Federal Reserve Bulletin, 1994-08

VOLUME 80 • NUMBER 8 • AUGUST 1994 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D.C. PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman • S. David Frost • Griffith L. Garwood • Donald L. Kohn • J. Virgil Mattingly, Jr. • Michael J. Prell • Richard Spillenkothen • Edwin M. Truman The Federal Reserve Bulletin is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressed except in official statements and signed articles. It is assisted by the Economic Editing Section headed by S. Ellen Dykes, the Graphics Center under the direction of Peter G. Thomas, and Publications Services supervised by Linda C. Kyles. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Table of Contents 681 MONETARY POLICY REPORT TO THE 709 John R LaWare, member, Board of Gover- CONGRESS nors, discusses title II, Small Business Capital Formation, of the Community Develop- The favorable performance of the U.S. econment, Credit Enhancement, and Regulatory omy continued in the first half of 1994. Eco- Improvement Act of 1994 (H.R.3474) and nomic activity advanced at a brisk pace, buildsays that the Board supports the objective of ing on the substantial gains in late 1993, and this legislation of increasing the availability of broad measures of inflation moved still lower. credit to small businesses by facilitating the Unemployment declined, and industrial capacsecuritization of small business loans and is ity utilization rose, largely eliminating the committed to continuing to work with the slack in resource use. In this context, monecommittee, the other banking agencies, and tary policy has been directed this year at headthe Administration in developing an approach ing off a destabilizing buildup of inflationary that will remove any unnecessary impedipressures that could jeopardize the continuaments to securitization, while at the same time tion of the economic expansion. To do so, the protecting the safety and soundness of the Federal Reserve has had to move away from banking system and minimizing regulatory its highly accommodative policy stance of burden, before the Subcommittee on Telerecent years, and it has firmed money market communications and Finance of the House conditions in four steps this year. Committee on Energy and Commerce, June 14, 1994. 702 INDUSTRIAL PRODUCTION AND 714 Alan Greenspan, Chairman, Board of Gover- CAPACITY UTILIZATION FOR JUNE 1994 nors, discusses recent monetary policy actions and issues related to inflation and says that Industrial production rose 0.5 percent in June, despite considerable policy challenges and the to 116.8 percent of its 1987 average. The always-present future uncertainties, the oututilization of total industrial capacity rose look for the U.S. economy is as bright as it has 0.3 percentage point, to 83.9 percent. been in decades and that the intent of monetary policy in recent years has been to foster this kind of healthy economic performance, 705 STATEMENTS TO THE CONGRESS before the House Committee on the Budget, Lawrence B. Lindsey, member, Board of June 22, 1994. Governors of the Federal Reserve System, addresses issues related to consumer credit 719 Susan M. Phillips, member, Board of Goverand says that credit to households appears to nors, discusses the trends in retail fees and the be quite readily available and that many availability of retail services at depository households have completed substantial adjust- institutions as revealed by data obtained from ments to alleviate debt-servicing strains and annual surveys sponsored by the Federal are showing that they are again willing to Reserve System and says that results of the borrow to finance spending, before the Sub- most recent surveys indicated that the availcommittee on Consumer Credit and Insurance ability of the majority of retail services examof the House Committee on Banking, Finance ined did not change appreciably between 1992 and Urban Affairs, June 9, 1994. and 1993 and that a general trend was also Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

observable in the direction of increased fees, 769 MEMBERSHIP OF THE BOARD OF corresponding to an increase in deposit insur- GOVERNORS OF THE FEDERAL ance premiums, before the Subcommittee on RESERVE SYSTEM, 1913-94 Consumer Credit and Insurance of the House List of appointive and ex officio members. Committee on Banking, Finance and Urban Affairs, June 22, 1994. A1 FINANCIAL AND BUSINESS STATISTICS These tables reflect data available as of 724 ANNOUNCEMENTS June 28, 1994. Appointments of Alan S. Blinder as a member of the Board of Governors and as Vice A3 GUIDE TO TABULAR PRESENTATION Chairman. A4 Domestic Financial Statistics Nominations sought for appointments to the A45 Domestic Nonfinancial Statistics Consumer Advisory Council. A53 International Statistics Production of a videotape for use in training staff of financial institutions, trade associa- A67 GUIDE TO STATISTICAL RELEASES AND tions, and others in fair lending practices. SPECIAL TABLES Final amendments to the real estate appraisal A76 INDEX TO STATISTICAL TABLES requirements. Proposed changes to Regulation C; a proposed A78 BOARD OF GOVERNORS AND STAFF amendment to Regulation H; proposed amendments to Regulation T. A80 FEDERAL OPEN MARKET COMMITTEE AND STAFF; ADVISORY COUNCILS Publication of a supplement to the Bank Holding Company Supervision Manual. A82 FEDERAL RESERVE BOARD Changes in Board staff. PUBLICATIONS A84 MAPS OF THE FEDERAL RESERVE 729 LEGAL DEVELOPMENTS SYSTEM Various bank holding company, bank service corporation, and bank merger orders; and A86 FEDERAL RESERVE BANKS, BRANCHES, pending cases. AND OFFICES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress Report submitted to the Congress on July 20, 1994, ing state-of-the-art equipment; rising utilization pursuant to the Full Employment and Balanced rates have spurred interest in expansion of capacity Growth Act of 19781 as well. Consumer outlays have trended higher this year, buoyed by the considerable gains in income and an increased willingness to borrow or use MONETARY POLICY AND THE ECONOMIC savings; lately, though, spending growth appears to OUTLOOK FOR 1994 AND 1995 have moderated somewhat. The rise in long-term interest rates that began last fall has damped the The favorable performance of the U.S. economy growth of housing activity this year, but the effect continued in the first half of 1994. Economic activ- has been relatively mild, in part because homes ity advanced at a brisk pace, building on the remain quite affordable by the standards of the past substantial gains in late 1993, and broad measures two decades. In the labor market, the employment of inflation moved still lower. Unemployment gains during the first half of this year were substandeclined and industrial capacity utilization rose, tially more rapid than those in 1993, and the unemsubstantially reducing the remaining slack in ployment rate has continued to move lower. resource use. Inflation generally was moderate during the first In this context, monetary policy has been di- half of 1994. Retail food and energy prices changed rected this year at heading off a buildup of infla- little, on balance, over the period, holding the rise tionary pressures that could jeopardize the continu- in the consumer price index (CPI) to 2Vi percent at ation of the economic expansion. To do so, the an annual rate. At the same time, the prices of a Federal Reserve has had to move away from its wide range of materials used in manufacturing and highly accommodative policy stance of recent construction have been boosted considerably by years. That stance had been adopted to counteract strong demand and the resulting higher rates of unusual restraint on domestic spending associated resource utilization. Looking ahead, retail energy in large part with the efforts of both borrowers and prices likely will rise over the summer, pushed up lenders to strengthen their financial condition. Data by the rebound in crude oil prices in recent months; available in late 1993 and early 1994 suggested in addition, the decline in the dollar since the that the restraint on spending had dissipated and beginning of the year, if not reversed, probably will that the economic expansion had become strong exert some upward pressure on prices. and self-sustaining. Against this background, the The Federal Reserve's policy actions this year Federal Reserve has firmed money market condi- have raised the federal funds rate to around A1 A pertions in four steps this year. cent, from 3 percent, and have boosted the discount Despite disruptions caused by severe winter rate to 3V2 percent, also from 3 percent. Other storms, real gross domestic product (GDP) rose at market interest rates have risen 1 lA to l3A percentan annual rate of 3V2 percent in the first quarter, age points since the beginning of the year. Increases and available indicators point to another sizable in intermediate- and long-term rates have been gain in the second quarter. Business fixed invest- unusually large relative to the adjustment of shortment has continued to grow rapidly this year, as term rates, reflecting stronger-than-anticipated firms have sought to improve efficiency by install- economic growth and market expectations of greater inflationary pressures as well as actual and expected tightening actions by the Federal Reserve 1. The charts for the report are available on request from Publi-to contain those pressures. On occasion, the declincations Services, Board of Governors of the Federal Reserve Sysing value of the dollar also appeared to contribute tem, Washington, DC 20551; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

682 Federal Reserve Bulletin • August 1994 to higher yields. Markets have been volatile at contracted sharply between 1989 and 1993, times this year as investors have adjusted to a appears to have expanded a bit. In contrast to the changing economic and policy outlook. The uncer- strength of private borrowing, the growth of federal tain conditions encouraged investors to try to government debt has slowed this year, reflecting reduce their risk exposure, and the associated the subdued growth of expenditures and sharply attempts to make large shifts in portfolios over higher tax receipts associated with fiscal policy short periods seemed to add to the upward pressure actions and the robust economy. As a result, the on long-term rates at times. total debt of the domestic nonfinancial sectors Despite the rise in U.S. interest rates, the dollar expanded at about a 5V4 percent annual rate from has declined considerably this year, with its trade- the fourth quarter of 1993 through May, close to its weighted foreign exchange value against the Group pace over the second half of last year and well of Ten (G-10) countries falling about 8 percent. within its monitoring range of 4 to 8 percent. Rising long-term interest rates abroad, associated Growth of the broad money aggregates has not with brighter prospects for economic growth, kept pace with that of nominal GDP again this year. tended to offset the effect on the dollar of higher M2 increased at about a VA percent annual rate U.S. rates. Moreover, other factors, including from the fourth quarter of last year through June, diminished hopes for a prompt resolution of trade while M3 fell slightly, placing these aggregates tensions with Japan and market concerns about around the lower bounds of their respective annual future inflation in the United States, fostered down- growth ranges. In the usual pattern, increases in ward pressure on the dollar. This pressure was rates on retail deposits and on money market especially intense in late April and early May and mutual funds have lagged the rise in market interagain in the second half of June and first half of est rates, inducing a redirection of savings from M2 July. The U.S. Treasury and the Federal Reserve into market instruments and boosting M2 velocity. made substantial dollar purchases on three occa- With returns on interest-paying checking accounts sions during these periods to deal with volatile virtually unchanged, compensating balance requiretrading conditions and movements in the dollar ments for demand deposits reduced by rising rates, judged to be inconsistent with economic fundamen- and transactions balances also depressed by several tals. Other governments shared the concern of U.S. special influences, Ml growth this year has slowed officials, and the more recent operations were coor- to less than half its rate of advance in 1993; through dinated with the monetary authorities of a large June, this aggregate had expanded at about a 4 pernumber of other countries, including the other cent annual rate since the fourth quarter of last members of the Group of Seven (G-7). year. Owing to the anemic expansion of transac- The strength of spending and a renewed willing- tions deposits, total reserves fell slightly over the ness to use and extend credit contributed to a first half of the year. Only continued strong demand pickup in borrowing by households and businesses for currency, much of which reflected use abroad, in the second half of last year, and this trend has supported growth of Ml and the monetary extended into the first half of 1994. However, the base. composition of borrowing has been affected by In contrast to 1992 and 1993, shifts into bond financial market conditions. Rising and more vola- and stock mutual funds were not a major factor in tile long-term interest rates have encouraged busi- the rise in M2 velocity this year. Falling securities nesses to rely more heavily on sources of shorter- prices created capital losses for bond and equity term financing, such as finance companies and mutual funds, prompting some fund holders to banks, and have prompted households to shift to reevaluate the risks and prospective returns of such adjustable rate mortgages. Banks, which had been investments. Bond mutual funds experienced outhampered by balance sheet problems of their own flows this spring, and a portion of the proceeds was in recent years, sought business and household directed to less-risky money market mutual funds, loans more aggressively by continuing to ease thus elevating M2 for a time. Even with more credit standards and the nonprice terms of lending. subdued moves in securities prices since the late Total commercial bank credit has increased moder- spring, many small investors have retained a more ately this year, and thrift institution credit, which cautious view of the possible risks and rewards of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 683 holding capital market instruments, and total 1. Ranges for growth of monetary and credit aggregates1 inflows to bond and stock mutual funds have Percent remained considerably weaker than in the past few Provisional for Aggregate 1993 1994 years. The effect of these slower flows on M2 has 1995 been offset by shifts into direct holdings of market M2 1-5 1-5 1-5 instruments, such as Treasury bills. As a conse- M3 0-4 0-4 0-4 Debt2 4-8 4-8 3-7 quence, the sum of M2 and household holdings of bond and stock mutual funds has decelerated 1. Change from average for fourth quarter of preceding year to average for fourth quarter of year indicated. sharply this year. 2. Monitoring range for debt of domestic nonfinancial sectors. Money and Debt Ranges for 1994 and 1995 The Committee also decided to retain its current monitoring range of 4 percent to 8 percent for At its July 1994 meeting, the Federal Open Market growth of the debt aggregate during 1994. With Committee reviewed the annual ranges for money debt expanding at a rate close to that of nominal growth for 1994 that it had established in February. income, the Committee's expectation for the In light of the experience of the firsth alf of the year growth of nominal GDP for the year suggested that and the likelihood that funds would continue to be the debt aggregate would finish the year comfortdiverted from deposits to higher-yielding market ably within this range. However, the Committee instruments, the Committee expected a substantial expected that in 1995, macroeconomic perforincrease in the level of M2 velocity over 1994. M3 mance consistent with sustainable expansion would velocity also was seen as likely to rise quite involve some slowing of the growth of nominal sharply, given the funding patterns of depository spending and moderate growth of debt; indeed, institutions, which had been favoring sources of rapid credit growth might suggest the possibility of funds not included in M3, such as capital and a borrow-and-spend psychology typical of strengthborrowing from overseas offices. As a conse- ening inflation. Consequently, the Committee voted quence, the Committee continued to expect that to set a provisional monitoring range for debt money growth within, though perhaps toward the growth for 1995 of 3 percent to 7 percent, a reduclower end of, the ranges of 1 percent to 5 percent tion of 1 percentage point at each end of the range. for M2 and 0 percent to 4 percent for M3 would be consistent with its broader objective of fostering financial conditions that would sustain economic Economic Projections for 1994 and 1995 expansion and contain price pressures. It therefore voted to retain these ranges for 1994 (table 1). With The members of the Board of Governors and the little information to suggest any new trends in Reserve Bank presidents, all of whom participate velocity for 1995, the Committee chose simply to in the deliberations of the Federal Open Market carry forward the 1994 ranges for M2 and M3 as Committee, generally anticipate that the growth of provisional ranges for those aggregates for 1995. real GDP will moderate during the second half of The Committee noted that these ranges, especially this year and into 1995 from the unsustainable pace that for M2, provided an indication of the longer- in recent quarters (table 2). Employment gains run growth of this aggregate that might be expected through the end of 1995 are expected to roughly with the attainment of reasonable price stability balance the net flow of individuals into the labor and a return to the past pattern of velocity fluctuat- force, leaving the unemployment rate about ing around a constant long-run level. Considerable unchanged from its average level in the second uncertainty about the behavior of velocity is likely quarter of this year. Inflation is expected to pick up to persist, however, and the Committee will con- a little over the next year and one-half. tinue to monitor a broad range of financial and The forecasts of the Board members and Reserve economic indicators in addition to the monetary Bank presidents for economic growth in 1994 are aggregates when determining the appropriate quite close to those made in February. Most constance of policy. tinue to expect that real GDP will rise 3 percent to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

684 Federal Reserve Bulletin • August 1994 2. Economic projections for 1994 and 1995 resulting deceleration in private domestic spending Percent is expected to be offset, in part, by a smaller decline in net exports than that registered over the FOMC members and nonvoting Reserve past several quarters; this projection for the exter- Bank presidents MMeeaassuurree AAddmmiinniissttrraattiioonn nal sector largely reflects an expectation of stronger D„ Central economic expansion abroad. ® tendency The Board members and Reserve Bank presi- 1994 dents generally expect the rise in the consumer CChhaannggee,, ffoouurrtthh qquuaarrtteerr price index over the four quarters of 1994 to end up ttoo ffoouurrtthh qquuaarrtteerr11 NNoommiinnaall GGDDPP 555'''///444---666'''///iii 555'''///222---666 555...888 in the range of 23A percent to 3 percent. So far this Real GDP 333---333'''///iii 333---333 VVViii 333...000 CCCooonnnsssuuummmeeerrr ppprrriiiccceee iiinnndddeeexxx222 ...... 222lll666---333VVViii 222333///444---333 222...999 year, retail energy prices have been flat on balance and retail food prices have moved up only a little, AAAvvveeerrraaagggeee llleeevvveeelll,,, fffooouuurrrttthhh qqquuuaaarrrttteeerrr restraining the rise in the total CPI. However, given UUUnnneeemmmpppllloooyyymmmeeennnttt rrraaattteee333 666---666 VVViii 666---666'''///444 666...222 the run-up in crude oil prices of late and the 1995 improbability of another large drop in the prices of fruits and vegetables, the rate of inflation projected CCChhhaaannngggeee,,, fffooouuurrrttthhh qqquuuaaarrrttteeerrr tttooo fffooouuurrrttthhh qqquuuaaarrrttteeerrr111 for the next year and one-half is slightly higher NNNooommmiiinnnaaalll GGGDDDPPP 444'''///222---666'''///444 555---555'''AAA 555...666 Real GDP 222'''///444---222333///444 222>>>AAA---222VVV444 222...777 than that posted recently. The decline in the dollar Consumer price index2 .. 222---444 VVViii 222333AAA---333 '''AAA 333...222 to date, if not reversed, also could exert some mild Average level, upward pressure on inflation. fourth quarter Unemployment rate3 555333///444---666»»»///222 666---666 VVViii 666...222 The Administration recently released its mid- 1. Change from average for fourth quarter of preceding year to average year update of economic and budgetary projecfor fourth quarter of year indicated. tions. The projections for nominal and real GDP 2. All urban consumers. 3. Civilian labor force. growth, inflation, and unemployment for 1994 and 1995 fall within the ranges anticipated by Federal Reserve officials and are essentially consistent 31/4 percent over the four quarters of this year. For with the central tendency of those ranges. Thus, it 1995, the central tendency of the forecasts is a appears that the monetary ranges set by the Federal range of 2Vi percent to 23A percent. The unemploy- Open Market Committee are compatible with the ment rate anticipated for the fourth quarter of 1994 goals of the Administration. has been revised down about Vi percentage point Both Federal Reserve policymakers and the from that projected in February.2 The forecasts of Administration anticipate further economic expanthe unemployment rate in the fourth quarter of sion accompanied by relatively low inflation. The 1994 are now bunched between 6 percent and Federal Reserve can do its part to prolong and 6V4 percent; this range is also the central tendency enhance this favorable performance of the econof the projections for the fourth quarter of 1995. omy by continuing to set monetary policy in accord These forecasts are based on the expectation that with the long-run objective of price stability. An the next several quarters will be a period of transienvironment of stable prices is a necessary condition to a more moderate expansion accompanied by tion for attaining the maximum sustainable growth reasonably full use of available resources. This of productivity and living standards. However, the transition is already evident in the housing market outcome for the economy will also depend on and, perhaps, in consumer outlays as well. The government policy in other areas. In this regard, the Congress and the Administration can help ensure that the nation's economy reaches its full 2. The unemployment forecast in February was subject to an potential by working to keep the federal budget unusual degree of uncertainty, as it was made shortly after the deficit on a downward course, by promoting an introduction of major revisions to the survey that generates the open world trading system, and by adopting regulaunemployment data. In February, the revised survey was believed to have boosted the unemployment rate from January 1994 forward tory policies that preserve the flexibility of labor, by roughly Vi percentage point. Subsequent analysis indicates that product, and financial markets and minimize the the upward shift caused by the new survey probably was smaller costs imposed on the private sector. than originally thought. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 685 THE PERFORMANCE ing through the monthly ups and downs, consumer OF THE ECONOMY IN 1994 spending appears to have posted a sizable advance over the first half of 1994, with most of the gain The economy entered 1994 with a considerable coming in the first quarter. Higher mortgage rates amount of forward momentum. Severe winter have cooled the growth of housing demand, but the weather disrupted activity, but real GDP still posted level of activity remains strong. a solid gain in the first quarter, amounting to In the first quarter of 1994, real consumer spend- 3V2 percent at an annual rate. As had been the case ing rose at an annual rate of about 5VA percent, during 1993, domestic private-sector spending was building on the large increases registered during robust in the first quarter, with consumer purchases the second half of 1993. Real outlays for motor of motor vehicles and investment in business vehicles were particularly strong in the first quarter. equipment both increasing at double-digit annual Spending on other durable goods, which had rates. At the same time, the ongoing cutbacks in advanced robustly during most of 1993, rose only defense spending depressed total purchases by the slightly in the first quarter, whereas outlays for federal government, and the sluggish economic nondurable goods and services remained on a solid performance of some major foreign industrial coun- uptrend. The severe weather that gripped much of tries held down the growth of U.S. exports. the country this winter left its mark on the monthly pattern of outlays but appears to have had little The data in hand suggest that real GDP increased effect on the level of consumer spending for the substantially further in the second quarter. In the first quarter as a whole. Outlays for furniture and labor market, gains in payroll employment and appliances, clothing, and food all tumbled in Janulonger workweeks appreciably boosted total hours ary but then rebounded smartly over the remainder worked, and the civilian unemployment rate fell of the first quarter. This pattern was reversed for further. The indicators of spending, although less energy consumption, which soared in January and robust on balance than those for the labor market, then turned down. still point to a sizable increase in economic activity. Inflation trends remained favorable over the first The growth of real consumer spending appears half of this year, with the consumer price index to have slowed in the second quarter, with much rising at an annual rate of only 2Vi percent over the of the deceleration reflecting declines in two period. Inflation has been damped by the healthy areas. First, consumer outlays for motor vehicles uptrend in productivity—which has offset much of softened in April and May, and the level of spendthe increase in compensation rates—and by the ing probably did not move up much, if at all, in minimal rise in non-oil import prices. In addition, June. However, underlying consumer demand the decline in crude oil prices through this spring has remained firmer than the recent spending held down retail energy prices. However, oil prices data would suggest, as vehicle sales in the sechave since moved up considerably, and the rise ond quarter were held down by shortages of populikely will boost retail energy prices over the sum- lar models. Second, household use of electricity mer. Prices have also risen substantially for many and gas for the second quarter as a whole likely industrial materials, but these increases have not will turn out to have been below the weatherhad a noticeable effect on the prices of finished boosted level of the first quarter. Apart from goods. these two categories, real consumer outlays evidently posted a moderate increase in the second quarter. On a pre-tax basis, real income growth has been The Household Sector brisk over the past year, buoyed by a considerable gain in wages and salaries, a sharp increase in Household balance sheets strengthened over 1992 the net income of nonfarm proprietorships, and an and 1993, and the setback in stock and bond mar- upturn in interest income. However, the higher kets this year has not made a major dent in the personal income taxes imposed on upper-bracket sector's financial position. In addition, real income taxpayers by the 1993 Budget Act have cut into the has continued to trend up at a healthy pace. Averag- growth of disposable income. All told, the average Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

686 Federal Reserve Bulletin • August 1994 level of real disposable income in April and May 1993, plummeted in January and remained low in was about 3V2 percent above the level during the February. Much of this sharp decline can be attribsame period in 1993. This rise in real income was uted to adverse weather. With the return to more slightly smaller than the advance in real consumer normal weather in the spring, starts did recover, but spending over the same time span. the rebound was relatively weak, leaving the May According to preliminary estimates (which are level below that in the fourth quarter of last year. subject to potentially large revisions), the personal Sales of both new and existing homes in May also saving rate averaged a bit less than 4 percent dur- were down from their respective fourth-quarter ing the first five months of this year—quite a low levels. In addition, consumer attitudes toward rate by historical standards. The level was so low homebuying have deteriorated somewhat since late partly because of a one-time charge against income winter. to account for the wealth lost in the Los Angeles Nonetheless, the level of sales and building earthquake. In addition, the higher taxes due on activity in the single-family market has remained returns filed this spring probably pushed down the fairly high. Even with the rise in mortgage rates, amount of personal saving. Still, a good part of the new homes continue to be quite affordable by decline in the saving rate from the 5 percent level the standards of recent decades. A simple measure prevailing two years ago reflects a burst of spend- of affordability is the monthly payment on a ing on motor vehicles and other durable goods. fixed-rate mortgage for a new home having a Such a decline in the saving rate often accompanies given set of attributes, divided by average housecyclical surges in outlays for consumer durables, hold income. By this measure, the cost burden which are counted as consumption in the national of homeownership in the second quarter of this accounts; in reality, much of the initial expenditure year was lower than at any time from mid-1973 to on durables is a form of saving, as these goods are early 1992. Moreover, in response to the rise in assets that provide a flow of services for years to long-term rates, an increasing share of households come. have financed home purchases this year with Household balance sheets have remained rela- adjustable-rate mortgages (ARMs); the lower tively strong despite the lower prices in financial initial rates on ARMs allow some households to markets this year. The total value of household obtain financing when they would be unable to assets—which includes not only financial assets, qualify for a fixed-rate mortgage. As another supbut also housing and consumer durables—rose port for housing demand, the strong labor market moderately on balance over the year ended in the in recent quarters has lessened the perceived first quarter of 1994. Moreover, survey data indi- likelihood of job loss, encouraging many housecate that households, in the aggregate, continue to holds to assume the financial commitment of view their current and expected financial positions homeownership. in a favorable light. This greater sense of financial Starts of multifamily housing units this year have security, and the attendant willingness to take on picked up from the extraordinarily low levels regisdebt, help explain the rapid growth of consumer tered from 1991 through 1993. This rise likely credit since the middle of last year. Other measures reflects an improving balance between demand and of household financial conditions also remain posi- supply in some local markets. Lenders have shown tive. Debt-service burdens, measured as a percent- a greater willingness to fund multifamily projects, age of disposable income, held about steady in the owing not only to the firming real estate market, first quarter at a level well below the peak reached but also to their own improved financial conseveral years ago. Delinquency rates for consumer ditions; equity investors—including real estate loans and home mortgages were little changed in investment trusts—also have been participating the first quarter, with most measures of delinquen- more actively in this market. However, for the cies holding near their lowest levels in a decade or nation as a whole, vacancy rates for multifamily more. rental units remain high and rent increases continue to be relatively small, suggesting that a The market for single-family housing has softmajor recovery in this sector is unlikely in the near ened in recent months. Starts of single-family term. homes, which strengthened over the course of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 687 The Business Sector margin between their cost of funds and the interest rates earned on their assets. Developments in the business sector remained Real outlays for business equipment continued to favorable during the first half of 1994. Apart from rise rapidly in the first quarter, increasing about losses from the Los Angeles earthquake, earnings 17 percent at an annual rate. This was the eighth have continued to be strong, and the repair of consecutive quarter that showed a double-digit balance sheets over the past few years has im- advance. Monthly data through May on orders and proved the access to credit for many businesses. shipments of business capital goods point to further Fixed investment has moved up further, supported sizable gains in real equipment purchases. by widespread efforts to boost productivity. The increase in equipment investment this year Business output, excluding that in the farm has been quite broad, as firms have attempted to cut sector, continued to increase at a brisk pace in the costs and improve product quality through the use first quarter. In real terms, the gross domestic of more advanced technology. Real outlays for product of this sector rose in the first quarter at computers and related devices climbed at an annual an annual rate of 4 lA percent, about the same rate rate of 20 percent in the first quarter, reaching a of advance recorded in 1993. Focusing on the level more than double that of three years earlier. industrial sector—for which output data are Businesses have invested heavily in computers to available on a more timely basis—production take advantage of the increasingly powerful equipadvanced at an annual rate of 5 percent over the ment available at ever-lower prices. Outlays for first half of 1994, with the strongest gains regis- industrial and other types of machinery, which tered early in the year. This pattern largely reflects turned up in the middle of 1992, continued to developments in the motor vehicle industry, expand at a solid pace early this year. Business where production rose sharply from last August spending for motor vehicles also rose substantially to February of this year in response to strength- in the first quarter, led by another large increase in ening demand and dwindling inventories. Since purchases of trucks; these purchases have likely February, assembly rates have moved lower on been bolstered by improvements in the safety and a seasonally adjusted basis, as capacity con- efficiency of new models and by the increased straints have hindered automakers from achiev- demand for shipping to support just-in-time invening their normal seasonal gains. Excluding tory management. In contrast to this widespread motor vehicles and parts, industrial production strength in investment, domestic purchases of comcontinued to advance strongly in the second mercial aircraft dropped in the first quarter to a quarter, j very low level, reflecting the excess capacity in the After having risen sharply over 1993, the profits airline industry. of U.S. corporations from current operations fell Business investment in nonresidential strucback in the first quarter of 1994. However, this tures fell sharply in the first quarter after having decline in economic profits appears to have been posted a moderate gain over 1993. Severe weather due entirely to the effects of the Los Angeles was responsible for the skid in activity during earthquake and the severe weather last winter; these January and February. Construction spending then events greatly increased the volume of claims recovered during the spring, leaving the level in against insurance companies and also resulted May about the same as that registered in Decemin uninsured damage to plant and equipment. ber of last year. The absence of growth, on net, Abstracting from these losses, pre-tax economic over this period might suggest that the sector profits in the first quarter rose slightly from the has lost some momentum, quite apart from the already high fourth-quarter level. Profits of non- effects of weather. However, the monthly confinancial corporations have been boosted by the struction data are prone to large revisions, which strong growth in sales and by continued tight con- limits the usefulness of the initial estimates. Two trol of costs. For financial corporations, domestic leading indicators of private nonresidential profits surged over 1993 and remained high in the construction—permit issuance and contract first quarter (after adjustment for the jump in awards—remained on a choppy uptrend through insurance payouts), buoyed by the relatively wide May. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

688 Federal Reserve Bulletin • August 1994 Looking at the major components of nonresiden- Farmers hurt by bad weather last year suffered tial construction, some progress has been made in income losses, and the financial positions of some reducing the huge stock of unoccupied office space, may have weakened. Nonetheless, the financial and the plunge in prices for office properties condition of the farm sector as a whole appears to appears to have abated. Nonetheless, the national be sound. Delinquency rates for farm loans at the vacancy rate remains high by historical standards, end of 1993 were quite low compared with the and starts of new office buildings continue to be experience of the past decade, and land values rose limited. In contrast, outlays for commercial struc- noticeably last year across most of the farm belt. tures other than offices moved up smartly last year. Reflecting these favorable conditions, investment Financing for these projects has become more in farm machinery has been relatively strong this readily available, and the proliferation of large- year. scale discount stores in suburban locations has been a major source of construction activity. In the industrial sector, utilization rates have risen The Government Sector considerably over the past year, but little sign has yet emerged of a significant rise in construc- Federal purchases of goods and services—the part tion of new plants. Public utilities, according to of federal spending included in gross domestic surveys taken this spring, anticipate only a small product—fell at an annual rate of 5 lA percent in rise in investment this year, in part because of the real terms in the first quarter. Real federal purperceived difficulty in gaining approval for rate chases have been trending down since the first half hikes and because of new rules requiring utilities of 1991, and the level of outlays in the first quarter to purchase power generated by other sources. of this year stood roughly 12 percent below the Meanwhile, real investment in petroleum drilling peak reached three years earlier. This decline has structures fell somewhat in the first quarter, to been driven by the ongoing reduction in military a level about unchanged from that of a year outlays. Real defense spending plunged at an earlier. annual rate of about 15 percent in the first quarter Nonfarm inventory investment during the first after having declined more than 9 percent over five months of 1994 picked up substantially from 1993. Real nondefense outlays jumped in the first the pace of late last year. Part of the pickup quarter, more than reversing the drop in late 1993; reflected efforts to replenish stocks at automotive however, given the appropriations for nondefense dealers, which had been depleted during the third spending in the fiscal year 1994 budget, these outquarter of 1993. In addition, the rate of inventory lays are not likely to increase much further in the accumulation increased this year for producers of near term. machinery, likely in response to the robust orders As measured in nominal terms in the unified for these goods. At the wholesale level, stocks of budget, total federal expenditures during the first machinery and other durable goods increased con- eight months of fiscal 1994—the period from Octosiderably during the spring; the pace of stockbuild- ber through May—were only 2xh percent above the ing in the retail sector spurted at about the same level during the comparable part of fiscal 1993. time. Although the drop in defense spending has figured In the farm sector, output last year was depressed importantly in the overall restraint on outlays, other by floods in the Midwest and by drought conditions factors have contributed as well. First, substantial farther east. As a result, inventories of some major gains in income and the expiration of the emerfield crops—principally corn and soybeans— gency unemployment compensation program have currently are unusually low. This year, changes in tempered the growth of income security payments. government subsidy programs encouraged farmers Second, net interest payments on the national debt to increase their planted acreage, and favorable have been about flat thus far in fiscal 1994, as a weather during the spring facilitated rapid planting. further decline in the average interest rate paid on Although the harvest is still several months away, federal debt has offset the effect of increases in the field conditions appear to be reasonably good at stock of debt. In addition, farm subsidy payments present. have fallen because of the rise in crop prices. The Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 689 main stimulus to federal outlays still comes from have remained the fastest growing component of spending on Medicare, Medicaid, and other health state and local spending, reflecting large increases programs. Health-related outlays during the first for Medicaid. Although the growth in Medicaid eight months of fiscal 1994 were up 10 percent spending has slowed markedly from the 30 percent from the same period in fiscal 1993; this increase, jump during 1991, these outlays still rose 13 peralthough about the same as that during fiscal 1993, cent over the year ended in the first quarter. In is considerably smaller than the increases regis- addition, state and local governments remain under tered during the preceding three fiscal years. pressure to fight crime, to repair aging infrastruc- The growth of federal receipts was strong during ture, and to meet the needs of a growing school-age the first eight months of fiscal year 1994, with all population. Boosted by higher spending on highmajor categories posting solid gains. The 93A per- ways and schools, outlays for construction rose cent rise in receipts over the comparable part of almost 7 percent in real terms over the year ended fiscal 1993 exceeded the increase in nominal GDP in the first quarter. This rise occurred even though by a wide margin. Receipts from corporate income adverse weather depressed construction activity taxes have been especially robust, reflecting the early this year, dragging down total state and local upswing in corporate profits and various provisions purchases in the first quarter in real terms. Apart of the 1993 Budget Act. Receipts from individual from transfer payments and construction spending, income and social insurance taxes have also been state and local outlays—mainly compensation for boosted by the tax hikes in the 1993 act. In addi- employees—have continued to grow at a relatively tion, revenues from excise taxes thus far in fiscal slow pace. 1994 are up markedly from the year-earlier level, The receipts of state and local governments in part because of the higher tax on transportation moved up about 6V2 percent in nominal terms over fuels that became effective last October. the year ended in the first quarter, also outpacing As a result of the slow growth in federal outlays the growth in nominal GDP. As noted earlier, this and the robust rise in receipts, the federal budget outcome was somewhat better than most states had deficit narrowed during the first eight months of anticipated. In response, tax cuts are now on the fiscal 1994. The deficit, as measured in the unified agenda in about one-third of the states. However, budget, totaled $165 billion during this period, most of these proposals are fairly narrow in scope down from the $212 billion deficit recorded over and, in the aggregate, would have only a small the same part of fiscal 1993. effect on expected revenues. In contrast to the improved budget picture at the federal level, the fiscal pressures facing state and local governments have not abated much. It is true The External Sector that for most states, receipts during the past year have matched or exceeded projected levels, as eco- Since December 1993, the trade-weighted foreign nomic growth turned out to be somewhat more exchange value of the dollar has declined about buoyant than anticipated. Even so, as measured in 8 percent relative to the currencies of the other the national income accounts, the deficit (net of members of the G-10. In terms of the currencies of social insurance funds) in state and local operating a wider group of major U.S. trading partners, the and capital accounts has remained large. The value of the dollar has dropped roughly 4 percent $57 billion deficit during the year ended in the first since last December, when adjusted for changes in quarter of 1994 amounted to 6*A percent of the consumer prices here and abroad. Taking a longer sector's expenditures, about the same percentage as view, the exchange value of the dollar—adjusted in the preceding three years. for these price changes—has held within a rather State and local outlays have continued to rise at a narrow range since the end of 1992 despite the fairly rapid pace despite efforts to curb spending. decline this year. (See the final section of this Over the year ended in the first quarter of 1994, report for a discussion of developments in foreign these outlays increased 63A percent in nominal exchange markets.) terms, about 1 percentage point faster than the rise Economic activity appears to be strengthening in in nominal GDP. Transfer payments to individuals the major foreign industrial countries. In Canada Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

690 Federal Reserve Bulletin • August 1994 and the United Kingdom, where recovery has uncertainty that had held down investment activity been under way for some time, real GDP continues during 1993. to expand at a fairly steady pace. Continental After having surged in the fourth quarter of last European countries, most of which were in reces- year, real U.S. exports of goods and services fell sion during 1993, are showing signs of a turn- back in the first quarter of this year; however, they around. In western Germany, real GDP rose remained about 43A percent above the year-earlier moderately in the first quarter; although indicators level. Preliminary data indicate that real exports in suggest that growth may have slowed somewhat April were somewhat above the first-quarter averin the second quarter, economic activity continues age. The uptrend largely reflects a boom in sales of to move back toward pre-recession levels. There capital goods; for other goods, and for services as is also some evidence of a turnaround in Japan: well, exports have risen only slightly over the past After no growth on net in 1993, real GDP moved year. Looking across our major trading partners, up strongly in the first quarter; data for the sec- exports to Canada and Latin America remained on ond quarter point to continued, albeit slower, an upward path through the first quarter. Although expansion. exports to Asia dropped back in the first quarter, The level of real GDP remains substantially they also remain on a strong upward trend. Exports below potential in all the major foreign industrial to continental Europe continued to expand slugcountries, and inflation generally has continued to gishly through the first quarter. slow. In western Germany, the twelve-month Real imports of goods and services posted change in the consumer price index was 3 percent another sizable increase in the first quarter, reflectin June, down from more than percent at the ing the strength in U.S. economic activity. Over the end of 1993. In Japan, consumer prices rose less year ended in the first quarter, real imports jumped than 1 percent over the twelve months ended in more than 11 percent, and the level of imports in June, an even more modest increase than that April stood somewhat above that in the first quarrecorded over the twelve months of 1993. Jobless ter. Imports of capital goods and industrial suprates remain very high in France and drifted some- plies have continued to be especially robust. Prices what higher in western Germany over the first half of non-oil imports rose relatively little over the of this year. The unemployment rate in Japan is twelve months ended in May, as inflation abroad essentially unchanged from its level at the end of generally remained subdued and the dollar's for- 1993; the number of job offers per applicant, a eign exchange value against the currencies of the more sensitive indicator of labor market conditions other G-10 countries was little changed on net over in Japan, also has shown no improvement since the this twelve-month period. end of last year. In contrast, in both the United The nominal trade deficit on goods and services Kingdom and Canada, the unemployment rate has widened to $97 billion (at an annual rate) in the continued to edge down from the peaks reached in first quarter, significantly larger than in any recent mid-1993. quarter, and remained at about that level in April. So far this year, growth in the major developing Net investment income showed a small deficit in countries appears to have slowed slightly, on bal- the first quarter, somewhat weaker than the average ance, from its rapid pace in 1993. The growth of performance in 1993. The current account deficit real output in China has moderated from its pre- widened to $128 billion (at an annual rate) in the viously very strong—and unsustainable—pace in first quarter, compared with $104 billion for all of response to tighter macroeconomic policy, while 1993. real growth in the other Asian developing countries Recorded net capital inflows for the first quarter has remained robust on average. Real output in about balanced the current account deficit. Foreign Mexico has rebounded somewhat this year after official inflows slowed, particularly on the part of having declined during the second half of 1993. some developing countries that had substantial The rebound appears to have been due in part to accumulations of reserves in 1993. the somewhat more expansionary fiscal policy Net inflows of private capital into the United in Mexico and to the ratification of the North States picked up in the first quarter of 1994. Private American Free Trade Agreement, which resolved foreign net purchases of U.S. securities were strong, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 691 as foreign investors added to their holdings of U.S. recorded during 1993 and again this year contrast government securities, corporate bonds, and stocks. with the lack of job growth on net over the preced- U.S. net purchases of foreign securities also ing four years. remained very high in the first quarter. Banking In addition to boosting the pace of hiring, offices in the United States reported substantial employers have continued to rely on a longer workinflows, as foreign-chartered banks in particular week to increase aggregate labor input. Indeed, in continued to substitute borrowing abroad for fund- April, the workweek of production or nonsupering in the United States. Foreign branches of U.S. visory workers in manufacturing reached a record banks also became net providers of funds to then- high for the post-World War II period; it has since US. offices. Direct investment inflows and out- edged off only slightly. Before this expansion, the flows were spurred by a revival of mergers and typical pattern had been for the workweek to rise as acquisitions. U.S. direct investment abroad contin- the recovery got under way but to drift back down ued at near-record levels; foreign direct investment with the eventual pickup in hiring. in the United States was also significant, although Firms have also shown an increased preference far below the peaks reached in the late 1980s. for using temporary workers. In the employment data, these workers appear on the payrolls of personnel supply agencies (a component of business Labor Market Developments services), where employment growth continued to be extremely fast in the first half of 1994. Although The labor market continued to strengthen in the these agencies represent only about 2 percent of first half of 1994. Nonfarm payroll employment total payroll employment, they accounted for more increased at an average rate of about 285,000 per than 15 percent of the total rise in employment in month during the period, up from the average 1993 and for nearly that share so far this year. monthly gain of roughly 200,000 during 1993. Manufacturing firms in particular have increased These increases brought the total rise in payrolls to their use of temporary workers. Both the growing about 5 million since the beginning of the current employment of temporary workers and the lengthexpansion in early 1991. ening of the workweek may be motivated, in part, The job gains this year have been spread across by the desire to avoid the rising costs of health most major sectors of the economy. In manufactur- insurance and other fringe benefits, which typically ing, employment turned up last October, and a are granted to new permanent workers. Morechoppy advance continued during the first half of over, given the greater costs now associated with 1994. Hiring has been concentrated in two indus- hiring and firing employees, such behavior may be tries that have experienced robust sales growth, a response to uncertainty about future staffing machinery and motor vehicles; payrolls also have needs. expanded in industries that supply materials and In January, the introduction of the redesigned parts to these producers. In contrast, employment household survey, along with the incorporation of in defense-related industries has continued to drop population estimates from the 1990 census, created this year. Meanwhile, construction employment, a break in the household measure of employment, held down early in the year by the severe weather, the civilian unemployment rate, and numerous moved up sharply in March and April and rose other series. The decline in the unemployment somewhat further in May and June. rate from January to June of 6.7 percent to 6 per- Considerable employment growth has also taken cent provides additional evidence of strong labor place this year in the service-producing sector. demand this year. Unemployment rates by region Continuing the pattern of recent years, employment have generally moved lower since January, and the in business services rose at a rapid clip in the first dispersion across regions also has narrowed; the half of 1994. Employment in health services has declines since January have been largest in Caliremained on a fairly brisk uptrend, and job gains fornia and other states in the Pacific region and in have been widespread in other service industries. New England. Another area of strength has been wholesale and The strength in hiring has not drawn many workretail trade, where the sizable employment gains ers into the civilian labor force. In fact, between Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

692 Federal Reserve Bulletin • August 1994 January and June the labor force contracted a bit, Vi percent over the year ended in the first quarter of pushing down the labor force participation rate— 1994. which measures the percentage of the working age population that is either employed or looking for work. The participation rate has changed little on Price Developments net during the current expansion, in contrast to the upswing that typically occurs with a strengthening Inflation slowed slightly further during the first half of labor demand. The reasons for this departure of 1994. The CPI excluding food and energy—a from the usual pattern are not entirely clear. It measure of the underlying trend of inflation—rose appears that more young women are opting for 3 percent during the period, down a bit from the activities outside the labor market. Also, according 3V* percent increases recorded in 1992 and 1993. to survey data, many individuals still perceive jobs "Core" inflation has not been this low for an as hard to find, which may be limiting their desire extended period since the early 1970s, when wage to search for employment. and price controls were in place; apart from that Output per hour in the nonfarm business sector episode, the core inflation rate over a twelve-month rose at an annual rate of PA percent in the first span was last below 3 percent in 1966. Food prices quarter after having advanced at a far more rapid have risen only slightly this year, and energy prices pace over the second half of 1993. Averaging have been flat on net, holding the increase in the through these movements, labor productivity rose total CPI over the first half of the year to 2Vi perabout 2Vi percent over the year ended in the first cent at an annual rate. Price pressures have been quarter of 1994, roughly in line with the increases evident in the markets for raw materials, but these during the first two years of the current expansion. increases have not had an obvious effect on infla- Most of the productivity gain over this three-year tion at the retail level. period likely reflects the normal cyclical upswing The news on food prices so far this year has been that accompanies the strengthening of output after quite favorable. After having risen at close to a a recession. Nonetheless, there does appear to have 4 percent annual rate during the second half of last been some speedup in the trend rate of productivity year, the CPI for food edged up at an annual rate of growth from the relatively slow pace in the 1970s less than 1 percent over the first half of 1994. This and 1980s. moderation largely reflects a decline in the prices The growth in labor compensation remained sub- of fruits and vegetables over the first few months of dued early this year. The employment cost index the year, which retraced much of the run-up that (ECI) for private industry—a measure that includes occurred over the second half of 1993. In addition, both wages and benefits—rose 3Vx percent over the plentiful supplies of beef and pork pushed down twelve months ended in March 1994, a shade retail meat prices a bit on balance over the first half below the increase registered over the preceding of 1994. Prices of other foods—which represent twelve months. The cost of employee benefits de- about two-thirds of total food in the CPI— i celerated quite a bit over the past year, largely increased at an annual rate of 2 lA percent during because of more moderate increases in employer the first half of the year. Looking ahead, the path costs for health insurance and workers' compensa- for retail food prices will depend heavily on the tion. In contrast, wage increases have held fairly outcome of this year's harvest. As discussed stable. The ECI for wages and salaries rose almost earlier, planting proceeded fairly smoothly this 3 percent over the twelve months ended in March, spring, and crops generally were in good condition a figure at about the midpoint of the twelve-month as of mid-July. changes recorded over the past two years. Separate The CPI for energy was about unchanged on data through June on average hourly earnings of balance over the first half of 1994, but this measure production or nonsupervisory workers also show has yet to reflect the rise in crude oil prices since no significant change in the rate of wage inflation. March. As the year began, consumer energy prices With the rise in labor compensation largely offset were still on a downward path, owing to the persisby improvements in productivity, unit labor costs tent oversupply of crude oil in world markets. in nonfarm business rose only a little more than Energy demand then soared when the frigid Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 693 weather hit in January and February, depleting rising 63A percent over the twelve months ended in inventories of fuel oil, gasoline, and natural gas. In June. response, the CPI for energy jumped in February The producer price index (PPI) for finished and rose slightly further in March, but most of this goods excluding food and energy, which covers increase was reversed in April and May. Quite domestically produced consumer goods and capital apart from any effects of abnormal weather, world equipment, rose only V2 percent over the twelve oil markets have tightened since March, boosting months ended in June 1994. As with the CPI, this the price of crude oil by as much as $6 per barrel. measure of inflation has been held down by the This increase appears to have resulted from the plunge in tobacco prices; excluding tobacco, the expectation of improved economic conditions— 13A percent rise over the twelve-month period was and hence stronger demand—in Western Europe about the same as that over the preceding twelve and Japan, combined with flat OPEC production months. At earlier stages of processing, price and supply disruptions in the North Sea and other increases have remained fairly small on balance. areas. Retail energy prices were little changed in The PPI for intermediate materials excluding food June, but the higher costs of crude oil are likely and energy rose 2 percent over the twelve months to be passed through to the retail level over the ended in June, after an increase of 1V2 percent over summer. the preceding twelve months. The CPI for commodities excluding food and In contrast, inflation pressures continue to be energy increased at an annual rate of 2Vi percent evident in the markets for raw commodities. With over the first half of 1994, a somewhat faster rise the exception of steel scrap, prices of industrial than during 1993. However, the increase last year metals have moved up from their lows last fall, in was held down by a huge drop in the price of some cases quite substantially. Lumber prices, tobacco products. Excluding tobacco as well as which have swung widely over the past few years, food and energy, goods prices rose at an annual have been at relatively high levels for most of this rate of 2l A percent during the first half of this year. Prices of other raw materials have been firm year, about the same rate of advance as in 1993. as well. As a summary measure of these move- Price increases for most consumer commodi- ments, the PPI for crude materials excluding food ties have been modest this year, owing in part and energy rose about 7 percent over the twelve to the very limited increases in the prices of months ended in June. However, crude materials imported goods. The only major area in which constitute a relatively small part of the value of prices have clearly accelerated is motor vehicles. finished goods, and price increases for these inputs Reflecting strong demand and the weakness of usually have a limited effect on the prices of finthe dollar vis a vis the yen, the CPI for new ished goods in the absence of more general cost motor vehicles rose 43A percent over the first half pressures. of 1994, up from the 3lA percent increase during Expectations of inflation appear to have changed 1993. little on net since the end of 1993. According to Inflation for consumer services other than energy the survey of households conducted by the Survey has continued to trend lower. During the first half Research Center of the University of Michigan, the of the year, the CPI for this aggregate rose at an mean expected increase in the CPI over the coming annual rate of 3lA percent, after increases of nearly year rose from 33 A percent in the fourth quarter of 4 percent in 1992 and 1993 and AVi percent in 1993 to 4V2 percent in March and April; however, 1991. Shelter costs—which represent about half of the readings for May through early July dropped non-energy services—have continued to rise at a back to an average of about 4 percent. In the relatively subdued rate, while price increases in a Conference Board survey of households, the variety of other areas have slowed. Indeed, the CPI expected rate of inflation over the coming year has for medical care services rose only 5 percent over held fairly steady at AXA percent since last Novemthe year ended in June, the smallest twelve-month ber. Expectations of inflation over longer periods change in this series in twenty years. Tuition costs, also have not changed much on balance this year. which posted increases of 8 percent to 9 percent In the University of Michigan survey, the expected annually for several years, have decelerated as well, rate of CPI inflation over the next five to ten years Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

694 Federal Reserve Bulletin • August 1994 jumped in March but has since retraced the Higher short-term market interest rates have also increase. Finally, the June 1994 survey of pro- restrained the monetary aggregates. Growth of the fessional forecasters conducted by the Federal broader aggregates has slowed somewhat from Reserve Bank of Philadelphia produced the same last year, and growth of Ml has decelerated expectation of inflation over the coming ten substantially. years—3.5 percent—as did the survey taken last Since December 1993, the dollar has declined December. about 10 percent against the German mark and about 11 percent against the Japanese yen, although it has appreciated against the Canadian MONETARY AND FINANCIAL DEVELOPMENTS dollar. Over the same period, stronger growth pros- IN 1994 pects abroad as well as portfolio adjustments by globally diversified investors have lifted long-term Interest rates have increased substantially in 1994. interest rates in the G-10 countries about IV2 per- Short-term rates started the year at the unusually centage points, similar to the rise in U.S. longerlow levels that prevailed throughout 1993, but they term yields. By contrast, foreign short-term rates, have subsequently risen in response to the Federal which largely reflect the thrust of monetary policy Reserve's monetary policy actions and market in individual countries, are about unchanged on a expectations about future actions. The Federal trade-weighted basis; rates have declined substan- Reserve has moved away from its previously very tially in Germany and a number of continental accommodative policy posture in four steps, which European countries, have changed little in Japan, lifted the federal funds rate a total of 1 lA percent- and have risen more in Canada than in the United age points. Other short-term rates increased com- States. Dollar weakness against the yen and mark mensurately, and banks raised their prime lending was intense from time to time and seemed to rate, also by 1 lA percentage points. reflect, in part, difficulty in resolving trade ten- Longer-term interest rates have risen about 1 lA sions, changing expectations about macroeconomic to 13A percentage points. These rates have been developments in Japan and Germany, and investor boosted by stronger-than-expected economic concerns that U.S. inflation prospects were no growth, market concerns about higher inflation, longer improving while inflation abroad seemed and actual and anticipated tightening moves. In likely to continue to move lower. On three occaaddition, a shift in the financial setting, from one sions when conditions warranted, the U.S. Treasury marked by yields that were stable or declining to and the Federal Reserve intervened to buy dollars. one characterized by rising rates, was accompanied by greater market volatility and a reevaluation of the risks of and returns on long-term securities. The Course of Policy and Interest Rates Investors seemed to become more uncertain about the future path of interest rates, and the resulting At the beginning of 1994, financial markets had portfolio shifts and volatility have contributed to been characterized for several years by falling and the upward pressure on long-term yields at times. then persistently low short-term interest rates, Despite the rise in interest rates, overall borrow- declining long-term rates, and unusually wide ing has remained fairly strong. The composition of spreads between long- and short-term yields. Moreprivate borrowing, however, has been affected by over, the volatility of bond prices had been quite financial market conditions. Businesses, in particu- low by recent historical standards. In this environlar, have reduced their issuance of long-term debt ment, investors had taken on riskier assets in purand stepped up their use of bank loans. Nonethe- suit of higher returns. For example, small investors less, overall bank lending has increased only had switched out of low-yielding, but low-risk, slightly, as growth in real estate loans has slowed. assets such as deposits and money market mutual The expansion of bank securities holdings, after funds and into such investments as bond and equity adjustment for certain accounting rule changes, mutual fund shares. has eased slightly, and bank credit growth has In February, when the Federal Open Market remained close to the pace recorded last year. Committee gathered for its first meeting of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 695 year, the available data suggested that the eco- Although a policy firming in the months ahead nomic expansion was solid and self-sustaining. was built into the structure of market interest rates, Spending had picked up considerably, partly the timing of the move caught many market particreflecting declines in long-term interest rates and ipants by surprise and, by itself, seemed to precipithe improved financial condition of businesses and tate a substantial shift in expectations. When the households. Short-term interest rates had been at move was followed by information indicating a historically low levels for some time, measured much stronger path for U.S. economic activity both absolutely and relative to inflation, and banks than had been anticipated and by an associated and other lenders had been loosening their terms heightening of concerns about inflationary presand standards for extending credit. In this environ- sures, short- and long-term interest rates moved ment, the Committee was concerned that keeping sharply higher throughout the remainder of the policy so accommodative risked elevating demands winter. International developments—such as trade on productive capacity to the point where inflation tensions, improving economic prospects, rising pressures might emerge. Even though current infla- long-term interest rates, and a declining value of tion readings were favorable, delaying a policy the dollar—also may have played a role in elevatmove until these indicators signaled an actual ing yields by raising investor concerns about price acceleration of prices would permit an inflationary pressures in the United States and about foreign process to become embedded in the economy. In investor appetite for dollar-denominated assets. that event, larger and possibly disruptive actions Rates were volatile on occasion, owing to shifting eventually would be needed to bring inflation back perceptions about the future course of economic under control. Against this backdrop, the Commit- and financial developments. Market participants tee decided to take steps toward eliminating the generally believed that the System's firming action considerable degree of monetary accommodation was the first of a series, but they were unsure of the that had prevailed for some time. timing and cumulative magnitude of future policy When discussing how to implement this deci- steps. This heightened uncertainty, as well as the sion, the Committee considered the possible reac- capital losses in the wake of the firming action, tion of financial markets. Market participants, while prompted market participants to reduce their risk anticipating that interest rates would rise at some exposure by attempting to shorten the maturities of point, generally did not expect a tightening of their investments and by trimming the degree to policy at this meeting. The Committee was con- which positions were leveraged. They sold longcerned that the capital losses engendered by the term assets denominated not only in dollars but in firming action might unsettle many investors, who other currencies as well. This rebalancing of porthad not faced a policy firming in nearly five years folios contributed to sharp rate swings and may and whose portfolio choices in some cases seemed have exacerbated the upward pressure on longnot to anticipate the consequences of rising rates. term interest rates, both in the United States and In these circumstances, the response to the policy abroad. action might be outsized, especially if a large When the Federal Open Market Committee conadjustment were made. Consequently, the Com- vened in mid-March, the evidence suggested that mittee decided to initiate its move toward a less the expansion of economic activity remained accommodative stance with a small step, although robust. There was a small risk that the weakness it thought that additional firming steps likely and volatility in financial markets might have sigwould be necessary in the months ahead. The nificantly affected household and business confi- Committee instructed the Domestic Trading Desk dence and spending. However, the Committee to increase slightly the degree of pressure on believed that, on balance, its policy stance still was reserve positions and authorized the Chairman to overly accommodative and likely to promote inflaannounce the action so as to avoid any misinter- tionary pressures. It therefore decided to continue pretation of its action or purpose. The tightening the process begun in February to remove the excess of reserve conditions pushed up the federal funds degree of monetary accommodation and, in light rate about lA percentage point, to a range around of recent financial market conditions, chose to 3lA percent. take another small step. The resultant increase in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

696 Federal Reserve Bulletin • August 1994 reserve pressures lifted the federal funds rate have to monitor incoming financial and economic lA percentage point, to about 3V2 percent. data carefully to determine whether additional Data released over the next several weeks indi- policy adjustments were needed to accomplish cated considerable strength in economic activity. its objective of maintaining favorable trends in Yields increased across the maturity spectrum, with inflation and thereby sustaining the economic long-term rates rising especially sharply into early expansion. April before settling back somewhat. On April 18, Long-term interest rates dropped immediately the Committee reviewed the incoming data, as well following the May 17 policy moves, but since that as the apparently more stable conditions in finan- time they have retraced the decline. Market particicial markets, during a telephone consultation. Fol- pants initially interpreted the Federal Reserve's lowing that review, Committee members supported policy announcement as signaling that it had comthe Chairman's decision to continue the process of pleted its firming actions, at least for a while. In reducing the degree of monetary accommodation. addition, investors apparently viewed the actions as Reserve pressures were tightened slightly further, reducing the degree and frequency of tightening and the federal funds rate again rose lA percentage that might be needed in the future. Long-term point. yields began to move up in June, however, reflect- Yields continued to increase, on balance, through ing the further depreciation of the dollar, intermitmid-May. Short-term rates were affected by expec- tent jumps in commodities prices, less sanguine tations of additional firming actions, while long- inflation reports, and rising foreign long-term interterm rates were subject to countervailing forces. est rates. Incoming data that showed signs of a possible At the time of the July Committee meeting, data cooling in the pace of the economic expansion, on employment and hours worked suggested that favorable price reports, and more stable trading the economy was still growing at a brisk rate, and conditions helped push bond yields down for a there remained a risk that an inflationary process time. Later, however, a falling dollar, especially in could begin to build. However, data on spending late April and early May, and the release of a showed some signs of moderation, and growth of stronger-than-expected employment report caused money and credit had not picked up. In these long-term yields to retrace some of the earlier circumstances, the Committee decided to maintain decline. the existing degree of reserve pressure and await Despite the earlier firming actions, real short- additional information to judge the trajectory of the term rates were still fairly low at the time of the economy and prices and the appropriateness of its May Committee meeting. The economy continued policy stance. to exhibit forward momentum, and a considerable portion of the remaining margin of slack in resource utilization had eroded. In financial mar- Credit and Money Flows kets, many of the more risk averse investors had made the initial portfolio adjustments to a rising Since mid-1993, credit expansion has picked up as rate environment. Under these circumstances, the the economy has strengthened and the restraint Federal Reserve thought that conditions warranted exerted by financial restructuring has ebbed. Lower eliminating much of the remaining degree of mon- debt-service burdens and improved balance sheets etary stimulus. The Board of Governors, therefore, have encouraged businesses and households to take approved an increase in the discount rate to 3V6 per- on new debt, while stronger capital positions and cent, from 3 percent, and the Committee directed more robust economic conditions apparently have the Domestic Trading Desk to permit the entire made banks and other lenders more willing to Vi percentage point rise to show through to the extend credit. Growth of the debt of nonfederal federal funds rate, which moved up to A1 A percent. nonfinancial sectors (nonfinancial businesses, These moves, along with the three earlier steps, households, and state and local governments) were judged to have substantially removed the picked up in the second half of 1993 and has degree of monetary accommodation that had pre- increased a bit more this year—to a 5 percent vailed throughout 1993. Still, the Committee would annual rate. Total domestic nonfinancial sector Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 697 3. Growth of money and debt Percent Domestic Measurement period Ml M2 M3 nonfinancial debt Year1 1980 7.4 8.9 9.6 9.1 1981 55..44 ((22..55 22)) 9.3 12.4 9.9 1982 88..88 9.2 9.9 9.6 1983 10.4 12.2 9.9 12.0 1984 5.5 8.1 10.9 14.0 1985 12.0 8.7 7.6 14.2 1986 15.5 9.3 8.9 13.4 1987 6.3 4.3 5.7 10.3 1988 4.3 5.3 6.3 9.0 1989 .6 4.8 3.8 7.8 1990 4.2 4.0 1.7 6.6 1991 7.9 2.9 1.2 4.6 1992 14.3 1.9 .5 5.0 1993 10.5 1.4 .6 5.0 Semiannual (annual rate)3 1994:H1 4.0 1.6 -.1 5.4 Quarter (annual rate)* 1994:Q1 6.0 1.8 .2 5.9 Q2 2.0 1.5 -.3 4.75 1. From average for fourth quarter of preceding year to average for fourth 4. From average for preceding quarter to average for quarter indicated. quarter of year indicated. 5. Based on data through May. 2. Adjusted for shifts to NOW accounts in 1981. 3. From average for fourth quarter of 1993 to average for second quarter of 1994. For debt aggregate, data for second quarter are through May. debt, which includes the debt of the federal govern- recorded in the second half of 1993, reflecting the ment, rose at a 5VA percent annual rate between the rise in mortgage rates that began late in that year. fourth quarter of last year and May, close to its Higher rates have curbed refinancing, a practice pace over the second half of 1993 and a little below that tended to boost mortgage debt growth as some the midpoint of its monitoring range of 4 percent to borrowers took the opportunity to liquefy some of 8 percent. (Historical data on the growth of the the capital in their homes. In contrast to the behavmoney and debt aggregates appear in table 3.) ior of mortgage debt, consumer credit growth has Rising market interest rates and less-hospitable remained brisk, reflecting strong demand for concapital market conditions have affected the growth sumer durable goods and relatively attractive rates and composition of borrowing by nonfinancial on many consumer loans. Generally, rates on such businesses. The debt of such firms has expanded at loans have risen much less than market rates. Cona somewhat faster pace in 1994 after three years of sumer credit at both finance companies and banks very little growth, in part reflecting a shift away has picked up in 1994. from equity issuance as stock prices fell. Moreover, Total loans at commercial banks have risen at rising and more-volatile interest rates have played a about a AlA percent annual rate, a bit above last role in discouraging businesses from issuing long- year's pace. The faster growth of business and term debt securities. Such issuance had been strong consumer loans has been offset by slower expanin 1993 as businesses took advantage of relatively sion of other types of loans, such as those for real low interest rates to refinance high-rate longer-term estate. In addition, security loans have dropped off debt and replace shorter-term debt, such as bank as the more subdued pace of debt issuance and the loans. In 1994, however, businesses have turned paring of dealer long positions in a rising rate more to banks and finance companies to meet their environment have reduced dealer financing needs. financing needs. The expansion of bank lending in 1993 and Interest rate developments have also affected 1994, following two years of virtually no growth, borrowing by households. The growth of house- has reflected not only stronger loan demand but hold mortgage debt has slowed a bit from the pace also an increased willingness on the part of banks Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

