactions between manufacturers and dealers, that is, For ordering address, see inside front cover. floor plan financing. 2. Includes all loans secured by liens on any type of real estate, for example, 7. Includes loans on commercial accounts receivable, factored commercial first and junior mortgages and home equity loans. accounts, and receivable dealer capital; small loans used primarily for business or 3. Includes personal cash loans, mobile home loans, and loans to purchase other farm purposes; and wholesale and lease paper for mobile homes, campers, and types of consumer goods such as appliances, apparel, general merchandise, and travel trailers. recreation vehicles. 4. Outstanding balances of pools upon which securities have been issued; these Digitized for FRbAalSanEceRs are no longer carried on the balance sheets of the loan originator. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate A37 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 1993 1994 IItteemm 11999911 11999922 11999933 July Aug. Sept. Oct. Nov. Dec. Jan. Terms and yields in primary and secondary markets PRIMARY MARKETS Terms1 1 Purchase price (thousands of dollars) 155.0 158.1 163.1 168.7 158.1 155.3 169.2 174.4 167.9 168.1 2 Amount of loan (thousands of dollars) 114.0 118.1 123.0 127.4 122.2 120.8 128.4 134.0 128.7 127.9 3 Loan-to-price ratio (percent) 75.0 76.6 78.0 77.8 78.4 78.5 78.0 79.1 79.2 78.0 4 Maturity (years) 26.8 25.6 26.1 26.2 26.4 26.5 26.7 26.9 26.8 27.2 5 Fees and charges (percent of loan amount) 1.71 1.60 1.30 1.28 1.21 1.13 1.23 1.23 1.10 1.18 Yield (percent per year) Contract rate1 9.02 7.98 7.02 6.99 6.86 6.76 6.61 6.61 6.74 6.77 7 Effective rate1,3 9.30 8.25 7.24 7.20 7.05 6.95 6.80 6.80 6.92 6.95 8 Contract rate (HUD series) 9.20 8.43 7.37 7.31 6.89 6.94 7.05 7.38 7.26 7.13 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (Section 203)5 9.25 8.46 7.46 7.51 7.02 7.03 7.08 7.51 7.52 7.05 10 GNMA securities6 8.59 7.71 6.59 6.53 6.42 6.15 6.11 6.38 6.07 5.95 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 122,837 142,833 172,791 174,674 177,992 180,057 182,524 185,463 190,861 194,441 12 FHA/VA insured 21,702 22,168 22,876 22,761 22,834 22,810 22,978 23,334 23,857 23,796 13 Conventional 101,135 120,664 149,914 151,913 155,158 157,247 159,546 162,129 167,004 170,645 Mortgage transactions (during period) 14 Purchases 37,202 75,905 92,037 7,854 8,176 8,866 8,780 8,979 12,123 7,919 Mortgage commitments (during period) 15 Issued 40,010 74,970 92,537 7,760 8,581 9,814 7,515 11,144 8,461 6,159 16 To sell8 7,608 10,493 5,097 458 2,585 0 0 0 209 664 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of periodf 17 Total 24,131 29,959 42,789 43,119 44,396 46,858 50,108 52,933 55,012 56,067 18 FHA/VA insured 484 408 327 314 324 323 321 324 321 n.a. 19 Conventional 23,283 29,552 42,462 42,805 44,072 46,536 49,787 52,610 54,691 n.a. Mortgage transactions (during period) 20 Purchases 99,965 191,125 229,242 19,700 19,636 18,372 18,658 27,062 29,396 22,160 21 92,478 179,208 208,723 18,631 18,008 16,230 15,985 24,028 26,607 21,253 Mortgage commitments (during period)9 22 Contracted 114,031 261,637 274,599 21,722 17,085 16,495 24,614 39,977 24,176 31,383 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 Financial Statistics • April 1994 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1992 1993 TTyyppee ooff hhoollddeerr aanndd pprrooppeerrttyy 11998899 11999900 11999911 Q3 Q4 Ql Q2 Q3P 1 All holders 3,549,564 3,761,525 3,923,371 4,020,556 4,042,926 4,059,200 4,099,621 4,160,167 By type of property 2 One- to four-family residences 2,408,402 2,615,435 2,778,803 2,911,442 2,953,527 2,976,784 3,026,924 3,088,521 3 Multifamily residences 306,517 309,369 306,410 301,975 294,976 293,578 290,609 290,857 4 Commercial 754,169 758,313 759,023 726,562 713,701 708,086 701,280 699,926 5 80,476 78,408 79,136 80,577 80,722 80,752 80,808 80,863 By type of holder 6 Major financial institutions 1,931,537 1,914,315 1,846,726 1,793,492 1,769,187 1,753,045 1,765,052 1,770,274 7 Commercial banks 767,069 844,826 876,100 891,445 894,513 891,755 910,944 922,366 8 One- to four-family 389,632 455,931 483,623 502,075 507,780 507,497 526,800 536,321 9 Multifamily 38,876 37,015 36,935 38,757 38,024 37,425 38,064 38,370 10 Commercial 321,906 334,648 337,095 330,705 328,826 326,853 325,485 326,859 11 Farm 16,656 17,231 18,447 19,908 19,882 19,980 20,595 20,815 12 Savings institutions3 910,254 801,628 705,367 648,178 627,972 617,163 612,379 610,081 13 One- to four-family 669,220 600,154 538,358 501,604 489,622 480,415 480,636 478,832 14 Multifamily 106,014 91,806 79,881 73,723 69,791 70,608 68,325 68,068 15 Commercial 134,370 109,168 86,741 72,517 68,235 65,808 63,0% 62,860 16 Farm 650 500 388 334 324 332 322 321 17 Life insurance companies 254,214 267,861 265,258 253,869 246,702 244,128 241,729 237,826 18 One- to four-family 12,231 13,005 11,547 11,779 11,441 11,316 11,195 11,008 19 Multifamily 26,907 28,979 29,562 28,591 27,770 27,466 27,174 26,718 20 Commercial 205,472 215,121 214,105 204,132 198,269 196,100 194,012 190,758 21 Farm 9,604 10,756 10,044 9,366 9,222 9,246 9,348 9,343 22 Federal and related agencies 197,778 239,003 266,146 277,485 286,263 287,182 299,214 310,825 23 Government National Mortgage Association 23 20 19 27 30 45 45 44 24 One- to four-family 23 20 19 27 30 37 38 37 25 Multifamily 0 0 0 0 0 8 7 7 26 Farmers Home Administration 41,176 41,439 41,713 41,671 41,695 41,630 41,669 41,669 27 One- to four-family 18,422 18,527 18,496 17,292 16,912 18,149 18,313 18,313 28 Multifamily 9,054 9,640 10,141 10,468 10,575 10,235 10,197 10,197 29 Commercial 4,443 4,690 4,905 5,072 5,158 4,934 4,915 4,915 30 Farm 9,257 8,582 8,171 8,839 9,050 8,313 8,245 8,245 31 Federal Housing and Veterans' Administrations 6,087 8,801 10,733 11,768 12,581 13,027 12,945 12,797 32 One- to four-family 2,875 3,593 4,036 4,531 5,153 5,631 5,635 5,460 33 Multifamily 3,212 5,208 6,697 7,236 7,428 7,3% 7,311 7,336 34 Resolution Trust Corporation 0 32,600 45,822 37,099 32,045 27,331 21,973 19,925 35 One- to four-family 0 15,800 14,535 12,614 12,960 11,375 8,955 8,381 36 Multifamily 0 8,064 15,018 11,130 9,621 8,070 6,743 6,002 37 Commercial 0 8,736 16,269 13,356 9,464 7,886 6,275 5,543 38 Farm 0 0 0 0 0 0 0 0 39 Federal National Mortgage Association 99,001 104,870 112,283 126,476 137,584 141,192 151,513 160,721 40 One- to four-family 90,575 94,323 100,387 113,407 124,016 127,252 137,340 146,009 41 Multifamily 8,426 10,547 11,896 13,069 13,568 13,940 14,173 14,712 42 Federal Land Banks 29,640 29,416 28,767 28,815 28,664 28,536 28,592 28,810 43 One- to four-family 1,210 1,838 1,693 1,695 1,687 1,679 1,682 1,695 44 Farm 28,430 27,577 27,074 27,119 26,977 26,857 26,909 27,115 45 Federal Home Loan Mortgage Corporation 21,851 21,857 26,809 31,629 33,665 35,421 42,477 46,859 46 One- to four-family 18,248 19,185 24,125 29,039 31,032 32,831 39,905 44,315 47 Multifamily 3,603 2,672 2,684 2,591 2,633 2,589 2,572 2,544 48 Mortgage pools or trusts5 917,848 1,079,103 1,250,666 1,385,460 1,425,546 1,461,612 1,472,844 1,513,024 49 Government National Mortgage Association 368,367 403,613 425,295 422,255 419,516 421,514 413,166 415,076 50 One- to four-family 358,142 391,505 415,767 413,063 410,675 412,798 404,425 405,%3 51 Multifamily 10,225 12,108 9,528 9,192 8,841 8,716 8,741 9,113 52 Federal Home Loan Mortgage Corporation 272,870 316,359 359,163 391,762 407,514 420,932 422,882 430,089 53 One- to four-family 266,060 308,369 351,906 385,400 401,525 415,279 417,646 425,154 54 Multifamily 6,810 7,990 7,257 6,362 5,989 5,654 5,236 4,935 55 Federal National Mortgage Association 228,232 299,833 371,984 429,935 444,979 457,316 465,220 481,880 56 One- to four-family 219,577 291,194 362,667 420,835 435,979 448,483 456,645 473,599 57 Multifamily 8,655 8,639 9,317 9,100 9,000 8,833 8,575 8,281 58 Farmers Home Administration 80 66 47 41 38 44 45 45 59 One- to four-family 21 17 11 9 8 10 10 10 60 Multifamily 0 0 0 0 0 0 0 0 61 Commercial 26 24 19 18 17 18 19 19 62 Farm 33 26 17 14 13 16 16 16 63 Private mortgage conduits 48,299 59,232 94,177 141,468 153,499 161,805 171,532 185,933 64 One- to four-family 43,325 53,335 84,000 123,000 132,000 137,000 145,000 158,000 65 Multifamily 462 731 3,698 5,7% 6,305 6,662 7,410 8,074 66 Commercial 4,512 5,166 6,479 12,673 15,194 18,143 19,121 19,859 67 Farm 0 0 0 0 0 0 0 0 68 Individuals and others6 502,401 529,104 559,833 564,118 561,930 557,360 562,511 566,045 69 One- to four-family 318,842 348,638 367,633 375,072 372,708 367,031 372,699 375,423 70 Multifamily 84,272 85,969 83,796 85,960 85,430 85,977 86,083 86,500 71 Commercial 83,440 80,761 93,410 88,090 88,538 88,344 88,357 89,113 72 Farm 15,846 13,737 14,994 14,9% 15,254 16,008 15,372 15,008 1. Based on data from various institutional and governmental sources; figures 5. Outstanding principal balances of mortgage-backed securities insured or for some quarters estimated in part by the Federal Reserve. Multifamily debt guaranteed by the agency indicated. refers to loans on structures of five or more units. 6. Other holders include mortgage companies, real estate investment trusts, 2. Includes loans held by nondeposit trust companies but not loans held by state and local credit agencies, state and local retirement funds, noninsured bank trust departments. pension funds, credit unions, and finance companies. 3. Includes savings banks and savings and loan associations. SOURCES. Based on data from various institutional and government sources. 4. FmHA-guaranteed securities sold to the Federal Financing Bank were Separation of nonfarm mortgage debt by type of property, if not reported directly, reallocated from FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4 and interpolations and extrapolations, when required, are estimated mainly by the because of accounting changes by the Farmers Home Administration. Federal Reserve. Line 64, from Inside Mortgage Securities. 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 11999911 11999922 11999933 July Aug. Sept. Oct. Nov. Dec. Seasonally adjusted 1 Total 733,510 741,093 789,836 757,465 762,503 768,573 775,620r 782,561r 789,836 2 Automobile 260,898 259,627 278,323 267,468 268,784 270,650 273,822r 276,853r 278,323 3 Revolving 243,564 254,299 281,695 266,938 270,753 273,703 277,125 279,273 281,695 4 Other 229,048 227,167 229,818 223,058 222,967 224,220 224,673r 226,435r 229,818 Not seasonally adjusted 5 Total 749,052 756,944 807,060 753,645 763,268 770,384 776,101r 784,148' 807,060 By major holder 6 Commercial banks 340,713 331,869 367,085 339,948 345,449 349,699 352,559 358,429 336677,,008855 7 Finance companies 121,937 117,127 117,030 113,076 111,864 112,645 112,602r lM.SOO1 117,030 8 Credit unions 92,681 97,641 114,452 106,027 108,095 109,687 110,830 112,342 114,452 9 Retailers 39,832 42,079 47,382 39,043 39,688 39,842 40,310 42,047 47,382 10 Savings institutions 45,965 43,461 33,000 36,485 35,919 34,985 34,251 33,500 33,000 11 Gasoline companies 4,362 4,365 4,462 4,668 4,728 4,574 4,599 4,507 4,462 12 Pools of securitized assets 103,562 120,402 123,649 114,398 117,525 118,952 120,950 118,523r 123,649 By major type of credit* 13 Automobile 261,219 259,964 278,693 267,646 270,495 273,291 275,882r 227777,,006600""^^ 227788,,669933 14 Commercial banks 112,666 109,743 123,731 116,729 118,535 120,574 122,162 122,989 123,731 15 Finance companies 63,415 57,605 55,280 56,817 55,247 55,057 54,324r 55,337r 55,280 16 Pools of securitized assets 28,915 33,878 36,781 33,673 35,569 36,123 37,630 36,569r 36,781 17 Revolving 256,876 267,949 296,678 264,100 269,663 272,579 275,109 280,080 2%, 678 18 Commercial banks 138,005 132,582 148,680 132,984 135,466 136,738 137,844 142,382 148,680 19 Retailers 34,712 36,629 41,378 33,505 34,099 34,214 34,668 36,319 41,378 20 Gasoline companies 4,362 4,365 4,462 4,668 4,728 4,574 4,599 4,507 4,462 21 Pools of securitized assets 63,595 74,243 77,416 69,935 71,562 72,646 73,556 72,357 77,416 22 Other 230,957 229,031 231,688 221,899 223,109 224,514 225,1101 227,008r 231,688 23 Commercial banks 90,042 89,544 94,674 90,235 91,448 92,387 92,553 93,058 94,674 24 Finance companies 58,522 59,522 61,749 56,259 56,616 57,588 58,278r 59,463r 61,749 25 Retailers 5,120 5,450 6,004 5,538 5,589 5,628 5,642 5,728 6,004 26 Pools of securitized assets 11,052 12,281 9,452 10,790 10,394 10,183 9,764 9,597 9,452 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 1993 IItteemm 11999911 11999922 11999933 June July Aug. Sept. Oct. Nov. Dec. INTEREST RATES Commercial banks2 1 48-month new car 11.14 9.29 8.09 n.a. n.a. 7.98 n.a. n.a. 77..6633 n.a. 2 24-month personal 15.18 14.04 13.47 n.a. n.a. 13.45 n.a. n.a. 13.22 n.a. 3 120-month mobile home 13.70 12.67 11.87 n.a. n.a. 11.53 n.a. n.a. 11.55 n.a. 4 Credit card 18.23 17.78 16.83 n.a. n.a. 16.59 n.a. n.a. 16.30 n.a. Auto finance companies 12.41 9.93 99..4488 99..4455 99..3377 9.21 99..2211 99..2255 88..%% 88..8800 6 Used car 15.60 13.80 12.79 12.55 12.46 12.48 12.52 12.58 12.41 12.33 OTHER TERMS3 Maturity (months) 7 New car 55.1 54.0 5544..55 54.6 54.7 54.9 54.7 5555..00 5544..55 5544..00 8 Used car 47.2 47.9 48.8 49.0 49.0 49.0 48.8 48.2 48.4 48.3 Loan-to-value ratio 9 New car 88 89 91 91 91 91 91 90 91 90 10 Used car 96 97 98 98 98 99 98 98 98 98 Amount financed (dollars) 11 New car 12,494 13,584 14,332 14,2% 14,430 14,324 14,348 1144,,665500 1144,,883399 1155,,009977 12 Used car 8,884 9,119 9,875 9,912 9,9% 10,104 9,808 9,%9 10,230 10,349 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 NonfinancialS tatistics • April 1994 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS' Billions of dollars; quarterly data at seasonally adjusted annual rates 1992 1993 Transartinn ratponrv nr <PrT Mr 11998888 11998899 11999900 11999911 11999922 Ql Q2 Q3 Q4 Ql Q2 Q3 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .. 752.6 723.0 631.0 475.5 582.4 603.3 586.2 610.8 529.1 399.3 667.5 579.7 By sector and instrument 2 U.S. government 155.1 146.4 246.9 278.2 304.0 323.8 352.9 299.1 240.1 229.6 348.2 177.2 3 Treasury securities 137.7 144.7 238.7 292.0 303.8 335.0 352.5 290.1 237.4 226.4 344.1 160.9 4 Budget agency issues and mortgages 17.4 1.6 8.2 -13.8 .2 -11.2 .4 9.0 2.7 3.2 4.1 16.2 5 Private 597.5 576.6 384.1 197.3 278.4 279.5 233.4 311.7 289.0 169.7 319.2 402.5 By instrument 6 Tax-exempt obligations 53.7 65.3 57.3 69.6 65.7 68.0 76.6 75.8 42.4 62.4 67.2 38.9 7 Corporate bonds 103.1 73.8 47.1 78.8 67.3 76.3 77.8 61.3 53.7 75.0 64.9 55.2 8 Mortgages 279.6 269.1 188.7 165.1 121.1 185.4 69.8 135.1 93.9 100.2 134.5 223.2 9 Home mortgages 219.6 212.5 177.2 166.0 176.0 216.5 111.6 203.3 172.8 128.4 176.2 229.7 10 Multifamily residential 16.1 12.0 3.4 -2.5 -11.1 11.6 -16.9 -11.2 -27.9 -6.6 -12.8 .2 11 Commercial 48.5 47.3 8.9 .9 -45.5 -46.9 -25.7 -57.7 -51.6 -21.7 -29.1 -6.9 12 Farm -4.6 -2.7 -.8 .7 1.6 4.2 .8 .8 .6 .1 .2 .2 13 Consumer credit 50.1 49.5 13.4 -13.1 9.3 -9.8 -14.7 13.5 48.2 19.2 22.9 60.8 14 Bank loans n.e.c 44.7 36.4 4.2 -46.8 -5.6 -47.3 27.7 -24.1 21.4 -39.7 31.8 8.1 15 Commercial paper 11.9 21.4 9.7 -18.4 8.6 2.5 -2.6 9.3 25.4 -24.2 34.8 24.2 16 Other loans 54.3 61.0 63.6 -37.8 12.0 4.5 -1.1 40.8 3.9 -23.0 -37.0 -8.0 By borrowing sector 17 Household 300.1 276.7 207.7 168.4 215.0 199.2 176.5 217.7 266.6 137.4 215.8 322.4 18 Nonfinancial business 248.4 236.3 121.9 -33.4 4.0 18.2 -10.1 20.5 -12.7 -38.9 34.5 36.4 19 Farm -10.0 .5 1.8 2.4 1.5 4.3 3.6 -.1 -1.6 -2.5 3.4 4.6 20 Nonfarm noncorporate 57.2 49.4 19.4 -24.5 -39.4 -21.8 -47.4 -37.3 -51.0 -36.7 -31.4 -14.1 21 Corporate 201.3 186.5 100.7 -11.3 41.8 35.7 33.7 57.9 39.9 .3 62.5 46.0 22 State and local government 48.9 63.5 54.5 62.3 59.4 62.1 66.9 73.5 35.1 71.2 68.9 43.7 23 Foreign net borrowing in United States 6.4 10.2 23.9 13.9 24.2 1.9 57.7 37.8 -.6 50.3 26.8 78.5 24 Bonds 6.9 4.9 21.4 14.1 17.3 4.9 21.9 20.3 22.2 75.6 30.4 85.5 25 Bank loans n.e.c -1.8 -.1 -2.9 3.1 2.3 1.5 14.1 3.9 -10.3 1.6 6.5 1.0 26 Commercial paper 8.7 13.1 12.3 6.4 5.2 -8.0 27.8 13.1 -12.1 -21.7 -.6 -1.6 27 U.S. government and other loans -7.5 -7.6 -7.0 -9.8 -.6 3.6 -6.1 .5 -.4 -5.3 -9.5 -6.4 28 Total domestic plus foreign 759.0 733.1 654.9 489.4 606.6 605.3 644.0 648.7 528.5 449.5 694.2 658.2 Financial sectors 29 Total net borrowing by financials ectors 239.9 213.7 193.5 150.4 209.5 167.6 206.3 294.4 169.6 148.5 130.3 366.8 By instrument 30 U.S. government-related 119.8 149.5 167.4 145.7 155.8 126.8 195.2 169.3 131.8 165.8 62.7 270.9 31 Government-sponsored enterprises securities 44.9 25.2 17.1 9.2 40.3 11.5 48.3 67.7 33.6 32.2 68.8 167.8 32 Mortgage pool securities 74.9 124.3 150.3 136.6 115.6 115.3 146.9 101.6 98.4 133.6 -6.1 103.1 33 Loans from U.S. government .0 .0 -.1 .0 .0 .0 .0 .0 -.1 .0 .0 .0 34 Private 120.1 64.2 26.1 4.6 53.7 40.8 11.0 125.1 37.8 -17.3 67.6 95.8 35 Corporate bonds 49.0 37.3 40.8 56.8 58.4 28.6 59.1 71.5 74.2 59.9 55.5 86.2 36 Mortgages .3 .5 .4 .8 .0 -.4 .1 .3 .1 .9 2.7 2.2 37 Bank loans n.e.c -3.8 6.0 1.1 17.1 -4.8 22.0 -39.1 17.7 -19.9 -21.2 -5.9 -12.5 38 Open market paper 54.8 31.3 8.6 -32.0 -.7 1.1 -14.8 17.5 -6.5 -75.5 -18.4 -12.4 39 Loans from Federal Home Loan Banks 19.7 -11.0 -24.7 -38.0 .8 -10.4 5.8 18.1 -10.1 18.6 33.5 32.3 By borrowing sector 40 Government sponsored enterprises 44.9 25.2 17.0 9.1 40.2 11.5 48.3 67.7 33.5 32.2 68.8 167.8 41 Federally related mortgage pools 74.9 124.3 150.3 136.6 115.6 115.3 146.9 101.6 98.4 133.6 -6.1 103.1 42 Private 120.1 64.2 26.1 4.6 53.7 40.8 11.0 125.1 37.8 -17.3 67.6 95.8 43 Commercial banks -3.0 -1.4 -.7 -11.7 8.8 3.2 5.5 12.1 14.5 5.4 10.1 6.2 44 Bank holding companies 5.2 6.2 -27.7 -2.5 2.3 10.9 -9.2 6.6 .8 21.1 1.3 -1.2 45 Funding corporations 39.1 13.8 12.5 -13.6 1.6 16.1 29.2 -7.7 -31.1 -54.2 7.2 -15.6 46 Savings institutions 21.7 -15.1 -30.2 -44.5 -6.7 -18.3 -5.4 11.2 -14.4 7.9 17.7 18.3 47 Credit unions .0 .0 .0 .0 .0 .0 .0 .0 .1 .0 .3 .3 48 Life insurance companies .0 .0 .0 .0 .0 .0 .0 .2 -.2 .1 .6 -.1 49 Finance companies 23.9 27.4 24.0 18.6 -3.6 -35.6 -20.1 21.2 19.9 -33.1 -38.6 9.4 50 Mortgage companies -6.2 3.0 -4.0 5.7 .1 27.5 -35.3 14.4 -6.4 -10.4 15.9 2.4 51 Real estate investment trusts (REITs) 1.8 1.3 1.0 1.6 .1 1.7 1.3 2.0 -4.7 -1.4 2.5 3.8 52 Issuers of asset-backed securities (ABSs) 37.6 28.9 51.1 51.0 51.1 35.3 45.0 65.0 59.2 47.2 50.5 72.5 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 1992 1993 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11998888 11998899 11999900 11999911 11999922 Ql Q2 Q3 Q4 Ql Q2 Q3 All sectors 5533 TToottaall nneett bboorrrroowwiinngg,, aallll sseeccttoorrss 998.8 946.8 848.4 639.8 816.0 772.8 850.2 943.0 698.1 598.1 824.5 1,024.9 5544 UU..SS.. ggoovveerrnnmmeenntt sseeccuurriittiieess 274.9 295.8 414.4 424.0 459.8 450.6 548.1 468.5 372.0 395.3 410.9 448.1 5555 TTaaxx--eexxeemmpptt sseeccuurriittiieess 53.7 65.3 57.3 69.6 65.7 68.0 76.6 75.8 42.4 62.4 67.2 38.9 5566 CCoorrppoorraattee aanndd ffoorreeiiggnn bboonnddss 159.0 116.0 109.2 149.6 143.0 109.7 158.8 153.2 150.1 210.5 150.9 226.9 5577 MMoorrttggaaggeess 280.0 269.6 189.1 165.8 121.1 185.0 69.8 135.4 94.0 101.0 137.3 225.5 5588 CCoonnssuummeerr ccrreeddiitt 50.1 49.5 13.4 -13.1 9.3 -9.8 -14.7 13.5 48.2 19.2 22.9 60.8 5599 BBaannkk llooaannss nn..ee..cc 39.2 42.3 2.4 -26.6 -8.1 -23.9 2.8 -2.5 -8.8 -59.3 32.4 -3.4 6600 OOppeenn mmaarrkkeett ppaappeerr 75.4 65.9 30.7 -44.0 13.1 -4.5 10.3 39.9 6.8 -121.4 15.8 10.3 6611 OOtthheerr llooaannss 66.6 42.4 31.8 -85.6 12.2 -2.4 -1.4 59.3 -6.7 -9.7 -13.0 17.9 Funds raised through mutual funds and corporate equities 62 Total net share issues -98.6 -59.6 22.2 210.6 282.5 274.2 264.1 293.3 298.4 292.2 461.9 497.9 63 Mutual funds 6.1 38.5 67.9 150.5 206.7 174.4 199.5 235.2 217.7 240.9 357.5 340.3 64 Corporate equities -104.7 -98.1 -45.7 60.1 75.8 99.9 64.6 58.1 80.7 51.2 104.4 157.6 65 Nonfinancial corporations -129.5 -124.2 -63.0 18.3 26.8 46.0 36.0 11.0 14.0 9.0 26.0 30.0 66 Financial corporations 23.9 8.8 9.9 11.2 18.4 24.8 17.4 12.3 19.2 10.3 28.1 27.2 67 Foreign shares purchased in United States .9 17.2 7.4 30.7 30.6 29.1 11.2 34.8 47.5 31.9 50.3 100.4 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables F.2 through F.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Financial Statistics • April 1994 1.58 SUMMARY OF FINANCIAL TRANSACTIONS1 Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates 1992 1993 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11998888 11998899 11999900 11999911 11999922 Ql Q2 Q3 Q4 Ql Q2 Q3 NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets 998.8 946.8 848.4 639.8 816.0 772.8 850.2 943.0 698.1 598.1 824.5 1,024.9 2 Private domestic nonfinancial sectors 196.1 122.6 162.8 -16.1 79.0 135.5 150.9 -62.3 92.1 -140.8 -118.1 -155.2 3 Households 170.3 78.6 140.1 -49.7 50.2 118.2 109.6 -99.7 72.5 -124.7 -134.6 -167.5 4 Nonfarm noncorporate business 3.1 -.7 -1.7 -4.2 -2.4 -3.9 -2.7 -2.0 -1.0 -3.7 -3.0 -2.2 5 Nonfinancial corporate business 5.7 13.6 -5.3 4.3 36.3 25.1 36.8 46.5 36.9 -1.8 14.3 25.9 6 State and local governments 17.1 31.1 29.6 33.5 -5.0 -3.9 7.2 -7.1 -16.3 -10.5 5.1 -11.5 7 U.S. government -10.6 -3.1 33.7 10.5 -11.9 15.2 -23.0 -26.7 -13.1 -24.1 -27.8 -15.4 8 Foreign 108.6 84.4 82.1 25.6 100.7 96.5 140.7 78.1 87.5 73.2 89.5 144.0 9 Financial sectors 704.8 742.9 569.9 619.8 648.2 525.6 581.7 953.9 531.5 689.8 880.9 1,051.6 10 Government sponsored enterprises 33.2 -4.1 16.4 14.2 69.0 92.7 38.6 73.0 71.7 14.6 144.1 162.7 11 Federally related mortgage pools 74.9 124.3 150.3 136.6 115.6 115.3 146.9 101.6 98.4 133.6 -6.1 103.1 12 Monetary authority 10.5 -7.3 8.1 31.1 27.9 28.5 19.0 15.7 48.3 44.5 32.6 28.2 13 Commercial banking 156.5 177.2 125.1 84.3 94.8 85.1 72.7 148.0 73.3 86.4 153.4 132.6 14 U.S. commercial banks 126.4 146.1 94.9 39.2 69.8 76.3 13.3 123.5 66.0 100.4 142.0 147.0 15 Foreign banking offices 29.4 26.7 28.4 48.5 16.5 -.5 56.7 5.2 4.8 -12.5 -.7 -17.2 16 Bank holding companies -.1 2.8 -2.8 -1.5 5.6 7.1 -.4 16.4 -.6 -4.3 9.5 .3 17 Banks in U.S. affiliated areas .8 1.6 4.5 -1.9 2.9 2.2 3.2 3.0 3.0 2.9 2.6 2.5 18 Private nonbank finance 429.7 452.9 270.0 353.7 341.0 204.1 304.5 615.5 239.9 410.7 556.8 625.0 19 Thrift institutions 114.8 -86.6 -153.3 -123.0 -59.9 -105.0 -75.8 -42.6 -16.1 -28.2 -17.1 7.4 20 Insurance 199.0 257.4 181.6 234.3 164.5 97.2 185.4 217.8 157.8 291.4 175.5 248.2 21 Life insurance companies 104.0 101.8 94.4 83.2 82.4 73.7 66.9 85.1 103.7 122.1 108.0 103.0 22 Other insurance companies 29.2 29.7 26.5 32.3 12.7 28.8 16.4 -2.8 8.3 8.9 10.6 9.0 23 Private pension funds 29.2 81.1 17.2 85.3 37.3 -33.2 74.1 99.9 8.4 118.0 11.1 86.3 24 State and local government retirement funds 36.6 44.7 43.5 33.5 32.2 27.8 28.0 35.6 37.4 42.4 45.9 49.9 25 Finance n.e.c 115.9 282.2 241.7 242.3 236.3 211.9 194.9 440.4 98.2 147.5 398.3 369.5 26 Finance companies 38.1 32.0 28.4 -12.1 1.7 -5.3 -16.0 4.0 24.0 -34.0 -22.8 5.7 2'/ Mortgage companies -7.4 6.1 -8.0 11.4 .1 23.0 -38.5 28.9 -12.8 -20.8 31.7 5.4 28 Mutual funds 11.9 23.8 41.4 90.3 123.7 95.1 123.7 156.9 119.2 130.2 193.4 171.2 29 Closed-end funds 19.8 6.3 .0 15.2 12.3 17.9 9.4 8.7 13.1 8.9 13.0 11.0 30 Money market funds 10.7 67.1 80.9 30.1 1.3 19.1 3.8 8.5 -26.1 -65.0 51.8 44.6 31 Real estate investment trusts (REITs) .9 .5 -.7 -1.0 .4 -.7 2.6 -.3 -.1 2.9 .8 1.3 32 Brokers and dealers -8.2 96.3 34.9 49.0 40.2 -2.4 73.0 180.3 -90.2 79.5 66.7 55.5 33 Asset-backed securities issuers (ABSs) 35.9 27.7 49.9 49.0 48.6 33.0 45.2 62.6 53.6 46.7 49.4 75.3 34 Bank personal trusts 14.3 22.4 14.8 10.4 8.0 32.2 -8.4 -9.3 17.3 -.9 14.4 -.5 RELATION OF LIABILITIES TO FINANCIAL ASSETS 35 Net flows through credit markets 998.8 946.8 848.4 639.8 816.0 772.8 850.2 943.0 698.1 598.1 824.5 1,024.9 Other financial sources 36 Official foreign exchange 4.0 24.8 2.0 -5.9 -1.6 3.5 -6.5 -8.5 5.1 3.4 -3.5 4.2 37 Treasury currency and special drawing rights certificates .5 4.1 2.5 .0 -1.8 .1 .3 .2 -7.7 .3 .4 .4 38 Life insurance reserves 25.3 28.8 25.7 25.7 28.4 33.8 22.7 27.3 29.8 51.4 41.0 39.4 39 Pension fund reserves 140.1 309.7 158.1 358.8 214.8 129.0 194.4 278.5 257.4 340.7 199.8 273.0 40 Interbank claims 2.9 -16.5 34.2 -3.7 49.0 25.7 36.9 82.3 51.1 17.7 54.9 -19.8 41 Deposits at financial institutions 278.6 284.8 98.1 48.2 9.3 -.7 6.3 174.1 -142.7 -8.2 247.2 70.3 42 Checkable deposits and currency 43.2 6.1 44.2 75.8 122.8 86.4 110.8 200.4 93.5 25.0 232.2 96.4 43 Small time and savings deposits 121.6 100.4 59.0 16.7 -60.8 -40.1 -81.8 -83.6 -37.8 -158.9 -54.2 -87.1 44 Large time deposits 53.1 13.9 -65.7 -60.8 -80.0 -72.9 -109.9 -52.9 -84.2 1.9 -17.5 -57.3 45 Money market fund shares 21.9 90.1 70.3 41.2 3.9 44.4 26.7 -22.4 -32.9 -37.7 66.8 57.2 46 Security repurchase agreements 23.7 77.8 -24.2 -16.5 33.6 8.1 103.7 89.6 -67.1 180.3 17.6 86.4 47 Foreign deposits 15.2 -3.6 14.6 -8.2 -10.2 -26.6 -43.2 43.0 -14.2 -18.8 2.4 -25.2 48 Mutual fund shares 6.1 38.5 67.9 150.5 206.7 174.4 199.5 235.2 217.7 240.9 357.5 340.3 49 Corporate equities -104.7 -98.1 -45.7 60.1 75.8 99.9 64.6 58.1 80.7 51.2 104.4 157.6 50 Security credit 3.0 15.6 3.5 51.4 4.2 -66.7 -4.9 82.8 5.5 39.7 38.3 34.8 51 Trade debt 89.6 59.4 32.1 -2.2 57.9 79.8 56.5 57.8 37.5 27.3 42.5 42.4 52 Taxes payable 5.3 2.0 -4.5 -8.5 7.7 8.5 6.1 6.5 9.9 9.6 11.3 4.1 53 Noncorporate proprietors' equity -24.0 -31.1 -35.5 -12.5 -10.7 -25.8 12.3 -33.2 4.0 3.6 -7.2 -28.7 54 Investment in bank personal trusts 7.2 23.1 21.5 29.8 -7.5 40.2 20.2 -55.4 -35.2 -10.1 35.8 -23.0 55 Miscellaneous 199.2 292.1 98.2 169.9 196.4 93.1 272.6 209.0 210.9 233.2 355.1 228.7 56 Total financial sources 1,632.0 1,883.8 1,306.5 1,501.3 1,644.7 1,367.6 1,731.2 2,057.7 1,422.3 1,598.7 2,302.0 2,148.7 Floats not included in assets (-) 57 U.S. government checkable deposits 1.6 8.4 3.3 -13.1 .7 11.3 -9.5 4.4 -3.6 .1 6.2 -5.1 58 Other checkable deposits .8 -3.2 2.5 2.0 1.6 13.8 2.0 -11.7 2.3 -1.8 -1.4 -5.6 59 Trade credit -6.2 -1.9 2.5 8.1 21.5 25.0 11.3 44.0 5.7 -21.8 8.7 3.9 Liabilities not identified as assets (-) 60 Treasury currency -.1 -.2 .2 -.6 -.2 -.3 -.2 -.2 -.1 -.2 -.2 -.2 61 Interbank claims -3.0 -4.4 1.6 26.2 -4.0 8.2 -18.2 -5.3 -.6 9.3 -.3 -14.8 62 Security repurchase agreements -29.6 32.4 -31.5 5.2 31.1 -26.7 84.1 43.5 23.4 155.2 25.4 78.6 63 Taxes payable 6.3 2.3 .5 .4 6.7 -7.6 7.0 23.8 3.7 -11.2 23.2 5.3 64 Miscellaneous 47.3 -77.8 -23.6 -32.1 -15.4 -60.5 -62.9 11.9 49.9 29.5 -31.0 -21.9 65 Total identified to sectors as assets 1,614.8 1,928.2 1,351.0 1,505.2 1,602.7 1,404.4 1,717.6 1,947.4 1,341.6 1,439.5 2,271.5 2,108.5 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical 2. Excludes corporate equities and mutual fund shares, release, tables F.6 and F.7. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A43 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billions of dollars, end of period 1992 1993 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11998899 11999900 11999911 11999922 QL Q2 Q3 Q4 QL Q2 Q3 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 10,054.3 10,692.0 11,160.6 11,746.9 11,289.2 11,427.0 11,580.3 11,746.9 11,823.0 1111,,997799..22 1122,,112255..44 By lending sector and instrument ? U.S. government 2,251.2 2,498.1 2,776.4 3,080.3 2,859.7 2,923.3 2,998.9 3,080.3 33,,114400..22 33,,220011..22 33,,224477..33 3 Treasury securities 2,227.0 2,465.8 2,757.8 3,061.6 2,844.0 2,907.4 2,980.7 3,061.6 3,120.6 3,180.6 3,222.6 4 Budget agency issues and mortgages 24.2 32.4 18.6 18.8 15.8 15.9 18.1 18.8 19.6 20.6 24.7 5 Private 7,803.1 8,193.9 8,384.3 8,666.5 8,429.4 8,503.7 8,581.5 8,666.5 8,682.9 8,777.9 8,878.2 By instrument 6 Tax-exempt obligations 1,004.7 1,062.1 1,131.6 1,197.3 1,145.5 1,163.7 1,186.4 1,197.3 11,,221100..00 11,,222255..77 11,,223399..55 7 Corporate bonds 961.1 1,008.2 1,086.9 1,154.2 1,106.0 1,125.4 1,140.8 1,154.2 1,172.9 1,189.2 1,203.0 8 3,512.8 3,715.4 3,880.4 4,001.9 3,918.1 3,941.5 3,979.7 4,001.9 4,017.9 4,057.6 4,117.6 9 Home mortgages 2,380.5 2,580.6 2,746.6 2,922.7 2,791.8 2,825.6 2,880.8 2,922.7 2,945.8 2,996.0 3,057.6 10 Multifamily residential 304.3 305.5 303.0 291.9 305.9 301.7 298.9 291.9 290.3 287.1 287.1 11 Commercial 747.6 750.8 751.7 706.5 740.3 733.8 719.4 706.5 701.1 693.8 692.1 1? 80.5 78.4 79.1 80.7 80.2 80.4 80.6 80.7 80.8 80.8 80.9 H Consumer credit 799.5 813.0 799.9 809.2 777.6 776.9 784.5 809.2 793.7 802.3 821.7 14 750.8 747.8 701.0 695.6 685.5 694.0 686.2 695.6 683.0 691.9 691.9 15 Commercial paper 107.1 116.9 98.5 107.1 110.4 112.0 108.2 107.1 114.6 125.0 124.3 16 Other loans 667.0 730.6 685.9 701.2 686.2 690.1 695.8 701.2 690.8 686.2 680.2 By borrowing sector 17 3,371.4 3,594.8 3,762.7 3,978.0 3,782.6 3,837.3 3,900.0 3,978.0 33,,998822..22 44,,004466..88 44,,113355..11 18 Nonfinancial business 3,615.7 3,728.5 3,688.7 3,696.3 3,701.5 3,705.4 3,698.3 3,696.3 3,693.6 3,708.0 3,704.9 19 134.4 134.9 134.8 136.3 133.6 137.0 137.9 136.3 133.5 136.8 138.8 7.0 Nonfarm noncorporate 1,199.6 1,219.0 1,192.3 1,154.5 1,187.6 1,177.3 1,165.1 1,154.5 1,144.2 1,138.3 1,132.0 ?1 Corporate 2,281.7 2,374.6 2,361.6 2,405.5 2,380.3 2,391.1 2,395.3 2,405.5 2,415.9 2,432.9 2,434.0 22 State and local government 816.1 870.5 932.8 992.2 945.3 961.0 983.1 992.2 1,007.1 1,023.2 1,038.2 23 Foreign credit market debt held in United States 261.2 285.1 298.9 313.8 288.7 304.7 312.9 313.8 332244..88 333333..11 335511..55 74 94.1 115.4 129.5 146.9 130.8 136.2 141.3 146.9 165.8 173.4 194.8 75 Bank loans n.e.c 21.4 18.5 21.6 23.9 22.0 25.5 26.5 23.9 24.3 25.9 26.2 7.6 Commercial paper 63.0 75.3 81.8 77.7 70.5 77.4 80.7 77.7 72.3 72.1 71.7 27 U.S. government and other loans 82.7 75.8 66.0 65.4 65.5 65.6 64.4 65.4 62.5 61.7 58.8 2288 Total credit market debt owed by nonfinancial sectors, domestic and foreign 10,315.5 10,977.1 11,459.5 12,060.7 11,577.9 11,731.8 11,893.2 12,060.7 12,147.9 12,312.3 1122,,447766..99 Financial sectors 29 Total credit market debt owed by financial sectors 2,362.7 2,559.4 2,709.7 2,928.5 2,751.2 2,805.7 2,877.4 2,928.5 2,961.7 2,997.3 3,087.6 By instrument 30 U.S. government-related 1,247.8 1,418.4 1,564.2 1,720.0 1,590.3 1,641.6 1,683.5 1,720.0 1,755.8 1,774.5 1,842.2 31 Government-sponsored enterprises securities 373.3 393.7 402.9 443.1 405.7 417.8 434.7 443.1 451.2 468.4 510.3 32 Mortgage pool securities 869.5 1,019.9 1,156.5 1,272.0 1,179.8 1,219.0 1,244.0 1,272.0 1,299.8 1,301.3 1,327.1 33 Loans from U.S. government 5.0 4.9 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 34 Private 1,114.8 1,140.9 1,145.6 1,208.5 1,160.9 1,164.1 1,193.9 1,208.5 1,205.9 1,222.9 1,245.4 35 Corporate bonds 509.1 549.9 606.6 665.0 613.8 628.6 646.4 665.0 680.0 693.9 715.4 36 Mortgages 4.0 4.3 5.1 5.1 5.0 5.0 5.1 5.1 5.4 6.0 6.6 37 Bank loans n.e.c 50.9 52.0 69.1 64.2 72.7 63.1 67.5 64.2 56.9 55.8 52.8 38 Open market paper 409.1 417.7 385.7 394.3 393.2 390.5 394.6 394.3 378.7 375.1 371.7 39 Loans from Federal Home Loan Banks 141.8 117.1 79.1 79.9 76.3 76.9 80.2 79.9 85.0 92.1 98.9 By borrowing sector 40 Government-sponsored enterprises 378.3 398.5 407.7 447.9 410.5 422.6 439.5 447.9 456.0 473.2 515.1 41 Federally related mortgage pools 869.5 1,019.9 1,156.5 1,272.0 1,179.8 1,219.0 1,244.0 1,272.0 1,299.8 1,301.3 1,327.1 42 Private financial sectors 1,114.8 1,140.9 1,145.6 1,208.5 1,160.9 1,164.1 1,193.9 1,208.5 1,205.9 1,222.9 1,245.4 43 Commercial banks 77.4 76.7 65.0 73.8 63.8 66.2 69.0 73.8 73.1 76.6 77.9 44 Bank holding companies 142.5 114.8 112.3 114.6 115.0 112.7 114.4 114.6 119.9 120.2 119.9 45 Funding corporations 125.4 137.9 124.3 135.2 137.6 144.9 143.0 135.2 127.1 128.9 125.0 46 Savings institutions 169.2 139.1 94.6 87.8 89.8 87.6 89.2 87.8 90.3 93.4 96.8 47 Credit unions .0 .0 .0 .0 .0 .0 .0 .0 .0 .1 .2 48 Life insurance companies .0 .0 .0 .0 .0 .0 .0 .0 .0 .2 .1 49 Finance companies 350.4 374.4 393.0 389.4 382.2 377.4 382.7 389.4 379.1 369.8 372.2 50 Mortgage companies 11.3 7.3 13.0 13.0 19.8 11.0 14.6 13.0 10.4 14.4 15.0 51 Real estate investment trusts (REITs) 11.4 12.4 14.0 14.1 14.4 14.8 15.3 14.1 13.7 14.4 15.3 52 Issuers of asset-backed securities (ABSs) 227.3 278.3 329.4 380.5 338.2 349.5 365.7 380.5 392.3 404.9 423.1 All sectors 53 Total credit martiet debt, domestic and foreign. 12,678.2 13,536.5 14,169.3 14,989.2 14,329.1 14,537.5 14,770.6 14,989.2 15,109.5 15,309.6 15,564.5 54 U.S. government securities 3,494.1 3,911.7 4,335.7 4,795.5 4,445.2 4,560.1 4,677.6 4,795.5 4,891.2 4,970.9 5,084.7 55 Tax-exempt securities 1.004.7 1,062.1 1,131.6 1,197.3 1,145.5 1,163.7 1,186.4 1,197.3 1,210.0 1,225.7 1,239.5 56 Corporate and foreign bonds 1,564.3 1,673.5 1,823.1 1,966.1 1,850.5 1,890.2 1,928.5 1,966.1 2,018.7 2,056.4 2,113.1 57 Mortgages 3.516.8 3,719.7 3,885.5 4,007.0 3,923.2 3,946.6 3,984.8 4,007.0 4,023.3 4,063.7 4,124.2 58 Consumer credit 799.5 813.0 799.9 809.2 777.6 776.9 784.5 809.2 793.7 802.3 821.7 59 Bank loans n.e.c 823.0 818.3 791.7 783.7 780.2 782.7 780.2 783.7 764.3 773.6 770.9 60 Open market paper 579.2 609.9 565.9 579.0 574.1 579.9 583.6 579.0 565.5 572.2 567.8 61 Other loans 896.5 928.4 835.8 851.3 832.8 837.4 845.1 851.3 843.0 844.8 842.7 Digitized for FRA1. SDEatRa 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. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Nonfinancial Statistics • April 1994 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 1992 1993 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11998899 11999900 11999911 11999922 QL Q2 Q3 Q4 QL Q2 Q3 CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 12,678.2 13,536.5 14,169.3 14,989.2 14,329.1 14,537.5 14,770.6 14,989.2 15,109.5 15,309.6 15,564.5 2 Private domestic nonfinancial sectors 2,096.4 2,246.8 2,205.8 2,290.7 2,211.4 2,233.1 2,221.6 2,290.7 2,247.6 2,200.2 2,165.4 3 Households 1,326.8 1,454.6 1,380.0 1,436.0 1,388.9 1,395.2 1,381.1 1,436.0 1,405.4 1,348.0 1,316.8 4 Nonfarm noncorporate business 56.5 54.9 50.7 48.3 49.3 48.7 48.1 48.3 47.0 46.3 45.6 5 Nonfinancial corporate business 181.2 175.8 180.1 216.4 180.0 192.6 199.5 216.4 208.6 216.3 218.1 6 State and local governments 531.9 561.5 595.1 590.0 593.3 596.6 592.9 590.0 586.5 589.6 584.9 1 U.S. government 205.4 239.1 247.0 235.1 251.2 246.3 239.2 235.1 229.5 223.4 219.0 8 Foreign 778.7 897.5 936.2 1,031.1 960.4 995.6 1,015.1 1,031.1 1,040.9 1,063.3 1,099.3 9 Financial sectors 9,597.7 10,153.1 10,780.3 11,432.2 10,906.0 11,062.5 11,294.7 11,432.2 11,591.6 11,822.8 12,080.9 10 Government-sponsored enterprises 355.4 371.8 397.7 466.7 419.9 429.0 446.3 466.7 464.1 499.2 538.9 11 Federally related mortgage pools 869.5 1,019.9 1,156.5 1,272.0 1,179.8 1,219.0 1,244.0 1,272.0 1,299.8 1,301.3 1,327.1 12 Monetary authority 233.3 241.4 272.5 300.4 271.8 282.6 285.2 300.4 303.6 318.2 324.2 13 Commercial banking 2,647.4 2,772.5 2,856.8 2,951.6 2,864.5 2,887.6 2,928.2 2,951.6 2,960.9 3,003.2 3,040.4 14 U.S. commercial banks 2,371.9 2,466.7 2,506.0 2,575.7 2,517.3 2,525.2 2,560.0 2,575.7 2,594.6 2,633.8 2,674.8 15 Foreign banking offices 242.3 270.8 319.2 335.8 313.3 328.2 328.9 335.8 326.7 327.1 322.3 16 Bank holding companies 16.2 13.4 11.9 17.5 13.6 13.1 17.5 17.5 16.4 18.4 18.8 17 Banks in U.S. affiliated areas 17.1 21.6 19.7 22.5 20.2 21.0 21.8 22.5 23.3 23.9 24.5 18 Private nonbank finance 5,491.9 5,747.4 6,096.7 6,441.5 6,170.1 6,244.3 6,391.0 6,441.5 6,563.2 6,700.9 6,850.4 19 Thrift institutions 1,475.4 1,324.6 1,197.3 1,140.9 1,172.0 1,154.1 1,145.1 1,140.9 1,131.2 1,128.0 1,131.5 20 Insurance 2,320.7 2,473.7 2,708.0 2,872.5 2,736.6 2,787.4 2,841.7 2,872.5 2,950.2 2,999.2 3,061.1 21 Life insurance companies 1,022.0 1,116.5 1,199.6 1,282.0 1,222.3 1,243.6 1,264.7 1,282.0 1,317.3 1,349.5 1,375.1 22 Other insurance companies 317.5 344.0 376.3 389.0 383.5 387.6 386.9 389.0 391.2 393.8 396.1 23 Private pension funds 590.2 607.4 692.7 730.0 684.4 702.9 727.9 730.0 759.5 762.2 783.8 24 State and local government retirement funds... 390.9 405.9 439.4 471.6 446.3 453.3 462.2 471.6 482.2 493.7 506.1 25 Finance n.e.c 1,695.9 1,949.1 2,191.5 2,428.0 2,261.5 2,302.8 2,404.1 2,428.0 2,481.8 2,573.6 2,657.8 26 Finance companies 468.6 497.0 484.9 486.6 479.5 480.5 477.8 486.6 473.7 473.5 471.4 27 Mortgage companies 22.6 14.6 25.9 26.1 31.7 22.1 29.3 26.1 20.9 28.8 30.1 28 Mutual funds 307.2 360.2 450.5 574.2 478.8 510.2 550.2 574.2 611.4 659.9 704.3 29 Closed-end funds 37.1 37.1 52.4 64.6 56.8 59.2 61.3 64.6 66.9 70.1 72.8 30 Money market funds 291.8 372.7 402.7 404.1 424.0 412.0 408.2 404.1 404.5 404.0 409.0 31 Real estate investment trusts (REITs) 8.4 7.7 6.8 7.4 6.8 7.5 7.4 7.4 8.1 8.3 8.6 32 Brokers and dealers 142.9 177.9 226.9 267.1 226.3 244.6 289.6 267.1 287.0 303.6 317.5 33 Asset-backed securities issuers (ABSs) 219.3 269.1 318.1 366.7 326.3 337.6 353.3 366.7 378.4 390.7 409.5 34 Bank personal trusts 198.0 212.9 223.3 231.2 231.3 229.2 226.9 231.2 231.0 234.6 234.5 RELATION OF LIABILITIES TO FINANCIAL ASSETS 35 Total credit market debt 12,678.2 13,536.5 14,169.3 14,989.2 14,329.1 14,537.5 14,770.6 14,989.2 15,109.5 15,309.6 15,564.5 Other liabilities 36 Official foreign exchange 53.6 61.3 55.4 51.8 52.7 54.4 55.4 51.8 54.5 53.9 55.6 37 Treasury currency and special drawing rights certificates 23.8 26.3 26.3 24.5 26.3 26.4 26.5 24.5 24.6 24.7 24.8 38 Life insurance reserves 354.3 380.0 405.7 434.1 414.2 419.8 426.7 434.1 447.0 457.2 467.1 39 Pension fund reserves 3,356.1 3,400.3 4,056.5 4,369.8 4,048.2 4,105.0 4,228.5 4,369.8 4,509.1 4,570.4 4,710.7 40 Interbank claims 32.4 64.0 65.2 114.0 63.0 68.5 101.3 114.0 109.9 118.5 129.4 41 Deposits at financial institutions 4,736.7 4,836.8 4,885.2 4,892.1 4,878.6 4,870.6 4,909.3 4,892.1 4,885.9 4,934.2 4,949.2 42 Checkable deposits and currency 888.6 932.8 1,008.5 1,131.0 984.3 1,032.9 1,072.0 1,131.0 1,092.2 1,169.1 1,182.6 43 Small time and savings deposits 2,277.4 2,336.3 2,353.0 2,292.2 2,351.3 2,325.8 2,303.7 2,292.2 2,261.2 2,242.3 2,219.4 44 Large time deposits 603.4 537.7 476.9 397.2 459.2 427.5 418.4 397.2 398.3 389.9 379.7 45 Money market fund shares 428.1 498.4 539.6 543.6 572.0 556.9 552.9 543.6 556.6 549.9 566.2 46 Security repurchase agreements 396.5 372.3 355.8 389.4 367.0 393.5 417.6 389.4 443.5 448.3 472.8 47 Foreign deposits 142.8 159.4 151.3 138.8 144.7 133.9 144.6 138.8 134.1 134.7 128.4 48 Mutual fund shares 566.2 602.1 813.9 1,042.1 860.4 924.4 965.6 1,042.1 1,134.6 1,225.8 1,342.1 49 Security credit 133.9 137.4 188.9 217.3 194.6 193.3 214.5 217.3 225.1 234.7 243.9 50 Trade debt 904.2 936.4 926.7 984.7 938.0 950.0 970.5 984.7 982.3 991.2 1,008.1 51 Taxes payable 81.8 77.4 68.9 76.6 73.1 70.7 74.5 76.6 81.3 79.8 83.3 52 Investment in bank personal trusts 503.2 509.9 596.7 619.1 612.9 612.7 610.9 619.1 625.0 635.6 643.6 53 Miscellaneous 2,591.1 2,732.4 2,884.3 3,056.2 2,899.7 2,957.3 3,027.6 3,056.2 3,082.3 3,149.3 3,203.6 54 Total liabilities 26,015.5 27,300.7 29,143.0 30,871.4 29,390.8 29,790.7 30,381.7 30,871.4 31,271.1 31,784.9 32,425.8 Financial assets not included in liabilities (+) 55 Gold and special drawing rights 21.0 22.0 22.3 19.6 22.0 22.7 23.2 19.6 19.8 20.0 20.3 56 Corporate equities 3,812.9 3,543.7 4,869.4 5,540.6 4,925.6 4,837.0 4,995.4 5,540.6 5,721.3 5,741.9 6,006.6 57 Household equity in noncorporate business 2,508.1 2,440.6 2,344.6 2,266.6 2,351.4 2,335.3 2,313.9 2,266.6 2,237.6 2,237.4 2,225.1 Floats not included in assets (—) 58 U.S. government checkable deposits 6.1 15.0 3.8 6.8 .9 1.4 4.0 6.8 3.4 3.5 2.2 59 Other checkable deposits 26.5 28.9 30.9 32.5 29.5 32.6 23.3 32.5 27.2 29.6 21.7 60 Trade credit -148.6 -146.0 -144.1 -121.9 -142.7 -151.1 -144.2 -121.9 -132.1 -141.8 -144.6 Liabilities not identified as assets (-) 61 Treasury currency -4.3 -4.1 -4.8 -4.9 -4.8 -4.9 -4.9 -4.9 -5.0 -5.0 -5.1 62 Interbank claims -31.0 -32.0 -4.2 -8.4 -1.8 -4.0 -4.3 -8.4 -5.2 -3.9 -5.6 63 Security repurchase agreements 13.7 -17.7 -12.5 18.6 -4.8 19.6 33.1 18.6 71.8 82.4 106.8 64 Taxes payable 20.6 17.8 15.5 22.2 7.3 13.1 18.1 22.2 12.4 21.9 22.9 65 Miscellaneous -210.7 -213.4 -254.6 -251.3 -280.6 -282.1 -267.7 -251.3 -279.4 -274.6 -319.5 66 Total identified to sectors as assets 32,685.1 33,658.6 36,749.2 39,004.7 37,086.8 37,361.0 38,056.8 39,004.7 39,556.7 40,072.2 40,999.0 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 1993 1994 MMeeaassuurree 11999911 11999922 11999933 May June July Aug. Sept. Oct. Nov.r Dec.r Jan. 1 Industrial production1 104.1 106.5 110.9r 110.0r 110.4r 110.9r m.r 111.3r 111.9r 112.8 113.9 114.4 Market groupings 7 Products, total 103.2r 105.7r 110.2 109.3 109.6r 110.4r 110.4r 110.6r 111111..22rr 111122..22 111133..00 111133..55 3 105.3 mo1" 112.8r 111.8r 112.1r 112.8r 112.7r 113.lr 113.8r 114.8 115.5 116.2 4 Consumer goods 102.8 105.7r 108.8r 107.8r 108. r lOS.SK 108.6r 108.5r 109.2r 109.9 110.1 110.4 5 Equipment 108.9 111.2r 118.6r 117.7r lis.tr 118.5r 118.6r 119.8r 120.4r 121.9 123.4 124.5 6 Intermediate 96.8r 99.0r 102.6r 101,7r 101.8r 102.9 103.3r 103.0"" 103.5r 104.1 105.2 105.4 7 Materials 105.4r 107.7r 111.9r 111.1*" 111.7r 111.7r 112.lr 112.2r 112.8r 113.7 115.2 115.7 Industry groupings 8 Manufacturing 103.7 106.8r 111.7r lll.lr 111.2r 111.6 111.8r 111122..llrr 111122..99rr 111144..11 111155..22 111155..44 9 Capacity utilization, manufacturing (percent) 77.8 78.6r 80.6r 80.2r so. r 80.3r 80.3r 80.4r 8800..88rr 8811..55 8822..22 8822..11 10 Construction contracts3 89.7 97.7 99.2r 91.0 104.0 98.0 99.0 101.0 103.0 105.0 102.0 103.0 11 Nonagricultural employment, total4 106.2 106.4 108.1 107.9 108.0 108.2 108.2 108.4 108.5 108.8 108.9 109.0 1? Goods-producing, total 96.6 94.9 93.1 93.2 93.0 93.0 92.8 92.8 93.0 93.2 93.2 93.3 n Manufacturing, total 97.1 95.8 93.7 93.8 93.5 93.5 93.3 93.2 93.2 93.4 93.4 93.5 14 Manufacturing, production workers ... 