698 Federal Reserve Bulletin • August 1994 to make loans. This heightened desire to extend from institution-only money market mutual funds, credit stems from the improved financial condition whose returns have lagged the rise in market rates. of banks as well as their borrowers. In the early M3 has also been held back by declines in large 1990s, banks had been pressed by balance sheet time deposits. The run-off in this component has problems and the need to meet more stringent been concentrated at U.S. branches and agencies of requirements for capital-asset ratios. By early foreign banks, which have stepped up their borrow- 1993, however, the capitalization ratios of many ings from affiliated foreign offices. Domestic banks banks were considerably stronger, and they have have also boosted such borrowings. In December continued to improve since then as banks issued 1993, domestic banks for the first time borrowed sizable volumes of equity and retained a high pro- more from their foreign affiliates than they lent to portion of their record earnings. In mid-1993, some them. This net borrowed position has expanded banks began to report an easing of their standards considerably since that time. Apparently, weaker and terms for business loans and residential mort- credit demands abroad have held down the costs of gages, and this easing has continued, albeit at a borrowing overseas relative to the costs of obtainreduced rate, into the first two quarters of 1994. ing funds in the United States. Measured growth of holdings of bank securities M2 growth has slowed a bit in 1994, and its this year has been affected by two accounting velocity appears to have registered another sizable changes. One change affects how banks report, on increase. The major factor behind the rise in veloctheir balance sheets, the fair market value of off- ity this year has been higher short-term market balance-sheet items. Banks are no longer permitted interest rates. In the usual pattern, the increases in to net positions in these items across customers; rates paid on M2 deposits and money market this change has appreciably boosted the "other mutual funds have lagged behind the rise in market securities" component, where these positions are rates, boosting the earnings forgone (opportunity booked. The other change in accounting rules costs) by holding the components of M2 and thus requires banks to value at market prices those secu- inducing shifts out of the aggregate. For example, rities that they do not plan to hold to maturity. With noncompetitive bids at Treasury auctions have the decline in securities prices this year, the require- increased sharply this year, and some of the funds ment of "marking to market" likely has restrained likely were drawn from the instruments included in the measured growth of bank securities portfolios, M2. Moreover, the composition of M2 has been although to an uncertain extent. Abstracting from affected by the varying speed with which rates on these special factors, growth of bank securities different components have adjusted to higher marholdings likely has slowed slightly further in 1994. ket yields. Rates on money market mutual funds This slowing has been about offset by the pickup in and retail certificates of deposit (CDs) have moved loan growth, leaving underlying bank credit growth up considerably since February, while rates on close to the pace recorded last year. Meanwhile, liquid deposits, such as savings and NOW thrift institution credit has resumed expanding this accounts, have been virtually unchanged. Partly as year, albeit modestly, after declining over the past a consequence, holdings of money market mutual five years. Expansion at credit unions has been funds have increased, small CDs have turned robust, while the contraction of the remainder of around, and liquid deposit growth has languished. the thrift sector has slowed somewhat further. From the fourth quarter of 1993 through June, M2 Despite the expansion of depository credit, the expanded at a VA percent annual rate, placing broadest monetary aggregate, M3, has edged a bit this aggregate around the lower bound of the lower since the fourth quarter of last year, as depos- 1 percent to 5 percent growth range set by the itory institutions have chosen to fund growth in Committee. assets with nondeposit sources. In June, M3 was The depressing effect of higher interest rates on around the bottom of the 0 percent to 4 percent M2 was offset for a time by flows from bond and growth range established by the Federal Open equity (or long-term) mutual funds into money Market Committee, and its velocity seems to be market mutual funds. Declining securities prices increasing faster this year than in 1993. The weak- and higher volatility prompted households to reconness in M3 partly reflects an exodus of investors sider their investments in long-term mutual funds Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 699 and encouraged many to liquidate some of their has contracted at a VA percent annual rate so far bond and equity mutual fund holdings. Over the this year, a stark contrast with its 12 percent expan- March-to-May period, households pulled more sion in 1993. The continued strong demand for money out of bond funds than they invested. A currency has propped up growth of the monetary portion of the proceeds from the redemptions likely base, whose growth has slowed only slightly this was placed in money market mutual funds, which year, to a 9lA percent annual rate. grew quite rapidly. As changes in securities prices became more subdued in late May, flows into longterm mutual funds began to pick up, but they have Foreign Exchange Developments remained weak by the standards of recent years. Shifts from M2 into direct holdings of securities, After starting the year with a firm tone, the dollar such as Treasury bills, as well as the capital losses declined on balance from February through late on long-term mutual funds, have damped the April. The dollar was supported initially by market growth of a measure that adds to M2 the net assets expectations that it would rise over the near term as of mutual funds not held by institutional investors the U.S. economy strengthened and U.S. interest or in retirement accounts. This series has grown at rates rose, in contrast to expected developments an estimated 1 percent annual rate this year, well abroad. Following the Committee's firming action below its 5V2 percent advance in 1993. Its velocity on February 4, the dollar rose only modestly and therefore also has increased, after several years of briefly, in part because foreign long-term rates rough stability. increased with U.S. rates. In the weeks that fol- Ml growth has been restrained by wider oppor- lowed, the dollar weakened with respect to the yen, tunity costs as well as some special factors. From especially in mid-February, when market particithe fourth quarter of last year through June, Ml pants became more concerned about the sizable expanded at about a 4 percent annual rate, less than external surpluses in Japan in the wake of the lack half of its IOV2 percent rise in 1993. Ml velocity, of progress in the framework talks between the which fell at a 5 percent rate last year, appears to United States and Japan. The dollar also came have increased this year. The growth of Ml has under downward pressure against the German stemmed primarily from the continued rapid rise in mark, particularly in February and March. Contincurrency, as overseas demand has remained robust ued strong growth in German M3, amid signs of and domestic demand has expanded with sales. In economic revival, suggested that further sizable contrast, increases in transactions deposits have cuts in German and other European rates were not been quite weak. Growth of demand deposits, as likely as had been previously thought, and longwhich pay no interest, has been reined in by higher term rates in these countries increased further. In market rates, the associated rise in earnings credits early April, the dollar came under renewed downon compensating balances, and a drop-off in ward pressure in terms of the yen. The resignation mortgage refinancings. Refinancings boost liquid of Prime Minister Hosokawa rejuvenated concerns deposits—especially demand deposits—because that progress on negotiations to open Japanese marthey are accompanied by a temporary parking of kets would stall and that plans to stimulate the funds in such accounts; however, as the volume Japanese economy would not be implemented. of refinancings declines, deposits return to more Market sentiment against the dollar became parnormal levels. Rate spreads have also depressed the ticularly strong in late April and early May, in growth of other checkable deposits, whose offering sometimes disorderly markets. On April 28, with rates have changed little since the beginning of the U.S. bond prices falling, the dollar approached its year. In addition, growth has been restrained by a postwar low against the yen in thin trading, and on large bank's introduction of a program that sweeps the following day it started to drop sharply against excess balances out of NOW accounts and into the mark as trading became more volatile. In money market deposit accounts. (The program, response, the Foreign Trading Desk at the Federal therefore, has no impact on M2.) The anemic Reserve Bank of New York entered the market and expansion of transactions deposits has contributed purchased dollars against both marks ($500 milto a decline in total reserves. This reserve measure lion) and yen ($200 million). Treasury Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

700 Federal Reserve Bulletin • August 1994 Bentsen confirmed the intervention and explained Federal Reserve Foreign Currency that it was prompted by disorderly market condi- Transactions tions. The dollar recovered briefly but resumed falling over the next several days. On May 4, the The Federal Reserve has undertaken other foreign U.S. Treasury and the Federal Reserve joined other currency transactions in 1994 in addition to the monetary authorities in substantial, coordinated intervention actions of April 29, May 4, and intervention in support of the dollar. Secretary June 24. The Federal Open Market Committee has Bentsen again confirmed the intervention and said authorized a restructuring of the System's portfolio it was in response to exchange market develop- of foreign currencies and has approved three recipments that were inconsistent with economic funda- rocal currency arrangements, also known as swap mentals. These actions stemmed the slide of the arrangements. dollar and contributed to a partial recovery over the At its December 1993 meeting, the Committee subsequent two weeks. authorized the Manager for Foreign Operations to The dollar fluctuated in a narrow range follow- sell all non-mark and non-yen foreign exchange ing the May 17 policy actions by the Federal reserves held by the Federal Reserve. The Manager Reserve, but it later lost ground. These policy sold these reserves, which were equivalent to actions were consistent with the view expressed $750 million, during the first few months of 1994. in the statement accompanying the May 4 inter- These holdings along with those of the Exchange vention that the U.S. Administration did not Stabilization Fund of the U.S. Treasury were elimibelieve that the prospects for the U.S. economy nated in light of the practice of U.S. monetary warranted a weak dollar. However, in mid-June, authorities in recent years to conduct intervention the dollar declined against the yen as market operations exclusively in marks and yen. perceptions resurfaced that the United States On March 24, the Committee approved a tempowas not concerned about a weak dollar, despite rary increase to $3 billion, from $700 million, in official statements to the contrary, and as an easing the System's swap arrangement with the Bank of of trade frictions with Japan appeared less likely Mexico. The value of the Mexican peso against the following the resignation of Prime Minister Hata dollar had been nearly stable during the initial on June 24. Downward pressure on the dollar in weeks of the year, following ratification of the terms of the German mark intensified at this time North American Free Trade Agreement by the as additional data confirmed that an economic United States in November. The peso began to recovery was under way in Germany. These data weaken in late February, however, in response to contributed to higher long-term rates and rein- disappointing economic news and political unrest forced views that Bundesbank official rates were in Mexico. The assassination of presidential candinot likely to be reduced further following the sub- date Luis Donaldo Colosio on March 23 further stantial adjustment on May 11. The selling pressure undermined the peso, which fell to the lower interon the dollar may also have been exacerbated by a vention limit against the dollar set by the Bank of rise in dollar-denominated commodity prices, Mexico. Mexican authorities then intervened which market participants viewed as indicative of a heavily to support the peso. At the request of the risk of higher U.S. inflation. With the dollar hover- Mexican government and the Bank of Mexico, ing around a postwar low against the yen on U.S. monetary authorities established a $6 billion June 24, the United States led substantial coordi- temporary bilateral swap facility for the Bank of nated intervention with the monetary authorities of Mexico, which was split between the U.S. Treasury the G-7 countries and a number of other countries. and the Federal Reserve. The swap was intended Secretary Bentsen confirmed the intervention, to help prevent any turmoil in Mexican markets, citing shared concerns over recent developments in which could have spilled into U.S. financial marforeign exchange markets. Since that time, senti- kets. In the event, no drawings were made on ment against the dollar has continued, with the this facility. In late April, the peso moved away dollar recording a new postwar low against the yen from its lower intervention limit as the substanon July 12 before rebounding moderately in sub- tial increase in Mexican interest rates persuaded sequent days. market participants of the commitment of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 701 Mexican government to maintain the value of the to $6 billion, with the Treasury and the Fedpeso. eral Reserve each participating up to $3 billion. On April 26, the monetary authorities of the The Federal Reserve and the Bank of Canada United States, Canada, and Mexico announced the reaffirmed their existing swap agreement of $2 bilcreation of the North American Financial Group to lion and extended its maturity to December 1995. provide an opportunity for more regular consulta- The Bank of Canada increased its swap line tion on economic and financial developments. with the Bank of Mexico to 1 billion Canadian Plans for this group had been under way for several dollars. These arrangements expand the pool of months in recognition of the increasing interdepen- potential resources available to the monetary dence of the three economies. In connection with authorities of each country to maintain orderly the formation of the group, the authorities of the exchange markets. The Federal Open Market Comthree countries established a trilateral foreign mittee approved the Federal Reserve's participaexchange swap facility. The United States and tion in these arrangements effective April 26. • Mexico put in place swap arrangements for up Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

702 Industrial Production and Capacity Utilization for June 1994 Released for publication July 15 sharp increase in the output of electric utilities. Apart from this rise, total industrial production for Industrial production rose 0.5 percent in June; revi- the month increased only 0.1 percent. sions for the preceding three months were, on net, The utilization of total industrial capacity rose slightly positive. A surge in demand for electricity, 0.3 percentage point, to 83.9 percent. The rise caused by unseasonably hot weather, resulted in a in operating rates at utilities more than accounted Industrial production indexes Twelve-month percent change Twelve-month percent change Capacity and industrial production Ratio scale, 1987 production = 100 Ratio scale, 1987 production = 100 Total industry 90 80 70 All series are seasonally adjusted. Latest series, June. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

703 Industrial production and capacity utilization, June 1994 Industrial production, index, 1987=100 Percentage change Category 1994 19941 June 1993 to Mar.r Apr.r Mayr June? Mar.r Apr/ Mayr June? June 1994 Total 115.9 116.1 116.3 116.8 5.8 Previous estimate 115.7 115.9 116.1 Major market groups Products, total2 114.7 114.9 115.0 115.6 .4 .2 5.5 Consumer goods ... 111.9 111.6 111.5 112.1 .3 -.3 3.8 Business equipment 145.5 146.2 147.0 147.7 .4 .5 10.3 Construction supplies 99.7 101.6 102.1 102.3 .8 2.0 7.4 Materials 117.7 117.9 118.1 118.7 1.3 .2 6.2 Major industry groups Manufacturing 117.2 117.6 117.8 118.0 1.0 .3 .2 .2 6.1 Durable 121.7 122.3 122.2 122.7 .6 .5 -.1 .4 8.6 Nondurable 111.7 111.8 112.4 112.2 1.4 .1 .5 -.1 3.0 Mining 99.5 99.9 98.8 98.2 .7 .4 -1.2 -.5 .3 Utilities 118.0 116.3 117.3 123.7 -1.6 -1.4 .9 5.4 7.1 Capacity utilization, percent MMMEEEMMMOOO CCCaaapppaaaccciiitttyyy,,, pppeeerrr--ccceeennntttaaagggeee 1993 1994 ccchhhaaannngggeee,,, AAvveerraaggee,, LLooww,, HHiigghh,, JJJuuunnneee 111999999333 11996677--9933 11998822 11998888--8899 June Mar.r Apr.1 Mayr JuneP tttooo JJJuuunnneee 111999999444 Total 81.9 71.8 84.8 81.1 83.8 83.7 83.6 83.9 2.3 Manufacturing 81.2 70.0 85.1 80.1 83.0 83.0 82.9 82.8 2.7 Advanced processing 80.6 71.4 83.3 78.6 81.6 81.5 81.3 81.2 3.3 Primary processing .. 82.2 66.8 89.1 83.8 86.3 86.7 87.0 86.8 1.2 Mining 87.4 80.6 87.0 88.0 89.9 90.4 89.3 88.8 -.7 Utilities 86.7 76.2 92.6 86.3 87.5 86.1 86.8 91.4 1.2 NOTE. Data seasonally adjusted or calculated from seasonally adjusted 2. Contains components in addition to those shown, monthly data. r Revised, 1. Change from preceding month. p Preliminary. for the gain; the operating rate at factories edged motive products eased a bit further, reflecting a down. small decrease in car assemblies. The production of At 116.8 percent of its 1987 average, total indus- other durable goods, such as appliances and furnitrial production was 5.8 percent higher in June than ture, increased about 1 percent, partially retracing it was a year earlier. Output grew 4.4 percent at an the May decline. On balance, the output of these annual rate in the second quarter, down from goods has changed little since last fall. The output 8.3 percent at an annual rate in the first quarter. The of nondurable goods other than energy products slowdown resulted mainly from a decrease in the was unchanged. seasonally adjusted production of motor vehicles, The production of business equipment excluding which had been hindered by capacity constraints. cars and trucks rose 0.6 percent in June, after an Excluding motor vehicles and parts, industrial pro- average monthly gain over the preceding three duction rose 6.3 percent at an annual rate last months of almost 1 percent. The deceleration in quarter, nearly the same as the pace of the first growth reflected, in part, strike-related losses in quarter. construction and mining machinery. Even so, the When analyzed by market group, the data show output of this sector advanced at an annual rate of that the production of consumer goods advanced about 11 percent in the second quarter, only about 0.6 percent in June, mainly because of the large 1 percentage point less than the growth rate for the rise in sales of electricity to residential users. first quarter. Among other consumer goods, the output of auto- The output of construction supplies, which had Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

704 Federal Reserve Bulletin • August 1994 risen sharply in March and April, recently posted motor vehicles and parts grew at an annual rate of small gains. The large rise in the production of about IV2 percent in the second quarter, up from business supplies reflected the weather-related the annual growth rate of 53A percent in the first increase in sales of electricity to commercial users. quarter. Among non-energy materials, production rose Total factory utilization edged down again in 0.2 percent, about the same as the gains in each of June, to 82.8 percent, as the operating rates for the two preceding months. Increases in the output both primary-processing and advanced-processing of basic metals and parts for equipment were industries declined slightly. The operating rates for largely offset by decreases in the production of most major industries decreased; the only signifipaper materials and parts for consumer durable cant increases occurred in the furniture and instrugoods. ments industries. Even though the overall factory When analyzed by industry group, the data show operating rate has eased a bit over the past two that manufacturing production moved up 0.2 per- months, the utilization rates for many industries, cent in June, about the same rate of increase as in including lumber, primary metals, textiles, petroboth May and April. Excluding motor vehicles and leum products, and machinery, remain well above parts, factory output rose 0.2 percent, down from their long-run averages. Moreover, the recent levels the 0.5 percent gains registered in May and April. of factory utilization for petroleum products and The slower rate of increase reflected mainly a soft- machinery have been running above their previous ening in the output of nondurables, particularly cyclical highs of the late 1980s. paper, apparel, and petroleum products; also con- Mining output declined 0.5 percent in June tributing to the slower increase was the production owing to another large decrease in coal mining. of chemicals, which had risen sharply in May but The output at utilities increased more than 5 perwas about unchanged last month. Despite the recent cent, reflecting the effects of the severe weather on slowing, the output of manufacturing excluding electricity demand. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

705 Statements to the Congress Statement by Lawrence B. Lindsey, Member, responsible for just 68 percent of the growth in Board of Governors of the Federal Reserve Sys- GDP. tem, before the Subcommittee on Consumer Investment in residential real estate showed a Credit and Insurance of the Committee on Bank- similar trend. During the current expansion, ing, Finance and Urban Affairs, U.S. House of housing has accounted for 16.4 percent of the Representatives, June 9, 1994 growth in GDP. During the 1980s expansion, increases in housing represented only 6.2 percent I am pleased to appear on behalf of the Board of of the increase in GDP. Combining these two Governors of the Federal Reserve System to categories of household outlays, therefore, address issues related to consumer credit. I will shows the importance of the household in the focus my prepared remarks on the questions you current expansion. The growth in personal conraised in your letter of invitation. sumption and housing investment constituted 87 Let me begin with some background. Two percent of GDP growth since the expansion months ago, the U.S. economy entered the began, compared with 74 percent during the fourth year of its current expansion. Although 1980s. Thus, the questions you asked about the this expansion began on a sluggish note, eco- financial health of the household sector and its nomic growth has been appreciable, on average, continued access to credit are particularly pertisince early 1992. For example, real gross domes- nent in today's economic environment. tic product expanded 3.9 percent during 1992 and As is usually the case in economic expansions, 3.1 percent during 1993. During the first quarter higher levels of household debt have helped of this year it rose at an annual rate of 3.0 finance increased activity. As policymakers, we percent, in line with the expectations of growth should recognize that households are the best for this year given in February by the members of judges of their own financial circumstances, so the Federal Open Market Committee. we should not view these increased levels of debt This economic expansion has resulted in mod- as necessarily "good" or "bad." Increased leverate, but still healthy, job gains and falling els of household income, more optimistic attiunemployment. We can all be pleased with the tudes toward employment prospects, and generdecline in the unemployment rate to 6.0 percent ally favorable conditions for borrowing are all in the latest survey by the Bureau of Labor contributing to the recently increased willingness Statistics. of households to take on debt. As is usually the case, changing spending The first question in your letter asked about patterns in the household sector have been key to recent growth in consumer credit and how it the expansion. For example, in inflation-adjusted compares with past expansions. It is important to terms, the increase in personal consumption ex- consider the various types of consumer credit. penditures has amounted to 71 percent of the The Federal Reserve has just released its report expansion in GDP since the recovery began in on consumer installment credit. In April, installthe second quarter of 1991. If anything, the ment credit grew at a 13.2 percent annual rate importance of consumption has increased as the after a revised 12.6 percent rate in March, recovery has progressed. Since the first quarter slightly higher than the 11.2 percent growth durof 1993, increased consumption has accounted ing the fourth quarter of last year. It is certainly for 77 percent of the expansion in overall GDP. well above the full-year growth of 6V2 percent in By contrast, during the economic expansion 1993 or growth of just 1 percent in 1992. Indeed, from 1982 to 1990, consumption growth was the double-digit pace reached over the past half Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

706 Federal Reserve Bulletin • August 1994 year or so is the most rapid since the third payments on nonmortgage consumer loans after quarter of 1986. 1986 has prompted some shift toward more use of Nevertheless, it is hard to determine conclu- home equity credit and less of traditional consively how the current rate of credit expansion sumer loans. The tailoring and promotion of auto compares to historical norms. Recall that we are leasing to individual consumers have provided now in the fourth year of an economic upswing. them with another means of acquiring cars that As the above data indicate, growth of installment has considerable appeal for some types of concredit was quite subdued during the early por- sumers. I would not want to overstate the impact tions of the current expansion. This makes qual- of these alternatives—estimates made by the itative comparisons of current growth with that Board staff indicate that shifts to these forms of in comparable earlier time periods somewhat financing have trimmed 1 to 3 percentage points problematic. The resurgence in consumer install- off the growth rate of consumer installment credit ment credit has come later than usual in the in recent years—but such considerations do current economic expansion, and the recent pace muddy the comparisons a bit. has still been well below peak rates reached A similar type of change in credit product that during some earlier expansion periods. makes comparison across business cycles diffi- Typically, installment credit starts to climb in cult has been the development and spread of the first or second quarter of a recovery and is general purpose credit cards for individual congenerally rising quite sharply by the second year, sumers during the past few decades. From less often reaching growth rates of 15 percent to 20 than $10 billion in 1970, debt outstanding on bank percent at some point in the cycle. In contrast, credit cards has grown to more than $200 billion during the most recent upturn in the economy, today. Revolving credit, including retail store installment credit continued to contract through cards as well as bank cards, is now the largest the fifth quarter of recovery; its growth rate did component of consumer credit, recently surpassnot reach double digits until October 1993, two ing auto credit. and one-half years into the recovery. On the How this development affects consumer balother hand, the household sector entered this ance sheets is somewhat unclear. A considerable expansion with a higher level of debt than it had amount of this revolving credit is commonly in the past, making comparison of percent in- called "convenience credit" because it is repaid creases difficult. by consumers within an interest-free grace pe- We should bear in mind that swings in growth riod. Whether one should view convenience of consumer credit are wider than fluctuations in credit as debt in a true sense is open to question, the economy as a whole because consumer credit but the convenience credit that is on a creditor's is used most heavily to finance purchases of books on the last day of the month will be durable goods, which are much more cyclical included in our measure of consumer credit. The than consumer income or total consumption. contribution of convenience use to credit growth Durable goods include autos and large consumer takes on more importance these days as people appliances, which often move with home sales. run more expenditures through their cards to The strength in these two sectors has meant that accumulate frequent-flier mileage or points todurables have been particularly important in the ward purchase of an automobile. Overall credit present expansion, contributing 25 percent of market conditions also affect the consumer's increased GDP, compared with just 16 percent choice of debt and make historical comparison during the 1980s expansion. problematic. For example, efforts to trim debt The comparability of the data on credit growth during the early 1990s and the early part of this is also somewhat limited by the development of expansion were probably reinforced by historialternative means of finance. Changes in con- cally wide spreads between the interest rates sumer tastes, the marketing of financing alterna- consumers were paying on existing loans and the tives, and the tax environment can all affect the interest rates they could earn on new financial composition of consumer credit. For instance, assets. In response to these wide spreads, some the phasing out of tax deductibility of interest people elected to pay down debts with maturing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 707 assets rather than roll them over at extremely rates to historically low levels. More recently, as low yields. For example, a consumer with a household debt growth has strengthened and maturing certificate of deposit yielding 8 percent interest rates have turned up, debt service paymight choose to pay off a 10 percent car loan with ments perhaps have edged up. the funds when new certificates of deposit yield The prospective risks this might pose are probonly 3 percent or 4 percent. In essence, these ably best determined by direct measures of debt spreads represent the cost of household liquidity, payment performance. In this regard, delinand households elected to assume less liquid quency rates on consumer and mortgage loans positions, reducing levels of both debt and of have suggested for some months now that the financial asset holdings as a result of this in- risks associated with debt burdens have dimincreased cost. Again, the lack of comparability of ished. According to both industry data from the these developments with other business cycles American Bankers Association (ABA) and calcumakes an evaluation of consumer debt positions lations from bank call reports, consumer loan difficult. delinquencies have been on the downswing since In sum, these factors seem to have come at least early 1992. together in recent months. The pattern of durable The ABA series for all loans combined goods consumption has turned stronger, provid- dropped in the fourth quarter last year to its ing a stimulus to the growth of installment credit. lowest level since the first quarter of 1984. Sim- Healthier consumer balance sheets, resulting ilar evidence is provided by data on past-due both from the earlier slowdown in growth of auto loans at the auto finance companies and on mortgage and consumer debt and from substan- past-due home mortgages reported by the Morttially lower average interest rates on the stock of gage Bankers Association. Personal bankruptdebt, have probably made individuals feel more cies, although still historically quite high, have comfortable about taking on debt again. In addi- also been declining in recent months. tion, heavy promotion of credit cards with re- Nonetheless, looking below these aggregate bates and other incentives tied to the volume of statistics, there are reasons to believe that some transactions has apparently boosted growth in households have not made much progress in this area. relieving debt burdens. As I have remarked else- As I have indicated, comparisons of growth where, some evidence suggests that middle inrates over time are complicated. Sifting through come households, who carry the bulk of houseall these considerations, I think it is fair to say hold debt, may not have fully shared in recent that the strength in consumer credit seen so far is income growth and thus in the easing of the not out of line with historical patterns. We also aggregate debt-servicing burden. need to look at the ability of households to Your second question dealt with the availabilsupport the debt. The stock of mortgage and ity and affordability of consumer credit. Availconsumer debt relative to income is historically ability of credit—the relative willingness of credhigh and has begun to rise a bit with the recent itors to make loans to consumers at specified rebound in debt growth after it had leveled off for interest rates—has increased. For instance, reseveral quarters. sponses to the Federal Reserve's Senior Loan On the other hand, debt-servicing payments— Officer Opinion Survey indicate that banks have covering both interest and principal—relative to become progressively more willing to lend to income suggest a net decline in burden. Our consumers since shortly after the end of the staff's estimate of the share of disposable income recession in 1991. Major new credit card plans, allocated to scheduled principal and interest pay- such as the joint ventures between card issuers ments by the end of last year had fallen appre- and the major auto manufacturers, have been ciably from the beginning of the decade. This offered within the past two years. decline resulted from the slowdown in borrowing Many factors can affect the availability of as well as to lower borrowing costs, especially consumer credit. Earlier in the decade, the balthose resulting from the surge in mortgage refi- ance sheet strains experienced by financial instinancing that accompanied declines in mortgage tutions resulting from heavy recession-related Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

708 Federal Reserve Bulletin • August 1994 loan losses and the need to meet stricter capital mittee anticipated further solid gains in output requirements restrained the availability of con- and income in 1994, about 3 percent or so, a view sumer credit, just as they limited the supply of that appears to have been confirmed by the other types of credit. The profitability of con- evidence to date. Also, private forecasters consumer lending remained relatively attractive, tinue to expect growth of about 3 percent this however, and this type of lending was probably year. In this context of continued economic curtailed less than some other types, such as expansion, and given the stronger position of commercial real estate. banks and other lenders, mortgage and consumer The development in recent years of a second- credit should generally be in ample supply. This ary market for consumer loans through securiti- situation will be buttressed by the continued zation of auto loan and credit card receivables development of active markets for securitized has also been a net plus for credit availability to mortgages and consumer receivables. consumers. Securitization has enabled banks and The final question in your letter raised quesother traditional lenders to households, such as tions about interest rates on consumer deposits auto finance companies, to continue to originate and whether they are unusually low in relation to consumer loans even when they were unable to market rates by historical standards. Historical profitably fund these credits themselves. This comparisons of deposit rates can be tricky, in has brought new lenders into the market as part because retail deposit rates were subject to indirect suppliers of credit, reducing the vulner- interest rate ceilings before the 1980s. Financial ability of this source of credit to the occasional market deregulation and innovations during the difficulties of traditional lenders. 1980s have clearly brought tremendous gains to An important component of the affordability of savers, particularly those who rely on typical consumer credit is the interest rate charged on consumer accounts. consumer loans. As you know, these rates have Rate spreads have been affected by greater come down substantially. Auto loan rates at regulatory costs imposed on banks and thrift banks averaged about 11 percent in 1991 but had institutions in recent years, notably higher dedropped to IVi percent on average by the first posit insurance premiums. Still, the evidence quarter of this year. This rate is dramatically shows that rates on negotiable order of withlower than it has been historically. The previous drawal (NOW) accounts, savings deposits, and record low was 10 percent and occurred in 1972, money market deposits have been very sticky. the year the series was begun. As a result, the They have been especially slow to respond to affordability of automobiles is historically high, upward movements in market interest rates, alor, put another way, debt payments on a new car though they have also been sluggish in the downrelative to income are historically low. ward direction. In 1991 and 1992, when market With regard to revolving credit, our series on rates of interest were coming down, rates on credit card rates, which typically has shown very these accounts dropped less rapidly, making little movement, dropped 2 percentage points them quite attractive in relation to market instrufrom its recent high in early 1991. However, our ments, such as Treasury bills. Rates on these credit card series may not fully take into account bank deposit accounts continued to fall last year the increased variety of terms that have emerged as they completed the adjustment to the earlier in this area. Market segmentation has signifi- declines in market rates. By contrast, these rates cantly complicated the analysis of effective credit currently appear to be sticky in an upward direccard rates. In all likelihood, the reduction in tion. effective rates to credit card holders is greater In part, this stickiness may reflect costs assothan our survey would suggest. ciated with changing such deposit rates. These The third question in your letter requires us to costs may be both of an internal administrative look ahead. In my judgment, prospects for the nature and market based. Holders of these acavailability and affordability of consumer credit counts seem to expect stability in rates and are are likely to remain quite favorable. Earlier this prone to close accounts and move balances elseyear, members of the Federal Open Market Com- where when deposit rates are cut. In recent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 709 years, when market rates declined to historically Rates on retail CDs, nonetheless, appear to have low levels, bankers appeared reluctant to drop been on the low side of historical norms over the rates on these liquid deposits and disturb their past year or so perhaps in part because loan long-term depositors in these accounts. During demand had been rather weak. In recent months, earlier rising rate environments, rates on such however, loan demand has firmed, and rates on accounts lagged earlier upward movements in retail CDs have been rising steadily as banks market rates. Banks and thrift institutions had have needed to raise funds. been unwilling to raise rates on these accounts as In conclusion, the recent strengthening in costs would have risen for all accounts, not just consumer credit can be viewed as another piece new ones. Taking this historical pattern of stick- of evidence that the economic expansion is iness into account, rates on these types of depos- firmly in place. Credit to households appears to its do not appear to be noticeably out of line with be quite readily available, and many houseprevious experience. holds, having completed substantial adjust- In the case of retail certificates of deposit ments to alleviate debt-servicing strains, are (CDs), rates have typically adjusted quite showing that they are again willing to borrow to promptly to movements in market interest rates. finance spending. Moreover, changes in our Unlike the liquid accounts just discussed, adjust- financial system, notably the securitization of ing the rate on such time deposits in keeping with mortgage and consumer debt, will better ensure movements in market rates does not immediately that credit supplies are not disrupted by the affect the whole cost structure of time deposits, financial difficulties of any segment of the finanonly the cost of new deposits and rollovers. cial services industry. • Statement by John P. LaWare, Member, Board mentation may prove helpful in encouraging the of Governors of the Federal Reserve System, development, through the securitization process, before the Subcommittee on Telecommunica- of a secondary market for small business loans. tions and Finance of the Committee on Energy We also support the bill's approach of promoting and Commerce,U.S. House of Representatives, this development by relying on the private sector June 14, 1994 rather than involving the government through yet another guarantee program. I am here today to discuss title II of the Commu- Small- and medium-sized businesses have alnity Development, Credit Enhancement, and Reg- ways been of critical importance to the U.S. ulatory Improvement Act of 1994 (H.R.3474), economy. They have served as an engine for job entitled Small Business Capital Formation, as creation and as a major source of innovation in passed by the Senate on March 17, 1994. Title II product development. To continue to fulfill these seeks to increase the availability of credit to small roles these businesses must have the ability to businesses by facilitating the securitization of obtain adequate credit accommodation. Tradismall business loans. The objective of this bill is tionally, the commercial banking system has extremely important, particularly given the prob- been the principal source of credit to smaller lems that some small businesses have had in businesses, and the small business segment has obtaining adequate credit accommodation. More- contributed importantly to the earnings of the over, experience in other sectors of the credit banking industry. markets where securitization has become wide- Unfortunately, during the latter part of the past spread suggests that securitization of small busi- decade, and in the first year of this decade, as ness loans could confer benefits on banks and banks encountered severe problems in their loan other financial institutions that originate, securi- portfolios, they generally tightened their lending tize, and invest in these loans. standards. As a result, the availability of credit Accordingly, the Federal Reserve supports the was significantly reduced, particularly to small objectives of title II. We believe that its imple- businesses. With its markedly improved perfor- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

710 Federal Reserve Bulletin • August 1994 mance in the past two years, the banking system ritized transactions must have sufficient credit has been able to strengthen its balance sheet and enhancement to obtain a credit-rating level that is in a much better position to lend to small makes the securities attractive to investors. businesses and other borrowers. Government Both sales and purchases of securitized pools agencies have also taken a number of steps to offer improved diversification and a greater seencourage banks to loan to small businesses, lection of risk and return alternatives. Purchases including a program to allow banks to establish a of securities backed by loans may be particularly "basket" of loans that will be judged on the basis valuable to smaller banks that do not have the of performance and not be criticized on the basis capability of diversifying their lending either geoof documentation deficiencies. Taking these de- graphically or according to industrial sector. velopments into account along with the generally Given the potential benefits to be gained from improving economy, it is not surprising that the the securitization of small business loans and volume of small business loans has been growing business loans generally, the Federal Reserve since last fall. believes that it is important to give careful con- Nonetheless, there may be many situations in sideration to proposals designed to promote and which creditworthy small businesses are continu- encourage the securitization of such loans. These ing to encounter difficulties in obtaining credit. potential benefits have been dramatically demon- Besides addressing the problem created by the strated by the impressive growth in the residencredit crunch of recent years, it is highly desir- tial mortgage-backed securities market and the able to find ways to promote, in an efficient but markets for securities based on auto loans and prudential manner, the flow of credit to smaller other consumer loans. It thus seems reasonable businesses. that small business lending could also benefit A possible way to maintain or increase small from securitization. businesses' access to credit could be the expan- Small business loans, however, differ substansion of opportunities to securitize small business tially from the types of loans—such as residential loans. Although the approach is no panacea, it mortgages, auto loans, and credit card receivhas been given increased consideration in recent ables—that are currently securitized. Although years. these types of loans are relatively homogeneous, In a securitization, loans are placed in a pool small business loans tend to be quite heterogeand securities are issued that entitle the holders neous, in part because of the natural diversity of to the proceeds of the principal and interest small business enterprises and their loan terms, payments flowing from the underlying loans. which are usually individually negotiated to suit Originators of loans that are used in asset-backed the unique credit needs of each borrower. This securities could benefit from improved liquidity, diversity results in loans with widely different enhanced fee income, and—to the extent that a maturities and repayment terms, different detrue sale has occurred and the assets are re- grees of documentation, and different amounts of moved from their balance sheets—less need for information regarding the underlying financial capital. Investors, on the other hand, acquire positions of the obligors. This heterogeneity securities that require no management of the greatly complicates the process of predicting the underlying loans on their part and yet provide an future cash flows produced by pools of even the attractive return for instruments that pose, de- highest credit quality. pending upon the nature of the credit enhance- Also, pools of small business loans may exhibit ment, little or no credit risk. a diversity in credit quality, which, coupled with For the securitization of assets to be success- a diversity in documentation standards, greatly ful, the resulting security must be appealing to complicates the task of performing due diligence investors, who are generally risk averse. When and reaching a judgment as to the overall quality evaluating securities, investors rely heavily on of the pool. Finally, the lack of a sufficiently the national credit-rating agencies to inform them broad and deep historical database on small of the credit risk associated with securities business loan performance makes actuarial meththrough the assigned credit ratings. Thus, secu- ods of estimating loan losses extremely difficult. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 711 All these barriers to successful widespread proportion of the potential losses on the transsecuritization of small business loans derive from ferred loans. the heterogeneity of this type of credit. The Under generally accepted accounting princiheterogeneity problem could be solved through a ples (GAAP)—or more specifically Financial Acmore standardized loan product that could be counting Standard 77 (FAS 77)—which the bill easier to securitize. Standardization, however, proposes to utilize, a bank may remove from its would introduce an element of inflexibility into balance sheet an asset sold with recourse even if small business lending and could preclude many it has retained the risk of ownership. This acsmall business firms from obtaining the credit counting standard treats the transfer of assets accommodation they need because they do not fit with recourse as a sale if the seller relinquishes the "mold." In addition, the standardization of the benefits of owning the asset, is reasonably small business loans could increase the amount able to estimate the expected losses to which it is of documentation needed to support such cred- still exposed under the recourse provision, and its, thereby increasing the cost to small business establishes a specific liability reserve equal to the borrowers. amount of these expected losses. This treatment In this regard, it should be noted that the generates a strong incentive for banks to undersecuritization of residential mortgages has re- estimate losses, and this weakness has caused sulted in much more elaborate and expensive some accounting professionals to criticize FAS documentation requirements. Thus, it is possible 77. Even if loss estimates were made in good that rigid and inflexible underwriting standards faith, however, this approach would still be of and increased documentation requirements could concern from a supervisory perspective because actually curtail the amount of available credit for it does not take into account the possibility that businesses. actual losses may turn out to be substantially Because greater homogeneity of small busi- greater than expected losses. The role of capital ness loans has not been achieved, the successful is to serve as a buffer against such developments, securitization of such assets has had to rely on and GAAP is silent on this aspect of risk exposignificant credit enhancements. Such large en- sure. hancements are needed to offset the concerns of The banking agencies' rules attempt to estabrisk-averse investors over the uncertainty asso- lish policies to ensure that government-insured ciated with the heterogeneous nature of small depository institutions will hold capital commenbusiness loans. surate with their risk exposure in any transac- The provision of credit enhancements by tions—including securitized transactions—that banks to facilitate the securitization of these they engage in. Thus, unlike GAAP, the regulaloans is certainly not an objectionable activity, so tory treatment of asset sales focuses on the long as it is carried out in a safe and sound retention of risk rather than the relinquishing of manner and adequate capital support is main- the benefits of ownership. Under this treatment, tained to protect depositors. In this connection, when a loan is transferred with recourse, the it should be noted that the heterogeneous nature agencies have generally treated the transaction of small business loans makes it relatively diffi- as a borrowing and have required the transferor cult for banks to accurately assess the riskiness to maintain capital against the entire amount of of providing credit enhancements for these trans- the assets transferred. actions. Thus, it becomes especially important to More recently, however, it has come to be ensure that banks maintain adequate capital for recognized that this conservative approach does such arrangements, including sales of assets with not fully take into account contractual limitations recourse. on the selling bank's recourse obligation and may Under a recourse arrangement, a bank typi- not accurately reflect expectations or practices of cally commits to cover any initial losses on loans the marketplace. In this regard, the agencies, that may occur up to a contractually agreed upon under the auspices of the Federal Financial Inamount. This arrangement results in the selling stitutions Examination Council, have reviewed bank being exposed to a possibly significant long-standing recourse rules. They have con- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

712 Federal Reserve Bulletin • August 1994 eluded that these rules should be modified to Section 138 also mandates that any revisions reduce the capital charges for certain asset sales that the agencies propose to their capital stanwith limited recourse to make those charges dards may not be less stringent than GAAP. This more commensurate with the contractual credit explicitly ties the banking agencies' regulatory risk to which the selling organization is exposed. capital rules to GAAP. The capital rules are not Accordingly, on May 25, 1994, the federal an accounting principle; they are a supervisory banking agencies published for public comment a tool to help ensure the safety and soundness of detailed proposal on the appropriate capital treat- the banking system. On the other hand, ment for recourse arrangements. The proposed GAAP—as set by the Financial Accounting Stanguidelines are consistent with the basic supervi- dards Board (FASB), a private standard-setting sory principle that the capital held against trans- group—is oriented toward the disclosure of inactions should be commensurate with their risk. formation for stockholders, investors, and ana- In particular, the agencies are proposing to re- lysts, which may or may not be relevant for duce the capital requirement for all recourse safety and soundness purposes. transactions when the selling banking organiza- Given the divergent purposes of the regulatory tion contractually limits its exposure to less than capital rules and GAAP, we believe that the the full, effective risk-based capital requirement banking regulators should have the authority to for the assets transferred. This low-level re- differ from GAAP when necessary to address course rule would apply to all types of assets, safety and soundness concerns without being including small business loans and commercial constrained by a stringency test relative to stanloans. For example, the risk-based capital re- dards set by a private group like FASB. The quirement for a standard risk asset transferred section 138 stringency test is similar to the one with a 3 percent recourse obligation would be set forth in section 121 of the Federal Deposit only 3 percent rather than the currently required Insurance Corporation Improvement Act 8 percent. (FDICIA) with respect to accounting standards In addition, the agencies are requesting public that banking organizations must use in completcomment on a preliminary proposal that would ing regulatory reports, and both cause concern. employ credit ratings to assess risk-based capital Section 138 of the House version of H.R.3474 against banking organizations' securitization ex- would effectively give FASB more authority over posure based on their relative risk of loss from the agencies' regulatory capital rules than the the underlying assets. This aspect of the agen- regulators themselves would have—-just as seccies' proposal could reduce the capital require- tion 121 of FDICIA has given FASB more aument against senior asset-backed securities that thority than the agencies have over regulatory currently are assessed 8 percent capital. Al- reporting requirements—since in both cases any though the existing regulatory guidance needs differences from GAAP would have to be justisome revision, its limitations have not precluded fied as "no less stringent." This concerns us the development of substantial securitization because safety and soundness considerations markets for a wide variety of loans. may dictate an approach to regulatory capital In this regard, in the House version of rules and regulatory reporting that is very differ- H.R.3474, section 138 calls for federal banking ent from what GAAP requires, and, thus, a agencies to review the capital standards applica- stringency test may not be applicable. As a ble to loans sold with recourse and revise their result, the banking regulators may be forced to capital standards in accordance with the agen- follow GAAP in cases in which that is not the cies' findings. The banking agencies are already prudential course of action from a safety and conducting such a review and, as mentioned soundness viewpoint, simply because that course earlier, recently published proposals to revise of action is so different that a stringency test their capital rules with regard to recourse ar- cannot be applied. rangements as a part of that review. Thus, it Accordingly, section 138 of the House version would seem that legislative action calling for of H.R.3474 should be either dropped or revised such a study is not necessary. to decouple the agencies' regulatory capital rules Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 713 from GAAP. Further, we would propose that the place and the preferential capital treatment was Congress also amend section 121 of FDICIA so limited to small business loans. We are conthat the agencies' regulatory reports can follow cerned, however, that establishing a special cap- GAAP to the extent consistent with safety and ital treatment for small business loans would set soundness. a troubling precedent for other types of loans and Now I would like to turn to the specifics of that the extension of the liberal treatment beyond section 208 of title II, which deals with the small business loans could raise safety and accounting, capital, and reserve requirements for soundness concerns. transfers of small business loans. In particular, As I mentioned earlier, the banking agencies with respect to capital, section 208 contains two have issued specific proposals to revise our principal provisions. First, small business loans capital standards for securitizations and other sold with recourse would be reported in accor- recourse arrangements. We believe that rather dance with GAAP on the regulatory reports filed than specifying detailed capital requirements by insured depository institutions. Second, the for a select group of assets by statute, it would maximum amount of capital and reserves to be be preferable for the Congress to revise this maintained by insured depository institutions legislation to support the agencies' efforts to selling small business loans with recourse would develop appropriate capital standards for secube limited to a specific reserve equal to the selling ritizing all types of loans. This would enable the institution's reasonable estimate of its liability agencies to address small business loan securiunder the recourse arrangement, plus an 8 per- tization in a manner that would be consistent cent capital requirement against the amount of with the maintenance of a safe and sound retained recourse. banking system. It would also avoid the rigidi- As I have noted, one of the most important ties that result when technical and complex safety and soundness considerations is the regulatory requirements are written into law. amount of capital that is maintained to protect The agencies need flexibility to be able to adjust banking organizations from any risks associated the rules to account for changes that occur in with loan securitization. In our view, the capital the marketplace. provision outlined in section 208 of title II ac- In view of the importance of credit availability cords quite preferential treatment to the securi- to small- and medium-sized businesses, we are tization of small business loans. If that treatment committed to continuing to work with this comwere to be extended to small business loan mittee, the other banking agencies, and the Adsecuritizations without imposing limitations, it ministration in developing an approach that will would raise safety and soundness concerns. The remove any unnecessary impediments to securibill incorporates some limitations, however, that tization, while at the same time protecting the help somewhat to mitigate these safety and safety and soundness of the banking system and soundness concerns. First, the preferential capi- minimizing regulatory burden. tal treatment would be restricted to those insti- In our view, the capital provisions outlined in tutions that, under the agencies' current risk- section 208 of title II would not, by themselves, based capital standards, are either well provide adequate protection to banks involved in capitalized or are adequately capitalized and securitization of small business loans. For examhave the approval of their primary regulator. ple, to encourage the securitization of small Second, the aggregate of the maximum contrac- business loans, section 208 of title II would give tual recourse obligations on all such loans "sold" designated institutions permission to maintain may not exceed 15 percent of a bank's total capital against risk exposure arising from the sale risk-based capital. of small business loans with first loss recourse in Although we do not believe that the approach an amount that is less than is required under the specified in title II is the best way to manage this banking agencies' existing or proposed capital activity, we did not object to the approach or standards. believe that it would unduly threaten safety and The Congress now has before it several other soundness so long as these limitations were in bills that would extend this preferential capital Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

714 Federal Reserve Bulletin • August 1994 treatment to a wide variety of assets that are the amount of small business loans that could be even more difficult to securitize than small busi- sold under the liberal capital terms. Moreover, to ness loans. We believe that such an expansion widen the list of eligible loans would serve to would be unwise. Most certainly, lending that complicate an already complex capital standard. would be subject to liberal capital terms should And such an extension is almost certain to be not be expanded beyond the constraints that perceived as a major departure from the estabhave been specified. That being the case, to the lished internationally accepted capital principles, extent other types of loans are made eligible for on which the U.S. banking agencies have based such treatment, that would require a reduction in their risk-based capital rules. • Statement by Alan Greenspan, Chairman, Board Reserve and to outside analysts. Indeed, in tesof Governors of the Federal Reserve System, timony to the Congress at that time I mentioned before the Committee on the Budget, U.S. that, with short-term real rates not far from zero, House of Representatives, June 22, 1994 "market participants anticipate that short-term real interest rates will have to rise as the head- I appreciate the opportunity to appear before you winds diminish if substantial inflationary imbalto discuss recent monetary policy actions and ances are to be avoided." But lingering questions issues related to inflation. into the second half of 1993 about whether the The Federal Reserve's moves to increase economy had fully recuperated made the approshort-term interest rates this year are most ap- priate timing of such action unclear. propriately understood in a historical context. Since the latter part of 1993, however, the In spring 1989, we began to ease monetary expansionary effects of the monetary policy of conditions as we observed the consequence of the past few years, along with the healing of balance sheet strains resulting from increased balance sheets, have become increasingly appardebt, along with significant weakness in the col- ent. Given the stronger economic and financial lateral underlying that debt. Households and conditions, it became evident by early 1994 that businesses became much more reluctant to bor- the mission of monetary policy of the past few row and spend, and lenders to extend credit—a years had been accomplished. The "headwinds" phenomenon often referred to as the "credit were substantially reduced, and the expansion crunch." In an endeavor to defuse these financial appeared solid and self-sustaining. strains, we moved short-term rates lower in a Having met our objective, there seemed no long series of steps that ended in late summer reasonable purpose in maintaining the demon- 1992, and we held them at unusually low levels strably stimulative level of short-term interest through the end of 1993—both absolutely and, rates held throughout 1993. Maintenance of that importantly, relative to inflation. These actions, degree of accommodation, history shows, would together with those to reduce federal budget have posed an unacceptable risk of mounting deficits, facilitated a significant decline in long- inflationary pressures. Given the resumption of term rates as well. more normal patterns of economic activity and Lower interest rates fostered a dramatic im- credit flows, a shift in policy stance was clearly provement in the financial condition of borrow- indicated. ers and lenders. The sharp, sustained decline in In early February, we initiated the process of debt-service charges and the restructuring of withdrawing the degree of monetary stimulus. At balance sheets alleviated the financial distress, the time, we thought long-term rates would move enabling the economy to begin to move again in a little higher temporarily as we tightened, but a normal expansionary pattern. By last summer, that anticipation was in the context of expectathe likelihood that the economy would soon tions of a more moderate pace of economic respond more vigorously to these financial devel- activity both here and abroad than that which opments was already evident both to the Federal emerged shortly thereafter. The subsequent dra- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 715 matic rise in market expectations of economic pectations about the level and fluctuations in growth here and abroad and associated concerns yields had made the needed adjustments. Thus, about inflation provided considerable impetus to we judged at our May 17 meeting that we could the sharp jump in rates. Given the changes in initiate a larger adjustment, without an undue economic conditions and prospects, and the mar- adverse market reaction. Indeed, markets reket's perception of them, longer-term rates acted quite positively, on balance, at that time, would eventually have increased significantly perhaps because they saw such timely action as even had the Federal Reserve done nothing this reducing the degree and frequency of tightening year. that might be needed in the future. The rise in long-term rates has reflected in- Some critics of our latest policy actions have creased uncertainty, as well as expectations of a noted that we tightened policy even though stronger economy. Although it was generally inflation had not picked up. That observation is expected, the move from accommodation, inter- accurate, but it is not relevant to policy deciacting with the news on the domestic and global sions. To be successful, we must implement the economy, triggered a reexamination by investors necessary monetary policy adjustments well in of their overly sanguine assumptions about price advance of the potential emergence of inflationrisk in longer-term financial assets. As volatility ary pressures, so as to forestall their actual and uncertainty increased, investors here and occurrence. Shifts in the stance of monetary abroad began to reverse their previous maturity policy influence the economy and inflation with extensions. They fled toward more price-certain a considerable lag, as long as a year or more. investments at the short end of the yield curve. The challenge of monetary policy is to interpret For example, some flows into bond mutual funds current data on the economy and financial marwere reversed; investors, fearing further rate kets with an eye to anticipating future inflationincreases and awakening to the nature of the risk ary or contractionary forces and to countering they had taken on, shifted funds back into shorter- them by taking action in advance. Indeed, if we term money market mutual funds and into depos- are successful in our current endeavors, there its. The sales of securities by bond mutual funds will not be an increase in overall inflation. The likely contributed to pressures on yields, espe- trends toward price stability will be extended in cially in markets in which they had been impor- the context of sustainable growth in economic tant buyers. activity. Because we at the Federal Reserve were con- You raised a number of questions that relate to cerned about sharp reactions in markets that had the issue of resource restraints and their influgrown accustomed to an unsustainable combina- ence on inflationary pressures. These relationtion of high returns and low volatility, we chose ships are not simple. High levels of resource a cautious approach to our policy actions, mov- utilization can contribute to the process that ing by small amounts at first. Members of the ultimately produces destabilizing inflation, but Federal Open Market Committee agreed that they need not do so. excess monetary accommodation had to be elim- Indeed, through much of this nation's history, inated expeditiously. We recognized, however, we had periods of tightened labor and product that our shift could impart uncertainty to finan- markets with only transitory effects on the gencial markets, and many of us were concerned eral price level. In these periods the discipline on that a large immediate move in rates would credit expansion provided by the gold standard create too big a dose of uncertainty, which could or other institutional arrangements limited the destabilize the financial system, indirectly affect- potential for prices to spiral upward and thus ing the real economy. In light of the substantial kept long-term inflation expectations from rising. variations in prices of financial assets over the After World War II, however, with those discipast few months as we adjusted our posture, our plines no longer in place, tightened markets worries seem to have been justified. But, through became increasingly associated with rising inflathis period, many of those who had purchased tion expectations and burgeoning credit delong-term securities with unduly optimistic ex- mands, which we were sometimes too slow to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

716 Federal Reserve Bulletin • August 1994 counter. A persistent inflation, unprecedented in difficulties result from the enormous complexity our history, eventually took hold, with devastat- and dynamism of our labor markets. Evolving ing effects on our economy and society. demographic trends and changes in the geograph- We are still paying a price for that episode ical distribution of activity can alter the degree of despite major successes in reversing inflationary short-term pressure on wages that is associated pressures during the past fifteen years. There with any given measure of aggregate unemployremains a significant inflation premium embodied ment. Moreover, structural shifts in the pattern in long-term interest rates, reflecting a still skep- of demand across industries and occupations can tical world financial market view that U.S. fiscal also influence the so-called natural rate. In addiand monetary policies retain some inflation bias. tion to the continual flux that is an integral Until the late 1970s, the markets held a deep- element of our market economy, public poliseated though, in retrospect, naive view that the cies—intentionally or unintentionally—can raise economic and institutional structure of the or lower the natural rate depending on whether United States rendered us particularly immune they hinder or facilitate adjustment in labor marfrom persistent inflationary forces. When that kets. Arriving at an overall assessment of these view was shattered by the reality of the late influences is far from straightforward and likely 1970s, bond markets collapsed. Much progress accounts for the wide range of estimates among has been made in restoring the degree of confi- professional economists. When the statistical undence that existed earlier in the post-World War certainty associated with these estimates is taken II period, but it has taken years. Moreover, into account, a plausible "confidence interval" is judging from the remaining inflation premium likely even wider. embodied in long-term rates, the job is not yet At present, assessments of the state of the complete. Having paid so large a price in revers- labor market have been complicated by the reviing inflation processes to date, it is crucial that sion this year to the Current Population Survey. we do not allow them to re-emerge. Based on initial tests of the new questionnaire With respect to your question about the so- and collection techniques by the Bureau of Labor called "natural rate" of unemployment, some Statistics, it appeared that the changes would analysts have suggested that unemployment rel- likely raise our statistical measure of the unemative to its natural rate can be used as a means of ployment rate. In response, many analysts have quantifying the aggregate demand-aggregate sup- increased their estimates of the natural rate by ply balance. The "natural rate" is usually de- the presumed difference between the old and new fined as the rate of unemployment consistent surveys. But a variety of technical issues remain with no tendency for the inflation rate to move up unresolved, and it may be a long time before we or down over time. Any attempt by either mon- know with any certainty the influence of these etary or fiscal policy to hold the unemployment changes on the measured unemployment rate. rate permanently below the "natural" rate, it is In light of these uncertainties, I do not think argued, would require increasing amounts of that any one estimate of the natural rate is useful monetary accommodation that, in the end, would in the formulation of monetary policy. We clearly only succeed in pushing inflation continually have entered a period in which economic policyupward. The record of the postwar period sug- makers need to watch carefully for signs of gests that episodes of tightness in the labor resource pressures in the labor market. But apmarket have been associated with increases in propriate analysis of current and prospective the rate of inflation, and the converse. But over conditions will need to extend beyond the aggrethe longer term, no trade-off is evident between gate figures for the labor market alone and adinflation and unemployment. dress regional and skill differences as they apply Although the idea of a national "threshold" at to wage determination. which short-term inflation rises or falls is statis- In addition to labor, the answers to your tically appealing, it is very difficult in practice to questions about our capacity for noninflationary arrive at useful estimates that would identify growth will depend on the expansion of the such a natural rate. In large measure, these nation's stock of plant and equipment and, most Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 40 important, ideas. Investment spending not only several decades has substantially altered the proraises the amount of capital per worker—an cess of domestic price formation. essential determinant of labor productivity—but The rate of capacity utilization in manufacalso is a principal channel through which new turing—a measure of the pressure on the domestechnologies are introduced into the production tic production of goods—was a shade under 83 process. Today we are in the midst of a capital percent in May—well above its historical averspending boom, as companies strive to modern- age. However, as with the unemployment rate, ize existing plants and add capacity. Investment there is no clear-cut "trigger point" for capacity in computers and high tech communications utilization as a signal for emerging inflationary equipment has been particularly strong, stimu- pressures. To be sure, as capacity utilization lated by waves of technological improvement increases, bottlenecks occur with greater freand rapidly expanding opportunities for the ap- quency, and production costs rise. Indeed, the plication of these technologies. But demand for recent firming of prices of some products and raw more traditional types of industrial machinery materials suggests that we may already be withas also been strong, and the construction of new nessing some elements of this process. To date, production facilities has revived. This strength in however, because of constrained increases in capital spending has been driven by the relatively unit labor costs, broad measures of producer low level of financing costs and by the conviction prices for final goods have not generally reflected within the business community that, with favor- the increases in those input costs. In addition, able prospects for a steady expansion of the monetary and credit growth remains quite economy, the risks in adding capacity are accept- muted. But, further increases in pressure on able. manufacturing facilities might suggest a greater The Federal Reserve's own index of output risk of emerging inflationary imbalances. capacity in manufacturing increased 2XA percent Of course, aggregate price trends obscure conlast year and is likely to surpass that performance siderable diversity across industries in the relain 1994. The Federal Reserve's indexes define tionship of capacity utilization to prices. For capacity as the highest level of output that a plant example, operating rates are high in the motor can maintain within the framework of a realistic vehicle and computer-related industries. Yet the work schedule, that is, one that allows for normal prices of light trucks have risen, while the prices downtime and sufficient availability of inputs. of microprocessors have plunged. Such differ- The Federal Reserve's capacity estimates are ences make it very difficult at the aggregate level developed from various sources, including ca- to pin down a particular level of capacity utilizapacity measures in physical units compiled by tion that can be associated with the emergence of trade associations, as well as surveys of utiliza- inflation pressures. All told, the rate of capacity tion rates as perceived by individual companies. utilization in manufacturing is not a foolproof But businesses have the ability over time to measure of inflation pressures. But, like the respond to changing market conditions. When unemployment rate, its level and trajectory dedemand is picking up, firms have historically serve close attention. been able to "stretch" capacity by working their The efficiency with which our labor and capital capital and labor overtime. The ability to import resources are combined also has an important raw materials, components, or even final prod- influence on the aggregate supply potential of the ucts from assembly plants abroad can also help at economy, and the recent record here is cause for times to meet unexpected growth in demand. some optimism. Since the last business cycle However, this solution is unlikely to be perma- peak in summer 1990, labor productivity—output nent because increased demand pressures abroad per hour in the nonfarm business sector—has as global activity recovers and expands will tend increased, on average, at about a 2 percent over time to push up import prices and eliminate annual rate. At this stage, disentangling trend any temporary cost advantage. At this point, we from cycle remains difficult. But there are some have little aggregate evidence that the increased signs of improvement in our underlying producopenness of the U.S. economy over the past tivity performance in response to increased Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

718 Federal Reserve Bulletin • August 1994 global and domestic competition and improved tivity but with faster growth of productivity as management. In addition, the investment in high well. Because of the increasing evidence of the tech equipment now finally appears to be paying deleterious effects of inflation in recent years, off. It has taken businesses time to learn how to there has emerged a growing consensus throughuse computers effectively in their operations. But out the world that a monetary policy geared better hardware and significant advances in soft- toward the pursuit of price stability over time is ware are now permitting many companies to the central bank's most significant contribution "re-engineer" the way they produce and distrib- to achieving maximal growth of a nation's wellute goods and services. being. It is important to remember that growth in The actions undertaken by the Congress can productivity is the key to increases in our stan- also have profound effects on the inflation threshdard of living over time. Productivity is the old of our economy and its productive potential. essential element that allows wages to grow in a Clearly, we ought to be encouraging measures to noninflationary way. It is for this reason that increase the flexibility of our work force and over long periods of time broad measures of labor markets. Improving education and facilitatcompensation per hour, which include both ing better and more rapid matching of workers wages and benefits, closely track the trend in with jobs are essential elements in making more labor productivity, when compensation is mea- effective use of the U.S. labor force. Just as sured relative to the prices of the goods and important, the Congress should avoid enacting services produced in the U.S. economy. Thus, if policies that create impediments to the efficient maintained, the strong growth in labor produc- movement of individuals across regions, industivity in this expansion will be a very welcome tries, and occupations, or that unduly discourage development indeed. the hiring of those seeking work. Competitive Finally, it is germane to ask what economic markets have shown a remarkable ability to policymakers can do to foster faster growth of create rising standards of living when left free to aggregate supply and thereby raise the threshold function. of resource utilization. In this regard, the role of Finally, the Congress and the Administration monetary policy is rather narrow but potentially can continue to contribute to the growth of our potent. Most important, we can reinforce ongo- economy by maintaining a disciplined fiscal poling trends in the private sector that enhance our icy. Last year's budget agreement, especially the productive potential by helping to create a stable spending caps, was a significant step in putting environment for sustainable noninflationary eco- fiscal policy on a more sustainable long-run path. nomic growth. Stability in economic conditions But, as this committee fully understands, under boosts confidence and makes long-range plan- current policy and law, later in this decade ning by businesses and households much easier. federal outlays will almost surely again be rising In that regard, the maintenance of inflation suf- at a pace that will exceed the growth of our tax ficiently low that it need not be a factor in base. Unless addressed, these trends will lead to business and consumer decisionmaking enhances increases in the deficit as a percent of gross the operation of the market price mechanism and domestic product, with unacceptable consehelps to ensure that resources are used most quences for financial stability and economic productively. Inflation interferes with such price growth. As I indicated to this committee last signals and spawns the wasteful use of resources year, increases in tax rates cannot solve this to hedge against unexpected price changes. problem. Only by reducing the growth in spend- Experience both here and abroad suggests that ing will ultimate balance be achievable. lower levels of inflation are conducive to the In summary, despite these considerable policy achievement of greater productivity and effi- challenges and the always-present future uncerciency and, therefore, higher standards of living. tainties, the outlook for the U.S. economy is as In fact, there is some, but by no means definitive, bright as it has been in decades. Economic evidence that lower rates of inflation have been activity has strengthened, unemployment is associated not just with higher levels of produc- down, and price trends have remained subdued. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 719 In addition, unlike some earlier periods, business that will bolster the economic welfare of our spending on new plant and equipment has been nation. The Federal Reserve welcomes these an important contributor to growth. This strength developments because the intent of our monetary in investment will enhance economic efficiency policy in recent years has been to foster precisely and lay the foundation for the productivity gains this kind of healthy economic performance. • Statement by Susan M. Phillips, Member, Board tion of increased fees was also observed, with of Governors of the Federal Reserve System, twenty-four out of forty-four estimated fee before the Subcommittee on Consumer Credit changes representing fee increases greater than and Insurance of the Committee on Banking, the rate of inflation and the remainder represent- Finance and Urban Affairs, U.S. House of Rep- ing either increases less than the rate of inflation resentatives, June 22, 1994 or, in a few cases, fee decreases. These observed changes in fees are similar to those found and I am pleased to be here today to discuss the reported in earlier years. trends in retail fees and the availability of retail Deposit insurance premiums have increased services at depository institutions. The informa- over the years, so that these fee increases do tion that I will describe today was obtained from correspond with an increase in deposit insurance annual surveys sponsored by the Federal Re- premiums. It is, however, difficult to determine serve System. with any certainty the extent to which the in- Before presenting the results, let me first note crease in deposit insurance premiums caused the original purpose of the surveys and explain fees to increase because changes in other factors how they are conducted. The Board instituted could also have played a role. this effort to meet the requirements of section The survey data were obtained through tele- 1002 of the Financial Institutions Reform, Recov- phone interviews conducted by a private survey ery, and Enforcement Act of 1989 (FIRREA). organization under contract with the Board. The The Congress required that the Board report number of institutions surveyed each year has annually on discernible changes in the cost and been approximately 150 banks and 180 savings availability of a wide variety of retail banking associations, with some minor changes from one services to assess the extent to which increased year to the next. These institutions are chosen deposit insurance premiums might be passed on randomly each year from each of seven different to retail customers in the form of reduced avail- geographical regions of the nation and from five ability of services or increased service fees. The different size groupings. The results reported in Congress further specified that these annual re- tables 1 through 4 are not simply averages of the ports be based on annual surveys that use sam- fees and service availability observed for the ples of insured depository institutions that are sampled institutions.1 Instead, they are weighted representative in terms of size and location. averages in which the weights are determined by Surveys meeting these requirements have been the region of the country and the size classificaconducted for each of the past five years. Copies tion from which each institution is drawn. This of all the resulting reports to the Congress, which procedure is analogous to that typically used in contain substantially more information than I will public opinion polling. The result in this case, we have time to present today, have been made believe, is a better estimate of what is true of the available to the committee. entire population of banks and savings associa- The most recent of these reports found that the tions. availability of the majority of retail services examined did not change appreciably between 1992 and 1993, with the few instances of im- 1. The attachments to this statement are available from proved availability outnumbering those of re- Publications Services, Board of Governors of the Federal duced availability. A general trend in the direc- Reserve System, Washington, DC 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