96.0' 94.5r 93.7 93.8 93.5 93.5 93.2 93.2 93.3 93.6 93.7 94.0 IS Service-producing 109.4r 110.5r 112.8 112.6 112.8 113.1 113.1 113.4 113.5 113.7 114.0 114.0 16 Personal income, total 127.6 135.3 141.7 141.5 141.3 141.1 142.9 143.1 144.1 144.9 145.8 n.a. 17 Wages and salary disbursements 124.5 131.5 136.2 136.8 136.5 137.2 138.2 138.0 138.8r 139.2 139.9 n.a. 18 Manufacturing 113.7 117.8 117.8 118.4 118.0 118.2 118.6 119.1 119.1 119.8 120.6 n.a. 19 Disposable personal income 128.6 136.8 143.1 142.8 142.6 142.3 144.1 144.4 145.4 146.2 147.1 n.a. 20 Retail sales6 121.3 127.1 135.4r 133.9 134.6 135.2 136.2 136.5 139.3 140.2 141.9 141.1 Prices7 71 Consumer (1982-84=100) 136.2 140.3 144.5 144.2 144.4 144.4 144.8 145.1 145.7 145.8 114455..88 114466..22 22 Producer finished goods (1982=100) 121.7 123.2 124.7 125.8 125.5 125.3 124.2 123.8r 124.7 124.4 124.1 124.4 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 1993R 1994 CCaatteeggoorryy 11999911RR 11999922RR 11999933RR June July Aug. Sept. Oct. Nov. Dec. Jan. HOUSEHOLD SURVEY DATA1 1 Civilian labor force1 125,303 126,982 128,040 128,056 128,102 128,334 128,108 128,580 128,662 128,898 130,667 7 Nonagricultural industries3 114,644 114,391 116,232 116,156 116,327 116,687 116,475 116,920 117,218 117,565 118,639 3 Agriculture 3,233 3,207 3,074 3,031 3,043 3,005 3,093 3,021 3,114 3,0% 3,331 Unemployment 4 Number 8,426 9,384 8,734 8,869 8,732 8,642 8,540 8,639 8,330 88,,223377 88,,669966 5 Rate (percent of civilian labor force) 6.7 7.4 6.8 6.9 6.8 6.7 6.7 6.7 6.5 6.4 6.7 ESTABLISHMENT SURVEY DATA 6 Nonagricultural payroll employment4 108,256 108,519 110,171 110,101 110,338 110,305 110,502 110,664 110,880 111,070 111,132 7 Manufacturing 18,455 18,192 17,804 17,771 17,760 17,718 17,698 17,709 17,735 17,737 17,763 8 Mining 689 631 599 596 595 592 596 596 595 606 604 9 Contract construction 4,650 4,471 4,571 4,574 4,593 4,593 4,592 4,629 4,664 4,663 4,660 10 Transportation and public utilities 5,762 5,709 5,710 5,711 5,709 5,690 5,692 5,693 5,700 5,701 5,716 11 Trade 25,365 25,391 25,849 25,861 25,916 25,902 25,953 25,968 25,982 26,038 26,068 1? Finance 6,646 6,571 6,605 6,590 6,604 6,602 6,616 6,632 6,651 6,661 6,667 N 28,336 29,053 30,193 30,175 30,320 30,381 30,433 30,534 30,649 30,706 30,706 14 Government 18,402 18,653 18,841 18,823 18,841 18,827 18,922 18,903 18,904 18,958 18,948 1. Beginning January 1994, reflects redesign of current population survey and 3. Includes all full- and part-time employees who worked during, or received population controls from the 1990 census. pay for, the pay period that includes the twelfth day of the month; excludes 2. Persons sixteen years of age and older, including Resident Armed Forces. proprietors, self-employed persons, household and unpaid family workers, and Monthly figures are based on sample data collected during the calendar week that members of the armed forces. Data are adjusted to the March 1992 benchmark, contains the twelfth day; annual data are averages of monthly figures. By and only seasonally adjusted data are available at this time. definition, seasonality does not exist in population figures. SOURCE. Based on data from U.S. Department of Labor, Employment and 2. Includes self-employed, unpaid family, and domestic service workers. Earnings. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • April 1994 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1993r 1993r 1993r Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Output (1987=100) Capacity (percent of 1987 output) Capacity utilization rate (percent)2 1 Total industry 109.7 110.3 111.1 112.8 135.3 135.9 136.5 137.2 81.1 81.2 81.4 82.3 2 Manufacturing 110.3 111.2 111.8 114.1 137.7 138.4 139.2 140.0 80.1 80.3 80.3 81.5 3 Primary processing3 106.1 107.0 107.7 109.7 127.6 127.9 128.3 128.6 83.1 83.6 83.9 85.3 4 Advanced processing 112.3 113.2 113.8 116.2 142.5 143.4 144.4 145.4 78.8 78.9 78.8 79.9 5 Durable goods 112.0 113.2 114.2 118.1 143.5 144.5 145.4 146.3 78.1 78.4 78.5 80.7 6 Lumber and products 99.8 98.0 100.8 105.0 114.6 114.8 115.0 115.2 87.1 85.4 87.6 91.1 7 Primary metals 105.1 105.2 106.7 109.5 123.7 123.3 123.0 122.6 85.0 85.3 86.8 89.3 8 Iron and steel 109.3 109.7 112.3 115.4 128.0 127.4 126.9 126.3 85.4 86.1 88.6 91.4 9 Nonferrous 99.4 99.0 98.9 101.3 117.7 117.6 117.6 117.6 84.4 84.1 84.1 86.2 10 Nonelectrical machinery 134.8 141.7 147.2 153.1 170.6 173.1 175.7 178.2 79.0 81.8 83.8 85.9 11 Electrical machinery 122.8 125.9 129.7 132.5 151.8 153.8 155.7 157.7 80.9 81.9 83.2 84.0 12 Motor vehicles and parts 121.7 118.1 112.0 131.6 152.1 153.4 154.8 156.1 80.0 76.9 72.3 84.3 13 Aerospace and miscellaneous transportation equipment . 92.7 90.3 87.4 85.3 134.1 133.7 133.2 132.8 69.1 67.6 65.6 64.2 14 Nondurable goods 108.1 108.7 108.9 109.1 130.5 131.0 131.6 132.1 82.8 83.0 82.8 82.6 15 Textile mill products 107.2 108.4 108.0 106.9 118.3 118.8 119.4 119.9 90.6 91.3 90.5 89.1 16 Paper and products 110.5 113.2 111.7 114.1 123.8 124.3 124.8 125.3 89.2 91.1 89.6 91.1 17 Chemicals and products 116.2 117.7 118.6 118.2 144.3 145.1 145.9 146.8 80.5 81.2 81.2 80.5 18 Plastics materials 111.5 112.8 111.5 129.2 130.1 131.1 86.3 86.7 85.1 19 Petroleum products 103.9 104.0 104.0 107.9 115.9 115.8 115.7 115.6 89.6 89.8 89.9 93.3 20 Mining 97.4 97.5 96.8 97.0 111.7 111.4 111.1 110.8 87.2 87.5 87.1 87.6 21 Utilities 116.0 114.1 117.5 116.0 133.3 133.6 134.0 134.3 87.0 85.4 87.8 86.4 22 Electric 115.2 114.8 118.0 115.1 130.4 130.8 131.2 131.7 88.4 87.7 89.9 87.4 1973 1975 Previous cycle2 Latest cycle3 1993 1993 1994 High Low High Low High Low Jan. Aug. Sept. Oct/ Nov/ Dec/ Jan.P Capacity utilization rate (percent)2 1 Total industry 99.0 82.7 87.3 71.8 84.8 78.3 80.9 81.4r 81.4r 81.7 82.2 82.9 83.1 2 Manufacturing 99.0 82.7 87.3 70.0 85.1 76.6 80.0 80.3r 80.4r 80.8 81.5 82.2 82.1 3 Primary processing3 99.0 82.7 89.7 66.8 89.1 77.9 82.9 84. lr 83^ 84.4 85.3 86.1 85.5 4 Advanced processing 99.0 82.7 86.3 71.4 83.3 76.1 78.8 78.7r 78.9 79.3 79.9 80.5 80.7 5 Durable goods 99.0 82.7 86.9 65.0 83.9 73.8 77.9 78.3r 79.0r 79.6 80.7 81.8 82.1 6 Lumber and products 99.0 82.7 87.6 60.9 93.3 76.8 87.0 87.7r 88.4r 90.9 90.6 91.8 91.9 7 Primary metals 99.0 82.7 102.4 46.8 92.9 74.3 84.0 87. lr 87.3r 86.5 89.5 91.9 88.8 8 Iron and steel 99.0 82.7 110.4 38.3 95.7 72.3 84.6 ss^ 88.7r 89.6 90.5 94.0 88.7 9 Nonferrous 99.0 82.7 90.5 62.2 88.9 75.9 83.2 84.5r 85.3r 81.8 88.0 88.7 89.0 10 Nonelectrical machinery 99.0 82.7 92.1 64.9 83.7 73.0 78.5 83.7r 84.T 84.7 85.6 87.3 88.5 11 Electrical machinery 99.0 82.7 89.4 71.1 84.9 76.8 80.3 83. lr 83.7r 83.6 83.8 84.5 85.3 12 Motor vehicles and parts 99.0 82.7 93.0 44.5 84.5 57.9 80.9 71.5r 74.2r 79.7 84.8 88.4 89.6 13 Aerospace and miscellaneous transportation equipment. 99.0 82.7 81.1 66.9 88.3 78.1 69.4 65.4r 65. r 64.3 64.3 63.9 63.2 14 Nondurable goods 99.0 82.7 87.0 76.9 86.8 80.4 82.8 83. <f 82.4r 82.5 82.6 82.6 82.1 15 Textile mill products 99.0 82.7 91.7 73.8 92.1 78.7 90.7 91.lr 89.2r 90.0 88.8 88.6 86.9 16 Paper and products 99.0 82.7 94.2 82.0 94.9 86.0 88.6 89.91 89.2r 90.1 91.1 92.0 91.1 17 Chemicals and products 99.0 82.7 85.1 70.1 85.9 78.5 80.6 81.4 80^ 80.4 80.7 80.4 80.6 18 Plastics materials 99.0 82.7 90.9 63.4 97.0 75.5 86.2 85.7r 84.6r 84.4 85.2 19 Petroleum products 99.0 82.7 89.5 68.2 88.5 84.2 89.2 89.5r 91. (f 93.6 93.3 93.1 91.8 20 Mining 99.0 82.7 96.6 80.6 87.0 86.8 87.8 s?^ 87.7r 88.4 86.9 87.4 88.2 21 Utilities 99.0 82.7 88.3 76.2 92.6 83.4 85.1 88.4r 86.7 85.6 86.4 87.1 90.1 22 Electric 99.0 82.7 88.3 78.7 94.8 87.4 86.9 91.0r 88. lr 86.5 87.5 88.3 90.8 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 1993 1993 GGrroouupp por- avg. tion Dec. Jan. Feb. Mar. Apr. May June July Aug/ Sept/ OOcctt// Nov/ DDeecc.."" Index (1987 = 100) MAJOR MARKETS 1 Total index 100.0 111.0 108.9 109.3 109.9 110.1 110.4 110.2 110.5 110.8 111.0 111.4 112.1 113.2 114.0 ? Products 60.8 110.2 108.2 108.5 109.2 109.5 109.6 109.3 109.4 110.0 110.3 110.5 111.4 112.4 113.0 Final products 46.0 113.5 111.5 111.9 112.4 112.7 112.8 112.5 112.7 113.2 113.5 113.8 114.8 115.9 116.6 4 Consumer goods, total 26.0 108.1 107.5 107.6 108.5 108.6 108.1 107.3 107.3 107.7 107.8 107.4 108.6 109.6 109.8 Durable consumer goods 5.6 111.3 107.9 110.9 111.3 111.5 112.2 110.8 107.9 108.6 107.9 109.3 113.4 117.0 118.6 6 Automotive products 2.5 110.6 108.7 112.7 111.9 111.2 112.1 109.7 105.3 103.3 103.0 105.6 112.9 119.5 123.4 7 Autos and trucks 1.5 112.2 111.7 116.8 114.6 113.4 114.3 110.1 105.0 100.3 99.2 104.1 114.9 124.9 131.5 8 Autos, consumer .9 86.1 86.9 86.6 90.2 90.5 90.2 86.5 83.5 78.2 71.8 75.4 85.2 95.4 98.8 9 Trucks, consumer .6 157.3 154.6 169.1 156.9 153.1 155.9 150.9 142.3 138.6 146.7 153.9 166.4 176.0 188.0 10 Auto parts and allied goods... 1.0 108.0 103.8 105.8 107.4 107.5 108.5 109.1 105.8 108.4 109.3 108.1 109.5 110.4 109.9 11 Other 3.1 111.9 107.2 109.3 110.7 111.7 112.3 111.8 110.2 113.2 112.2 112.5 113.8 114.9 114.4 1? Appliances, A/C, and TV .8 122.9 110.5 116.0 117.6 125.0 124.3 121.1 116.1 127.3 123.8 125.9 129.6 131.9 128.5 N Carpeting and furniture .9 107.8 105.4 105.5 106.7 104.5 106.2 108.9 109.1 109.9 108.3 107.3 109.0 108.6 109.4 14 Miscellaneous home goods ... 1.4 108.3 106.6 108.0 109.5 108.9 109.6 108.4 107.6 107.4 108.1 108.2 108.0 109.3 109.6 IS Nondurable consumer goods 20.4 107.2 107.4 106.7 107.7 107.7 106.9 106.3 107.2 107.4 107.8 106.9 107.3 107.4 107.2 16 Foods and tobacco 9.1 104.5 104.8 104.6 105.5 104.3 103.9 104.3 104.7 104.9 105.5 104.2 104.8 104.5 104.4 17 Clothing 2.6 93.7 96.0 95.7 95.0 94.6 94.9 94.2 94.6 93.6 93.3 92.6 92.6 92.9 92.5 18 Chemical products 3.5 123.3 121.7 122.4 121.1 123.7 123.1 122.6 123.0 124.0 123.8 124.0 123.0 124.2 124.3 19 Paper products 2.5 100.9 100.9 100.2 101.8 102.1 101.7 101.8 102.6 101.3 100.8 100.8 101.3 100.6 99.4 ?N Energy 2.7 114.0 114.4 109.5 115.5 116.0 111.5 107.4 110.4 112.9 114.7 112.9 114.6 115.4 115.7 ?I Fuels .7 108.3 106.1 106.5 108.9 107.1 106.6 106.5 105.8 105.0 104.0 108.2 113.1 114.6 112.0 22 Residential utilities 2.0 116.2 117.5 110.7 118.0 119.5 113.4 107.7 112.2 116.0 118.9 114.7 115.1 115.7 117.1 ?3 Equipment 20.0 121.2 117.2 118.1 118.0 118.7 119.7 119.9 120.4 121.2 121.6 122.9 123.8 125.2 126.6 74 Business equipment 13.9 137.0 129.6 131.2 131.7 133.4 134.8 135.4 136.1 137.1 137.6 139.4 140.8 142.9 144.9 75 Information processing and related .. 5.6 156.2 143.2 144.4 146.1 149.1 150.6 153.5 155.7 158.2 158.8 161.5 162.3 164.9 168.2 76 Office and computing 1.9 223.6 186.4 192.0 198.0 203.3 209.5 216.5 221.0 226.5 232.0 237.1 241.8 247.9 255.0 77 Industrial 4.0 115.8 112.3 113.1 112.2 113.7 115.0 115.0 115.6 117.2 117.3 117.8 117.6 118.5 119.5 ?8 Transit 2.5 141.2 144.1 146.7 146.5 145.0 145.0 142.5 138.0 133.2 132.5 135.3 141.3 145.7 147.7 79 Autos and trucks 1.2 134.5 131.4 136.7 136.8 135.8 136.2 133.1 127.2 118.9 119.6 126.5 139.6 150.5 154.9 10 Other 1.9 119.1 109.2 112.6 113.4 114.9 117.5 116.2 117.6 119.6 121.9 123.1 124.5 125.0 125.5 31 Defense and space equipment 5.4 78.7 82.5 82.0 81.5 80.7 80.5 79.5 78.6 78.6 78.0 77.5 76.9 76.6 76.1 3? Oil and gas well drilling .6 82.5 91.2 89.0 77.9 71.1 72.4 - 75.1 82.4 81.0 87.8 90.5 88.9 85.7 85.0 33 Manufactured homes .2 128.6 129.4 127.1 116.2 114.9 112.1 113.6 118.5 116.2 120.6 127.7 138.4 34 Intermediate products, total 14.7 100.1 98.3 98.2 99.3 99.6 100.0 99.7 99.4 100.4 100.6 100.4 101.0 101.8 101.9 35 Construction supplies 6.0 98.1 94.5 94.8 97.5 96.4 96.4 97.7 96.8 98.4 98.7 99.3 99.9 100.7 101.3 36 Business supplies 8.7 101.5 100.8 100.5 100.5 101.8 102.5 101.0 101.1 101.7 101.8 101.2 101.6 102.5 102.2 37 Materials 39.2 112.2 110.0 110.4 110.9 110.9 111.5 111.6 112.1 112.0 112.2 112.7 113.2 114.3 115.5 38 Durable goods materials 19.4 116.0 111.9 113.3 114.2 114.1 114.9 114.8 114.9 115.4 115.8 117.2 118.2 119.7 121.7 39 Durable consumer parts 4.2 112.7 107.5 110.8 111.8 112.2 112.6 111.6 110.2 109.8 110.3 112.0 114.2 118.6 123.6 40 Equipment parts 7.3 125.1 119.7 120.4 121.0 121.3 122.7 123.5 124.1 124.9 126.2 128.0 129.2 129.6 131.5 41 Other 7.9 109.9 107.5 108.6 109.7 108.9 109.5 109.2 109.4 110.2 109.7 110.6 110.8 111.9 112.8 47 Basic metal materials 2.8 111.4 108.8 110.4 113.2 109.9 110.3 111.1 111.3 111.3 109.7 110.8 112.2 112.8 114.3 43 Nondurable goods materials 9.0 114.0 111.5 112.4 112.1 112.8 113.8 114.1 114.8 114.2 115.2 113.8 114.4 115.5 115.3 44 Textile materials 1.2 104.0 102.9 104.2 103.2 104.2 102.7 104.3 104.9 105.9 105.6 102.9 103.9 104.1 104.2 45 Pulp and paper materials 1.9 113.3 110.7 110.7 111.9 112.8 115.3 114.1 115.9 113.4 113.5 112.6 112.1 114.2 113.1 46 Chemical materials 3.8 117.5 114.6 114.9 114.6 115.6 116.1 117.2 118.6 117.3 119.5 117.9 118.0 119.1 119.8 47 Other 2.1 113.8 111.3 114.1 112.5 112.6 114.2 113.6 112.3 114.0 114.2 113.3 115.8 116.7 115.6 48 Energy materials 10.9 103.5 105.1 103.4 103.8 103.5 103.4 103.4 104.6 103.7 102.8 103.3 102.9 103.0 103.9 49 Primary energy 7.2 98.8 101.3 100.4 98.3 97.4 99.9 101.6 100.9 98.2 96.7 98.7 97.9 97.6 98.5 50 Converted fuel materials 3.7 112.6 112.4 109.1 114.6 115.4 110.3 106.8 111.7 114.5 114.9 112.4 112.7 113.8 114.4 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.3 110.7 108.6 108.9 109.5 109.7 110.1 110.0 110.4 110.9 111.1 111.3 111.8 112.6 113.2 52 Total excluding motor vehicles and parts ... 95.3 110.5 108.6 108.7 109.3 109.6 109.9 109.8 110.3 110.9 111.1 111.2 111.5 112.2 112.7 53 Total excluding office and computing machines 97.5 108.3 107.1 107.3 107.8 107.8 108.0 107.7 107.8 108.1 108.1 110088..44 109.0 111100..00 111100..66 54 Consumer goods excluding autos and trucks 24.5 107.8 107.3 107.0 108.1 108.2 107.6 107.1 107.5 108.2 108.4 107.7 108.2 110088..55 110088..22 55 Consumer goods excluding energy 23.3 107.5 106.8 107.4 107.7 107.7 107.6 107.3 107.0 107.1 107.0 106.8 108.0 108.9 109.1 56 Business equipment excluding autos and trucks 12.7 137.2 129.5 130.7 131.3 133.2 134.6 135.6 136.8 138.7 139.1 140.6 114400..99 114422..22 114444..11 57 Business equipment excluding office and computing equipment 12.0 122.4 120.1 121.0 120.6 121.6 122.2 121.8 121.8 122.1 121.7 123.0 123.8 112255..22 112266..44 58 Materials excluding energy 28.4 115.4 111.8 113.0 113.6 113.7 114.6 114.6 114.9 115.1 115.6 116.1 117.0 118.4 119.8 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • April 1994 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued 1987 1992 1993 O _ r oup SIC pro- 1993 code por- avg. tion Dec. Jan. Feb. Mar. Apr. May June July Aug/ Sept.r Oct/ Nov.r Dec.p Index (1987 = 100) MAJOR INDUSTRIES 59 Total index 100.0 111.0 108.9 109.3 109.9 110.1 110.4 110.2 110.5 110.8 111.0 111.4 112.1 113.2 114.0 60 Manufacturing 84.3 111.9 109.2 109.9 110.5 110.8 111.4 111.3 111.3 111.6 111.9 112.3 113.2 114.5 115.3 61 Primary processing 27.1 107.5 105.0 105.8 106.9 106.4 107.1 107.1 107.5 107.6 108.0 107.6 108.2 109.5 109.9 62 Advanced processing 57.1 113.9 111.3 111.9 112.2 112.9 113.4 113.3 113.0 113.5 113.7 114.5 115.6 116.8 117.8 63 Durable goods 46.5 115.9 111.8 112.9 113.8 114.1 115.0 114.9 114.6 115.4 115.7 117.0 118.3 120.1 121.7 64 Lumber and products... "'24 2.1 100.0 98.0 99.3 101.8 98.0 98.1 97.4 96.5 99.1 99.9 100.7 104.0 104.2 104.6 65 Furniture and fixtures... 25 1.5 109.4 103.9 105.2 106.0 107.3 108.8 108.4 109.5 111.1 111.1 111.3 111.4 111.5 110.9 66 Clay, glass, and stone products 32 2.4 100.5 98.0 97.0 98.9 98.6 99.8 99.6 100.5 100.8 100.9 102.4 101.4 102.9 103.0 67 Primary metals 33 3.3 105.5 102.4 102.8 108.0 104.2 104.4 104.2 105.7 105.3 106.2 106.0 105.0 107.1 109.1 68 Iron and steel 331,2 1.9 110.5 107.4 107.0 112.9 107.6 108.4 108.1 110.9 111.9 112.1 111.1 112.4 111.1 114.6 69 Raw steel .1 104.6 103.4 105.9 102.0 102.6 105.1 106.8 108.2 106.2 105.3 106.7 106.8 70 Nonferrous 333-6,9 1.4 98^6 95.7 97.1 101.4 99.4 98.9 98.9 98.5 96.3 98.0 98.9 94.9 101.6 101 [6 71 Fabricated metal products 34 5.4 100.9 97.8 99.8 99.7 100.3 101.4 100.6 100.1 101.2 101.0 100.9 101.6 102.7 103.3 72 Industrial and commercial machinery and computer equipment . 35 8.5 146.8 133.8 135.0 136.7 139.6 142.8 144.2 145.4 148.5 149.9 152.1 153.7 156.2 158.8 73 Office and computing machines 357 2.3 223.6 186.4 192.0 198.0 203.3 209.5 216.5 221.0 226.5 232.0 237.1 241.8 247.9 255.0 74 Electrical machinery 36 6.9 131.7 124.8 125.8 127.1 128.5 129.0 129.7 130.1 132.3 133.5 135.2 136.0 137.2 138.7 75 Transportation equipment 37 9.9 105.6 106.3 108.4 107.8 106.9 106.9 105.5 102.6 100.8 100.4 102.4 106.3 110.0 112.7 76 Motor vehicles and parts 371 4.8 120.1 116.2 120.9 120.7 120.1 120.4 118.1 114.3 110.1 110.0 115.0 124.1 132.3 138.8 77 Autos and light trucks 2.2 114.9 114.4 118.2 117.8 116.9 117.5 113.1 108.2 102.8 104.0 104.8 116.3 127.3 133.5 78 Aerospace and miscellaneous transportation equipment... 372-6,9 5.1 92.0 97.1 96.7 95.8 94.6 94.2 93.7 91.8 92.0 91.3 90.5 89.5 89.0 88.2 79 Instruments 38 5.1 102.2 103.3 103.0 102.2 103.3 102.6 102.5 102.5 102.8 101.3 102.0 101.7 101.5 102.1 80 Miscellaneous 39 1.3 113.1 111.8 110.9 111.9 112.6 114.3 113.1 112.1 112.3 112.5 114.3 113.7 114.3 115.1 81 Nondurable goods 37.8 106.8 106.0 106.4 106.4 106.6 106.9 106.9 107.2 107.0 107.3 106.5 107.0 107.6 107.4 82 Foods "20 8.8 106.9 106.2 105.9 106.9 106.7 106.7 106.7 107.1 107.2 107.8 107.3 107.8 107.2 107.0 83 Tobacco products 21 1.0 91.1 96.1 100.5 99.3 92.4 90.2 92.1 89.1 91.5 92.7 85.8 88.2 89.1 88.7 84 Textile mill products 22 1.8 106.3 106.0 106.9 106.2 105.4 104.2 106.9 107.1 107.7 107.4 105.4 106.6 106.3 106.8 85 Apparel products 23 2.3 90.8 92.7 93.1 92.5 92.1 92.0 91.2 91.1 90.7 90.6 89.6 89.4 90.0 89.7 86 Paper and products 26 3.6 112.0 108.3 108.6 110.4 111.1 113.1 112.1 114.2 112.0 113.1 111.2 111.8 113.8 112.8 87 Printing and publishing.. 27 6.5 94.1 94.7 94.7 94.0 94.7 95.6 94.7 94.5 93.8 93.4 93.8 94.3 94.4 93.3 88 Chemicals and products. 28 8.8 118.3 116.7 116.8 116.2 117.6 117.8 118.1 119.1 118.7 119.1 118.5 118.1 119.6 120.0 89 Petroleum products 29 1.3 104.8 103.4 103.2 104.7 104.7 104.3 103.6 103.9 102.5 102.4 104.3 107.9 108.2 107.1 90 Rubber and plastic products 30 3.2 113.7 111.3 113.6 112.7 112.9 113.6 113.8 112.8 114.7 114.8 113.9 113.9 115.4 116.4 91 Leather and products ... 31 .3 98.1 96.7 97.1 99.0 99.1 100.1 98.2 97.0 96.8 97.0 98.2 99.1 99.3 99.4 92 Mining 8.0 97.0 98.2 98.3 95.9 95.3 96.4 97.3 98.0 96.4 95.5 97.7 98.2 97.4 97.9 93 Metal 10 .3 165.5 158.1 167.7 163.0 158.2 162.5 169.3 164.4 167.7 148.2 161.5 178.5 172.0 172.8 94 Coal 11,12 1.2 103.6 107.9 108.2 101.7 102.3 108.2 106.4 106.7 101.0 95.9 103.9 104.7 100.7 104.0 95 Oil and gas extraction 13 5.8 92.0 93.4 92.7 90.9 90.4 90.5 91.6 93.1 91.6 92.4 93.0 92.7 92.6 92.6 % Stone and earth minerals .. 14 .7 93.9 92.6 93.8 95.2 93.4 92.3 94.0 91.7 93.2 94.7 95.0 94.3 95.9 94.5 97 Utilities 7.7 116.0 116.8 112.8 117.5 117.8 114.4 112.1 114.9 116.9 117.7 115.3 114.6 115.4 116.6 98 Electric 49I,3PT 6.1 115.7 116.4 112.9 116.5 116.3 114.5 114.0 115.6 118.1 118.9 115.1 113.6 114.8 116.1 99 Gas 492,3PT 1.6 116.9 118.2 112.4 121.4 123.3 113.9 104.9 112.2 112.4 113.3 116.0 118.2 117.8 118.6 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 79.5 111.4 108.8 109.3 109.8 110.2 110.8 110.9 111.1 111.7 112.0 112.1 112.6 113.4 113.8 101 Manufacturing excluding office and computing machines 81.9 108.7 107.0 107.6 108.0 108.1 108.6 108.3 108.1 108.3 108.5 108.7 109.5 110.7 111.3 Gross value (billions of 1987 dollars, annual rates) MAJOR MARKETS 102 Products, total 1,707.0 1,890.0 1,857.5 1,864.9 1,880.2 1,880.3 1,882.8 1,872.6 1,873.2 1,877.4 1,879.3 1,887.2 1,914.3 1,938.2 1,947.2 103 Final 1,314.6 1,492.5 1,466.8 1,476.4 1,485.7 1,484.3 1,485.6 1,477.9 1,477.5 1,479.0 1,480.5 1,489.1 1,513.4 1,534.3 1,542.1 104 Consumer goods 866.6 944.8 936.3 940.0 949.4 946.1 943.6 936.1 935.5 935.5 935.6 936.7 953.8 965.7 966.6 105 Equipment 448.0 547.6 530.5 536.5 536.3 538.2 541.9 541.8 541.9 543.4 544.9 552.4 559.6 568.7 575.5 106 Intermediate 392.5 397.6 390.7 388.4 394.5 396.0 397.3 394.7 395.7 398.4 398.8 398.1 401.0 403.9 405.1 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 1993 IItteemm 11999911 11999922 11999933 Mar. Apr. May June July Aug. Sept. Oct.* Nov.* Dec. Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 949 1,095 1,201 1,034 1,101 1,121 1,115 1,162 1,242 1,271 1,304 1,374 1,476 2 One-family 754 911 1,009 871 925 919 925 977 1,015 1,047 1,097 1,145 1,198 3 Two-or-more-family 195 184 192 163 176 202 190 185 227 224 207 229 278 4 Started 1,014 1,200 1,285 l,092r l,232r l,241r 1,238r l,245r 1,319* 1,359* 1,409 1,406 1,571 5 One-family 840 1,030 1,124 957r 1,082* l,100r l,067r l,076r 1,178* 1,160* 1,231 1,248 1,349 6 Two-or-more-family 174 169 162 135* 150* 141 171r 169* 141* 199* 178 158 222 7 Under construction at end of period1.. 606 612 681 635 637 645 649 658 662 678 688 700 715 8 One-family 434 473 545 502 506 515 517 527 534 543 551 563 577 9 Two-or-more-family 173 140 137 133 131 130 132 131 128 135 137 137 138 10 Completed 1,091 1,158 1,193 1,108 1,222 1,129 1,158 1,088 1,256 1,166 1,254 1,255 1,301 11 One-family 838 964 1,038 995 1,075 987 987 947 1,078 1,034 1,084 1,109 1,129 12 Two-or-more-family 253 194 156 113 147 142 171 141 178 132 170 146 172 13 Mobile homes shipped 171 210 234 245r 240* 235r 238r 246r 247* 254* 260 283 n.a. Merchant builder activity in one-family units 14 Number sold 507 610 669 602 689 629 641 647 642 742* 729 ' 774 862 15 Number for sale at end of period1 ... 284 265 303 270 271 274 274 276 286 288* 292 298 303 Price of units sold (thousands 16 Median 120.0 121.3 125.8 125.0 127.0 129.9 124.5 123.9 126.6 129.4 125.0 130.0 121.0 17 Average 147.0 144.9 147.6 146.6 148.4 152.3 145.7 143.4 150.6 150.1* 147.2 153.8 145.3 EXISTING UNITS (one-family) 18 Number sold 3,219 3,520 3,800 3,430" 3,460" 3,610"^ 3,700r 3,850* 3,860* 3,990* 4,030 4,120 4,350 Price of units sold (thousands of dollars) 19 Median 99.7 103.6 106.5 105.1 105.5r 106.5 109.2r 108.4r 108.8* 107.2 106.6 110077..11 110077..44 20 Average 127.4 130.8 133.1 131.6r 132.7r 132.6r 137.3r 135.8r 135.4* 133.6* 133.0 133.1 133.7 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 403,439 436,043 470,294 454,465 449,054 453,256 460,680 466,593 468,547 477,125 489,660 500,041 513,100 7? Private 293,536 317,256 342,715 336,972 328,150 332,231 335,028 337,909 341,351 345,572 354,102 364,482 371,917 73 Residential 157,837 187,820 207,901 205,519 197,317 198,380 200,496 204,631 206,594 209,520 215,198 222,299 228,584 24 Nonresidential 135,699 129,436 134,814 131,453 130,833 133,851 134,532 133,278 134,757 136,052 138,904 142,183 143,333 75 Industrial buildings 22,281 20,720 20,725 22,152 19,458 20,091 19,316 19,799 20,126 21,346 21,311 22,325 22,805 26 Commercial buildings 48,482 41,523 42,992 41,323 42,426 42,428 42,723 41,524 42,342 42,225 44,405 46,162 47,163 77 Other buildings 20,797 21,494 23,467 21,484 22,568 23,293 23,849 23,817 25,047 24,487 24,737 24,211 25,158 28 Public utilities and other 44,139 45,699 47,630 46,494 46,381 48,039 48,644 48,138 47,242 47,994 48,451 49,485 48,207 79 Public 109,900 118,784 127,581 117,493 120,904 121,025 125,652 128,684 127,196 131,553 135,558 135,559 141,183 30 Military 1,837 2,502 2,500 2,586 2,533 2,393 2,234 2,493 2,583 2,492 2,550 2,341 2,501 31 Highway 32,026 34,929 37,331 33,413 34,534 34,320 37,649 37,376 35,148 39,147 40,551 41,539 41,689 37 Conservation and development... 4,861 5,918 6,138 7,112 5,875 6,019 6,103 5,661 5,620 6,307 5,940 6,363 6,471 33 Other 71,176 75,435 81,612 74,382 77,962 78,293 79,666 83,154 83,845 83,607 86,517 85,316 90,522 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 • April 1994 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data except as noted Change from 12 Change from 3 months earlier months earlier (annual rate) Change from 1 month earlier IIInnndddeeexxx llleeevvveeelll,,, IIIttteeemmm 1993r 1993 19941 JJJaaannn... 11999933 11999944 111999999444111 JJaann.. JJaann.. Mar. June Sept. Dec. Sept. Oct. Nov. Dec. Jan. CONSUMER PRICES2 (1982-84=100) 1 All items 3.3 2.5 3.1 2.5 2.0 3.3 .LR .3R .3R .2 .0 146.2 2 Food 1.9 2.8 2.0 2.3 2.6 4.9 .3r ,5r .2r .5 -.1 143.7 3 Energy items 3.3 -2.0 1.2 -3.8 -4.2 1.2 -.4 1.9 -.9 -,7r -.8 101.3 4 All items less food and energy 3.5 2.9 3.8 3.2 2.1 3.4 .1 .3 ,4r .2r .1 154.3 5 Commodities 2.7 1.3 3.0 .9 .0 2.4 -.3r .2r .3r .R .0 135.4 6 Services 3.8 3.6 4.1 4.1 3.5 3.7 .2 ,2r ,4R .3r .2 165.1 PRODUCER PRICES (1982=100) 7 Finished goods 2.0 .2 3.9 .0 -2.5 -.3 .2 -.R .R -.1 .2 124.4 8 Consumer foods 1.5 2.3 .0 1.3 3.2 5.2 .6r -.2r .9r .6r -.3 127.1 9 Consumer energy 3.1 -4.0 14.1 -5.4 -7.4 -14.6 -R .9 -2.2r -2.6r .8 73.5 1 1 0 1 C O a th p e it r a l c o e n q s u u ip m m e e r n g t o ods 1 1 . . 7 9 - 1 .5 .9 4 2 . . 1 9 . . 6 6 -6 2 . . 4 2 1 . . 9 2 . .R ff - - , . 3 3 r r , . 4 2 r . . R 3 . . 3 6 1 1 3 3 8 3 . . 3 3 Intermediate materials 12 Excluding foods and feeds 1.9 .6 4.2 .3 -1.0 -.7 .(f ,2r -.R -.3 .2 116.1 13 Excluding energy 1.5 1.5 4.0 .0 1.0 1.6 .0 .R .I .2 .2 124.7 Crude materials 14 Foods 1.8 5.6 1.9 -3.0 13.1 15.5 .5R -1.5 4.2r l.ff -.9 111.5 15 Energy 5.6 -9.0 -10.1 17.5 -28.1 -26.8 1.2r 5.5r -3.8 -8.9 3.8 71.5 16 Other 9.2 10.0 22.1 11.2 -4.5 19.6 .R ,4r 1.8r 2.3r 1.6 147.7 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 11999911 11999922 11999933 Q4 Ql Q2 Q3 Q4 GROSS DOMESTIC PRODUCT 1 5,722.9 6,038.5 6,374.0 6,194.4 6,261.6 6,327.6 6,395.9 6,510.8 By source 2 Personal consumption expenditures 3,906.4 4,139.9 4,390.6 4,256.2 4,296.2 4,359.9 44,,441199..11 44,,448877..44 3 Durable goods 457.8 497.3 537.7 516.6 515.3 531.6 541.9 561.9 4 Nondurable goods 1,257.9 1,300.9 1,350.2 1,331.7 1,335.3 1,344.8 1,352.4 1,368.4 5 Services 2,190.7 2,341.6 2,502.7 2,407.9 2,445.5 2,483.4 2,524.8 2,557.2 6 Gross private domestic investment 736.9 796.5 892.0 833.3 874.1 874.1 884.0 935.8 7 Fixed investment 745.5 789.1 875.2 821.3 839.5 861.0 876.3 924.1 8 Nonresidential 555.9 565.5 622.9 579.5 594.7 619.1 624.9 653.0 9 Structures 182.6 172.6 178.6 171.1 172.4 177.6 179.1 185.2 10 Producers' durable equipment 373.3 392.9 444.4 408.3 422.2 441.6 445.8 467.8 11 Residential structures 189.6 223.6 252.3 241.8 244.9 241.9 251.3 271.1 12 Change in business inventories -8.6 7.3 16.8 12.0 34.6 13.1 7.7 11.7 13 Nonfarm -8.6 2.3 23.1 9.5 33.0 16.8 22.6 19.9 14 Net exports of goods and services -19.6 -29.6 -65.7 -38.8 -48.3 -65.1 -71.9 -77.7 IS Exports 601.5 640.5 660.1 654.7 651.3 660.0 653.2 675.8 16 Imports 621.1 670.1 725.8 693.5 699.6 725.0 725.1 753.5 17 Government purchases of goods and services 1,099.3 1,131.8 1,157.1 1,143.8 1,139.7 1,158.6 1,164.8 1,165.3 18 Federal 445.9 448.8 443.4 452.4 442.7 447.5 443.6 439.7 19 State and local 653.4 683.0 713.7 691.4 697.0 711.1 721.2 725.6 By major type of product 70 Final sales, total 5,731.6 6,031.2 6,357.2 6,182.5 66,,222277..11 6,314.5 66,,338888..22 66,,449999..00 71 Goods 2,227.0 2,305.5 2,403.1 2,365.6 2,362.9 2,395.0 2,401.7 2,452.9 ?? Durable 934.3 975.8 1,034.6 1,008.3 1,003.5 1,037.8 1,032.9 1,064.3 73 Nondurable 1,292.8 1,329.6 1,368.5 1,357.3 1,359.3 1,357.1 1,368.8 1,388.6 74 Services 3,032.7 3,221.1 3,409.5 3,296.1 3,341.8 3,388.1 3,437.8 3,470.3 25 Structures 471.9 504.7 544.6 520.8 522.4 531.5 548.7 575.8 26 Change in business inventories -8.6 7.3 16.8 12.0 34.6 13.1 7.7 11.7 77 Durable goods -12.9 2.1 13.0 -1.2 15.0 2.7 14.8 19.5 28 Nondurable goods 4.3 5.3 3.8 13.2 19.5 10.4 -7.2 -7.7 MEMO 29 Total GDP in 1987 dollars 4,861.4 4,986.3 5,132.7 5,068.3 5,078.2 5,102.1 5,138.3 5,212.1 NATIONAL INCOME 30 4,598.3 4,836.6 n.a. 4,975.8 5,038.9 5,104.0 5,143.2 n.a. 31 Compensation of employees 3,402.4 3,582.0 3,772.1 3,658.6 3,705.1 3,750.6 3,793.9 3,839.0 3? Wages and salaries 2,814.9 2,953.1 3,100.4 3,015.8 3,054.3 3,082.7 3,115.4 3,149.2 33 Government and government enterprises 545.3 567.5 589.7 574.2 584.1 586.3 592.8 595.5 34 Other 2,269.6 2,385.6 2,510.7 2,441.6 2,470.2 2,496.3 2,522.6 2,553.7 35 Supplement to wages and salaries 587.5 629.0 671.7 642.8 650.7 668.0 678.5 689.8 36 Employer contributions for social insurance 290.6 306.3 321.0 311.3 312.2 321.4 323.8 326.8 37 Other labor income 296.9 322.7 350.7 331.5 338.5 346.6 354.7 362.9 38 Proprietors' income1 376.4 414.3 442.1 431.2 444.1 439.4 422.5 462.4 39 Business and professional 339.5 370.6 397.1 383.6 388.4 392.4 397.6 410.1 40 Farm1 36.8 43.7 45.0 47.6 55.7 47.0 24.8 52.4 41 Rental income of persons2 -12.8 -8.9 13.0 -1.2 7.5 12.7 13.7 17.9 42 Corporate profits1 369.5 407.2 n.a. 439.5 432.1 458.1 468.5 n.a. 43 Profits before tax3 362.3 395.4 n.a. 409.9 419.8 445.6 443.8 n.a. 44 Inventory valuation adjustment 4.9 -5.3 -7.8 4.9 -12.7 -12.2 1.0 -7.2 45 Capital consumption adjustment 2.2 17.1 24.3 24.7 25.1 24.7 23.8 23.6 46 Net interest 462.8 442.0 n.a. 447.7 450.1 443.2 444.6 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 • April 1994 2.17 PERSONAL INCOME AND SAVING Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1992 1993 AAccccoouunntt 11999911 11999922 11999933 Q4 Ql Q2 Q3 Q4 PERSONAL INCOME AND SAVING 1 Total personal income 4,850.9 5,144.9 5,387.6 5,328.3 5,254.7 5,373.2 5,412.7 5,509.8 7 Wage and salary disbursements 2,815.0 2,973.1 3,080.4 3,095.8 2,974.3 3,082.7 3,115.4 3,149.2 Commodity-producing industries 738.1 756.5 763.6 783.3 740.7 765.1 769.4 779.0 4 557.2 577.6 577.2 602.0 559.7 580.3 581.5 587.5 5 Distributive industries 648.0 682.0 706.4 709.9 682.9 709.1 714.4 719.2 <s Service industries 883.5 967.0 1,020.8 1,028.4 966.6 1,022.2 1,038.8 1,055.5 7 Government and government enterprises 545.4 567.5 589.7 574.2 584.1 586.3 592.8 595.5 8 Other labor income 296.9 322.7 350.7 331.5 338.5 346.6 354.7 362.9 376.4 414.3 442.1 431.2 444.1 439.4 422.5 462.4 10 Business and professional1 339.5 370.6 397.1 383.6 388.4 392.4 397.6 410.1 11 36.8 43.7 45.0 47.6 55.7 47.0 24.8 52.4 1? Rental income of persons -12.8 -8.9 13.0 -1.2 7.5 12.7 13.7 17.9 N 127.9 140.4 158.3 152.3 157.0 157.8 159.0 159.4 14 Personal interest income 715.6 694.3 695.8 694.5 695.4 693.1 695.7 699.2 is Transfer payments 769.9 858.4 911.6 877.4 894.4 905.5 918.5 927.9 16 Old-age survivors, disability, and health insurance benefits ... 382.3 413.9 438.2 420.8 433.1 435.0 439.4 445.4 17 LESS: Personal contributions for social insurance 237.8 249.3 264.3 253.3 256.6 264.5 266.8 269.2 18 EQUALS: Personal income 4,850.9 5,144.9 5,387.6 5,328.3 5,254.7 5,373.2 5,412.7 5,509.8 19 LESS: Personal tax and nontax payments 620.4 644.8 681.6 670.7 657.1 681.0 689.0 699.1 20 EQUALS: Disposable personal income 4,230.5 4,500.2 4,706.0 4,657.6 4,597.5 4,692.2 4,723.7 4,810.7 21 LESS: Personal outlays 4,029.0 4,261.5 4,515.7 4,377.9 4,419.7 4,483.6 4,544.0 4,615.5 22 EQUALS: Personal saving 201.5 238.7 190.3 279.7 177.9 208.7 179.7 195.2 MEMO n P G e r r o s c s a d p o it m a e ( s 1 t 9 ic 8 7 p r d o o d l u la c r t s) 19,237.9 19,518.0 19,874.5 19,754.1 19,744.4 19,785.4 1199,,886688..88 2200,,009977..33 74 Personal consumption expenditures 12,895.2 13,080.9 13,368.5 13,240.9 13,234.2 13,311.6 13,416.2 13,510.7 25 Disposable personal income 13,965.0 14,219.0 14,329.0 14,490.0 14,163.0 14,326.0 14,341.0 14,484.0 26 Saving rate (percent) 4.8 5.3 4.0 6.0 3.9 4.4 3.8 4.1 GROSS SAVING 27 Gross saving 733.7 717.8 n.a. 718.8 762.0 766.7 774.3 n.a. 28 Gross private saving 929.9 986.9 n.a. 969.4 1,024.8 988.3 988.7 n.a. 79 Personal saving 201.5 238.7 190.3 279.7 177.9 208.7 179.7 195.2 30 Undistributed corporate profits 102.3 110.4 n.a. 121.7 103.7 116.3 129.3 n.a. 31 Corporate inventory valuation adjustment 4.9 -5.3 -7.8 4.9 -12.7 -12.2 1.0 -7.2 Capital consumption allowances 3T 383.2 396.6 408.9 396.5 402.2 440055..22 441144..00 441144..11 33 Noncorporate 242.8 261.3 262.3 251.5 261.0 258.1 265.7 264.5 34 Government surplus, or deficit (-), national income and product accounts -196.2 -269.1 -223.7 -250.6 -262.8 -221.5 --221144..44 n.a. 35 Federal -203.4 -276.3 -225.8 -264.2 -263.5 -222.6 -212.7 n.a. 36 State and local 7.3 7.2 2.1 13.5 .8 1.1 -1.7 n.a. 37 Gross investment 743.3 741.4 n.a. 750.9 796.5 778.7 787.6 n.a. 38 Gross private domestic 736.9 796.5 892.0 833.3 874.1 874.1 884.0 935.8 39 Net foreign 6.4 -55.1 n.a. -82.4 -77.6 -95.4 -96.4 n.a. 40 Statistical discrepancy 9.6 23.6 n.a. 32.1 34.4 12.0 13.3 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 Q3 Q4 Ql Q2 Q3P 1 Balance on current account -91,861 -8,324 -66,400 -17,775 -23,687 -22,308 -27,172 -27,986 2 Merchandise trade balance2 -109,033 -73,802 -96,138 -27,612 -25,962 -29,309 -34,384 -36,279 3 Merchandise exports 389,303 416,937 440,138 109,493 113,992 111,530 113,118 111,912 4 Merchandise imports -498,336 -490,739 -536,276 -137,105 -139,954 -140,839 -147,502 -148,191 5 Military transactions, net -7,834 -5,851 -2,751 -617 -836 -145 -226 -341 6 Other service transactions, net 38,485 51,733 59,163 15,898 14,265 14,769 14,685 14,448 7 Investment income, net 20,348 13,021 6,222 1,703 -806 -37 47 1,748 8 U.S. government grants -17,434 24,073 -14,688 -2,783 -5,883 -3,242 -2,730 -2,970 9 U.S. government pensions and other transfers -2,934 -3,461 -3,735 -940 -846 -978 -979 -976 10 Private remittances and other transfers -13,459 -14,037 -14,473 -3,424 -3,619 -3,366 -3,585 -3,616 11 Change in U.S. government assets other than official reserve assets, net (increase, -) 2,307 2,905 -1,609 -305 -737 535 -275 -86 12 Change in U.S. official reserve assets (increase, -) -2,158 5,763 3,901 1,952 1,542 -983 822 -545 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -192 -177 2,316 -173 2,829 -140 -166 -118 15 Reserve position in International Monetary Fund 731 -367 -2,692 -118 -2,685 -228 313 -48 16 Foreign currencies -2,697 6,307 4,277 2,243 1,398 -615 675 -378 17 Change in U.S. private assets abroad (increase, -) -44,280 -68,643 -53,253 -12,445 -31,243 -11,910 -29,888 -43,331 18 Bank-reported claims3 16,027 3,278 24,948 6,584 -3,481 28,055 5,317 7,547 19 Nonbank-reported claims -4,433 1,932 4,551 -3,214 1,132 -4,774 443 20 U.S. purchases of foreign securities, net -28,765 -44,740 -47,961 -13,787 -17,405 -26,889 -24,098 -45,290 21 U.S. direct investments abroad, net -27,109 -29,113 -34,791 -2,028 -11,489 -8,302 -11,550 -5,588 22 Change in foreign official assets in United States (increase, +) .. 34,198 17,564 40,684 -7,378 5,931 10,929 17,699 19,646 23 U.S. Treasury securities 29,576 14,846 18,454 -323 -7,379 1,039 5,668 18,808 24 Other U.S. government obligations 667 1,301 3,949 912 874 710 1,082 1,545 25 Other U.S. government liabilities 2,156 1,542 2,542 864 943 -395 3% 1,322 26 Other U.S. liabilities reported by U.S. banks3 3,385 -1,484 16,427 -7,831 11,219 8,171 9,454 -2,213 27 Other foreign official assets -1,586 1,359 -688 -1,000 274 1,404 1,099 184 28 Change in foreign private assets in United States (increase, +).. 70,976 65,875 88,895 33,828 32,914 14,789 24,681 46,806 29 U.S. bank-reported liabilities3 16,370 -11,371 18,609 23,647 -1,171 -18,862 -1,381 23,525 30 U.S. nonbank-reported liabilities 7,533 -699 741 1,553 -2,717 2,057 1,361 31 Foreign private purchases of U.S. Treasury securities, net -2,534 18,826 36,893 4,870 21,232 13,599 -623 3,995 32 Foreign purchases of other U.S. securities, net 1,592 35,144 30,274 2,730 12,478 9,394 15,025 17,411 33 Foreign direct investments in United States, net 48,015 23,975 2,378 1,028 3,092 8,601 10,299 1,875 34 Allocation of special drawing rights 0 0 0 0 0 0 0 0 3 3 5 6 Di D sc u r e e p t a o n s c e y a sonal adjustment 30,820 -15,140 -12,218 -6 2 , , 7 1 5 2 4 3 15 1, , 2 2 2 8 2 0 8 5, , 8 9 1 4 4 8 14,1 6 3 8 3 1 -7 5 , , 6 4 0 9 5 5 37 Before seasonal adjustment 30,820 -15,140 -12,218 8,877 14,058 3,134 13,452 13,100 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) -2,158 5,763 3,901 1,952 1,542 -983 822 -544 39 Foreign official assets in United States, excluding line 25 (increase, +) 32,042 16,022 38,142 -8,242 4,988 11,324 17,303 18,324 40 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) 1,707 -4,882 5,857 3,051 2,336 463 -916 -3,043 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 • April 1994 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data seasonally adjusted 1993 IItteemm 11999911 11999922 11999933 June July Aug. Sept. Oct. Nov.r Dec." 1 Exports of domestic and foreign merchandise, excluding grant-aid shipments 421,730 448,164 464,767 37,639 37,109 3388,,005500 3388,,888855 4400,,009922 4400,,223366 42,225 2 General imports including merchandise for immediate consumption plus entries into bonded warehouses 488,453 532,665 580,544 49,698 47,534 48,097 49,506 50,990 49,915 49,633 3 Trade balance -66,723 -84,501 -115,777 -12,058 -10,425 -10,047 -10,621 -10,897 -9,679 -7,408 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 1993 1994 July Aug. Sept. Oct. Nov. 1 Total 83,316 77,719 71,323 74,139 75,231 75,835 74,550 74,042 73,442 2 Gold stock, including Exchange Stabilization Fund1 11,058 11,057 11,056 11,057 11,057 11,057 11,056 11,054 11,053 3 Special drawing rights ,3 10,989 11,240 8,503 8,905 9,133 9,203 9,038 9,091 9,039 4 Reserve position in International Monetary Fund 9,076 9,488 11,759 12,083 12,118 12,101 11,908 11,827 11,818 5 Foreign currencies 52,193 45,934 40,005 42,094 42,923 43,474 42,548 42,070 41,532 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 1994 AAsssseett 11999900 11999911 11999922 July Aug. Sept. Oct. Nov. Dec.r Jan." 1 Deposits 369 968 205 284 357 501 390 596 386 257 Held in custody 2 U.S. Treasury securities 278,499 281,107 314,481 343,378 356,671 358,860 358,975 373,864 379,394 388,065 3 Earmarked gold 13,387 13,303 13,686 12,756 12,686 12,562 12,464 12,381 12,327 12,302 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 1993 AAccccoouunntt 11999900 11999911 11999922 June July Aug. Sept. Oct. Nov. Dec. ASSETS All foreign countries 1 Total payable in any currency 556,925 548,999 542,761 562,021R 550,936* 560,051* 555,646* 562,192 561,963* 554,853 ? Claims on United States 188,496 176,487 166,799 176,026 163,793 166,817 168,086* 164,023 164,889* 169,815 3 Parent bank 148,837 137,695 132,276 141,025 127,474 130,865 136,938* 127,347 127,021* 136,703 4 Other banks in United States 13,296 12,884 9,703 9,498 8,993 9,457 6,862 7,739 7,647 6,577 5 Nonbanks 26,363 25,908 24,820 25,503 27,326 26,495 24,286 28,937 30,221 26,535 6 Claims on foreigners 312,449 303,934 318,284 316,681 317,198 326,098 318,895* 327,336 324,274* 313,359 7 Other branches of parent bank 135,003 111,729 123,469 111,851 105,299 108,216 108,805* 107,155 104,639* 99,495 8 Banks 72,602 81,970 82,190 85,977 88,653 90,013 84,942* 92,262 89,750* 86,350 9 Public borrowers 17,555 18,652 20,756 18,183 17,687 18,364 17,797 17,881 19,855 19,233 10 Nonbank foreigners 87,289 91,583 91,869 100,670 105,559 109,505 107,351* 110,038 110,030* 108,281 11 Other assets 55,980 68,578 57,678 69,314r 69,945* 67,136* 68,665* 70,833 72,800* 71,679 12 Total payable in U.S. dollars 379,479 364,078 365,941 355,357R 341,060 338,953* 348,210* 342,145 339,177* 345,573 13 Claims on United States 180,174 169,848 162,126 169,503 155,387 157,538 160,820* 154,083 153,892 160,251 14 Parent bank 142,962 133,662 129,330 137,712 124,072 127,028 133,223* 124,064 123,370 133,014 15 Other banks in United States 12,513 12,025 9,266 8,638 8,270 8,475 6,322 7,046 6,977 5,999 16 Nonbanks 24,699 24,161 23,530 23,153 23,045 22,035 21,275 22,973 23,545 21,238 17 Claims on foreigners 174,451 167,010 183,641 168,886 167,295 164,379 168,744* 166,803 163,631* 164,366 18 Other branches of parent bank 95,298 78,114 83,231 73,071 70,400 68,623 70,699* 67,602 65,432 65,969 19 Banks 36,440 41,635 47,250 43,679 44,267 42,383 43,925* 44,722 43,549* 44,406 70 Public borrowers 12,298 13,685 14,313 12,049 11,951 11,999 11,580 11,512 12,504 11,935 ?1 Nonbank foreigners 30,415 33,576 38,847 40,087 40,677 41,374 42,540 42,967 42,146* 42,056 22 Other assets 24,854 27,220 20,174 16,968r 18,378 17,036* 18,646* 21,259 21,654* 20,956 United Kingdom 23 Total payable in any currency 184,818 175,599 165,850 172,439* 166,431* 172,072* 172,368* 173,948 175,316 178,073 74 Claims on United States 45,560 35,257 36,403 37,038 34,032 35,491 34,053 32,641 35,377 41,200 75 Parent bank 42,413 31,931 33,460 33,059 29,184 30,612 30,776 26,562 27,944 36,620 76 Other banks in United States 792 1,267 1,298 1,006 808 877 631 1,010 804 933 77 Nonbanks 2,355 2,059 1,645 2,973 4,040 4,002 2,646 5,069 6,629 3,647 78 Claims on foreigners 115,536 109,692 111,623 109,528 107,799 114,150 115,203 118,207 112,705 110,126 79 Other branches of parent bank 46,367 35,735 46,165 40,130 37,164 39,778 40,613 40,545 36,971 32,598 30 Banks 31,604 36,394 33,399 36,848 38,543 40,332 40,277 44,704 42,454 42,239 31 Public borrowers 3,860 3,306 3,329 2,342 2,341 2,606 2,171 2,147 2,984 2,900 3? Nonbank foreigners 33,705 34,257 28,730 30,208 29,751 31,434 32,142 30,811 30,296 32,389 33 Other assets 23,722 30,650 17,824 25,873* 24,600* 22,431* 23,112* 23,100 27,234 26,747 34 Total payable in U.S. dollars 116,762 105,974 109,493 100,418* 96,200 93,735* 97,832* 94,820 94,227 99,479 35 Claims on United States 41,259 32,418 34,508 34,110 30,573 31,753 31,160 27,731 30,092 36,143 36 Parent bank 39,609 30,370 32,186 31,265 27,580 28,938 29,130 24,756 26,046 34,628 37 Other banks in United States 334 822 1,022 533 300 308 328 430 365 479 38 Nonbanks 1,316 1,226 1,300 2,312 2,693 2,507 1,702 2,545 3,681 1,036 39 Claims on foreigners 63,701 58,791 66,335 60,479 58,944 56,603 59,725 59,396 55,167 53,466 40 Other branches of parent bank 37,142 28,667 34,124 30,287 27,814 27,713 28,306 27,478 24,779 20,965 41 Banks 13,135 15,219 17,089 16,658 17,590 15,466 17,967 18,910 17,103 18,135 4 4 ? 