720 Federal Reserve Bulletin • August 1994 In assessing observed changes from one year strong evidence of an overall reduction in the to the next, it is important to note that institu- availability of services during this period. Intions surveyed were not, in general, the same in deed, the availability of some services (including each of the years covered. In addition, changes NOW accounts and ATM services at banks and observed from one year to the next may reflect noninterest checking at savings associations) indifferences in the sample drawn, as well as in the creased dramatically over the period. true trend over time. This problem tends to be The availability of no-fee accounts at banks more severe in the case of data items for which and savings associations is limited for all of the few financial institutions are observed. If, for years examined. For example, only about 8 perexample, only 10 percent of financial institutions cent of the banks and 12 percent of savings offer a particular retail service, few observations associations offered no-fee noninterest checking of financial institutions in the sample can be used in 1993, and only 11 percent of banks and 1.5 to estimate the average fee for that service, and percent of savings associations offered no-fee the sampling error will be large. In general, savings accounts. Although no-fee noninterest however, we think that this problem is insignifi- checking was still at a relatively low level of cant for most of the items of interest. availability, it became somewhat more available at both types of institutions over the period. However, no-fee NOW and savings accounts SER VICE A VAIL ABILITY became less available at both banks and savings associations, with the availability of no-fee sav- Table 1 focuses solely on the issue of service ings accounts dropping particularly sharply at availability and how it has changed over time. savings associations. Finally, the availability of Service availability can be measured in a number ATM services at banks has continued to increase of different ways. For the purpose of this table, it in recent years, although estimates of the availis measured as the percentage of banks or sav- ability at savings associations over the period ings associations that offer a particular service. exhibit a volatile pattern. Estimated percentages are presented for each year from 1989 to 1993, and results are reported separately for banks and savings associations. The table also indicates the change in the per- SERVICE FEES centages that occurred between 1989 and 1993 for both banks and savings associations. The Tables 2, 3, and 4 focus directly on the level of services included in the table are some of the fees charged by banks and savings associations most important retail services offered by depos- for various services and how the fees have itory institutions. These services include nonin- changed over time. We have divided the presenterest checking accounts, negotiable orders of tation of this information into three different withdrawal (NOW) accounts, which are basically categories: information on the average level of checking accounts that pay interest, savings ac- fees required to maintain and use various types counts, money orders or cashiers checks (which of checkable accounts; information on fees assoare aggregated because they are substitutes for ciated with various types of special actions, such each other), and automated teller machine as those associated with the return of checks for (ATM) services. Because of the importance of insufficient funds, deposit items returned, and assessing the availability of basic banking ser- stop-payment orders; and information on the vices, we have also included information on the various types of fees associated with the use of percentages of institutions that offer those types ATM services. Percentage changes in fees and of noninterest checking accounts, NOW ac- balance requirements, when meaningful data are counts, and savings accounts that carry no fee. available, are presented for the period between In assessing the trends in service availability, it 1989 and 1993, along with the corresponding is clear that results differ from one type of service change in the consumer price index during the to another. As a generalization, we do not find period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 721 Fees Charged for the Maintenance and per check as well as a monthly fee. Only 10 Use of Checkable Accounts percent to 25 percent of banks and no more than 5 percent of savings associations offered ac- Analysis of fees charged for the maintenance and counts with this fee structure. Because of the use of checkable accounts over time is compli- existence of a charge per check, average monthly cated by the fact that the terms of accounts can fees charged by banks (about $4.00 in 1993) are differ considerably. For example, different lower than those charged for the first type of nonchecking services may be provided with the account, thus illustrating the need for separate account; the balances that depositors must main- reporting of these different account types. In tain to avoid fees may vary; and the mix of fees contrast with the first type of account, the avercharged the account holder can differ widely. age monthly fee charged by banks for this ac- Depository institutions can, and frequently do, count rose 24 percent between 1989 and 1993. offer more than one type of account. So that fee This increase was substantially higher than the information may be compared systematically change in the CPI during the period, although over time, the focus in table 2 is restricted to four considerable variation was exhibited in the estirather narrowly defined accounts. Nevertheless, mates of this fee. The average charge per check the many dimensions of even these narrowly of about 20 cents, however, did not increase.3 defined accounts make comparisons over time Because so few savings associations offered this difficult. type of account, reliable fee and minimum bal- The first of these accounts we have termed a ance information cannot be reported for savings "single-balance, single-fee, noninterest checking associations for four of the five years surveyed. account." This account pays no interest and The third noninterest checking account reimposes no fee if a minimum balance is main- ported is a fee-only account, defined as an actained; otherwise the account incurs a single count in which the customer is charged a monthly fee but no charge per check. About 38 monthly fee regardless of the account balance; a percent of banks and 23 percent of savings asso- per check charge may also be assessed, but not ciations offered this account in 1993. The necessarily. The proportion of banks and savings monthly fee charged by banks averaged about associations offering this type of account in- $5.90 in 1993 and does not seem to have changed creased substantially over the period, with about much during the period. Neither the average 42 percent of banks and 18 percent of savings minimum balance needed to avoid the fee nor the associations offering the account in 1993. The average minimum balance required to open the average monthly fee charged by banks increased account at banks increased during the period, about 45 percent, about three times the increase and, in fact, both balances exhibit slight declines. in the CPI, during the period. This increase, For savings associations, the monthly fee aver- however, exaggerates the overall increase in fees aged $5.50 in 1993 and rose about 17 percent over charged holders of this account because, as indithe period. Although that fee has stabilized over cated, a smaller percentage of the banks surthe past three years, the entire increase over the veyed in 1993 included a charge per check and full period is roughly equivalent to the change in the per check charge was roughly constant. Simthe consumer price index (CPI) between the ilarly, the substantial decline (22 percent) in the dates of the 1989 and 1993 surveys.2 As with monthly fee registered for savings associations banks, the minimum balances associated with offering this account is offset by the fact that this account at savings associations exhibit, if check charges were more common in 1993 than anything, slight declines. in 1989. The second type of noninterest checking ac- The final checkable account for which fee count differs from the first in that failure to information is reported is a NOW account for maintain a minimum balance results in a charge 3. Estimates from the 1992 Functional Cost Analysis suggest that it costs banks between 22 cents and 26 cents to 2. The CPI used throughout is the urban index, all items. process "on us" debit items, which include checks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

722 Federal Reserve Bulletin • August 1994 which the institution charges no fee if a minimum banks and savings associations were charging balance is maintained; otherwise, the institution these fees at the beginning of the period, virtually levies one monthly fee with no check charges. all institutions imposed these charges by the end This type of account is offered by about half of all of the period. banks and savings associations. Presumably be- The case of the fee charged for returned decause the account holder receives interest for posit items is somewhat different. Although avbalances maintained in this type of account, erage fees did not rise faster than inflation for the average monthly fees and the average minimum whole period between 1989 and 1993, there apbalances required to avoid the fee and open the pears to have been a substantial jump between account are all higher than in the case of nonin- 1992 and 1993 at banks. Also, the proportion of terest checking accounts. The monthly fees for institutions charging for returned deposit items this type of account averaged $7.78 for banks and seems to have increased, particularly at banks. $6.50 for savings associations. This fee increased Taken together, and with the exception of at banks somewhat less than the increase in the money orders, I would conclude that, in general, CPI during the period, although the average these kinds of penalty fees have risen sharply monthly fee increased more than the CPI at over the past few years, and in most cases the savings associations. rise has been greater than that accounted for by In sum, fees charged for the maintenance and overall inflation. By contrast, the increases in use of checkable accounts have gone up substan- money order fees appear to have kept pace with tially in some cases. These results lack unifor- inflation at banks and increased at a faster rate at mity, however, because in other cases fees do savings associations, although the latter started not seem to have risen much. Minimum balance from a considerably lower base. requirements appear to have fallen in a number of cases, although results are not uniform and Fees Associated with ATM Services estimates exhibit substantial volatility from year to year. The surveys covering ATM fees differ from those covering other items in that the first survey was Fees Associated with Specialized Services conducted in 1988 rather than 1989. Among other or Actions things, this series of surveys requested information from institutions on any yearly fees that they The picture appears to be quite different in the charge for the use of ATMs and on various types case of fees associated with specialized services of transaction fees. These transactions include or actions. For these types of fees the recorded withdrawals, deposits, and balance inquiries increases appear to be a good deal more uniform. made through the use of ATMs. Because fees For each item, information is presented both on may differ depending on whether the customer the percentage of institutions that charge a fee uses the institution's own ATM (called an "on and on the average fee calculated for those us" transaction) or another institutions's ATM institutions that charge. (called an "on others" transaction), fee informa- Between 1989 and 1993, the charge for money tion is reported separately. orders increased at banks about the same per- Results indicate that a small minority of banks centage as did the increase in the CPI and by and savings associations charge their customers substantially more than that at savings associa- an annual fee for the use of ATMs. In recent tions. Savings associations, on average, charged years, this fee has been about $10.00 to $12.00 less than banks in 1989 but tended to catch up and in general appears to have decreased during during the period. the period. At both banks and savings associations, the The most important changes have occurred in fees charged for stop-payment orders, checks the area of ATM transaction fees. The most returned for insufficient funds, and overdrafts all striking change over the past few years has been rose substantially more than the increase in the the substantial increase in the proportion of CPI during this period. Further, although not all institutions charging for "on others" transac- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 723 tions. The proportion of banks charging for with- Except in the case of withdrawals "on others" drawals "on others," for example, increased at savings associations, average transaction fees from 50 percent in 1988 to about 76 percent in do not seem to have risen as much as the CPI, 1993, while it increased from one-third to about which increased about 22 percent between the two-thirds for savings associations during the dates of the earliest and latest surveys. Savings period. Other types of "on others" transactions associations appear to have been catching up to exhibit similar increases. In contrast, it is rela- banks for fees charged for withdrawals "on othtively uncommon for institutions to charge for ers." "on us" transactions, and, if anything, the per- It thus appears from these results that the most centage of institutions charging for such transac- important change occurring in the area of ATM tions seems to have declined over the period. fees has been the sharp increase in the number of This distinction between the fees charged for "on institutions charging customers for "on others" others" and "on us" transactions may be partly transactions. explained by the fact that "on others" transac- In summary, the trends in fees seem to depend tions typically require a payment to the ATM very much on the type of fee at issue. Fees network by the customer's institution (which can associated with special actions clearly exhibit the range from 3 cents to 20 cents) and a payment to most consistently large increases, while the picthe owner of the ATM (which can vary between ture for other types of fees is decidedly more 20 cents and $1.20). mixed. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

724 Announcements ALAN S. BLINDER: APPOINTMENTS AS A clarity. He is a keen intellect, who reached the top of his MEMBER OF THE BOARD OF GOVERNORS profession without losing the common touch or ever forgetting the human implications of the often abstract AND AS VICE CHAIRMAN economic decisions we in government must make. He has served as an economic conscience in my Administra- On April 22, 1994, President Clinton announced tion, striving to ensure that our policies met the test of his intention to nominate Alan S. Blinder as a rationality and workability for real people. I am also pleased to announce my intention to nomimember of the Board of Governors and as Vice nate Janet Yellen to a full term on the Federal Reserve Chairman. Dr. Blinder was subsequently confirmed Board. Dr. Yellen is one of the most prominent econoby the Senate on June 24 and took the oath of mists of her generation on the intersection of macrooffice, administered by Chairman Greenspan, on economics and labor markets. She is also an expert June 27. The text of the White House announce- in international economics on such issues as the determinants of the balance of trade. She was a clear and ment follows: unanimous choice of my top economic advisers who found her to be a top-flight intellect, with a prag- The White House matic approach to monetary policy and a judicious Office of the Press Secretary temperament. April 22, 1994 I am confident that both candidates, if confirmed, will serve this nation with distinction as Governors of the Statement by President Clinton on His Nominations for Federal Reserve Board. the Two Vacancies on the Federal Reserve Board A stable monetary system is the platform upon which NOMINATIONS SOUGHT FOR APPOINTMENTS any efforts of economic renewal must be built. My Administration recognized that our first task was to put TO THE CONSUMER ADVISORY COUNCIL our fiscal house in order, so that an ever-growing federal budget deficit did not absorb capital and slow economic The Federal Reserve Board announced on June 17, growth. I believe that we have now put our nation on the 1994, that it is seeking nominations of qualified path to sustainable economic growth. The Federal individuals for thirteen appointments to its Con- Reserve Board is the critical institution that preserves the stability of our monetary system and the confidence sumer Advisory Council. of our markets. The position of Governor of the Federal The Consumer Advisory Council comprises Reserve Board requires acute sensitivity to the need thirty representatives of consumer and community to strike a careful balance—to prudently manage the interests and of the financial services industry. The money supply and avoid the excesses of inflation, while council was established by the Congress in 1976, at ensuring that the men and women in our economy have the opportunity to prosper and fulfill their dreams. the suggestion of the Board, to advise the Board To fill the vital job of Vice Chairman of the Federal on the exercise of its responsibilities under the Reserve, I am delighted to nominate Dr. Alan Blinder, Consumer Credit Protection Act and other matters currently a member of the Council of Economic Advison which the Board seeks its advice. The council ers. Dr. Blinder is one of the world's most respected by law represents the interests both of consumers macroeconomists. He is an expert on fiscal and monetary policy and productivity, has served as chairman of the and of the financial community. The group meets in economics department at Princeton, authored countless Washington, D.C., three times a year. articles and books, including one of the Nation's top Thirteen new members will be selected from the textbooks, Economic Principles and Policy, which he nominations to serve three-year terms that will co-authored with William Baumol. begin in January 1995. The Board expects to Alan has been an integral part of my economic team over the last 15 months. He has always expressed his announce the selection of new members by yearviews to me freely, with intellectual integrity, force and end 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

725 Nominations should be submitted in writing and • Underwriting standards and practices that do should include the address and telephone number not arbitrarily disadvantage lower-income and of the nominee. Also, information should be minority applicants and ensure that all applicants included about past and present positions held and are treated fairly special knowledge, interests, or experience related • Alternative loan products that help a bank to consumer credit or other consumer financial reduce risks and costs of lending to customers services. who may not meet all conventional underwriting The written nominations must be received by standards August 31, 1994, and should be addressed to • Second review policies that ensure impartial Dolores S. Smith, Associate Director, Division of reviews of rejected applications Consumer and Community Affairs, Board of Gov- • Marketing strategies designed specifically to ernors of the Federal Reserve System, Washington, increase awareness of bank products and services DC 20051. Information about nominees will be in minority communities available for inspection on request. • Participation in small business and homebuyer education programs, which provide financial and other types of counseling and technical assistance for prospective borrowers PRODUCTION OF VIDEOTAPE FOR USE • Working with third parties, such as appraisers, IN TRAINING STAFF IN FAIR LENDING mortgage insurance companies, or real estate PRACTICES brokers, to ensure fairness in the lending process • Self-testing and assessments to ensure that all aspects of the lending process are free from dis- Production of a videotape designed to help financriminatory practices. cial institutions combat lending discrimination was announced on June 2, 1994, by the Federal Reserve The video was jointly developed by the commu- System. nity affairs programs of the Federal Reserve Banks Entitled Closing the Gap: A Guide to Equal of Boston, Chicago, and San Francisco. It is based Opportunity Lending, the videotape is designed for on information from a publication of the same use as a training tool for financial institutions, trade name that was produced by the Federal Reserve associations, and others to help senior management Bank of Boston last year and widely distributed by and their staff to understand fair lending and to the Federal Reserve System. combat discrimination. The videotape was broadcast on American The videotape features an introduction by Fed- Financial Sky link, the American Bankers Associaeral Reserve Chairman Alan Greenspan and a distion's satellite communications network, on Tuescussion of the ten "best practices," which, if day, July 5. adopted by financial institutions, would help them The Federal Reserve System will provide single ensure equitable treatment of all applicants and copies of the video to the presidents of all state borrowers. These recommended practices are the banks it supervises as well as numerous bank holdfollowing: ing companies for use in their internal training programs. • Staff training programs to make employees The video will also be used by the Federal familiar with antidiscrimination laws and sensitive Reserve in examiner training and will be featured to how racial and cultural differences may affect in fair lending and community reinvestment conthe lending process ferences and workshops for bankers sponsored by • Hiring and promotion practices that foster the Community Affairs programs of the Federal racial and ethnic diversity within the financial Reserve Banks. institution Additional single or bulk copies of the video • Compensation structures that do not discour- may be obtained from VIDICOPY, 650 Vaqueros age lending to lower-income or financially unso- Avenue, Sunnyvale, CA 94086, at the following phisticated applicants rates: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

726 Federal Reserve Bulletin • August 1994 1-30 copies—$9.95 each, including shipping and Board approval and other public welfare investhandling ments with specific approval. The proposed rule 31-99 copies—$8.95 each, including shipping and also addresses the procedural aspects of these inhandling vestments. Comments were requested by July 22, 100-249 copies—$5.75 each, plus shipping and 1994. handling The Federal Reserve Board on June 28, 1994, 250-500 copies—$4.75 each, plus shipping and requested public comment on proposed amendhandling. ments to Regulation T (Credit by Brokers and Dealers) regarding settlement of securities pur- For additional information on pricing and how to chases and the status of government securities order copies of the tape, contact VIDICOPY at transactions. Comments should be received by 1-800-708-7080. August 15, 1994. REAL ESTATE APPRAISAL REQUIREMENTS: PUBLICATION OF A SUPPLEMENT TO THE FINAL AMENDMENTS BANK HOLDING COMPANY SUPERVISION MANUAL The Federal Reserve Board and other financial institutions regulatory agencies issued on June 6, A June 1994 supplement to the Bank Holding 1994, final amendments to real estate appraisal Company Supervision Manual has been published requirements. The amendments were effective by the Board's Division of Banking Supervision June 7, 1994. and Regulation and is now available for purchase The amendments make the following changes: by the public. The Manual is used by Federal Reserve examiners in the supervision, regulation, • Increase to $250,000 the threshold level at or and inspection of bank holding companies and their below which appraisals are not required subsidiaries. • Expand and clarify the type of transactions The new topics covered in the supplement that are exempt from the appraisal requirement include a discussion of a bank holding company's • Narrow the type of exempt transactions for supervisory oversight responsibility over its subsidwhich evaluations are required iaries in relation to (1) an interagency policy state- • Revise the requirements governing appraisal ment on retail sales of nondeposit investment prodcontent and the use of appraisals prepared by the ucts (that is, mutual funds and annuities); (2) an financial services institutions. interagency policy statement on the maintenance of an adequate allowance for loan and lease losses and an effective loan review system; and (3) the PROPOSED ACTIONS Board's February 1994 revision of Regulation O (Loans to Executive Officers, Directors, The Federal Reserve Board on June 7, 1994, pub- and Principal Shareholders of Member Banks). lished for public comment proposed changes to its Another new section discusses risk management Regulation C (Home Mortgage Disclosure Act and internal controls as they pertain to the examin- (HMDA)), and to the instructions and reporting er' s inspection of trading activities. Also discussed forms that financial institutions must use in com- are recent nonbanking activities approved by Board plying with the annual reporting requirements. order including (1) providing a network for the Comments are requested by August 10, 1994. processing and transmission of medical payment The Federal Reserve Board on June 6, 1994, data and the provision of other incidental services, requested public comment on a proposed amend- (2) issuance and sale of variably denominated payment to Regulation H (Membership of State Bank- ment instruments without limitation as to face ing Institutions in the Federal Reserve System), value, (3) engaging in career counseling services, (4) asset management activities involving nonwhich would permit state member banks to make financial institutions, and (5) acting as a dealercertain public welfare investments without specific Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 727 manager in connection with cash-tender and Manual and all its supplements, through June 1994, exchange-offer transactions. Other topics that have may be ordered from Publications for $50.00. been revised include nonbanking activities of, and investment in, qualifying foreign banking organizations as well as the exemptions for those organiza- CHANGES IN BOARD STAFF tions under sections 2(h) and 4(c)(9) of the Bank Holding Company Act, and changes to the risk- The Federal Reserve Board announced the resignabased capital guidelines to lower the risk weight tion of John Rea, Assistant Director in the Division from 100 percent to 50 percent for multifamily of Research and Statistics, effective July 29, 1994. housing loans meeting certain criteria, effective The Board also announced the promotion of December 31, 1993. Jennifer J. Johnson to Deputy Secretary of the The June 1994 supplement to the Manual may Board. Ms. Johnson was with the Board's staff be ordered for $10.00 from Publications Services, from 1975 until 1986. She returned to the Board in Mail Stop 127, Board of Governors of the Federal 1989 as Associate Secretary of the Board. She Reserve System, Washington, DC 20551. The holds a J.D. from the University of Pennsylvania. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

729 Legal Developments FINAL RULE—AMENDMENT TO REGULATION A 201.3(b) is a flexible rate that takes into account rates on market sources of funds, but in no case will the rate The Board of Governors is amending 12 C.F.R. Part charged be less than the rate for adjustment credit as 201, its Regulation A (Extensions of Credit by Federal set out in section 201.51. Reserve Banks; Change in Discount Rate) to reflect its (b) Extended credit. For extended credit to depository approval of an increase in the basic discount rate at institutions under section 201.3(c), for credit outstandeach Federal Reserve Bank. The Board acted on ing for more than 30 days, a flexible rate will be requests submitted by the Boards of Directors of the charged that takes into account rates on market twelve Federal Reserve Banks. sources of funds, but in no case will the rate charged These amendments to Part 201 (Regulation A) were be less than the rate for adjustment credit, as set out in effective June 2,1994. The rate changes for adjustment section 201.51, plus one-half percentage point. At the credit were effective on the dates specified in section discretion of the Federal Reserve Bank, this time 201.51. period may be shortened, and the rate may be the discount rate applicable to adjustment credit. Part 201—Extensions of Credit by Federal Reserve Banks (Regulation A) ORDERS ISSUED UNDER BANK HOLDING 1. The authority citation for 12 C.F.R. Part 201 is COMPANY ACT revised to read as follows: Orders Issued Under Section 3 of the Bank Authority: 12 U.S.C. 343 et seq., 347a, 347b, 347c, Holding Company Act 347d, 348 et seq., 357, 374, 374a and 461. United Bancorporation 2. Section 201.51 is revised to read as follows: Osseo, Wisconsin Section 201.51—Adjustment credit for Order Approving the Formation of a Bank Holding depository institutions. Company The rates for adjustment credit provided to depository United Bancorporation, Osseo, Wisconsin ("Bancorinstitutions under section 201.3(a) are: poration"), has applied under section 3(a)(1) of the Bank Holding Company Act ("BHC Act") (12 U.S.C. § 1842(a)(1)) to become a bank holding company Federal Reserve Bank Rate Effective within the meaning of the BHC Act by acquiring from Boston 3.5 May 17, 1994 85.11 to 100 percent of the shares of the following New York 3.5 May 17, 1994 banks (the "Banks"): Cambridge State Bank, Cam- Philadelphia 3.5 May 17, 1994 Cleveland 3.5 May 18, 1994 bridge, Wisconsin (100 percent); Lincoln County Richmond 3.5 May 17, 1994 Bank, Merrill, Wisconsin (85.11 percent); United Atlanta 3.5 May 17, 1994 Chicago 3.5 May 17, 1994 Bank, Osseo, Wisconsin (96.91 percent); Bank of St. Louis 3.5 May 17, 1994 Poynette, Poynette, Wisconsin (99.67 percent); Farm- Minneapolis 3.5 May 17, 1994 Kansas City 3.5 May 17, 1994 ers & Merchants State Bank, Iroquois, South Dakota Dallas 3.5 May 17, 1994 San Francisco 3.5 May 17, 1994 (91.20 percent); Farmers State Bank, Stickney, South Dakota (100 percent); and Clarke County State Bank, Section 201.52—Extended credit for depository Osceola, Iowa (88.82 percent).1 institutions. 1. This transaction constitutes a reorganization of interests by the (a) Seasonal credit. The rate for seasonal credit exmajority shareholder of the Banks. After consummation of this tended to depository institutions under section transaction, the majority shareholder, members of his family and a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

730 Federal Reserve Bulletin • August 1994 Notice of the application, affording interested per- the conditions of the Iowa statute have been met by sons an opportunity to submit comments, has been this proposal.6 published (59 Federal Register 15,731 (1994)). The South Dakota law expressly authorizes the acquisitime for filing comments has expired, and the Board tion of a South Dakota bank by an out-of-state bank has considered the application and all comments re- holding company.7 In order to approve such an acquiceived in light of the factors set forth in section 3(c) of sition, the South Dakota Banking Commission must the BHC Act. find either that the laws of the jurisdiction in which the Bancorporation is a nonoperating corporation bank holding company is located, in this case, Wisformed for the purpose of acquiring the Banks. Upon consin, are reciprocal with the laws of South Dakota,8 consummation of this proposal, Bancorporation would or that the jurisdiction in which the out-of-state bank become the 25th largest commercial banking organiza- holding company is located permits the proposed tion in Wisconsin, controlling deposits of $156.9 mil- acquisition because South Dakota has authorized inlion, representing less than 1 percent of total deposits terstate banking acquisitions.9 Wisconsin corporate in commercial banking organizations in the state;2 the law authorizes any corporation located in Wisconsin 85th largest commercial banking organization in Iowa, to acquire shares of any entity and conduct its busicontrolling deposits of $70.4 million, representing less ness within or outside of Wisconsin, and Wisconsin than 1 percent of total deposits in commercial banking bank holding companies may exercise this general organizations in the state; and the 34th largest com- corporate authority. The South Dakota Attorney Genmercial banking organization in South Dakota, con- eral and Director of Banking have indicated that this trolling deposits of $39.5 million, representing less proposal meets the requirements of South Dakota's than 1 percent of total deposits in commercial banking interstate banking statute.10 Based on these opinions, organizations in the state. and all other facts of record, the Board has concluded that Bancorporation is authorized under the statute Section 3(d) of the BHC Act, the Douglas Amendlaws of Iowa and South Dakota to acquire the Banks ment, prohibits the Board from approving an applicalocated in those states. Accordingly, Board approval tion by a bank holding company to acquire control of of this proposal is not prohibited by the Douglas any bank located outside the bank holding company's Amendment. Approval of this proposal is conditioned, home state, unless such acquisition is "specifically however, upon the receipt by Bancorporation of all authorized by the statute laws of the State in which required state regulatory approvals. such bank is located, by language to that effect and not merely by implication."3 For purposes of the Douglas Banks do not compete directly in any relevant Amendment, the home state of Bancorporation is banking market. Based on all the facts of record, the Wisconsin.4 Bancorporation proposes to acquire Board concludes that consummation of the proposal banks in Iowa, South Dakota, and Wisconsin. would not have any substantially adverse effect on The interstate banking statute of Iowa permits out- competition or on the concentration of banking reof-state bank holding companies located in states in a sources in any relevant banking market. The Board certain region, including Wisconsin, to acquire banks located in Iowa, subject to certain conditions and to the approval of the Superintendent of Banking.5 All Iowa Code Ann. § 524.1906(4)(b). The Iowa bank to be acquired has been in existence and continuously operated for over five years. 6. Bancorporation is newly organized for the purpose of acquiring the Banks. corporation under their control will own shares in Bancorporation in 7. S.D. Codified Laws Ann. § 51A-2-38. proportion to their current ownership interests in the Banks. 8. S.D. Codified Laws Ann. § 51A-2-38(l). Wisconsin law does not 2. All deposit data are as of June 30, 1993. meet the reciprocity requirement of the South Dakota statute because 3. 12 U.S.C. § 1842(d). Wisconsin permits acquisitions of Wisconsin banking institutions by 4. A bank holding company's home state is that state in which the out-of-state bank holding companies that have their principal place of operations of the bank holding company's banking subsidiaries were business in a limited region which does not include South Dakota. principally conducted on July 1, 1966, or the date on which the 9. Section 51A-2-38(2) of the South Dakota interstate banking company became a bank holding company, whichever is later. See statute permits the Banking Commission to approve the acquisition of 12 U.S.C. § 1842(d). Upon consummation of this transaction, Bancor- a South Dakota bank by an out-of-state bank holding company if the poration would become a bank holding company and the operations of "statutes of the jurisdiction in which the operations of the out-of-state its banking subsidiaries would be principally conducted in Wisconsin. bank holding company's banking subsidiaries are principally con- 5. Iowa Code Ann. § 524.1903. Under Iowa law, the out-of-state ducted authorize the acquisition of control because the out-of-state bank holding company must have been in existence for at least three bank holding company or subsidiary is authorized by §§ 51A-2-38 to years, and the bank to be acquired must have been in existence and 51A-2-41, inclusive, to acquire control of and hold shares of banking continuously operated as a bank for five years or more. Iowa Code institutions in this state ..." Ann. § 524.1906(3). Although Bancorporation has not been in exis- 10. The Board previously has accorded substantial weight to tence for three years, the Iowa statute provides that this requirement reasoned opinions of a state's Attorney General or banking agency is fulfilled if the bank holding company is newly organized solely for that are not inconsistent with the language or purpose of a statute. the purpose of facilitating the acquisition of another bank that has Bancorp of Mississippi, Inc., 72 Federal Reserve Bulletin 257 (1986); been in existence and continuously operated for the requisite period. Mellon National Corporation, 70 Federal Reserve Bulletin 441 (1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 731 also concludes that financial and managerial resources Exchange Commission under the Securities Exchange and future prospects of Bancorporation, and the other Act of 1934 (15 U.S.C. 78a et seq.), in underwriting supervisory factors that the Board must consider and dealing, to a limited extent, in all types of equity under section 3 of the BHC Act, are consistent with securities, including, without limitation, common approval of this proposal. Considerations relating to stock; American Depositary Receipts; Global Deposthe convenience and needs of the communities to be itary Receipts; securities convertible into equity secuserved also are consistent with approval. rities and options; other direct and indirect equity Based on the foregoing and other facts of record, the ownership interests in domestic and foreign corpora- Board has determined that the application should be, tions and other entities; warrants and other rights and hereby is, approved. The Board's approval is issued in connection with the above securities; and expressly conditioned upon compliance with all the securities issued by closed-end investment companies, commitments made by Bancorporation in connection but not including ownership interests in open-end with this application and with the conditions referred investment companies. Chase proposes to conduct to in this order. The commitments and conditions these activities worldwide. relied on by the Board in reaching this decision are Notice of the application, affording interested perboth deemed to be conditions imposed in writing by sons an opportunity to submit comments on the prothe Board in connection with its findings and decision, posal, has been published (59 Federal Register 21,767 and, as such, may be enforced in proceedings under (1994)). The time for filing comments has expired, and applicable law. the Board has considered the application and all The acquisition of the Banks shall not be consum- comments received in light of the public interest mated before the thirtieth calendar day following the factors set forth in section 4(c)(8) of the BHC Act. effective date of this order, or later than three months Chase, with total consolidated assets of $112.6 bilafter the effective date of this order, unless such period lion, operates bank subsidiaries in New York, Conis extended for good cause by the Board or by the necticut, Delaware, Florida, and Arizona.1 Chase has Federal Reserve Bank of Minneapolis, acting pursuant received Federal Reserve approval to engage directly to delegated authority. and through subsidiaries in a broad range of permis- By order of the Board of Governors, effective sible nonbanking activities, including underwriting and June 27, 1994. dealing in all types of debt securities on a limited basis.2 Company is, and will continue to be, a broker- Voting for this action: Chairman Greenspan and Governors dealer registered with the Securities and Exchange LaWare, Lindsey, and Phillips. Absent and not voting: Commission ("SEC"), and a member of the National Governor Kelley. Association of Securities Dealers, Inc. ("NASD"). Accordingly, Company is subject to the record-keep- JENNIFER J. JOHNSON ing, reporting, fiduciary standards, and other require- Associate Secretary of the Board ments of the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.), the SEC, and the NASD. Orders Issued Under Section 4 of the Bank The Board has determined that, subject to the Holding Company Act prudential framework of limitations established in previous decisions to address the potential for conflicts of The Chase Manhattan Corporation interests, unsound banking practices, or other adverse New York, New York effects, the proposed activities of underwriting and dealing in bank-ineligible securities are so closely Order Approving an Application to Engage in related to banking as to be proper incidents thereto Underwriting and Dealing in Bank-Ineligible within the meaning of section 4(c)(8) of the BHC Act.3 Securities on a Limited Basis The Chase Manhattan Corporation, New York, New 1. Asset data are as of March 31, 1994. York ("Chase"), a bank holding company within the 2. See J.P. Morgan & Co., Inc., et al., 75 Federal Reserve Bulletin 192 (1989). As used in this order, "bank-ineligible securities" refers to meaning of the Bank Holding Company Act ("BHC all types of debt and equity securities that a bank may not underwrite Act"), has applied under section 4(c)(8) of the BHC or deal in directly under section 20 of the Glass-Steagall Act (12 U.S.C. § 377). Act (12 U.S.C. § 1843(c)(8)), and section 225.23 of the 3. See Canadian Imperial Bank of Commerce, 76 Federal Reserve Board's Regulation Y (12 C.F.R. 225.23), to engage Bulletin 158 (1990); J.P. Morgan & Co. Incorporated, et al., 75 de novo through its wholly owned subsidiary, Chase Federal Reserve Bulletin 192 (1989), affd sub nom. Securities Industries Ass'n v. Board of Governors of the Federal Reserve System, 900 Securities, Inc., New York, New York ("Company"), F.2d 360 (D.C. Cir. 1990); Citicorp, et al., 73 Federal Reserve Bulletin a broker-dealer registered with the Securities and 473 (1987), affd sub nom. Securities Industry Ass'n v. Board of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

732 Federal Reserve Bulletin • August 1994 The Board also has determined that the conduct of proval of this proposal is conditioned upon a satisfacthese securities underwriting and dealing activities is tory determination by the Reserve Bank that consistent with section 20 of the Glass-Steagall Act Company's operational and managerial infrastructure (12 U.S.C. § 377), provided that the company engaged and policies and procedures relating to underwriting in the underwriting and dealing activities derives no and dealing in equity securities are adequate to ensure more than 10 percent of its total gross revenue from compliance with the requirements of the Section 20 underwriting and dealing in bank-ineligible securities Orders. The Board has reviewed the capitalization of over any two-year period.4 Chase has committed that Chase and Company in accordance with the standards Company will conduct its underwriting and dealing set forth in the Section 20 Orders, and finds the activities with respect to bank-ineligible securities capitalization of each to be consistent with approval. subject to the 10-percent revenue test, and the pruden- With respect to the capitalization of Company, aptial limitations established by the Board in previous proval of the requested activities is limited to a level orders. consistent with the projections of position size and The Federal Reserve Bank of New York ("Reserve types of securities in the application. Accordingly, Bank") is reviewing the operational and managerial subject to the satisfactory completion of the Reserve infrastructure of Company, including its computer, Bank's review of Company's operational and manageaudit, and accounting systems, and internal risk man- rial infrastructure and policies and procedures, the agement procedures and controls. The Board's ap- Board concludes that the financial and managerial considerations are consistent with approval of this application. Governors of the Federal Reserve System, 839 F.2d 47 (2d Cir.), cert, In order to approve this application, the Board also denied, 486 U.S. 1059 (1988) (collectively, "Section 20 Orders"). must determine that the performance of the proposed Chase has committed to conduct the proposed underwriting and dealing activities using the same methods and procedures and subject activities by Chase can reasonably be expected to to the same prudential limitations as those established by the Board in produce public benefits that would outweigh possible the Section 20 Orders. adverse effects under the proper incident to banking Chase proposes for its subsidiary banks and the direct and indirect broker-dealer subsidiaries of those banks (including overseas broker- standard of section 4(c)(8) of the BHC Act. Under the dealer subsidiaries of Edge Act subsidiaries) to act as a riskless framework established in this and prior decisions, principal or broker for customers in buying and selling bank-eligible securities that Company underwrites or deals in. Except as described consummation of this proposal is not likely to result in below, there would be no employees in common between Company any significant adverse effects, such as undue concenand any of its bank affiliates or their subsidiaries. In addition, tration of resources, decreased or unfair competition, Company's arrangement to sell bank-eligible securities through affiliated banks and their subsidiaries would not involve any exclusive conflicts of interests, or unsound banking practices. arrangements. Company's role in underwriting or dealing in securities The Board expects that the de novo entry of Chase brokered by its affiliates would be fully disclosed to the affiliates' brokerage customers, and all such brokerage transactions would be into the market for the proposed services in the United conducted on an arm's length basis. The Board previously has States would provide added convenience to Chase's determined that these activities are consistent with the Glass-Steagall customers, and would increase the level of competi- Act. See Chemical Banking Corporation, 80 Federal Reserve Bulletin 49 (1994); BankAmerica Corporation, 79 Federal Reserve Bulletin tion among existing providers of these services. Ac- 1163 (1993). The Board also notes that the sale by a financial cordingly, the Board has determined that the perforinstitution of uninsured investment products, such as bank-eligible mance of the proposed activities by Chase could securities, must comply with applicable regulations and guidelines of the institution's primary federal regulator. reasonably be expected to produce public benefits that A limited number of employees of the foreign subsidiaries of would outweigh possible adverse effects under the Chase's bank subsidiaries would serve as employees of Company. As employees of Company, they would be engaged solely in marketing, proper incident to banking standard of section 4(c)(8) outside the United States, the securities and services of Company, and of the BHC Act. the related creation of underwriting syndicates, or the dissemination Accordingly, and for the reasons set forth in the of research, all involving non-U.S. issuers. These employees would not be involved in selling securities to investors in the United States. Section 20 Orders, the Board concludes that Chase's The Board also has considered Chase's request for the foreign proposal to engage through Company in the proposed subsidiaries of Company's bank affiliates to market the securities of Company overseas. The Board has approved this request by a activities is consistent with the Glass-Steagall Act, separate letter. and is so closely related to banking as to be a proper 4. See Section 20 Orders. Compliance with the 10-percent revenue incident thereto within the meaning of section 4(c)(8) limitation shall be calculated in accordance with the method stated in of the BHC Act, provided Chase limits Company's the Section 20 Orders, as modified by the Order Approving Modifications to the Section 20 Orders, 75 Federal Reserve Bulletin 751 (1989), activities as provided in the Section 20 Orders, as the Order Approving Modifications to the Section 20 Orders, 79 Fed- modified by the Modification Orders. eral Reserve Bulletin 226 (1993), and the Supplement to Order Approving Modifications to Section 20 Orders, 79 Federal Reserve On the basis of the record, the Board has deter- Bulletin 360 (1993) (collectively, "Modification Orders"). The Board mined to, and hereby does, approve this application notes that Chase has adopted the Board's alternative indexed-revenue subject to all the terms and conditions discussed in this test to measure compliance with the 10-percent limitation on bankineligible securities activities. order and in the Section 20 Orders as modified by the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 733 Modification Orders. The Board's approval of this § 1843(c)(8)) and section 225.23 of the Board's Reguproposal extends only to activities conducted within lation Y (12 C.F.R. 225.23) to acquire all of the voting the limitations of those orders and this order, including shares of the following nonbanking subsidiaries of The the Board's reservation of authority to establish addi- Dreyfus Corporation, New York, New York ("Dreytional limitations to ensure that Company's activities fus"): are consistent with safety and soundness, conflict of (1) The Dreyfus Security Savings Bank, F.S.B., interest, and other relevant considerations under the Paramus, New Jersey ("DSSB"), and thereby en- BHC Act. Underwriting and dealing in any manner gage in operating a savings association pursuant to other than as approved in this order or the Section 20 section 225.25(b)(9) of the Board's Regulation Y;1 Orders (as modified by the Modification Orders) is not (2) The Dreyfus Trust Company, Uniondale, New within the scope of the Board's approval and is not York ("DTC"), and thereby engage in operating a authorized for Company. trust company pursuant to section 225.25(b)(3) of The Board's determination is also subject to all the the Board's Regulation Y; and terms and conditions set forth in Regulation Y, includ- (3) The Truepenny Corporation, New York, New ing those in sections 225.4(d) and 225.23(b), and to the York ("Truepenny"), and its subsidiaries, and Board's authority to require modification or termina- thereby engage in community development advisory tion of the activities of a bank holding company or any activities and in development of residential housing of its subsidiaries as the Board finds necessary to in an urban redevelopment project located in New assure compliance with, and to prevent evasion of, the York City, known as the Queens West Development provisions of the BHC Act, and the Board's regula- Project ("Project").2 tions and orders issued thereunder. The Board's decision is specifically conditioned on compliance with all Notice of the application, affording interested perthe commitments made in connection with this appli- sons an opportunity to submit comments on the procation, including the commitments discussed in this posal, has been published (59 Federal Register 23,066 order and the conditions set forth in the above noted (1994)). The time for filing comments has expired, and Board regulations and orders. These commitments and the Board has considered the application and all conditions shall be deemed to be conditions imposed comments received in light of the factors set forth in in writing by the Board in connection with its findings section 4(c)(8) of the BHC Act. and decisions, and may be enforced in proceedings Applicant, with total consolidated assets of under applicable law. $36.7 billion, is the 24th largest commercial banking This transaction shall not be consummated later organization in the United States and operates bank than three months after the effective date of this order subsidiaries in Pennsylvania, Delaware, Maryland, unless such period is extended for good cause by the and Massachusetts.3 Applicant engages through its Board, or by the Federal Reserve Bank of New York subsidiaries in a broad range of banking and permissiacting pursuant to delegated authority. ble nonbanking activities. By order of the Board of Governors, effective Section 4(c)(8) of the BHC Act provides that a bank June 6, 1994. holding company may, with Board approval, engage in any activity that the Board determines to be "closely Voting for this action: Chairman Greenspan and Governors related to banking or managing or controlling banks." Kelley, La Ware, Lindsey, and Phillips. The Board also must determine that the activity is a JENNIFER J. JOHNSON Associate Secretary of the Board 1. DSSB is a federally chartered savings bank insured by the Bank Insurance Fund of the Federal Deposit Insurance Corporation. In addition to its principal office, DSSB operates a branch office in San Mellon Bank Corporation Francisco, California, and has received approval from the Office of Pittsburgh, Pennsylvania Thrift Supervision to open 13 interstate branches located in California, New York, Illinois, Colorado, Georgia, Florida, and Massachusetts. 2. Applicant proposes to acquire these nonbanking companies Order Approving Application to Acquire Nonbanking simultaneously with the acquisition by Applicant's lead bank subsidiary, Mellon Bank, N.A., Pittsburgh, Pennsylvania, of Dreyfus and its Companies securities brokerage, investment advisory, and mutual fund administrative subsidiaries. The Office of the Comptroller to the Currency recently approved the acquisition of these securities-related compa- Mellon Bank Corporation, Pittsburgh, Pennsylvania nies. See Letter from Frank Maguire, Office of the Comptroller of the ("Applicant"), a bank holding company within the Currency, to Michael E. Bleier (May 4, 1994). Applicant proposes to meaning of the Bank Holding Company Act ("BHC acquire DSSB and DTC, through its wholly owned subsidiary, MBC Investments Corporation ("MBC Investments"), and to acquire Act"), has applied for the Board's approval under Truepenny directly. section 4(c)(8) of the BHC Act (12 U.S.C. 3. Asset data are as of March 31, 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

734 Federal Reserve Bulletin • August 1994 proper incident to banking. In judging whether the Trotwood also indirectly owns a small parcel of land performance of an activity meets the proper incident designated for development in the Project's second to banking test, the Board must determine whether the phase and holds an option to acquire or develop the proposed activity can reasonably be expected to pro- remaining land in this second phase. duce public benefits that outweigh any possible ad- The Board, in Regulation Y, has permitted bank verse effects. holding companies to engage in "making equity and debt investments in corporations or projects designed Proposed Involvement in Real Estate Project primarily to promote community welfare, such as the economic rehabilitation and development of low- Applicant contends that the proposed activities of income areas by providing housing, services, or jobs Truepenny are permissible community development for residents."7 Applicant contends that the merits of activities under section 225.25(b)(6) of Regulation Y, the Project justify permitting Applicant to continue which permits bank holding companies to participate Dreyfus's investment and development role in the in community development activities by making equity Project.8 In this regard, Applicant asserts that, while and debt investments in corporations or projects de- not directed at low- to moderate-income persons, the signed primarily to promote community welfare.4 The Project's first phase is targeted to New York City's proposal raises the issue of whether the activities of working "middle class." In addition, Applicant con- Truepenny, through its wholly owned subsidiary, The tends that the Project would benefit the community by Trotwood Corporation, New York, New York ("Trot- revitalizing a geographic area that is largely abanwood"), as a partial owner and manager of the Project, doned. Applicant points out that state and local govare permissible community development activities un- ernments have committed substantial financial reder Regulation Y.5 sources to the Project and, as confirmed by comment letters received by the Board, view it as critical to this The Project is a large-scale, urban redevelopment area's revitalization. initiative, jointly sponsored by government and private entities, involving the development of a largely In each review of a proposed community developabandoned waterfront area of the Borough of Queens ment activity, the Board has required that the promoin New York City. The Project is planned as a long- tion of community welfare, in particular, low- and term, four-phase development, consisting of three moderate-income individuals, be the primary thrust of primarily residential developments and a commercial- the activity rather than a collateral effect.9 In deterretail development, with a park, a new public elemen- mining whether a real estate-related community develtary school, and a community-recreation center, that will be developed over the next twenty years. Trotwood indirectly acts as a managing general Point, and the other limited partners of Hunters Point and M.O. partner of M.O. Associates, L. P. ("M.O. Associ- Associates, include entities controlled by unaffiliated real estate ates"), a private development venture, which: developers and investors. 7. 12 C.F.R. 225.25(b)(6). In a policy statement, the Board has (1) Actively participates in the management and outlined several examples of permissible community development planning of the Project's first phase, projects, which include projects: (1) To construct or rehabilitate housing for low- or moderate-income (2) Has a substantial ownership interest in the land persons, designated for development as the Project's first (2) To construct or rehabilitate ancillary local commercial facilities phase, and necessary to provide goods or services principally to persons residing in low- and moderate-income housing, and (3) Has preliminary rights to develop the first of four (3) Designed explicitly to create improved job opportunities for lowresidential buildings in the first phase.6 or moderate-income groups. The Board's policy statement also provides that investments in a project organized to build or rehabilitate high-income housing, or commercial facilities that are not designed explicitly to create improved job opportunities for low- 4. 12 C.F.R. 225.25(b)(6). income persons, are presumed not to be designed primarily to 5. Trotwood also has provided advisory services to several other promote community welfare, unless there is substantial evidence to community development corporations and to a foreign government on the contrary, even if to some extent the investment may benefit the the financing of residential housing for low- and moderate-income community. 12 C.F.R. 225.127. persons and business development in low- and moderate-income 8. See, e.g., Luxemburg Bancshares, Inc., 11 Federal Reserve areas. These activities are permissible for bank holding companies and Bulletin 63 (1991); First Financial Corporation, 76 Federal Reserve Applicant has committed that Trotwood would conduct future similar Bulletin 671 (1990). activities in a manner consistent with the Board's prior approvals. 9. See, e.g., Shorebank Corporation, 78 Federal Reserve Bulletin See, e.g., The Shorebank Corporation, 78 Federal Reserve Bulletin 619 (1992) (provision of financial assistance to small business projects 619 (1992). designed explicitly to create improved job opportunities for low- and 6. Trotwood acts as joint managing general partner of Hunters Point moderate-income groups); R.I.H.T., 58 Federal Reserve Bulletin 595 Associates, L. P. ("Hunters Point"), which, in turn, acts as managing (1972) (denial of an application to invest in a shopping and office general partner of M.O. Associates. Trotwood also holds, through two complex on a parcel of real estate in an urban renewal project, subsidiaries, additional general partnership and limited partnership concluding that a project of this type would only collaterally promote interests in M.O. Associates. The other general partners of Hunters the community welfare). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 735 opment proposal meets the community welfare test, Applicant must terminate or otherwise conform its the Board generally has distinguished community de- involvement in the Project to the requirements of velopment investments from entrepreneurial invest- Regulation Y and this order. This period should permit ments on the basis of whether the proposed residential Applicant a reasonable opportunity to terminate or development was designed primarily for low- or mod- conform its involvement in the Project in an orderly erate-income persons.10 The Board generally has con- manner. sidered the term "low- or moderate-income" to mean, as determined by the Department of Housing and Acquisition of Savings Association and Trust Urban Development, a level of income that is below Company 80 percent of the median income of the relevant metropolitan statistical area.11 Moreover, the Board The Board has previously determined, by regulation, has not recognized as permissible real estate develop- that operating a savings association and a trust comment projects that do not provide direct benefits pany are closely related to banking.14 Applicant has primarily to low- and moderate-income persons. committed that DSSB and DTC will conduct their Based on the record, the Board does not believe that activities pursuant to the conditions and limitations Applicant's proposed participation in the Project is specified in the Board's regulations.15 In considering within the scope of activities permitted by section the proposed acquisition of DSSB and DTC, the Board 225.25(b)(6) of Regulation Y. The Board recognizes, must consider the financial condition and resources of however, the important role Dreyfus has played and the applicant and its subsidiaries and the effect of the continues to play in the Project, that Dreyfus has a proposal on these resources.16 Based on all the facts of relatively small financial investment in the Project, and record, the Board has concluded that financial and that its contribution to the Project has been largely managerial considerations are consistent with apthrough the provision of advisory and management proval of this proposal. assistance.12 In light of this, the expected benefits of The Board also expects that Company's conduct of the Project, the fact that this proposal represents a the proposed savings association and trust company small portion of Applicant's acquisition of Dreyfus, activities would enable Applicant to provide added and other facts of record, the Board has determined to convenience and services to its customers, and would permit Mellon to continue Dreyfus's involvement in not significantly reduce the level of competition among the Project through the projected completion of the existing providers of these services. Accordingly, first phase of the Project.13 By the end of this period, based on all the facts of record, including the commitments provided by Applicant, and the conditions specified above, the Board has concluded that approval of the application can reasonably be expected to produce 10. See 12 C.F.R. 225.127. 11. Applicant has indicated that at least 10 percent of the approxi- public benefits that would outweigh possible adverse mately 1500 units planned for the four buildings in the Project's first phase would be "below market" set-aside units, allocated to low-, moderate- and middle-income persons who are elderly or local residents. Applicant represents that, apart from these set-aside units, M.O. Associates expects to market the units in the first building to phase is not completed, Applicant must seek Federal Reserve System persons with minimum household incomes ranging from about $22,000 consent for continued involvement in the Project's first phase. During to $75,000, depending on the type of unit, with the majority of the units this period, Applicant may not increase its investment or financial targeted to persons with minimum household incomes ranging from involvement in the Project without consent of the Federal Reserve about $35,000 to $60,000. However, the proposal does not include any System, and must consult with the System in the event that any limitation on sales of units, apart from the set-aside units, to high- material changes are expected to the development plans. income persons. The current adjusted median income of the New 14. 12 C.F.R. 225.25(b)(3) and (9). York Metropolitan Statistical Area approximates $42,000, meaning 15. Section 225.25(b)(9) of Regulation Y requires that savings that low- and moderate-income households would include households associations acquired by bank holding companies conform their direct earning no more than $33,600. Applicant anticipates similar develop- and indirect activities to those permissible for bank holding companies ment plans for the other buildings in the Project's first phase. under section 4(c)(8) of the BHC Act and Regulation Y. Applicant has 12. The Board has received a number of comments, including committed that, should DSSB be found to engage in any impermissible comments from several members of Congress, the New York Gover- activities, Applicant will divest these activities, as follows: nor, local governmental officials, and various union officials, unani- (1) Any impermissible securities or insurance activities will cease on mously expressing support of the proposal and concern about antici- or before consummation (for up to two years following consummapated harm to the Project in the event Trotwood is required at this tion, DSSB may continue to service insurance policies existing at time to discontinue its involvement in the Project. Many of these the time of consummation, but will not renew these policies); and commenters have advised that Trotwood, through its indirect man- (2) Any impermissible real estate activities will be divested within agement of M.O. Associates, plays a pivotal leadership role in the two years of consummation of the proposal and no new impermis- Project, particularly at this time when commencement of the infra- sible projects or investments will be undertaken (and capital adestructure improvements by the government and construction of the quacy guidelines will be met excluding specified real estate investfirst phase by M.O. Associates are imminent, and that the success of ments). this first phase is critical to the success of the entire Project. 16. See 12 C.F.R. 225.24. See also The Fuji Bank, Limited, 13. Applicant has indicated that the Project's first phase should be 75 Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, completed within seven years. If within such time period the first 73 Federal Reserve Bulletin 155 (1987). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

736 Federal Reserve Bulletin • August 1994 effects under the proper incident to banking standard This transaction shall not be consummated later of section 4(c)(8) of the BHC Act.17 than three months after the effective date of this order, Based on the foregoing and all the facts of record, unless such period is extended for good cause by the including the commitments made in connection with Board or by the Federal Reserve Bank of Cleveland, the application, the Board has determined to, and acting pursuant to delegated authority. hereby does, approve the application, subject to the By order of the Board of Governors, effective conditions specified in this order as well as compliance June 22, 1994. with all the commitments made in connection with this application.18 The Board's determination also is sub- Voting for this action: Chairman Greenspan and Governors ject to all the terms and conditions set forth in Regu- Kelley, La Ware, Lindsey, and Phillips. lation Y, including those in sections 225.4(d) and 225.23(b) of Regulation Y, and to the Board's author- JENNIFER J. JOHNSON ity to require such modification or termination of the Associate Secretary of the Board activities of a bank holding company or any of its Meridian Bancorp, Inc. subsidiaries as the Board finds necessary to ensure Reading, Pennsylvania compliance with, and to prevent evasion of, the provisions of the BHC Act and the Board's regulations and orders issued thereunder. For purposes of this Order Approving Application to Engage De Novo in action, these commitments and conditions are deemed Investment Advisory and Private Placement to be conditions imposed in writing by the Board in Activities connection with its findings and decision, and, as such, may be enforced in proceedings under applicable law. Meridian Bancorp, Inc., Reading, Pennsylvania ("Applicant"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has applied under section 4(c)(8) of the BHC Act and 17. The Board received a comment from the president of a bank section 225.23 of the Board's Regulation Y (12 C.F.R. holding company urging careful scrutiny of any assurances that Applicant has made in connection with this application, in light of 225.23) to engage de novo through a wholly owned disputes that have arisen with respect to a loan that Applicant's lead subsidiary, McGlinn Capital Management, Inc., Wyobank ("Bank") made to the company's employee stock ownership missing, Pennsylvania ("Company"),1 in the following plan. Applicant has responded that the commenter misstated certain facts and that the essential allegations by the commenter were raised securities-related activities nationwide: and rejected by a federal district court, which granted Bank's motion (1) Providing investment advice to and investing in a for summary judgment in a loan collection action that Bank brought against this bank holding company. After considering this comment series of unregistered limited partnerships now exand Applicant's response, the Board does not believe that the com- isting or to be established in the future ("Partnerment raises any adverse effects that are not outweighed by the public ships"); benefits of Applicant's proposal, under the proper incident to banking standard of section 4(c)(8). (2) Privately placing limited partnership interests in 18. Applicant proposes to acquire all the voting shares of Dreyfus the Partnerships with a limited number of investors, Partnership Management, Inc. ("DPM"). DPM serves as a nonall of whom are sophisticated investors; and managing general partner of two mutual funds organized as limited partnerships, which are advised and managed by Dreyfus. Applicant (3) Providing portfolio investment advice (including has committed that, by December 31, 1997, each mutual fund will be the exercise of investment discretion) to institureorganized in corporate or trust form and DPM will no longer serve as a non-managing general partner of, or have an equity interest in, tional customers. either fund. Prior to that time, Applicant has committed that DPM will not own more than 5 percent of the outstanding shares of either mutual Notice of the application, affording interested perfund and that each fund will limit its holdings to not more than 5 percent of the outstanding voting shares, and to not more than sons an opportunity to submit comments on the pro- 25 percent of the total equity, of any company. Applicant also has posal, has been published (59 Federal Register 11,995 committed that neither DPM nor any Mellon affiliate will serve as a non-managing general partner (or other form of general partner) of any (1994)). The time for filing comments has expired, and other mutual fund organized in partnership form, without the Board's the Board has considered the application and all approval or unless applicable law is changed to permit such activity. comments received in light of the public interest In addition, Applicant's duties as a non-managing general partner have been limited and will not permit Applicant to engage in manage- factors set forth in section 4(c)(8) of the BHC Act. ment of the funds, except in the extraordinary event that no managing Applicant, with total consolidated assets of approxgeneral partner remains to continue the business of the fund. Should such event occur, DPM's role as managing general partner would imately $14 billion, is the fifth largest commercial terminate within 90 days. banking organization in Pennsylvania.2 Applicant op- Applicant also proposes to acquire, through MBC Investments, all the voting shares of Dreyfus Realty Advisors, Inc. ("DRA"), Major Trading Corporation ("MTC"), and Dreyfus Acquisition Corporation ("DAC"), each of which are located in New York, New York, but has 1. Applicant will organize Company to acquire the assets and committed to divest DRA (including its 21 subsidiaries) and to dissolve business of an unaffiliated company of the same name. MTC and DAC within two years of consummation of this proposal. 2. Asset and market data are as of December 31, 1993. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 737 erates subsidiary banks in Pennsylvania, Delaware, Applicant has committed that the private placement of and New Jersey,3 and engages directly and through limited partnership interests would conform with the subsidiaries in a broad range of permissible nonbank- conditions and limitations in the Board's previous ing activities. Company would be registered as an orders approving private placement activities.10 Appliinvestment adviser with the Securities and Exchange cant is not seeking authority to engage in the private Commission ("SEC") and, therefore, would be sub- placement of any securities other than limited partnerject to the recordkeeping, reporting, fiduciary stan- ship interests in the Partnerships.11 dards, and other requirements of the Investment Advisers Act of 1940 (15 U.S.C. § 80b-l et seq.) and Financial Factors, Managerial Resources, and Other the SEC. Considerations Company would be the investment adviser, administrator, and sole general partner of a series of seven In order to approve this application, the Board must Partnerships that are sold to a small number of instidetermine that the performance of the proposed activtutional investors.4 Company would maintain an eqities by Applicant can reasonably be expected to uity interest of approximately 1.25 percent of total produce public benefits that would outweigh possible capitalization in each Partnership.5 adverse effects under the proper incident to banking The Partnerships are engaged solely in investing in standard of section 4(c)(8) of the BHC Act. In every limited amounts of debt and equity securities, includcase under section 4 of the BHC Act, the Board must ing interests in real estate investment trusts.6 The determine the financial condition and resources of the Partnerships, together with Applicant and its other applicant and its subsidiaries and the effect of the subsidiaries, would hold not more than 5 percent of proposal on these resources.12 Based on the facts of any class of voting securities of any issuer,7 and not this case, the Board concludes that the financial conmore than 25 percent of the total equity of any siderations are consistent with approval of this appliissuer.8 All such equity investments would be held in cation. The managerial resources of Applicant also are accord with section 4(c)(6) of the BHC Act and consistent with approval. section 225.22(c)(5) of the Board's Regulation Y. See The Board expects that the de novo entry of Appli- 12 U.S.C. § 1843(c)(6); 12 C.F.R. 225.22(c)(5). cant into the market for the proposed services would Company also proposes to privately place limited partnership interests with new investors, and might form similar additional Partnerships in the future.9 (1987); The Toronto-Dominion Bank, 76 Federal Reserve Bulletin 573 (1990). Company may not place debt securities issued by the Partnerships with any person without prior approval from the Federal 3. These subsidiary banks are: Meridian Bank, Reading, Pennsyl- Reserve System. vania; Delaware Trust Company, Wilmington, Delaware; and Merid- 10. See J.P. Morgan & Company Incorporated, 76 Federal Reserve ian Bank, New Jersey, Cherry Hill, New Jersey. Bulletin 26 (1990); Bankers Trust New York Corporation, 75 Federal 4. The Partnerships are not registered as investment companies Reserve Bulletin 829 (1989). Applicant proposes to continue Comunder the Investment Company Act of 1940 (15 U.S.C. § 80a-l et seq.) pany's practice of permitting an existing investor in a Partnership to ("Investment Company Act"). Each Partnership is limited to not add to its investment in that Partnership in any amount, and would more than 100 investors. permit an investor with $250,000 or more under management by 5. Because the Partnerships would be subsidiaries of Applicant, Company to invest in any Partnership in any amount. The Board has Applicant must, for regulatory purposes, present financial information previously imposed a large minimum denomination requirement relating to Company and the Partnerships on a consolidated basis. ($100,000) on private placement activities to ensure that it is unlikely 6. The Partnerships will not invest in futures contracts or options on that the general public would be buyers of such securities. The Mitsui futures contracts on any financial or non-financial commodity, or Taiyo Kobe Bank, Limited, 77 Federal Reserve Bulletin 116, 118 fn. 9 knowingly invest in debt that is in default at the time of acquisition, (1991). In this case, the Board believes that, because Company would without prior approval from the Federal Reserve System. In addition, require that each investor initially invest at least $100,000, the Applicant has committed not to use the investments of the Partner- conditions under which Company would accept additional investships to obtain or exercise control over any issuer of securities owned ments of less than $100,000 continue to impose adequate safeguards or held by the Partnerships, and that no directors, officers, or against public participation in the placement of limited partnership employees of Applicant and its affiliates will serve as directors, interests. officers, or employees of any issuer of which Applicant and its 11. Company also proposes to exercise investment discretion on affiliates hold more than 10 percent of the total equity. behalf of a small number of individuals related to Company's presi- 7. The Partnerships currently hold interests in excess of 5 percent in dent. The Board has not generally authorized bank holding companies three real estate investment trusts, the excess amounts of which to exercise investment discretion except on behalf of institutional Applicant must cause the Partnerships to divest within two years of customers or through a trust company. Because of the limited number the date of this order. of individuals involved, their connection with the president of Com- 8. Applicant has committed that all subordinated debt of an issuer pany, and the fact that the president of Company has provided this will be subject to this 25 percent limit. service to these individuals for several years, this proposal does not 9. Company would privately place limited partnership interests only raise the concerns that would be raised if discretionary investment with sophisticated, institutional customers, as defined in section services were offered on a retail basis. 225.2(g) of the Board's Regulation Y (12 C.F.R. 225.2(g)) and with 12. 12 C.F.R. 225.24; The Fuji Bank, Limited, 75 Federal Reserve additional persons approved by the Board in previous orders. See Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 Federal Reserve Manufacturers Hanover Corporation, 73 Federal Reserve Bulletin 930 Bulletin 155 (1987). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

738 Federal Reserve Bulletin • August 1994 provide added convenience to Applicant's customers, Orders Issued Under Sections 3 and 4 of the and would increase the level of competition among Bank Holding Company Act existing providers of investment advisory services. To address the potential adverse effects of its perfor- Banc One Corporation mance of the proposed activities, Applicant has com- Columbus, Ohio mitted to conduct the proposed activities subject to a number of restrictions concerning extensions of credit, Order Approving the Acquisition of a Bank Holding disclosures, marketing, conflicts of interests, and un- Company fair competition. Based on the commitments made by Applicant Banc One Corporation, Columbus, Ohio ("Banc regarding its conduct of the proposed activities, the One"), a bank holding company within the meaning of limitations noted in this order, and all the facts of the Bank Holding Company Act ("BHC Act"), has record, the Board has determined that the perfor- applied for the Board's approval under section 3 of the mance of the proposed activities by Applicant could BHC Act (12 U.S.C. § 1842) to acquire Liberty Nareasonably be expected to produce public benefits that tional Bancorp, Inc., Louisville, Kentucky ("Liberty would outweigh the possible adverse effects under the National"), and thereby indirectly acquire Liberty proper incident to banking standard of section 4(c)(8) National's subsidiary banks in Kentucky and Indiana.1 of the BHC Act. Banc One also has applied under section 4(c)(8) of the Based on the foregoing and all the facts of record, BHC Act (12 U.S.C. § 1843(c)(8)) to acquire the the Board has determined to, and hereby does, ap- nonbanking subsidiaries of Liberty National. The Libprove the application subject to all the terms and erty National subsidiaries to be acquired in this proconditions set forth in this order, and in the above- posal are listed in the appendix. noted Board regulations and orders. The Board's Notice of the applications, affording interested perdetermination is also subject to all of the terms and sons an opportunity to submit comments, has been conditions set forth in the Board's Regulation Y, published (59 Federal Register 11,605 (1994)). The including those in sections 225.4(d) and 225.23(b), and time for filing comments has expired, and the Board the Board's authority to require modification or termi- has considered the applications and all comments nation of the activities of a bank holding company or received in light of the factors set forth in sections 3(c) any of its subsidiaries as it finds necessary to assure and 4(c)(8) of the BHC Act. compliance with, and to prevent evasion of, the pro- Banc One, with total deposits of $61.1 billion, convisions of the BHC Act and the Board's regulations trols subsidiary banks in Ohio, Indiana, Michigan, and orders issued thereunder. The Board's decision is Wisconsin, Illinois, Texas, Colorado, Kentucky, West specifically conditioned on compliance with all the Virginia, Arizona, California, Oklahoma, and Utah. commitments made in this application, including the Upon consummation of the proposal, Banc One would commitments discussed in this order and the condi- become the largest commercial banking organization tions set forth in this order and in the above-noted in Kentucky, controlling $5.1 billion in deposits, rep- Board regulations and orders. These commitments and resenting 14.8 percent of the total deposits in commerconditions shall be deemed to be conditions imposed cial banking organizations in the state.2 In Indiana, in writing by the Board in connection with its findings Banc One would remain the second largest commerand decisions, and may be enforced in proceedings cial banking organization, controlling $6 billion in under applicable law. deposits, representing 12.2 percent of the total depos- This transaction shall not be consummated later its in commercial banking organizations in the state. than three months after the effective date of this order, unless such period is extended for good cause by the Douglas Amendment Analysis Federal Reserve Bank of Philadelphia, pursuant to delegated authority. Section 3(d) of the BHC Act, the Douglas Amend- By order of the Board of Governors, effective ment, prohibits the Board from approving an applica- June 28, 1994. tion by a bank holding company to acquire control of any bank located outside of the bank holding com- Voting for this action: Chairman Greenspan and Governors LaWare, Lindsey, and Phillips. Absent and not voting: Governor Kelley. 1. In connection with this application, Banc One has requested approval to acquire an option to purchase up to 17 percent of the voting shares of Liberty National. This option will terminate upon JENNIFER J. JOHNSON consummation of this proposal. Associate Secretary of the Board 2. State deposit data are as of December 30, 1993. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 739 pany's home state, unless such acquisition is "specif- would increase by 349 points to 1672.7 Banc One has ically authorized by the statute laws of the State in committed to divest two branches in this market to which such bank is located, by language to that effect mitigate any potential anti-competitive effects of this and not merely by implication."3 For purposes of the proposal, and with these divestitures, Banc One would Douglas Amendment, Banc One's home state is Ohio. control 34.7 percent of market deposits and the HHI The Board previously has determined that the inter- would increase by 238 points to 1561.8 In the Cincinstate statutes of Kentucky and Indiana permit a bank nati banking market, consummation of the proposal holding company located in Ohio to acquire banking would not exceed the Department of Justice merger organizations in those states.4 Based on all the facts of guidelines.9 record, the Board has determined that its approval of In light of all the facts of record, including the this proposal is not prohibited by the Douglas Amend- number of competitors remaining in the markets, the ment. Approval of this proposal is conditioned upon increase in market share and market concentration as Banc One receiving all required state regulatory ap- measured by the HHI, and the proposed divestitures, provals. the Board concludes that consummation of the proposal would not have a significantly adverse effect on Competitive Considerations competition in the Lexington and Cincinnati banking markets or any relevant banking market. Banc One and Liberty National compete directly in the Lexington, Kentucky, and Cincinnati, Ohio, bank- Convenience and Needs Considerations ing markets.5 Banc One is the largest depository institution in the Lexington market, controlling In acting upon an application to acquire a depository $1.1 billion in deposits, representing 31 percent of the institution under the BHC Act, the Board must contotal deposits in depository institutions in the market sider the convenience and needs of the communities to ("market deposits").6 Liberty National is the fifth be served, and take into account the records of the largest depository institution in the market, controlling relevant depository institutions under the Community $201.5 million in deposits, representing 5.7 percent of Reinvestment Act (12 U.S.C. § 2901 et seq.) market deposits. Upon consummation of this pro- ("CRA"). The CRA requires the federal financial posal, Banc One would control $1.3 billion in deposits, supervisory agencies to encourage financial institurepresenting 36.5 percent of market deposits. The tions to help meet the credit needs of the local com- Herfindahl-Hirschman Index ("HHI") for the market munities in which they operate, consistent with the safe and sound operation of such institutions. To accomplish this end, the CRA requires the appropriate 3. 12 U.S.C. § 1842(d). A bank holding company's home state is that federal supervisory authority to "assess the institustate in which the operations of the bank holding company's banking tion's record of meeting the credit needs of its entire subsidiaries were principally conducted on July 1, 1966, or the date on which the company became a bank holding company, whichever is later. 4. See Banc One Corporation, 78 Federal Reserve Bulletin 699 (1992) (acquisition of Kentucky banks by Ohio bank holding compa- 7. Under the revised Department of Justice Merger Guidelines, 49 nies); Banc One Corporation, 72 Federal Reserve Bulletin 422 (1988) Federal Register 26,823 (June 29, 1984), a market in which the (acquisition of Indiana banks by Ohio bank holding companies). post-merger HHI is between 1000 and 1800 is considered moderately Under Kentucky law, each bank to be acquired must have been in concentrated. The Justice Department has informed the Board that a existence for at least five years, and the proposed transaction must not bank merger or acquisition generally will not be challenged (in the result in the acquiring organization controlling more than 15 percent of absence of other factors indicating anti-competitive effects) unless the total deposits held by depository institutions in Kentucky. Ky. Rev. post-merger HHI is at least 1800 and the merger increases the HHI by Stat. Ann. § 287.900(2) and (3). Each of Liberty National's subsidiary 200 points. The Justice Department has stated that the higher than banks has been in existence for five years, and upon consummation of normal HHI thresholds for screening bank mergers for anti-competithis proposal, Banc One would control approximately 11.9 percent of tive effects implicitly recognize the competitive effect of limitedthe total deposits in depository institutions in Kentucky. purpose lenders and other non-depository financial entities. 5. The Lexington, Kentucky, banking market is approximated by 8. Banc One has executed an agreement to sell the two branches in the counties of Bourbon, Clark, Fayette, Jessamine, Powell, Scott and the Lexington banking market to a bank holding company that Woodford, all in Kentucky. The Cincinnati, Ohio, banking market is currently operates in the market and has committed to complete these approximated by Dearborn County, Indiana; Boone, Campbell, divestitures within 180 days of consummation of the transaction. Banc Grant, Kenton, and Pendleton Counties in Kentucky; Clarmont and One also has committed that, in the event it is unsuccessful in Hamilton Counties in Ohio, and parts of Brown, Butler and Warren completing these divestitures within 180 days of consummation of the Counties in Ohio. proposal, it will transfer the relevant office or offices to an independent 6. In this context, depository institutions include commercial banks, trustee with instructions to sell the office or offices promptly. See savings banks, and savings associations. Market deposit data are as of BankAmerica Corporation, 78 Federal Reserve Bulletin 337, 340 June 30, 1993, and are based on calculations in which the deposits of (1992); and United New Mexico Financial Corporation, 11 Federal thrift institutions are included at 50 percent. The Board previously has Reserve Bulletin 484, 485 (1991). indicated that thrift institutions have become, or have the potential to 9. In the Cincinnati banking market, Banc One would become become, major competitors of commercial banks. See WM Bancorp, the fifth largest depository institution in the market, controlling 76 Federal Reserve Bulletin 788 (1990); National City Corporation, $909.7 million in deposits, representing 4.8 percent of market depos- 70 Federal Reserve Bulletin 743 (1984). its. The HHI for the market would increase by 10 points to 1221. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

740 Federal Reserve Bulletin • August 1994 community, including low- and moderate-income factor in the consideration of an institution's CRA neighborhoods, consistent with the safe and sound record and that these reports will be given great weight operation of such institution," and to take that record in the applications process.13 Banc One's lead subsidinto account in its evaluation of bank holding company iary bank in Ohio, Bank One, Columbus, N.A. ("Bank applications.10 One - Columbus"), received an "outstanding" rating The Board has received comments from several from the Office of the Comptroller of the Currency organizations and an individual on this proposal. ("OCC") at its most recent examination for CRA Three community-based organizations and an individ- performance as of April 28, 1993. In addition, all but ual in Kentucky commented in favor of the proposal, one of Banc One's remaining 80 subsidiary banks that commending Liberty National's commitment to af- have been examined for CRA performance received fordable housing in Louisville, and its development of either "outstanding" or "satisfactory" ratings from lending programs for minority and low- and moderate- their primary regulators in the most recent examinaincome borrowers. The Board also received comments tions of their CRA performance.14 opposing the proposal, including comments from the Liberty National's lead bank, Liberty National of National Community Reinvestment Network repre- Louisville ("Liberty Bank - Louisville"), received an senting several organizations ("Protestants"). Protes- "outstanding" rating from its primary regulator, the tants allege, on the basis of data filed under the Home OCC, at its most recent examination for CRA perfor- Mortgage Disclosure Act ("HMDA") (12 U.S.C. mance as of August 31,1992. In addition, all of Liberty § 2801 et seq.), that Banc One and Liberty National National's remaining six subsidiary banks that have have engaged in discriminatory lending practices been examined for CRA performance received either against African-Americans in housing-related loans, "outstanding" or "satisfactory" ratings from their and that both institutions have failed to meet the credit primary regulators in the most recent examinations of needs of minority-owned small businesses.11 Protes- their CRA performance.15 tants further allege that the two organizations have a In connection with several recent applications, the poor record of marketing and outreach to the African- Board has reviewed in detail the performance ratings American community. of Banc One's subsidiary banks in light of Banc One's The Board has carefully reviewed the CRA perfor- corporate CRA policies.16 For the reasons more fully mance records of Banc One, Liberty National, and stated in those orders, which are incorporated by their respective subsidiary banks, as well as all com- reference, the Board has found that these policies have ments received regarding these applications, Banc substantively contributed to the satisfactory or better One's responses to those comments, and all other CRA performance evaluations achieved by almost all relevant facts of record in light of the CRA, the of Banc One's subsidiary banks. Following consum- Board's regulations, and the Statement of the Federal mation of this proposal, Banc One will integrate Lib- Financial Supervisory Agencies Regarding the Com- erty National completely into its community reinvestmunity Reinvestment Act ("Agency CRA State- ment program, and each Liberty National subsidiary ment").12 bank will adopt Banc One's CRA policies to enhance its CRA programs. Records of Performance Under the CRA A. Evaluations of CRA Performance 13. Id. at 13,745 (1989). Protestants disagree with the CRA performance evaluations of Banc One and Liberty National's subsidiary The Agency CRA Statement provides that a CRA banks by federal banking supervisors, and allege that these evaluaexamination is an important and often controlling tions are contrary to relevant lending data. 14. In this regard, Bank One, Akron, N.A. ("Bank One - Akron") was assigned a rating of "satisfactory" by the OCC as of February 26, 1993; and Bank One, Cincinnati, N.A. ("Bank One - Cincinnati") was assigned a rating of "satisfactory" by the OCC as of July 20,1993. The 10. 12 U.S.C. § 2903. OCC assigned a rating of "needs to improve" to Bank One, Cleve- 11. Protestants's comments relate to the Ohio subsidiary banks of land, N.A. ("Bank One - Cleveland") as of April 12, 1993. As Banc One in Columbus, Cincinnati, Cleveland and Akron, and Liberty discussed in this order, Banc One has taken corrective steps to National's subsidiary banks in Louisville and Erlanger, both in improve the CRA performance of this bank. Kentucky, and in Charlestown, Indiana. Protestants also maintain 15. In this regard, Liberty National Bank of Indiana ("Liberty Bankthat there is insufficient information about the specific CRA activities Indiana") was assigned a rating of "outstanding" by the OCC as of of Banc One to support approval, including a lack of information about May 31, 1993; and Liberty National Bank of Northern Kentucky Banc One's charitable contributions and the ethnic composition of its ("Liberty Bank - Northern Kentucky") was assigned a rating of ^mall-business and consumer-loan applicants. Protestants have also "satisfactory" by the OCC as of August 31, 1992. requested that the Board make a referral to the Department of Justice, 16. Banc One Corporation (FirsTier), 79 Federal Reserve Bulletin and have indicated that they filed their comments on these applica- 1168 (1993) ("the FirsTier Order"); see also Banc One Corporation tions with the Department of Justice on March 31, 1994. (Valley National Corporation), 79 Federal Reserve Bulletin 524 (1993) 12. 54 Federal Register 13,742 (1989). ("the Valley National Order"). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 741 B. HMD A Data The Board is concerned when an institution's record indicates disparities in lending to minority applicants Protestants allege that data required to be filed under and believes that all banks are obligated to ensure that the HMDA show that Banc One's subsidiary banks in their lending practices are based on criteria that assure Columbus, Cincinnati, Cleveland and Akron, and Lib- not only safe and sound lending, but also assure equal erty Bank - Louisville, Liberty Bank - Indiana and access to credit by creditworthy applicants regardless Liberty Bank - Northern Kentucky, discriminate of race. The Board recognizes, however, that HMDA against African-Americans in the provision of home data alone provide only a limited measure of any given purchase mortgage and refinancing loans.17 In partic- institution's lending in its community. The Board also ular, Protestants contend that the disparities shown in recognizes that HMDA data have limitations that the 1992 data in the number of loan applications from make the data an inadequate basis, absent other inforand originations to African-Americans, and in the mation, for conclusively determining whether an instidenial rates for African-Americans, when compared to tution has engaged in illegal discrimination in making white borrowers indicate illegal discriminatory prac- lending decisions. tices. The most recent OCC examinations for CRA com- In some categories, the HMDA data for 1992 indi- pliance and performance of Banc One's subsidiary cate that these Banc One and Liberty National banks banks in Columbus, Cincinnati, Cleveland and Akron are lending at a level that meets or exceeds their peers. found no evidence of illegal discrimination or other For example, HMDA-reported loan originations by illegal credit practices. Examiners also found no evi- Banc One's Ohio subsidiaries to African-Americans in dence of any practices or procedures that would 1992, as a percentage of total loans originated by these discourage applications for available credit from any banks, exceeds the aggregate percentage of loans segment of the delineated communities of these made to African-Americans by peer organizations. banks.20 Moreover, these examinations indicate gen- Furthermore, the data indicate an increase from 1992 erally that the geographic distribution of each instituto 1993 in the number of HMDA-reported loan appli- tion's credit extensions, applications, and denials recations received from African-Americans by Banc flect reasonable penetration in all segments of their One's four subsidiary banks, as well as an increase in delineated communities, including low- and moderatethe number of originations to this group.18 However, income areas.21 In addition, Banc One has taken steps both the 1992 and 1993 data show a low number of to ensure that all loan decisions are made in accorhousing-related loans to African-Americans, and dis- dance with fair lending laws. For example, compliance parities in the declination rates for African-Americans officers at Bank One - Columbus and Bank One compared to white applicants at the subsidiary banks Cincinnati periodically review files of approved and of both Banc One and Liberty National.19 denied consumer loan applications as part of the corporate compliance program to ensure that the banks' loan process is conducted on a nondiscriminatory basis. 17. Protestants also have criticized Liberty National Bank of Lexington, Lexington, Kentucky, for its lack of lending and outreach The most recent OCC examinations for CRA comto African-Americans. That bank, which was assigned a rating of pliance and performance of Liberty Bank - Louisville, "satisfactory" by the OCC at its most recent examination for CRA performance as of June 30, 1992, was merged into Liberty Liberty Bank - Indiana and Liberty Bank - Northern Bank - Louisville on October 1, 1993. Kentucky also found no evidence of illegal discrimi- 18. For example, from 1992 to 1993, the number of loan applications from African-Americans increased from 1736 to 2232, and the number of originations increased from 772 to 901. 19. Protestants requested that the Board delay action until the Federal Reserve System has conducted a comprehensive study of the home lending practices of the subsidiary banks of Banc One and has conducted an audit of the number and dollar amount of small-business submitted by Protestants, the Board does not believe a further delay loans and contracts awarded to African-Americans by these banks. in acting on these applications is warranted. Protestants also requested additional time to analyze the 1993 HMDA 20. Protestants allege that Banc One's subsidiary banks prescreened data or, in the alternative, that the Board not use the data in its minority applicants and thereby have been able to lower their denial analysis of this case. In addition, Protestants requested that the Board rates. The OCC found in its 1993 CRA examinations that each bank not act on these applications until the two vacancies on the Board has adopted policies, procedures, and training programs to preclude have been filled. illegal credit practices. Periodic self-assessments are also performed The Board has carefully reviewed substantial information relating to at several of the banks to assure the adequacy of these policies, the CRA performance of Banc One and Liberty National in this case, procedures and programs. including data relating to small-business lending. The Board provided 21. The OCC's 1993 examination of Banc One - Akron found a low Protestants with a substantial comment period of approximately 98 number of home purchase applications from minority applicants in days, including a 14-day extension of the comment period to submit 1991. The OCC noted that bank lenders were working with area additional comments and analysis of these applications. Protestant did realtors and a neighborhood organization to increase the number of submit substantial written comments on this case. Based on all the minority applicants and that the bank adopted a revised marketing facts of record, including the substantial comments that have been plan in 1993 to increase applications from minorities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

742 Federal Reserve Bulletin • August 1994 nation or other illegal credit practices.22 In addition, proved under this program, including 22 from Africanexaminers found no evidence of any practices or Americans, for a total of approximately $7.8 million. procedures that would discourage applications for In addition, Bank One - Cincinnati generated 71 smallavailable credit from any segment of the delineated business-loan applications from low- and moderatecommunities of these banks. Liberty National's sub- income neighborhoods, and made 30 of these loans sidiaries also have a second review process whereby during the first half of 1993. The bank had four every recommended denial of a mortgage, small busi- commercial loans and lines of credit totalling approxness or commercial loan application receives a second imately $1 million outstanding to borrowers in census review to insure that the recommendation is consistent tracts in the Cincinnati MSA that had a minority with fair lending laws. population greater than 80 percent as of December 31, 1993. C. Banc One's Record of Performance Akron. Bank One - Akron has developed the "Own- A-Home Program," an affordable-housing loan prod- Lending Programs of Subsidiary Banks. The FirsTier uct targeting low- and moderate-income individuals in Order noted that the lending programs at each of the its delineated community. Through this program, four Banc One subsidiary banks identified by Protes- Bank One - Akron extended 77 loans totalling tants offered a variety of credit products and services $2.8 million in 1992. Bank One - Akron also extended designed to assist in meeting the credit needs of low- 385 small business loans totalling $31.9 million in 1992, and moderate-income and minority neighborhoods, and participates in various government-sponsored and in particular inner-city neighborhoods, within loan programs. As of December 31, 1993, the bank had their delineated communities.23 The Board has care- 20 commercial loans and lines of credit totalling apfully reviewed the lending programs of these banks in proximately $2 million outstanding to borrowers in light of Protestants' comments and the Board's previ- census tracts in the Akron MSA that had a minority ous assessment of the banks' lending activities. population greater than 80 percent. Columbus. Bank One - Columbus offers a number of Cleveland. The Board previously has recognized direct and subsidized home-loan products through the weaknesses in aspects of the CRA performance of Community Home Buyers Program; the Ohio Housing Bank One - Cleveland, and has considered Banc One's Finance Agency First Time Homebuyers Program; efforts to improve its performance in these areas. In and a variety of government-sponsored loan programs, approving Banc One's acquisition of Valley National including programs through the Federal Housing Au- Corporation, the Board required Banc One to submit thority and the Veterans Administration. In addition, to the Board, when delivered to the OCC, a copy of its from 1991 through the first quarter of 1993, the bank plan to address areas of concern in the CRA program made 1,627 small business loans totalling $61.5 mil- of Bank One - Cleveland, and to submit periodic lion, $47 million of which were generated by branches reports on the progress of this plan.24 The Board serving low- and moderate-income areas. Further- believes that progress has been shown since the Valley more, as of December 31, 1993, the bank had 76 National acquisition to improve Bank One - Clevecommercial loans and lines of credit totalling approx- land's CRA performance. For example, it has introimately $23 million outstanding to borrowers in census duced several new loan products designed to meet the tracts in the Columbus Metropolitan Statistical Area credit needs of low- and moderate-income communi- ("MSA") that had a minority population greater than ties including: 80 percent. (1) A home-mortgage product with low-down- Cincinnati. Bank One - Cincinnati has introduced a payment requirements and flexible underwriting cri- "Welcome Home" loan program designed to facilitate teria; home ownership for low- and moderate-income indi- (2) A mortgage-loan product that covers both acquividuals by reducing down payment requirements and sition and rehabilitation costs; closing costs, eliminating mortgage guaranty insur- (3) A secured home-improvement loan product; and ance, and employing flexible underwriting guidelines. (4) A mortgage loan for one-to-eight-unit rental As of June 30, 1993, 131 applications had been ap- properties.25 24. See the Valley National Order. 22. The OCC noted some substantive technical violations relating to 25. Banc One - Cleveland introduced its Home Buyer's Dream HMDA reporting and fair lending laws at Liberty Bank - Louisville program in May, 1993. This program has a low down payment and Liberty Bank - Northern Kentucky. The OCC has indicated that requirement, provides financing for closing costs and provides a management implemented appropriate corrective actions during the waiver of mortgage insurance. In the fourth quarter of 1993, Banc examination. One- Cleveland extended 77 loans for a total of $4.4 million under this 23. See the FirsTier Order, supra, at 1170-72. program. In the third and fourth quarters of 1993, Banc One - Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 743 In addition, the bank recently opened a branch in bank advertised its products in low- and moderate- Fairfax, a low- and moderate-income neighborhood in income communities and in a minority-owned news- Cleveland. Finally, as of December 31, 1993, the bank paper. The OCC noted in its 1993 examination that had 74 commercial loans and lines of credit totalling this bank had instituted a more aggressive marketing approximately $11 million outstanding to borrowers in plan in 1993 in response to a low level of home census tracts in the Cleveland MSA that had a minor- mortgage applications from minorities in 1991 and ity population greater than 80 percent.26 1992. Finally, the OCC's 1993 examination of Bank Ascertainment and Marketing. The Board noted in One - Cleveland found that it adequately ascertains the Valley National Order that Banc One affiliates the credit needs of its community, and that a signifactively assess the credit and banking needs of their icant portion of the bank's CRA marketing efforts local service areas. Each affiliate bank is responsible was devoted to targeted marketing through newsletfor formulating and submitting to its board of directors ters and programs sponsored by minority groups. a strategic plan for identifying local banking needs. The bank advertises consistently in a newspaper Furthermore, each bank engages in direct communi- targeted to minorities, and on radio stations that have cation with its service communities through interviews a significant number of minority listeners. with community leaders, the creation of community advisory councils, and bank participation in community organizations. D. Conclusion Regarding Convenience and Banc One's subsidiary banks market specific prod- Needs Factors ucts by advertising on television and radio and in print media. They also supplement corporate market- The Board has carefully considered all the facts of ing materials to meet the individual needs of their record, including the comments received, in reviewbanking communities. For example, the OCC's 1993 ing the convenience and needs factors under the examination found that Bank One - Columbus main- BHC Act. Based on a review of the entire record of tained and analyzed media demographics and market performance, including information provided by circulation/coverage data in order to target specific commenters supporting the proposal and the Protesaudiences. The examination found that the bank tants, and the CRA performance examinations by the consistently advertises in local newspapers, includ- banks' primary regulators, the Board believes that ing minority publications, and advertises on radio the efforts of Banc One and Liberty National to help stations with large minority audiences. The bank also meet the credit needs of all segments of the commuholds seminars targeted at start-up, minority and nities served by their subsidiary banks are consistent female-owned businesses. The OCC's 1993 examina- with approval of these applications. The Board contion of Banc One - Cincinnati found that the bank cludes that convenience and needs considerations, attempts to reach low- and moderate-income neigh- including the CRA performance records of the comborhoods through the use of door hangers, bus bench panies and banks involved in these proposals, are advertisements, billboards, and advertisements in consistent with approval of these applications.27 publications and on radio stations with large low- and moderate-income and minority audiences. The bank's board of directors and senior management periodically review internal analyses of the geographic distribution of the bank's products, and use 27. Protestants have requested that the Board hold a public meeting these analyses to evaluate marketing efforts in taror hearing on these applications. The Board is not required under geted geographic areas and to develop new products section 3(b) of the BHC Act to hold a hearing on an application unless to make credit more widely available. the appropriate banking authority for the bank to be acquired makes a timely written recommendation of denial of the application. In this In its 1993 examination of Banc One - Akron, the case, neither the Kentucky Department of Financial Institutions nor the Indiana Department of Financial Institutions has recommended OCC found that the bank had a comprehensive denial of this proposal. program for ascertaining credit needs and that the Generally, under the Board's rules, the Board may, in its discretion, hold a public hearing or meeting on an application to clarify factual issues related to the application, and to provide an opportunity for testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). The Board Cleveland made 30 home improvement loans, totalling $489,000, to has carefiilly considered this request. In the Board's view, interested borrowers living in low- and moderate-income areas of the Cleveland parties have had a sufficient opportunity to present written submismetropolitan area, under its home improvement loan program that has sions, and have submitted substantial written comments that have a higher-than-usual debt-to-income ratio. been considered by the Board. On the basis of all the facts of record, 26. The Board will continue to monitor the progress of Banc One- the Board has determined that a public meeting or hearing is not Cleveland in improving its CRA program, including reviewing prog- necessary to clarify the factual record in these applications, or ress reports that are submitted to the Federal Reserve Bank of otherwise warranted in this case. Accordingly, the request for a public Cleveland on a regular basis. meeting or hearing on these applications is hereby denied. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

744 Federal Reserve Bulletin • August 1994 Other Considerations 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 The financial and managerial resources and future such modification or termination of the activities of a prospects of Banc One, Liberty National, and their holding company or any of its subsidiaries as the respective subsidiaries, and other supervisory factors Board finds necessary to assure compliance with, or to the Board must consider under section 3 of the BHC prevent evasions of, the provisions and purposes of Act, also are consistent with approval.28 the BHC Act and the Board's regulations and orders Banc One also has applied, pursuant to section 4 of issued thereunder. The commitments and conditions the BHC Act, to acquire the nonbanking subsidiaries relied on by the Board in reaching this decision are of Liberty National that engage in consumer lending, deemed to be conditions imposed in writing by the credit-related insurance, and certain securities-related Board in connection with its findings and decision, activities. The Board previously has determined that and, as such, may be enforced in proceedings under these activities are permissible for bank holding com- applicable law. panies under section 4(c)(8) of the BHC Act, the The acquisition of Liberty National's subsidiary Board's Regulation Y and prior Board orders, and banks shall not be consummated before the thirtieth Banc One proposes to conduct these activities in calendar day following the effective date of this order, accordance with those regulations and orders. The and the acquisition of Liberty National's subsidiary record in this case indicates that there are numerous banks and nonbanking subsidiaries shall not be conproviders of these nonbanking services, and there is summated later than three months after the effective no evidence in the record to indicate that consumma- date of this order, unless such period is extended for tion of this proposal is likely to result in any signifi- good cause by the Board or by the Federal Reserve cantly adverse effects, such as undue concentration of Bank of Cleveland, acting pursuant to delegated auresources, decreased or unfair competition, conflicts thority. of interests, or unsound banking practices that would By order of the Board of Governors, effective outweigh the public benefits of this proposal. Accord- June 2, 1994. ingly, the Board has determined that the balance of public interest factors it must consider under section Voting for this action: Chairman Greenspan and Governors 4(c)(8) of the BHC Act is favorable and consistent with Kelley, La Ware, Lindsey, and Phillips. approval of Banc One's application to acquire Liberty National's nonbanking subsidiaries. JENNIFER J. JOHNSON Associate Secretary of the Board Conclusion Appendix Based on the foregoing and other facts of record, the Subsidiary Banks to be Acquired Board has determined that the applications should be, and hereby are, approved. The Board's approval is (1) Liberty National Bank and Trust Company of expressly conditioned upon compliance with all the Kentucky, Louisville, Kentucky; commitments made by Banc One in connection with (2) Liberty National Bank of Owensboro, Owensboro, these applications and with the conditions referred to Kentucky; in this order, including obtaining all required state (3) Liberty National Bank and Trust Company of approvals. The determinations as to the nonbanking Central Kentucky, Elizabethtown, Kentucky; activities are also subject to all the conditions in the (4) Liberty National Bank of Northern Kentucky, Board's Regulation Y, including those in sections Erlanger, Kentucky; (5) Liberty National Bank of Shelby ville, Shelbyville, Kentucky; (6) Liberty National Bank and Trust Company of 28. Protestants have criticized the employment practices of both institutions relating to minorities, including minority participation in Indiana, Charlestown, Indiana; and senior management, on boards of directors, and in third-party con- (7) Liberty National Bank of Western Kentucky, tracts. In this regard, the Board notes that, because Banc One and Liberty National subsidiary banks employ more than 50 people and Madison ville, Kentucky. act as an agent to sell or redeem U.S. savings bonds and notes, they are required by Treasury Department and Department of Labor Nonbanking Subsidiaries to be Acquired regulations to: (1) File annual reports with the Equal Employment Opportunity Commission; and (1) Liberty Financial Services, Inc., Louisville, Ken- (2) Have in place a written affirmative action program which states their intentions, efforts, and plans to achieve equal opportunity in tucky, and thereby engage in consumer lending activthe employment, hiring, promotion, and separation of personnel. ities and the sale of credit-related insurance pursuant Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 745 to sections 225.25(b)(1) and (8)(i) and (ii) of the Notice of the applications, affording interested per- Board's Regulation Y; and sons an opportunity to submit comments, has been (2) Liberty Investment Services, Inc., Louisville, published (59 Federal Register 13,727 and 15,412 Kentucky, and thereby engage in full-service securi- (1994)). The time for filing comments has expired, and ties brokerage services, riskless principal activities the Board has considered the application and all and underwriting and dealing in bank-eligible and comments received in light of the factors set forth in ineligible securities pursuant to sections 225.25(b)(15) sections 3 and 4 of the BHC Act. and (16) of the Board's Regulation Y and prior Board Financial is a nonoperating corporation formed for orders. the purpose of becoming a bank holding company through the acquisition of Bank. Bank is the 81st Financial Corporation of Louisiana largest commercial banking organization in Louisiana, Crowley, Louisiana controlling deposits of approximately $59.2 million, representing less than 1 percent of total deposits in Order Approving Formation of a Bank Holding commercial banks in the state.4 Progressive is the 35th Company and Acquisition of Shares of a Bank largest commercial banking organization in Louisiana, Holding Company controlling deposits of approximately $118.9 million, representing less than 1 percent of total deposits in Financial Corporation of Louisiana, Crowley, Louisi- commercial banks in the state. Bank and Progressive ana ("Financial"), has applied under section 3(a)(1) of do not compete directly in any banking market. Acthe Bank Holding Company Act ("BHC Act") cordingly, consummation of this proposal would not (12 U.S.C. § 1842(a)(1)) to acquire all the voting shares have a significantly adverse effect on competition or of First National Bank of Crowley, Crowley, Louisi- the concentration of banking resources in any relevant ana ("Bank"), and thereby become a bank holding banking market. company.1 Financial also has applied pursuant to The Board has carefully reviewed comments from section 4(c)(8) of the BHC Act to acquire First Crow- the chairman of the board of Progressive's bank subley Financial Corporation, Crowley, Louisiana ("First sidiary ("Protestant"), Progressive Bank & Trust, Crowley"), and thereby engage in: Houma, Louisiana ("Progressive Bank"), objecting to (1) Making and servicing loans pursuant to section Financial's acquisition of a minority interest in Pro- 225.25(b)(1) of the Board's Regulation Y (12 C.F.R. gressive. Protestant alleges that this acquisition will 225.25(b)(1)); and adversely affect Progressive's ability to raise capital (2) Acting as principal, agent, or broker for credit- and serve the credit needs of its communities. Protesrelated insurance pursuant to section 225.25(b)(8) of tant also objects to the fact that Financial is located Regulation Y (12 C.F.R. 225.25(b)(8)).2 outside of Progressive Bank's local community, and asserts that dissimilarities between Progressive Bank Financial also has applied pursuant to section 3 of the and Bank both in terms of asset size and marketing BHC Act to acquire 8.25 percent of the voting shares strategies should preclude the acquisition of the Proof Progressive Bancorporation, Inc., Houma, Louisi- gressive interest.5 Financial maintains that its investana ("Progressive"), which are currently held by First Crowley.3 4. State deposit data are as of June 30, 1993. 5. Protestant questions whether Bank satisfied divestiture requirements in a timely manner in its disposition of Progressive stock acquired in 1988 (less than 1 percent) and 1989 (8.25 percent) through foreclosure on loans secured by such stock. Under the rules of the 1. This proposal represents a reorganization of current ownership Office of the Comptroller of the Currency regarding the acquisition of interests. Financial would acquire Bank by forming an interim na- securities in the course of securing a debt previously contracted, a tional bank subsidiary ("Interim") and merging Bank into Interim national bank has five years to divest of such shares. See Comptrolwith Interim as the surviving institution under Bank's charter. First ler's Handbook for National Bank Examiners, Section 203.1 (Febru- Crowley would also merge with and into Financial, with Financial ary 1982). In 1992, Bank divested its interest in Progressive to First surviving the merger. Crowley. This transfer to First Crowley satisfied the divestiture 2. First Crowley engages in real estate activities that are not requirements of the BHC Act and the National Bank Act. The transfer permissible for bank holding companies under the BHC Act. Financial to First Crowley was not financed by debt to Bank, and the record has committed that all impermissible real estate activities will be does not indicate that, following the transfer of shares to First divested or terminated within two years of consummation of the Crowley, Bank was able to control either the transferred shares or proposal, that no new impermissible projects or investments will be Progressive itself. Although two shareholders of First Crowley also undertaken during this period, and that capital adequacy guidelines owned shares of Progressive at the time of the divestiture, the record will be met excluding specified real estate investments. does not indicate that these additional holdings permitted either First Crowley or Bank to control Progressive. One of these shareholders 3. Principals of Financial own an additional 3.45 percent of the owns 1.5 percent of Progressive's voting shares; and the second voting shares of Progressive. Therefore, Financial would control individual, who owns less than 5 percent of the shares of First approximately 11.7 percent of the voting shares of Progressive upon Crowley, owns an additional 1.9 percent of Progressive's voting consummation of this proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

746 Federal Reserve Bulletin • August 1994 ment in Progressive is completely passive, and that it (4) Acquire or retain shares of Progressive that has no intention of exercising or attempting to exercise would cause the combined interests of Financial and a controlling influence over the management or poli- its affiliates, officers, and directors to equal or excies of Progressive or any of its subsidiaries.6 ceed 25 percent of the outstanding voting shares of The Board has previously approved the acquisition Progressive; by a bank holding company of less than a controlling (5) Propose a director or a slate of directors in interest in a bank, noting that "nothing in section 3(c) opposition to a nominee or slate of nominees proof the Act requires denial of an application solely posed by the management or board of directors of because a bank holding company proposes to acquire Progressive or its subsidiary banks; less than a controlling interest in a bank or bank (6) Attempt to influence the dividend policies or holding company."7 The Board has also noted that the practices of Progressive; requirement in section 3(a)(3) of the BHC Act that the (7) Solicit or participate in soliciting proxies with Board's prior approval be obtained before a bank respect to any matter presented to the shareholders holding company acquires more than 5 percent of the of Progressive; voting shares of a bank also suggests that Congress (8) Attempt to influence the loan and credit decicontemplated the acquisition by bank holding compa- sions or policies of Progressive or any of its subsidnies of between 5 percent and 25 percent of the voting iary banks, the pricing of services, any personnel shares of banks. For these reasons, the Board con- decision, the location of any offices, branching, the cludes that the purchase by Financial of less than a hours of operation, or similar activities of Progrescontrolling interest in Progressive is not a factor that, sive or any of its subsidiary banks; by itself, justifies denial of this application. (9) Dispose or threaten to dispose of shares of As part of this proposal, Financial has made a Progressive in any manner as a condition of specific number of commitments to address concerns relating action or nonaction by Progressive or any of its to the effect that its acquisition of shares of Progres- subsidiary banks; sive would have on the management and operation of (10) Enter into any banking or nonbanking transac- Progressive Bank. In particular, Financial has commit- tions with Progressive or any of its subsidiary ted that it will not, without the Board's prior approval: banks, except that Financial and its subsidiaries (1) Exercise or attempt to exercise a controlling may establish and maintain deposit accounts with influence over the management or policies of Pro- Progressive or subsidiary banks of Progressive, progressive or any of its subsidiary banks; vided that the aggregate balance of all such deposit (2) Have or seek to have any employees or repre- accounts does not exceed $500,000, and provided sentatives serve as an officer, agent, or employee of that the accounts are maintained on substantially the Progressive or any of its subsidiary banks; same terms as those prevailing for comparable ac- (3) Take any action causing Progressive or any of its counts of persons unaffiliated with Progressive; and subsidiary banks to become a subsidiary of Appli- (11) Seek or accept representation on the board of cant; directors of Progressive or any of its subsidiary banks. shares. Moreover, Progressive is controlled by a chain banking Based on the facts of record and Financial's comorganization that owns 48.7 percent of its voting shares and that is mitments, the Board concludes that Financial would unaffiliated with First Crowley. Under these circumstances, First not acquire control or the ability to exercise a control- Crowley's interest in Progressive does not meet any of the presumptions of control in the BHC Act or its implementing provisions in the ling influence over the management or policies of Board's Regulation Y, and the record does not indicate that First Progressive upon consummation of this proposal. On Crowley has acted in concert with any other parties to control or attempt to control Progressive. Accordingly, these comments do not this basis, the Board does not believe that the prowarrant denial of this application. posed retention of shares by Financial would impede 6. Protestant contends that Financial has rejected offers to purchase Progressive's ability to serve the needs of its commuthe Progressive interest and believes that these actions indicate some other motive in retaining this interest, including the sale of the stock nity or raise capital as needed. For these reasons and to a competitor of Progressive. Financial denies that it has rejected based on all facts of record, the Board concludes that any reasonable offers to purchase these shares. The Board notes that Protestant's comments do not warrant denial of these Financial would not be able to acquire control of Progressive in the future or sell its interest in Progressive to another bank holding applications. The Board also concludes that the financompany without prior Board approval, and that the Board would at cial and managerial resources and future prospects of that time re-examine the effects of the proposal under the factors set forth in section 3(c) of the BHC Act after providing an opportunity for Financial and Bank and other supervisory factors that public comment. the Board must consider under section 3 of the BHC 7. See United Counties Bancorporation, 75 Federal Reserve Bulle- Act are consistent with approval of this proposal. tin 714 (1989); Midlantic Banks, Inc., 70 Federal Reserve Bulletin 776 Considerations relating to the convenience and needs (1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 747 of the communities to be served also are consistent Reserve Bank of Atlanta, acting pursuant to delegated with approval. authority. Financial also has applied pursuant to section 4(c)(8) By order of the Board of Governors, effective of the BHC Act to engage in making, acquiring, or June 8, 1994. servicing loans or other extensions of credit and to engage in credit insurance activities. The Board has Voting for this action: Governors Kelley, La Ware, Linddetermined by regulation (12 C.F.R. 225.25(b)(1) and sey, and Phillips. Absent and not voting: Chairman Greenspan. (b)(8)(i» that these activities are closely related to banking and permissible for bank holding companies JENNIFER J. JOHNSON under section 4(c)(8) of the BHC Act. Financial pro- Associate Secretary of the Board poses to conduct these activities pursuant to the requirements of the Board's regulations. The record does not indicate that consummation of this proposal ACTIONS TAKEN UNDER THE FEDERAL DEPOSIT is likely to result in any significantly adverse effects, INSURANCE CORPORATION IMPROVEMENT ACT such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or un- By the Board sound banking practices that would not be outweighed by the likely public benefits of this proposal. Accord- NationsBank Corporation ingly, the Board has determined that the balance of Charlotte, North Carolina public interest factors it must consider under section 4(c)(8) of the BHC Act is favorable and consistent with Order Approving Applications to Acquire Branches approval of Financial's application to acquire First Crowley. of a Savings Bank NationsBank Corporation, Charlotte, North Carolina Conclusion ("NationsBank"), and its subsidiaries NationsBank of Florida, N.A., Tampa, Florida ("NationsBank- Florida"), and NationsBank of Georgia, N.A., At- Based on the foregoing and other facts of record, the lanta, Georgia ("NationsBank-Georgia") (collective- Board has determined that the applications should be, ly, "Applicants"), propose to purchase certain assets and hereby are, approved. The Board's approval is and assume certain liabilities of 44 branch offices of expressly conditioned upon compliance with all the California Federal Bank, F.S.B., Los Angeles, Calicommitments made by Financial in connection with fornia ("CalFed"). These branches are located these applications, including the commitments dis- throughout Florida and Georgia.1 Applicants seek cussed in this order. The determination as to the Board approval of this transaction pursuant to section nonbanking activities are subject to all of the condi- 5(d)(3) of the Federal Deposit Insurance Act tions in the Board's Regulation Y, including those in (12 U.S.C. § 1815(d)(3) ("FDI Act")), as amended by sections 225.4(d) and 225.23(b)(3) (12 C.F.R. 225.4(d) the Federal Deposit Insurance Corporation Improveand 225.23(b)(3)), and to the Board's authority to ment Act of 1991 (Pub. L. No. 102-242, § 501, 105 require such modification or termination of the activ- Stat. 2236, 2388-2392 (1991)). ities of a holding company or any of its subsidiaries as Section 5(d)(3) of the FDI Act requires the Board to the Board finds necessary to assure compliance with, review any proposed merger between a Savings Assoor to prevent evasions of, the provision and purposes ciation Insurance Fund member and any Bank Insurof the BHC Act and the Board's regulations and orders ance Fund ("BIF") member if the acquiring or resultissued thereunder. The commitments and conditions ing institution is a BIF insured subsidiary of a bank relied on by the Board in reaching this decision are holding company, and, in reviewing these proposals, deemed to be conditions imposed in writing by the to follow the procedures and consider the factors set Board in connection with its findings and decision, forth in section 18(c) of the FDI Act (12 U.S.C. and, as such, may be enforced in proceedings under § 1828(c) ("the Bank Merger Act")).2 The proposed applicable law. The banking transactions shall not be consummated before the thirtieth calendar day following the effective date of this order, and the banking and nonbanking 1. The branch locations that Applicants propose to acquire are listed transactions shall not be consummated later than three in the Appendix. 2. 12 U.S.C. § 1815(d)(3)(E). These factors include considerations months after the effective date of this order, unless relating to competition, financial and managerial resources, and future such period is extended for good cause by the Federal prospects of the existing and proposed institutions, and the conve- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

748 Federal Reserve Bulletin • August 1994 transaction also is subject to review under the Bank institutions in Georgia. Upon consummation of the Merger Act by the Office of the Comptroller of the proposed transaction, NationsBank would remain the Currency ("OCC"), the primary banking regulator for largest depository institution in Georgia, controlling NationsBank-Florida and NationsBank-Georgia. deposits of $8.2 billion, representing approximately Notice of the applications, affording interested per- 13 percent of total deposits in depository institutions in sons an opportunity to submit comments, has been the state. given in accordance with the Bank Merger Act and the NationsBank and CalFed compete directly in the Board's Rules of Procedure (12 C.F.R. 262.3(b)). Re- Eastern Palm Beach County, Fort Meyers, Miamiports on the competitive effects of the merger were Fort Lauderdale, Sarasota, and Tampa Bay, Florida requested from the United States Attorney General, banking markets, and the Atlanta, Georgia banking the Office of the Comptroller of the Currency market. Upon consummation of this proposal, all of ("OCC"), and the Federal Deposit Insurance Corpo- these banking markets would remain unconcentrated ration. The time for filing comments has expired, and or moderately concentrated as measured by the the Board has considered the applications and all Herfindahl-Hirschman Index ("HHI").5 After considcomments received in light of the factors set forth in ering the competition offered by other depository the Bank Merger Act and section 5(d)(3) of the FDI institutions in the market, the number of competitors Act. remaining in the market, the relatively small increase NationsBank, with consolidated assets of in concentration as measured by the HHI,6 and all $159.7 billion, controls 11 banks in Delaware, the other facts of record, the Board concludes that con- District of Columbia, Florida, Georgia, Kentucky, summation of the proposal would not result in a Maryland, North Carolina, South Carolina, Tennes- significantly adverse effect on competition in any see, Texas, and Virginia.3 NationsBank is the fourth relevant banking market. largest depository institution in Florida, controlling total deposits of $15.1 billion, representing approxi- Convenience and Needs Considerations mately 11.1 percent of total deposits in depository institutions in the state.4 The Florida branch offices of The Board also is required under section 5(d)(3) of the CalFed that Applicants propose to acquire control FDI Act to consider the effect of the proposal on the deposits of $4.1 billion, representing 1.5 percent of convenience and needs of the communities to be total deposits in depository institutions in Florida. served. The Board has reviewed the comments sub- Upon consummation of the proposed transaction, mitted to the Board by two organizations in Florida NationsBank would become the third largest deposi- ("Florida Protestants") and one organization in Texas tory institution in Florida, controlling deposits of ("Texas Protestant") that are critical of the efforts of $19.2 billion, representing 13.9 percent of total depos- NationsBank and its bank subsidiaries in meeting the its in depository institutions in the state. credit and banking needs of their entire communities, NationsBank is the largest depository institution in including low- and moderate-income neighborhoods.7 Georgia, controlling total deposits of $8.1 billion, representing approximately 13 percent of total deposits in depository institutions in the state. The Georgia 5. Under the revised Department of Justice Merger Guidelines, branch office of CalFed that Applicants propose to 49 Federal Register 26,823 (June 29, 1984), a market in which the acquire controls deposits of $43.2 million, representing post-merger HHI is less than 1000 is considered unconcentrated, and a market in which the post-merger HHI is between 1000 and 1800 is less than 1 percent of total deposits in depository considered moderately concentrated. The Justice Department has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the nience and needs of the communities to be served. 12 U.S.C. merger increases the HHI by more than 200 points. The Justice § 1828(c). Department has stated that the higher than normal HHI thresholds for 3. Asset data are as of December 31, 1993. screening bank mergers for anticompetitive effects implicitly recog- 4. Deposit and market data are as of June 30, 1993. In this context, nize the competitive effect of limited-purpose lenders and other depository institutions include commercial banks, savings banks, and non-depository financial institutions. savings associations. Market share data before consummation are 6. The HHI would increase in these banking markets as follows: based on calculations in which the deposits of thrift institutions are Eastern Palm Beach (by 39 points to 922); Fort Meyers (by 36 points included at 50 percent. The Board previously has indicated that thrift to 1280); Miami-Fort Lauderdale (by 87 points to 610); Sarasota (by 49 institutions have become, or have the potential to become, significant points to 1550); Tampa Bay (by 103 points to 994); and Atlanta (by 3 competitors of commercial banks. See WM Bancorp, 76 Federal points to 1140). Reserve Bulletin 788 (1990); National City Corporation, 70 Federal 7. The Florida Protestants are Florida Legal Services Inc., Talla- Reserve Bulletin 743 (1984). Because the deposits of CalFed would be hassee, Florida, commenting on behalf of The Farmworker Associatransferred to a commercial bank under this proposal, those deposits tion of Florida, Springfield Preservation and Restoration, Inc., and are included at 100 percent in the calculation of pro forma market Neighborhood Housing Services of Jacksonville, Florida, Inc.; and share. See Norwest Corporation, 78 Federal Reserve Bulletin 452 the Rural Law Center, Inc., Apopka, Florida, commenting on behalf (1992); First Banks, Inc., 76 Federal Reserve Bulletin 669 (1990). of itself and The Farmworker Association of Florida. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 749 The Florida Protestants allege that NationsBank- ry" rating from its primary regulator, the Office of Florida has failed to meet a commitment to Florida Thrift Supervision, in September 1992. low-income community groups to support a proposed The Board also has taken into account Nationsmulti-bank community development corporation, and, Bank's progress under its commitment to initiate a as a result, is not meeting the credit needs of its entire $10 billion/10 year Community Investment Program community.8 One of the Florida Protestants also al- ("CIP").11 The CIP includes all the communities that leges that the 1991 HMDA data for NationsBank- are served by NationsBank's subsidiaries, and lending Florida and NationsBank's mortgage company subsid- in the first two years of this program totalled iary, NationsBank Mortgage Corporation, Dallas, $5.1 billion, $2.9 billion of which was extended in Texas, indicate that the bank and the mortgage com- 1993. In this regard, in 1993, NationsBank-Florida pany illegally discriminate against individuals living in originated 2,026 home mortgage and home improvepredominately African-American areas in Florida. ment loans totalling $69.9 million in low- and moder- Texas Protestant alleges that NationsBank of Texas, ate-income census tracts, and 1,323 home mortgage N.A., Dallas, Texas ("NationsBank-Texas") has dis- and home improvement loans totalling $89.9 million to criminated against the Dalworth neighborhood in the minority applicants. Commercial real estate lending City of Grand Prairie, Texas, and similarly situated under the CIP in Florida included 727 loans totalling banking markets in Texas.9 $185.7 million in 1993. In addition, with respect to The Board also has considered the record of perfor- small business lending, NationsBank-Florida made mance of NationsBank and its subsidiaries under the 329 loans totalling $108 million to small businesses in CRA and the programs that NationsBank has in place low- and moderate-income areas. to serve community needs in assessing the impact of In addition, in 1993, NationsBank-Texas originated this proposal on the convenience and needs of the 2,430 home mortgage and home improvement loans communities to be served. totalling $53.5 million in low- and moderate-income census tracts, and 3,560 home mortgage and home Record of Performance Under the CRA improvement loans totalling $98.3 million to minority applicants. NationsBank-Texas also made 165 com- A. Evaluations of CRA performance mercial loans totalling $101.7 million, for multi-family housing units for low- and moderate-income individu- The Board notes that all of NationsBank's subsidiary als, and renovations for community and retail centers banks received "satisfactory" ratings from their pri- in underserved areas. In addition, NationsBank-Texas mary regulators during the most recent examinations made 1421 loans totalling $426.4 million to small of their CRA performance. The bank subsidiaries businesses in low- and moderate-income areas.12 acquired in NationsBank's 1992 acquisition of C&S/ Sovran Corporation, Atlanta, Georgia, and Norfolk, B. NationsBank's CRA Performance in Florida Virginia ("C&S/Sovran"), also received "satisfactory" ratings from their primary regulators during the In addition to reviewing examination records of Namost recent examinations for their CRA perfor- tionsBank's subsidiaries, the Board has carefully remance.10 In addition, CalFed received a "satisfacto- viewed the CRA performance of NationsBank-Florida in light of Florida Protestants' comments criticizing NationsBank's CRA record in Florida. In particular, Florida Protestants allege that NationsBank-Florida 8. The Florida Protestants have filed similar protests with the OCC, which will consider the comments as part of its review of the withdrew its commitment to fund a proposed multitransaction under the Bank Merger Act. The OCC approved the bank community development corporation known as acquisition of the Georgia branch on May 12, 1994. the Florida Community Development Assistance Cor- 9. Texas Protestant specifically alleges that NationsBank-Texas: (1) Has failed to adequately market its credit products to African- American neighborhoods and community based organizations; (2) Has not developed lending programs that would provide financial services to low- and moderate-income individuals; a "satisfactory" rating for CRA performance from the Federal Re- (3) Does not make a proportionate amount of business loans to serve Bank of St. Louis in March 1992. Dalworth residents; 11. In connection with NationsBank's application to acquire C&S/ (4) Has not developed a specific plan of action for serving the Sovran, NationsBank committed to improve its CRA performance residents and business owners in its community; and record through the CIP. The Board noted in the C&S/Sovran order (5) Discriminates in its operations, policies and procedures. that it would take NationsBank's efforts into account in future 10. C&S/Sovran's subsidiary banks in Florida, Georgia, South acquisitions. See Statement by the Board of Governors of the Federal Carolina, Virginia, and Washington, D.C. received "satisfactory" Reserve System Regarding the Application by NCNB Corporation to ratings for CRA performance from the OCC in October 1991. C&S/ Acquire C&S/Sovran Corporation, 78 Federal Reserve Bulletin 141 Sovran's bank subsidiary in Tennessee received a "satisfactory" (1992) ("C&S/Sovran Order"). rating for CRA performance from the Federal Reserve Bank of 12. These numbers reflect NationsBank's lending in the entire state Atlanta in September 1991, and its Kentucky bank subsidiary received of Texas, including the Dallas-Fort Worth area. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

750 Federal Reserve Bulletin • August 1994 poration ("FCDAC"), which would have provided $1.5 million were extended as a result of this center.14 pre-development financing and technical assistance to Community Development Activities. NationsBankcommunity-based development organizations that pro- Florida also participates in a variety of projects that vide low-income housing. support community development activities in provid- The proposed FCDAC originally was supported by ing housing for low- to moderate-income individuals. Local Initiatives Support Corporation ("LISC"), a For example, in 1994, pursuant to the NationsBank national nonprofit community development organiza- Neighborhood Program, NationsBank-Florida estabtion. NationsBank-Florida provided LISC with funds lished the East Tampa Initiative pursuant to which that were held in escrow for the project. According to NationsBank-Florida committed $5 million for housing NationsBank, however, the effort to create FCDAC and small business initiatives. NationsBank-Florida failed because of the lack of sufficient additional fund- also has committed $7.5 million to a $50 million loan ing from other sources. As a result, by late 1989, LISC pool to develop affordable housing through the Central had withdrawn from the project and the escrowed Florida Community Reinvestment Corporation, and funds were returned to the bank. NationsBank-Florida has committed an additional $5 million in mortgage subsequently participated in efforts to develop a re- loans to low- and moderate-income families through vised FCDAC, but concluded in early 1993 that the the Broward County Housing Finance Authority's objectives of FCDAC could be best met by the bank Lender's Program.15 As of April 1993, 13 loans totalthrough other community development activities in ling over $720,000 were extended under this program. Florida, including the efforts described below. NationsBank-Florida also committed $16 million to Technical Assistance. NationsBank-Florida has un- the 1st Housing Development Corporation multi-bank dertaken a number of measures to provide technical $100 million lending pool for multi-family low-income assistance for community based organizations working housing in Tampa.16 In addition, in August 1994, the to develop affordable housing, small business owners, NationsBank Community Development Corporation is and consumers. For example, over the past two and a scheduled to begin its first project in Florida, the half years, NationsBank-Florida, in conjunction with redevelopment of the former Augustine Quarters site the State of Florida Housing Catalyst Program, has in Sarasota into 25 new single-family affordable funded the Florida Affordable Housing Resource houses. The project is expected to generate Primer, a guide to identifying and using the federal, $1.6 million in permanent mortgages. state, and local resources available for the delivery of HMDA Data and Lending Practices. The Board has low-income housing in both urban and rural areas.13 carefully reviewed the 1992 and 1993 HMDA data The primer is scheduled for use as an educational aide reported by NationsBank-Florida and NationsBank in the Affordable Housing Workshops administered by Mortgage Corporation in light of Florida Protestants' Miami-Dade Community College and the State of comments. These data indicate disparities in the rates Florida Department of Community Affairs in the third of housing-related loan applications, and in denials quarter of this year. NationsBank-Florida also re- that vary by racial and ethnic group in areas served by cently established a Small Business Technical Assis- NationsBank-Florida. tance Program to provide information and direction to The Board is concerned when an institution's record entrepreneurs regarding starting and operating small indicates disparities in lending to minority applicants businesses. In addition, in 1993, in partnership with and believes that all banks are obligated to ensure that the National Association for the Advancement of their lending practices are based on criteria that assure Colored People ("NAACP"), NationsBank estab- not only safe and sound lending, but also assure equal lished a Community Development Resource Center in access to credit by creditworthy applicants regardless Fort Lauderdale to provide technical assistance and of race. The Board recognizes, however, that HMDA education to consumers and small business owners. data alone provide an incomplete measure of an insti- During the past year, loans in the amount of tution's lending in its community, have limitations that make the data an inadequate basis, absent other infor- 13. The goal of the Resource Primer is to provide the most current description of available housing programs and resources for affordable 14. The center also instructed over 500 individuals in NationsBank's housing financing from federal, state, local, and private sectors. The Community Home Buyer Program. primer will identify obstacles to effective resource utilization, describe 15. NationsBank-Florida also has committed $430,000 to the Orhow to use multiple resources in an affordable housing project, and lando Neighborhood Investment Corporation for a $1 million project will show how to "reinvent affordable housing delivery." The primer to develop a 26-unit low-income housing complex in the Parramore/ will be supplemented by a series of statewide training sessions on Heritage Area of the City of Orlando. affordable housing, and will be distributed to community development 16. NationsBank-Florida also has committed $2.5 million toward corporations, banks, public housing agencies, for-profit developers, the creation of a $5 million loan program to enable businesses owned the Department of Housing and Urban Development, state agencies, by women and minorities to provide contractor services to the Greater and local governments. Orlando Aviation Authority. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 751 mation, for concluding that an institution has engaged ascertain the credit needs of the Dalworth area and in illegal discrimination in making lending decisions. advertise its credit products to residents in the Dal- In this regard, the Board notes that the 1991 CRA worth area. These efforts include ongoing communiperformance examinations for NCNB National Bank cations with the Grand Prairie Chapter of the NAACP, of Florida, Tampa, Florida, and C&S National Bank of a number of churches, and Texas Protestant. The bank Florida, Fort Lauderdale, Florida, the predecessor also offers Banking Basics classes through the Grand banks of NationsBank-Florida, found no evidence of Prairie office of the Dallas County Community Action prohibited discrimination or other illegal credit prac- Committee.19 In addition, NationsBank-Texas advertices. The examinations also found no evidence of tises its credit products in a number of media designed practices intended to discourage applications for the to reach low- and moderate-income residents of Daltypes of credit listed in the banks' CRA statements. In worth. These media include Minority Opportunity addition, NationsBank-Florida has two different News, Dallas Weekly, Dallas Examiner, and KKDA mechanisms in place to ensure that mortgage applica- Radio, Grand Prairie. tions from low- to moderate-income applicants obtain With regard to Texas Protestant's assertion that a fair review. First, NationsBank-Florida has initiated NationsBank-Texas does not have a "specific action a second review process under the NationsBank/ plan" for serving the Dalworth area, both the City of National Urban League Community Loan Review Grand Prairie and the Dalworth neighborhood are Board Program. The purpose of the Loan Review covered by the NationsBank-Texas' Dallas Market Boards is to offer a second review to any NationsBank Development Plan.20 Moreover, two specific goals of applicant who has been denied a home mortgage or the plan are increasing market share in low- to home improvement loan on a primary residence.17 moderate-income census tracts, and increasing market Second, NationsBank-Florida has introduced a share in predominately African-American areas.21 "one-up review process" whereby all initially rejected HMDA Data and Lending Practices. The Board has applications from low- to moderate-income individuals carefully reviewed the 1992 and 1993 HMDA data for loans to purchase, refinance, or improve one-to- reported by NationsBank-Texas and NationsBank four family residences are referred to another loan Mortgage Corporation in light of Texas Protestant's officer for a second review before the customer is comments. These data indicate some disparities in the notified that the application has been declined.18 rates of approvals and denials of loan applications In addition, NationsBank-Florida participates in 48 according to racial group in the Dallas-Fort Worth credit programs focused on meeting the credit needs of Metropolitan Statistical Area ("MSA").22 low- to moderate-income consumers in the areas of The Board notes that the 1991 CRA performance affordable housing and small business. These pro- examination of NCNB National Bank of Texas, Dalgrams include a commitment of $20.4 million for the las, Texas, now known as NationsBank of Texas, origination of low- to moderate-income single-family N.A., found no evidence of prohibited discriminatory housing loans, a $50 million commitment for multifamily affordable housing programs, and $3 million for small business loan programs. 19. Bank representatives also participate in meetings with numerous organizations, and serve on the boards of directors of organizations that serve low- and moderate-income neighborhoods. The President of C. NationsBank's CRA Performance in Texas the Grand Prairie Banking Center, for instance, is President of the Grand Prairie-based Quality of Life Foundation which provides funding for charitable causes, including the provision of affordable housing The Board also has carefully reviewed the CRA perfor low-income families in Grand Prairie. formance of NationsBank-Texas in light of Texas 20. NationsBank prepares a "Market Development Plan" for each of its largest markets. The plan covers all areas within a market, Protestant's comments criticizing NationsBank's including under-performing areas singled out for special attention CRA. under a geographic action plan. Ascertainment and Marketing. NationsBank-Texas 21. NationsBank-Texas has created area-specific action plans to increase loan production in census tracts that it determines, based on has engaged in a variety of outreach efforts in order to certain objective criteria, to be most in need of immediate attention. For example, of the 1,016 low- to moderate-income census tracts included in NationsBank-Texas' delineated community, only 158 were designated as requiring a geographic action plan in 1993. Nations- 17. Loan Review Boards are comprised of one local Urban League Bank-Texas has not created a separate plan for the Dalworth area member and three community members selected by the local Urban because: League and local NationsBank representatives. NationsBank-Florida (1) Neither of the census tracts in which Dalworth is located meets has instituted this program in Jacksonville, Fort Lauderdale, Orlando, the bank's four-part eligibility requirement for a geographic action Miami, and Tampa, and will serve applicants throughout the State of plan, and Florida. (2) The neighborhood is already covered by the Dallas Market 18. The second loan officer is independent of the original loan Development Plan. officer, and is charged with objectively reviewing all relevant infor- 22. Both Dalworth and Grand Prairie, Texas, are part of the mation, and has final authority to approve or decline the applications. Dallas-Fort Worth MSA. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

752 Federal Reserve Bulletin • August 1994 or other illegal credit practices at the bank, and noted tion, or a public entity.25 The second mortgage product that the bank was in compliance with applicable fair is similar to the first, but is only available to lowerhousing and fair credit laws and regulations. The 1991 income applicants.26 This product provides for a loan examination also found no evidence of any practices of up to 95 percent of the value of the property with no intended to discourage applications of the types of requirement of private mortgage insurance. Under this credit set forth in the bank's CRA statement. In program, the borrower can contribute as little as $500 addition, NationsBank-Texas has instituted a second- of the down payment, with the balance provided ary review process under the NationsBank/National through a public or nonprofit "soft second" mortgage, Urban League Community Loan Review Board Pro- grant or down payment assistance program, or a gift gram and a one-up review process similar to the one in from a relative. Both mortgage products provide displace at NationsBank-Florida.23 tinct advantages to low- to moderate-income borrow- As noted above, NationsBank-Texas and Nations- ers in that no underwriting fees are charged and both Bank Mortgage Corporation actively promote their loans require less cash from the customer than tradihousing-related credit products to low- to moderate- tional mortgage products.27 income individuals and minorities within the Dallas- With respect to business lending, NationsBank- Fort Worth MSA. In this regard, in 1993, Nations- Texas participates in a variety of programs to meet the Bank-Texas and NationsBank Mortgage Corporation small business needs of its community. For example, originated 953 HMDA-reportable loans totalling in June 1992, NationsBank-Texas was approved as a $31.2 million in low- to moderate-income census certified lender for The Business Consortium Fund tracts, and 395 HMDA-reportable loans totalling (the "Fund"), a minority development company of the $12.2 million to African-American applicants within National Minority Supplier Development Council. The the Dallas-Fort Worth MSA. These loans represent a Fund provides contract financing to certified minority significant increase in lending in low- to moderate- businesses across the country through a network of income areas and to African-Americans. In 1992, local participating banks, Regional Minority Purchas- NationsBank-Texas and NationsBank Mortgage Com- ing Councils, and Regional Minority Suppliers. Loans pany originated 752 HMDA-reportable loans totalling up to a maximum of $500,000 each are available to $28.8 million to low- to moderate-income individuals, minority suppliers to finance specific transactions for and 283 HMDA-reportable loans totalling $7.9 million which the borrower has a contract or purchase order. to African-Americans.24 In addition, NationsBank-Texas actively participates In response to an ascertained need for affordable in government-insured loan programs such as those of mortgage products in Dalworth and other low- to the Small Business Administration ("SBA"). In this moderate-income areas of its community, Nations- regard, in 1992, NationsBank-Texas originated 28 Bank-Texas has developed two affordable housing SBA loans totalling $5.4 million.2® products specifically targeted to low- and moderate- Community Development. NationsBank-Texas parincome families and individuals. The first mortgage ticipates in a variety of projects that support commuproduct provides for a loan of up to 95 percent of the value of a property with private mortgage insurance. Borrowers who cannot make the minimum 5 percent 25. To be eligible for this program, a borrower must have total down payment from their own funds have the option of household income of less than or equal to 115 percent of the 1990 providing a minimum of 3 percent from their own median income for the county or MSA, and must complete a homebuyer education class. funds and the remaining 2 percent of the down pay- 26. To be eligible for this program, the borrower must have total ment, and up to 3 percent of the loan amount in closing household income of less than or equal to 80 percent of the 1990 costs, in the form of a gift from a relative, a grant from median income of the county or MSA. 27. NationsBank-Texas also uses an application scorecard credit a nonprofit organization or public entity, or an unsemodel for low- to moderate-income applicants. The scorecard model cured loan from NationsBank, a nonprofit organiza seeks to identify factors that are good predictors of payment performance for the low- to moderate-income segment of the population. The approach takes into account the differences that exist between low- to moderate-income applicants and higher-income applicants with respect to factors which correlate with good payment performance. NationsBank forecasts that the use of the low- to moderate- 23. The one-up review process and the Loan Review Board Pro- income scorecard has increased its approval rate for low- to moderategram are available at both NationsBank-Texas and NationsBank income applicants by two to three percentage points over the approval Mortgage Corporation. rate that would be observed with a scorecard based on the general 24. With respect to lending in Dalworth, in particular, in 1993, population. NationsBank-Texas and NationsBank Mortgage Company received 28. NationsBank-Texas also supports Texas small businesses 88 loan applications from Dalworth residents, 55 of which were through the recent expansion of NationsBank's Small Business Lendapproved, resulting in 43 loan originations totalling $2%,000. Of the 43 ing Unit and participation in programs such as the Fort Worth loans extended in Dalworth, 22 were consumer loans and 21 were Economic Development Corporation and the Southern Dallas Develfinancial product loans such as bank card and student loans. opment Corporation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 753 nity development activities in providing housing for (2) NationsBank, NationsBank-Florida, and Nalow- to moderate-income individuals in the Dalworth tionsBank-Georgia currently meet, and upon conarea. For example, in February 1994, NationsBank- summation of the proposed transaction will continue Texas was formally approved as a permanent financing to meet, all applicable capital standards; and lender under The Grand Prairie Hope 3 Program to the (3) The proposed transaction would comply with the Dalworth area. The Grand Prairie Hope 3 Program is interstate banking provision of the Bank Holding Grand Prairie's implementation of a national matching Company Act (12 U.S.C. § 1842(d)) if the Florida fund and grant program sponsored by the United States and Georgia branches of CalFed were a state bank Department of Housing and Urban Development to that NationsBank was applying to acquire directly. promote home ownership by low- to moderate-income See 12 U.S.C. § 1815(d)(3). families. The goal of this program is to make one-to- Based on the foregoing and all the facts of record, the four family homes available for sale to low- to Board has determined that this application should be, moderate-income families and first-time homebuyers. and hereby is, approved. The Board's approval of this Under this program, the City of Grand Prairie Housing application is conditioned upon NationsBank's compliand Community Development Department has to date ance with the commitments made in connection with acquired nine homes, two of which are in the Dalworth this application. This approval is further subject to area. NationsBank-Texas also has provided a $15,000 NationsBank's obtaining the OCC's approval for the loan to the Grand Prairie Chapter of NAACP to rehaproposed transaction. For purposes of this action, the bilitate and convert the facility used by a drug and alcohol center in Dalworth.29 commitments and conditions relied on in reaching this decision are both conditions imposed in writing by the Board and, as such, may be enforced in proceedings Conclusion Regarding Convenience and Needs under applicable law. This approval is limited to the Considerations proposal presented to the Board by NationsBank, and may not be construed as applying to any other transac- For the foregoing reasons, and based on all the facts of tion. record in this case, including Protestants' comments This transaction may not be consummated before and NationsBank's response to these comments, the the thirtieth calendar day after the effective date of this Board concludes that convenience and needs considorder, or later than three months after the effective erations, including the records of NationsBank, date of this order, unless such period is extended by NationsBank-Florida, NationsBank-Georgia, and the Board or the Federal Reserve Bank of Richmond, NationsBank-Texas under the CRA, are consistent acting pursuant to delegated authority. with approval of this application.30 By order of the Board of Governors, effective June 8, 1994. Other Considerations Voting for this action: Governors Kelley, La Ware, Lind- The Board also concludes that the financial and mansey, and Phillips. Absent and not voting: Chairman agerial resources and future prospects of NationsBank Greenspan. and CalFed are consistent with approval of this application. Moreover, the record in this case shows that: JENNIFER J. JOHNSON Associate Secretary of the Board (1) The transaction will not result in the transfer of any federally insured depository institution's federal Appendix A deposit insurance from one federal deposit insurance fund to the other; Broward County Coral Ridge 29. NationsBank-Texas also participates in the Tarrant County 3600 N. Federal Highway Housing Partnership which is designed to promote and expand home Ft. Lauderdale, Florida 33308 ownership in low- to moderate-income areas. 30. Texas Protestant also alleges that NationsBank engages in discriminatory employment practices. The Board notes that because Lauderdale Lakes NationsBank employs more than 50 people and acts as an agent to sell 3099 N. State Road 7 or redeem U.S. savings bonds and notes, it is required by Treasury Lauderdale Lakes, Florida 33313 Department and Department of Labor regulations to: (1) File annual reports with the Equal Employment Opportunity Commission; and Lighthouse Point (2) Have in place a written affirmative action program which states 3260 N. Federal Highway its intentions, efforts, and plans to achieve equal opportunity in the employment, hiring, promotion, and separation of personnel. Lighthouse Point, Florida 33064 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

754 Federal Reserve Bulletin • August 1994 Tamarac Palm Beach County 5900 Rock Island Road Ft. Lauderdale, Florida 33319 Boynton Beach 289 N. Congress Avenue Boynton Beach, Florida 33435 University 7001 N. University Drive Delray Beach Tamarac, Florida 33321 1002 E. Atlantic Avenue Delray Beach, Florida 33444 Harbor Beach 2400 SE 17th Street Causeway Woolbright Ft. Lauderdale, Florida 33316 1600 S. Federal Highway Boynton Beach, Florida 33435 Hollywood Boca Glades 4601 Sheridan Street 2200 W. Glades Road Hollywood, Florida 33021 Boca Raton, Florida 33431 Pompano Beach Boca Del Mar 1201 S. Ocean Boulevard 7301 W. Palmetto Park Road Pompano Beach, Florida 33062 Boca Raton, Florida 33433 Sunrise Lakes Crystal Tree 1201 N. U.S. Highway 1, Suite 1 3000 N. University Drive North Palm Beach, Florida 33408 Sunrise, Florida 33322 Dade County Jacaranda 8181 W. Broward Boulevard Coral Gables Plantation, Florida 33324 221 Aragon Avenue Coral Gables, Florida 33134 Coral Springs 1260 N. University Drive North Kendall Coral Springs, Florida 33071 6901 SW 117th Avenue Miami, Florida 33183 Tower Hernando County 2400 E. Commercial Boulevard Ft. Lauderdale, Florida 33308 Spring Hill 1530 Pinehurst Drive #4 Deerfield Spring Hill, Florida 34606 1761 W. Hillsboro Boulevard Deerfield Beach, Florida 33442 Hillsborough County Westshore Pembroke Pines 4830 W. Kennedy Boulevard 10050 Pines Boulevard Suite 150 Pembroke Pines, Florida 33025 Tampa, Florida 33609 Lauderhill 5518 W. Oakland Park Boulevard Palma Ceia Lauderhill, Florida 33313 11555 S. Dale Mabry Highway Tampa, Florida 33629 Coconut Creek Carrollwood 4803 Coconut Creek Parkway 13188 N. Dale Mabry Highway Coconut Creek, Florida 33441 Tampa, Florida 33618 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 755 Pinellas County Dunnellon 11392 N. Williams Street Largo Dunnellon, Florida 32670 2100 E. Bay Drive Largo, Florida 34641 Paddock Park 3101 SW 34th Avenue Clearwater Ocala, Florida 32674 1810 N. Belcher Road Clearwater, Florida 34625 Citrus County Bryan Dairy Inverness 7490 Bryan Dairy Road 1488 N. Highway 41 Largo, Florida 34647 Inverness, Florida 32650 Safety Harbor Georgia Branch 2519 Mcmullen Booth Road Clearwater, Florida 33519 7385 Rosewall Road, NE Bay Pointe Atlanta, Georgia 30328 5275 34th Street South Peoples Heritage Financial Group St. Petersburg, Florida 33711 Portland, Maine Pasco County Order Approving an Application to Acquire a Port Richey Savings Bank 9116 Highway 19 North Port Richey, Florida 33586 Peoples Heritage Financial Group, Inc., Portland, Maine ("Peoples Heritage"), proposes to acquire Mid Lee County Maine Savings Bank, Auburn, Maine ("Mid Maine"), a federally chartered savings bank with branches in Fort Myers Maine and New Hampshire. Applicants seek Board 7050 Winkler Road SW approval of this transaction pursuant to section 5(d)(3) Fort Myers, Florida 33907 of the Federal Deposit Insurance Act (12 U.S.C. § 1815(d)(3) ("FDI Act")), as amended by the Federal Sarasota County Deposit Insurance Corporation Improvement Act of 1991 (Pub. L. No. 102-242, § 501, 105 Stat. 2236, South Sarasota 2388-2392 (1991)). 8292 S. Tamiami Trail Section 5(d)(3) of the FDI Act requires the Board to Sarasota, Florida 33583 review any proposed merger between a Savings Association Insurance Fund member and any Bank Insur- Sarasota Central ance Fund ("BIF") member, if the acquiring or result- 1950 S. Tamiami Trail ing institution is a BIF-insured subsidiary of a bank Sarasota, Florida 33577 holding company, and, in reviewing these proposals, to follow the procedures and consider the factors set Marion County forth in section 18(c) of the FDI Act (12 U.S.C. § 1828(c) ("the Bank Merger Act")).* The Federal Midtown Deposit Insurance Corporation ("FDIC"), the pri- 25 E. Silver Springs Boulevard mary federal regulator of Peoples Bank, has approved Ocala, Florida 32670 the proposed merger pursuant to the Bank Merger Boulevard 2444 E. Silver Springs Boulevard Ocala, Florida 32670 1. 12 U.S.C. § 1815(d)(3)(E). These factors include considerations Belleview relating to competition, financial and managerial resources, and future prospects of the existing and proposed institutions, and the conve- 10990 SE Highway 441 nience and needs of the communities to be served. 12 U.S.C. Belleview, Florida 32670 § 1828(c). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

756 Federal Reserve Bulletin • August 1994 Act. The Maine Bureau of Banking also has approved ket deposits").5 Mid Maine is the sixth largest deposthe proposal under applicable state law. itory institution in the market, controlling deposits of Notice of the application, affording interested per- $75.6 million, representing 5.6 percent of market desons an opportunity to submit comments, has been posits. Upon consummation of this proposal, Peoples given in accordance with the Bank Merger Act and the Bank would control $243.6 million in deposits, repre- Board's Rules of Procedure (12 C.F.R. 262.3(b)). The senting approximately 34.2 percent of market depostime for filing comments has expired, and the Board its. The Herfindahl-Hirschman Index ("HHI") for has considered the application and all comments re- this market would increase 419 points to 2022.6 ceived in light of the factors set forth in the Bank A number of factors indicate that the increase in Merger Act and section 5(d)(3) of the FDI Act. concentration levels in the Lewiston-Auburn banking Peoples Heritage, with consolidated assets of market as measured by the HHI tend to overstate the $2.4 billion, controls a savings bank in Maine and a competitive effects of this proposal. The Board notes commercial bank in New Hampshire.2 Peoples Heri- that Mid Maine experienced a substantial decline in tage is the third largest banking organization in Maine, market deposits between June 1992 and June 1993 and controlling total deposits of $1.6 billion, representing was, until recently, subject to supervisory action by its approximately 13.8 percent of total deposits in depos- primary regulator, the Office of Thrift Supervision, itory institutions in the state.3 Mid Maine is the 26th due to its financial condition. In addition, nine deposlargest depository institution in Maine, controlling itory institutions, including the four largest bank holddeposits of $88.2 million, representing less than ing companies in Maine, would continue to operate in 1 percent of total deposits in depository institutions in the market following consummation of this proposal. the state. Upon consummation of the proposed trans- The Board also notes that credit unions have a comaction, Peoples Heritage would remain the third larg- petitive effect on banking services offered in the est banking organization in Maine, controlling deposits Lewiston-Auburn banking market.7 of $1.7 billion, representing 14.5 percent of total deposits in depository institutions in the state. Peoples Heritage would also become the seventh largest banking organization in New Hampshire, controlling de- 5. The Board previously has indicated that thrift institutions have posits of $327 million, representing 2.6 percent of total become, or have the potential to become, significant competitors of deposits in depository institutions in the state. commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin 788 (1990); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Market share data before consummation are based on calcu- Competitive Considerations lations in which the deposits of thrift institutions operating in the market, except Peoples Bank, are included at 50 percent. The record in this case indicates that Peoples Bank offers all or virtually all of the Under section 5(d)(3) of the FDI Act, the Board is cluster of banking products and services, including commercial loans. required to consider the effects that a proposed merger As of year-end 1993, outstanding non-real estate commercial loans would have on competition. Peoples Heritage and Mid accounted for 8.9 percent of Peoples Bank's total assets compared to the national average for U.S. thrift institutions of 1.1 percent. Accord- Maine compete directly in the Lewiston-Auburn and ingly, deposits controlled by Peoples Bank have been included at Sanford banking markets, both in Maine, and the 100 percent in the calculation of existing market share. See Fleet/ Norstar Financial Group, Inc., 77 Federal Reserve Bulletin 750 Portsmouth-Dover-Rochester, New Hampshire bank- (1991). Because the deposits of Mid Maine would be transferred to ing market.4 Peoples Bank and a commercial bank subsidiary of Peoples Heritage Peoples Heritage's lead bank, Peoples Heritage Sav- under this proposal, those deposits are included at 100 percent in the calculation of Peoples Heritage's post-consummation share of state ings Bank, Portland, Maine ("Peoples Bank"), is the and banking market deposits. See Norwest Corporation, 78 Federal largest depository institution in the Lewiston-Auburn Reserve Bulletin 452 (1992); First Banks, Inc., 76 Federal Reserve Bulletin 669 (1990). banking market, controlling deposits of $168 million, 6. Under the revised Department of Justice Merger Guidelines, 49 representing approximately 24.9 percent of total de- Federal Register 26,823 (June 29, 1984), a market in which the posits in depository institutions in the market ("mar- post-merger HHI is above 1800 is considered highly concentrated. The Justice Department has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by more than 200 points. The Justice Department has stated that the higher than normal 2. Asset data are as of March 31, 1994. HHI thresholds for screening bank mergers for anticompetitive effects 3. Deposit and market data are as of June 30, 1993. In this context, implicitly recognize the competitive effect of limited-purpose lenders depository institutions include commercial banks, savings banks, and and other non-depository financial institutions. savings associations. 7. Credit unions account for 20 percent of the combined deposits in 4. The Lewiston-Auburn banking market is approximated by the depository institutions and credit unions in the market, which is Lewiston-Auburn Rand-McNally Area plus the Androscoggin County substantially higher than the 5.6 percent national average of deposits townships of Durham, Leeds, Turner, and Wales; the Oxford County controlled by credit unions. Six of these credit unions, accounting for township of Hebron; and the Cumberland County township of New 12 percent of the combined deposits in this banking market, have Gloucester. community-based membership criteria. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 757 In the Sanford, Maine and Portsmouth-Dover- continue to meet, all applicable capital standards; Rochester, New Hampshire banking markets, con- and summation of this proposal would not exceed the (3) The proposed transaction would comply with the threshold levels in the Department of Justice's revised interstate banking provision of the Bank Holding Merger Guidelines.8 Moreover, numerous competitors Company Act (12 U.S.C. § 1842(d)) if Mid Maine would remain in both markets. were a state bank that Peoples Heritage was apply- In accordance with the Bank Merger Act, the Board ing to acquire directly. See 12 U.S.C. § 1815(d)(3).9 has sought comments from the United States Attorney General, the Office of the Comptroller of the Cur- Based on the foregoing and all the facts of record, rency, ("OCC"), and the FDIC on the competitive the Board has determined that this application should effects of this proposal. The Attorney General has be, and hereby is, approved. Approval of this applicaindicated that there would be no significantly adverse tion is conditioned on Peoples Heritage's compliance effects on competition in any relevant banking market, with the commitments made in connection with this and as previously noted, the FDIC has approved this application, and is further subject to Portsmouth Bank acquisition. The OCC also has not objected to the obtaining the OCC's approval for the proposed transacquisition. Based on all the facts of record, including action. For purposes of this action, the commitments the number of depository institution competitors re- and conditions relied on in reaching this decision are maining in these markets, the competitive effects of both conditions imposed in writing by the Board and, credit unions, and all other facts of record, the Board as such, may be enforced in proceedings under appliconcludes that consummation of this proposal would cable law. This approval is limited to the proposal not have significantly adverse effects on competition presented to the Board by Peoples Heritage, and may or on the concentration of resources in any relevant not be construed as applying to any other transaction. banking market. This transaction may not be consummated before the thirtieth calendar day after the effective date of this Other Considerations order, or later than three months after the effective date of this order, unless such period is extended by The Board also concludes that the financial and man- the Board or the Federal Reserve Bank of Boston, agerial resources and future prospects of Peoples acting pursuant to delegated authority. Heritage and Mid Maine are consistent with approval By order of the Board of Governors, effective of this application. Considerations relating to the con- June 20, 1994. venience and needs of the communities to be served and the other supervisory factors that the Board is Voting for this action: Chairman Greenspan and Governors required to consider under The Bank Merger Act also Kelley, LaWare, Lindsey, and Phillips. are consistent with approval. Moreover, the record in this case shows that: JENNIFER J. JOHNSON Associate Secretary of the Board (1) The transaction will not result in the transfer of any federally insured depository institution's federal deposit insurance from one federal deposit insur- 9. Maine and New Hampshire have each enacted an interstate ance fund to the other; banking statute that permits bank holding companies in every state to (2) Applicant and Peoples Bank currently meet, and acquire banks in in their respective states. See Me. Rev. Stat. Ann. upon consummation of the proposed transaction will title 9-B, § 1013(2) (Supp. 1993); N.H. Rev. Stat. Ann. § 384:47 (Supp. 1993). Mid Maine would merge with and into Peoples Bank. Immediately following the merger, Peoples Heritage's bank subsidiary, The First National Bank of Portsmouth, Portsmouth, New Hampshire 8. The HHI in the Sanford banking market would increase by 90 ("Portsmouth Bank"), would assume the liabilities and purchase the points to 2165, and the HHI in the Portsmouth-Dover-Rochester assets of the Hampton, New Hampshire branch office of Mid Maine. banking market would increase by 145 points to 1037. Peoples Bank would not operate the New Hampshire branches. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

758 Federal Reserve Bulletin • August 1994 ACTIONS TAKEN UNDER THE FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991 By the Secretary of the Board Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Acquired Acquiring Approval Bank Holding Company Thrift Bank(s) Date First National of Nebraska, Inc. Franklin Federal Savings First National Bank June 10, 1994 Omaha, Nebraska Association, of Kansas, Ottawa, Kansas Overland Park, Kansas Security Capital Bancorp, First Charlotte Interim Security Bank and June 30, 1994 Salisbury, North Carolina Bank, Trust Company, Charlotte, North Salisbury, North Carolina Carolina Trans Financial Bancorp, Inc. Trans Financial Bank of Peoples Bank and June 27, 1994 Bowling Green, Kentucky Tennessee, F.S.B., Trust of the Cookeville, Tennessee Cumberlands, Cooke ville, Tennessee 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 BSB Bancorp., Inc., Columbia Banking FSA, Binghamton Savings June 3, 1994 Binghamton, New York Rochester, New York Bank, Binghamton, New York Chemical Bank and Trust Standard Federal Bank, Chemical Financial June 15, 1994 Company, Troy, Michigan Corporation, Midland, Michigan Midland, Michigan Community Bank System, Inc., Columbia Banking FSA, Community Bank, June 3, 1994 DeWitt, New York Rochester, New York N.A., Canton, New York Family Bancorp, First Federal Savings Family Mutual June 10, 1994 Haverhill, Massachusetts Bank of Boston, Savings Bank, Boston, Massachusetts Haverhill, Massachusetts Financial Institutions, Inc., Columbia Banking FSA, The National Bank of June 3, 1994 Warsaw, New York Rochester, New York Geneva, Geneva, New York Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 759 FDICIA Orders—Continued Acquired Acquiring Approval Bank Holding Company Thrift Bank(s) Date Financial Institutions, Inc., Columbia Banking FSA, Wyoming County June 3, 1994 Warsaw, New York Rochester, New York Bank, Warsaw, New York First Citizens Bank and Trust Cooper River Federal First Citizens June 3, 1994 Company of South Carolina, Savings Association, Bancorporation of Columbia, South Carolina North Charleston, South Carolina, South Carolina Inc., Columbia, South Carolina Fulton Financial Corporation, Great Valley Savings Fulton Bank, June 7, 1994 Lancaster, Pennsylvania Bank, Lancaster, Reading, Pennsylvania Pennsylvania The First National Bank of Danville, Danville, Pennsylvania Swineford National Bank, Middleburg, Pennsylvania Harbor Bankshares Corporation, John Hanson Federal The Harbor Bank of June 10, 1994 Baltimore, Maryland Savings Bank, Maryland, Beltsville, Maryland Baltimore, Maryland KeyCorp, Inc., Columbia Banking Key Bank of New June 3, 1994 Cleveland, Ohio Federal Savings York, Association, Albany, New York Rochester, New York Meridian Bancorp, Inc., Security Federal Savings Meridian Bank, June 17, 1994 Cherry Hill, New Jersey Bank, New Jersey, Vineland, New Jersey Cherry Hill, New Jersey Mercantile Bancorporation Inc., United Postal Savings Mercantile Bank of June 14, 1994 St. Louis, Missouri Association, St. Louis, N.A., St. Louis, Missouri St. Louis, Missouri ONBANCorp, Inc., Columbia Banking FSA, OnBank & Trust June 3, 1994 Syracuse, New York Rochester, New York Company, Syracuse, New York Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

760 Federal Reserve Bulletin • August 1994 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, United American Bancshares, Inc., June 15, 1994 Little Rock, Arkansas Palestine, Texas The First National Bank of Palestine, Palestine, Texas Keystone Financial, Inc., The Frankford Corporation, June 6, 1994 Harrisburg, Pennsylvania Philadelphia, Pennsylvania Union Planters Corporation, Earle Bankshares, Inc., June 7, 1994 Memphis, Tennessee Earle, Arkansas Section 4 Effective Applicant(s) Bank(s) Date Compass Bancshares, Inc. to engage de novo in June 14, 1994 Birmingham, Alabama making, acquiring or servicing loans or other extensions of credit First Commercial Corporation, to engage de novo in June 10, 1994 Little Rock, Arkansas making, acquiring, or servicing loans or other extensions of credit 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 761 Section 3 Reserve Effective Applicant(s) Bank(s) Bank Date Adam Financial Corporation, New Adam Bank Group, Dallas June 2, 1994 Bryan, Texas Inc., Dover, Delaware First American Bank, Bryan, Texas Alabama National Citizens Holding Atlanta June 1, 1994 Bancorporation, Company, Inc., Shoal Creek, Alabama Talladega, Alabama Alabama National Saint Clair Holding Atlanta June 1, 1994 Bancorporation, Company, Inc., Shoal Creek, Alabama Pell City, Alabama AMCORE Financial, Inc., First State Bancorp of Chicago June 17, 1994 Rockford, Illinois Princeton Illinois, Inc., Princeton, Illinois Central Pennsylvania Financial Central Pennsylvania Philadelphia June 7, 1994 Corporation, Savings Bank, Shamokin, Pennsylvania Shamokin, Pennsylvania Central Shares, Inc., Security Bancshares of St. Louis May 24, 1994 Lebanon, Missouri Pulaski County, Inc., St. Robert, Missouri Citco Community Bancshares, Citco Bancshares, Inc., Atlanta June 7, 1994 Inc., Elizabethton, Elizabethton, Tennessee Tennessee Comerica Incorporated, Lockwood Banc Group, Chicago June 14, 1994 Detroit, Michigan Inc., Comerica Texas Incorporated, Houston, Texas Dallas, Texas Commercial Financial Central Trust Investment, Chicago May 27, 1994 Corporation, Inc., Inc., Storm Lake, Iowa Cherokee, Iowa Community Bancshares of Citizens Bancshares of Kansas City May 27, 1994 Marysville, Inc., Marysville, Inc., Marysville, Kansas Marysville, Kansas Citizens Bancshares of Waterville, Inc., Waterville, Kansas Cooperative Bankshares, Inc., Cooperative Bank for Richmond June 22, 1994 Wilmington, North Carolina Savings, Inc., SSB, Wilmington, North Carolina CSB, Inc., Citizens Security Kansas City May 27, 1994 Bixby, Oklahoma Bancshares, Inc., Bixby, Oklahoma FCB Bancshares, Inc., First Commercial Bank of Atlanta May 31, 1994 Good Hope, Alabama Cullman County, Good Hope, Alabama Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

762 Federal Reserve Bulletin • August 1994 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank Date F & M National Corporation, Hallmark Bank and Trust Richmond May 31, 1994 Winchester, Virginia Company, Springfield, Virginia F & M National Corporation, PNB Financial Richmond May 31, 1994 Winchester, Virginia Corporation, Warrenton, Virginia First Ainsworth Company, Kulek Insurance Agency, Kansas City June 1, 1994 Ainsworth, Nebraska Ainsworth, Nebraska First National Agency of Ainsworth, Inc., Ainsworth, Nebraska First Bank Corp., Vista Bancorporation, St. Louis June 15, 1994 Fort Smith, Arkansas Inc., Van Buren, Arkansas First Financial Bancshares, Inc. First Sallisaw Bancshares, Kansas City May 27, 1994 Sallisaw, Oklahoma Inc., Sallisaw, Oklahoma First Tennessee National Planters Bank, St. Louis May 25, 1994 Corporation, Tunica, Mississippi Memphis, Tennessee First Trust Holdings, Inc., The First Trust and Chicago June 1, 1994 Watseka, Illinois Savings Bank of Watseka, Watseka, Illinois The First National Bank of Clifton, Clifton, Illinois Freedom Bancshares, Inc., Citizens State Bank, Kansas City June 21, 1994 Osage City, Kansas Osage City, Kansas Fulton Financial Corporation, Central Pennsylvania Philadelphia June 7, 1994 Lancaster, Pennsylvania Savings Bank, Shamokin, Pennsylvania Glen Rock State Bancorp, Inc., The Glen Rock State Philadelphia May 25, 1994 Glen Rock, Pennsylvania Bank, Glen Rock, Pennsylvania Heartland Financial USA, Inc., Keokuk Bancshares, Inc., Chicago June 16, 1994 Dubuque, Iowa Keokuk, Iowa Kingston Bancshares, Inc., Kingston National Bank, Cleveland June 13, 1994 Kingston, Ohio Kingston, Ohio Madison Bancorp, Inc., Madison National Bank, Chicago June 22, 1994 Madison Heights, Michigan Madison Heights, Michigan Marquette National Corporation, Orland State Bank, Chicago May 31, 1994 Chicago, Illinois Orland Park, Illinois McCreary Bancshares, Inc., First Trust and Savings Cleveland June 13, 1994 Whitley City, Kentucky Bank, Oneida, Tennessee Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 763 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank Date Mountain West Financial Corp., Mountain West Bank of Minneapolis June 2, 1994 Helena, Montana Helena, N.A., Helena, Montana New Adam Bank Group, Inc., First American Bank, Dallas June 2, 1994 Dover, Delaware Bryan, Texas PCI Holdings, Inc., St. Marys State Bank, Kansas City June 1, 1994 St. Marys, Kansas St. Marys, Kansas Pinnacle Bancorp, Inc., Nebraska Capital Kansas City May 27, 1994 Central City, Nebraska Corporation, Lincoln, Nebraska Prescott Bancshares, Inc., First State Holding St. Louis June 14, 1994 Pre scott, Arkansas Company of Prescott, Prescott, Arkansas The Second Fourth St. Financial Herget Financial Corp., Chicago June 21, 1994 Corp., Pekin, Illinois Pekin, Illinois The Herget National Bank of Pekin, Pekin, Illinois Security Bancshares of Pulaski Security Bank of Pulaski St. Louis May 24, 1994 County, Inc., County, St. Robert, Missouri St. Robert, Missouri Texas Financial Bancorporation, Bedford National Bank, Dallas June 9, 1994 Inc., Bedford, Texas Minneapolis, Minnesota First Bancorp, Inc., Denton, Texas First Delaware Bancorp, Inc., Dover, Delaware Waterhouse Investor Services, Waterhouse National New York June 10, 1994 Inc., Bank, New York, New York White Plains, New York Westside Financial Corporation, The Westside Bank and Atlanta June 17, 1994 Kennesaw, Georgia Trust Company, Kennesaw, Georgia Section 4 . .. . . Nonbanking Reserve Effective PP Activity/Company Bank Date Banco Santander, S.A., First Fidelity Bank, New York June 10, 1994 Santander, Spain FSB, Belts ville, Maryland John Hanson Federal Savings Bank, Belts ville, Maryland Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

764 Federal Reserve Bulletin • August 1994 Section 4—Continued Nonbanking Reserve Effective Applicant(s) Activity/Company Bank Date BankAmerica Corporation, BA Futures, Inc., San Francisco June 3, 1994 San Francisco, California Chicago, Illinois BankAmerica Corporation, United Mortgage Holding San Francisco June 17, 1994 San Francisco, California Company, Bloomington, Minnesota Citco Community Bancshares, Small Business Atlanta June 7, 1994 Inc., Resources, Inc., Elizabethton, Tennessee Panama City, Florida Community Bancshares, Inc., Community Mortgage Richmond June 2, 1994 North Wilkesboro, Corporation of North North Carolina Carolina, States ville, North Carolina First Banks, Inc., St. Charles Federal St. Louis June 15, 1994 Clayton, Missouri Bancshares Inc., St. Charles, Missouri First Fidelity Bancorporation, First Fidelity Bank, FSB, Philadelphia June 10, 1994 Lawrenceville, New Jersey Belts ville, Maryland First State Bancorp, Inc., Community First Minneapolis June 2, 1994 La Crosse, Wisconsin Development Corporation, La Crosse, Wisconsin Fulton Financial Corporation, Central Pennsylvania Philadelphia June 7, 1994 Lancaster, Pennsylvania Financial Corp., Shamokin, Pennsylvania Central Pennsylvania Savings Association, Shamokin, Pennsylvania J.P. Morgan & Co. Incorporated, to engage in making New York June 20, 1994 New York, New York equity and debt investments in corporations or projects designed primarily to promote community welfare J.P. Morgan & Co. Incorporated, The New York Equity New York June 3, 1994 New York, New York Fund 1989 Limited Partnership, New York, New York Henry Phipps Plaza South Associates Limited Partnership, New York, New York HUDC TC Limited Partnership, New York, New York Mainline Bankshares of Portland, to engage in lending St. Louis June 9, 1994 Inc., activities Digitized for FRASER Portland, Arkansas http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 765 Section 4—Continued Nonbanking Reserve Effective Applicant(s) Activity/Company Bank Date National Penn Bancshares, Inc., Investors Trust Company, Philadelphia June 7, 1994 Boyertown, Pennsylvania Wyomissing, Pennsylvania Northwest Bancorporation, Inc., Coronado Financial Dallas June 16, 1994 Houston, Texas Group, Inc., Houston, Texas Norwest Corporation, American Land Title Minneapolis June 8, 1994 Minneapolis, Minnesota Company of Kansas City, Inc., Kansas City, Missouri Norwest Corporation, First Insurance Agency of Minneapolis June 22, 1994 Minneapolis, Minnesota Detroit Lakes, Inc., Detroit Lakes, Minnesota Norwest Corporation, Title Network Agency, Minneapolis May 26, 1994 Minneapolis, Minnesota Buffalo, New York Wilmington Trust Corporation, Wilmington Trust FSB, Philadelphia June 10, 1994 Wilmington, Delaware Salisbury, Maryland APPLICATIONS APPROVED UNDER BANK MERGER ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Reserve Effective Applicant(s) Bank(s) Bank Date Bank of Fresno, Merced Bank of San Francisco May 23, 1994 Fresno, California Commerce, Merced, California Fleet Bank of New York, Fleet Bank, New York June 1, 1994 Albany, New York Melville, New York Wellington State Bank, First National Bank in Dallas June 16, 1994 Wellington, Texas Wheeler, Wheeler, Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

766 Federal Reserve Bulletin • August 1994 PENDING CASES INVOLVING THE BOARD OF with prior order requiring compliance with Board GOVERNORS prohibition and civil money penalty orders. Oral argument was held June 16, 1994. This list of pending cases does not include suits Jackson v. Board of Governors, No. CV-N-93-401against the Federal Reserve Banks in which the Board ECR (D. Nev., filed June 14, 1993). Pro se action for of Governors is not named a party. violation of a prisoner's civil rights. On November 26, 1993, the Board filed a motion to dismiss. National Title Resource Agency v. Board of Gover- First National Bank ofBellaire v. Board of Governors, nors, No. 94-2050 (8th Cir., filed April 28, 1994). No. H-93-1708 (S.D. Texas, filed June 8, 1993). Petition for review of Board's order, issued under Action to enjoin possible enforcement actions by section 4 of the Bank Holding Company Act, ap- Board of Governors and other bank regulatory agenproving the application of Norwest Corp., Minneap- cies. On March 8,1994, the district court granted the olis, Minnesota, to acquire Double Eagle Financial agencies' motion to dismiss; on June 20, 1994, the Corp., Phoenix, Arizona, and its subsidiary, United court denied plaintiff's motion for reconsideration. Title Agency, Inc., and thereby engage in title Kubany v. Board of Governors, et al., No. 93-1428 (D. insurance agency activities and real estate settle- D.C., filed July 9, 1993). Action challenging Board ment services (80 Federal Reserve Bulletin 453) determination under the Freedom of Information (1994)). Petitioner's brief was filed June 7, 1994. Act. The Board's motion to dismiss was filed on Scott v. Board of Governors, No. 94-4117 (10th Cir.), October 15, 1993. filed April 28, 1994. Appeal of dismissal of action Bennett v. Greenspan, No. 93-1813 (D. D.C., filed against Board and others for damages and injunctive April 20, 1993). Employment discrimination action. relief for alleged constitutional and statutory viola- Trial is scheduled to commence August 1, 1994. tions caused by issuance of Federal Reserve notes. Amann v. Prudential Home Mortgage Co., et al., No. Beckman v. Greenspan, No. CV 94-41-BCG-RWA 93-10320 WD (D. Massachusetts, filed February 12, (D. Mont., filed April 13, 1994). Action against 1993). Action for fraud and breach of contract Board and others seeking damages for alleged vioarising out of a home mortgage. On April 17, 1993, lations of constitutional and common law rights. The the Board filed a motion to dismiss. Board's motion to dismiss was filed May 19, 1994. DLG Financial Corp. v. Board of Governors, No. Adams v. Greenspan, No. 93-0167 (D. D.C., filed 94-10078 (5th Cir., filed January 20, 1994). Appeal January 27,1993). Action by former employee under the Civil Rights Act of 1964 and the Rehabilitation of district court dismissal of appellants' action to Act of 1973 concerning termination of employment. enjoin the Board and the Federal Reserve Bank of The Board's motion for partial summary judgment Dallas from taking certain enforcement actions, and was filed on January 4, 1994. for money damages on a variety of tort and contract theories. The case has been consolidated on appeal CBC, Inc. v. Board of Governors, No. 93-1458 (U.S. with Board of Governors v. DLG Financial Corp., Supreme Court, filed March 17, 1994). Petition for Nos. 93-2944 and 94-20013 (5th Cir., filed Decem- review of civil money penalty assessment against a ber 14, 1993 and December 31,1993), an appeal of a bank holding company and three of its officers and temporary restraining order and a preliminary in- directors for failure to comply with reporting rejunction obtained by the Board freezing assets of a quirements. On November 30, 1993, the Court of corporation and an individual pending administra- Appeals for the 10th Circuit denied the petition for tive adjudication of civil money penalty assessments review, and the plaintiffs' petition for certiorari was by the Board. Oral argument on the consolidated denied on June 6, 1994. appeal was held June 1, 1994. Zemel v. Board of Governors, No. 92-1056 (D. D.C., Richardson v. Board of Governors, et al., No. 94- filed May 4, 1992). Age Discrimination in Employ- 4020 (10th Cir.), filed January 14, 1994. Appeal of ment Act case. The parties' cross-motions for sumdismissal of action against Board and others for mary judgment are pending. damages and injunctive relief for alleged constitu- Board of Governors v. Ghaith R. Pharaon, No. 91tional and statutory violations caused by issuance of CIV-6250 (S.D. New York, filed September 17, Federal Reserve notes. The Board's brief was filed 1991). Action to freeze assets of individual pending June 3, 1994. administrative adjudication of civil money penalty Board of Governors v. Oppegard, No. 93-3706 (8th assessment by the Board. On September 17, 1991, Cir., filed November 1, 1993). Appeal of district the court issued an order temporarily restraining the court order ordering appellant Oppegard to comply transfer or disposition of the individual's assets. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 767 FINAL ENFORCEMENT ORDERS ISSUED BY THE against Scott A. Noyes, the sole officer and director of BOARD OF GOVERNORS Peoples Bancshares, Inc. Gene A. Osborne Peoples Bancshares, Inc. Englewood, Colorado Colorado Springs, Colorado The Federal Reserve Board announced on June 3, 1994, the issuance of an Order of Prohibition against The Federal Reserve Board announced on June 21, Gene A. Osborne, the former president and principal 1994, the issuance of an Order of Assessment of a Civil shareholder of Arvada Bank Holding Company, En- Money Penalty against Peoples Bancshares, Inc., Colglewood, Colorado, a former registered bank holding orado Springs, Colorado, a bank holding company. company. Pioneer Bank Scott A. Noyes Fullerton, California Colorado Springs, Colorado The Federal Reserve Board announced on June 9, The Federal Reserve Board announced on June 21, 1994, the issuance of a Prompt Corrective Action 1994, the issuance of a combined Order to Cease and Directive by Consent against Pioneer Bank, Fullerton, Desist and of Assessment of a Civil Money Penalty California. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

769 Membership of the Board of Governors of the Federal Reserve System, 1913-94 APPOINTIVE MEMBERS1 Federal Reserve Date of initial Other dates and information relating Name District oath of office to membership2 Charles S. Hamlin. .Boston Aug. 10, 1914 Reappointed in 1916 and 1926. Served until Feb. 3, 1936.3 Paul M. Warburg... .New York do. Term expired Aug. 9, 1918. Frederic A. Delano .Chicago do. Resigned July 21, 1918. W.P.G. Harding .Atlanta do. Term expired Aug. 9, 1922. Adolph C. Miller.... .San Francisco do. Reappointed in 1924. Reappointed in 1934 from the Richmond District. Served until Feb. 3, 1936.3 Albert Strauss New York .Oct. 26, 1918 Resigned Mar. 15, 1920. Henry A. Moehlenpah Chicago.... .Nov. 10, 1919 Term expired Aug. 9, 1920. Edmund Piatt New York .June 8, 1920 Reappointed in 1928. Resigned Sept. 14, 1930. David C. Wills Cleveland ... .Sept. 29, 1920 Term expired Mar. 4, 1921. John R. Mitchell Minneapolis .May 12, 1921 Resigned May 12, 1923. Milo D. Campbell Chicago .Mar. 14, 1923 Died Mar. 22, 1923. Daniel R. Crissinger Cleveland ... .May 1, 1923 Resigned Sept. 15, 1927. George R. James St. Louis.... .May 14, 1923 Reappointed in 1931. Served until Feb. 3, 1936.4 Edward H. Cunningham...Chicago do Died Nov. 28, 1930. Roy A. Young Minneapolis . .Oct. 4, 1927 Resigned Aug. 31, 1930. Eugene Meyer New York ... .Sept. 16, 1930 Resigned May 10, 1933. Wayland W. Magee Kansas City. .May 18, 1931 Term expired Jan. 24, 1933. Eugene R. Black Atlanta .May 19, 1933 Resigned Aug. 15, 1934. M.S. Szymczak Chicago June 14, 1933 Reappointed in 1936 and 1948. Resigned May 31, 1961. J.J. Thomas Kansas City... do Served until Feb. 10, 1936.3 Marriner S. Eccles San Francisco .Nov. 15, 1934 Reappointed in 1936, 1940, and 1944. Resigned July 14, 1951. Joseph A. Broderick New York .. .Feb. 3, 1936 Resigned Sept. 30, 1937. John K. McKee Cleveland ... do Served until Apr. 4, 1946.3 Ronald Ransom Atlanta do Reappointed in 1942. Died Dec. 2, 1947. Ralph W. Morrison Dallas .Feb. 10, 1936 Resigned July 9, 1936. Chester C. Davis Richmond... .June 25, 1936 Reappointed in 1940. Resigned Apr. 15, 1941. Ernest G. Draper New York .. .Mar. 30, 1938 Served until Sept. 1, 1950.3 Rudolph M. Evans Richmond... .Mar. 14, 1942 Served until Aug. 13, 1954.3 James K. Vardaman, Jr. ..St. Louis — .Apr. 4, 1946 Resigned Nov. 30, 1958. Lawrence Clayton Boston .Feb. 14, 1947 Died Dec. 4, 1949. Thomas B. McCabe Philadelphia .Apr. 15, 1948 Resigned Mar. 31, 1951. Edward L. Norton Atlanta .Sept. 1, 1950 Resigned Jan. 31, 1952. Oliver S. Powell Minneapolis do Resigned June 30, 1952. Wm. McC. Martin, Jr New York .. .April 2, 1951 Reappointed in 1956. Term expired Jan. 31, 1970. A.L. Mills, Jr San Francisco .Feb. 18, 1952 Reappointed in 1958. Resigned Feb. 28, 1965. J.L. Robertson Kansas City... do Reappointed in 1964. Resigned Apr. 30, 1973. C. Canby Balderston Philadelphia... .Aug. 12, 1954 Served through Feb. 28, 1966. Paul E. Miller Minneapolis ... .Aug. 13, 1954 Died Oct. 21, 1954. Chas. N. Shepardson Dallas .Mar. 17, 1955 Retired Apr. 30, 1967. G.H. King, Jr Atlanta .Mar. 25, 1959 Reappointed in 1960. Resigned Sept. 18, 1963. George W. Mitchell Chicago Aug. 31, 1961 Reappointed in 1962. Served until Feb. 13, 1976.3 J. Dewey Daane Richmond Nov. 29, 1963 Served until Mar. 8, 1974.3 Sherman J. Maisel San Francisco Apr. 30, 1965 Served through May 31, 1972. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

770 Federal Reserve Date of initial Other dates and information relating Name District oath of office to membership2 Andrew F. Brimmer Philadelphia Mar. 9, 1966 Resigned Aug. 31, 1974. William W. Sherrill Dallas May 1, 1967 Reappointed in 1968. Resigned Nov. 15, 1971. Arthur F. Burns New York Jan. 31, 1970 Term began Feb. 1, 1970. Resigned Mar. 31, 1978. John E. Sheehan St. Louis Jan. 4, 1972 Resigned June 1, 1975. Jeffrey M. Bucher San Francisco June 5, 1972 Resigned Jan. 2, 1976. Robert C. Holland Kansas City June 11, 1973 Resigned May 15, 1976. Henry C. Wallich Boston Mar. 8, 1974 Resigned Dec. 15, 1986. Philip E. Coldwell Dallas Oct. 29, 1974 Served through Feb. 29, 1980. Philip C. Jackson, Jr Atlanta July 14, 1975 Resigned Nov. 17, 1978. J. Charles Partee Richmond Jan. 5, 1976 Served until Feb. 7, 1986.3 Stephen S. Gardner Philadelphia Feb. 13, 1976 Died Nov. 19, 1978. David M. Lilly Minneapolis June 1, 1976 Resigned Feb. 24, 1978. G. William Miller San Francisco Mar. 8, 1978 Resigned Aug. 6, 1979. Nancy H. Teeters Chicago Sept. 18, 1978 Served through June 27, 1984. Emmett J. Rice New York June 20, 1979 Resigned Dec. 31, 1986. Frederick H. Schultz Atlanta July 27, 1979 Served through Feb. 11, 1982. Paul A. Volcker Philadelphia Aug. 6, 1979 Resigned August 11, 1987. Lyle E. Gramley Kansas City May 28, 1980 Resigned Sept. 1, 1985. Preston Martin San Francisco Mar. 31, 1982 Resigned April 30, 1986. Martha R. Seger Chicago July 2, 1984 Resigned March 11, 1991. Served through Feb. 9, 1994. Wayne D. Angell Kansas City Feb. 7, 1986 Resigned August 3, 1990. Manuel H. Johnson Richmond Feb. 7, 1986 Resigned July 31, 1989. H. Robert Heller San Francisco Aug. 19, 1986 Reappointed in 1990. Edward W. Kelley, Jr Dallas May 26, 1987 Reappointed in 1992. Alan Greenspan New York Aug. 11, 1987 John P. LaWare Boston Aug. 15, 1988 David W. Mullins, Jr St. Louis May 21, 1990 Resigned Feb. 14, 1994. Lawrence B. Lindsey Richmond Nov. 26, 1991 Susan M. Phillips Chicago Dec. 2, 1991 Alan S. Blinder Philadelphia June 27, 1994 Chairmen4 Vice Chairmen4 Charles S. Hamlin Aug. 10, 1914-Aug. 9, 1916 Frederic A. Delano Aug. 10, 1914-Aug. 9, 1916 W.P.G. Harding Aug. 10, 1916-Aug. 9, 1922 Paul M. Warburg Aug. 10, 1916-Aug. 9, 1918 Daniel R. Crissinger May 1, 1923-Sept. 15, 1927 Albert Strauss Oct. 26, 1918-Mar. 15, 1920 Roy A. Young Oct. 4, 1927-Aug. 31, 1930 Edmund Piatt July 23, 1920-Sept. 14, 1930 Eugene Meyer Sept. 16, 1930-May 10, 1933 J.J. Thomas Aug. 21, 1934-Feb. 10, 1936 Eugene R. Black May 19, 1933-Aug. 15, 1934 Ronald Ransom Aug. 6, 1936-Dec. 2, 1947 Marriner S. Eccles Nov. 15, 1934-Jan. 31, 1948 C. Canby Balderston Mar. 11, 1955-Feb. 28, 1966 Thomas B. McCabe Apr. 15, 1948-Mar. 31, 1951 J.L. Robertson Mar. 1, 1966-Apr. 30, 1973 Wm. McC. Martin, Jr. ..Apr. 2, 1951-Jan. 31, 1970 George W. Mitchell May 1, 1973-Feb. 13, 1976 Arthur F. Burns Feb. 1, 1970-Jan. 31, 1978 Stephen S. Gardner Feb. 13, 1976-Nov. 19, 1978 G. William Miller Mar. 8, 1978-Aug. 6, 1979 Frederick H. Schultz ...July 27, 1979-Feb. 11, 1982 Paul A. Volcker Aug. 6, 1979-Aug. 11, 1987 Preston Martin Mar. 31, 1982-Apr. 30, 1986 Alan Greenspan Aug. 11, 1987- Manuel H. Johnson Aug. 4, 1986-Aug. 3, 1990 David W. Mullins, Jr. ...July 24, 1991-Feb. 14, 1994 Alan S. Blinder June 27, 1994- EX-OFFICIO MEMBERS1 Secretaries of the Treasury Comptrollers of the Currency W.G. McAdoo Dec. 23, 1913-Dec. 15, 1918 John Skelton Williams...Feb. 2, 1914-Mar. 2, 1921 Carter Glass Dec. 16, 1918-Feb. 1, 1920 Daniel R. Crissinger Mar. 17, 1921-Apr. 30, 1923 David F. Houston Feb. 2, 1920-Mar. 3, 1921 Henry M. Dawes May 1, 1923-Dec. 17, 1924 Andrew W. Mellon Mar. 4, 1921-Feb. 12, 1932 Joseph W. Mcintosh Dec. 20, 1924-Nov. 20, 1928 Ogden L. Mills Feb. 12, 1932-Mar. 4, 1933 J.W. Pole Nov. 21, 1928-Sept. 20, 1932 William H. Woodin Mar. 4, 1933-Dec. 31, 1933 J.F.T. O'Connor May 11, 1933-Feb. 1, 1936 Henry Morgenthau Jr. ...Jan. 1, 1934-Feb. 1, 1936 1. Under the provisions of the original Federal Reserve Act, the Treasury and the Comptroller of the Currency should continue to Federal Reserve Board was composed of seven members, including serve as members until Feb. 1, 1936; that the appointive members in five appointive members, the Secretary of the Treasury, who was office on the date of that act should continue to serve until Feb. 1, ex-officio chairman of the Board, and the Comptroller of the Cur- 1936, or until their successors were appointed and had qualified; and rency. The original term of office was ten years, and the five original that thereafter the terms of members should be fourteen years and that appointive members had terms of two, four, six, eight, and ten years the designation of Chairman and Vice Chairman of the Board should respectively. In 1922 the number of appointive members was in- be for a term of four years. creased to six, and in 1933 the term of office was increased to twelve 2. Date after words "Resigned" and "Retired" denotes final day of years. The Banking Act of 1935, approved Aug. 23,1935, changed the service. name of the Federal Reserve Board to the Board of Governors of the 3. Successor took office on this date. Federal Reserve System and provided that the Board should be 4. Chairman and Vice Chairman were designated Governor and composed of seven appointive members; that the Secretary of the Vice Governor before Aug. 23, 1935. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Al Financial and Business Statistics CONTENTS WEEKLY REPORTING COMMERCIAL BANKS A3 Guide to Tabular Presentation Assets and liabilities A21 Large reporting banks A23 Branches and agencies of foreign banks Domestic Financial Statistics MONEY STOCK AND BANK CREDIT FINANCIAL MARKETS A4 Reserves, money stock, liquid assets, and debt A24 Commercial paper and bankers dollar measures acceptances outstanding A5 Reserves of depository institutions, Reserve Bank 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 All Stock market—Selected statistics A7 Selected borrowings in immediately available funds—Large member banks FEDERAL FINANCE POLICY INSTRUMENTS A28 Federal fiscal and financing operations A29 U.S. budget receipts and outlays A8 Federal Reserve Bank interest rates A30 Federal debt subject to statutory limitation A9 Reserve requirements of depository institutions A30 Gross public debt of U.S. Treasury—Types A10 Federal Reserve open market transactions and ownership A31 U.S. government securities dealers—Transactions FEDERAL RESERVE BANKS A32 U.S. government securities dealers—Positions and financing All Condition and Federal Reserve note statements A3 3 Federal and federally sponsored credit A12 Maturity distribution of loan and security agencies—Debt outstanding holdings MONETARY AND CREDIT AGGREGATES SECURITIES MARKETS AND CORPORATE FINANCE A13 Aggregate reserves of depository institutions and monetary base A34 New security issues—Tax-exempt state and local A14 Money stock, liquid assets, and debt measures governments and corporations A16 Deposit interest rates and amounts outstanding— A35 Open-end investment companies—Net sales commercial and BIF-insured banks and assets A17 Bank debits and deposit turnover A3 5 Corporate profits and their distribution A35 Nonfarm business expenditures on new plant and equipment COMMERCIAL BANKING INSTITUTIONS A36 Domestic finance companies—Assets and liabilities, and consumer, real estate, and business A18 Assets and liabilities, Wednesday figures credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • August 1994 Domestic Financial Statistics—Continued A54 Foreign official assets held at Federal Reserve Banks REAL ESTATE A55 Selected U.S. liabilities to foreign official institutions A37 Mortgage markets A3 8 Mortgage debt outstanding REPORTED BY BANKS IN THE UNITED STATES CONSUMER INSTALLMENT CREDIT A55 Liabilities to and claims on foreigners A56 Liabilities to foreigners A39 Total outstanding A58 Banks' own claims on foreigners A39 Terms A59 Banks' own and domestic customers' claims on foreigners A59 Banks' own claims on unaffiliated foreigners FLOW OF FUNDS A60 Claims on foreign countries—Combined domestic offices and foreign branches A40 Funds raised in U.S. credit markets A42 Summary of financial transactions REPORTED BYNONBANKING BUSINESS A43 Summary of credit market debt outstanding ENTERPRISES IN THE UNITED STATES A44 Summary of financial assets and liabilities A61 Liabilities to unaffiliated foreigners A62 Claims on unaffiliated foreigners Domestic Nonfinancial Statistics SECURITIES HOLDINGS AND TRANSACTIONS SELECTED MEASURES A45 Nonfinancial business activity—Selected A63 Foreign transactions in securities measures A64 Marketable U.S. Treasury bonds and A45 Labor force, employment, and unemployment notes—Foreign transactions A46 Output, capacity, and capacity utilization A47 Industrial production—Indexes and gross value INTEREST AND EXCHANGE RATES A49 Housing and construction A50 Consumer and producer prices A65 Discount rates of foreign central banks A51 Gross domestic product and income A65 Foreign short-term interest rates A52 Personal income and saving A66 Foreign exchange rates A67 Guide to Statistical Releases and Special Tables International Statistics SUMMARY STATISTICS SPECIAL TABLES A53 U.S. international transactions—Summary A68 Terms of lending at commercial banks, May 1994 A54 U.S. foreign trade A72 Assets and liabilities of U.S. branches and agencies A54 U.S. reserve assets of foreign banks, March 31, 1994 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

3 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) MSA Metropolitan statistical area 0 Calculated to be zero NOW Negotiable order of withdrawal . . . Cell not applicable OCD Other checkable deposit ATS Automatic transfer service OPEC Organization of Petroleum Exporting Countries BIF Bank insurance fund OTS Office of Thrift Supervision CD Certificate of deposit PO Principal only CMO Collateralized mortgage obligation REIT Real estate investment trust FFB Federal Financing Bank REMIC Real estate mortgage investment conduit FHA Federal Housing Administration RP Repurchase agreement FHLBB Federal Home Loan Bank Board RTC Resolution Trust Corporation FHLMC Federal Home Loan Mortgage Corporation SAIF Savings Association Insurance Fund FmHA Farmers Home Administration SCO Securitized credit obligation FNMA Federal National Mortgage Association SDR Special drawing right FSLIC Federal Savings and Loan Insurance Corporation SIC Standard Industrial Classification 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 Domestic Nonfinancial Statistics • August 1994 1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 1993 1994 1994 MMoonneettaarryy oorr ccrreeddiitt aaggggrreeggaattee Q2 Q3 Q4 Q1 Jan. Feb.r Mar.r Apr. May Reserves of depository institutions2 1 Total 10.4 12.5 14.2 3.1 2.5 3.2 -3.4 -7.4 -3.9 2 Required 12.0 12.4 14.1 2.5 -5.2 9.5 .0 -11.2 .8 3 Nonborrowed 10.2 11.0 15.6 3.7 2.7 3.3 -3.1 -8.8 -5.4 4 Monetary base 10.1 10.6 9.8 10.2 11.7 13.4 9.3 6.3 8.2 Concepts of money, liquid assets, and debt4 J Ml 10.7 12.0 9.4 6.0 5.4 5.4 4.0 -1.2 2.0 6 M2 2.2 2.5r 2.3r 1.8r 1.7r -1.3 4.7 2.3 .3 7 M3 2.1 1.0 2.5r .2r 1.2r -7.5 2.4 2.1 -2.7 8 L 3.2r \.(f 1.91 2.6 4.7r -2.7 1.7 3.4 n.a. 9 Debt 4.7r 5.8r 4.9r 5.7 4.7 5.2 4.4 n.a. Nontrgnsaction components 10 InM2y .... -1.4 -1.7 -.8r -.r ,<f -4.4 5.0 3.9 -.5 11 In M3 only6 1.6 -6.7 3.8r -8.6r —2.0r -41.0 -10.5 1.1 -19.9 Time and savings deposits Commercial banks 12 Savings, including MMDAs 5.1 4.9 3.6 4.3r 7.3 1.5 -1.2 -3.2 -6.2 13 Small time7 -9.2 -10.6 -7.4 -5.2 -7.7 -4.1 -3.4 -2.6 6.2 14 Large time8'9 -.7 -7.7 -,4r -3.6r 10.4r -23.6 -17.5 -3.1 16.9 Thrift institutions 15 Savings, including MMDAs .7 2.3 -.4 ,4r .0 -1.4 5.3 2.2 -1.9 lb Small time7 -11.9 -14^ -9.5r -11.5r -11.7r -13.4 -7.3 -6.2 -7.0 17 Large time ' -8.5 -4.5 -6.7 -9.3 3.9 -5.8 -15.6 5.9 -27.5 Money market mutual funds 18 General purpose and broker-dealer .2 -1.8 1.2 -.r -3.4 -14.1 16.4 45.1 12.0 19 Institution-only -2.2 -10.5 8.8 -26.7 -26.2 -98.4 3.4 -2.7 -52.2 Debt components* 20 Federal 10.4 9.2 5.5 7.1 3.(f 5.2 9.0 2.9 n.a. 21 Nonfederal 2.6r 4.6r 4.6r 5.2 7.1r 4.6 3.8 5.0 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 aU 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 smaU 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 1994 1994 Mar. Apr. May Apr. 13 Apr. 20 Apr. 27 May 4 May 11 May 18 May 25 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 375,629 382,420 382,760 380,871 384,4% 382,062 383,059 382,150 382,315 382,550 U.S. government securities2 2 Bought outright—System account 335,371 341,226 343,765 338,384 343,611 343,561 344,217 343,133 343,419 344,147 3 Held under repurchase agreements ... 2,721 2,452 1,376 3,975 2,366 0 0 655 1,449 1,716 Federal agency obligations 4 Bought outright 4,235 4,115 4,019 4,145 4,101 4,076 4,047 4,040 4,022 4,016 5 Held under repurchase agreements ... 261 99 414 131 143 0 0 106 136 942 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 41 61 65 54 35 67 90 46 122 30 8 Seasonal credit 24 55 134 42 53 74 93 110 133 148 9 Extended credit 0 0 0 0 0 0 0 0 0 0 10 Float 585 628 402 452 335 400 603 482 446 20 11 Other Federal Reserve assets 32,391 33,783 32,584 33,689 33,852 33,883 34,009 33,576 32,588 31,531 12 Gold stock 11,053 11,052 11,052 11,052 11,052 11,052 11,052 11,052 11,052 11,052 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 22,265 22,327 22,387 22,316 22,330 22,344 22,358 22,372 22,386 22,400 ABSORBING RESERVE FUNDS 15 Currency in circulation 366,753 370,738 374,164 371,284 371,152 370,552 371,452 373,405 374,032 374,016 16 Treasury cash holdings 377 376 373 376 378 378 378 378 375 373 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 5,122 5,701 6,174 3,965 6,568 5,473 8,992 6,067 5,997 5,287 18 Foreign 189 248 185 209 330 213 170 160 205 215 19 Service-related balances and adjustments 6,565 6,371 6,092 6,231 6,714 6,308 6,322 6,163 6,061 6,017 20 Other 358 311 304 303 297 309 322 308 318 282 21 Other Federal Reserve liabilities and capital 10,066 10,386 10,426 10,740 10,144 10,132 10,170 10,363 10,440 10,489 22 Reserve balances with Federal Reserve Banks 27,536r 29,685 26,500 29,149 30,313 30,111 26,682 26,747 26,343 27,342 End-of-month figures Wednesday figures Mar. Apr. May Apr. 13 Apr. 20 Apr. 27 May 4 May 11 May 18 May 25 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 381,269r 381,576 386,651 378,045 384,970 382,112 385,820 380,611 381,730 383,834 U.S. government securities2 Bought outright—System account . 337,260 343,079 344,365 338,513 343,454 343,160 346,650 342,801 342,512 346,899 Held under repurchase agreements 5,300 0 4,405 374 3,034 0 0 0 2,016 375 Federal agency obligations Bought outright 4,227 4,047 3,977 4,102 4,098 4,047 4,047 4,022 4,022 3,977 Held under repurchase agreements 150 0 1,300 0 0 0 0 0 955 725 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions Adjustment credit 426 151 76 187 60 75 46 34 48 35 Seasonal credit 37 82 164 43 67 83 105 121 140 165 Extended credit 0 0 0 0 0 0 0 0 0 0 Float 444r 48 495 1,313 169 753 1,371 266 638 37 Other Federal Reserve assets 33,424 34,168 31,869 33,513 34,088 33,994 33,601 33,367 31,400 31,622 12 Gold stock 11,052 11,053 11,052 11,052 11,053 11,052 11,052 11,052 11,052 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 22,302 22,358 22,414 22,316 22,330 22,344 22,358 22,372 22,386 22,400 ABSORBING RESERVE FUNDS 15 Currency in circulation 369,016 370,677 377,892 372,074 371,389 371,556 373,055 374,706 374,582 375,694 16 Treasury cash holdings 370 378 361 378 378 378 379 375 373 361 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 6,181 7,965 5,675 3,904 9,166 7,543 10,373 6,330 5,131 5,594 18 Foreign 454 171 174 209 235 200 164 171 178 222 19 Service-related balances and adjustments 6,232r 6,322 5,981 6,231 6,714 6,308 6,322 6,163 6,061 6,017 20 Other 316 312 278 274 305 308 319 308 314 297 21 Other Federal Reserve liabilities and capital 10,618 10,189 10,836 9,955 9,993 9,989 9,991 10,195 10,295 10,291 22 Reserve balances wjth Federal Reserve Banks 29,455r 26,990 26,939 26,405 28,190 27,245 26,645 23,804 26,252 26,829 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 • August 1994 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RRReeessseeerrrvvveee ccclllaaassssssiiifffiiicccaaatttiiiooonnn 1991 1992 1993 1993 1994 Dec. Dec. Dec. Nov. Dec. Jan. Feb. Mar. Apr. May 11111 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 26,659 25,368 29,374 29,018 29,374 27,817 26,922 27,396r 29,614 26,791 22222 TTTTToooootttttaaaaalllll vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh 32,509 34,542 36,812 35,655 36,812 37,907 36,295 35,585 35,215 35,892 33333 AAAAAppppppppppllllliiiiieeeeeddddd vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh 28,872 31,172 33,484 32,278 33,484 34,254 32,671 32,208 32,027 32,484 44444 SSSSSuuuuurrrrrpppppllllluuuuusssss vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh 3,637 3,370 3,328 3,377 3,328 3,653 3,624 3,377 3,188 3,408 55555 TTTTToooootttttaaaaalllll rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss66666 55,532 56,540 62,858 61,296 62,858 62,072 59,593 59,605 61,641 59,275 66666 RRRRReeeeeqqqqquuuuuiiiiirrrrreeeeeddddd rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss 54,553 55,385 61,795 60,195 61,795 60,624 58,454 58,638r 60,489 58,358 77777 EEEEExxxxxccccceeeeessssssssss rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss ............... 979 1,155 1,063 1,101 1,063 1,448 1,140 967r 1,151 917 88888 TTTTToooootttttaaaaalllll bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 192 124 82 89 82 73 - 70 55 124 200 99999 SSSSSeeeeeaaaaasssssooooonnnnnaaaaalllll bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss 38 18 31 75 31 15 15 24 57 134 1111100000 EEEEExxxxxttttteeeeennnnndddddeeeeeddddd cccccrrrrreeeeedddddiiiiittttt99999 1 1 0 0 0 0 0 0 0 0 Biweekly averages of daily figures for weeks ending on date indicated 1994 Feb. 2 Feb. 16 Mar. 2 Mar. 16 Mar. 30 Apr. 13r Apr. 27 May 11 May 25 June 8 11111 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 25,672 26,339 27,811 27,139 27,434 29,641 30,212 26,702 26,848 26,820 22222 TTTTToooootttttaaaaalllll vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh33333 38,108 37,475 34,617 36,654 34,667 35,434 34,748 36,447 35,320 36,209 33333 AAAAAppppppppppllllliiiiieeeeeddddd vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh 34,152 33,651 31,282 33,105 31,440 32,268 31,599 32,983 31,952 32,812 44444 SSSSSuuuuurrrrrpppppllllluuuuusssss vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh 3,957 3,824 3,335 3,549 3,227 3,167 3,150 3,464 3,368 3,397 55555 TTTTToooootttttaaaaalllll rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss66666 59,824 59,989 59,093 60,244 58,874 61,909 61,810 59,684 58,800 59,632 66666 RRRRReeeeeqqqqquuuuuiiiiirrrrreeeeeddddd rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss 58,557 58,878 57,942 59,192 58,013r 61,012 60,350 58,871 57,881 58,531 77777 EEEEExxxxxccccceeeeessssssssss rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss ............... 1,267 1,112 1,151 1,052 861r 897 1,460 814 919 1,101 88888 TTTTToooootttttaaaaalllll bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 45 95 45 39 68 125 114 170 216 218 99999 SSSSSeeeeeaaaaasssssooooonnnnnaaaaalllll bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss 18 15 15 17 32 40 64 102 141 176 1111100000 EEEEExxxxxttttteeeeennnnndddddeeeeeddddd cccccrrrrreeeeedddddiiiiittttt99999 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 1994, week ending Monday SSoouurrccee aanndd mmaattuurriittyy Apr. 4 Apr. 11 Apr. 18 Apr. 25 May 2 May 9 May 16 May 23 May 30 Federal funds purchased, repurchase agreements, and other selected borrowings From commercial banks in the United States 1 For one day or under continuing contract 72,139 71,680 69,568 63,648 65,833 68,573 68,148 66,700 66,665 2 For all other maturities 13,350 11,424 12,785 13,226 12,976 12,781 12,765 12,498 12,504 From other depository institutions, foreign banks and official institutions, and U.S. government agencies 3 For one day or under continuing contract 23,688 24,751 21,512 22,378 18,933 18,210 20,401 23,418 20,452 4 For all other maturities 20,146 19,158 19,909 21,662 19,425 20,093 21,017 21,742 21,704 Repurchase agreements on U.S. government and federal agency securities Brokers and nonbank dealers in securities 5 For one day or under continuing contract 20,969 26,002 25,591 23,001 20,226 22,298 23,630 24,001 22,351 6 For all other maturities 36,030 35,477 37,190 34,276 33,846 33,538 29,969 29,841 34,067 All other customers 7 For one day or under continuing contract 28,186 31,750 31,907 29,831 30,306 29,046 30,238 31,458 31,843 8 For all other maturities 19,496 16,099 16,396 16,464 16,845 15,869 15,570 16,644 16,442 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 52,960 43,928 45,846 48,620 52,788 48,864 53,700 50,909 50,373 10 To all other specified customers2 23,638 25,634 24,176 21,753 22,402 21,618 24,802 23,001 23,592 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 • August 1994 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels Adjustment credit1 Seasonal credit2 Extended credit3 FFeeddeerraall RReesseerrvvee BBaannkk 7/ O 1/ n 9 4 Effective date Previous rate 7/ O 1/ n 9 4 Effective date Previous rate 7/ O 1/ n 9 4 Effective date Previous rate Boston 3.5 5/17/94 3.0 4.35 6/23/94 4.35 4.85 6/23/94 4.85 New York 5/17/94 6/23/94 6/23/94 Philadelphia 5/17/94 6/23/94 6/23/94 Cleveland 5/18/94 6/23/94 6/23/94 Richmond 5/17/94 6/23/94 6/23/94 Atlanta 5/17/94 6/23/94 6/23/94 Chicago 5/17/94 6/23/94 6/23/94 St. Louis 5/17/94 6/23/94 6/23/94 Minneapolis 5/17/94 6/23/94 6/23/94 Kansas City 5/17/94 6/23/94 6/23/94 Dallas 5/17/94 6/23/94 6/23/94 San Francisco ... 3.5 5/17/94 3.0 4.35 6/23/94 4.35 4.85 6/23/94 4.85 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 Effectivf A le l v l e F l) . — R. Ba o n f k Effective date A le l v l e F l) . — R. Ba o n 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. ? 13-14 13 20 6.5 6.5 6 13 13 1987—Sept. 4 5.5-6 6 MMaayy 11 6.5-7 7 Dec. 4 12 12 11 6 6 12 7 7 JJuullyy 3 7-7.25 7.25 11998822——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. 1? 9.5-10 9.5 13 9.5 9.5 1991—Feb. 1 6-6.5 6 1979—July 20 10 10 Nov. 7? 9-9.5 9 4 6 6 AAuugg.. 17 10-10.5 10.5 ?6 9 9 Apr. 30 5.5-6 5.5 20 10.5 10.5 Dec. 14 8.5-9 9 May 2 5.5 5.5 SSeepptt.. 19 10.5-11 11 15 8.5-9 8.5 Sept. 13 5-5.5 5 21 11 11 17 8.5 8.5 17 5 5 Oct. 8 11-12 12 Nov. 6 4.5-5 4.5 10 12 12 11998844——AApprr.. 9 8.5-9 9 7 4.5 4.5 13 9 9 Dec. 20 3.5-4.5 3.5 1980—Feb. 15 12-13 13 Nov. 71 8.5-9 8.5 24 3.5 3.5 19 13 13 76 8.5 8.5 MMaayy 29 12-13 13 Dec. 74 8 8 1992—July 2 3-3.5 3 30 12 12 7 3 3 June 13 11-12 11 11998855——MMaayy 70 7.5-8 7.5 16 11 11 74 7.5 7.5 29 10 10 IInn eeffffeecctt JJuullyy 11,, 11999944 3.5 3.5 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 SO basis points. seasonal needs for funds that arise from a clear pattern of intrayearly movements 4. For earlier data, see the following publications of the Board of Governors: in their deposits and loans and that cannot be met through special industry Banking and Monetary Statistics, 1914-1941, and 1941-1970-, and the Annual lenders. The discount rate on seasonal credit takes into account rates on market Statistical Digest, 1970-1979. sources of funds and ordinarily is reestablished on the first business day of each In 1980 and 1981, the Federal Reserve applied a surcharge to short-term two-week reserve maintenance period; however, it is never less than the discount adjustment-credit borrowings by institutions with deposits of $500 million or more rate applicable to adjustment credit. that had borrowed in successive weeks or in more than four weeks in a calendar 3. May be made available to depository institutions when similar assistance is quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7, not reasonably available from other sources, including special industry lenders. 1980. A surcharge of 2 percent was reimposed on Nov. 17, 1980; the surcharge Such credit may be provided when exceptional circumstances (including sus- was subsequently raised to 3 percent on Dec. 5,1980, and to 4 percent on May 5, tained deposit drains, impaired access to money market funds, or sudden 1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981, and to 2 deterioration in loan repayment performance) or practices involve only a partic- percent effective Oct. 12, 1981. As of Oct. 1, 1981, the formula for applying the ular institution, or to meet the needs of institutions experiencing difficulties surcharge was changed from a calendar quarter to a moving thirteen-week period. adjusting to changing market conditions over a longer period (particularly at times The surcharge was eliminated on Nov. 17, 1981. of deposit disintermediation). The discount rate applicable to adjustment credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Type of deposit Net transaction accounts 1 $0 million-$51.9 million... 12/21/93 2 More than $51.9 million4.. 12/21/93 3 Nonpersonal time deposits5 12/27/90 4 Eurocurrency liabilities6. . 12/27/90 1. Required reserves must be held in the form of deposits with Federal Reserve automatic, or other transfers per month, of which no more than three may be Banks or vault cash. Nonmember institutions may maintain reserve balances with checks. Accounts subject to such limits are savings deposits. a Federal Reserve Bank indirectly on a pass-through basis with certain approved The Monetary Control Act of 1980 requires that the amount of transaction institutions. For previous reserve requirements, see earlier editions of the Annual accounts against which the 3 percent reserve requirement applies be modified Report or the Federal Reserve Bulletin. Under provisions of the Monetary annually by 80 percent of the percentage change in transaction accounts held by Control Act, depository institutions include commercial banks, mutual savings all depository institutions, determined as of June 30 each year. Effective Dec. 21, banks, savings and loan associations, credit unions, agencies and branches of 1993, for institutions reporting quarterly and weekly, the amount was increased foreign banks, and Edge Act corporations. from $46.8 million to $51.9 million. 2. The Garn-St Germain Depository Institutions Act of 1982 (Public Law 4. The reserve requirement was reduced from 12 percent to 10 percent on 97-320) requires that $2 million of reservable liabilities of each depository Apr. 2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for institution be subject to a zero percent reserve requirement. The Board is to adjust institutions that report quarterly. the amount of reservable liabilities subject to this zero percent reserve require- 5. For institutions that report weekly, the reserve requirement on nonpersonal ment each year for the succeeding calendar year by 80 percent of the percentage time deposits with an original maturity of less than IVi years was reduced from 3 increase in the total reservable liabilities of all depository institutions, measured percent to IVi percent for the maintenance period that began Dec. 13, 1990, and on an annual basis as of June 30. No corresponding adjustment is to be made in to zero for the maintenance period that began Dec. 27, 1990. The reserve the event of a decrease. On Dec. 21, 1993, the exemption was raised from $3.8 requirement on nonpersonal time deposits with an original maturity of IVi years million to $4.0 million. The exemption applies in the following order: (1) net or more has been zero since Oct. 6, 1983. negotiable order of withdrawal (NOW) accounts (NOW accounts less allowable For institutions that report quarterly, the reserve requirement on nonpersonal deductions); and (2) net other transaction accounts. The exemption applies only to time deposits with an original maturity of less than IVi years was reduced from 3 accounts that would be subject to a 3 percent reserve requirement. percent to zero on Jan. 17, 1991. 3. Includes all deposits against which the account holder is permitted to make 6. The reserve requirement on Eurocurrency liabilities was reduced from 3 withdrawals by negotiable or transferable instruments, payment orders of with- percent to zero in the same manner and on the same dates as was the reserve drawal, and telephone and preauthorized transfers for the purpose of making requirement on nonpersonal time deposits with an original maturity of less than payments to third persons or others, other than money market deposit accounts 1 Vi years (see note 5). (MMDAs) and similar accounts that permit no more than six preauthorized, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Financial Statistics • August 1994 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 1993 1994 TTyyppee ooff ttrraannssaaccttiioonn 11999911 11999922 11999933 aanndd mmaattuurriittyy Oct. Nov. Dec. Jan. Feb. Mar. Apr. U.S. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 20,158 14,714 17,717 1,396 5,911 1,394 0 1,264 900 1,101 2 Gross sales 120 1,628 0 0 0 0 0 0 0 0 3 Exchanges 277,314 308,699 332,229 25,783 27,641 33,536 28,986 28,709 33,163 28,881 4 Redemptions 1,000 1,600 468 468 0 0 0 0 0 0 Others within one year 5 Gross purchases 3,043 1,096 1,223 0 0 189 0 0 147 209 6 Gross sales 0 0 0 0 0 0 0 0 0 0 7 Maturity shifts 24,454 36,662 31,368 913 5,158 2,910 0 0 0 0 8 Exchanges -28,090 -30,543 -36,582 -1,566 -7,641 -2,910 0 0 0 0 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 0 100 2,619 0 0 1,413 2,817 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shifts -21,211 -34,478 -27,140 -31 -4,689 -2,910 0 0 0 0 13 Exchanges 24,594 25,811 0 1,566 5,341 2,910 0 0 0 0 Five to ten years 14 Gross purchases 1,280 2,818 4,168 0 0 1,008 0 0 1,103 1,117 15 Gross sales 0 0 0 0 0 0 0 0 0 0 16 Maturity shifts -2,037 -1,915 0 -882 -272 0 0 0 0 0 17 Exchanges 2,894 3,532 0 0 2,300 0 0 0 0 0 More than ten years 18 Gross purchases 375 2,333 3,457 0 0 826 0 0 618 896 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shifts -1,209 -269 0 0 -197 0 0 0 0 0 21 Exchanges 600 1,200 0 0 0 0 0 0 0 0 All maturities 22 Gross purchases 31,439 34,079 36,915 1,396 6,011 6,035 0 1,264 4,181 6,140 23 Gross sales 120 1,628 0 0 0 0 0 0 0 0 24 Redemptions 1,000 1,600 468 468 0 0 616 0 0 440 Matched transactions 25 Gross sales 1,570,456 1,482,467 1,475,085 115,160 109,941 137,645 132,872 124,125 155,950 120,393 26 Gross purchases 1,571,534 1,480,140 1,475,941 112,837 112,772 136,821 133,468 124,270 155,625 134,051 Repurchase agreements 27 Gross purchases 310,084 378,374 475,447 27,693 38,493 33,751 25,818 33,693 38,490 19,741 28 Gross sales 311,752 386,257 470,723 30,397 34,072 29,577 29,348 37,425 38,115 25,041 29 Net change in U.S. Treasury securities 29,729 20,642 42,027 -4,099 13,263 9,386 -3,550 -2,323 4,232 14,058 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 70 15 81 202 102 108 180 Repurchase agreements 33 Gross purchases 22,807 14,565 35,063 3,812 2,841 2,211 2,600 3,277 3,160 728 34 Gross sales 23,595 14,486 34,669 5,509 2,861 1,615 3,106 3,636 3,170 878 35 Net change in federal agency obligations -1,085 -554 -678 -1,767 -35 515 -708 -461 -118 -330 36 Total net change in System Open Market Account 28,644 20,089 41,348 -5,866 13,228 9,901 -4,258 -2,784 4,114 13,728 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 Apr. 27 May 4 May 11 May 18 May 25 Mar. 31 Apr. 30 May 31 Consolidated condition statement 1 Gold certificate account 11,052 11,052 11,052 11,052 11,053 11,052 11,053 11,052 2 Special drawing rights certificate account 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 3 Coin 415 411 406 397 380 435 429 357 Loans 4 To depository institutions 158 151 154 188 200 463 234 240 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 4,047 4,047 4,022 4,022 3,977 4,227 4,047 3,977 8 Held under repurchase agreements 0 0 0 955 725 150 0 1,300 9 Total U.S. Treasury securities. 343,160 346,650 342,801 344,528 347,274 342,560 343,079 348,770 10 Bought outright 343,160 346,650 342,801 342,512 346,899 337,260 343,079 344,365 11 BiHs 164,248 167,737 163,889 163,600 167,981 162,947 164,167 165,297 12 Notes 137,445 137,445 137,445 138,531 138,536 133,858 137,445 138,686 13 Bonds 41,467 41,467 41,467 40,381 40,381 40,455 41,467 40,381 14 Held under repurchase agreements 0 0 0 2,016 375 5,300 0 4,405 15 Total loans and securities 347,365 350,848 346,978 349,693 352,176 347,400 347,360 354,287 16 Items in process of collection 6,135 6,929 5,296 5,572 4,756 4,735 4,571 2,412 17 Bank premises 1,056 1,056 1,057 1,057 1,057 1,054 1,055 1,058 Other assets 18 Denominated in foreign currencies3 23,115 22,911 22,208 22,225 22,242 23,297 23,149 22,349 19 All other4 9,808 9,833 10,058 8,072 8,308 9,021 9,967 8,673 20 Total assets 406,964 411,058 405,074 406,086 407,989 405,013 405,602 408,207 LIABILITIES 21 Federal Reserve notes 350,006 351,487 353,116 352,967 354,036 347,520 349,127 356,197 22 Total deposits 41,866 43,711 36,866 37,778 39,105 42,683 41,922 39,306 223i DDeeppoossiittoorryy iinnssttiittuuttiioonnss 33,816 32,855 30,057 32,155 32,995 35,733 33,474 33,186 24 U.S. Treasury—General account 7,543 10,373 6,330 5,131 5,594 6,181 7,965 5,675 25 Foreign—Official accounts 200 164 171 178 222 454 171 174 26 Other 308 319 308 314 297 316 312 278 27 Deferred credit items 5,104 5,869 4,897 5,047 4,558 4,192 4,363 1,868 28 Other liabilities and accrued dividends 2,705 2,707 2,879 2,947 2,924 2,684 2,763 3,106 29 Total liabilities. 399,681 403,774 397,758 398,739 400,623 397,080 398,176 400,477 CAPITAL ACCOUNTS 30 Capital paid in 3,479 3,484 3,483 3,516 3,517 3,445 3,479 3,517 31 Surplus 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401 32 Other capital accounts. 403 399 432 431 448 1,088 546 811 33 Total liabilities and capital accounts 406,964 411,058 405,074 406,086 407,989 405,013 405,602 408,207 MEMO 34 Marketable U.S. Treasury securities held in custody for foreign and international accounts 368,705 370,716 372,683 363,985 365,291 371,757 367,031 372,886 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to Banks). 419,232 419,474 420,397 420,722 420,919 414,534 419,336 420,983 36 LESS: Held by Federal Reserve Banks 69,226 67,987 67,281 67,755 66,883 67,014 70,209 64,787 37 Federal Reserve notes, net 350,006 351,487 353,116 352,967 354,036 347,520 349,127 356,197 Collateral held against notes, net: 38 Gold certificate account 11,052 11,052 11,052 11,052 11,053 11,052 11,053 11,052 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 330,935 332,417 334,046 333,897 334,965 328,450 330,056 337,126 42 Total collateral. 350,006 351,487 353,116 352,967 354,036 347,520 349,127 356,197 1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly 3. Valued monthly at market exchange rates. statistical release. For ordering address, see inside front cover. 4. Includes special investment account at the Federal Reserve Bank of Chicago 2. Includes securities loaned—fully guaranteed by U.S. Treasury securities in Treasury bills maturing within ninety days. pledged with Federal Reserve Banks—and excludes securities sold and scheduled 5. Includes exchange-translation account reflecting the monthly revaluation at to be bought back under matched sale-purchase transactions. market exchange rates of foreign exchange commitments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Financial Statistics • August 1994 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holding Millions of dollars Wednesday End of month Type of holding and maturity 1994 1994 Apr. 27 May 4 May 11 May 18 May 25 Mar. 31 Apr. 29 May 31 1 Total loans 158 151 155 188 200 463 234 240 2 Within fifteen days1 148 75 74 171 176 445 1% 155 3 Sixteen days to ninety days ... 10 75 80 17 24 18 38 85 4 Ninety-one days to one year .. 0 0 0 0 0 0 0 0 5 Total acceptances 0 0 0 0 0 0 0 0 6 Within fifteen days1 0 0 0 0 0 0 0 0 7 Sixteen days to ninety days ... 0 0 0 0 0 0 0 0 8 Ninety-one days to one year .. 0 0 0 0 0 0 0 0 9 Total U.S. Treasury securities.. 343,160 346,650 342,801 344,528 347,274 337,260 343,079 344,365 10 Within fifteen days1 17,576 23,851 16,713 18,845 20,859 9,213 11,062 10,423 11 Sixteen days to ninety days ... 79,084 80,294 79,744 78,334 78,589 77,058 89,445 88,120 12 Ninety-one days to one year .. 103,711 98,809 102,649 104,939 105,410 112,661 99,783 103,708 13 One year to five years 84,250 85,157 85,157 84,021 84,026 81,093 84,250 83,725 14 Five years to ten years 24,961 24,961 24,961 25,264 25,264 24,553 24,961 25,264 15 More than ten years 33,578 33,578 33,578 33,125 33,125 32,682 33,578 33,125 16 Total federal agency obligations 4,047 4,047 4,022 4,977 4,702 4,227 4,047 3,977 17 Within fifteen days1 130 25 45 1,241 966 325 130 266 18 Sixteen days to ninety days ... 528 624 579 353 353 527 528 386 19 Ninety-one days to one year .. 955 964 964 949 949 960 955 891 20 One year to five years 1,833 1,833 1,833 1,833 1,833 1,913 1,833 1,833 21 Five years to ten years 577 577 577 577 577 477 577 577 22 More than ten years 25 25 25 25 25 25 25 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.. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Seasonally adjusted AADDJJUUSSTTEEDD FFOORR CCHHAANNGGEESS IINN RREESSEERRVVEE RREEQQUUIIRREEMMEENNTTSS22 11 TToottaall rreesseerrvveess33 41.77 45.53 54.34 60.48 59.75 60.32 60.48 60.60 60.76 60.59 60.22 60.02 22 NNoonnbboorrrroowweedd rreesseerrvveess 41.44 45.34 54.22 60.39 59.46 60.23 60.39 60.53 60.69 60.53 60.09 59.82 33 NNoonnbboorrrroowweedd rreesseerrvveess pplluuss eexxtteennddeedd ccrreeddiitt55 41.47 45.34 54.22 60.39 59.46 60.23 60.39 60.53 60.69 60.53 60.09 59.82 44 RReeqquuiirreedd rreesseerrvveess 40.11 44.55 53.19 59.41 58.66 59.22 59.41 59.16 59.62 59.62r 59.06 59.10 55 MMoonneettaarryy bbaassee66 293.16 317.12 350.61 385.86 381.40 384.03 385.86 389.61 393.96 397.01 399.09 401.83 Not seasonally adjusted 6 Total reserves 43.07 46.98 56.06 62.37 59.48 60.67 62.37 62.04 59.53 59.50 61.40 58.97 7 Nonborrowed reserves 42.74 46.78 55.93 62.29 59.20 60.58 62.29 61.96 59.46 59.44 61.27 58.77 8 Nonborrowed reserves plus extended credit .. 42.77 46.78 55.93 62.29 59.20 60.58 62.29 61.96 59.46 59.44 61.27 58.77 9 Required reserves 41.40 46.00 54.90 61.31 58.39 59.57 61.31 60.59 58.39 58.53 60.25 58.06 10 Monetary base9 296.68 321.07 354.55 390.59 380.80 384.29 390.59 391.00 390.86 394.15 399.76 400.26 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS10 11 Total reserves11 59.12 55.53 56.54 62.86 60.04 61.30 62.86 62.07 59.59 59.61 61.64 59.28 12 Nonborrowed reserves 58.80 55.34 56.42 62.78 59.75 61.21 62.78 62.00 59.52 59.55 61.52 59.08 13 Nonborrowed reserves plus extended credit .. 58.82 55.34 56.42 62.78 59.75 61.21 62.78 62.00 59.52 59.55 61.52 59.08 14 Required reserves 57.46 54.55 55.39 61.80 58.95 60.20 61.80 60.62 58.45 58.64 60.49 58.36 15 Monetary base 313.70 333.61 360.90 397.62 387.51 391.14 397.62 397.89 397.93 400.78 406.32 406.59 16 Excess reserves13 1.66 .98 1.16 1.06 1.09 1.10 1.06 1.45 1.14 ,97r 1.15 .92 17 Borrowings from the Federal Reserve .33 .19 .12 .08 .29 .09 .07 .07 .06 .12 .20 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 Financial Statistics • August 1994 1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES1 BiUions of dollars, averages of daily figures 1994 1990 1991 1992 1993 IItteemm Dec. Dec. Dec. Dec. Feb/ Mar.r Apr. May Seasonally adjusted Measures2 1 Ml 826.4 897.7 1,024.8 1,128.4 1,138.6 1,142.4 1,141.3 1,143.2 2 M2 3,353.0 3,455.3 3,509.0 3,567.4r 3,568.7 3,582.7 3,589.5 3,590.4 3 M3 4,125.7 4,180.4 4,183.0 4,229.4r 4,207.0 4,215.3 4,222.8 4,213.2 4 L 4,974.8 4,992.9 5,057.1 5,131.8r 5,140.5 5,147.7 5,162.2 n.a. 5 Debt 10,670.1 11,147.3 ll,727.7r 12,309.8r 12,419.8 12,473.3 12,519.2 n.a. Ml components 6 Currency3 246.7 267.1 292.2 321.4 329.2 332.4 334.8 337.6 7 Travelers checks 7.8 7.7 8.1 7.9 7.9 8.0 8.1 8.1 8 Demand deposits3 277.9 290.0 339.6 384.8 390.3 390.0 388.9 385.8 9 Other checkable deposits6 294.0 332.8 384.9 414.3 411.2 411.9 409.5 411.6 Nontransaction components 10 In M2; 2,526.6 2,557.6 2,484.3 2,439. lr 2,430.2 22,,444400..33 22,,444488..22 22,,444477..22 11 In M38 772.7 725.2 674.0 662.0r 638.3 632.7 633.3 622.8 Commercial banks 12 Savings deposits, including MMDAs 582.1 665.5 754.6 785.3 791.1 790.3 788.2 784.1 13 Small time deposits9. 611.3 602.9 508.7 468.5 463.9 462.6 461.6 464.0 14 Large time deposits10, 11 368.6 342.4 292.8 277. lr 274.0 270.0 269.3 273.1 Thrift institutions 15 Savings deposits, including MMDAs 338.3 375.6 429.0 430.2 429.7 431.6 432.4 431.7 16 Small time deposits9. 563.2 464.5 361.8 317.1r 310.5 308.6 307.0 305.2 17 Large time deposits 120.9 83.4 67.5 61.8 61.7 60.9 61.2 59.8 Money market mutual funds 18 General purpose and broker-dealer 355.5 370.4 352.0 348.8 343.7 348.4 361.5 336655..11 19 Institution-only 135.0 181.0 201.5 197.0 176.9 177.4 177.0 169.3 Debt components 20 Federal debt 2,490.7 2,763.8 3,068.4 3,327.6r 3,350.3 3,375.4 3,383.5 n.a. 21 Nonfederal debt 8,179.4 8,383.5 8,659.3r 8,982. lr 9,069.5 9,097.9 9,135.7 n.a. Not seasonally adjusted Measures1 22 Ml 843.8 916.7 1,046.7 1,153.8 1,124.7 1,131.9 1,153.3 1,133.2 23 M2 3,366.0 3,470.4 3,527.6 S^.O1 3,556.6 3,581.1 3,606.9 3,575.7 24 M3 4,135.5 4,191.9 4,198.2 4,248.8r 4,197.8 4,215.3 4,238.5 4,204.2 25 L 4,997.2 5,018.0 5,087.6 5,166.8r 5,132.2 5,151.6 5,171.4 n.a. 26 Debt 10,667.7 11,144.6 U,729.5r 12,312.2r 12,391.9 12,448.1 12,493.4 n.a. Ml components 27 Currency3 249.5 269.9 295.0 324.9 327.3 330.7 334.4 337.3 28 Travelers checks4 7.4 7.4 7.8 7.6 7.7 7.8 7.8 7.9 29 Demand deposits3 289.9 303.1 355.1 402.6 380.6 380.7 390.3 378.9 30 Other checkable deposits6 297.0 336.3 388.9 418.6 409.1 412.9 420.8 409.1 Nontransaction components 31 In M2„ 2,522.3 2,553.7 2,480.9 2,436.3r 2,432.0 2,449.1 2,453.5 2,442.5 32 In M38 769.5 721.6 670.5 658.8r 641.1 634.2 631.7 628.4 Commercial banks 33 Savings deposits, including MMDAs 580.8 664.0 752.9 783.9 787.7 791.3 790.6 784.8 34 Small time deposits9 610.5 601.9 507.8 467.6 463.8 462.1 461.2 463.0 35 Large time deposits10, 11 367.7 341.3 291.7 276.0r 272.3 269.8 268.6 275.5 Thrift institutions 36 Savings deposits, including MMDAs 337.6 374.8 428.1 429.4 427.9 432.2 433.7 432.0 37 Small time deposits9 562.4 463.8 361.2 316.4r 310.4 308.3 306.7 304.5 38 Large time deposits10 120.6 83.1 67.2 61.6 61.3 60.9 61.0 60.3 Money market mutual funds 39 General purpose and broker-dealer 353.8 368.5 350.2 347.2 349.4 357.4 336677..22 336644..55 40 Institution-only 134.7 180.4 200.4 195.8 186.1 180.5 176.2 171.0 Repurchase agreements and Eurodollars 41 Overnight 7777..33 80.6 8800..77 9911..99rr 92.8 97.8 94.1 9933..77 42 Term 158.3 130.1 126.7 141.7r 137.5 139.0 142.8 140.1 Debt components 43 Federal debt 2,491.3 22,,776655..00 3,069.8 33,,332299..55 3,345.4 33,,337744..44 33,,337766..77 n.a. 44 Nonfederal debt 8,176.3 8,379.7 8,659.7r 8,982.7r 9,046.5 9,073.7 9,116.7 n.a. Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary and Credit Aggregates A15 NOTES TO TABLE 1.21 1. Latest monthly and weekly figures are available from the Board's H.6 (508) market fund holdings of these assets. Seasonally adjusted L is computed by weekly statistical release. Historical data are available from the Money and summing U.S. savings bonds, short-term Treasury securities, commercial paper, Reserves Projection Section, Division of Monetary Affairs, Board of Governors of and bankers acceptances, each seasonally adjusted separately, and then adding the Federal Reserve System, Washington, DC 20551. this result to M3. 2. Composition of the money stock measures and debt is as follows: Debt: Debt of domestic nonfinancial sectors consists of outstanding credit Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the market debt of the U.S. government, state and local governments, and private vaults of depository institutions, (2) travelers checks of nonbank issuers, (3) nonfinancial sectors. Private debt consists of corporate bonds, mortgages, condemand deposits at all commercial banks other than those owed to depository sumer credit (including bank loans), other bank loans, commercial paper, bankers institutions, the U.S. government, and foreign banks and official institutions, less acceptances, and other debt instruments. Data are derived from the Federal cash items in the process of collection and Federal Reserve float, and (4), other Reserve Board's flow of funds accounts. Debt data are based on monthly checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW) averages. This sum is seasonally adjusted as a whole. and automatic transfer service (ATS) accounts at depository institutions, credit 3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of union share draft accounts, and demand deposits at thrift institutions. Seasonally depository institutions. adjusted Ml is computed by summing currency, travelers checks, demand 4. Outstanding amount of U.S. dollar-denominated travelers checks of nondeposits, and OCDs, each seasonally adjusted separately. bank issuers. Travelers checks issued by depository institutions are included in M2: Ml plus (1) overnight (and continuing-contract) repurchase agreements demand deposits. (RPs) issued by all depository institutions and overnight Eurodollars issued to 5. Demand deposits at commercial banks and foreign-related institutions other U.S. residents by foreign branches of U.S. banks worldwide, (2) savings (includ- than those owed to depository institutions, the U.S. government, and foreign ing MMDAs) and small time deposits (time deposits—including retail RPs—in banks and official institutions, less cash items in the process of collection and amounts of less than $100,000), and (3) balances in both taxable and tax-exempt Federal Reserve float. general-purpose and broker-dealer money market funds. Excludes individual 6. Consists of NOW and ATS account balances at all depository institutions, retirement accounts (IRAs) and Keogh balances at depository institutions and credit union share draft account balances, and demand deposits at thrift institumoney market funds. Also excludes all balances held by U.S. commercial banks, tions. money market funds (general purpose and broker-dealer), foreign governments 7. Sum of (1) overnight RPs and overnight Eurodollars, (2) money market fund and commercial banks, and the U.S. government. Seasonally adjusted M2 is balances (general purpose and broker-dealer), (3) savings deposits (including computed by adjusting its non-Mi component as a whole and then adding this MMDAs), and (4) small time deposits. result to seasonally adjusted Ml. 8. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S. M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of residents, and (4) money market fiind balances (institution-only), less (5) a $100,000 or more) issued by all depository institutions, (2) term Eurodollars held consolidation adjustment that represents the estimated amount of overnight RPs by U.S. residents at foreign branches of U.S. banks worldwide and at all banking and Eurodollars held by institution-only money market funds. offices in the United Kingdom and Canada, and (3) balances in both taxable and 9. Small time deposits—including retail RPs—are those issued in amounts of tax-exempt, institution-only money market funds. Excludes amounts held by less than $100,000. All IRAs and Keogh accounts at commercial banks and thrift depository institutions, the U.S. government, money market funds, and foreign institutions are subtracted from small time deposits. banks and official institutions. Also excluded is the estimated amount of overnight 10. Large time deposits are those issued in amounts of $100,000 or more, RPs and Eurodollars held by institution-only money market funds. Seasonally excluding those booked at international banking facilities. adjusted M3 is computed by adjusting its non-M2 component as a whole and then 11. Large time deposits at commercial banks less those held by money market adding this result to seasonally adjusted M2. funds, depository institutions, U.S. government, and foreign banks and official L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term institutions. Treasury securities, commercial paper, and bankers acceptances, net of money Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Nonfinancial Statistics • August 1994 1.22 DEPOSIT INTEREST RATES AND AMOUNTS OUTSTANDING Commercial and BIF-insured saving banks1 1993 1994 Ji tem D 19 e 9 c 1 . D 19 e 9 c 2 . Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Interest rates (annual effective yields) INSURED COMMERCIAL BANKS 1 Negotiable order of withdrawal accounts ... 3.76 2.33 1.% 1.92 1.89 1.86 1.84 1.82 1.82r 1.81 1.82 2 Savings deposits 4.30 2.88 2.51 2.49 2.48 2.46 2.46 2.43 2.43 2.45 2.50 Interest-bearing time deposits with balances of less than $100,000, by maturity 3 7 to 91 days 4.18 2.90 2.63 2.63 2.64 2.65 2.65 2.68 2.76 2.87 2.99 4 92 to 182 days 4.41 3.16 2.92 2.91 2.92 2.91 2.90 2.94 3.02 3.13 3.28 5 183 days to 1 year 4.59 3.37 3.13 3.11 3.13 3.13 3.14 3.18 3.27 3.42 3.64 6 More than 1 year to 2Vi years 4.95 3.88 3.55 3.54 3.54 3.55 3.56 3.61 3.69 3.87 4.12 7 More than 2 Vl years 5.52 4.77 4.28 4.27 4.28 4.29 4.31 4.35 4.46 4.67 4.89 BIF-INSURED SAVINGS BANKS3 8 Negotiable order of withdrawal accounts ... 4.44 2.45 2.01 1.98 1.95 1.87 1.89 1.88 1.83 1.86 1.86 9 Savings deposits 4.97 3.20 2.73 2.68 2.65 2.63 2.62 2.64 2.63 2.65 2.67 Interest-bearing time deposits with balances of less than $100,000, by maturity 10 7 to 91 days 4.68 3.13 2.76 2.75 2.73 2.70 2.69 2.69 2.71 2.72 2.77 11 92 to 182 days 4.92 3.44 3.05 3.05 3.03 3.02 3.03 3.04 3.08 3.13 3.21 12 183 days to 1 year 4.99 3.61 3.33 3.34 3.32 3.31 3.33 3.34 3.37 3.47 3.67 13 More than 1 year to 2 Vl years 5.23 4.02 3.69 3.68 3.69 3.66 3.72 3.76 3.85 3.% 4.12 14 More than 2Vi years 5.98 5.00 4.62 4.57 4.60 4.62 4.61 4.66 4.75 4.85 5.08 Amounts outstanding (millions of dollars) INSURED COMMERCIAL BANKS 15 Negotiable order of withdrawal accounts ... 244,637 286,541 286,056 289,813 297,329 305,223 293,806 295,573 297,496r 293,888 292,813 16 Savings deposits2 652,058 738,253 758,835 765,372 770,609 766,413 771,559 776,204 779,340r 771,869 773,173 1/ Personal 508,191 578,757 592,028 595,715 598,200 597,838 606,615 611,725 615,875r 611,720 612,622 18 Nonpersonal 143,867 159,496 166,807 169,657 172,408 168,575 164,944 164,479 163,465r 160,149 160,551 Interest-bearing time deposits with balances of less than $100,000, by maturity 1199 7 to 91 days 47,094 38,474 30,384 30,022 29,730 29,455 29,312 29,578 29,539" 29,467 29,958 20 92 to 182 days 158,605 127,831 108,574 108,504 109,228 110,069 109,110 109,444 107,407r 105,615 104,580 21 183 days to 1 year 209,672 163,098 152,501 149,758 147,334 146,565 144,037 143,624 144,022r 146,733 148,818 2 2 More than 1 year to 2Vi years 171,721 152,977 139,406 139,042 139,315 141,223 141,204 141,006 139,946r 139,313 139,648 23 More than 2Vi years 158,078 169,708 184,414 183,790 180,972 181,528 182,193 181,240 180,973r 181,977 180,451 24 IRA/Keogh Plan deposits 147,266 147,350 145,636 144,776 145,002 143,985 143,875 143,409 142,002r 142,448 142,049 BIF-INSURED SAVINGS BANKS3 25 Negotiable order of withdrawal accounts.... 9,624 10,871 10,471 10,548 10,852 11,151 10,796 10,870 11,078 11,051 11,040 26 Savings deposits 71,215 81,786 78,182 77,995 77,948 80,115 78,660 78,016 78,701r 78,982 78,784 2/ Personal 68,638 78,695 74,978 74,737 74,664 77,035 75,445 74,756 75,444r 75,717 75,443 28 Nonpersonal 2,577 3,091 3,204 3,258 3,284 3,079 3,215 3,260 3,257 3,265 3,342 Interest-bearing time deposits with balances of less than $100,000, by maturity 29 7 to 91 days 4,146 3,867 2,886 2,839 2,778 2,793 2,737 2,735 2,671 2,697 2,699 30 92 to 182 days 21,686 17,345 13,261 13,131 12,926 12,946 13,094 13,165 13,177 13,058 12,811 31 183 days to 1 year 29,715 21,780 17,798 17,441 17,178 17,426 17,418 17,436 17,511 17,504 17,429 32 More than 1 year to 2Vi years 25,379 18,442 16,161 16,124 15,995 16,546 16,281 16,338 16,180r 16,453 16,471 33 More than 2 Vl years 18,665 18,845 19,610 19,657 19,645 20,464 20,630 20,939 21,llO1 21,454 21,532 34 IRA/Keogh Plan accounts 23,007 21,713 19,766 19,601 19,382 19,356 19,395 19,474 19,447 19,860 19,760 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 1994 Oct. Nov. Dec. Jan.r Feb. Mar. DEBITS Seasonally adjusted Demand deposits3 1 All insured banks 277,741.7 313,251.6 334,793.7 329,586.5 358,503.0 367,734.8 349,548.3 371,836.4 393,904.6 2 Major New York City banks 137,337.2 165,484.5 171,312.0 168,055.5 187,022.4 189,024.1 183,244.7 200,051.3 210,684.3 3 Other banks 140,404.5 147,767.2 163,481.7 161,530.9 171,480.6 178,710.7 166,303.6 171,785.1 183,220.3 4 Other checkable deposits4 3,643.1 3,781.5 3,486.8 3,348.0 3,598.6 3,809.5 3,448.1 3,812.6 3,909.7 5 Savings deposits (including MMDAs) 3,206.4 3,310.6 3,507.3 3,403.1 3,740.5 3,933.6 3,595.3 4,057.0 3,918.8 DEPOSIT TURNOVER Demand deposits3 6 All insured banks 803.7 826.0 786.5 741.7 803.0 826.9 771.4 823.2 873.6 7 Major New York City banks 4,267.1 4,794.5 4,200.6 3,937.7 4,352.2 4,550.0 4,268.2 4,674.4 4,798.4 8 Other banks 448.1 428.9 424.8 402.1 425.0 443.3 405.4 420.1 450.2 9 Other checkable deposits4 16.2 14.4 11.9 11.1 12.0 12.6 11.4 12.7 13.0 10 Savings deposits (including MMDAs) 5.2 4.7 4.6 4.4 4.8 5.1 4.6 5.2 5.0 DEBITS Not seasonally adjusted Demand deposits3 11 All insured banks 277,752.4 313,416.8 334,775.6 336,009.2 344,140.1 380,187.5 349,643.9 345,559.7 406,855.0 12 Major New York City banks 137,307.2 165,595.0 171,283.5 172,675.6 180,990.2 194,541.0 181,971.7 187,904.4 218,783.5 13 Other banks 140,445.2 147,821.9 163,492.1 163,333.6 163,149.9 185,646.4 167,672.1 157,655.3 188,071.5 14 Other checkable deposits4 3,645.2 3,784.4 3,485.2 3,323.3 3,370.1 3,888.9 3,768.6 3,505.6 3,916.7 15 Savings deposits (including MMDAs) 3,209.2 3,310.0 3,505.8 3,336.0 3,511.8 4,066.4 3,780.9 3,616.9 3,883.0 DEPOSIT TURNOVER Demand deposits3 16 All insured banks 803.6 826.3 786.5 750.0 754.8 820.6 759.5 783.1 923.4 17 Major New York City banks 4,269.0 4,803.5 4,197.9 4,059.2 4,129.6 4,387.8 4,047.8 4,319.0 5,140.2 18 Other banks 448.1 429.0 424.9 402.8 395.9 443.1 403.6 396.3 472.5 19 Other checkable deposits4 16.2 14.4 11.9 11.2 11.2 12.7 12.2 11.7 13.0 20 Savings deposits (including MMDAs) 5.2 4.7 4.6 4.3 4.5 5.2 4.8 4.6 5.0 1. Historical tables containing revised data for earlier periods can be obtained 4. As of January 1994, other checkable deposits (OCDs) previously defined as from the Publications Section, Division of Support Services, Board of Governors automatic transfer to demand deposits (ATSs) and negotiable order of withdrawal of the Federal Reserve System, Washington, DC 20551. (NOW) accounts, were expanded to include telephone and preauthorized transfer Data in this table also appear in the Board's G.6 (406) monthly statistical accounts. This change redefined OCDs for debits data to be consistent with OCDs release. For ordering address, see inside front cover. for deposits data. 2. Annual averages of monthly figures. 5. Money market deposit accounts. 3. Represents accounts of individuals, partnerships, and corporations and of states and political subdivisions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Financial Statistics • August 1994 1.26 ASSETS AND LIABILITIES OF COMMERCIAL BANKS1 Billions of dollars Monthly averages Wednesday figures Account 1993 1993r 1994 1994r Mayr Nov. Dec. Jan.r Feb/ Mar.r Apr. May May 4 May 11 May 18 May 25 ALL COMMERCIAL BANKING INSTITUTIONS Seasonally adjusted Assets 1 Bank credit 3,015.6 3,091.2 3,104.7 3,124.2 3,138.3 3,165.8 3,192.5 3,198.2 3,185.0 3,198.4 3,194.2 3,202.4 2 Securities in bank credit 883.9 903.1 910.9 925.0 930.1 950.1 966.9 965.5 963.9 966.4 965.7 964.7 3 U.S. government securities ... 701.3 720.4 726.7 732.3 732.3 747.6 758.8 752.2 752.3 754.8 752.6 748.1 4 Other securities 182.6 182.8 184.2 192.6 197.8 202.4 208.1 213.3 211.6 211.6 213.1 216.6 5 Loans and leases in bank credit2. 2,131.8 2,188.0 2,193.8 2,199.2 2,208.2 2,215.7 2,225.6 2,232.8 2,221.1 2,232.0 2,228.5 2,237.8 6 Commercial and industrial 591.4 584.3 583.6 588.7 591.1 595.9 602.6 606.6 605.0 605.0 606.7 607.4 7 Real estate 907.6 933.8 940.9 942.3 941.2 941.1 943.3 944.7 943.7 943.6 943.7 944.7 8 Revolving home equity 75.2 73.5 73.2 73.0 73.1 73.2 73.2 73.6 73.3 73.4 73.6 73.7 9 Other 832.4 860.3 867.7 869.3 868.1 868.0 870.2 871.1 870.4 870.3 870.1 871.1 10 Consumer 369.2 388.2 390.9 393.8 397.1 401.3 407.4 410.7 409.9 410.2 410.7 410.6 11 Security3 69.3 87.9 87.3 80.9 82.1 83.3 76.9 77.5 69.8 79.1 73.2 83.3 12 Other 194.2 193.8 191.0 193.5 196.6 194.0 195.3 193.2 192.8 194.0 194.2 191.8 N Interbank loans4 154.7 154.0 153.0 153.7 153.5 145.9 146.0 156.6 146.7 165.1 153.8 164.2 14 Cash assets5 215.1 218.8 219.2 219.6 225.4 216.8 210.4 218.2 207.8 216.3 209.2 218.5 15 Other assets6 218.5 217.4 214.4 220.2 222.4 222.8 228.5 232.3 231.9 234.1 231.3 231.3 16 Total assets7 3,543.1 3,622.5 3,633.0 3,660.0 3,682.2 3,694.1 3,720.1 3,747.8 3,714.0 3,756.4 3,730.9 3,758.9 Liabilities 17 Deposits 2,518.3 2,533.2 2,537.8 2,537.2 2,530.8 2,516.2 2,505.7 2,518.6 2,507.6 2,527.2 2,497.5 2,525.2 18 Transaction 775.0 816.5 819.1 815.9 818.1 814.4 801.5 813.4 798.6 820.4 795.2 819.1 19 Nontransaction 1,743.3 1,716.7 1,718.8 1,721.3 1,712.8 1,701.8 1,704.2 1,705.1 1,709.0 1,706.8 1,702.3 1,706.2 20 Large time 363.7 347.4 349.8 348.2 339.9 331.7 334.4 337.1 338.9 337.4 336.3 338.1 21 Other 1,379.6 1,369.3 1,368.9 1,373.1 1,372.8 1,370.1 1,369.9 1,368.0 1,370.1 1,369.4 1,366.0 1,368.1 22 Borrowings 509.3 515.7 522.4 543.2 541.1 552.2 576.5 578.5 564.5 590.6 578.1 573.2 23 From banks in the U.S 156.8 153.3 152.4 150.3 149.7 141.9 144.9 158.4 144.4 166.0 158.2 165.6 24 From nonbanks in the U.S 352.6 362.5 370.0 392.9 391.4 410.3 431.6 420.1 420.1 424.5 419.9 407.6 25 Net due to related foreign offices 84.2 121.8 119.4 116.0 136.0 157.5 172.4 173.8 166.9 166.7 176.6 181.8 26 Other liabilities8 151.8 144.1 143.1 155.7 162.5 159.7 164.7 168.9 167.6 168.2 170.9 170.8 27 Total liabilities 3,263.6 3,314.7 3,322.7 3,352.1 3,370.5 3,385.6 3,419.2 3,439.8 3,406.6 3,452.7 3,423.1 3,451.0 28 Residual (assets less liabilities)9.... 279.5 307.8 310.3 307.9 311.8 308.5 300.8 308.0 307.4 303.7 307.8 307.9 Not seasonally adjusted Assets 29 Bank credit 3,006.4 3,102.0 3,120.3 3,125.2 3,136.9 3,164.6 3,190.9 3,187.2 3,187.8 3,185.7 3,185.1 3,177.8 30 Securities in bank credit 881.2 908.5 910.4 920.9 930.0 953.4 967.9 961.3 964.5 962.9 961.6 956.3 31 U.S. government securities ... 699.2 724.4 726.3 728.3 731.0 751.3 760.9 749.2 753.5 751.7 750.1 742.8 37 Other securities 182.0 184.1 184.2 192.6 199.0 202.1 207.0 212.1 211.0 211.3 211.5 213.5 33 Loans and leases in bank credit2. 2,125.2 2,193.4 2,209.9 2,204.3 2,206.9 2,211.2 2,223.0 2,225.9 2,223.3 2,222.8 2,223.4 2,221.5 34 Commercial and industrial 592.9 585.2 585.5 587.9 590.3 598.8 605.6 608.1 609.5 607.1 607.7 607.4 35 Real estate 907.5 936.3 944.1 940.8 937.8 937.4 941.4 945.1 943.3 945.5 944.0 944.1 36 Revolving home equity 74.9 74.0 73.5 73.1 72.9 72.5 72.7 73.3 73.1 73.1 73.3 73.4 37 Other 832.6 862.3 870.6 867.6 864.8 864.9 868.7 871.8 870.3 872.4 870.7 870.7 38 Consumer 368.0 388.4 395.3 398.2 398.4 398.5 404.2 409.4 408.0 408.7 409.8 409.5 39 Security3 65.8 87.8 89.3 83.2 86.7 85.5 79.6 73.6 72.1 72.3 72.1 74.4 40 Other 190.8 195.8 195.7 194.2 193.6 191.0 192.3 189.7 190.4 189.1 189.8 186.1 41 Interbank loans4 149.8 155.6 161.3 157.9 154.3 145.8 147.5 151.7 148.6 155.5 150.2 152.6 4? Cash assets5 212.2 226.3 232.5 224.6 219.9 211.5 207.7 215.7 210.6 204.2 203.2 204.5 43 Other assets6 215.8 220.2 218.5 222.6 221.9 221.3 224.9 229.4 231.6 232.2 226.5 224.9 44 Total assets7 3,523.3 3,644.9 3,673.8 3,672.8 3,675.3 3,685.5 3,713.8 3,726.4 3,721.1 3,720.0 3,707.2 3,702.2 Liabilities 45 Deposits 2,508.1 2,544.0 2,566.6 2,540.5 2,520.5 2,507.9 2,512.4 2,507.3 2,515.6 2,503.3 2,484.2 2,484.2 46 Transaction 764.2 828.1 853.6 825.5 808.9 802.8 809.8 802.0 809.1 796.3 781.9 779.1 47 Nontransaction 1,743.9 1,715.9 1,713.1 1,715.0 1,711.6 1,705.0 1,702.6 1,705.3 1,706.4 1,707.0 1,702.3 1,705.0 48 Large time 368.1 344.3 346.0 344.6 340.3 334.3 335.5 341.1 341.5 340.9 340.6 343.0 49 Other 1,375.8 1,371.6 1,367.0 1,370.3 1,371.3 1,370.8 1,367.1 1,364.1 1,365.0 1,366.1 1,361.7 1,362.0 50 Borrowings 497.5 526.6 532.4 545.1 545.5 546.2 561.2 567.5 565.5 575.0 566.6 556.8 51 From banks in the U.S 149.8 154.2 159.6 155.9 152.1 143.3 146.3 151.7 148.6 155.5 150.2 152.6 52 From nonbanks in the U.S 347.6 372.4 372.8 389.2 393.4 403.0 414.8 415.7 416.9 419.5 416.4 404.1 53 Net due to related foreign offices 87.2 124.6 126.5 124.2 139.0 162.2 171.3 179.4 170.0 170.5 185.0 188.0 54 Other liabilities8 148.0 150.0 146.6 158.0 162.6 159.5 159.1 164.4 162.9 164.8 164.8 165.8 55 Total liabilities 3,240.7 3,345.2 3,372.1 3,367.7 3,367.6 3,375.7 3,404.0 3,418.6 3,413.9 3,413.6 3,400.6 3,394.7 56 Residual (assets less liabilities)9 282.6 299.7 301.7 305.0 307.7 309.8 309.8 307.8 307.2 306.4 306.7 307.5 Footnotes appear on last page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions A19 1.26 ASSETS AND LIABILITIES OF COMMERCIAL BANKS1—Continued Billions of dollars Monthly averages Wednesday figures 1993* 1994 1994r May1 Nov. Dec. Jan.1 Feb.r Mar.r Apr. May May 4r May llr May 18r May 25r DOMESTICALLY CHARTERED COMMERCIAL BANKS Seasonally adjusted Assets 57 Bank credit 2,682.9 2,756.2 2,771.9 2,792.9 2,801.0 2,826.1 2,840.8 2,847.8 2,838.3 2,845.9 2,846.3 2,852.3 58 Securities in bank credit 810.6 826.2 833.6 846.5 850.1 869.3 876.8 874.2 874.5 874.8 874.4 873.9 59 U.S. government securities . 652.9 668.2 673.3 678.4 676.8 691.1 695.4 691.7 691.9 693.1 692.2 689.4 60 Other securities 157.7 158.0 160.3 168.1 173.3 178.1 181.4 182.4 182.5 181.7 182.2 184.5 61 Loans and leases in bank credit2 1,872.3 1,930.0 1,938.3 1,946.4 1,950.9 1,956.8 1,964.0 1,973.6 1,963.8 1,971.1 1,971.9 1,978.4 62 Commercial and industrial .. 438.1 434.1 435.5 440.3 442.5 444.3 448.2 451.1 450.4 450.0 450.8 451.5 63 Real estate 857.8 886.8 894.7 897.5 896.7 897.3 900.8 902.6 901.6 901.6 901.5 902.7 64 Revolving home equity ... 75.2 73.5 73.2 73.0 73.1 73.1 73.2 73.5 73.3 73.4 73.6 73.7 65 Other 782.6 813.3 821.5 824.5 823.6 824.1 827.7 829.0 828.3 828.3 828.0 829.1 66 Consumer 369.2 388.2 390.9 393.8 397.1 401.3 407.4 410.7 409.9 410.2 410.7 410.6 67 Security3 48.2 60.0 57.9 54.4 54.5 55.5 49.5 51.5 45.8 51.5 50.7 56.6 68 Other 158.9 160.9 159.4 160.5 160.1 158.3 158.0 157.7 156.2 157.9 158.1 157.0 69 Interbank loans4 134.1 132.9 133.6 135.3 130.4 125.9 124.4 133.0 124.0 140.2 131.2 138.1 70 Cash assets5 188.2 193.2 193.8 194.5 200.9 191.4 184.3 191.0 182.1 189.1 181.2 190.8 71 Other assets6 172.2 172.5 171.7 175.4 175.9 177.0 182.6 182.9 183.5 183.8 182.4 182.8 72 Total assets7 3,116.6 3,196.1 3,212.7 3,240.6 3,251.1 3,263.2 3,274.7 3,297.2 3,270.6 3,301.6 3,283.6 3,306.4 Liabilities 73 Deposits 2,362.2 2,378.9 2,379.4 2,381.6 2,381.5 2,375.3 2,362.2 2,374.6 2,361.9 2,383.0 2,355.1 2,379.7 74 Transaction 764.2 804.9 808.2 805.0 806.7 802.9 790.7 802.6 788.2 809.6 784.5 808.2 75 Nontransaction 1,598.0 1,574.0 1,571.2 1,576.6 1,574.9 1,572.4 1,571.5 1,572.0 1,573.8 1,573.4 1,570.6 1,571.5 76 Large time 222.5 210.8 208.9 210.3 208.6 207.2 207.5 208.9 209.3 209.0 208.6 209.1 77 Other 1,375.5 1,363.2 1,362.3 1,366.3 1,366.3 1,365.2 1,364.0 1,363.1 1,364.4 1,364.4 1,362.0 1,362.4 78 Borrowings 387.1 410.3 417.2 437.2 440.3 455.6 475.1 474.5 467.5 483.5 475.6 470.3 79 From banks in the U.S 115.9 121.5 121.9 120.3 121.7 117.3 116.9 126.9 115.2 129.7 129.3 135.1 80 From nonbanks in the U.S. 271.1 288.9 295.3 317.0 318.5 338.2 358.1 347.6 352.3 353.8 346.3 335.2 81 Net due to related foreign offices -13.8 -2.7 1.7 3.4 3.2 14.0 21.1 25.2 18.7 16.1 31.3 31.4 82 Other liabilities8 109.0 104.9 104.7 113.2 119.1 117.8 122.9 125.8 124.6 125.0 127.9 127.5 83 Total liabilities 2,844.4 2,891.4 2,903.0 2,935.5 2,944.1 2,962.7 2,981.2 3,000.1 2,972.8 3,007.7 2,989.9 3,009.0 84 Residual (assets less liabilities)9. 272.1 304.7 309.8 305.1 307.0 300.5 293.5 297.1 297.9 293.8 293.7 297.5 Not seasonally adjusted Assets 85 Bank credit 2,678.8 2,764.9 2,778.7 2,786.0 2,797.2 2,821.0 2,841.5 2,842.9 2,843.3 2,840.6 2,843.0 2,836.3 86 Securities in bank credit 809.1 830.3 830.9 840.1 849.3 870.0 879.1 871.7 875.0 872.7 872.4 867.7 87 U.S. government securities . 652.1 670.9 670.6 672.3 675.6 692.7 699.0 690.5 693.2 691.9 691.8 685.9 88 Other securities 157.0 159.4 160.3 167.8 173.7 177.2 180.0 181.2 181.8 180.8 180.6 181.8 89 Loans and leases in bank credit2 1,869.8 1,934.6 1,947.7 1,945.9 1,947.9 1,951.0 1,962.4 1,971.2 1,968.3 1,967.9 1,970.6 1,968.6 90 Commercial and industrial.. 440.7 434.9 435.5 437.8 44.1.7 446.3 450.9 453.8 455.2 453.2 453.3 453.0 91 Real estate 857.8 889.1 898.0 896.1 893.1 893.4 899.0 903.0 901.1 903.4 901.9 902.2 92 Revolving home equity ... 74.9 74.0 73.5 73.1 72.9 72.5 72.7 73.3 73.0 73.1 73.3 73.4 93 Other 782.9 815.2 824.6 823.0 820.2 820.9 826.3 829.7 828.1 830.3 828.6 828.8 94 Consumer 368.0 388.4 395.3 398.2 398.4 398.5 404.2 409.4 408.0 408.7 409.8 409.5 95 Security3 46.3 59.8 57.2 53.9 56.6 56.7 52.1 49.4 48.4 48.0 50.2 50.5 96 Other 156.9 162.5 161.8 159.8 158.0 156.1 156.3 155.7 155.6 154.6 155.4 153.4 97 Interbank loans4 129.6 134.6 138.9 138.4 132.6 126.5 126.4 128.8 126.1 131.5 127.7 127.4 98 Cash assets5 186.3 200.6 206.8 199.7 196.0 186.6 182.5 189.5 185.2 178.4 176.6 178.2 99 Other assets6 170.5 173.8 173.8 176.6 175.1 176.1 179.9 181.1 183.7 182.5 178.8 177.8 100 Total assets7 3,104.4 3,214.9 3,239.4 3,243.3 3,243.3 3,252.6 3,273.1 3,284.7 3,280.9 3,275.4 3,268.4 3,262.1 Liabilities 101 Deposits 2,348.2 2,394.0 2,411.4 2,386.6 2,370.4 2,363.8 2,367.6 2,360.1 2,367.4 2,356.6 2,338.8 2,334.8 102 Transaction 753.8 816.5 842.5 814.3 797.5 791.8 799.2 791.6 799.0 785.9 771.9 768.5 103 Nontransaction 1,594.4 1,577.5 1,569.0 11,,557722..22 1,572.8 1,572.1 1,568.4 1,568.5 1,568.4 1,570.7 1,567.0 1,566.2 104 Large time 223.0 211.3 207.5 220088..88 208.7 206.6 206.8 209.5 209.2 209.6 209.1 210.2 105 Other 1,371.4 1,366.2 1,361.4 1,363.4 1,364.2 1,365.4 1,361.6 1,359.0 1,359.2 1,361.1 1,357.8 1,356.1 106 Borrowings 380.3 420.1 425.8 439.1 446.2 450.3 461.3 467.8 469.8 472.8 469.1 459.2 107 From banks in the U.S 112.4 121.3 126.7 124.9 124.9 118.6 119.3 123.0 120.8 123.1 124.2 125.4 108 From nonbanks in the U.S. ... 267.9 298.8 299.1 314.1 321.2 331.7 342.0 344.8 349.0 349.8 344.9 333.8 109 Net due to related foreign offices -9.4 -3.3 -1.8 3.0 5.4 16.0 20.6 31.1 20.1 22.0 35.2 41.1 110 Other liabilities8 105.7 109.6 107.4 114.5 118.6 117.9 118.3 121.8 565.5 575.0 566.6 556.8 111 Total liabilities 2,824.8 2,920.5 2,942.8 2,943.1 2,940.6 2,948.0 2,967.9 2,980.8 2,977.6 2,972.9 2,965.7 2,958.5 112 Residual (assets less liabilities)9., 279.6 294.4 296.6 300.1 302.8 304.6 305.2 303.9 303.3 302.5 302.7 303.6 Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Nonfinancial Statistics • August 1994 NOTES TO TABLE 1.26 1. Covers the following types of institutions in the fifty states and the District 4. Consists of federal funds sold to, reverse repurchase agreements with, and of Columbia: domestically chartered commercial banks that submit a weekly loans to commercial banks in the United States. report of condition (large domestic); other domestically chartered commercial 5. Includes vault cash, cash items in process of collection, demand balances banks (small domestic); branches and agencies of foreign banks; New York State due from depository institutions in the United States, balances due from Federal investment companies, and Edge Act and agreement corporations (foreign-related Reserve Banks, and other cash assets. institutions). Excludes international banking facilities. Data are Wednesday 6. Excludes the due-from position with related foreign offices, which is values, or pro rata averages of Wednesday values. Large domestic banks included in lines 25, 53, 81, and 109. constitute a universe; data for small domestic banks and foreign-related institu- 7. Excludes unearned income, reserves for losses on loans and leases, and tions are estimates based on weekly samples and on quarter-end condition reserves for transfer risk. Loans are reported gross of these items. reports. Data are adjusted for breaks caused by reclassifications of assets and 8. Excludes the due-to position with related foreign offices, which is included in liabilities. lines 25, 53, 81, and 109. 2. Excludes federal funds sold to, reverse repurchase agreements with, and 9. This balancing item is not intended as a measure of equity capital for use in loans to commercial banks in the United States. capital adequacy analysis. 3. Consists of reserve repurchase agreements with broker-dealers and loans to purchase and carry securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Commercial Banks A21 1.27 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS Millions of dollars, Wednesday figures 1994 Account Mar. 30" Apr. 6 Apr. 13 Apr. 20 Apr. 27 May 4 May 11 May 18 ASSETS 1 Cash and balances due from depository institutions 112,145 113,279 108,545 111,076 101,279 108,992 103.871 104,071 2 U.S. Treasury and government securities 318,573 325,919 322,816 319,297 312,989 314,%2 312.872 312,382 3 Trading account 24,755 29,031 27,778 27,129 24,357 26,163 25,766 26,647 4 Investment account 293,818 296,888 295,038 292,167 288,632 288,800 287,106 285,735 5 Mortgage-backed securities1 92,206 93,637 92,800 91,068 88,058 87,685 86,980 86,2% All others, by maturity 6 One year or less 51,012 49,029 48,359 49,489 50,438 49,351 48,347 49,534 7 One year through five years 79,615 82,387 82,177 79,998 79,211 79,946 79,769 78,350 8 More than five years 70,985 71,835 71,701 71,612 70,925 71,817 72,011 71,556 9 Other securities 87,892 90,930 90,706 90,784 90,467 92,486 91,418 91,274 10 Trading account 1,940 1,970 1,638 1,773 1,784 1,776 1,806 1,868 11 Investment account 57,847 58,029 58,340 58,094 57,790 57,935 57,857 57,723 12 State and political subdivisions, by maturity .. 21,748 21,701 21,7% 21,819 21,842 21,734 21,720 21,692 13 One year or less 4,231 4,175 4,410 4,391 4,412 4,467 4,448 4,437 14 More than one year 17,517 17,526 17,385 17,428 17,430 17,267 17,272 17,256 15 Other bonds, corporate stocks, and securities 36,099 36,328 36,544 36,275 35,948 36,201 36,137 36,031 16 Other trading account assets 28,105 30,9311 30,728 30,917 30,893 32,775 31,754 31,683 17 Federal funds sold2 92,762 91,996 %,2% 91,330 100,447 92,311 97,088 %,788 18 To commercial banks in the United States 61,388 56,739 59,5% 59,165 65,794 59,730 65,662 62,999 19 To nonbank brokers and dealers 25,950 29,412 31,140 26,209 29,398 26,757 25,995 28,147 20 To others' 5,423 5,845 5,560 5,956 5,256 5,824 5,432 5,642 21 Other loans and leases, gross 1,041,746 1,043,921 1,043,222 1,048,448 1,047,488 1,052,695 1,052,412 1,052,645 22 Commercial and industrial 287,801 288,806 286,890 290,830 290,281 293,744 291,966 291,959 23 Bankers acceptances and commercial paper ... 2,663 2,688 2,858 2,972 2,882 2,964 3,101 3,197 24 All other 285,138 286,118 284,032 287,858 287,399 290,780 288,865 288,762 25 U.S. addressees 283,122 284,1911 282,120 285,920 285,604 288,894 287,038 286,939 2 2 2 2 3 3 3 3 4 4 4 4 3 3 3 3 3 3 4 6 7 8 9 5 6 7 8 0 1 2 4 0 1 2 3 4 9 3 O L O E t t T T F T R T T A L h h S o o e o o o o e e S e l R A C B N l r r a a r : f f f i s s l o e o a l o i n i l L o p a U N t e l n n o v n t m e a n d s r u o - h o a a a n o e k o t s s f i b r a m e e n n v n t i t i e e l c s n a n h v g n a s r i c c a t s h - n e d s t i a e i n e r i U a l e n a n r a k a a n u r n o c s n g n g a n l . a c e l a f i i f S d g , o d o a n l d i i o d i n n s n . n r l a v g h r s p i l g s l e n a i e a o c 4 f b e e t o n i a n o r s d u i m a a a r g l c n t n c r e d l s i n u s n o t m t d e i e c e r p u k i t a m c e i e c s r e s e e l o r c a s i , a o e r n e q v a n i s l i l s u n n s t u r n a e s o s s e n r s e p i b e n y u t t r t t t r s l a y i v h r a i b o e t n n i u e e l d s d e d g t i s u e i U v o x c o s i n n t p s e f i f i i s c e o o i t u n c e n n i r d d a s i i t l t i S u e i t n s r a e s t t s e i t s u tions 1, 4 2 0 3 1 4 1 0 3 2 2 7 0 3 1 1 1 1 6 2 3 2 5 9 5 9 4 6 5 5 4 9 1 4 1 8 2 1 , , , , , , , , , , , , , , , , , , , 0 4 9 2 5 5 5 7 0 7 0 8 9 9 1 8 6 0 1 1 8 4 0 1 1 7 2 6 7 3 7 5 7 9 7 0 4 9 6 2 5 8 7 9 9 6 4 0 6 5 1 1 8 0 5 4 9 1, 4 3 2 0 1 2 4 3 0 7 2 2 3 0 1 1 1 6 1 3 2 6 7 3 9 8 4 6 4 7 6 1 1 5 1 5 9 1 , , , , , , , , , , , , , , , , , , , 0 4 2 0 4 1 4 8 0 9 0 5 7 8 1 9 0 5 5 1 9 3 3 1 6 2 4 0 3 6 0 0 0 5 2 4 9 9 1 1 3 9 7 7 7 0 6 4 5 7 8 5 6 6 9 0 0 1, 4 2 3 0 1 4 2 1 3 2 2 3 8 0 1 1 1 1 6 6 3 2 4 0 5 6 4 2 1 1 6 4 7 1 8 1 4 , , , , , , , , , , , , , , , , , , 0 5 5 5 2 7 7 7 0 4 9 9 9 9 5 8 5 9 2 4 1 7 8 2 7 9 9 1 2 1 3 8 8 6 3 8 1 6 6 9 1 0 5 5 2 7 7 5 2 0 1 6 5 6 8 6 8 1, 4 2 3 0 1 4 2 1 2 2 3 7 3 1 1 1 1 6 1 3 1 6 2 1 5 5 6 8 4 1 2 1 1 5 7 1 4 8 , , , , , , , , , , , , , , , , , , , 7 9 4 3 1 8 2 7 2 9 9 0 4 9 2 1 5 0 2 5 7 5 4 0 7 2 1 0 2 7 0 0 3 1 9 0 5 1 9 0 7 3 6 1 1 1 4 4 5 1 1 8 6 4 4 1 7 1, 4 3 2 0 1 4 2 3 2 2 3 7 1 1 1 1 1 6 1 3 6 1 2 5 3 4 6 7 2 1 1 1 1 8 6 1 2 7 , , , , , , , , , , , , , , , , , , , 8 0 0 9 2 5 5 9 2 4 3 7 0 0 5 6 8 9 2 9 9 5 4 3 2 8 9 4 1 4 1 8 7 1 3 8 8 5 2 9 7 0 8 3 1 5 5 5 9 7 7 0 6 8 8 6 3 1, 4 3 2 0 1 4 2 3 2 2 1 8 3 1 1 1 1 6 1 6 3 4 2 6 7 3 0 2 4 6 1 1 1 6 5 1 8 7 , , , , , , , , , , , , , , , , , , , 1 8 1 3 7 2 1 2 9 0 9 1 8 6 5 6 1 8 % 0 5 4 1 8 3 4 1 4 1 2 3 5 3 8 9 2 7 7 5 6 1 4 8 6 5 5 9 5 1 2 6 0 9 1 3 1 1, 4 3 2 0 1 4 2 3 2 2 3 8 1 1 1 1 1 6 1 6 3 5 2 5 6 7 2 2 3 5 1 1 8 6 6 1 7 , , , , , , , , , , , , , , , , , , 9 9 1 0 1 2 2 4 0 5 9 8 7 7 1 2 6 6 0 9 4 7 6 0 1 8 9 5 9 2 9 1 1 0 4 3 4 6 1 1 5 3 0 5 1 9 1 5 7 2 3 8 0 1 1 6 3 1, 4 0 3 2 1 4 2 3 2 3 1 7 2 1 1 1 1 1 5 6 4 3 2 6 5 7 5 9 4 3 1 7 1 6 1 1 6 9 , , , , , , , , , , , , , , , , , , , 8 1 2 2 0 9 5 7 3 3 5 8 1 8 1 1 6 5 9 9 1 3 2 3 5 7 7 2 2 5 1 1 5 1 5 7 4 % 1 9 1 8 4 4 1 2 3 3 6 1 7 7 2 7 8 0 45 Total assets 1,778,685 1,795,217 1,790,116 1,788,854 1,779,452 1,793,073 1,789,033 1,780,444 Footnotes appear on the following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 DomesticN onfinancial Statistics • August 1994 1.27 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued Millions of dollars, Wednesday figures 1994 AAccccoouunntt Mar. iff Apr. 6 Apr. 13 Apr. 20 Apr. 27 May 4 May 11 May 18 May 25 LIABILITIES 46 Deposits 1,129,345 1,149,060 1,147,134 1,131,055 1,119,976 1,134,591 1,128,951 1,118,594 1,116,016 47 Demand deposits 293,242 300,862 300,322 292,226 286,899 292,867 288,046 281,479 281,242 48 Individuals, partnerships, and corporations 243,530 250,303 252,578 243,522 236,503 243,931 241,927 235,189 234,993 49 Other holders 49,711 50,559 47,744 48,705 50,3% 48,936 46,119 46,290 46,249 50 States and political subdivisions 8,734 8,468 8,763 10,032 10,148 10,286 8,631 8,633 8,867 51 U.S. government 2,073 2,169 2,255 3,420 3,061 2,093 1,939 1,893 1,738 52 Depository institutions in the United States 20,789 22,213 21,010 20,288 20,235 21,854 20,354 20,364 21,249 53 Banks in foreign countries 5,444 6,566 5,030 5,195 5,304 5,500 5,282 5,125 4,890 54 Foreign governments and official institutions 583 644 729 588 1,028 585 631 795 545 55 Certified and officers' checks 12,088 10,499 9,957 9,182 10,619 8,618 9,282 9,480 8,959 56 Transaction balances other than demand deposits 123,769 129,064 128,424 127,229 122,056 125,789 123,406 122,636 121,488 57 Nontransaction balances 712,334 719,134 718,388 711,600 711,020 715,935 717,498 714,478 713,286 58 Individuals, partnerships, and corporations 690,914 698,705 698,005 689,102 688,336 693,148 694,356 691,123 689,885 59 Other holders 21,420 20,428 20,384 22,498 22,685 22,787 23,142 23,355 23,401 60 States and political subdivisions 17,818 17,915 17,788 17,676 17,755 17,852 18,113 18,343 18,371 61 U.S. government 1,519 622 610 2,832 2,800 2,678 2,706 2,684 2,692 62 Depository institutions in the United States 1,707 1,514 1,611 1,614 1,757 1,882 1,940 1,943 1,961 63 Foreign governments, official institutions, and banks .... 377 377 376 376 374 376 383 385 377 64 Liabilities for borrowed money5 345,925 340,208 337,390 351,964 351,752 350,074 349,626 343,566 334,397 65 Borrowings from Federal Reserve Banks 0 0 150 0 0 0 0 0 0 66 Treasury tax and loan notes , 14,291 6,466 9,166 31,776 33,420 32,497 30,528 13,676 8,823 67 Other liabilities for borrowed money6 331,634 333,742 328,074 320,188 318,332 317,577 331199,,009988 332299,,888899 332255,,557755 68 Other liabilities (including subordinated notes and debentures) 139,478 141,049 140,534 141,006 142,801 144,649 147,004 154,772 158,418 69 Total liabilities 1,614,748 1,630,317 1,625,059 1,624,025 1,614,529 1,629,314 1,625,581 1,616,932 1,608,832 70 Residual (total assets less total liabilities)7 163,937 164,901 165,058 164,829 164,924 163,759 163,452 163,513 163,379 MEMO 71 Total loans and leases, gross, adjusted, plus securities .. 1,464,686 1,480,919 1,478,514 1,475,269 1,469,519 1,475,893 1,471,888 1,472,973 1,467,404 72 Time deposits in amounts of $100,000 or more 91,561 92,382 93,488 95,373 95,477 96,505 96,682 96,112 9966,,773322 73 Loans sold outright to affiliates 697 694 694 693 695 700 700 699 669988 74 Commercial and industrial 334 329 329 329 329 329 328 328 328 75 Other 363 365 365 364 366 371 371 371 370 76 Foreign branch credit extended to U.S. residents1" 21,882 21,774 21,958 22,026 22,107 22,141 22,283 22,598 22,399 77 Net owed to related institutions abroad 16,171 10,625 13,663 17,644 19,806 15,503 16,963 30,309 35,913 1. Includes certificates of participation, issued or guaranteed by agencies of the 9. Affiliates include a bank's own foreign branches, nonconsolidated nonbank U.S. government, in pools of residential mortgages. affiliates of the bank, the bank's holding company (if not a bank), and noncon- 2. Includes securities purchased under agreements to resell. solidated nonbank subsidiaries of the holding company. 3. Includes allocated transfer risk reserve. 10. Credit extended by foreign branches of domestically chartered weekly 4. Includes negotiable order of withdrawal accounts (NOWs), automatic trans- reporting banks to nonbank U.S. residents. Consists mainly of commercial and fer service (ATS), and telephone and preauthorized transfers of savings deposits. industrial loans, but includes an unknown amount of credit extended to other than 5. Includes borrowings only from other than directly related institutions. nonfinancial businesses. 6. Includes federal funds purchased and securities sold under agreements to NOTE. Data that formerly appeared in table 1.28, Assets and Liabilities of Large repurchase. Weekly Reporting Commercial Banks in New York City, can be obtained from the 7. This balancing item is not intended as a measure of equity capital for use in Board's H.4.2 (504) weekly statistical release. For ordering address, see inside capital-adequacy analysis. front cover. 8. Excludes loans to and federal funds transactions with commercial banks in the United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Commercial Banks A23 1.28 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS Assets and Liabilities1 Millions of dollars, Wednesday figures Account Mar. 30 Apr. 6 Apr. 13 Apr. 20 Apr. 27 May 4 May 11 May 18 May 25 ASSETS 1 Cash and balances due from depository institutions 16,412 15,670 16,016 16,309 16,790 16,347 16,652 17,210 17,097 2 U.S. Treasury and government agency securities 38,776 41,128 41,176 40,089 39,920 39,482 39,227 38,317 37,429 3 Other securities. 8,670 8,592 8,887 9,478 9,956 10,136 10,584 10,725 11,057 4 Federal funds sold1 27,290 25,055 26,813 24,234 28,989 24,474 25,961 22,910 26,134 5 To commercial banks in the United States .. 7,438 5,344 6,509 4,374 8,204 7,028 8,062 7,152 8,879 6 To others2 19,852 19,711 20,304 19,860 20,785 17,446 17,900 15,758 17,255 7 Other loans and leases, gross 160,813 159,422 157,353 159,567 159,526 157,997 157,427 158,221 157,348 8 Commercial and industrial 98,598r 98,787 97,685 99,492 99,177 98,753 98,793 99,158 99,542 9 Bankers acceptances and commercial paper 3,380 3,812 3,582 3,820 3,794 3,662 3,662 3.444 3,476 10 All other 95,218r 94,975 94,103 95,671 95,383 95,092 95,131 95,714 96,066 11 U.S. addressees 91,482r 91,213 90,477 92,026 91,672 91,399 91,443 91,8% 92,165 12 Non-U.S. addressees 3,736r 3,762 3,627 3,645 3,710 3,693 3,688 3,818 3,901 13 Loans secured by real estate 28,428 28,180 27,694 27,751 27,781 27,777 27,750 27,747 27,718 14 To financial institutions 23,366r 24,021 23,724 23,456 23,706 23,443 22,971 23,518 22,327 15 Commercial banks in the United States. 5,449 5,635 5,477 5,392 5,448 5,488 5,322 5.445 5,280 16 Banks in foreign countries 2,349 2,237 2,069 2,026 1,965 1,867 1,795 2,065 1,847 17 Nonbank financial institutions 15,568r 16,149 16,178 16,038 16,294 16,088 15,854 16,008 15,200 18 For purchasing and carrying securities ... 6,121 4,233 3,819 4,577 4,446 3,761 3,755 3,636 3,706 19 To foreign governments and official institutions 545 666 815 656 629 570 642 557 528 20 All other 3,754r 3,535 3,616 3,636 3,787 3,692 3,515 3,606 3,526 21 Other assets (claims on nonrelated parties) . 31,709r 31,706 31,585 32,174 30,392 33,643 35,176 33,620 33,307 22 Total assets3 301,888r 300,912 300,511 303,034 302,627 302,571 305,815 302,697 303,449 LIABILITIES 23 Deposits or credit balances owed to other 24 Dem t a h n a d n d d e ir p e o c s t i l t y s - related institutions 9 5 0 , , 1 2 9 8 4 8 8 4 7 , , 6 28 8 2 8 8 4 7 , , 2 9 1 3 0 6 9 4 1 , , 2 2 7 0 5 0 9 4 0 , , 6 0 1 5 1 6 9 4 2 , , 1 5 9 8 4 6 9 4 1 , , 3 5 2 9 5 8 9 4 2 , , 2 2 2 1 0 7 9 4 3 , , 4 3 3 1 3 8 2 2 2 5 6 7 No I O n n t d t h r i a e v c n r i o d s r a u p c a o t l i r s o a , n t p i o a a n r c t s c n o e u rs n h ts ip s, and 8 3 5 1 , , , 0 8 3 9 9 0 4 1 3 82 3 , , 5 7 9 9 2 6 4 8 1 83 3 , , 7 4 7 9 2 1 8 5 3 86 3 , , 9 5 7 2 5 2 5 0 5 85 3 1 , , , 4 4 1 4 9 1 5 7 5 88 3 , , 3 4 7 9 3 6 1 2 2 8 3 7, , 2 4 9 7 0 2 3 5 0 87 3 , , 9 4 7 9 7 4 7 6 5 8 3 8 , , 5 8 9 1 8 2 0 5 3 2 2 8 9 I O n t d h i e v c r i o d r u p a o l r s a , t p io a n rt s n erships, and 5 2 8 6 , , 1 9 2 7 3 1 5 26 5 , , 6 9 5 4 3 1 5 26 6 , , 8 8 6 6 5 1 5 27 8 , , 9 9 2 9 6 9 5 2 8 7 , , 0 4 0 4 4 1 5 28 9 , , 6 7 1 7 3 8 5 28 8 , , 6 6 1 5 9 3 5 29 8 , , 3 6 5 3 8 9 5 3 8 0 , , 7 10 8 2 3 3 3 0 1 B Fe o d rr e r o r e w a l l a i t n f e u g d n s d i f n s r s o p t m i u tu r o c ti h t o h a n e s s r e d t . h , an directly- 6 3 4 1 , ,9 9 4 72 4 r 7 3 0 7 , , 2 7 6 4 9 9 7 37 2 , , 6 2 4 9 8 8 7 37 2 , , 1 1 7 9 2 2 6 35 8 , , 7 7 5 6 3 0 6 3 6 2 , , 3 6 5 5 2 8 7 3 0 4 , , 4 4 5 8 2 5 6 2 8 9 , , 5 9 6 7 9 6 6 30 7 , , 7 6 6 1 2 0 3 3 3 2 3 4 Ot F F h r r e o o r m m l U i a n c o b o i t i t h l m e i e d t m i r e s S s e t r f a c o t i e a r s l b b o a rr n o k w s e i d n t m he o ney 6 2 7 4 4 , , , 0 9 9 1 2 72 5 9 r 2 7 8 0 9 , , , 3 2 4 1 6 3 4 9 5 7 2 2 9 8 , , , 2 5 0 9 5 9 8 5 3 7 2 2 8 9 , , , 1 1 0 9 1 6 2 1 1 6 2 8 7 8 , , , 7 0 6 6 6 8 0 8 5 2 6 6 5 6 , , , 6 3 9 8 5 7 1 2 7 7 2 9 0 5 , , , 3 4 0 5 9 9 2 2 3 6 2 5 8 3 , , , 5 9 9 6 8 % 9 0 2 67 6 3 , , , 6 8 8 1 6 % 0 6 35 To commercial banks in the United States 5,348r 5,429 5,294 5,718 6,225 6,378 6,776 6,438 6,243 36 To others 27,681 27,091 29,356 29,302 26,782 27,317 29,191 32,156 30,604 37 Other liabilities to nonrelated parties 29,401r 27,685 28,772 28,600 28,466 30,459 31,013 30,748 30,359 38 Total liabilities6 301,888r 300,912 300,511 303,034 302,627 302,571 305,815 302,697 303,449 39 M To E t M al O l oans (gross) and securities, adjusted . '. 222,662 223,219 222,243 223,602 224,739 219,574 219,816 217,576 217,810 40 Net owed to related institutions abroad 99,008r 96,337 92,824 89,859 98,290 92,683 91,965 89,470 91,087 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