3 P N u o b n l b ic a n b k o r f r o o r w ei e g r n s e rs 1 3 0 , , 1 2 4 8 3 1 1 2 2 , , 8 0 5 5 3 2 1 2 2 , , 3 7 4 7 9 3 11 1 , , 7 80 3 4 0 1 1 1 , , 7 7 4 9 4 6 11 1 , ,8 5 3 9 2 2 11 1 , , 8 61 3 4 8 1 1 1 , , 6 3 1 9 3 5 1 2 0 , , 4 8 4 3 6 9 1 2 2 , , 3 0 1 4 9 7 44 Other assets 11,802 14,765 8,650 5,829* 6,683 5,379* 6,947* 7,693 8,968 9,870 Bahamas and Cayman Islands 45 Total payable in any currency 162,316 168,512 147,422 148,982 140,580 140,172 147,385 146,834 144,327 148,814 46 Claims on United States 112,989 115,430 96,280 102,109 93,736 93,661 98,873 98,100 96,389 96,023 47 Parent bank 77,873 81,706 66,608 74,023 66,363 67,055 74,040 72,185 70,682 71,606 48 Other banks in United States 11,869 10,907 7,828 7,651 7,477 7,360 5,489 5,710 5,993 4,957 49 23,247 22,817 21,844 20,435 19,896 19,246 19,344 20,205 19,714 19,460 50 Claims on foreigners 41,356 45,229 44,509 40,437 39,609 39,588 41,814 40,028 40,257 46,286 51 Other branches of parent bank 13,416 11,098 7,293 7,009 6,772 7,226 8,958 8,024 8,713 15,692 5? Banks 16,310 20,174 21,212 18,117 17,688 16,863 17,090 16,228 15,999 15,718 53 Public borrowers 5,807 7,161 7,786 6,334 6,185 6,102 5,955 5,767 5,735 5,539 54 Nonbank foreigners 5,823 6,796 8,218 8,977 8,964 9,397 9,811 10,009 9,810 9,337 55 Other assets 7,971 7,853 6,633 6,436 7,235 6,923 6,698 8,706 7,681 6,931 56 Total payable in U.S. dollars 158,390 163,957 142,861 143,900 136,025 135,698 142,831 142,273 140,010 144,707 1. Since June 1984, reported claims held by foreign branches have been reduced by an increase in the reporting threshold for "shell" branches from $50 million to $150 million equivalent in total assets, the threshold now applicable to all reporting branches. This table has been discontinued with the December 1993 data because these data are no longer collected. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics • April 1994 3.14 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data1—Continued 1993 June July Aug. Sept. Oct. Nov. Dec. LIABILITIES All foreign countries 57 Total payable in any currency 556,925 548,999 542,761 562,021r 550,936r 560,051r 555,646r 562,192 561,963r 554,853 58 Negotiable certificates of deposit (CDs) .. 18,060 16,284 10,032 14,154 14,568 14,604 12,666 12,166 l l^ 12,930 59 To United States 189,412 198,307 189,445 186,374 174,089 172,074 180,247R 173,532 173,488R 180,246 60 Parent bank 138,748 136,431 134,340 129,486 120,953 118,724 121,821r 114,945 114,807R 116,741 61 Other banks in United States 7,463 13,260 12,182 13,514 10,440 9,561 11,662 10,699 11,568 14,592 62 Nonbanks 43,201 48,616 42,923 43,374 42,696 43,789 46,764 47,888 47,113 48,913 63 To foreigners 311,668 288,254 309,917 319,105 319,673 333,165 322,305R 335,078 332,331R 321,981 64 Other branches of parent bank 139,113 112,033 125,189 115,743 108,954 113,582 11 L,759R 109,288 107,7%R 103,047 65 Banks 58,986 63,097 62,268 67,258 71,509 73,682 68,117R 78,882 75,164R 73,439 66 Official institutions 14,791 15,596 19,731 22,466 23,147 23,049 22,698 24,712 26,020 26,508 67 Nonbank foreigners 98,778 97,528 102,729 113,638 116,063 122,852 119,731R 122,1% 123,351 118,987 68 Other liabilities 37,785 46,154 33,367 42,388R 42,606R 40,208R 40,428R 41,416 44,205R 39,6% 69 Total payable in U.S. dollars 383,522 370,710 368,869 356,464r 341,778r 338,776r 346,776r 340,549 339,440r 345,779 70 Negotiable CDs 14,094 11,909 6,238 8,138 7,958 7,370 6,131 5,886 5,712R 6,732 /I To United States 175,654 185,472 178,675 172,708 160,499 157,841 167,272R 160,049 160, AW 166,493 72 Parent bank 130,510 129,669 127,949 121,922 113,313 110,881 114,NC 107,631 107,878R 109,063 73 Other banks in United States 6,052 11,707 11,512 12,862 9,789 8,842 11,092 9,927 10,923 13,838 74 Nonbanks 39,092 44,096 39,214 37,924 37,397 38,118 42,010 42,491 41,698 43,592 75 To foreigners 179,002 158,993 172,284 166,193 163,673 165,121 163,770R 162,435 159,341 163,602 76 Other branches of parent bank 98,128 76,601 83,714 75,798 72,924 72,504 72,395R 68,934 66,909 68,815 77 Banks 20,251 24,156 26,159 23,440 23,631 24,522 23,804R 24,252 24,034 25,764 78 Official institutions 7,921 10,304 12,430 12,951 12,868 12,031 10,720 11,416 11,210 13,868 79 Nonbank foreigners 52,702 47,932 49,981 54,004 54,250 56,064 56,85lr 57,833 57,188 55,155 80 Other liabilities 14,772 14,336 11,672 9,425r 9,648r 8,444r 9,603r 12,179 13,888r 8,952 United Kingdom 81 Total payable in any currency 184,818 175,599 165,850 172,439r 166,431r 172,072r 172,368r 173,948 175,316 178,073 82 Negotiable CDs 14,256 11,333 4,517 6,566 6,364 6,674 5,318 4,489 4,188 5,429 83 To United States 39,928 37,720 39,174 39,514 35,521 36,600 37,180 33,498 31,953 29,716 84 Parent bank 31,806 29,834 31,100 30,410 27,183 28,076 29,217 25,147 24,755 21,466 85 Other banks in United States 1,505 1,438 1,065 1,097 850 741 682 782 556 887 86 Nonbanks 6,617 6,448 7,009 8,007 7,488 7,783 7,281 7,569 6,642 7,363 87 To foreigners 108,531 98,167 107,176 106,725 105,949 112,121 112,534 118,837 117,926 125,231 88 Other branches of parent bank 36,709 30,054 35,983 32,275 28,408 30,534 31,578 31,921 34,236 39,114 89 Banks 25,126 25,541 25,231 25,848 28,504 29,039 28,064 32,055 30,120 30,583 90 Official institutions 8,361 9,670 12,090 12,139 11,885 11,575 12,425 13,269 13,104 15,892 91 Nonbank foreigners 38,335 32,902 33,872 36,463 37,152 40,973 40,467 41,592 40,466 39,642 92 Other liabilities 22,103 28,379 14,983 19,634r 18,597r 16,677r 17,336r 17,124 21,249 17,697 93 Total payable in U.S. dollars 116,094 108,755 108,214 97,750r 92,745r 91,432r 94,017r 91,614 91,266 97,956 94 Negotiable CDs 12,710 10,076 3,894 5,462 5,197 4,890 3,728 3,388 3,234 4,642 95 To United States 34,697 33,003 35,417 34,523 30,669 31,579 32,838 28,725 27,055 25,142 % Parent bank 29,955 28,260 29,957 28,747 25,753 26,600 28,039 24,093 23,524 20,454 97 Other banks in United States 1,156 1,177 709 847 637 476 397 350 337 506 98 Nonbanks 3,586 3,566 4,751 4,929 4,279 4,503 4,402 4,282 3,194 4,182 99 To foreigners 60,014 56,626 62,048 53,282 52,336 51,256 52,608 54,211 53,230 63,782 100 Other branches of parent bank 25,957 20,800 22,026 17,691 16,198 16,063 16,859 16,108 18,487 25,262 101 Banks 9,488 11,069 12,540 8,305 8,347 7,666 8,877 9,%7 7,831 9,702 102 Official institutions 4,692 7,156 8,847 8,812 8,720 8,042 7,195 7,399 7,238 10,090 103 Nonbank foreigners 19,877 17,601 18,635 18,474 19,071 19,485 19,677 20,737 19,674 18,728 104 Other liabilities 8,673 9,050 6,855 4,483r 4,543r 3,707r 4,843r 5,290 7,747 4,390 Bahamas and Cayman Islands 105 Total payable in any currency 162,316 168,512 147,422 148,982 140,580 140,172 147,385 146,834 144,327 148,814 106 Negotiable CDs 646 1,173 1,350 1,535 1,562 1,307 1,315 1,260 1,370 1,099 107 To United States 114,738 130,058 111,861 109,238 101,036 99,418 108,107 106,453 107,554 116,507 108 Parent bank 74,941 79,394 67,347 64,608 59,352 58,031 60,407 59,323 59,368 64,818 109 Other banks in United States 4,526 10,231 10,445 11,567 8,603 7,791 10,146 9,117 10,056 12,812 110 Nonbanks 35,271 40,433 34,069 33,063 33,081 33,5% 37,554 38,013 38,130 38,877 111 To foreigners 44,444 35,200 32,556 36,621 35,973 37,808 36,449 35,291 32,347 29,909 112 Other branches of parent bank 24,715 17,388 15,169 18,944 18,164 19,103 18,609 17,451 14,131 11,665 113 Banks 5,588 5,662 6,422 6,417 6,996 7,766 6,347 6,272 6,356 7,257 114 Official institutions 622 572 805 1,031 902 836 881 770 953 822 115 Nonbank foreigners 13,519 11,578 10,160 10,229 9,911 10,103 10,612 10,798 10,907 10,165 116 Other liabilities 2,488 2,081 1,655 1,588 2,009 1,639 1,514 3,830 3,056 1,299 117 Total payable in U.S. dollars 157,132 163,789 143,150 144,014 135,893 135,483 142,449 142,246 140,068 144,367 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 1993 IItteemm 11999911 11999922 June July Aug. Sept. Oct. Nov. Dec." 1 Total1 360,530 398,816 427,561 427,039 436,972 445,692 444,107r 456,734r 468,268 By type 2 Liabilities reported by banks in the United States^ 38,396 54,967 72,714 67,464 68,827 70,219 65,668 67,544 69,048 3 U.S. Treasury bills and certificates 92,692 104,596 119,860 128,837 136,488 139,638 140,525 144,865 150,900 U.S. Treasury bonds and notes 4 Marketable 203,677 210,553 201,118 196,441 197,165 200,346 201,965r 208,213r 211,869 5 Nonmarketable4 4,858 4,532 5,451 5,488 5,508 5,542 5,579 5,615 5,652 6 U.S. securities other than U.S. Treasury securities 20,907 24,168 28,418 28,809 28,984 29,947 30,370 30,497 30,799 By area 7 Europe1 171,317 191,708 193,401 188,981 191,890 198,254 193,676 208,370 208,643 8 Canada 7,460 7,920 8,297 88,,880088 8,075 8,260 9,441 8,657 9,505 9 Latin America and Caribbean 33,554 40,025 48,548 5533,,880055 55,343 54,703 54,275 50,41^ 57,960 10 Asia 139,465 152,276 169,504 169,080 174,901 177,164 178,889r 182,462r 185,304 11 Africa 2,092 3,565 3,621 2,844 3,109 3,888 3,665 3,650 3,893 12 Other countries6 6,640 3,320 4,188 3,519 3,652 3,421 4.1597 3,183r 2,961 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 Dec. Mar. June Sept.r 1 Banks' liabilities 67,835 70,477 75,129 72,796 80,999 74,697 81,045 2 Banks' claims 65,127 66,796 73,195 62,799r 64,057 55,161 59,116 3 Deposits 20,491 29,672 26,192 24,240 24,928 23,449 22,724 4 Other claims 44,636 37,124 47,003 38,559r 39,129 31,712 36,392 5 Claims of banks' domestic customers 3,507 6,309 3,398 4,432 2,625 3,234 2,640 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 • April 1994 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 1993 IItteemm 11999911 11999922 11999933 June July Aug. Sept. Oct. Nov.* Dec." HOLDER AND TYPE OF LIABILITY 1 Total, ail foreigners 756,066 810,259 892,925 824,957 821,788 846,626 862,147 867,083* 884,471 892,925 2 Banks' own liabilities 575,374 606,444 619,159 597,695 589,281 606,529 614,608 608,979* 615,361 619,159 3 Demand deposits 20,321 21,828 21,569 21,466 21,818 21,503 25,445 22,035 25,462 21,569 4 Time deposits 159,649 160,385 174,816 152,072 151,293 152,967 153,607 158,845* 155,928 174,816 5 Other. 66,305 93,237 109,608 107,462 106,962 116,406 113,063 129,438* 128,563 109,608 6 Own foreign offices4 329,099 330,994 313,166 316,695 309,208 315,653 322,493 298,661* 305,408 313,166 7 Banks' custodial liabilities5 180,692 203,815 273,766 227,262 232,507 240,097 247,539 258,104* 269,110 273,766 8 U.S. Treasury bills and certificates6 110,734 127,644 176,430 144,059 115533,,335599 116611,,882277 116655,,115511 116644,,336655 116699,,772299 117766,,443300 9 Other negotiable and readily transferable instruments7 18,664 21,974 36,078 30,056 26,477 27,643 30,879 37,562* 38,555 36,078 10 Other 51,294 54,197 61,258 53,147 52,671 50,627 51,509 56,177* 60,826 61,258 11 Nonmonetary international and regional organizations8 8,981 9,350 10,836 9,330 9,587 12,365 11,409 10,984 12,955 10,836 12 Banks' own liabilities 6,827 6,951 5,540 6,270 6,397 8,671 7,995 6,780 9,081 5,540 13 Demand deposits 43 46 15 19 29 37 72 71 34 15 14 Time deposits2 2,714 3,214 2,770 3,607 2,920 2,882 4,062 2,968 2,853 2,770 15 Other 4,070 3,691 2,755 2,644 3,448 5,752 3,861 3,741 6,194 2,755 16 Banks' custodial liabilities5 2,154 2,399 5,296 3,060 3,190 3,694 3,414 4,204 3,874 5,296 17 U.S. Treasury bills and certificates6 1,730 1,908 4,275 22,,332200 22,,663355 33,,441188 33,,119999 33,,556666 33,,220011 44,,227755 18 Other negotiable and readily transferable instruments7 424 486 1,021 740 549 276 215 638 672 1,021 19 Other 0 5 0 0 6 0 0 0 1 0 20 Official institutions9 131,088 159,563 219,948 192,574 196,301 205,315 209,857 206,193 212,409 219,948 21 Banks' own liabilities 34,411 51,202 63,471 62,972 62,062 62,255 63,618 60,995 61,748 63,471 22 Demand deposits 2,626 1,302 1,599 2,231 1,583 1,321 1,951 2,121 2,089 1,599 23 Time deposits 16,504 17,939 21,494 19,603 18,935 18,110 20,552 14,885 16,938 21,494 24 Other3 15,281 31,961 40,378 41,138 41,544 42,824 41,115 43,989 42,721 40,378 25 Banks' custodial liabilities5 96,677 108,361 156,477 129,602 134,239 143,060 146,239 145,198 150,661 156,477 26 U.S. Treasury bills and certificates6 92,692 104,596 150,900 119,860 128,837 136,488 113399,,663388 114400,,552255 114444,,886655 115500,,990000 27 Other negotiable and readily transferable instruments 3,879 3,726 5,482 9,602 5,297 6,514 6,149 4,491 5,614 5,482 28 Other 106 39 95 140 105 58 452 182 182 95 29 Banks10 522,265 547,320 561,485 529,179 521,266 531,961 544,176 543,385* 553,327 561,485 30 Banks' own liabilities 459,335 476,117 473,751 459,341 450,361 462,736 470,133 460,075* 467,446 473,751 31 Unaffiliated foreign banks 130,236 145,123 160,585 142,646 141,153 147,083 147,640 161,414* 162,038 160,585 32 Demand deposits 8,648 10,170 9,713 9,919 10,677 10,478 12,808 9,948 13,369 9,713 33 Time deposits 82,857 90,296 105,203 83,064 84,567 85,965 83,070 95,208* 91,462 105,203 3 3 4 5 Ow O n th f e o r r 3 e ign offices4 3 3 2 8 9 , , 7 0 3 9 1 9 3 4 3 4 0 , , 6 9 5 9 7 4 3 4 1 5 3 , , 6 1 6 6 9 6 3 4 1 9 6 , , 6 69 6 5 3 3 4 0 5 9 , , 9 20 0 8 9 3 5 1 0 5 , , 6 6 4 5 0 3 3 5 2 1 2 , , 7 4 6 9 2 3 29 5 8 6 , , 6 2 6 5 1 8 * 3 5 0 7 5 , , 2 4 0 0 7 8 3 4 1 5 3 , , 6 1 6 6 9 6 36 Banks' custodial liabilities5 62,930 71,203 87,734 69,838 70,905 69,225 74,043 83,310* 85,881 87,734 37 U.S. Treasury bills and certificates6 7,471 11,087 10,707 10,546 10,627 11,327 1111,,779944 1100,,004466 1100,,553399 1100,,770077 38 Other negotiable and readily transferable instruments7 5,694 7,555 16,810 7,741 9,049 8,760 12,688 19,106* 17,124 16,810 39 Other 49,765 52,561 60,217 51,551 51,229 49,138 49,561 54,158* 58,218 60,217 40 Other foreigners 93,732 94,026 100,656 93,874 94,634 96,985 96,705 106,521* 105,780 100,656 41 Banks' own liabilities 74,801 72,174 76,397 69,112 70,461 72,867 72,862 81,129* 77,086 76,397 42 Demand deposits 9,004 10,310 10,242 9,297 9,529 9,667 10,614 9,895 9,970 10,242 43 Time deposits 57,574 48,936 45,349 45,798 44,871 46,010 45,923 45,784 44,675 45,349 44 Other 8,223 12,928 20,806 14,017 16,061 17,190 16,325 25,450* 22,441 20,806 45 Banks' custodial liabilities5 18,931 21,852 24,259 24,762 24,173 24,118 23,843 25,392 28,694 24,259 46 U.S. Treasury bills and certificates6 8,841 10,053 10,548 1111,,333333 1111,,226600 1100,,559944 1100,,552200 1100,,222288 1111,,112244 1100,,554488 47 Other negotiable and readily transferable instruments7 8,667 10,207 12,765 11,973 11,582 12,093 11,827 13,327 15,145 12,765 48 Other 1,423 1,592 946 1,456 1,331 1,431 1,496 1,837 2,425 946 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 7,456 9,111 17,567 10,388 9,389 9,481 11,264 17,533 17,089 17,567 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 1993 11999911rr 11999922rr 11999933 Juner Julyr Aug/ Sept/ Oct/ Nov/ Dec." AREA t Total, all foreigners 756,066 810,259 892,925 824,957 821,788 846,626 862,147 867,083 884,471 892,925 2 Foreign countries .. 747,085 800,909 882,089 815,627 812,201 834,261 850,738 856,099 871,516 882,089 3 Europe 249,097 307,670 376,205 324,252 321,005 335,460 340,374 357,847 369,518 376,205 4 Austria 1,193 1,611 1,857 1,4% 1,415 1,614 1,672 1,808 1,797 1,857 5 Belgium and Luxembourg 13,337 20,567 28,650 21,817 20,805 23,345 23,635 24,641 27,541 28,650 6 Denmark 937 3,060 4,517 3,088 3,983 3,023 3,135 5,084 4,151 4,517 7 Finland 1,341 1,299 1,872 2,580 2,873 2,667 2,347 2,712 2,250 1,872 8 France 31,808 41,411 39,704 33,744 33,%3 36,517 40,622 43,034 36,623 39,704 9 Germany 8,619 18,630 26,617 22,752 24,498 22,199 22,530 22,820 27,025 26,617 10 Greece 765 913 1,530 819 1,078 1,122 1,378 1,366 1,704 1,530 11 Italy 13,541 10,041 11,561 10,402 10,721 11,426 11,285 10,466 10,734 11,561 12 Netherlands 7,161 7,365 15,999 11,271 10,465 10,854 11,429 13,368 14,737 15,999 13 Norway 1,866 3,314 2,975 2,840 2,757 2,833 2,901 2,7% 3,199 2,975 14 Portugal 2,184 2,465 3,366 2,764 2,894 3,015 3,180 3,215 3,229 3,366 15 Russia 241 577 2,511 1,129 1,406 2,254 2,229 2,623 2,530 2,511 16 Spain 11,391 9,793 20,483 15,507 16,644 17,207 20,495 20,181 19,704 20,483 17 Sweden 2,222 2,953 2,573 2,336 2,210 1,460 3,474 2,355 2,672 2,573 18 Switzerland 37,238 39,440 41,865 41,270 40,494 40,987 41,909 43,195 42,886 41,865 19 Turkey 1,598 2,666 3,228 2,497 2,882 2,618 2,553 2,897 2,947 3,228 20 United Kingdom 100,292 111,805 133,698 115,251 113,171 118,793 116,205 130,941 135,697 133,698 21 Yugoslavia" . 622 504 569 512 501 511 524 541 546 569 22 Other Europe and former U.S.S.R. 12,741 29,256 32,630 32,177 28,245 33,015 28,871 23,804 29,546 32,630 23 Canada. 21,605 22,420 20,227 20,051 22,264 23,917 25,147 27,452 24,152 20,227 24 Latin America and Caribbean. 345,529 317,228 330,166 316,654 315,885 316,747 326,346 317,698 322,408 330,166 25 Argentina 7,753 9,477 14,492 11,289 14,120 14,579 14,051 14,319 13,694 14,492 26 Bahamas 100,622 82,284 73,067 80,713 73,414 73,790 77,8% 76,557 78,354 73,067 27 Bermuda 3,178 7,079 7,873 6,074 6,%9 6,931 7,239 8,021 7,287 7,873 28 Brazil 5,704 5,584 5,309 4,936 5,425 5,299 5,268 5,057 5,069 5,309 29 British West Indies 163,620 153,033 163,078 151,695 151,519 149,897 156,953 149,468 157,172 163,078 30 Chile 3,283 3,035 3,203 3,552 3,934 3,5% 3,867 3,952 3,455 3,203 31 Colombia 4,661 4,580 3,173 4,405 4,464 4,383 3,988 3,025 3,101 3,173 32 Cuba 2 3 33 3 5 5 6 7 7 33 33 Ecuador 1,232 993 881 924 889 860 819 868 851 881 34 Guatemala 1,594 1,377 1,207 1,397 1,304 1,315 1,278 1,275 1,243 1,207 35 Jamaica 231 371 410 341 341 364 375 376 401 410 36 Mexico 19,957 19,454 28,063 22,318 24,138 24,833 24,414 24,248 21,946 28,063 37 Netherlands Antilles 5,592 5,205 4,188 4,059 4,159 5,413 4,695 5,283 4,726 4,188 38 Panama 4,695 4,177 3,625 3,749 3,747 3,657 3,743 3,567 3,468 3,625 39 Peru 1,249 1,080 931 979 891 898 903 873 889 931 40 Uruguay 2,096 1,955 1,622 1,775 1,775 1,822 1,734 1,716 1,643 1,622 41 Venezuela 13,181 11,387 12,807 12,242 12,373 12,782 12,868 12,903 13,076 12,807 42 Other 6,879 6,154 6,204 6,203 6,418 6,323 6,249 6,183 6,026 6,204 43 Asia 120,462 143,540 144,5% 143,166 143,132 147,517 147,648 141,363 144,476 144,5% China 44 People's Republic of China 2,626 3,202 4,011 2,885 2,728 3,292 3,261 3,280 3,187 4,011 45 Republic of China (Taiwan) 11,491 8,408 10,634 9,548 9,999 9,483 9,969 9,804 10,960 10,634 46 Hong Kong 14,269 18,499 17,233 15,890 16,193 15,621 16,388 16,389 18,573 17,233 47 India 2,418 11,,339999 1,113 1,315 1,053 1,211 1,288 1,251 1,525 1,113 48 Indonesia 1,463 11,,448800 1,986 2,132 1,688 1,582 1,715 1,504 1,674 1,986 49 Israel 2,015 3,773 4,436 2,764 2,790 2,729 3,241 5,450 4,582 4,436 50 Japan 47,069 58,435 61,476 62,791 62,233 67,999 65,626 60,171 58,866 61,476 51 Korea (South) 2,587 3,337 4,866 3,842 4,298 3,873 4,356 3,889 4,409 4,866 52 Philippines 2,449 2,275 2,035 2,933 3,1% 2,648 2,735 2,192 1,902 2,035 53 Thailand 2,252 5,582 6,137 5,233 5,830 6,058 5,846 6,446 6,231 6,137 54 Middle Eastern oil-exporting countries" 15,752 21,437 15,825 20,327 18,409 19,141 17,255 14,681 15,489 15,825 55 Other 16,071 15,713 14,844 13,506 14,715 13,880 15,968 16,306 17,078 14,844 56 Africa 4,825 5,884 6,623 6,475 5,680 5,649 6,127 6,179 5,762 6,623 57 Egypt 1,621 2,472 2,209 2,784 1,880 2,018 2,457 2,220 2,089 2,209 58 Morocco 79 76 99 119 138 78 86 87 110 99 59 South Africa 228 190 451 265 172 233 275 367 272 451 60 Zaire 31 19 12 15 25 20 16 15 10 12 61 Oil-exporting countries 1,082 1,346 1,303 1,332 1,417 1,279 1,281 1,271 1,446 1,303 62 Other 1,784 1,781 2,549 1,960 2,048 2,021 2,012 2,219 1,835 2,549 63 Other 5,567 4,167 4,272 5,029 4,235 4,971 5,0% 5,560 5,200 4,272 64 Australia 4,464 3,043 3,308 4,078 3,253 3,890 4,045 4,434 3,853 3,308 65 Other ... 1,103 1,124 964 951 982 1,081 1,051 1,126 1,347 964 66 Nonmonetary international and regional organizations. 8,981 9,350 10,836 9,330 9,587 12,365 11,409 10,984 12,955 10,836 International 6,485 7,434 6,751 5,812 6,028 8,367 7,679 7,340 9,084 6,751 Latin American regional1 1,181 1,415 3,218 2,318 2,077 2,737 2,448 2,539 3,050 3,218 Other regional 1,315 501 867 1,200 1,482 1,261 1,282 1,105 821 867 11. Since December 1992, has excluded Bosnia, Croatia, and Slovenia. 15. Principally the International Bank for Reconstruction and Development. 12. Includes the Bank for International Settlements. Since December 1992, Excludes "holdings of dollars" of the International Monetary Fund. includes all parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, 16. Principally the Inter-American Development Bank. and Slovenia. 17. Asian, African, Middle Eastern, and European regional organizations, 13. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and except the Bank for International Settlements, which is included in "Other United Arab Emirates (Trucial States). Western Europe." 14. Comprises Algeria, Gabon, Libya, and Nigeria. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics • April 1994 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 1993 AArreeaa aanndd ccoouunnttrryy 11999911rr 11999922rr 11999933 Juner Julyr Aug.r Sept.r Oct.r Nov.r Dec.p 1 Total, all foreigners 514,339 499,437 482,804 482,549 472,877 461,191 477,233 465,986 469,045 482,804 2 Foreign countries 508,056 494,355 480,349 480,469 471,570 459,239 474,854 464,743 466,844 480,349 3 Europe 114,310 123,377 121,456 122,297 125,094 116,836 124,253 124,616 120,707 121,456 4 Austria 327 331 413 1,080 1,094 691 457 568 501 413 5 Belgium and Luxembourg 6,158 6,404 6,421 5,955 6,127 6,515 6,589 5,500 5,903 6,421 6 Denmark 686 707 389 721 835 693 631 1,056 1,261 389 7 Finland 1,907 1,418 598 1,225 1,007 705 594 730 606 598 8 France 15,112 14,723 12,097 11,833 11,847 11,500 10,963 11,516 11,622 12,097 9 Germany 3,371 4,222 7,683 6,236 7,746 6,766 7,994 7,570 6,961 7,683 10 Greece 553 717 681 564 509 508 629 592 684 681 11 Italy 8,242 9,047 8,945 9,250 8,153 8,839 8,985 8,050 8,417 8,945 12 Netherlands 2,546 2,468 3,004 2,764 3,260 3,081 3,383 3,163 3,607 3,004 13 Norway 669 355 422 789 876 941 841 779 598 422 14 Portugal 344 325 720 670 710 803 787 826 787 720 15 Russia 1,970 3,147 2,294 3,045 2,799 2,591 2,547 2,581 2,295 2,294 16 Spain 1,881 2,755 2,756 3,607 5,117 4,184 3,652 4,747 4,388 2,756 17 Sweden 2,335 4,923 4,124 4,062 5,131 4,278 4,619 4,111 3,531 4,124 18 Switzerland 4,540 4,717 6,567 4,123 5,193 5,634 5,216 4,647 5,946 6,567 19 Turkey 1,063 962 1,311 1,584 1,492 1,549 1,418 1,638 1,790 1,311 20 United Kingdom 60,395 63,430 60,878 62,565 60,772 55,118 62,510 64,052 59,445 60,878 21 Yugoslavia2 825 569 536 548 547 547 542 535 549 536 22 Other Europe and former U.S.S.R.3 1,386 2,157 1,617 1,676 1,879 1,893 1,8% 1,955 1,816 1,617 23 Canada 15,113 13,845 18,410 16,246 17,776 17,373 19,009 15,756 15,575 18,410 24 Latin America and Caribbean 246,137 218,078 223,474 212,672 208,294 207,554 215,634 212,031 216,720 223,474 25 Argentina 5,869 4,958 4,425 4,066 4,841 4,740 4,715 4,390 4,518 4,425 26 Bahamas 87,138 60,835 65,047 59,989 56,843 56,276 60,906 60,350 63,242 65,047 27 Bermuda 2,270 5,935 8,032 4,319 8,578 7,122 5,550 8,915 7,565 8,032 28 Brazil 11,894 10,773 11,831 12,319 10,842 10,927 11,294 11,675 11,677 11,831 29 British West Indies 107,846 101,507 97,452 96,986 91,246 93,116 97,409 90,041 92,621 97,452 30 Chile 2,805 3,397 3,609 3,675 3,898 3,796 3,832 3,857 3,728 3,609 31 Colombia 2,425 2,750 3,199 2,847 2,886 2,916 2,921 2,957 3,040 3,199 32 Cuba 0 0 0 1 0 0 0 0 0 0 33 Ecuador 1,053 884 595 771 732 739 701 707 704 595 34 Guatemala 228 262 286 266 240 256 244 269 286 286 35 Jamaica 158 162 194 184 182 181 183 175 186 194 36 Mexico 16,567 14,991 15,834 15,321 15,738 15,652 15,724 16,155 16,073 15,834 37 Netherlands Antilles 1,207 1,379 2,271 3,011 3,172 3,153 3,155 3,339 3,100 2,271 38 Panama 1,560 4,654 2,892 2,549 2,532 2,361 2,370 2,491 2,625 2,892 39 Peru 739 730 651 657 651 667 617 636 620 651 40 Uruguay 599 936 951 904 807 816 926 926 918 951 41 Venezuela 2,516 2,525 3,068 2,803 3,001 2,876 2,835 2,815 3,054 3,068 42 Other 1,263 1,400 3,137 2,004 2,105 1,960 2,252 2,333 2,763 3,137 43 Asia 125,262 131,789 110,383 122,134 113,182 111,196 110099,,009955 110055,,551111 110077,,553388 111100,,338833 China 44 People's Republic of China 747 906 2,300 1,898 871 638 699 773 706 2,300 45 Republic of China (Taiwan) 2,087 2,046 2,622 1,840 1,549 1,585 1,594 1,674 2,003 2,622 46 Hong Kong 9,617 9,642 10,858 9,804 10,654 9,390 11,153 9,640 10,449 10,858 47 India 441 529 590 438 473 442 572 623 645 590 48 Indonesia 952 1,189 1,463 1,503 1,282 1,289 1,330 1,268 1,474 1,463 49 Israel 860 820 826 111 733 775 747 752 787 826 50 Japan 84,807 79,172 59,358 71,327 62,726 64,890 60,263 60,308 59,953 59,358 51 Korea (South) 6,048 6,179 7,548 7,428 7,587 7,245 7,098 7,133 7,138 7,548 52 Philippines 1,910 2,145 1,408 1,402 1,357 1,250 1,143 1,168 1,265 1,408 53 Thailand 1,713 1,867 2,080 1,865 2,006 2,018 2,143 2,146 2,110 2,080 54 Middle Eastern oil-exporting countries4 8,284 18,540 14,398 17,437 16,976 15,912 14,251 13,580 13,853 14,398 55 Other 7,796 8,754 6,932 6,415 6,968 5,762 8,102 6,446 7,155 6,932 56 Africa 4,928 4,279 3,817 3,812 3,856 3,902 4,023 3,919 3,799 3,817 57 Egypt 294 186 196 177 148 168 176 160 218 1% 58 Morocco 575 441 444 416 437 443 454 433 437 444 59 South Africa 1,235 1,041 633 748 742 705 713 663 664 633 60 Zaire 4 4 4 3 4 4 3 3 4 4 61 Oil-exporting countries5 1,298 1,002 1,128 1,156 1,232 1,224 1,206 1,187 1,119 1,128 62 Other 1,522 1,605 1,412 1,312 1,293 1,358 1,471 1,473 1,357 1,412 63 Other 2,306 2,987 2,809 3,308 3,368 2,378 2,840 2,910 2,505 2,809 64 Australia 1,665 2,243 2,072 2,574 2,443 1,847 2,414 2,401 1,964 2,072 65 Other 641 744 737 734 925 531 426 509 541 737 66 Nonmonetary international and regional organizations6 6,283 5,082 2,455 2,080 1,307 1,952 2,379 1,243 2,201 2,455 1. Reporting banks include all types of depository institutions, as well as some 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and brokers and dealers. United Arab Emirates (Trucial States). 2. Since December 1992, has excluded Bosnia, Croatia, and Slovenia. 5. Comprises Algeria, Gabon, Libya, and Nigeria. 3. Includes the Bank for International Settlements. Since December 1992, 6. Excludes the Bank for International Settlements, which is included in includes all parts of the former U.S.S.R. (except Russia), and Bosnia, 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 1993 CCllaaiimm 11999911 11999922rr 11999933 Juner Julyr Aug.r Sept.r Oct/ Nov/ Dec.p 1 Total 579,683r 559,495 532,442 518,514 2 Banks' claims 514,339 499,437 482,804 482,549 472,877 461,191 477,233 465,986 469,045 482,804 3 Foreign public borrowers 37,126 31,367 28,937 29,431 32,788 30,310 31,940 31,335 29,776 28,937 4 Own foreign offices 318,800 303,991 286,233 298,483 280,100 275,295 286,604 269,956 279,834 286,233 5 Unaffiliated foreign banks 116,602 109,342 98,377 94,018 93,101 94,009 96,146 91,921 92,064 98,377 6 Deposits 69,018 61,550 47,113 46,262 44,812 45,473 44,664 43,785 44,007 47,113 7 Other 47,584 47,792 51,264 47,756 48,289 48,536 51,482 48,136 48,057 51,264 8 All other foreigners 41,811 54,737 69,257 60,617 66,888 61,577 62,543 72,774 67,371 69,257 9 Claims of banks' domestic customers3... 65,344 60,058 49,893 41,281 10 Deposits 15,280 15,452 12,960 9,343 11 Negotiable and readily transferable instruments 37,125 31,474 23,498 18,475 12 Outstanding collections and other claims 12,939 13,132 13,435 13,463 MEMO 13 Customer liability on acceptances 8,974 8,655 8,160 8,190 14 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States 43,024r 36,163 n.a. 2288,,222255 29,316 2288,,339955 2244,,551166 2266,,992211 2211,,666666 n.a. 1. For banks' claims, data are monthly ; for claims of banks' domestic custom- foreign bank, and foreign branches, agencies, or wholly owned subsidiaries of ers, data are quarterly. head office or parent foreign bank. Reporting banks include all types of depository institution, as well as some 3. Assets held by reporting banks in the accounts of their domestic customers. brokers and dealers. 4. Principally negotiable time certificates of deposit and bankers acceptances. 2. For U.S. banks, includes amounts due from own foreign branches and 5. Includes demand and time deposits and negotiable and nonnegotiable foreign subsidiaries consolidated in Consolidated Report of Condition filed with certificates of deposit denominated in U.S. dollars issued by banks abroad. For bank regulatory agencies. For agencies, branches, and majority-owned subsidiar- description of changes in data reported by nonbanks, see Federal Reserve ies of foreign banks, consists principally of amounts due from head office or parent Bulletin, vol. 65 (July 1979), p. 550. 3.20 BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States1 Payable in U.S. Dollars Millions of dollars, end of period 1992 1993 MMaattuurriittyy,, bbyy bboorrrroowweerr aanndd aarreeaa22 11998899 11999900 11999911 Dec/ Mar/ Juner Sept. 1 238,123 206,903 195,302 195,119 182,445 183,312 189,900 By borrower 2 Maturity of one year or less 178,346 165,985 162,573 163,325 152,226 154,648 162,195 3 Foreign public borrowers 23,916 19,305 21,050 17,813 21,239 17,962 21,226 4 All other foreigners 154,430 146,680 141,523 145,512 130,987 136,686 140,%9 5 Maturity of more than one year 59,776 40,918 32,729 31,794 30,219 28,664 27,705 6 Foreign public borrowers 36,014 22,269 15,859 13,266 12,214 11,255 10,507 7 All other foreigners 23,762 18,649 16,870 18,528 18,005 17,409 17,198 By area Maturity of one year or less 8 Europe 53,913 49,184 51,835 53,300 54,871 54,405 5577,,225522 9 Canada 5,910 5,450 6,444 6,091 7,884 7,979 9,835 10 Latin America and Caribbean 53,003 49,782 43,597 50,376 45,148 48,619 51,683 11 57,755 53,258 51,059 45,709 37,871 38,803 37,725 17, Africa 3,225 3,040 2,549 1,784 1,677 1,712 1,916 13 All other3 4,541 5,272 7,089 6,065 4,775 3,130 3,784 Maturity of more than one year 14 Europe 4,121 3,859 3,878 5,367 4,8% 4,579 44,,442233 15 Canada 2,353 3,290 3,595 3,287 3,120 2,909 2,549 16 Latin America and Caribbean 45,816 25,774 18,277 15,312 14,574 13,828 13,519 17 4,172 5,165 4,459 5,038 5,063 4,809 4,736 18 Africa 2,630 2,374 2,335 2,380 2,130 2,050 2,049 19 All other3 684 456 185 410 436 489 429 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 • April 1994 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 Sept. Dec. Mar. June Sept. Dec. Mar. June Sept. 1 Total 340.9 320.1 338.4 343.6 351.7 358.7 344.5 346.5 361.0* 377.1* 388.1' 2 G-10 countries and Switzerland 152.9 132.2 135.0 137.6 130.9 135.6 136.0 132.9 142.4 150. lr 153.4* 3 Belgium and Luxembourg 6.3 5.9 5.8 6.0 5.3 6.2 6.2 5.6 6.1 7.0 7.1 4 France 11.7 10.4 11.1 11.0 10.0 11.9 15.3 15.3 13.5 14.0 12.3* 5 Germany 10.5 10.6 9.7 8.3 8.4 8.8 10.9 9.3 9.9 10.8 12.4 6 Italy 7.4 5.0 4.5 5.6 5.4 8.0 6.4 6.5 6.7 7.9* 8.7* 7 Netherlands 3.1 3.0 3.0 4.7 4.3 3.3 3.7 2.8 3.6 3.7 3.7 8 Sweden 2.0 2.2 2.1 1.9 2.0 1.9 2.2 2.3 3.0 2.5 2.5 9 Switzerland 7.1 4.4 3.9 3.4 3.2 4.6 5.2 4.8 5.3 4.7 5.6 10 United Kingdom 67.2 60.9 65.6 68.5 64.7 65.6 61.0 60.8 65.7 73.5 74.7* 11 Canada 5.4 5.9 5.8 5.8 6.5 6.5 6.3 6.3 8.2 8.1 9.7 12 Japan 32.3 24.0 23.5 22.6 21.1 18.7 18.9 19.3 20.4 17.9 16.9 13 Other industrialized countries 21.0 22.9 22.1 22.8 21.4 25.5 25.0 24.0 25.4 27.2 26.0 14 Austria 1.5 1.4 1.0 .6 .8 .8 .7 1.2 1.2 1.3 .6 15 Denmark 1.1 1.1 .9 .9 .8 1.3 1.5 .9 .8 1.0 1.1 16 Finland 1.0 .7 .6 .7 .8 .8 1.0 .7 .7 .9 .6 17 Greece 2.5 2.7 2.3 2.6 2.3 2.8 3.0 3.0 2.7 3.1 3.2 18 Norway 1.4 1.6 1.4 1.4 1.5 1.7 1.6 1.2 1.8 1.8 2.1 19 Portugal .4 .6 .5 .6 .5 .5 .5 .4 .7 .9 1.0 20 Spain 7.1 8.3 8.3 8.3 7.7 10.1 9.7 8.9 9.5 10.5 9.3 21 Turkey 1.2 1.7 1.6 1.4 1.2 1.5 1.5 1.3 1.4 2.1 2.1 22 Other Western Europe 1.0 1.2 1.3 1.8 1.5 2.0 1.5 1.7 2.0 1.7 2.2 23 South Africa 2.0 1.8 1.6 1.9 1.8 1.7 1.7 1.7 1.6 1.3 1.2 24 Australia 1.6 1.8 2.4 2.7 2.3 2.2 2.3 2.9 2.9 2.5 2.8 25 OPEC2 17.1 12.8 15.6 14.5 15.8 16.2 15.9 16.1 16.8 15.9 14.9 26 Ecuador 1.3 1.0 .8 .7 .7 .7 .7 .6 .6 .6 .5 27 Venezuela 7.0 5.0 5.6 5.4 5.4 5.3 5.4 5.2 5.3 5.6 5.6 28 Indonesia 2.0 2.7 2.8 2.7 3.0 3.0 3.0 3.0 3.1 3.1 2.8 29 Middle East countries 5.0 2.5 5.0 4.2 5.3 5.9 5.4 6.2 6.6 5.4 4.9 30 African countries 1.7 1.7 1.5 1.5 1.4 1.4 1.4 1.1 1.1 1.1 1.1 31 Non-OPEC developing countries 77.5 65.4 64.7 63.9 69.7 68.1 72.8 72.1 74.4 76.6 76.9 Latin America 32 Argentina 6.3 5.0 4.5 4.8 5.0 5.1 6.2 6.6 7.0 6.6 7.2 33 Brazil 19.0 14.4 10.5 9.6 10.8 10.6 10.8 10.8 11.6 12.3 11.6 34 Chile 4.6 3.5 3.7 3.6 3.9 4.0 4.2 4.4 4.6 4.6 4.7 35 Colombia 1.8 1.8 1.6 1.7 1.6 1.6 1.7 1.8 1.9 1.9 2.0 36 Mexico 17.7 13.0 16.2 15.5 17.7 16.3 17.1 16.0 16.8 16.8 17.5 37 Peru .6 .5 .4 .4 .4 .4 .5 .5 .4 .4 .3 38 Other 2.8 2.3 1.9 2.1 2.2 2.2 2.5 2.6 2.6 2.7 2.6 Asia China 39 Peoples Republic of China .3 .2 .4 .3 .3 .3 .3 .7 .6 1.6 .5 40 Republic of China (Taiwan) 3.5 4.1 4.1 4.8 4.6 5.0 5.2 5.3 5.9 6.4 41 India 3.1 3.3 2.8 3.0 3.6 3.8 3.6 3.2 3.1 3.1 2.9 42 Israel .5 .5 .5 .4 .4 .4 .4 .5 .4 .4 43 Korea (South) 6.2 6.5 6.8 6.9 6.9 7.4 6.6 6.5 6.9 6.5 44 Malaysia 1.9 2.3 2.3 2.5 2.7 3.0 3.1 3.4r 3.7 4.1 45 Philippines 3.8 3.6 3.7 3.6 3.1 3.6 3.6 3.4 2.9 2.6 46 Thailand 1.3 1.5 1.9 1.7 1.7 1.9 2.2 2.2 2.2 2.4 2.8 47 Other Asia3 1.7 2.0 2.0 2.3 2.5 2.7 2.7 2.7 2.6 3.0 Africa 48 Egypt .4 .4 .4 .4 .3 .5 .3 .2 .2 .2 .2 49 Morocco .9 .8 .7 .7 .7 .7 .6 .6 .5 .6 .6 50 Zaire , .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 51 Other Africa3 1.0 1.0 .8 .7 .7 .6 .9 1.0 .8 .9 .8 52 Eastern Europe 3.5 2.3 1.8 2.4 2.9 3.0 3.1 3.1 2.9 3.2 3.0 53 Russia .7 .2 .4 .9 1.4 1.7 1.8 1.9 1.7 1.9 1.7 54 Yugoslavia 1.6 1.2 .8 .9 .8 .7 .7 .6 .6 .6 .6 55 Other 1.3 .9 .7 .7 .6 .6 .7 .6 .7 .7 .7 56 Offshore banking centers 38.4 44.7 54.6 54.2 63.0 61.4 54.5 58.3 6o. r 57.8* 67.5* 57 Bahamas 5.5 2.9 6.7 11.9 15.3 12.9 8.9 6.9 9.6 6.9 12.4 58 Bermuda 1.7 4.4 7.1 2.3 3.9 5.1 3.8 6.2 4.1 4.5 5.5 59 Cayman Islands and other British West Indies 9.0 11.7 13.8 15.8 18.6 19.3 16.9 21.8 17.6r 15.6 15.1 60 Netherlands Antilles 2.3 7.9 3.9 1.2 1.0 .8 .7 1.1 1.6 2.5 2.8 61 Panama 1.4 1.4 1.3 1.4 1.6 1.9 2.0 1.9 2.0 2.1 2.1 62 Lebanon .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 63 Hong Kong 11.3 9.7 14.0 14.4 14.0 14.9 15.2 13.8 16.7r 16.9* 19.1* 64 Singapore 7.0 6.6 7.7 7.1 8.5 6.4 6.8 6.5 8.4 9.3 10.4 65 Other .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 66 Miscellaneous and unallocated6 30.5 39.9 44.4 48.0 47.8 48.6 36.8 39.7 38.8r 46.2* 46.3* 1. The banking offices covered by these data are the U.S. offices and foreign by an increase in the reporting threshold for "shell" branches from $50 million to branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks. $150 million equivalent in total assets, the threshold now applicable to all Offices not covered include (1) U.S. agencies and branches of foreign banks, and reporting branches. (2) foreign subsidiaries of U.S. banks. U.S. office data include other types of 2. Organization of Petroleum Exporting Countries, shown individually; other U.S.-owned depository institutions as well as some types of brokers and dealers. members of OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, To minimize duplication, the data are adjusted to exclude the claims on foreign Saudi Arabia, and United Arab Emirates); and Bahrain and Oman (not formally branches held by a U.S. office or another foreign branch of the same banking members of OPEC). institution. The data in this table combine foreign branch claims in table 3.14 (the 3. Excludes Liberia. sum of lines 7 through 10) with the claims of U.S. offices in table 3.18 (excluding 4. Includes Canal Zone. those held by agencies and branches of foreign banks and those constituting 5. Foreign branch claims only. claims on own foreign branches). 6. Includes New Zealand, Liberia, and international and regional Since June 1984, reported claims held by foreign branches have been reduced 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 1992 1993 TTyyppee ooff lliiaabbiilliittyy aanndd aarreeaa oorr ccoouunnttrryy 11998899 11999900 11999911 June Sept. Dec. Mar. June Sept.p 1 38,764 46,043 44,549 46,122 46,981 45,218 45,776 45,881 48,147 ? Payable in dollars 33,973 40,786 38,893 39,270 38,286 37,159 37,501 36,558 38,447 3 Payable in foreign currencies 4,791 5,257 5,656 6,852 8,695 8,059 8,275 9,323 9,700 By type 4 Financial liabilities 17,879 21,066 22,344 23,178 24,417 23,244 23,610 24,175 25,928 5 Payable in dollars 14,035 16,979 17,968 17,777 17,417 16,587 16,785 16,434 18,178 6 Payable in foreign currencies 3,844 4,087 4,376 5,401 7,000 6,657 6,825 7,741 7,750 7 Commercial liabilities 20,885 24,977 22,205 22,944 22,564 21,974 22,166 21,706 22,219 8 Trade payables 8,070 10,683 9,267 10,285 10,227 9,893 10,005 9,683 9,080 9 Advance receipts and other liabilities 12,815 14,294 12,938 12,659 12,337 12,081 12,161 12,023 13,139 10 Payable in dollars 19,938 23,807 20,925 21,493 20,869 20,572 20,716 20,124 20,269 11 Payable in foreign currencies 947 1,170 1,280 1,451 1,695 1,402 1,450 1,582 1,950 By area or country Financial liabilities 1? 11,660 10,978 11,858 13,470 14,262 13,034 13,397 1133,,999977 1166,,225555 13 Belgium and Luxembourg 340 394 216 193 256 414 306 268 278 14 258 975 2,106 2,324 2,785 1,608 1,610 2,216 2,074 15 Germany 464 621 682 634 738 810 820 787 779 16 Netherlands 941 1,081 1,056 979 980 606 639 585 573 17 Switzerland 541 545 408 490 627 569 503 491 378 18 United Kingdom 8,818 6,357 6,383 7,963 8,074 8,357 8,965 8,995 11,583 19 Canada 610 229 292 362 345 516 576 492 663 70 Latin America and Caribbean 1,357 4,153 4,784 3,908 3,997 4,053 4,099 3,799 3,319 71 157 371 537 353 230 369 521 426 1,301 7? Bermuda 17 0 114 114 115 114 114 124 114 73 Brazil 0 0 6 10 18 19 18 18 18 74 British West Indies 724 3,160 3,524 2,757 2,933 2,860 2,770 2,551 1,200 75 Mexico 6 5 7 8 12 12 13 11 15 26 Venezuela 0 4 4 4 5 6 5 5 5 77 4,151 5,295 5,352 5,349 5,723 5,607 5,477 5,717 5,541 78 Japan 3,299 4,065 4,116 4,245 4,678 4,568 4,495 4,564 4,552 29 Middle East oil-exporting countries 2 5 13 10 17 19 24 19 23 30 Africa 2 2 6 0 5 6 6 130 132 31 Oil-exporting countries 0 0 4 0 0 0 0 123 124 32 Mother4 100 409 52 89 85 28 55 40 18 Commercial liabilities 33 9,071 10,310 8,715 7,848 7,492 77,,555555 66,,993300 66,,881100 66,,991133 34 Belgium and Luxembourg 175 275 248 240 173 296 262 267 255 35 877 1,218 1,039 724 756 750 705 773 610 36 Germany 1,392 1,270 1,052 799 851 717 643 603 565 37 Netherlands 710 844 710 605 601 567 537 577 601 38 Switzerland 693 775 575 461 482 349 469 440 535 39 United Kingdom 2,620 2,792 2,311 2,405 2,282 2,526 2,118 2,198 2,294 40 1,124 1,261 1,014 1,109 1,114 1,001 991 933 831 41 Latin America and Caribbean 1,224 1,672 1,355 1,814 1,493 1,495 1,776 1,820 1,762 47 Bahamas 41 12 3 8 3 3 11 6 4 43 308 538 310 409 325 307 429 356 340 44 100 145 219 218 121 209 236 226 214 45 British West Indies 27 30 107 73 85 24 34 16 36 46 323 475 307 480 326 447 553 659 570 47 Venezuela 164 130 94 279 125 124 171 172 183 48 7,550 9,483 9,335 10,445 11,026 10,791 11,067 10,823 11,575 49 2,914 3,651 3,722 3,538 3,918 3,953 4,035 3,715 4,534 50 Middle Eastern oil-exporting countries2'5 1,632 2,016 1,498 1,778 1,813 1,791 1,796 1,815 1,816 51 886 844 715 111 675 556 675 665 558 52 Oil-exporting countries3 339 422 327 389 335 295 322 378 279 53 Other4 1,030 1,406 1,071 951 764 576 727 655 580 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 • April 1994 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1992r 1993 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11998899 11999900 11999911 June Sept. Dec. Mar.r Juner Sept. 1 Total 33,173 35,348 45,121 46,517 46,192 41,637 45,569 41,174 41,715r 2 Payable in dollars 30,773 32,760 42,548 43,492 43,218 39,047 42,704 38,093 38,485r i Payable in foreign currencies 2,400 2,589 2,573 3,025 2,974 2,590 2,865 3,081 3,230" By type 4 Financial claims 19,297 19,874 27,744 28,977 28,573 23,532 26,073 21,791 23,331r 5 Deposits 12,353 13,577 19,946 19,813 19,524 15,100 16,527 11,646 13,2%r 6 Payable in dollars 11,364 12,552 19,071 18,456 18,387 14,302 15,469 10,728 12,317r 7 Payable in foreign currencies 989 1,025 875 1,357 1,137 798 1,058 918 979r 8 Other financial claims 6,944 6,297 7,798 9,164 9,049 8,432 9,546 10,145 10,035r 9 Payable in dollars 6,190 5,280 6,906 8,433 8,028 7,667 8,793 9,221 9,276r 10 Payable in foreign currencies 754 1,017 892 731 1,021 765 753 924 759" 11 Commercial claims 13,876 15,475 17,377 17,540 17,619 18,105 19,4% 19,383 18,384r 12 Trade receivables 12,253 13,657 14,465 14,846 14,676 15,547 17,140 16,953 15,458r 13 Advance payments and other claims 1,624 1,817 2,912 2,694 2,943 2,558 2,356 2,430 2,926r 14 Payable in dollars 13,219 14,927 16,571 16,603 16,803 17,078 18,442 18,144 16,892" 15 Payable in foreign currencies 657 548 806 937 816 1,027 1,054 1,239 l,492r By area or country Financial claims 16 Europe 8,463 9,645 13,316 12,906 11,301 99,,331100 10,330 9,623 8,261r 17 Belgium and Luxembourg 28 76 13 25 16 88 6 13 9" 18 France 153 371 269 777 768 762 905 774 688r 19 Germany 152 367 283 354 292 326 378 373 361r 20 Netherlands 238 265 334 715 750 515 544 499 485r 21 Switzerland 153 357 581 765 587 490 478 460 454r 22 United Kingdom 7,496 7,971 11,409 8,731 8,078 6,234 6,987 6,570 5,257" 23 Canada 1,904 2,934 2,642 2,545 2,281 1,709 2,007 1,761 l,573r 24 Latin America and Caribbean 8,020 6,201 10,704 12,160 13,837 11,122 9,718 6,704 10,067r 25 Bahamas 1,890 1,090 814 568 1,248 658 320 697 494" 26 Bermuda 7 3 8 12 65 40 79 258 197" 27 Brazil 224 68 351 331 589 686 592 590 590" 28 British West Indies 5,486 4,635 9,056 10,828 11,492 9,266 8,266 4,650 8,109" 29 Mexico 94 177 212 244 239 286 235 270 385" 30 Venezuela 20 25 40 32 26 29 23 24 25" 31 Asia 590 860 640 952 717 807 3,263 2,%1 2,726" 32 Japan 213 523 350 705 471 643 3,066 2,444 2,199" 33 Middle East oil-exporting countries2 8 8 5 4 4 3 3 10 5 34 Africa 140 37 57 57 71 79 128 125 88 35 Oil-exporting countries3 12 0 1 0 1 9 1 1 1 36 All other4 180 195 385 357 366 505 627 617 616 Commercial claims 37 Europe 6,209 7,044 8,192 8,480 8,146 8,287 8,650 8,777 7,879 38 Belgium and Luxembourg 242 212 194 255 173 188 169 170 162 39 France 964 1,240 1,585 1,685 1,824 1,519 1,468 1,453 1,389 40 Germany 696 807 954 922 895 916 %1 968 862 41 Netherlands 479 555 645 666 588 546 724 556 391 42 Switzerland 313 301 295 394 305 352 425 441 374 43 United Kingdom 1,575 1,775 2,086 2,172 2,004 2,068 2,312 2,502 2,206 44 Canada 1,091 1,074 1,114 1,066 1,143 1,226 1,270 1,290 1,295 45 Latin America and Caribbean 2,184 2,375 2,655 2,737 3,222 2,997 3,401 3,379 2,973 46 Bahamas 58 14 13 12 12 27 18 16 19 47 Bermuda 323 246 264 291 256 255 195 239 225 48 Brazil 297 326 427 450 409 352 829 782 400 49 British West Indies 36 40 41 32 43 40 17 43 39 50 Mexico 508 661 840 861 975 907 974 880 830 51 Venezuela 147 192 203 253 307 340 336 310 268 52 Asia 3,570 4,127 4,594 4,500 4,322 4,695 5,310 5,028 5,325 53 Japan 1,199 1,460 1,900 1,798 1,776 1,842 2,127 1,824 2,443 54 Middle Eastern oil-exporting countries 518 460 621 609 513 682 760 659 446 55 Africa 429 488 429 428 439 549 456 507 492 56 Oil-exporting countries3 108 67 95 73 60 78 75 97 107 57 Other4 393 367 393 329 347 351 409 402 420 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 1993 Transaction and area or country 1992 1993 J D a e n c .- . June July Aug.r Sept.r Oct/ Nov/ Dec.p U.S. corporate securities STOCKS 1 Foreign purchases 221,367 319,416 319,416 24,310r 24,441r 26,133 23,892 32,350 31,898 32,836 2 Foreign sales 226,503 297,913 297,913 23,467r 25,046r 23,693 23,023 27,840 28,755 28,362 3 Net purchases or sales (-) -5,136 21,503 21,503 843R —605R 2,440 869 4,510 3,143 4,474 4 Foreign countries -5,169 21,231 21,231 815R -652R 2,413 951 4,598 3,073 4,450 5 Europe -4,927 10,582 10,582 415r -185r 670 434 3,095 1,381 2,408 6 France -1,350 -103 -103 -66r 45r -9 -152 198 45 61 7 Germany -80 1,647 1,647 99r 76r 202 112 328 130 266 8 Netherlands -262 -603 -603 -91r -452r 133 69 134 -767 183 9 Switzerland 168 2,986 2,986 178r 3691 354 -259 409 205 338 10 United Kingdom -3,301 4,477 4,477 195r -73r -204 570 1,709 1,444 1,071 11 Canada 1,407 -3,213 -3,213 -532r - l^ -128 -596 -300 11 -110 1? Latin America and Caribbean 2,203 5,709 5,709 72r 413r 613 139 1,245 941 1,058 13 Middle East1 -88 -311 -311 -22 -135 -44 10 -77 53 11 14 Other Asia -3,943 8,199 8,199 1,073 632 1,204 977 602 601 965 15 Japan -3,598 3,826 3,826 230 626 860 1,016 349 488 681 16 Africa 10 63 63 20 -49 63 3 5 6 20 17 Other countries 169 202 202 -211 72 35 -16 28 80 98 18 Nonmonetary international and regional organizations 33 272 272 28 47 27 -82 -88 7700 2244 BONDS2 19 Foreign purchases 214,922 284,346 284,346 24,091 22,738 22,288 24,845 27,565 28,913 29,124 20 Foreign sales 175,842 218,425 218,425 16,825 20,730 16,481 16,294 19,000 21,545 18,215 21 Net purchases or sales (-) 39,080 65,921 65,921 7,266 2,008 5,807 8,551 8,565 7,368 10,909 22 Foreign countries 37,964 65,384 65,384 7,229 2,018 5,801 7,865 8,426 7,341 10,843 73 Europe 17,435 21,732 21,732 2,710 -1,001 2,102 3,913 3,911 1,500 3,079 74 France 1,203 22,,334466 2,346 -12 -76 64 13 512 110 145 25 Germany 2,480 888833 883 -241 2 -207 -419 913 -231 -62 76 Netherlands 540 -229 -229 -134 11 317 219 -518 49 156 77 Switzerland -579 -627 -627 -56 172 -327 -204 203 -80 28 78 United Kingdom 12,421 18,936 18,936 3,033 -1,214 1,847 4,059 2,666 2,266 2,853 79 Canada 237 1,653 1,653 397 218 164 249 95 54 319 30 Latin America and Caribbean 9,300 16,490 16,490 1,770 901 1,678 846 1,727 2,650 3,678 31 Middle East1 3,166 3,257 3,257 202 147 158 171 375 432 383 37. Other Asia 7,545 20,830 20,830 2,089 1,382 1,432 2,373 2,256 2,765 3,121 33 Japan -450 11,569 11,569 863 890 919 993 1,574 1,478 2,477 34 Africa 354 1,149 1,149 2 224 317 236 47 -2 119 35 Other countries -73 273 273 59 147 -50 77 15 -58 144 36 Nonmonetary international and regional organizations 1,116 537 537 37 -10 6 686 139 2277 6666 Foreign securities 37 Stocks, net purchases or sales (-)' -32,259 -67,821 -67,821 -6,353 -7,992 -12,229 -5,176 -7,474 -6,928 -5,263 38 Foreign purchases 150,051 246,055 246,055 18,507 19,607 20,737 21,475 24,740 28,421 31,599 39 Foreign sales 182,310 313,876 313,876 24,860 27,599 32,966 26,651 32,214 35,349 36,862 40 Bonds, net purchases or sales (-) -15,605 -60,754 -60,754 -7,535 -10,661 -1,046 -9,903 -2,446 -54 -7,576 41 Foreign purchases 513,589 834,487 834,487 70,373 68,741 75,850 80,145 76,034 87,459 79,319 42 Foreign sales 529,194 895,241 895,241 77,908 79,402 76,896 90,048 78,480 87,513 86,895 43 Net purchases or sales (-), of stocks and bonds -47,864 -128,575 -128,575 -13,888 -18,653 -13,275 -15,079 -9,920 -6,982 -12,839 44 Foreign countries -51,274 -128,736 -128,736 -13,950 -18,763 -13,329 -15,155 -10,269 -6,991 -12,869 45 Europe -31,350 -86,353 -86,353 -11,721 -15,516 -10,544 -13,207 -5,004 -4,527 -3,147 46 Canada -6,893 -14,591 -14,591 -1,277 -2,557 1,635 -1,394 -916 709 -1,729 47 Latin America and Caribbean -4,340 -8,790 -8,790 421 -633 -1,127 1,945 --1,280 -2,248 -3,984 48 -7,923 -14,941 -14,941 -787 121 -2,644 -2,221 -2,002 -502 -3,553 49 Africa -13 -185 -185 9 4 7 14 14 0 13 50 Other countries -755 -3,876 -3,876 -595 -182 -656 -292 -1,081 -423 -469 51 Nonmonetary international and regional organizations 3,410 161 161 62 NO 54 76 349 9 30 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 • April 1994 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1993 1993 Country or area 1992 1993 Jan.- Juner Julyr Aug.r Sept.r Oct.r Nov.r Dec." Dec. Transactions, net purchases or sales (-) during period1 1 Estimated total 39,288 24,215 24,215 -5,709 -1,531 13,980 -10,890 3,925 15,214 417 2 Foreign countries 37,935 24,108 24,108 -5,955 -1,144 14,368 -10,748 5,055 14,627 670 3 Europe 19,625 -2,292 -2,292 1,473 -1,539 3,547 -5,917 3,500 -821 498 4 Belgium and Luxembourg 1,985 1,218 1,218 86 505 -218 207 -205 22 -65 5 Germany 2,076 -9,977 -9,977 -1,100 -2,918 305 1,209 1,176 -750 571 6 Netherlands -2,959 -515 -515 -393 524 -167 137 -506 206 -189 7 Sweden -804 1,421 1,421 673 32 293 53 47 141 -31 8 Switzerland 488 -1,491 -1,491 888 -223 -74 -209 448 583 -70 9 United Kingdom 24,184 6,275 6,275 2,147 1,455 3,787 -8,201 833 -1,890 -413 10 Other Europe and former U.S.S.R -5,345 777 777 -828 -914 -379 887 1,707 867 695 11 Canada 562 11,252 11,252 133 2,270 324 -1,119 -342 1,358 846 12 Latin America and Caribbean -3,222 -4,699 -4,699 -1,419 -333 6,917 -3,311 3,701 2,068 -4,835 13 Venezuela 539 389 389 5 2 -7 32 -102 19 56 14 Other Latin America and Caribbean -1,956 -5,932 -5,932 711 510 1,178 -1,700 676 -38 -1,066 15 Netherlands Antilles -1,805 844 844 -2,135 -845 5,746 -1,643 3,127 2,087 -3,825 16 Asia 23,517 20,533 20,533 -5,687 -2,587 3,755 -574 -2,034 11,796 4,005 17 Japan 9,817 17,070 17,070 -301 -980 3,561 -1,809 156 5,661 649 18 Africa 1,103 1,155 1,155 81 116 292 616 74 35 114 19 Other -3,650 -1,841 -1,841 -536 929 -467 -443 156 191 42 20 Nonmonetary international and regional organizations 1,353 107 107 246 -387 -388 -142 -1,130 587 -253 21 International 1,018 -398 -398 403 -321 -698 -99 -874 823 60 22 Latin American regional 533 654 654 106 -21 30 18 -23 40 -1 MEMO 23 Foreign countries 37,935 24,108 24,108 -5,955 -1,144 14,368 -10,748 5,055 14,627 670 24 Official institutions 6,876 1,316 1,316 -760 -4,677 724 3,181 1,619 6,248 3,656 25 Other foreign 31,059 22,792 22,792 -5,195 3,533 13,644 -13,929 3,436 8,379 -2,986 Oil-exporting countries 26 Middle East2 4,317 -8,836 -8,836 -2,443 -1,261 -1,172 -980 -820 -6 84 27 11 -5 -5 0 0 0 0 0 0 -9 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 Feb. 28, 1994 Rate on Feb. 28, 1994 Rate on Feb. 28, 1994 Country Country Country Percent e M ffe o c n t t i h v e Percent e M ffe o c n t t i h v e e M ffe o c n t t i h v e Austria.. 5.0 Feb. 1994 Germany... 5.25 Feb. 1994 Norway 4.75 Feb. 1994 Belgium . 5.0 Feb. 1994 Italy 7.5 Feb. 1994 Switzerland 4.0 Dec. 1993 Canada.. 4.10 Feb. 1994 Japan 1.75 Sept. 1993 United Kingdom 12.0 Sept. 1992 Denmark 5.50 Feb. 1994 Netherlands 5.0 Dec. 1993 France .. 6.10 Feb. 1994 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 1994 TTyyppee oorr ccoouunnttrryy 11999911 11999922 11999933 Aug. Sept. Oct. Nov. Dec. Jan. Feb. 1 5.86 3.70 3.18 3.14 3.08 3.26 3.36 3.26 3.15 3.43 11.47 9.56 5.88 5.79 5.88 5.74 5.52 5.29 5.34 5.15 9.07 6.76 5.14 4.58 4.90 4.76 4.34 4.09 3.89 3.89 4 9.15 9.42 7.17 6.49 6.52 6.53 6.20 5.99 5.76 5.78 S 8.01 7.67 4.79 4.56 4.61 4.44 4.44 4.10 3.90 4.04 f, 9.19 9.25 6.73 6.27 6.26 6.20 5.85 5.50 5.12 5.19 7 9.49 10.14 8.30 7.45 7.07 6.85 6.56 6.39 6.19 6.18 8 12.04 13.91 10.09 9.20 9.05 8.69 8.94 8.56 8.38 8.42 q 9.30 9.31 8.10 9.02 9.82 9.05 7.93 7.03 6.88 6.39 1100 7.33 4.39 2.96 3.02 2.59 2.44 2.31 2.06 2.13 2.21 P 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 • April 1994 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar except as noted 1993 1994 CCoouunnttrryy//ccuurrrreennccyy uunniitt 11999911 11999922 11999933 Sept. Oct. Nov. Dec. Jan. Feb. 1 Australia/dollar2 77.872 73.521 67.993 65.167 66.100 66.465 67.364 69.608 71.611 2 Austria/schilling 11.686 10.992 11.639 11.402 11.540 11.958 12.025 12.252 12.200 3 Belgium/franc 34.195 32.148 34.581 34.847 35.674 36.227 35.694 36.206 35.768 4 Canada/dollar 1.1460 1.2085 1.2902 1.3215 1.3263 1.3174 1.3308 1.3173 1.3424 5 China, P.R./yuan 5.3337 5.5206 5.7795 5.8015 5.8013 5.8086 5.8210 8.7219 8.7249 6 Denmark/krone 6.4038 6.0372 6.4863 6.6336 6.6379 6.7667 6.7042 6.7697 6.7674 7 Finland/markka 4.0521 4.4865 5.7251 5.7868 5.7554 5.8143 5.7602 5.7004 5.5930 8 France/franc 5.6468 5.2935 5.6669 5.6724 5.7541 5.9069 5.8477 5.9207 5.8955 9 Germany/deutsche mark 1.6610 1.5618 1.6545 1.6219 1.6405 1.7005 1.7105 1.7426 1.7355 10 Greece/drachma 182.63 190.81 229.64 232.56 237.93 243.43 245.51 250.29 250.48 11 Hong Kong/dollar 7.7712 7.7402 7.7357 7.7384 7.7307 7.7272 7.7245 7.7251 7.7353 12 India/rupee 22.712 28.156 31.291 31.578 31.505 31.434 31.440 31.440 31.449 13 Ireland/pound 161.39 170.42 146.47 143.40 143.19 140.31 141.82 143.03 134.46 14 Italy/lira 1,241.28 1,232.17 1,573.41 1,569.10 1,600.93 1,666.31 1,687.17 1,699.45 1,685.% 15 Japan/yen 134.59 126.78 111.08 105.57 107.02 107.88 109.91 111.44 106.30 16 Malaysia/ringgit 2.7503 2.5463 2.5738 2.5475 2.5478 2.5548 2.5737 2.7160 2.7624 17 Netherlands/guilder 1.8720 1.7587 1.8585 1.8214 1.8438 1.9084 1.9162 1.9516 1.9464 18 New Zealand/dollar2 57.832 53.792 54.127 55.157 55.260 54.787 55.631 56.263 57.436 19 Norway/krone 6.4912 6.2142 7.0979 7.0829 7.1755 7.3882 7.4211 7.5064 7.4885 20 Portugal/escudo 144.77 135.07 161.08 166.28 169.60 173.93 174.58 176.04 175.15 21 Singapore/dollar 1.7283 1.6294 1.6158 1.5972 1.5735 1.5950 1.5975 1.6037 1.5873 22 South Africa/rand 2.7633 2.8524 3.2729 3.4135 3.3924 3.3680 3.3788 3.4107 3.4520 23 South Korea/won 736.73 784.58 805.75 811.84 813.45 809.79 812.57 813.55 812.24 24 Spain/peseta 104.01 102.38 127.48 130.54 132.18 137.27 140.42 143.04 141.08 25 Sri Lanka/rupee 41.200 44.013 48.205 48.854 48.954 49.187 49.322 49.460 49.113 26 Sweden/krona 6.0521 5.8258 7.7956 8.0170 8.0195 8.2660 8.3501 8.1184 7.9869 27 Switzerland/franc 1.4356 1.4064 1.4781 1.4182 1.4432 1.4969 1.4634 1.4716 1.4565 28 Taiwan/dollar 26.759 25.160 26.416 26.931 26.865 26.884 26.768 26.495 26.440 29 Thailand/baht 25.528 25.411 25.333 25.196 25.269 25.382 25.460 25.543 25.382 30 United Kingdom/pound 176.74 176.63 150.16 152.48 150.23 148.08 149.13 149.23 147.92 MEMO 31 United States/dollar3 89.84 86.61 93.18 92.07 93.29 95.47 95.73 96.54 95.79 1. Averages of certified noon buying rates in New York for cable transfers. the 1972-76 average world trade of that country divided by the average world Data in this table also appear in the Board's G.5 (405) monthly statistical release. trade of all ten countries combined. Series revised as of August 1978 (see Federal For ordering address, see inside front cover. Reserve Bulletin, vol. 64 (August 1978), p. 700). 2. Value in U.S. cents. 3. Index of weighted-average exchange value of U.S. dollar against the currencies of ten industrial countries. The weight for each of the ten countries is Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A69 Guide to Statistical Releases and Special Tables STATISTICAL RELEASES—List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases December 1993 A78 SPECIAL TABLES—Quarterly Data Published Irregularly, with Latest Bulletin Reference Title and Date Issue Page Assets and liabilities of commercial banks December 31, 1992 May 1993 A70 March 31, 1993 August 1993 A70 June 30, 1993 November 1993 A70 September 30, 1993 February 1994 A70 Terms of lending at commercial banks February 1993 May 1993 A76 May 1993 August 1993 A76 August 1993 November 1993 A76 November 1993 February 1994 A76 Assets and liabilities of U.S. branches and agencies of foreign banks December 31, 1992 May 1993 A80 March 31, 1993 August 1993 A80 June 30, 1993 November 1993 A80 September 30, 1993 February 1994 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 Agricultural loans, commercial banks, 22,23 Banks, by classes, 20-24 Assets and liabilities (See also Foreigners) Ownership by individuals, partnerships, and Banks, by classes, 20-23 corporations, 24 Domestic finance companies, 36 Turnover, 17 Federal Reserve Banks, 11 Depository institutions Financial institutions, 28 Reserve requirements, 9 Foreign banks, U.S. branches and agencies, 24 Reserves and related items, 4, 5, 6, 13 Automobiles Deposits (See also specific types) Consumer installment credit, 39 Banks, by classes, 4, 20-23, 24 Production, 47, 48 Federal Reserve Banks, 5,11 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 Business activity, nonfinancial, 45 EMPLOYMENT, 45 Business expenditures on new plant and equipment, 35 Eurodollars, 26 Business loans (See Commercial and industrial loans) FARM mortgage loans, 38 Federal agency obligations, 5, 10, 11, 12, 31, 32 CAPACITY utilization, 46 Federal credit agencies, 33 Capital accounts Banks, by classes, 20 Federal finance Federal Reserve Banks, 11 Debt subject to statutory limitation, and types and ownership Central banks, discount rates, 67 of gross debt, 30 Certificates of deposit, 26 Receipts and outlays, 28, 29 Commercial and industrial loans Treasury financing of surplus, or deficit, 28 Commercial banks, 18, 22 Treasury operating balance, 28 Weekly reporting banks, 22-24 Federal Financing Bank, 28, 33 Commercial banks Federal funds, 7, 19, 22, 23, 24, 26, 28 Assets and liabilities, 20-23 Federal Home Loan Banks, 33 Commercial and industrial loans, 18, 20, 21, 22, 23, 24 Federal Home Loan Mortgage Corporation, 33, 37, 38 Consumer loans held, by type and terms, 39 Federal Housing Administration, 33, 37, 38 Deposit interest rates of insured, 16 Federal Land Banks, 38 Loans sold outright, 22 Federal National Mortgage Association, 33, 37, 38 Nondeposit funds, 19 Federal Reserve Banks Real estate mortgages held, by holder and property, 38 Condition statement, 11 Time and savings deposits, 4 Discount rates (See Interest rates) Commercial paper, 25, 26, 36 U.S. government securities held, 5, 11, 12, 30 Condition statements (See Assets and liabilities) Federal Reserve credit, 5, 6, 11, 12 Construction, 45, 49 Federal Reserve notes, 11 Consumer installment credit, 39 Federally sponsored credit agencies, 33 Consumer prices, 45, 46 Finance companies Consumption expenditures, 52, 53 Assets and liabilities, 36 Corporations Business credit, 36 Nonfinancial, assets and liabilities, 35 Loans, 39 Profits and their distribution, 35 Paper, 25, 26 Security issues, 34, 65 Financial institutions, loans to, 22, 23, 24 Cost of living (See Consumer prices) Float, 51 Credit unions, 39 Flow of funds, 40, 42, 43, 44 Currency in circulation, 5, 14 Foreign banks, assets and liabilities of U.S. branches and Customer credit, stock market, 27 agencies, 23, 24 Foreign currency operations, 11 Foreign deposits in U.S. banks, 5, 11, 22, 23 DEBITS to deposit accounts, 17 Foreign exchange rates, 68 Debt (See specific types of debt or securities) Foreign trade, 54 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A71 Foreigners Profits, corporate, 35 Claims on, 55, 57, 60, 61, 62, 64 Liabilities to, 23, 54, 55, 57, 58, 63, 65, 66 REAL estate loans Banks, by classes, 18, 22, 23, 38 GOLD Terms, yields, and activity, 37 Certificate account, 11 Type of holder and property mortgaged, 38 Stock, 5, 54 Repurchase agreements, 7, 19, 22, 23, 24 Government National Mortgage Association, 33, 37, 38 Reserve requirements, 9 Gross domestic product, 51 Reserves Commercial banks, 20 HOUSING, new and existing units, 49 Depository institutions, 4, 5, 6, 13 Federal Reserve Banks, 11 INCOME, personal and national, 45, 51, 52 U.S. reserve assets, 54 Industrial production, 45, 47 Residential mortgage loans, 37 Installment loans, 39 Retail credit and retail sales, 39, 40, 45 Insurance companies, 30, 38 Interest rates SAVING Bonds, 26 Flow of funds, 40, 42, 43, 44 Consumer installment credit, 39 National income accounts, 51 Deposits, 16 Savings and loan associations, 38, 39, 40. (See also SAIF-insured Federal Reserve Banks, 8 institutions) Foreign central banks and foreign countries, 67 Savings banks, 38, 39 Money and capital markets, 26 Savings deposits (See Time and savings deposits) Mortgages, 37 Securities (See also specific types) Prime rate, 25 Federal and federally sponsored credit agencies, 33 International capital transactions of United States, 53-67 Foreign transactions, 65 International organizations, 57, 58, 60, 63, 64 New issues, 34 Inventories, 51 Prices, 27 Investment companies, issues and assets, 35 Special drawing rights, 5, 11, 53, 54 Investments (See also specific types) State and local governments Banks, by classes, 20, 21, 22, 23, 24 Deposits, 22, 23 Commercial banks, 4, 18, 20-23 Holdings of U.S. government securities, 30 Federal Reserve Banks, 11, 12 New security issues, 34 Financial institutions, 38 Ownership of securities issued by, 22, 23 Rates on securities, 26 LABOR force, 45 Stock market, selected statistics, 27 Life insurance companies (See Insurance companies) Stocks (See also Securities) Loans (See also specific types) New issues, 34 Banks, by classes, 20-23 Prices, 27 Commercial banks, 4, 18, 20-23 Federal Reserve Banks, 5, 6, 8, 11, 12 Student Loan Marketing Association, 33 Financial institutions, 38 Insured or guaranteed by United States, 37, 38 T Th A r X if t r i e n c s e t i i p tu ts t , i o f n ed s, e r 4 a . l, ( S 2 e 9 e also Credit unions and Savings and loan associations) MANUFACTURING Time and savings deposits, 4, 14, 16, 19, 20, 21, 22, 23, 24 Capacity utilization, 46 Trade, foreign, 54 Production, 46, 48 Treasury cash, Treasury currency, 5 Margin requirements, 27 Treasury deposits, 5, 11, 28 Member banks (See also Depository institutions) Treasury operating balance, 28 Federal funds and repurchase agreements, 7 Reserve requirements, 9 UNEMPLOYMENT, 45 Mining production, 48 U.S. government balances Mobile homes shipped, 49 Commercial bank holdings, 20, 21, 22, 23 Monetary and credit aggregates, 4, 13 Treasury deposits at Reserve Banks, 5, 11, 28 Money and capital market rates, 26 U.S. government securities Money stock measures and components, 4, 14 Bank holdings, 20-23, 24, 30 Mortgages (See Real estate loans) Dealer transactions, positions, and financing, 32 Mutual funds, 35 Federal Reserve Bank holdings, 5, 11, 12, 30 Mutual savings banks (See Thrift institutions) Foreign and international holdings and transactions, 11, 30, 66 NATIONAL defense outlays, 29 Open market transactions, 10 National income, 51 Outstanding, by type and holder, 28, 30 Rates, 25 OPEN market transactions, 10 U.S. international transactions, 53-67 Utilities, production, 48 PERSONAL income, 52 Prices VETERANS Administration, 37, 38 Consumer and producer, 45, 50 Stock market, 27 WEEKLY reporting banks, 22-24 Prime rate, 25 Wholesale (producer) prices, 45, 50 Producer prices, 45, 50 Production, 45, 47 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 Chairman ALAN GREENSPAN, EDWARD W. KELLEY, JR. JOHN P. LAWARE OFFICE OF BOARD MEMBERS DIVISION OF INTERNATIONAL FINANCE JOSEPH R. COYNE, Assistant to the Board