A24 Domestic Nonfinancial Statistics • August 1994 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period Year ending December 1993 1994 IItteemm 1989 1990 1991 1992 1993 Nov. Dec. Jan. Feb. Mar. Apr. Commercial paper (seasonally adjusted unless noted otherwise) 11 AAllll iissssuueerrss 525,831 562,656 528,832 545,619 555,075 547,982 555,075 559,443r 560,352 557,129 553,355 FFiinnaanncciiaall ccoommppaanniieess'' DDeeaalleerr--ppllaacceedd ppaappeerr 22 TToottaall 183,622 214,706 212,999 226,456 218,947 216,887 218,947 219,3501 221,649 214,722 205,267 33 BBaannkk--rreellaatteedd ((nnoott sseeaassoonnaallllyy aaddjjuusstteedd))33 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 210,930 200,036 182,463 171,605 180,389 175,868 180,389 182,075 186,318 194,527 199,803 55 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. 66 NNoonnffiinnaanncciiaall ccoommppaanniieess55 131,279 147,914 133,370 147,558 155,739 155,227 155,739 158,018r 152,385 147,880 148,285 Bankers dollar acceptances (not seasonally adjusted)6 7 Total 62,972 54,771 43,770 38,194 32,348 31,997 32,348 31,792 30,994 31,061 31,775 By holder 8 Accepting banks 9,433 9,017 11,017 10,555 12,421r 12,475 12,421r 11,410" ll,258r 11,727 11,643 9 Own bills 8,510 7,930 9,347 9,097 10,707r 10,853 10,707r 9,953r 10,248r 10,758 10,888 10 Bills bought from other banks 924 1,087 1,670 1,458 1,714 1,622 1,714 1,457 1,010 969 755 Federal Reserve Banks 11 Foreign correspondents 1,066 918 1,739 1,276 725 650 725 869 753 693 625 12 Others 52,473 44,836 31,014 26,364 19,202r 18,872 19,202r 19,513r 18,983r 18,641 19,507 By basis 13 Imports into United States 15,651 13,095 12,843 12,209 10,217 10,368 10,217 10,649 10,707 10,554 10,834 14 Exports from United States 13,683 12,703 10,351 8,096 7,293 7,054 7,293 7,123 6,872 6,708 6,723 15 All other 33,638 28,973 20,577 17,890 14,838 14,575 14,838 14,020 13,414 13,800 14,217 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A25 1.33 PRIME RATE CHARGED BY BANKS Short-Term Business Loans1 Percent per year Date of change Period Av r e a r t a e g e Period Av r e a r t a e g e Period Av r e a r t a e g e 1991— Jan. 1 10.00 1991 8.46 1992— Jan. 6.50 1993—Jan. ... 6.00 2 9.50 1992 6.25 Feb. 6.50 Feb. .. 6.00 Feb. 4 9.00 1993 6.00 Mar. 6.50 Mar. .. 6.00 May 1 8.50 Apr. 6.50 Apr. .. 6.00 Sept. 13 8.00 1991- 9.52 May 6.50 May ... 6.00 Nov. 6 7.50 Feb. 9.05 June 6.50 June .. 6.00 Dec. 23 6.50 Mar. 9.00 July 6.02 July ... 6.00 Apr. 9.00 Aug. 6.00 Aug. .. 6.00 1992— July 2 6.00 May . 8.50 Sept. 6.00 Sept. .. 6.00 June 8.50 Oct. 6.00 Oct. ... 6.00 1994— Mar. 24 6.25 July . 8.50 Nov. 6.00 Nov. .. 6.00 Apr. 19 6.75 Aug. 8.50 Dec. 6.00 Dec. , 6.00 May 17 7.25 Sept. 8.20 Oct. . 8.00 1994—Jan. 6.00 Nov. 7.58 Feb. 6.00 Dec. 7.21 Mar. 6.06 Apr. 6.45 May , 6.99 June 7.25 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 DomesticN onfinancial Statistics • August 1994 1.35 INTEREST RATES Money and Capital Markets Averages, percent per year; figures are averages of business day data unless otherwise noted 1994 1994, week ending IItteemm 11999911 11999922 11999933 Feb. Mar. Apr. May Apr. 29 May 6 May 13 May 20 May 27 MONEY MARKET INSTRUMENTS 1 Federal funds1'2'3 5.69 3.52 3.02 3.25 3.34 3.56 4.01 3.59 3.76 3.70 4.02 4.22 2 Discount window borrowing2, 5.45 3.25 3.00 3.00 3.00 3.00 3.24 3.00 3.00 3.00 3.14 3.50 Commercial paper3,5'6 3 1-month 5.89 3.71 3.17 3.39 3.63 3.81 4.28 3.89 4.05 4.37 4.35 4.33 4 3-month 5.87 3.75 3.22 3.49 3.85 4.05 4.57 4.15 4.38 4.73 4.61 4.55 5 6-month 5.85 3.80 3.30 3.62 4.08 4.40 4.92 4.56 4.76 5.07 4.96 4.89 Finance paper, directly placed3,5,7 6 1-month 5.73 3.62 3.12 3.30 3.53 3.71 4.19 3.81 3.97 4.30 4.25 4.23 7 3-month 5.71 3.65 3.16 3.40 3.71 3.94 4.44 4.07 4.23 4.60 4.48 4.42 8 6-month 5.60 3.63 3.15 3.39 3.70 4.03 4.45 4.15 4.26 4.53 4.50 4.49 Bankers acceptances3,5,8 9 3-month 5.70 3.62 3.13 3.40 3.73 3.% 4.45 4.06 4.31 4.63 4.46 4.41 10 6-month 5.67 3.67 3.21 3.56 3.96 4.27 4.77 4.39 4.65 4.95 4.77 4.72 Certificates qf deposit, secondary market*'9 11 1-month 5.82 3.64 3.11 3.31 3.56 3.75 4.23 3.84 4.02 4.34 4.29 4.28 12 3-month 5.83 3.68 3.17 3.43 3.77 4.01 4.51 4.12 4.35 4.68 4.53 4.49 13 6-month 5.91 3.76 3.28 3.62 4.03 4.38 4.90 4.50 4.74 5.09 4.91 4.84 14 Eurodollar deposits, 3-month3,10 5.86 3.70 3.18 3.43 3.75 4.00 4.51 4.14 4.33 4.71 4.53 4.49 U.S. Treasury bills Secondary market3,5 15 3-month 5.38 3.43 3.00 3.25 3.50 3.68 4.14 3.85 4.04 4.19 4.16 4.18 16 6-month 5.44 3.54 3.12 3.43 3.78 4.09 4.60 4.26 4.47 4.74 4.56 4.61 17 1-year 5.52 3.71 3.29 3.69 4.11 4.57 5.03 4.72 4.96 5.19 4.95 5.00 Auction average • • 18 3-month 5.42 3.45 3.02 3.21 3.52 3.74 4.19 3.85 4.00 4.32 4.22 4.23 19 6-month 5.49 3.57 3.14 3.38 3.79 4.13 4.64 4.25 4.41 4.81 4.69 4.63 20 1-year 5.54 3.75 3.33 3.59 4.03 4.30 4.77 n.a. 4.77 n.a. n.a. n.a. U.S. TREASURY NOTES AND BONDS Constant maturities12 21 1-year 5.86 3.89 3.43 3.87 4.32 4.82 5.31 4.99 5.23 5.49 5.23 5.29 22 2-year 6.49 4.77 4.05 4.47 5.00 5.55 5.97 5.67 5.91 6.15 5.85 5.94 23 3-year 6.82 5.30 4.44 4.83 5.40 5.99 6.34 6.08 6.30 6.54 6.20 6.30 24 5-year 7.37 6.19 5.14 5.40 5.94 6.52 6.78 6.56 6.76 6.98 6.65 6.73 25 7-year 7.68 6.63 5.54 5.72 6.28 6.80 7.01 6.77 7.00 7.22 6.87 6.94 26 10-year 7.86 7.01 5.87 5.97 6.48 6.97 7.18 6.96 7.16 7.37 7.06 7.14 27 20-year n.a. n.a. 6.29 6.57 7.00 7.40 7.54 7.34 7.51 7.69 7.44 7.54 28 30-year 8.14 7.67 6.59 6.49 6.91 7.27 7.41 7.22 7.38 7.56 7.31 7.40 Composite 29 More than 10 years (long-term) 8.16 7.52 6.45 6.44 6.90 7.32 7.47 7.27 7.44 7.62 7.36 7.46 STATE AND LOCAL NOTES AND BONDS Moody's series13 30 6.56 6.09 5.38 5.06 5.29 5.44 n.a. 5.47 5.53 5.58 5.66 5.72 31 Baa 6.99 6.48 5.82 5.52 5.74 5.87 n.a. 5.91 5.95 5.97 6.05 6.11 32 Bond Buyer series1 6.92 6.44 5.60 5.40 5.91 6.23 6.19 6.16 6.18 6.32 6.14 6.13 CORPORATE BONDS 33 Seasoned issues, all industries15 9.23 8.55 7.54 7.39 7.78 8.17 8.28 8.11 8.26 8.41 8.19 8.27 Rating group 34 8.77 8.14 7.22 7.08 77..4488 7.88 7.99 7.81 7.97 8.12 7.89 77..9988 35 Aa 9.05 8.46 7.40 7.29 7.69 8.08 8.19 8.01 8.17 8.32 8.10 8.18 36 A 9.30 8.62 7.58 7.44 7.82 8.22 8.32 8.14 8.30 8.45 8.23 8.31 37 Baa 9.80 8.98 7.93 7.76 8.13 8.52 8.62 8.46 8.59 8.74 8.53 8.62 38 A-rated, recently offered utility bonds16 9.32 8.52 7.46 7.45 7.82 8.20 8.37 8.27 8.51 8.46 8.23 8.30 MEMO Dividend-price ratio17 39 Preferred stocks 8.17 7.46 6.89 7.00 7.07 7.33 7.44 7.34 7.43 7.44 7.44 7.43 40 Common stocks 3.24 2.99 2.78 2.70 2.78 2.90 2.89 2.88 2.88 2.95 2.87 2.86 1. The daily effective federal funds rate is a weighted average of rates on 12. Yields on actively traded issues adjusted to constant maturities. Source: trades through New York brokers. U.S. Treasury. 2. Weekly figures are averages of seven calendar days ending on Wednesday 13. General obligations based on Thursday figures; Moody's Investors Service. of the current week; monthly figures include each calendar day in the month. 14. General obligations only, with twenty years to maturity, issued by twenty 3. Annualized using a 360-day year or bank interest. state and local governmental units of mixed quality. Based on figures for 4. Rate for the Federal Reserve Bank of New York. Thursday. 5. Quoted on a discount basis. 15. Daily figures from Moody's Investors Service. Based on yields to maturity 6. An average of offering rates on commercial paper placed by several leading on selected long-term bonds. dealers for firms whose bond rating is AA or the equivalent. 16. Compilation of the Federal Reserve. This series is an estimate of the yield 7. An average of offering rates on paper directly placed by finance companies. on recently offered, A-rated utility bonds with a thirty-year maturity and five 8. Representative closing yields for acceptances of the highest-rated money years of call protection. Weekly data are based on Friday quotations. center banks. 17. Standard & 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. issue-date basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets All 1.36 STOCK MARKET Selected Statistics 1993 1994 IInnddiiccaattoorr 11999911 11999922 11999933 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Prices and trading volume (averages of daily figures) Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 206.35 229.00 249.71 254.86 257.53 255.93 257.73 262.11 261.97 257.32 247.97 249.56 2 Industrial 258.16 284.26 300.10 300.92 306.61 310.84 313.22 320.92 322.41 318.08 304.48 307.58 3 Transportation 173.97 201.02 242.68 247.74 254.04 262.96 268.11 278.29 276.67 265.68 250.43 244.75 4 Utility 92.64 99.48 114.55 122.32 120.49 115.08 114.97 112.67 116.22 107.72 105.04 102.89 5 Finance 150.84 179.29 216.55 229.35 228.18 214.08 216.00 218.71 217.12 211.02 208.12 211.30 6 Standard & Poor's Corporation (1941-43 = 10)' 376.20 415.75 451.63 459.24 463.90 462.89 465.95 472.99 471.58 463.81 447.23 450.90 7 American Stock Exchange (Aug. 31, 1973 = 50? 360.32 391.28 438.77 454.91 472.73 472.41 465.95 481.14 476.25 465.72 437.01 437.54 Volume of trading (thousands of shares) 8 New York Stock Exchange 179,411 202,558 263,374 261,770 280,503 277,886 259,457 313,223 307,269 311,0% 301,242 269,812 9 American Stock Exchange 12,486 14,171 n.a. 18,889 21,279 18,436 17,461 19,211 19,630 19,481 15,805 15,727 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers 36,660 43,990 60,310 53,700 56,690 59,760 60,310 61,250 62,020 61,960 60,700 59,870 Free credit balances at brokers4 11 Margin accounts 8,290 8,970 12,360 10,030 10,270 10,940 12,360 12,125 12,890 13,185 13,175 12,715 12 Cash accounts 19,255 22,510 27,715 23,170 22,450 23,560 27,715 26,020 25,665 26,190 24,800 23,265 Margin requirements (percent of market value and effective date)6 Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 13 Margin stocks 70 80 65 55 65 50 14 Convertible bonds 50 60 50 50 50 50 15 Short sales 70 80 65 55 65 50 1. Effective July 1976, includes a new financial group, banks and insurance on securities other than options are the difference between the market value (100 companies. With this change the index includes 400 industrial stocks (formerly percent) and the maximum loan value of collateral as prescribed by the Board. 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 Regulation T was adopted effective Oct. 15, 1934; Regulation U, effective May 1, financial. 1936; Regulation G, effective Mar. 11, 1968; and Regulation X, effective Nov. 1, 2. On July 5,1983, the American Stock Exchange rebased its index, effectively 1971. cutting previous readings in half. On Jan. 1, 1977, the Board of Governors for the first time established in 3. Since July 1983, under the revised Regulation T, margin credit at broker- Regulation T the initial margin required for writing options on securities, setting dealers has included credit extended against stocks, convertible bonds, stocks it at 30 percent of the current market value of the stock underlying the option. On acquired through the exercise of subscription rights, corporate bonds, and Sept. 30, 1985, the Board changed the required initial margin, allowing it to be the government securities. Separate reporting of data for margin stocks, convertible same as the option maintenance margin required by the appropriate exchange or bonds, and subscription issues was discontinued in April 1984. self-regulatory organization; such maintenance margin rules must be approved by 4. Free credit balances are amounts in accounts with no unfulfilled commit- the Securities and Exchange Commission. Effective Jan. 31, 1986, the SEC ments to brokers and are subject to withdrawal by customers on demand. approved new maintenance margin rules, permitting margins to be the price of the 5. New series since June 1984. option plus 15 percent of the market value of the stock underlying the option. 6. These requirements, stated in regulations adopted by the Board of Gover- Effective June 8, 1988, margins were set to be the price of the option plus 20 nors pursuant to the Securities Exchange Act of 1934, limit the amount of credit percent of the market value of the stock underlying the option (or 15 percent in the that can be used to purchase and carry "margin securities" (as defined in the case of stock-index options). regulations) when such credit is collateralized by securities. Margin requirements Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Financial Statistics • August 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 Dec. Jan. Feb. Mar. Apr. May U.S. budget1 1 Receipts, total 1,054,272 1,090,453 1,153,226 125,408 122,966 72,874 93,108 141,326 83,546 2 On-budget 760,388 788,027 841,292 99,714 94,396 46,879 64,612 104,311 55,367 3 Off-budget 293,885 302,426 311,934 25,694 28,570 25,995 28,496 37,015 28,179 4 Outlays, total 1,323,793 1,380,856 l,408,484r 133,660 107,718 114,440 125,423 123,872 115,600 5 On-budget 1,082,106 1,128,518 l,141,897r 121,977 83,527 88,523 100,260 100,625 89,729 6 Off-budget 241,687 252,339 266,587 11,682 24,191 25,918 25,163 23,247 25,871 7 Surplus or deficit (-), total -269,521 -290,403 -255,258r -8,252 15,248 -41,566 -32,315 17,454 -32,054 8 On-budget -321,719 -340,490 —300,605r -22,263 10,869 -41,644 -35,648 3,686 -34,362 9 Off-budget 52,198 50,087 45,347 14,012 4,379 77 3,333 13,768 2,308 Source of financing (total) 10 Borrowing from the public 276,802 310,918 248,619 13,995 -6,933 31,633 26,511 -21,801 27,649 11 Operating cash (decrease, or increase (-)) ... -1,329 -17,305 6,283 -17,413 -8,089 19,666 -6,461 -4,124 21,537 12 Other^ -5,952 -3,210 356r 11,670 -226 -9,733 12,265 8,471 -17,132 MEMO 13 Treasury operating balance (level, end of period) 41,484 58,789 52,506 49,723 57,812 38,146 44,607 48,731 27,194 14 Federal Reserve Banks 7,928 24,586 17,289 14,809 21,541 4,886 6,181 7,965 5,675 15 Tax and loan accounts 33,556 34,203 35,217 34,914 36,271 33,259 38,426 40,766 21,519 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 Source or type 1992 1993 1994 1992 19931 HI H2 HI H2 Mar. Apr. RECEIPTS 1 All sources 1,090,453 1,153,226 560,318 540,484 593,212 582,054 93,108 141,326 2 Individual income taxes, net 475,964 509,680 236,576 246,938 255,556 262,073 29,917 60,038 4 6 3 5 P N W R r e o e i f n t s h u w i h n d i e e d t l n s h d t h i e a l l d E lection Campaign Fund . 4 1 8 0 4 1 8 9 , , , 7 3 3 6 4 5 3 0 2 2 0 4 1 7 3 5 5 0 4 , , , 5 2 9 4 1 8 2 6 7 2 8 1 1 7 1 9 3 0 8 , , , 3 9 8 9 0 6 2 5 8 8 0 2 3 1 7 9 5 , , , 9 5 2 4 8 8 1 2 4 8 0 2 1 6 0 1 7 9 3 , , , 4 5 5 6 0 2 3 8 6 5 5 r r 22 41 8 8 , , , 7 1 4 6 1 2 5 4 9 2 4 1 4 2 7 , , , 4 8 3 3 0 3 1 4 5 6 4 4 3 2 7 2 4 , , , 2 9 1 0 7 6 1 0 1 9 7 8 7 Co G R rp e ro o fu s ra s n t d i r o s e n c e i i n p c ts o me taxes 1 1 1 7 7 , , 6 95 8 1 0 1 1 3 4 1 , , 0 5 2 4 7 8 6 9 1 , , 4 6 0 82 3 5 7 8 , , 2 0 1 2 9 2 6 7 9 , , 1 04 9 4 8 6 6 8 , , 5 2 1 6 4 6 1 1 7 , , 6 2 6 3 0 4 21 1 , , 9 4 9 0 4 8 9 Socia n l e t i nsurance taxes and contributions, 413,689 428,300 224,569 192,599 227,177 206,174 36,957 50,323 10 Emp c lo o y n m tri e b n u t ti t o a n x s e 2 s and 385,491 396,939 208,110 180,758 208,776 192,749 35,976 47,348 1 1 1 1 2 3 O U t n S h e e e m l r f p - n c e l o e o m t n y p t r m r e l i o c e b y e n u m i t t p i i e o t n s n n 4 s t s u 3 t r a a x n e c s e and 2 2 4 3 4 , , , 4 4 7 2 1 8 1 0 8 2 2 6 0 4 , , , 5 6 8 5 0 0 6 4 5 2 1 0 2 4 , , , 4 3 0 3 8 7 4 9 0 3 9 2 , , , 3 9 4 9 8 4 7 8 5 1 1 2 6 6 , , , 3 0 2 2 7 7 6 4 0 1 4 2 1 , , , 3 4 0 3 1 1 5 7 0 1, 5 4 6 2 3 5 2 0 9 1 2 3 , , 6 7 3 0 5 7 5 4 0 14 Excise taxes 45,569 48,057 22,389 23,456 23,398 25,994 5,285 4,050 15 Customs deposits 17,359 18,802 8,146 9,497 8,860 10,215 1,745 1,479 16 Estate and gift taxes 11,143 12,577 5,701 5,733 6,494 6,617 1,211 2,378 17 Miscellaneous receipts 26,459 18,273 10,658 11,458 9,879 9,227 2,418 2,472 OUTLAYS 18 All types l,380,856r 1,408,484 704,266 723,527 673,915r 728,200r 125,423 123,872 19 National defense 298,350 291,086 147,065 155,231 140,535 146,177 24,476 24,501 2 2 2 2 2 3 1 2 4 0 A N G I E n n g a e te n t e r u i r r e c n r g r u a a a y l l l t t i u r o s e r c n e s i a o e l u n a r c c f e f e , a s s i r p a s n a c d e e , n a v n i d r o t n e m ch e n n o t logy . 2 1 1 1 4 0 5 6 6 , , , , , 0 5 2 4 1 2 0 0 0 0 5 5 9 7 0 ' 2 2 1 1 4 0 0 6 7 , , , , , 3 2 4 0 8 1 3 4 3 2 9 9 3 0 6 8 7 8 7 1 , , , , , 9 5 5 5 4 5 9 2 4 4 1 4 6 0 2 1 9 8 3 8 1 , , , , , 8 5 9 1 4 5 2 1 0 6 2 1 6 9 7 1 6 7 2 8 1 , , , , , 4 5 5 8 9 6 9 6 7 % 2 2 5 2 1 1 7 8 1 0 1 , , , , , 3 9 6 5 0 3 0 4 3 7 5 4 1 4 7 1 1 1 , , , 6 5 6 6 4 1 3 8 3 % 0 1 5 9 1 1 1 1 , , , , 6 5 3 4 2 5 4 6 3 1 4 1 3 8 6 25 Commerce and housing credit 10,083r -22,725 15,615 -7,697 -14,537r -1,724 -1,260 -702 26 Transportation 33,333 35,004 15,651 18,425 16,076r 20,375 2,845 2,620 27 Community and regional development .. 6,838 9,051 3,903 4,464 4,929 5,606 1,276 938 28 Education, training, employment, and social services 45,248r 50,012 23,767 21,241 24,106r 25,515 2,285 3,694 29 Health 89,497 99,415 44,164 47,232 49,882 52,631 10,014 8,410 3 3 0 1 S In o c c o ia m l e s e s c e u c r u i r ty it y a nd Medicare 4 1 0 9 6 6 , , 5 9 6 5 9 8 r 4 2 3 0 5 7 , , 1 2 3 5 7 7 2 1 0 0 5 4 , , 5 5 0 3 0 7 2 9 3 8 2 , , 3 1 8 0 2 9 1 1 9 0 5 7 , , 9 8 3 6 3 3 r 2 1 2 0 3 3 , , 7 1 3 6 5 3 4 2 0 0 , , 3 54 5 9 0 3 2 7 0 , , 8 9 7 5 2 7 3 3 2 3 A V d et m er in an is s t r b a e ti n o e n f i o ts f a ju n s d t i s c e e r vices 3 1 4 4 , , 1 4 3 2 8 6 r 3 1 5 4 , , 7 9 2 5 0 5 1 7 5 , , 4 5 3 9 5 7 1 7 8 , , 2 5 3 6 8 1 1 7 6 , , 4 38 8 5 2 r 1 7 9 , , 4 8 4 4 8 8 2 1 , , 7 7 9 6 3 0 3 1 , , 9 2 3 3 0 0 34 General government 13,009 5,050 8,223 5,205 6,565 779 -148 3 3 6 5 U N n et d i i s n t t r e ib re u s t t e 6 d offsetting receipts 1 ' - 1 3 9 9 9 ,2 ,4 8 2 0 1 r - 1 3 9 7 8 ,3 ,8 8 1 6 1 - 1 1 0 8 0 , , 2 1 2 6 9 1 -2 9 0 8 , , 6 6 2 9 8 2 -1 9 7 9 , , 0 6 3 3 5 5 -2 9 0 9 , , 4 % 07 3 - 1 2 6 ,9 ,5 9 9 9 4 - 1 2 7 ,7 ,0 2 8 1 0 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. Fjscal 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, U.S. governthe Budget have not been fully distributed across months. ment contributions for employee retirement, and certain asset sales. 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 1995. disability fund. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Nonfinancial Statistics • August 1994 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1992 1993 1994 IItteemm Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 1 Federal debt outstanding 3,897 4,001 4,083 4,1% 4,250 4,373 4,436 4,562 4,576 2 Public debt securities 3,881 3,985 4,065 4,177 4,231 4,352 4,412 4,536 A 3 Held by public 2,918 2,977 3,048 3,129 3,188 3,252 3,295 3,382 I 4 Held by agencies 964 1,008 1,016 1,048 1,043 1,100 1,117 1,154 1 5 Agency securities 16 16 18 19 20 21 25 27 n.a. 61 Held by public 16 16 18 19 20 21 25 27 •1 Held by agencies 0 0 0 0 0 0 0 0 8 Debt subject to statutory limit 3,784 3,891 3,973 4,086 4,140 4,256 4,316 4,446 4,491 9 Public debt securities 3,783 3,890 3,972 4,085 4,139 4,256 4,315 4,445 4,491 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 4,370 4,900 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 1994 TTyyppee aanndd hhoollddeerr 11999900 11999911 11999922 11999933 Q2 Q3 04 Ql 1 Total gross public debt 3,364.8 3,801.7 4,177.0 4,535.7 4,352.0 4,411.5 4,535.7 n.a. By type 2 Interest-bearing 3,362.0 3,798.9 4,173.9 4,532.3 4,349.0 4,408.6 4,532.3 4,572.6 3 Marketable 2,195.8 2,471.6 2,754.1 2,989.5 2,860.6 2,904.9 2,989.5 3,042.9 4 Bills 527.4 590.4 657.7 714.6 659.3 658.4 714.6 721.2 5 Notes 1,265.2 1,430.8 1,608.9 1,764.0 1,698.7 1,734.2 1,764.0 1,802.5 6 7 No B n o m n a d r s k etable1 1, 3 1 8 6 8 6 . . 2 2 1, 4 3 3 2 5 7 . . 5 2 1, 4 4 7 1 2 9 . . 5 8 1, 4 5 9 4 5 2 . . 9 9 1, 4 4 8 8 7 8 . . 6 4 1, 4 5 9 0 7 3 . . 4 7 1, 4 5 9 4 5 2 . . 9 9 1, 5 5 0 2 4 9 . . 2 7 8 State and local government series 160.8 159.7 153.5 149.5 152.8 149.5 149.5 145.5 9 Foreign issues 43.5 41.9 37.4 43.5 43.0 42.5 43.5 42.7 10 Government 43.5 41.9 37.4 43.5 43.0 42.5 43.5 42.7 11 Public .0 .0 .0 .0 .0 .0 .0 ,0 12 Savings bonds and notes 124.1 135.9 155.0 169.4 164.4 167.0 169.4 172.6 13 Government account series3 813.8 959.2 1,043.5 1,150.0 1,097.8 1,114.3 1,150.0 1.138.4 14 Non-interest-bearing 2.8 2.8 3.1 3.4 2.9 2.9 3.4 3.3 By holder 4 15 U.S. Treasury and other federal agencies and trust funds 828.3 968.7 1,047.8 1,153.5 1,099.8 1,116.7 1,153.5 16 Federal Reserve Banks 259.8 281.8 302.5 334.2 328.2 325.7 334.2 1/ Private investors 2,288.3 2,563.2 2,839.9 3,047.7 2,938.4 2,983.0 3,047.7 18 Commercial banks 171.5 233.4 294.0 316.0 306.5r 313.3r 316.0 19 Money market funds 45.4 80.0 79.4 80.5 76.2 75.2 80.5 20 Insurance companies 142.0 168.7 197.5 216.0 210.2r 215.5r 216.0 21 Other companies 108.9 150.8 192.5 213.0 206.1 215.6 213.0 n.a. 22 State and local treasuries 490.4 520.3 534.8 564.0 555533..99 555588..00 556644..00 Individuals 23 Savings bonds 126.2 138.1 157.3 171.9 166.5 169.1 171.9 24 Other securities 107.6 125.8 131.9 137.9 136.4 136.7 137.9 25 Foreign and international5 458.4 491.8 549.7 623.3 568.2 592.3 623.3 26 Other miscellaneous investors 637.7 651.3 702.4 725.0 714.3r 707.2r 725.0 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 1994 1994, week ending Item Feb. Mar Apr. Mar. 30 Apr. 6 Apr. 13 Apr. 20 Apr. 27 May 4 May 11 May 18 IMMEDIATE TRANSACTIONS2 By type of security U.S. Treasury securities 1 Bills 53,692 54,077 50,420 63,400 64,117 46,593 55,007 38,280 51,478 48,474 60,154 Coupon securities, by maturity 2 Less than 3.5 years 68,772 60,771 56,202 58,870 69,629 46,897 56,159 53,531 59,398 69,921 70,575 3 3.5 to 7.5 years 48,599 45,280 40,471 43,769 47,199 35,305 43,142 37,946 39,568 37,687 42,854 4 7.5 to 15 years 34,562r 31,297" 29,625 31,054 42,450 28,702 27,106 21,636 32,551 42,686 37,108 5 15 years or more 22,524 19,964 15,977 19,170 22,206 12,728 14,610 14,965 17,584 17,133 17,484 Federal agency securities Debt, by maturity 6 Less than 3.5 years 11,177 12,927 12,901 13,740 13,503 13,398 13,663 10,952 13,424 13,393 14,007 7 3.5 to 7.5 years 695 664 504 613 572 667 413 404 434 385 553 8 7.5 years or more 525 536 623 601 674 530 854 487 513 700 578 Mortgage-backed 9 Pass-throughs 23,264r 24,765 25,873 22,319 25,199 35,887 28,898 14,921 22,004 29,273 27,324 10 All others 3,807 3,409" 3,053 3,353" 3,502 3,577 3,041 2,399 2,507 3,258 2,425 By type of counterparty Primary dealers and brokers 11 U.S. Treasury securities 144,393 137,235 123,507 138,966 154,331 109,384 128,265 107,415 125,505 140,471 147,846 Federal agency securities 12 Debt 1,666 2,023 2,143 1,961 2,301 2,206 2,176 1,774 2,514 2,283 1,502 13 Mortgage-backed ll,377r 12,317" 13,076 12,896 12,735 17,002 14,977 8,402 10,880 12,039 13,400 Customers 14 U.S. Treasury securities 83,756r 74,155" 69,188 77,296 91,270 60,841 67,760 58,942 75,073 75,429 80,330 Federal agency securities 15 Debt 10,731 12,104 11,884 12,993 12,448 12,389 12,754 10,069 11,858 12,194 13,636 16 Mortgage-backed 15,693r 15,857" 15,849 12,776" 15,966 22,461 16,962 8,918 13,631 20,492 16,349 FUTURES AND FORWARD TRANSACTIONS4 By type of deliverable security U.S. Treasury securities 17 Bills 3,094 3,733" 3,904 2,865 7,797 3,246 3,701 1,899 3,281 3,341 3,315 Coupon securities, by maturity 18 Less than 3.5 years 3,197 3,399 2,535 2,265 3,288 1,747 2,336 2,720 3,034 3,701 3.315 19 3.5 to 7.5 years 2,932r 2,465" 1,941 1,927" 2,354 1,326 1,873 2,209 2,150 2,282 2,037 20 7.5 to 15 years 4,928r 5,013" 4,367 4,018 5,804 3,870 4,038 3,741 5,125 6,416 5.316 21 15 years or more 13,903 14,204" 12,689 12,808 16,078 10,396 13,279 11,295 13,653 14,074 13,297 Federal agency securities Debt, by maturity 22 Less than 3.5 years 237 181 105 269 85 90 211 30 100 64 17 23 3.5 to 7.5 years 211 133 126 36 99 255 178 6 31 50 65 24 7.5 years or more 201 80 35 49 37 6 33 70 19 58 39 Mortgage-backed 25 Pass-throughs 24,752r 25,161" 22,207 15,597 31,634 29,053 18,667 12,799 18,605 29,441 20,732 26 Others3 2,198 1,522 1,022 887 1,276 983 747 1,141 1,001 691 823 OPTIONS TRANSACTIONS5 By type of underlying security U.S. Treasury, coupon securities, by maturity 27 Less than 3.5 years 3,329 3,428 3,767 3,134 6,423 3,387 2,884 3,171 3,105 4,717 4,968 28 3.5 to 7.5 years 899 1,253 877 1,388 1,522 735 589 912 570 904 498 29 7.5 to 15 years 1,613 1,297 1,091 1,907 1,766 1,079 711 1,041 844 1,177 1,368 30 15 years or more 2,595r 2,133" 1,654 2,112" 1,964 1,549 1,570 1,682 1,440 2,069 2,732 Federal agency, mortgagebacked securities 31 Pass-throughs 952 801 1,390 514 308 559 394 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 DomesticN onfinancial Statistics • August 1994 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 1994 1994, week ending IItteemm Feb. Mar. Apr. Mar. 30 Apr. 6 Apr. 13 Apr. 20 Apr. 27 May 4 May 11 May 18 Positions2 NET IMMEDIATE POSITIONS3 By type of security U.S. Treasury securities 1 Bills 3,681 4,792 12,752 1,838 11,375 14,931 9,561 14,514 13,755 12,975 4,177 Coupon securities, by maturity 2 Less than 3.5 years -9,169 -18,921r -21,399 -19,779 -22,696 -28,330 -20,993 -15,786 -16,680 -14,038 -16,886 3 3.5 to 7.5 years -24,417 -25,482r -26,208 -25,156 -24,087 -25,521 -28,030 -28,722 -21,939 -23,055 -23,503 4 7.5 to 15 years -2,424 -4,212r -7,653 -5,893 -7,414 -7,110 -7,028 -7,999 -10,052 -6,765 -10,543 5 15 years or more 5,994 2,016r -3,026 -1,151 -889 -2,258 -3,008 -4,496 -5,701 -6,305 -7,376 Federal agency securities Debt, by maturity 6 Less than 3.5 years 12,031 8,925 8,667 6,919 8,500 7,982 7,924 9,589 10,178 7,544 7,991 7 3.5 to 7.5 years 3,226 4,707 5,728 5,009 5,542 5,834 5,792 5,785 5,572 5,292 5,575 8 7.5 years or more 3,798 4,174 5,276 3,695 4,775 5,211 5,133 5,860 5,404 4,574 4,850 Mortgage-backed 9 Pass-throughs 51,071 51,257 44,711 31,442 37,717 55,359 46,279 43,266 33,569 43,369 36,402 10 All others 28,837 32,642r 33,965 37,3% 35,632 33,098 33,640 31,996 38,006 35,419 32,901 Other money market instruments 11 Certificates of deposit 3,925 2,431 2,728 1,840 1,702 2,240 2,206 4,160 3,791 2,765 3,240 12 Commercial paper 7,619 5,489 5,398 4,799 4,839 4,409 5,774 6,040 6,451 4,895 5,322 13 Bankers acceptances 777 553 589 475 383 498 484 969 574 411 568 FUTURES AND FORWARD POSITIONS5 By type of deliverable security U.S. Treasury securities 14 Bills -1,382 2,030r 2,133 2,384 1,058 3,029 3,092 1,711 942 -870 -1,975 Coupon securities, by maturity 15 Less than 3.5 years -175 22,,773399rr 1,579 2,863 2,116 868 1,995 1,857 542 -397 -74 16 3.5 to 7.5 years 2,608r 3,115r 2,536 3,879 2,458 2,230 1,711 3,694 2,624 2,990 2,790 17 7.5 to 15 years 7,942r 10,7 lO1 7,992 13,719 10,982 8,847 7,178 5,349 8,087 6,152 4,449 18 15 years or more -6,634r -10,009"^ -7,551 -7,813 -8,809 -7,581 -8,186 -6,372 -6,231 -6,168 -4,590 Federal agency securities Debt, by maturity 19 Less than 3.5 years 3 112266rr 79 161 206 117 38 16 -18 -7 23 20 3.5 to 7.5 years 123 127 91 -50 138 176 91 6 -2 -25 -18 21 7.5 years or more 438 -157r -62 -56 -173 -144 24 -5 14 43 33 Mortgage-backed 22 Pass-throughs -37,532r -39,342r -32,719 -20,327 -25,255 -43,303 -34,266 -31,569 -22,020 -27,287 -21,9% 23 All others^ 8,687 9,561r 7,039 6,053 6,314 8,012 7,984 8,690 162 1,416 1,055 24 Certificates of deposit -241,652 -186,475 -154,901 -164,886 -148,732 -159,956 -135,899 -173,125 -157,263 -139,404 -176,418 Financing® Reverse repurchase agreements 25 Overnight and continuing 226688,,884422rr 229922,,443355rr 275,469 273,517 292,619 295,517 289,758 229,746 267,732 287,508 305,958 26 Term 409,814r 398,126r 396,537 406,468 361,633 400,928 402,640 425,162 375,066 389,128 358,758 Repurchase agreements 27 Overnight and continuing 483,847 479,210 447,713 438,311 467,253 483,478 472,957 367,928 452,442 466,892 503,904 28 Term 382,705 375,510 376,304 390,186 322,254 363,039 375,200 449,462 347,232 368,673 322,076 Securities borrowed 29 Overnight and continuing 152,813r 155,484r 152,707 152,127 151,914 156,126 153,458 147,766 156,0% 160,022 162,316 30 Term 45,660r 39,830r 35,824 38,661 35,702 35,907 35,552 38,648 29,923 30,729 29,800 Securities loaned 31 Overnight and continuing 5,444 4,579 3,591 4,316 3,914 3,617 3,735 3,370 3,061 3,366 3,803 32 Term 294 348 306 346 201 302 132 546 373 322 415 Collateralized loans 33 Overnight and continuing 16,243 20,074 24,153 24,751 23,876 26,035 25,339 22,431 21,564 22,206 21,513 MEMO: Matched book7 Reverse repurchase agreements 34 Overnight and continuing 182,784 200,306 197,715 199,853 202,131 204,543 213,257 171,759 197,248 206,664 226,047 35 Term 359,530 348,058 340,574 350,977 309,999 349,530 348,351 359,966 317,435 335,092 312,477 Repurchase agreements 36 Overnight and continuing 240,887 244,375 232,199 234,106 241,528 255,676 253,576 181,833 226,400 239,950 257,419 37 Term 290,676 286,309 286,839 302,695 243,751 281,812 284,981 337,164 271,650 293,001 254,480 1. Data for positions and financing are obtained from reports submitted to the delivery. Forward contracts for U.S. Treasury securities and federal agency debt Federal Reserve Bank of New York by the U.S. government securities dealers on securities are included when the time to delivery is more than five business days. its published list of primary dealers. Weekly figures are close-of-business Wednes- Forward contracts for mortgage-backed agency securities are included when the day data; monthly figures are averages of weekly data. time to delivery is more than thirty business days. 2. Securities positions are reported at market value. 6. Overnight financing refers to agreements made on one business day that 3. Net immediate positions include securities purchased or sold (other than mature on the next business day; continuing contracts are agreements that remain mortgage-backed agency securities) that have been delivered or are scheduled to in effect for more than one business day but have no specific maturity and can be be delivered in five business days or less and "when-issued" securities that settle terminated without advance notice by either party; term agreements have a fixed on the issue date of offering. Net immediate positions of mortgage-backed agency maturity of more than one business day . securities include securities purchased or sold that have been delivered or are 7. Matched-book data reflect financial intermediation activity in which the scheduled to be delivered in thirty business days or less. borrowing and lending transactions are matched. Matched-book data are included 4. Includes such securities as collateralized mortgage obligations (CMOs), real in the financing breakdowns given above. The reverse repurchase and repurchase estate mortgage investment conduits (REMICs), interest-only securities (IOs), numbers are not always equal because of the "matching" of securities of different and principal-only securities (POs). values or different types of collateralization. 5. Futures positions reflect standardized agreements arranged on an exchange. NOTE. Data for futures and forward commercial paper and bankers acceptances and Forward positions reflect agreements made in the over-the-counter market that for term financing of collateralized loans are no longer available because of insufficient Digitized for FRspAecSifyE dRel ayed delivery. All futures positions are included regardless of time to activity. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A33 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1993 1994 AAggeennccyy 11998899 11999900 11999911 11999922 Nov. Dec. Jan. Feb. Mar. 1 Federal and federally sponsored agencies 411,805 434,668 442,772 483,970 568,021 570,711 581,886 592,751 604,421 2 Federal agencies 35,664 42,159 41,035 41,829 44,055 45,193 44,988 44,753 44,291 3 Defense Department1 7 7 7 7 7 6 6 6 6 4 Export-Import Bank2,3 10,985 11,376 9,809 7,208 5,801 5,315 5,315 5,315 4,853 5 Federal Housing Administration 328 393 397 374 255 255 80 99 114 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 9,732 9,732 9,732 9,732 9,732 8 Tennessee Valley Authority 17,899 23,435 22,401 23,580 28,260 29,885 29,855 29,601 29,586 9 United States Railway Association6 0 0 0 0 0 0 0 0 0 10 Federally sponsored agencies7 375,428 392,509 401,737 442,141 523,966 525,518 536,898 547,998 560,130 11 Federal Home Loan Banks 136,108 117,895 107,543 114,733 139,364 141,577 139,241 137,862 147,309 12 Federal Home Loan Mortgage Corporation 26,148 30,941 30,262 29,631 56,809 49,993 61,245 70,482 62,908 13 Federal National Mortgage Association 116,064 123,403 133,937 166,300 195,165 201,112 203,013 206,493 216,430 14 Farm Credit Banks" 54,864 53,590 52,199 51,910 51,861 53,123 52,621 52,839 52,433 15 Student Loan Marketing Association 28,705 34,194 38,319 39,650 40,840 39,784 40,861 40,407 41,120 16 Financing Corporation10 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 17 Farm Credit Financial Assistance Corporation1 847 1,261 1,261 1,261 1,261 1,261 1,261 1,261 1,261 18 Resolution Funding Corporation12 4,522 23,055 29,9% 29,9% 29,9% 29,9% 29,9% 29,9% 29,9% MEMO 19 Federal Financing Bank debt13 134,873 179,083 185,576 154,994 126,490 128,187 125,182 123,304 120,103 Lending to federal and federally sponsored agencies 20 Export-Import Bank3 10,979 11,370 9,803 7,202 5,795 5,309 55,,330099 5,309 4,847 21 Postal Service6 6,195 6,698 8,201 10,440 9,732 9,732 9,732 9,732 9,732 22 Student Loan Marketing Association 4,880 4,850 4,820 4,790 4,760 4,760 2,760 1,760 0 23 Tennessee Valley Authority 16,519 14,055 10,725 6,975 6,325 6,325 6,075 6,075 6,075 24 United States Railway Association6 0 0 0 0 0 0 0 0 0 Other lending1* 25 Farmers Home Administration 53,311 52,324 48,534 42,979 38,619 38,619 38,619 38,619 38,209 26 Rural Electrification Administration 19,265 18,890 18,562 18,172 17,561 17,578 17,511 17,512 17,360 27 Other 23,724 70,896 84,931 64,436 43,698 45,864 45,176 43,667 43,880 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 Nonfinancial Statistics • August 1994 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1993 1994 TTyyppee ooff iissssuuee oorr iissssuueerr,, 11999911 11999922 11999933 oorr uussee Oct. Nov. Dec. Jan. Feb. Mar. Apr. May 1 All issues, new and refunding1 154,402 215,191 279,945 21,900 18,094 24,520 16,560 14,698 15,461 10,129 12,388 By type of issue 2 General obligation 55,100 78,611 90,599 7,495 6,422 6,542 4,622 4,365 7,371 3,469 4,029 3 Revenue 99,302 136,580 189,346 14,405 11,672 17,978 11,000 8,553 8,090 6,660 8,359 By type of issuer 4 State 24,939 25,295 28,285 3,216 885 1,265 1,235 921 3,302 1,013 1,158 5 Special district or statutory authority2 80,614 129,686 164,169 9,875 10,992 16,485 10,672 10,263 6,145 5,235 8,085 6 Municipality, county, or township 48,849 60,210 84,972 8,418 4,528 6,770 4,653 3,514 6,014 3,881 3,145 7 Issues for new capital 116,953 120,272 91,434 7,261 6,734 9,543 5,558r 8,774r 10,114 8,147 9,125 By use of proceeds 8 Education 21,121 22,071 17,098 547 1,416 1,227 1,573 2,292 1,859 2,102 1,933 9 Transportation 13,395 17,334 9,571 304 979 429 293 1,223 401 1,453 1,037 10 Utilities and conservation 21,039 20,058 11,802 593 687 1,454 480 243 540 707 423 11 Social welfare 25,648 21,7% n.a. 1,764 n.a. 2,171 825 1,660 1,670 1,502 2,099 12 Industrial aid 8,376 5,424 6,381 518 673 1,272 392 1,316 470 601 657 13 Other purposes 30,275 33,589 29,519 3,737 1,820 2,990 5,558 8,774 5,174 1,782 2,976 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 1994 TTyyppee ooff iissssuuee,, ooffffeerriinngg,, 11999911 11999922 11999933 oorr iissssuueerr Sept. Oct. Nov. Dec. Jan. Feb.* Mar. Apr. 1 All issues1 465,246 559,827r 766,6% 64,495' 56,143 54,813r 44,394r 57,239* 47,135 52,100 31,146 2 Bonds2 389,822 471,502r 642,543 53,837 45,608 43,214 33,863r 51,512* 39,433 43,001 25,800 By type of offering 3 Public, domestic 286,930 378,058r 487,924r 49,132 42,645 39,525 32,282* 46,068* 32,116 40,427 23,000 4 Private placement, domestic 74,930 65,853 116,240 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5 Sold abroad 27,962 27,591 38,379* 4,705 2,963 3,689 1,582 5,444r 7,317 2,574 2,800 By industry group 6 Manufacturing 86,628 82,058 88,002r 4,036 3,273 3,334 3,068 4,635* 3,511 2,416 2,010 7 Commercial and miscellaneous 36,666 43,lllr 60,443r 2,378 6,306 3,078 2,525 2,869 2,362 3,419 2,073 8 Transportation 13,598 9,979 10,756r 288 1,416 648 895 693 100 870 540 9 Public utility 23,944 48,055 56,272* 5,163 2,585 1,763 2,336 2,566 1,868 1,489 1,510 10 Communication 9,431 15,394 31,950* 2,237 2,991 1,015 2,001 2,495 2,212 2,090 1,798 11 Real estate and financial 219,555 272,904r 395,121r 39,735 29,039 33,376 23,039* 38,254* 29,380 32,717 17,868 12 Stocks2 75,424 88,325 124,153 10,658r 10,535 11,599* 10,531 5,727* 7,702 9,099 5,346 By type of offering 13 Public preferred 17,085 21,339 21,677 1,358 2,549 1,385 650 1,592 1,318 1,969 2,248 14 Common 48,230 57,118 90,559 9,336 7,987 10,209 9,881 4,135* 6,383 6,564 3,099 15 Private placement 10,109 9,867 11,917 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 22,271 2,274 2,121 2,169 2,267 1,564 1,807 2,891 2,669 17 Commercial and miscellaneous 19,418 20,231 25,761 2,242 1,842 3,061 1,970 1,516 1,682 1,547 785 18 Transportation 2,439 2,595 2,237 153 128 221 162 78 703 980 106 19 Public utility 3,474 6,532 7,050 908 1,103 371 129 293 203 480 75 20 Communication 475 2,366 3,439 248 18 1,074 1,603 n.a. 120 0 0 21 Real estate and financial 25,507 33,879 49,889 4,666 5,323 4,486 4,381 2,397* 3,800 4,360 1,715 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 1994 IItteemm 11999922 11999933 Sept. Oct. Nov. Dec. Jan. Feb.r Mar. Apr. 1 Sales of own shares2 647,055 69,938 74,490 72,865 89,775 98,679 78,032 87,381 71,173 2 Redemptions of own shares 447,140 1 49,270 47,168 51,306 62,764 61,829 56,235 73,395 61,941 3 Net sales3 199,915 n.a. 20,667 27,322 21,559 27,011 36,849 21,797 13,986 9,233 4 Assets4 1,056,310 1 1,370,654 1,411,628 1,416,841 1,510,047 1,572,907 1,561,705 1,500,745 1,510,599 5 Cash5 73,999 1 96,848 104,301 103,352 100,209 110,022 113,975 112,399 118,535 6 Other 982,311 • 1,273,807 1,307,327 1,303,489 1,409,838 1,462,879 1,447,730 1,388,347 1,392,063 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 capita] 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 1994 AAccccoouunntt 11999911 11999922 11999933RR Q2 Q3 Q4 QL Q2 Q3 Q4R QL 1 Profits with inventory valuation and capital consumption adjustment 369.5 407.2 466.6 411.7 367.5 439.5 432.1 458.1 468.5 507.9 474.4 2 Profits before taxes 362.3 395.4 449.4 409.5 357.9 409.9 419.8 445.6 443.8 488.4 470.3 3 Profits tax liability 129.8 146.3 174.0 153.0 130.1 155.0 160.9 173.3 169.5 192.5 185.3 4 Profits after taxes 232.5 249.1 275.4 256.5 227.8 254.9 258.9 272.3 274.3 295.9 284.9 5 Dividends 137.4 150.5 169.0 146.1 155.2 162.9 167.5 168.5 169.7 170.3 171.8 6 Undistributed profits 95.2 98.6 106.4 110.4 72.7 92.0 91.4 103.9 104.6 125.6 113.2 7 Inventory valuation 4.9 -5.3 -7.1 -13.7 -7.8 4.9 -12.7 -12.2 1.0 -4.3 -16.0 8 Capital consumption adjustment 2.2 17.1 24.3 16.0 17.4 24.7 25.1 24.7 23.8 23.9 20.1 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 Q4 Ql Q2 Q3 Q4 Ql Q21 Q31 1 Total nonfarm business 546.60 585.64 634.02 559.24 564.13 579.79 594.11 604.51 619.11 637.14 639.71 Manufacturing 2 Durable goods industries 73.32 81.33 90.12 73.30 79.11 80.88 81.99 83.35 86.98 92.42 90.86 3 Nondurable goods industries 100.69 97.84 101.49 103.56 95.94 96.21 100.18 99.04 99.06 102.54 101.21 Nonmanufacturing 4 Mining 8.88 10.03 10.75 8.47 8.89 9.10 11.14 10.98 11.30 10.34 10.79 Transportation 5 Railroad 6.67 6.23 6.79 7.04 6.00 6.00 5.91 7.01 6.69 6.07 7.10 6 Air 8.93 6.43 4.07 7.60 7.30 6.54 6.92 4.95 4.27 4.53 4.02 7 Other 7.04 9.22 10.50 6.97 9.17 9.04 8.88 9.78 10.94 9.50 11.04 Public utilities 8 Electric 48.22 52.26 52.62 49.57 49.92 50.51 52.74 55.88 48.63 53.30 54.85 9 Gas and other 23.99 23.46 25.03 24.50 23.59 24.04 22.88 23.33 24.26 24.01 25.19 10 Commercial and other2 268.84 298.83 332.65 278.24 284.21 297.46 303.47 310.20 326.98 334.44 334.65 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 Nonfinancial Statistics • August 1994 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1 Billions of dollars, end of period; not seasonally adjusted 1992 1993 AAccccoouunntt 11999911 11999922 11999933 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ASSETS 1 Accounts receivable, gross2 480.6 482.1 476.1 476.7 473.9 482.1 469.6 469.3 467.6 476.1 2 Consumer 121.9 117.1 117.5 116.7 116.7 117.1 111.9 111.3 112.6 117.5 3 Business 292.9 296.5 290.1 293.2 288.5 296.5 289.6 290.7 287.8 290.1 4 Real estate 65.8 68.4 68.6 66.8 68.8 68.4 68.1 67.2 67.2 68.6 5 LESS; Reserves for unearned income 55.1 50.8 49.0r 51.2 50.8 50.8 47.4 47.5 47.9 49.0r 6 Reserves for losses 12.9 15.8 11.0* 12.3 12.0 15.8 15.5 13.8 11.1 ll.tF 7 Accounts receivable, net 412.6 415.5 416.1r 413.2 411.1 415.5 406.6 408.0 408.6 416. r 8 All other 149.0 150.6 177.3r 139.4 146.5 150.6 155.0 156.6 169.7 177.3r 9 Total assets 561.6 566.1 593.4r 552.6 557.6 566.1 561.6 564.6 578.3 593.4r LIABILITIES AND CAPITAL 10 Bank loans 42.3 37.6 25.3 37.8 38.1 37.6 34.1 29.5 25.8 25.3 11 Commercial paper 159.5 156.4 159.2 147.7 153.2 156.4 149.8 144.5 149.9 159.2 Debt 12 Other short-term n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 13 Long-term n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 14 Owed to parent 34.5 37.8 46.1 34.8 34.9 37.8 41.9 46.4 47.9 46.1 15 Not elsewhere classified 191.3 195.3 199.9 191.9 191.4 195.3 195.1 195.8 198.1 199.9 16 All other liabilities 69.0 71.2 91.1 73.4 73.7 71.2 74.2 81.3 87.6 91.1 17 Capital, surplus, and undivided profits 64.8 67.8 71.7 67.1 68.1 67.8 66.6 67.1 68.9 71.7 18 Total liabilities and capital 561.2 566.1 593.4 552.7 559.4 566.1 561.7 564.6 578.3 593.4 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 1994 TTyyppee ooff ccrreeddiitt 11999911 11999922 11999933 Nov. Dec. Jan. Feb. Mar. Apr. Seasonally adjusted 11 TToottaall 519,910 534,845 532,828 532,687 532,828 535,567 539,513' 546,756 549,632 22 CCoonnssuummeerr 154,822 157,707 159,791 157,438 159,791 159,313 160,371r 160,831 161,408 33 RReeaall eessttaattee22 65,383 68,011 68,174 68,540 68,174 69,441 69,543r 69,604 70,566 44 BBuussiinneessss 299,705 309,127 304,863 306,709 304,863 306,813 309,599r 316,321 317,658 Not seasonally adjusted 5 Total 523,192 538,158 536,124 532,354 536,124 535,138 537,278r 546,925 6 Consumer 155,713 158,631 160,734 157,848 160,734 159,186 158,543r 159,448 7 Motor vehicles 63,415 57,605 55,274 55,337 55,274 56,509 56,963 57,797 8 Other consumer 58,522 59,522 62,189 59,463 62,189 61,427 61,132r 62,264 9 Securitized motor vehicles 23,166 29,775 34,659 34,301 34,659 32,924 32,280 31,439 10 Securitized other consumer 10,610 11,729 8,611 8,747 8,611 8,325 8,168 7,948 11 Real estate2 65,760 68,410 68,577 68,718 68,577 69,385 69,446r 69,005 12 Business 301,719 311,118 306,814 305,788 306,814 306,568 309,289* 318,472 13 Motor vehicles 90,613 87,456 90,172 88,510 90,172 88,377 90,668r 95,719 14 Retail5.... 22,957 19,303 16,024 16,723 16,024 16,965 17,514r 19,162 15 Wholesale6 31,216 29,962 31,067 29,260 31,067 27,975 29,435 31,070 16 Leasing 36,440 38,191 43,081 42,526 43,081 43,437 43,720 45,487 17 Equipment 141,399 151,607 148,858 146,703 148,858 147,915 147,425 149,721 18 Retail...., 30,962 32,212 33,266 32,360 33,266 33,109 33,033 33,861 19 Wholesale6 9,671 8,669 8,007 7,802 8,007 7,996 7,972 8,281 20 Leasing 100,766 110,726 107,585 106,541 107,585 106,810 106,420 107,579 21 Other business 60,900 57,464 51,054 53,886 51,054 50,821 51,489* 53,596 22 Securitized business assets 8,807 14,590 16,730 16,690 16,730 19,456 19,707 19,436 23 Retail 576 1,118 1,830 1,953 1,830 1,696 1,593 1,486 24 Wholesale 5,285 8,756 9,697 9,407 9,697 12,358 13,006 12,866 25 Leasing 2,946 4,716 5,203 5,330 5,203 5,402 5,108 5,084 1. Includes finance company subsidiaries of bank holding companies but not of 5. Passenger car fleets and commercial land vehicles for which licenses are retailers and banks. Data are before deductions for unearned income and losses. required. Data in this table also appear in the Board's G.20 (422) monthly statistical release. 6. Credit arising from transactions between manufacturers and dealers, that is, For ordering address, see inside front cover. floor plan financing. 2. Includes all loans secured by liens on any type of real estate, for example, 7. Includes loans on commercial accounts receivable, factored commercial first and junior mortgages and home equity loans. accounts, and receivable dealer capital; small loans used primarily for business or 3. Includes personal cash loans, mobile home loans, and loans to purchase other farm purposes; and wholesale and lease paper for mobile homes, campers, and types of consumer goods such as appliances, apparel, general merchandise, and travel trailers. recreation vehicles. Digitized for FR4A. OSuEtsRta nding balances of pools upon which securities have been issued; these balances are no longer carried on the balance sheets of the loan originator. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate A37 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 1993 1994 IItteemm 11999911 11999922 11999933 Nov. Dec. Jan. Feb. Mar. Apr. May Terms and yields in primary and secondary markets PRIMARY MARKETS Terms1 1 Purchase price (thousands of dollars) 155.0 158.1 163.1 174.4 167.9 168.1 157.9 167.8 166.1 171.6 2 Amount of loan (thousands of dollars) 114.0 118.1 123.0 134.0 128.7 127.9 124.1 131.0 127.6 132.2 3 Loan-to-price ratio (percent) 75.0 76.6 78.0 79.1 79.2 78.0 80.2 80.2 79.3 78.5 4 Maturity (years) 26.8 25.6 26.1 26.9 26.8 27.2 27.0 27.6 26.7 27.6 5 Fees and charges (percent of loan amount) 1.71 1.60 1.30 1.23 1.10 1.18 1.16 1.20 1.16 1.45 Yield (percent per year) 6 Contract rate1 9.02 7.98 7.02 6.61 6.74 6.77 6.67 6.81 7.13 77..2200 7 Effective rate1'3 9.30 8.25 7.24 6.80 6.92 6.95 6.85 6.99 7.31 7.43 8 Contract rate (HUD series)4 9.20 8.43 7.37 7.38 7.26 7.13 7.54 8.31 8.56 8.61 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (Section 203)5 9.25 8.46 7.46 7.51 7.52 7.05 7.59 8.57 88..6633 88..6633 10 GNMA securities6 8.59 7.71 6.65 6.61 6.58 6.45 6.72 7.40 7.93 8.05 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 122,837 142,833 172,791 185,463 190,861 194,441 1%,078 197,770 220011,,554422 220066,,114477 12 FHA/VA insured 21,702 22,168 22,876 23,334 23,857 23,7% 23,789 24,226 25,088 25,303 13 Conventional 101,135 120,664 149,914 162,129 167,004 170,645 172,289 173,544 176,454 180,844 Mortgage transactions (during period) 14 Purchases 37,202 75,905 92,037 8,979 12,123 7,919 5,427 5,820 66,,667777 77,,223388 Mortgage commitments (during period) 15 Issued 40,010 74,970 92,537 11,144 8,461 6,159 4,858 8,683 44,,778888 33,,880011 16 To sell8 7,608 10,493 5,097 0 209 664 525 136 90 281 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period f 17 Total 24,131 29,959 42,789 52,933 55,012 56,067 57,245 58,498 59,352 60,799 18 FHA/VA insured 484 408 327 324 321 319 318 315 309 304 19 Conventional 23,283 29,552 42,462 52,610 54,691 55,747 56,928 59,184 59,043 60,495 Mortgage transactions (during period) 20 Purchases 99,965 191,125 229,242 27,062 29,396 22,611 17,840 15,970 14,589 1100,,662299 21 Sales 92,478 179,208 208,723 24,028 26,607 21,253 16,719 14,486 14,175 10,228 Mortgage commitments (during period)9 22 Contracted 114,031 261,637 274,599 39,977 24,176 31,393 12,880 22,533 2222,,776655 99,,558866 1. Weighted averages based on sample surveys of mortgages originated by 6. Average net yields to investors on fully modified pass-through securities major institutional lender groups for purchase of newly built homes; compiled by backed by mortgages and guaranteed by the Government National Mortgage the Federal Housing Finance Board in cooperation with the Federal Deposit Association (GNMA), assuming prepayment in twelve years on pools of thirty- Insurance Corporation. year mortgages insured by the Federal Housing Administration or guaranteed by 2. Includes all fees, commissions, discounts, and "points" paid (by the the Department of Veterans Affairs. borrower or the seller) to obtain a loan. 7. Does not include standby commitments issued, but includes standby com- 3. Average effective interest rate on loans closed for purchase of newly built mitments converted. homes, assuming prepayment at the end of ten years. 8. Includes participation loans as well as whole loans. 4. Average contract rate on new commitments for conventional first mort- 9. Includes conventional and government-underwritten loans. The Federal gages; from U.S. Department of Housing and Urban Development (HUD). Based Home Loan Mortgage Corporation's mortgage commitments and mortgage transon transactions on the first day of the subsequent month. actions include activity under mortgage securities swap programs, whereas the 5. Average gross yield on thirty-year, minimum-downpayment first mort- corresponding data for FNMA exclude swap activity. gages insured by the Federal Housing Administration (FHA) for immediate delivery in the private secondary market. Based on transactions on first day of subsequent month. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Nonfinancial Statistics • August 1994 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1993 1994 TTyyppee ooff hhoollddeerr aanndd pprrooppeerrttyy 11999900 11999911 11999922 Ql Q2 Q3 Q4 Ql" 1 All holders 3,762,872r 3,924,782r 4,049,256" 4,059,221" 4,108,890" 4,166,286" 4,208,512" 4,247,007 By type of property 2 One- to four-family residences 2,616,288r 2,780,044r 2,959,558r 2,975,768" 3,034,781" 3,0%,443" 3,146,832" 3,189,641 3 Multifamily residences 309,369 306,410 295,417r 294,045" 291,272" 290,679 290,553" 289,273 4 Commercial 758,313 759,023 713,862r 708,966 702,210 698,435" 690,388" 687,126 5 Farm 78,903r 79,306r 80,419" 80,442" 80,627" 80,730" 80,739" 80,%7 By type of holder 6 Major financial institutions 1,914,315 1,846,726 1,769,187 1,753,045 1,765,176 1,769,014" 1,766,633" 1,747,288 7 Commercial banks 844,826 876,100 894,513 891,755 910,989 922,5%" 940,253" 937,966 8 One- to four-family 455,931 483,623 507,780 507,497 526,817 538,919" 558,583" 555,434 9 Multifamily 37,015 36,935 38,024 37,425 38,058 37,633" 38,436" 38,166 10 Commercial 334,648 337,095 328,826 326,853 325,519 325,201" 322,373" 323,120 11 Farm 17,231 18,447 19,882 19,980 20,595 20,843" 20,862" 21,245 12 Savings institutions3 801,628 705,367 627,972 617,163 612,458 609,563" 598,348" 584,352 13 One- to four-family 600,154 538,358 489,622 480,415 480,722 478,324" 469,689" 457,679 14 Multifamily 91,806 79,881 69,791 70,608 68,303 68,552" 67,823" 67,348 15 Commercial 109,168 86,741 68,235 65,808 63,111 62,367" 60,531" 59,029 16 Farm 500 388 324 332 322 320 305" 297 17 Life insurance companies 267,861 265,258 246,702 244,128 241,729 236,855 228,032" 224,970 18 One- to four-family 13,005 11,547 11,441 11,316 11,195 10,%7 10,534" 10,387 19 Multifamily 28,979 29,562 27,770 27,466 27,174 26,620 25,568" 25,211 20 Commercial 215,121 214,105 198,269 1%,100 194,012 190,061 182,553" 180,001 21 Farm 10,756 10,044 9,222 9,246 9,348 9,206 9,376" 9,371 22 Federal and related agencies 239,003 266,146 286,263 287,081 298,991 309,579 321,486" 325,835 23 Government National Mortgage Association 20 19 30 45 45 43 22" 20 24 One- to four-family 20 19 30 37 38 37 15" 13 25 Multifamily 0 0 0 8 7 7 7 7 26 Farmers Home Administration 41,439 41,713 41,695 41,529 41,446 41,424 41,386 41,209 27 One- to four-family 18,527 18,496 16,912 16,536 16,133 15,714 15,303 14,870 28 Multifamily 9,640 10,141 10,575 10,650 10,739 10,830 10,940 11,037 29 Commercial 4,690 4,905 5,158 5,187 5,250 5,347 5,406 5,399 30 Farm 8,582 8,171 9,050 9,156 9,324 9,533 9,739 9,903 31 Federal Housing and Veterans' Administrations 8,801 10,733 12,581 13,027 12,945 11,797 12,215 11,344 32 One- to four-family 3,593 4,036 5,153 5,631 5,635 4,850 5,364 4,738 33 Multifamily 5,208 6,697 7,428 7,3% 7,311 6,947 6,851 6,606 34 Resolution Trust Corporation 32,600 45,822 32,045 27,331 21,973 19,925 17,284 14,241 35 One- to four-family 15,800 14,535 12,960 11,375 8,955 8,381 7,203" 6,312 36 Multifamily 8,064 15,018 9,621 8,070 6,743 6,002 5,327" 4,190 37 Commercial 8,736 16,269 9,464 7,886 6,275 5,543 4,754" 3,739 38 Farm 0 0 0 0 0 0 0 0 39 Federal National Mortgage Association 104,870 112,283 137,584 141,192 151,513 160,721 166,642 172,343 40 One- to four-family 94,323 100,387 124,016 127,252 137,340 146,009 151,310 156,576 41 Multifamily 10,547 11,896 13,568 13,940 14,173 14,712 15,332 15,767 42 Federal Land Banks 29,416 28,767 28,664 28,536 28,592 28,810 28,460" 28,181 43 One- to four-family 1,838 1,693 1,687 1,679 1,682 1,695 1,675" 1,658 44 Farm 27,577 27,074 26,977 26,857 26,909 27,115 26,785" 26,523 45 Federal Home Loan Mortgage Corporation 21,857 26,809 33,665 35,421 42,477 46,859 55,476 58,498 46 One- to four-family 19,185 24,125 31,032 32,831 39,905 44,315 52,929 55,942 47 Multifamily 2,672 2,684 2,633 2,589 2,572 2,544 2,547 2,556 48 Mortgage pools or trusts5 1,079,103 1,250,666 1,425,546 1,462,181 1,473,323 1,514,002 1,546,818 1,602,595 49 Government National Mortgage Association 403,613 425,295 419,516 421,514 413,166 415,076 414,066 423,446 50 One- to four-family 391,505 415,767 410,675 412,798 404,425 405,%3 404,864 414,194 51 Multifamily 12,108 9,528 8,841 8,716 8,741 9,113 9,202 9,251 52 Federal Home Loan Mortgage Corporation 316,359 359,163 407,514 420,932 422,882 430,089 439,029 457,577 53 One- to four-family 308,369 351,906 401,525 415,279 417,646 425,154 434,494 453,407 54 Multifamily 7,990 7,257 5,989 5,654 5,236 4,935 4,535 4,170 55 Federal National Mortgage Association 299,833 371,984 444,979 457,316 465,220 481,880 495,525 507,376 56 One- to four-family 291,194 362,667 435,979 448,483 456,645 473,599 486,804 498,489 57 Multifamily 8,639 9,317 9,000 8,833 8,575 8,281 8,721 8,887 58 Farmers Home Administration 66 47 38 34 32 30 28 26 59 One- to four-family 17 11 8 7 6 6 5 5 60 Multifamily 0 0 0 0 0 0 0 0 61 Commercial 24 19 17 16 15 14 13 12 62 Farm 26 17 13 11 11 10 10 9 63 Private mortgage conduits 59,232 94,177 153,499 162,385 172,023 186,927 198,171 214,171 64 One- to four-family 53,335 84,000 132,000 137,000 145,000 158,000 164,000 177,000 65 Multifamily 731 3,698 6,305 6,665 7,407 7,991 8,701 9,481 66 Commercial 5,166 6,479 15,194 18,720 19,616 20,936 25,469 27,689 67 Farm 0 0 0 0 0 0 0 0 68 Individuals and others6 530,452r 561,244r 568,260" 556,913" 571,400" 573,691" 573,576" 571,289 69 One- to four-family 349,491r 368,874r 378,739" 367,632" 382,637" 384,510" 384,060" 382,938 70 Multifamily 85,969 83,7% 85,871" 86,026" 86,235" 86,512" 86,565" 86,597 71 Commercial 80,761 93,410 88,699" 88,3% 88,412 88,966" 89,289" 88,137 72 Farm 14,232r 15,164r 14,951" 14,859" 14,117" 13,703" 13,662" 13,618 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 1994 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11999911 11999922 11999933 Nov. Dec. Jan. Feb.r Mar. Apr. Seasonally adjusted 11 TToottaall 733,510 741,093 790,082 782,561 790,082 796,458 800,440 808,872 817,755 22 AAuuttoommoobbiillee 260,898 259,627 278,321 276,853 278,321 279,046 280,444 284,232 287,048 33 RReevvoollvviinngg 243,564 254,299 281,474 279,273 281,474 284,898 287,414 288,838 293,816 44 OOtthheerr 229,048 227,167 230,288 226,435 230,288 232,514 232,582 235,802 236,890 Not seasonally adjusted 5 Total 749,052 756,944 807,298 784,148 807,298 801,883 798,387 801,251 811,393 By major holder 6 Commercial banks 340,713 331,869 367,140 358,429 367,140 365,607 365,136 368,653 337744,,992200 7 Finance companies 121,937 117,127 117,464 114,800 117,464 117,937 118,095 120,061 122,845 8 Credit unions 92,681 97,641 114,451 112,342 114,451 115,055 116,034 117,962 120,091 9 Retailers 39,832 42,079 47,382 42,047 47,382 44,986 43,164 43,088 42,866 10 Savings institutions 45,965 43,461 33,000 33,500 33,000 32,500 32,000 31,751 31,750 11 Gasoline companies 4,362 4,365 4,212 4,507 4,212 4,189 3,952 3,769 3,980 12 Pools of securitized assets 103,562 120,402 123,649 118,523 123,649 121,609 120,006 115,967 114,941 By major type of credit* n Automobile 261,219 259,964 278,690 277,060 278,690 227788,,226655 227788,,773333 228811,,667744 228855,,229977 14 Commercial banks 112,666 109,743 123,734 122,989 123,734 123,916 124,491 126,866 129,833 15 Finance companies 63,415 57,605 55,274 55,337 55,274 56,509 56,%3 57,797 59,458 16 Pools of securitized assets2 28,915 33,878 36,781 36,569 36,781 34,947 34,217 33,275 31,454 17 Revolving 256,876 267,949 296,445 280,080 2%,445 290,197 286,351 285,025 289,703 18 Commercial banks 138,005 132,582 148,698 142,382 148,698 144,874 143,633 145,157 148,380 19 Retailers 34,712 36,629 41,378 36,319 41,378 39,057 37,293 37,191 36,966 20 Gasoline companies 4,362 4,365 4,212 4,507 4,212 4,189 3,952 3,769 3,980 21 Pools of securitized assets 63,595 74,243 77,416 72,357 77,416 77,280 76,581 73,722 74,782 7? Other 230,957 229,031 232,162 227,008 232,162 233,420 233,303 234,552 236,393 7,3 Commercial banks 90,042 89,544 94,708 93,058 94,708 96,817 97,012 96,630 96,707 24 Finance companies 58,522 59,522 62,189 59,463 62,189 61,427 61,132 62,264 63,387 25 Retailers 5,120 5,450 6,004 5,728 6,004 5,929 5,871 5,897 5,900 26 Pools of securitized assets2 11,052 12,281 9,452 9,597 9,452 9,382 9,208 8,970 8,705 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 1994 IItteemm 11999911 11999922 11999933 Oct. Nov. Dec. Jan. Feb. Mar. Apr. INTEREST RATES Commercial banks2 1 48-month new car 11.14 9.29 8.09 n.a. 7.63 n.a. n.a. 77..5544 n.a. n.a. 2 24-month personal 15.18 14.04 13.47 n.a. 13.22 n.a. n.a. 12.89 n.a. n.a. 3 120-month mobile home 13.70 12.67 11.87 n.a. 11.55 n.a. n.a. 11.56 n.a. n.a. 4 Credit card 18.23 17.78 16.83 n.a. 16.30 n.a. n.a. 16.06 n.a. n.a. Auto finance companies 5 New car 12.41 9.93 9.48 99..2255 88..9966 88..8800 77..5555 88..9933 99..1133 99..7711 6 Used car 15.60 13.80 12.79 12.58 12.41 12.33 12.02 12.23 12.68 13.25 OTHER TERMS3 Maturity (months) 55.1 54.0 54.5 5555..00 5544..55 5544..00 5522..99 5544..44 5544..00 5533..88 8 Used car 47.2 47.9 48.8 48.2 48.4 48.3 50.0 50.3 50.1 50.0 Loan-to-value ratio 9 New car 88 89 91 90 91 90 91 91 9922 9922 10 Used car 96 97 98 98 98 98 98 99 99 99 Amount financed (dollars) 11 New car 12,494 13,584 14,332 14,650 14,839 1155,,009977 1155,,333300 1144,,990044 1144,,882211 1155,,006677 12 Used car 8,884 9,119 9,875 9,969 10,230 10,349 10,434 10,449 10,427 10,477 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 DomesticN onfinancial Statistics • August 1994 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 1992 1993 1994 Q3 04 Q1 Q2 Q3R Q4R Q1 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .. 723.0 631.0 475.5 582.4 592.3 611.1 529.5 382.6r 719.2r 584.2 683.2 620.0 By sector and instrument 2 U.S. government 146.4 246.9 278.2 304.0 256.1 299.1 240.1 229.6 348.2 177.2 269.6 195.9 3 Treasury securities 144.7 238.7 292.0 303.8 248.3 290.1 237.4 226.4 344.1 160.9 261.9 197.2 4 Budget agency issues and mortgages 1.6 8.2 -13.8 .2 7.8 9.0 2.7 3.2 4.1 16.2 7.7 -1.3 5 Private 576.6 384.1 197.3 278.4 336.2 312.0 289.4 153.1R 370.9R 407.0 413.6 424.1 By instrument 6 Tax-exempt obligations 65.3 57.3 69.6 65.7 60.4 75.8 42.4 62.4 67.2 48.3 63.9 60.5 7 Corporate bonds 73.8 47.1 78.8 67.5 75.3 61.7 54.0 85.7R 75.7R 72.6 67.4 51.0 8 Mortgages 269.1 188.7 165.1 120.8 155.4 134.8 94.0 74.9* 171.5R 206.7 168.6 184.0 9 Home mortgages 212.5 177.2 166.0 176.0 187.1 203.3 172.8 100. lr 211.6R 229.9 206.7 206.7 10 Multifamily residential 12.0 3.4 -2.5 -11.1 -6.3 -11.2 -27.8 —6.5R -12.0R -4.4 -2.3 -6.9 11 Commercial 47.3 8.9 .9 -45.5 -25.7 -57.8 -51.5 -18.9* -28.9 -19.2 -35.8 -16.7 12 Farm -2.7 -.8 .7 1.3 .3 .6 .5 .lr ,7R .4 .0 .9 13 Consumer credit 49.5 13.4 -13.1 9.3 49.0 13.5 48.3 19.2 22.9 60.7 93.3 49.5 14 Bank loans n.e.c 36.4 4.2 -46.8 -5.6 4.7 -24.0 21.3 -39.7 31.7 6.9 20.0 36.7 15 Commercial paper 21.4 9.7 -18.4 8.6 10.0 9.3 25.4 -27.1 33.7 23.8 9.7 -27.4 16 Other loans 61.0 63.6 -37.8 12.1 -18.8 40.8 4.1 -22.3R -31.6R -11.9 -9.2 69.7 By borrowing sector 17 Household 276.7 207.7 168.4 215.0 247.8 217.9 266.5 109.2R 251.LR 324.3 306.5 255.2 18 Nonfinancial business 236.3 121.9 -33.4 4.0 23.0 20.6 -12.2 —27.8R 50.8R 30.6 38.3 96.7 19 Farm .5 1.8 2.4 1.2 1.9 -.2 -1.9 -2.7R 3.1R 4.4 2.7 3.8 20 Nonfarm noncorporate 49.4 19.4 -24.5 -39.4 -25.6 -37.3 -51.0 -32.7 -31.4 -24.1 -14.3 29.7 21 Corporate 186.5 100.7 -11.3 42.1 46.7 58.2 40.7 7.5R 79.R 50.3 49.8 63.2 22 State and local government 63.5 54.5 62.3 59.4 65.4 73.5 35.1 71.7 69.1 52.1 68.8 72.2 23 Foreign net borrowing in United States 10.2 23.9 13.9 24.2 47.7 37.8 -.6 50.3 39.3R 82.4 19.0 7.6 24 Bonds 4.9 21.4 14.1 17.3 60.5 20.3 22.2 75.6 42.4 84.5 39.3 43.8 25 Bank loans n.e.c -.1 -2.9 3.1 2.3 .7 3.9 -10.3 1.6 6.5 1.0 -6.3 6.1 26 Commercial paper 13.1 12.3 6.4 5.2 -9.0 13.1 -12.1 -21.7 -.6 -1.6 -12.0 -49.0 27 U.S. government and other loans -7.6 -7.0 -9.8 -.6 -4.5 .5 -.4 -5.3 —9.0R -1.5 -2.0 6.7 28 Total domestic plus foreign 733.1 654.9 489.4 606.6 640.0 649.0 528.8 432.9r 758.5r 666.6 702.2 627.6 Financial sectors 29 Total net borrowing by financial sectors 213.7 193.5 150.4 216.4 239.0 304.1 174.8 145.4r 131.5r 385.7 293.2 408.7 By instrument 30 U.S. government-related 149.5 167.4 145.7 155.8 157.2 169.3 131.8 165.8 62.7 273.7 126.4 322.7 31 Government-sponsored enterprises securities 25.2 17.1 9.2 40.3 80.6 67.7 33.6 32.2 68.8 167.8 53.4 160.0 32 Mortgage pool securities 124.3 150.3 136.6 115.6 76.6 101.6 98.4 133.5 -6.1 105.9 73.0 181.9 33 Loans from U.S. government .0 -.1 .0 .0 .0 .0 -.1 .0 .0 .0 .0 -19.2 34 Private 64.2 26.1 4.6 60.6 81.8 134.8 42.9 -20.3R 68.8r 112.0 166.8 86.0 35 Corporate bonds 37.3 40.8 56.8 65.3 70.8 81.2 79.4 54.6R 55.7R 97.3 75.7 81.8 36 Mortgages .5 .4 .8 .0 3.8 .4 .0 .9 2.7 6.2 5.5 5.4 37 Bank loans n.e.c 6.0 1.1 17.1 -4.8 -9.9 17.5 -19.8 -21.2 -5.9 -14.0 1.5 8.6 38 Open market paper 31.3 8.6 -32.0 -.7 -6.2 17.5 -6.5 -73.1 -17.3 -9.7 75.5 4.5 39 Loans from Federal Home Loan Banks -11.0 -24.7 -38.0 .8 23.3 18.1 -10.1 18.6 33.5 32.3 8.6 -14.3 By borrowing sector 40 Government sponsored enterprises 25.2 17.0 9.1 40.2 80.6 67.7 33.5 32.2 68.8 167.8 53.4 140.8 41 Federally related mortgage pools 124.3 150.3 136.6 115.6 76.6 101.6 98.4 133.5 -6.1 105.9 73.0 181.9 42 Private 64.2 26.1 4.6 60.6 81.8 134.8 42.9 —20.3R 68.8R 112.0 166.8 86.0 43 Commercial banks -1.4 -.7 -11.7 8.8 5.6 12.1 14.5 5.4 10.1 6.2 .8 7.0 44 Bank holding companies 6.2 -27.7 -2.5 2.3 8.1 6.6 .8 21.1 1.3 -2.2 12.2 4.1 45 Funding corporations 13.8 12.5 -13.6 1.6 -10.7 -7.7 -31.1 -51.9 8.2 -13.2 14.0 -22.2 46 Savings institutions -15.1 -30.2 -44.5 -6.7 11.1 11.2 -14.4 7.9 17.7 18.4 .6 -9.0 47 Credit unions .0 .0 .0 .0 .2 .0 .1 .0 .3 .3 .1 .1 48 Life insurance companies .0 .0 .0 .0 .2 .2 -.2 .1 .6 -.1 .4 .0 49 Finance companies 27.4 24.0 18.6 -3.6 -5.0 21.2 19.9 -33.1 -38.6 16.0 35.8 56.2 50 Mortgage companies 3.0 -4.0 5.7 .1 4.0 14.4 -6.4 -10.4 15.9 2.4 8.0 -5.9 51 Real estate investment trusts (REITs) 1.3 1.0 1.6 .1 3.3 2.3 -5.1 -1.4 2.5 6.1 5.9 6.0 52 Issuers of asset-backed securities (ABSs) 28.9 51.1 51.0 58.0 64.9 74.3 64.8 41.9R 50.7R 78.1 89.0 49.7 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 1994 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11998899 11999900 11999911 11999922 11999933rr Q3 Q4 Ql Q2 Q3r Q4r Ql All sectors 53 Total net borrowing, all sectors 946.8 848.4 639.8 822.9 879.0 953.1 703.6 578.3r 889.9* 1,052.3 995.4 1,036.3 54 U.S. government securities ... 295.8 414.4 424.0 459.8 413.3 468.5 372.0 395.3 410.9 450.9 396.0 537.8 55 Tax-exempt securities 65.3 57.3 69.6 65.7 60.4 75.8 42.4 62.4 67.2 48.3 63.9 60.5 56 Corporate and foreign bonds .. 116.0 109.2 149.6 150.1 206.6 163.3 155.6 215.9* 173.8* 254.4 182.4 176.7 57 Mortgages 269.6 189.1 165.8 120.8 159.2 135.3 93.9 75.7r 174.2* 212.9 174.1 189.4 58 Consumer credit 49.5 13.4 -13.1 9.3 49.0 13.5 48.3 19.2 22.9 60.7 93.3 49.5 59 Bank loans n.e.c 42.3 2.4 -26.6 -8.1 -4.5 -2.5 -8.8 -59.3 32.3 -6.2 15.2 51.3 60 Open market paper 65.9 30.7 -44.0 13.1 -5.1 39.9 6.8 -121.9 15.7 12.5 73.2 -71.9 61 Other loans 42.4 31.8 -85.6 12.2 .0 59.3 -6.6 -9.1r -7.1* 18.8 -2.6 43.0 Funds raised through mutual funds and corporate equities 62 Total net share issues -59.6 22.2 210.6 284.0 423.7 297.7 300.3 296.0* 462.2* 491.7 445.1 320.8 63 Mutual funds 38.5 67.9 150.5 206.7 310.8 235.2 217.7 240.9 357.5 337.6 307.2 217.5 64 Corporate equities -98.1 -45.7 60.1 77.3 112.9 62.5 82.6 55.1* 104.7* 154.1 137.8 103.3 65 Nonfinancial corporations -124.2 -63.0 18.3 27.0 22.9 12.0 14.0 8.6* 24.8* 28.7 29.5 2.0 66 Financial corporations 8.8 9.9 11.2 19.6 25.1 15.7 21.1 14.5* 25.9* 26.7 33.2 30.0 67 Foreign shares purchased in United States 17.2 7.4 30.7 30.6 64.9 34.8 47.5 31.9 54.0 98.6 75.1 71.3 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 • August 1994 1.58 SUMMARY OF FINANCIAL TRANSACTIONS1 Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates 1992 1993 1994 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11998899 11999900 11999911 11999922 11999933 Q3 Q4 Ql Q2 Q3 Q4* Ql NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets 946.8 848.4 639.8 822.9 879.0 953.1 703.6 578.3' 889.9* 1,052.3' 995.4 1,036.3 2 Private domestic nonfinancial sectors 122.6 162.8 -16.1 65.3 -62.8 -105.4 87.0 -79.8r -82.4* -94.8* 5.8 306.5 3 Households 78.6 140.1 -49.7 37.0 -67.9 -135.7 66.6 —83.9* -82.5* -110.7* 5.4 260.4 4 Nonfarm noncorporate business -.7 -1.7 -4.2 -2.4 -2.5 -2.0 -1.0 -3.7 -3.0 -2.2 -1.0 -4.4 5 Nonfinancial corporate business 13.6 -5.3 4.3 36.3 12.3 46.5 36.9 -4.0* 10.6* 42.7* .0 24.1 6 State and local governments 31.1 29.6 33.5 -5.7 -4.8 -14.1 -15.5 11.8 -7.5 -24.6 1.3 26.4 7 U.S. government -3.1 33.7 10.5 -12.0 -18.6 -26.7 -13.3 -24.7 -28.5* -15.4' -5.9 -41.7 8 Foreign 84.4 82.1 25.6 100.8 128.2 78.1 87.8 74.0* 93.4* 138.3' 207.2 112.8 9 Financial sectors 742.9 569.9 619.8 668.8 832.2 1,006.9 542.1 608.9* 907.4* 1,024.2' 788.3 658.7 10 Government sponsored enterprises -4.1 16.4 14.2 69.0 90.2 73.0 71.7 14.6 134.1 145.1' 66.7 77.9 11 Federally related mortgage pools 124.3 150.3 136.6 115.6 76.6 101.6 98.4 133.5 -6.1 105.9 73.0 181.9 12 Monetary authority -7.3 8.1 31.1 27.9 36.2 15.7 48.3 44.5 32.6 28.2 39.5 51.5 N Commercial banking 177.2 125.1 84.3 94.8 143.2 148.0 73.3 86.4 153.4 131.9 201.1 169.6 14 U.S. commercial banks 146.1 94.9 39.2 69.8 150.5 123.5 66.0 100.4 142.0 147.0 212.7 108.7 15 Foreign banking offices 26.7 28.4 48.5 16.5 -9.8 5.2 4.8 -12.5 -.7 -17.2 -8.7 50.2 16 Bank holding companies 2.8 -2.8 -1.5 5.6 -.1 16.4 -.6 -4.3 9.5 -.4 -5.1 8.6 17 Banks in U.S. affiliated areas 1.6 4.5 -1.9 2.9 2.6 3.0 3.0 2.9 2.6 2.5 2.3 2.1 18 Private nonbank finance 452.9 270.0 353.7 361.6 486.0 668.6 250.4 329.9* 593.3* 6i3.<Y 407.9 177.8 19 Thrift institutions -86.6 -153.3 -123.0 -59.5 -13.3 -42.6 -15.0 -33.3 -5.2 10.3* -24.9 10.1 7.0 Insurance 257.4 181.6 234.3 177.9 192.4 261.4 161.6 257.0 172.9 261.6 78.1 65.9 21 Life insurance companies 101.8 94.4 83.2 82.4 109.5 85.1 103.7 122.1 108.0 117.1 90.6 119.6 22 Other insurance companies 29.7 26.5 32.3 12.7 9.4 -2.8 8.3 8.9 10.6 8.6 9.7 19.7 23 Private pension funds 81.1 17.2 85.3 37.3 40.2 99.9 8.4 118.0 11.1 91.9 -60.1 -104.9 24 State and local government retirement funds 44.7 43.5 33.5 45.5 33.3 79.2 41.2 8.0 43.2 44.0 37.9 31.5 25 Finance n.e.c 282.2 241.7 242.3 243.2 306.9 449.7 103.8 106.2* 425.7* 341.1' 354.7 101.9 26 Finance companies 32.0 28.4 -12.1 1.7 -5.4 4.0 24.0 -34.0 -22.8 8.1 27.2 64.9 27 Mortgage companies 6.1 -8.0 11.4 .1 -.4 28.9 -12.8 -50.3* 64.9* -1.9 -14.2 -12.0 7,8 Mutual funds 23.8 41.4 90.3 123.7 164.0 156.9 119.2 130.2 193.4 168.4 163.9 45.5 29 Closed-end funds 6.3 .0 15.2 12.3 11.4 8.7 13.1 8.9 13.0 11.0 12.7 12.5 30 Money market funds 67.1 80.9 30.1 1.3 12.9 8.5 -26.1 -65.0 51.5 11.5 53.6 -46.3 31 Real estate investment trusts (REITs) .5 -.7 -1.0 .4 .6 -.3 -.1 .2* .8 1.0 .2 .7 32 Brokers and dealers 96.3 34.9 49.0 40.2 57.1 180.3 -90.2 79.5 66.7 69.0 13.4 -37.9 33 Asset-backed securities issuers (ABSs) 27.7 49.9 49.0 55.5 63.6 72.0 59.2 41.4* 49.6* 80.9* 82.5 50.3 34 Bank personal trusts 22.4 14.8 10.4 8.0 3.1 -9.3 17.3 -4.7* 8.6* -7.0' 15.5 24.1 RELATION OF LIABILITIES TO FINANCIAL ASSETS 35 Net flowst hrough credit markets 946.8 848.4 639.8 822.9 879.0 953.1 703.6 578.3* 889.9* 1,052.3' 995.4 1,036.3 Other financial sources 36 Official foreign exchange 24.8 2.0 -5.9 -1.6 .8 -8.5 5.1 3.4 -4.0 1.7 2.2 6.0 37 Treasury currency and special drawing rights certificates 4.1 2.5 .0 -1.8 .4 .2 -7.7 .3 .4 ..44 .7 .7 38 Life insurance reserves 28.8 25.7 25.7 27.3 50.6 41.5 26.3 53.6 39.5 59.5 49.6 49.6 39 Pension fund reserves 309.7 158.1 358.8 227.8 235.4 291.7 267.0 332.9* 224.2* 304.1' 80.3 -65.8 40 Interbank claims -16.5 34.2 -3.7 48.1 32.9 79.8 50.0 26.2* 48.3* 14.8* 42.4 156.3 41 Deposits at financial institutions 284.8 98.1 48.2 9.3 85.7 174.1 -142.7 -.4 219.6 -14.6* 138.3 33.7 42 Checkable deposits and currency 6.1 44.2 75.8 122.8 119.5 200.4 93.5 25.0 232.2 96.3 124.4 78.0 43 Small time and savings deposits 100.4 59.0 16.7 -60.8 -79.8 -83.6 -37.8 -155.9 -57.3 -73.0* -33.0 -24.5 44 Large time deposits 13.9 -65.7 -60.8 -80.0 -16.1 -52.9 -84.2 1.9 -17.5 -57.3 8.7 -31.8 45 Money market fund shares 90.1 70.3 41.2 3.9 15.8 -22.4 -32.9 -37.7 66.5 -15.8 50.3 -1.7 46 Security repurchase agreements 77.8 -24.2 -16.5 33.6 67.2 89.6 -67.1 180.3 17.6 78.7 -7.9 21.7 47 Foreign deposits -3.6 14.6 -8.2 -10.2 -20.9 43.0 -14.2 -13.9 -21.9 -43.5* -4.2 -8.0 48 Mutual fund shares 38.5 67.9 150.5 206.7 310.8 235.2 217.7 240.9 357.5 337.6 307.2 217.5 49 Corporate equities -98.1 -45.7 60.1 77.3 112.9 62.5 82.6 55.1* 104.7* 154.1* 137.8 103.3 50 Security credit 15.6 3.5 51.4 4.2 61.9 82.8 5.5 39.7 38.3 77.2 92.6 13.4 51 Trade debt 59.4 32.1 -2.2 54.9 53.4 54.0 33.0 29.2* 43.0* 57.6* 83.8 30.3 52 Taxes payable 2.0 -4.5 -8.5 7.9 3.7 6.7 10.3 3.4* 9.3* -4.2* 6.2 3.0 53 Noncorporate proprietors' equity -31.1 -35.5 -12.5 -5.7 -18.5 -27.5 10.5 -10.1* -20.3* -8.4* -35.2 -103.4 54 Investment in bank personal trusts 23.1 21.5 29.8 -7.5 13.8 -55.4 -35.2 -27.7* 24.8* 32.4* 25.7 17.1 55 Miscellaneous 292.1 98.2 169.9 195.7 281.7 202.6 211.8 190.4* 423.7* 177.8* 335.0 188.3 56 Total financial sources 1,883.8 1,306.5 1,501.3 1,665.5 2,104.7 2,092.8 1,437.9 1,515.2* 2,398.9* 2,242.4* 2,262.3 1,686.2 Floats not included in assets (-) 57 U.S. government checkable deposits 8.4 3.3 -13.1 .7 -1.5 4.4 -3.6 .1 6.2 -6.4 -5.8 -5.9 58 Other checkable deposits -3.2 2.5 2.0 1.6 -3.8 -11.7 2.3 -1.8 -1.4 -5.6 -6.3 -9.1 59 Trade credit -1.9 2.5 8.1 18.5 17.7 40.2 1.2 -8.6* 28.6* 10.7* 39.9 1.6 Liabilities not identified as assets (-) 60 Treasury currency -.2 .2 -.6 -.2 -.2 -.2 -.1 -.2 -.2 --..22 -.2 -.1 61 Interbank claims -4.4 1.6 26.2 -4.9 4.2 -7.8 -1.7 11.4 -5.7 -16.5 27.7 -17.5 62 Security repurchase agreements 32.4 -31.5 5.2 31.1 69.3 43.5 23.4 154.9* 14.1* 66.7* 41.4 -24.9 63 Taxes payable 2.3 .5 .4 6.9 -1.3 24.1 4.0 -17.4* 21.2* -.1* -9.1 -18.7 64 Miscellaneous -77.8 -23.6 -32.1 -21.1 -46.6 1.2 49.3 -77.2* -31.0* -61.3* -16.8 110.3 65 Total identified to sectors as assets 1,928.2 1,351.0 1,505.2 1,632.8 2,067.0 1,999.2 1,363.1 1,454.1* 2,367.2* 2,255.0* 2,191.5 1,650.7 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 1994 Transaction category or sector 11999900 11999911 11999922 11999933 Q3 Q4 Ql Q2 Q3 Q4" Ql Nonfinancial sectors 1 Tota d l o c m re e d s i t t i c m n a o r n k f e in t a d n e c b i t a l o s w e e c d to b rs y 10,692.0 11,160.6 11,747.2 12,347.0 11,580.6 11,747.2 11,826.0" 11,995.0" 12,142.4" 12,347.0 12,478.8 2 4 3 B U y . T B S l r . e u e n d g a d g o s i e v u n t e r g y r a n g s s m e e e c n e c t c n o u y t r r i i t a s ie n s s u d e i s n s a t n r d u m m e o n r t t gages ... 2 2 , , 4 4 9 6 3 8 5 2 . . . 1 8 4 2 2 , , 7 7 7 5 1 6 7 8 . . . 4 8 6 3 3 , , 0 0 8 6 1 0 1 8 . . . 3 6 8 3 3 , , 3 3 3 2 0 6 9 6 . . . 5 9 6 2 2 , , 9 9 9 8 1 8 0 8 . . . 9 7 1 3 3 , , 0 0 8 6 1 0 1 8 . . . 3 6 8 3 3 , , 1 1 4 2 1 0 0 9 . . . 2 6 6 3 3 , , 2 1 0 8 2 1 0 0 . . . 2 6 6 3 3 , , 2 2 4 2 2 7 2 4 . . . 3 6 7 3 3 , , 3 3 3 0 2 6 9 6 . . . 5 9 6 3 3 , , 3 3 8 6 2 7 1 6 . . . 7 4 3 5 Private 8,193.9 8,384.3 8,666.9 9,010.5 8,581.7 8,666.9 8,685.8" 8,793.8" 8,895.1" 9,010.5 9,091.1 1 1 1 1 1 1 1 8 6 7 9 2 1 3 6 0 4 5 B C T M O C C B y a o o o a t o H F C M x h r n n m i r p a - e n o o k t s u e r g o r m s u m m x m l t a r l m t l r o e e a i m g o e f u r m a t e e a a c e m e n m r s n m i p r s a s b e c o c t i l n i o l r n r a o y p e t t n . l g b d e a d r a l . i p e s i c g t g e s e i a r d s t i e o n n ti s a l 3 2 1 1 , , , , 7 5 0 3 7 8 7 7 0 1 7 1 8 0 1 0 3 5 4 6 1 8 5 0 8 3 5 0 0 7 2 6 . . . . . . . . . . . 4 4 2 6 0 5 6 1 8 8 9 3 2 1 1 , , , , 8 7 7 7 6 0 3 7 1 8 7 4 9 5 9 8 8 3 0 0 0 9 6 1 8 9 5 6 1 3 1 . . . . . . . . . . . 4 1 6 7 5 9 9 9 6 0 0 4 2 1 1 . . . . 0 9 1 2 7 8 6 7 1 1 0 8 2 0 0 5 0 9 9 9 0 1 0 2 1 9 4 6 5 1 7 7 . . . . . . . . . . . 4 6 6 7 2 4 5 6 9 3 1 4 3 1 1 , , , , 1 6 1 2 6 8 7 2 2 1 6 8 8 1 8 5 0 8 5 2 1 0 3 3 5 6 8 0 1 7 9 7 . . . . . . . . . . . 7 6 0 8 0 3 3 0 8 8 8 3 2 1 1 , , , , 9 8 7 6 6 2 7 1 1 1 7 8 8 8 8 1 9 4 9 8 0 9 0 4 6 0 9 0 8 6 8 6 . . . . . . . . . . . 4 3 5 2 4 8 9 4 9 2 1 4 2 1 1 . . . . 0 9 7 6 1 2 8 7 1 1 0 8 2 0 9 0 0 9 5 9 0 1 0 2 6 5 1 9 1 4 7 7 . . . . . . . . . . . 4 6 7 5 6 2 9 6 4 3 1 4 2 1 1 , , , , 0 9 6 1 2 7 7 6 2 1 1 4 8 9 7 9 9 0 8 1 1 4 7 1 0 5 0 3 2 3 0 3 . . . . . . . . . . . 8 5 9 4 9 7 7 0 0 0 9 " " " " 4 3 1 1 , , , , 0 0 6 6 1 2 6 8 2 1 6 0 8 8 9 9 8 0 9 2 2 6 3 8 4 0 7 1 2 4 5 4 . . . . . . . . . . . 9 8 3 8 6 7 8 3 8 7 0 " " " " " " 4 3 1 1 , , , , 1 0 6 2 2 6 8 6 2 1 2 6 8 8 1 8 9 2 8 4 2 2 5 0 2 1 9 1 1 6 1 3 . . . . . . . . . . . 7 4 9 7 9 5 2 7 6 8 2 " " " " " " 4 3 1 1 , , , , 1 1 6 2 6 8 7 2 2 1 6 8 1 8 5 0 8 8 2 5 1 3 5 0 3 8 0 6 1 7 9 7 . . . . . . . . . . . 6 8 7 0 3 3 0 0 8 8 8 4 3 1 1 , . , . 2 1 6 7 6 2 2 8 2 1 0 8 5 0 9 7 4 7 8 4 2 0 1 7 8 5 6 9 0 4 2 5 . . . . . . . . . . . 7 0 5 6 3 8 9 0 3 5 1 By borrowing sector 2 2 2 1 1 1 0 1 2 8 9 7 N S H t o o a N F C n u t a o e o f s r i r n e m n a p h f n a o a o n d r r l c m a d l i t o a e n c l a o b l n u c g s o i o n r v e p e s o r s n r a m te e nt 3 3 2 1 . . , , 7 3 5 2 8 1 2 7 9 1 7 3 8 4 4 9 0 4 . . . . . . 5 6 8 0 5 9 3 3 2 1 , , , , 6 7 3 9 1 1 8 6 6 3 9 3 8 2 1 2 2 4 . . . . . . 7 7 6 8 3 8 3 3 2 1 , . . , 6 9 4 9 1 1 9 7 0 9 5 3 6 8 6 2 4 6 . . . . . . 7 0 1 2 5 0 4 3 2 1 1 , . , . , 7 2 4 1 0 1 2 3 5 2 5 3 1 1 4 8 7 7 . . . . . . 0 8 3 9 7 9 2 3 3 1 , , , , 3 6 9 9 1 1 9 9 0 8 6 3 5 8 0 3 5 7 . . . . . . 8 6 1 1 1 6 3 3 2 1 . . , , 9 4 6 9 1 1 7 0 9 9 5 3 8 6 6 2 4 6 . . . . . . 0 1 7 2 5 0 2 3 3 1 1 , , , , , 4 9 6 0 1 1 1 8 9 0 4 3 9 1 7 7 5 3 . . . . . . 1 2 4 1 2 3 " " " " 4 3 2 1 1 , , , . . 0 7 4 0 1 1 5 1 4 2 3 3 4 5 0 6 3 9 . . . . . . 5 9 3 3 4 3 " " " " 4 3 2 1 1 , , , , , 1 7 4 1 0 1 4 1 4 3 4 3 3 1 2 0 8 0 . . . . . . 4 3 4 6 3 5 " " " " " 4 2 3 1 1 . , , . , 2 4 7 1 0 1 3 5 2 2 5 3 1 4 1 8 7 7 . . . . . . 8 3 0 9 7 9 4 2 3 1 1 , . , . , 2 4 7 0 1 1 6 8 5 7 3 3 4 3 1 2 6 5 . . . . . . 9 4 8 6 9 0 23 Fore U ig n n i t c e r d e d S i t t a m tes a rket debt held in 285.1 298.9 313.8 361.6 312.9 313.8 324.8 336.3" 355.6 361.6 361.8 2 2 2 2 4 5 6 7 B B C U o a o .S n n m . k d m s g l o o er v a c n e i r a s n l n m p .e a e . p n c e t r a nd other loans 1 7 7 1 1 5 5 5 8 . . . . 4 3 8 5 1 2 8 6 2 1 1 6 9 . . . . 6 8 0 5 1 2 6 7 4 5 3 7 6 . . . . 4 9 7 9 2 2 6 6 0 4 0 8 7. . . . 3 6 9 7 1 2 8 6 4 6 4 0 1 . . . . 5 4 7 3 1 2 7 6 4 5 3 7 6 . . . . 4 9 7 9 1 2 7 6 6 4 2 2 5 . . . . 3 5 3 8 1 2 7 6 7 5 1 2 6 . . . . 9 9 1 4 " 1 2 7 6 9 0 6 1 7 . . . . 2 5 2 7 " " 2 2 6 0 6 4 0 7 8 . . . . 3 6 9 7 2 2 1 5 6 6 8 6 0 . . . . 2 3 5 9 28 Total s e c c r t e o d r i s t , m do a m rk e e s t t i d c e a b n t d o w fo e r d ei b g y n nonfinancial 10,977.1 11,459.5 12,061.0 12,708.5 11,893.5 12,061.0 12,150.8" 12,331.3" 12,498.0" 12,708.5 12,840.6 Financial sectors 29 Total f i c n r a e n di c t i a m l a s r e k c e t t o r d s e bt owed by 2,559.4 2,709.7 2,941.7 3,186.0 2,889.3 2,941.7 2,974.1" 3,010.1" 3,104.4" 3,186.0 3,284.4 30 B U y . S in . g st o r v u e m rn e m nt e nt-related 1,418.4 1,564.2 1,720.0 1,877.1 1,683.5 1,720.0 1,755.8 1,774.5 1,842.2 1,877.1 1,952.1 3 3 3 3 3 3 3 3 3 5 2 3 4 6 7 8 9 1 Pr C i L G M O L B M v o o o a a o p o o n a a r t e v r r e p n n k t n t e g g o s s s r l a a m e n r o f f a g g c m r r a a t e u e o o e n r e s r m m k p s i n b t e o t i o n - e t F o U s n . s p e e l p d . d . a S o s s c p e e n . r c e s g a u r o l o r r v i e H t e d ie o r n s m e m n e t e e L n rp t o r a i n se B s anks 1 1 , , 5 3 4 0 1 1 4 5 9 1 1 4 1 4 4 9 3 7 2 9 0 7 . . . . . . . . . 9 3 9 7 7 0 9 9 1 1 1 . . 4 6 1 3 1 0 6 7 0 5 8 4 2 4 5 9 9 6 6 5 5 . . . . . . . . . 9 1 8 1 1 6 5 7 6 1 1, , 4 6 2 2 3 6 7 4 7 2 7 9 4 5 4 9 3 8 1 2 4 . . . . . . . . . 2 8 1 2 9 1 7 0 3 1 1 , , 7 5 3 3 3 1 5 4 9 2 4 0 0 4 8 9 4 3 3 8 8 3 . . . . . . . . . 9 8 0 3 5 7 6 9 1 1 1 , , 4 6 2 3 2 3 6 8 5 0 9 4 4 4 5 7 0 8 5 4 4 . . . . . . . . . 8 7 5 2 1 3 8 6 0 1 1 , , 4 6 2 3 2 6 7 4 7 2 9 7 4 5 4 9 3 8 1 4 2 . . . . . . . . . 1 8 2 9 1 2 7 3 0 1 1, , 4 6 2 2 3 5 9 5 8 1 7 9 4 5 1 1 8 5 6 9 9 . . . . . . . . . 3 8 2 4 8 0 2 9 8 " " 1 1, , 4 7 2 3 3 6 0 5 9 3 7 0 4 8 5 6 5 5 2 5 1 . . . . . . . . . 8 6 4 8 0 8 1 9 3 " " 1 1, , 5 7 2 3 3 1 3 5 9 6 7 2 7 4 0 0 2 2 8 3 7 . . . . . . . . . 2 1 6 3 8 4 2 9 1 " " 1 1 , , 5 7 3 3 3 1 5 2 4 4 0 9 0 4 8 4 3 9 8 8 3 3 . . . . . . . . . 9 8 7 3 0 6 9 5 1 1 1 , , 5 7 4 3 3 1 5 6 0 6 1 3 8 0 4 7 0 3 0 8 2 0 . . . . . . . . . 5 0 1 7 3 4 0 3 4 4 4 4 4 4 4 4 4 4 4 5 5 5 2 0 1 3 4 5 6 7 8 9 0 1 2 B P F G e r y o i C C F R L S B F I M d v v b s u e a i i o r e a a s e n o f o e v r n a n m t u r e a a r r d e i d n l k e t n l n r f m i g i l i m e r g t o n c n i y h a s s n e s e u w s g e g o t r o r a u a n n i l e c e i c c n d n f r t i t n i l o e a o - o a i s c a c a g s n m n n t r o l t s i i p i e p g c n a s t m s s b p o u d o e e v e l a c a n t s p r t c e n i o c n m - a s e a o s t b o o m k i t c o n t n e i o a m r m t s o r i s p o s e r c e n t e d p a k r s g s s n n a e a e n i t d g e n i t e s e r t s e u s e p r s c o p t u o s r r i l i s ( s t R e i e s E s I ( T A s) B Ss)— 1 1 , , 2 3 0 1 3 1 1 1 7 9 1 4 7 7 1 3 3 1 7 6 8 9 0 8 4 4 9 7 2 . . . . . . . . . . . . . 7 3 9 9 5 4 3 0 0 8 1 9 4 1 1 . . 4 1 3 1 3 1 1 6 9 0 4 5 9 2 1 1 1 2 5 7 4 5 6 3 9 3 4 2 4 . . . . . . . . . . . . . 0 7 0 6 6 5 0 4 0 0 0 3 3 1 1, , 4 2 2 3 3 1 1 7 8 4 2 8 9 7 1 1 3 1 3 7 7 1 9 3 2 5 4 3 4 . . . . . . . . . . . . . 8 8 9 7 4 0 0 7 0 2 1 6 0 1 1 , , 4 5 3 3 3 1 1 7 9 5 8 2 0 4 1 1 2 2 9 9 8 4 8 8 8 7 7 9 2 . . . . . . . . . . . . . 5 0 4 5 2 2 6 9 6 4 9 7 0 1 1 , , 4 2 3 2 3 1 1 6 8 3 0 8 4 7 1 4 1 1 9 9 9 2 5 4 7 4 3 5 4 . . . . . . . . . . . . . 5 2 0 0 7 8 0 5 0 4 0 3 6 1 1, , 4 2 2 3 3 1 1 7 8 4 2 8 9 7 1 1 1 3 3 7 7 1 9 3 2 3 4 4 5 . . . . . . . . . . . . . 8 9 7 4 8 0 0 7 0 0 1 6 2 1 1 , , 2 4 4 3 2 1 1 7 9 1 0 5 7 9 2 1 1 1 8 0 4 3 6 9 9 0 7 3 9 . . . . . . . . . . . . . 3 2 3 1 0 0 0 1 8 4 7 6 9 " " 1 1 , , 2 4 4 3 3 1 1 7 9 3 1 7 6 0 1 1 2 2 5 3 6 6 3 9 1 4 4 0 9 . . . . . . . . . . . . . 6 9 4 6 2 1 2 8 3 4 4 2 7 " " 1 1 , , 2 5 4 3 3 1 1 7 9 6 3 1 7 2 2 1 1 1 2 7