EDWIN M. TRUMAN, Staff Director DONALD J. WINN, Assistant to the Board LARRY J. PROMISEL, Senior Associate Director THEODORE E. ALLISON, Assistant to the Board for Federal CHARLES J. SIEGMAN, Senior Associate Director Reserve System Affairs DALE W. HENDERSON, Associate Director LYNN S. FOX, Special Assistant to the Board DAVID H. HOWARD, Senior Adviser WINTHROP P. HAMBLEY, Special Assistant to the Board DONALD B. ADAMS, Assistant Director BOB STAHLY MOORE, Special Assistant to the Board PETER HOOPER III, Assistant Director DIANE E. WERNEKE, Special Assistant to the Board KAREN H. JOHNSON, Assistant Director RALPH W. SMITH, JR., Assistant Director LEGAL DIVISION J. VIRGIL MATTINGLY, JR., General Counsel DIVISION OF RESEARCH AND STATISTICS SCOTT G. ALVAREZ, Associate General Counsel MICHAEL J. PRELL, Director RICHARD M. ASHTON, Associate General Counsel EDWARD C. ETTIN, Deputy Director OLIVER IRELAND, Associate General Counsel WILLIAM R. JONES, Associate Director KATHLEEN M. O'DAY, Associate General Counsel THOMAS D. SIMPSON, Associate Director LAWRENCE SLIFMAN, Associate Director OFFICE OF THE SECRETARY DAVID J. STOCKTON, Associate Director MARTHA BETHEA, Deputy Associate Director WILLIAM W. WILES, Secretary PETER A. TINSLEY, Deputy Associate Director JENNIFER J. JOHNSON, Associate Secretary MYRON L. KWAST, Assistant Director BARBARA R. LOWREY, Associate Secretary PATRICK M. PARKINSON, Assistant Director MARTHA S. SCANLON, Assistant Director DIVISION OF BANKING JOYCE K. ZICKLER, Assistant Director SUPERVISION AND REGULATION JOHN J. MINGO, Senior Adviser RICHARD SPILLENKOTHEN, Director LEVON H. GARABEDIAN, Assistant Director STEPHEN C. SCHEMERING, Deputy Director (Administration) DON E. KLINE, Associate Director WILLIAM A. RYBACK, Associate Director DIVISION OF MONETARY AFFAIRS FREDERICK M. STRUBLE, Associate Director HERBERT A. BIERN, Deputy Associate Director DONALD L. KOHN, Director ROGER T. COLE, Deputy Associate Director DAVID E. LINDSEY, Deputy Director JAMES I. GARNER, Deputy Associate Director BRIAN F. MADIGAN, Associate Director HOWARD A. AMER, Assistant Director RICHARD D. PORTER, Deputy Associate Director NORMAND R.V. BERNARD, Special Assistant to the Board GERALD A. EDWARDS, JR., Assistant Director JAMES D. GOETZINGER, Assistant Director DIVISION OF CONSUMER STEPHEN M. HOFFMAN, JR., Assistant Director 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 WILLIAM SCHNEIDER, Project Director, National Information Center Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LAWRENCE B. LINDSEY SUSAN M. PHILLIPS OFFICE OF DIVISION OF RESERVE BANK OPERATIONS STAFF DIRECTOR FOR MANAGEMENT AND PAYMENT SYSTEMS S. DAVID FROST, Staff Director CLYDE H. FARNSWORTH, JR., Director PORTIA W. THOMPSON, Equal Employment Opportunity DAVID L. ROBINSON, Deputy Director (Finance and Programs Officer Control) CHARLES W. BENNETT, Assistant Director DIVISION OF HUMAN RESOURCES JACK DENNIS, JR., Assistant Director MANAGEMENT EARL G. HAMILTON, Assistant Director JEFFREY C. MARQUARDT, Assistant Director DAVID L. SHANNON, Director JOHN H. PARRISH, Assistant Director JOHN R. WEIS, Associate Director LOUISE L. ROSEMAN, Assistant Director ANTHONY V. DIGIOIA, Assistant Director FLORENCE M. YOUNG, Assistant Director JOSEPH H. HAYES, JR., Assistant Director FRED HOROWITZ, Assistant Director OFFICE OF THE INSPECTOR GENERAL BRENT L. BOWEN, Inspector General OFFICE OF THE CONTROLLER DONALD L. ROBINSON, Assistant Inspector General GEORGE E. LIVINGSTON, Controller BARRY R. SNYDER, Assistant Inspector General 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 • April 1994 Federal Open Market Committee and Advisory Councils FEDERAL OPEN MARKET COMMITTEE MEMBERS ALAN GREENSPAN, Chairman WILLIAM J. MCDONOUGH, Vice Chairman J. ALFRED BROADDUS, JR. EDWARD W. KELLEY, JR. SUSAN M. PHILLIPS ROBERT P. FORRESTAL JOHN P. LAWARE ROBERT T. PARRY JERRY L. JORDAN LAWRENCE B. LINDSEY ALTERNATE MEMBERS THOMAS M. HOENIG THOMAS C. MELZER JAMES H. OLTMAN SILAS KEEHN STAFF DONALD L. KOHN, Secretary and Economist JOHN M. DAVIS, Associate Economist NORMAND R.V. BERNARD, Deputy Secretary MARVIN S. GOODFRIEND, Associate Economist JOSEPH R. COYNE, Assistant Secretary DAVID E. LINDSEY, Associate Economist GARY P. GILLUM, Assistant Secretary LARRY J. PROMISEL, Associate Economist J. VIRGIL MATTINGLY, JR., General Counsel CHARLES J. SIEGMAN, Associate Economist ERNEST T. PATRIKIS, Deputy General Counsel THOMAS D. SIMPSON, Associate Economist MICHAEL J. PRELL, Economist DAVID J. STOCKTON, Associate Economist EDWIN M. TRUMAN, Economist SHEILA L. TSCHINKEL, Associate Economist JACK H. BEEBE, Associate Economist JOAN E. LOVETT, Manager for Domestic Operations, System Open Market Account PETER R. FISHER, Manager for Foreign Operations, System Open Market Account FEDERAL ADVISORY COUNCIL RICHARD M. ROSENBERG, President EUGENE A. MILLER, Vice President MARSHALL N. CARTER, First District EUGENE A. MILLER, Seventh District J. CARTER BACOT, Second District ANDREW B. CRAIG, III, Eighth District ANTHONY P. TERRACCIANO, Third District JOHN F. GRUNDHOFER, Ninth District FRANK V. CAHOUET, Fourth District DAVID A. RISMILLER, Tenth District RICHARD G. TILGHMAN, Fifth District CHARLES R. HRDLICKA, Eleventh District CHARLES E. RICE, Sixth District RICHARD M. ROSENBERG, Twelfth District HERBERT V. PROCHNOW, Secretary Emeritus WILLIAM J. KORSVIK, Co-Secretary JAMES ANNABLE, Co-Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A75 CONSUMER ADVISORY COUNCIL JEAN POGGE, Chicago, Illinois, Chairman JAMES L. WEST, Tijeras, New Mexico, Vice Chairman BARRY A. ABBOTT, San Francisco, California GARY S. HATTEM, New York, New York JOHN R. ADAMS, Philadelphia, Pennsylvania RONALD HOMER, Boston, Massachusetts JOHN A. BAKER, Atlanta, Georgia THOMAS L. HOUSTON, Dallas, Texas MULUGETTA BIRRU, Pittsburgh, Pennsylvania KATHARINE W. MCKEE, Durham, North Carolina DOUGLAS D. BLANKE, St. Paul, Minnesota EDMUND MIERZWINSKI, Washington, D.C. GENEVIEVE BROOKS, Bronx, New York ANNE B. SHLAY, Philadelphia, Pennsylvania CATHY CLOUD, Washington, D.C. JOHN V. SKINNER, Irving, Texas ALVIN J. COWANS, Orlando, Florida REGINALD J. SMITH, Kansas City, Missouri MICHAEL D. EDWARDS, Yelm, Washington LOWELL N. SWANSON, Portland, Oregon MICHAEL FERRY, St. Louis, Missouri MICHAEL W. TIERNEY, Washington, D.C. ELIZABETH G. FLORES, Laredo, Texas LORRAINE VANETTEN, Troy, Michigan NORMA L. FREIBERG, New Orleans, Louisiana GRACE W. WEINSTEIN, Englewood, New Jersey LORI GAY, Los Angeles, California LILY K. YAO, Honolulu, Hawaii BONNIE GUITON, Charlottesville, Virginia ROBERT O. ZDENEK, Greenwich, Connecticut THRIFT INSTITUTIONS ADVISORY COUNCIL BEATRICE D'AGOSTINO, Somerville, New Jersey, President CHARLES JOHN KOCH, Cleveland, Ohio, Vice President MALCOLM E. COLLIER, Lakewood, Colorado ROBERT MCCARTER, New Bedford, Massachusetts WILLIAM A. COOPER, Minneapolis, Minnesota NICHOLAS W. MITCHELL, JR., Winston-Salem, North Carolina PAUL L. ECKERT, Davenport, Iowa STEPHEN W. PROUGH, Irvine, California GEORGE R. GLIGOREA, Sheridan, Wyoming STEPHEN D. TAYLOR, Miami, Florida KERRY KILLINGER, Seattle, Washington JOHN M. TIPPETS, DFW Airport, Texas 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. Loose-leaf; updated MS-127, Board of Governors of the Federal Reserve System, 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 US. bank. Securities Credit Transactions Handbook. $75.00 per year. The Payment System Handbook. $75.00 per year. Federal Reserve Regulatory Service. Four 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, 1993-94. 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, THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A MULTIand Mexico. Elsewhere, $35.00 per year or $3.00 each. COUNTRY MODEL, May 1984. 590 pp. $14.50 each. ANNUAL STATISTICAL DIGEST: period covered, release date, 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 FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY. 1983 October 1984 264 pp. $11.50 December 1986. 264 pp. $10.00 each. 1984 October 1985 254 pp. $12.50 FINANCIAL SECTORS IN OPEN ECONOMIES: EMPIRICAL ANALY- 1985 October 1986 231 pp. $15.00 SIS AND POLICY ISSUES. August 1990. 608 pp. $25.00 each. 1986 November 1987 288 pp. $15.00 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 1992 December 1993 215 pp. $25.00 Consumer Handbook on Adjustable Rate Mortgages Consumer Handbook to Credit Protection Laws SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES A Guide to Business Credit for Women, Minorities, and Small OF CHARTS. Weekly. $30.00 per year or $.70 each in the Businesses United States, its possessions, Canada, and Mexico. Else- How to File A Consumer Credit Complaint where, $35.00 per year or $.80 each. Series on the Structure of the Federal Reserve System The Board of Governors of the Federal Reserve System THE FEDERAL RESERVE ACT and other statutory provisions The Federal Open Market Committee affecting the Federal Reserve System, as amended through Federal Reserve Bank Board of Directors August 1990. 646 pp. $10.00. Federal Reserve Banks REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL Organization and Advisory Committees RESERVE SYSTEM. A Consumer's Guide to Mortgage Lock-Ins A Consumer's Guide to Mortgage Settlement Costs ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— A Consumer's Guide to Mortgage Refinancings Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. Home Mortgages: Understanding the Process and Your Right Vol. II (Irregular Transactions). 1969. 116 pp. Each volto Fair Lending ume $2.25; 10 or more of same volume to one address, Making Deposits: When Will Your Money Be Available? $2.00 each. Making Sense of Savings GUIDE TO THE FLOW OF FUNDS ACCOUNTS. 672 pp. $8.50 When Your Home is on the Line: What You Should Know each. About Home Equity Lines of Credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All STAFF STUDIES: Only Summaries Printed in the 156. INTERNATIONAL TRENDS FOR U.S. BANKS AND BANKING MARKETS, by James V. Houpt. May 1988. 47 pp. BULLETIN 157. M2 PER UNIT OF POTENTIAL GNP AS AN ANCHOR FOR Studies and papers on economic and financial subjects that are THE PRICE LEVEL, by Jeffrey J. Hallman, Richard D. of general interest. Requests to obtain single copies of the full Porter, and David H. Small. April 1989. 28 pp. text or to be added to the mailing list for the series may be sent 158. THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIREto Publications Services. MENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE PRODUCTS, by Mark J. Warshawsky with the assistance of Staff Studies 1-145 are out of print. Dietrich Earnhart. September 1989. 23 pp. 159. NEW DATA ON THE PERFORMANCE OF NONBANK SUBSID- IARIES OF BANK HOLDING COMPANIES, by Nellie Liang 146. THE ROLE OF THE PRIME RATE IN THE PRICING OF and Donald Savage. February 1990. 12 pp. BUSINESS LOANS BY COMMERCIAL BANKS, 1977-84, by 160. BANKING MARKETS AND THE USE OF FINANCIAL SER- Thomas F. Brady. November 1985. 25 pp. VICES BY SMALL AND MEDIUM-SIZED BUSINESSES, by 147. REVISIONS IN THE MONETARY SERVICES (DIVISIA) IN- Gregory E. Elliehausen and John D. Wolken. September DEXES OF THE MONETARY AGGREGATES, by Helen T. Farr 1990. 35 pp. and Deborah Johnson. December 1985. 42 pp. 161. A REVIEW OF CORPORATE RESTRUCTURING ACTIVITY, 148. THE MACROECONOMIC AND SECTORAL EFFECTS OF THE 1980-90, by Margaret Hastings Pickering. May 1991. ECONOMIC RECOVERY TAX ACT: SOME SIMULATION 21pp. RESULTS, by Flint Bray ton and Peter B. Clark. December 162. EVIDENCE ON THE SIZE OF BANKING MARKETS FROM 1985. 17 pp. MORTGAGE LOAN RATES IN TWENTY CITIES, by Stephen 149. THE OPERATING PERFORMANCE OF ACQUIRED FIRMS IN A. Rhoades. February 1992. 11 pp. BANKING BEFORE AND AFTER ACQUISITION, by Stephen 163. CLEARANCE AND SETTLEMENT IN U.S. SECURITIES MAR- A. Rhoades. April 1986. 32 pp. KETS, by Patrick Parkinson, Adam Gilbert, Emily Gollob, 150. STATISTICAL COST ACCOUNTING MODELS IN BANKING: Lauren Hargraves, Richard Mead, Jeff Stehm, and Mary A REEXAMINATION AND AN APPLICATION, by John T. Ann Taylor. March 1992. 37 pp. Rose and John D. Wolken. May 1986. 13 pp. 164. THE 1989-92 CREDIT CRUNCH FOR REAL ESTATE, by 151. RESPONSES TO DEREGULATION: RETAIL DEPOSIT PRICING James T. Fergus and John L. Goodman, Jr. July 1993. FROM 1983 THROUGH 1985, by Patrick I. Mahoney, Alice 20 pp. P. White, Paul F. O'Brien, and Mary M. McLaughlin. 165. THE DEMAND FOR TRADE CREDIT: AN INVESTIGATION OF January 1987. 30 pp. MOTIVES FOR TRADE CREDIT USE BY SMALL BUSINESSES, 152. DETERMINANTS OF CORPORATE MERGER ACTIVITY: A by Gregory E. Elliehausen and John D. Wolken. Septem- REVIEW OF THE LITERATURE, by Mark J. Warshawsky. ber 1993. 18 pp. April 1987. 18 pp. 166. THE ECONOMICS OF THE PRIVATE PLACEMENT MARKET, 153. STOCK MARKET VOLATILITY, by Carolyn D. Davis and by Mark Carey, Stephen Prowse, John Rea, and Gregory Alice P. White. September 1987. 14 pp. Udell. January 1994. Ill pp. 154. THE EFFECTS ON CONSUMERS AND CREDITORS OF PROPOSED CEILINGS ON CREDIT CARD INTEREST RATES, by Glenn B. Canner and James T. Fergus. October 1987. REPRINTS OF BULLETIN ARTICLES 26 pp. A limited number of reprints of Bulletin articles are available. 155. THE FUNDING OF PRIVATE PENSION PLANS, by Mark J. One reprint of an article will be sent on request to Publications Warshawsky. November 1987. 25 pp. Services. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

A79 1-A 2-B 3-C 4-D 5-E Baltimore Pittsburgh Charlotte / NH •Cincinnati MA I Buffalo / • ^ CT NJ NY BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F 7-G 8-H • Nashville ™_RV Birmingham, k\m WI Ml MO • MS / GA 1A Detroit • < 7% L ouisville - v - A —^ ILB — \J TN LA m ' Jacksonville IN • Memphis New Orleans „ Littl? > MS J Rock \ Miami ATLANTA # CHICAGO ST. LOUIS 9-1 MT 1 ND MN • Helt: na 1 MI WI I SD • MINNEAPOLIS 10-J 12-L /- CO — Omaha • Den • ver M • O ALASKA / Seattle /• • ^ - w— NM p~ Portland Oklahoma City • OR C KANSAS CITY CA ^ ^^ / NV i UT 11-K • A / Salt iSke City AZ • Los Angel es HAWAII SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 Federal Reserve Banks, Branches, and Offices FEDERAL RESERVE BANK Chairman President Vice President branch, or facility Zip Deputy Chairman First Vice President in charge of branch BOSTON* 02106 Jerome H. Grossman Richard F. Syron Warren B. Rudman Cathy E. Minehan NEW YORK* 10045 Maurice R. Greenberg William J. McDonough David A. Hamburg James H. Oltman Buffalo 14240 Joseph J. Castiglia James O. Aston PHILADELPHIA 19105 James M. Mead Edward G. Boehne Donald J. Kennedy William H. Stone, Jr. CLEVELAND* 44101 A. William Reynolds Jerry L. Jordan G. Watts Humphrey, Jr. Sandra Pianalto Cincinnati 45201 John N. Taylor, Jr. Charles A. Cerino1 Pittsburgh 15230 Robert P. Bozzone Harold J. Swart1 RICHMOND* 23219 Henry J. Faison J. Alfred Broaddus, Jr. Claudine B. Malone Jimmie R. Monhollon Baltimore 21203 Rebecca Hahn Windsor Ronald B. Duncan1 Charlotte 28230 Harold D. Kingsmore Walter A. Varvel1 Culpeper Communications John G. Stoides1 and Records Center 22701 ATLANTA 30303 Leo Benatar Robert P. Forrestal Hugh M. Brown Jack Guynn Donald E. Nelson1 Birmingham 35283 Shelton E. Allred FredR. Herr1 Jacksonville 32231 Samuel H. Vickers James D. Hawkins1 Miami 33152 Dorothy C. Weaver James T. Curry III Nashville 37203 Paula Lovell Melvyn K. Purcell New Orleans 70161 Jo Ann Slaydon 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 John F. McDonnell James R. Bowen Little Rock 72203 Robert D. Nabholz, Jr. Karl W. Ashman Louisville 40232 Laura M. Douglas Howard Wells Memphis 38101 Sidney Wilson, Jr. John P. Baumgartner MINNEAPOLIS 55480 Gerald A. Rauenhorst Gary H. Stern Jean D. Kinsey Colleen K. Strand Helena 59601 Lane Basso 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 Cece Smith Robert D. McTeer, Jr. Roger R. Hemminghaus Tony J. Salvaggio El Paso 79999 Alvin T. Johnson 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 Anita E. Landecker John F. Moore1 Portland 97208 William A. Hilliard E. Ronald Liggett1 Salt Lake City 84125 Gerald R. Sherratt 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. 1. Senior Vice President. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Statistical Releases Available on the Commerce Department's Economic Bulletin Board The Board of Governors of the Federal Reserve scription. For further information regarding a System makes some of its statistical releases avail- subscription to the economic bulletin board, able to the public through the U.S. Department of please call (202) 482-1986. The releases transmitted Commerce's economic bulletin board. Computer to the economic bulletin board, on a regular basis, access to the releases can be obtained by sub- are the following: Reference Number Statistical release Frequency of release H.3 Aggregate Reserves Weekly/Thursday H.4.1 Factors Affecting Reserve Balances Weekly/Thursday H.6 Money Stock Weekly/Thursday H.8 Assets and Liabilities of Insured Domestically Chartered Weekly/Monday and Foreign Related Banking Institutions H.10 Foreign Exchange Rates Weekly/Monday H.15 Selected Interest Rates Weekly/Monday G.5 Foreign Exchange Rates Monthly/end of month G.17 Industrial Production and Capacity Utilization Monthly/midmonth G.19 Consumer Installment Credit Monthly/fifth business day Z.7 Flow of Funds Quarterly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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 four-volume loose-leaf service The Consumer and Community Affairs Handbook containing all Board regulations as well as related contains Regulations B, C, E, M, Z, AA, BB, and DD, statutes, interpretations, policy statements, rulings, and 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 Regulato monetary policy, securities credit, consumer affairs, tions CC, J, and EE, related statutes and commenand the payment system. taries, and policy statements on risk reduction in the These publications are designed to help those who payment system. must frequently refer to the Board's regulatory mate- For domestic subscribers, the annual rate is $200 rials. They are updated monthly, and each contains for the Federal Reserve Regulatory Service and $75 citation indexes and a subject index. for each Handbook. For subscribers outside the The Monetary Policy and Reserve Requirements United States, the price including additional air mail Handbook contains Regulations A, D, and Q, plus costs is $250 for the Service and $90 for each Handrelated materials. book. All subscription requests must be accompanied The Securities Credit Transactions Handbook conb-y a check or money order payable to the Board of tains Regulations G, T, U, and X, dealing with exten- Governors of the Federal Reserve System. Orders sions of credit for the purchase of securities, together should be addressed to Publications Services, mail with related statutes, Board interpretations, rulings, stop 127, Board of Governors of the Federal Reserve and staff opinions. Also included are the Board's list System, Washington, DC 20551. GUIDE TO THE FLOW OF FUNDS ACCOUNTS A recent Federal Reserve publication, Guide to the dures as seasonal adjustment, extrapolation, and Flow of Funds Accounts, explains in detail how the interpolation. U.S. financial flow accounts are prepared. The The balance of the Guide contains explanatory accounts, which are compiled by the Division of tables corresponding to the tables of financial flows Research and Statistics, are published in the Board's data that appeared in the September 1992 Z.l release. quarterly Z.l statistical release, "Flow of Funds These tables give, for each data series, the source of Accounts, Flows and Outstandings." The Guide the data or the methods of calculation, along with updates and replaces Introduction to Flow of Funds, annual data for 1991 that were published in the published in 1980. September 1992 release. The 670-page Guide begins with an explanation of Guide to the Flow of Funds Accounts is available the organization and uses of the flow of funds for $8.50 per copy from Publications Services, Board accounts and their relationship to the national income of Governors of the Federal Reserve System, Washand product accounts prepared by the U.S. Depart- ington, DC 20551. Orders must include a check or ment of Commerce. Also discussed are the individual money order, in U.S. dollars, made payable to the data series that make up the accounts and such proce- Board of Governors of the Federal Reserve System. 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 127, 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 suid« to Business A Consumer's Credit Guide to Mortgage (or Women, Minorities, and Lock-Ins Small Businesses Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis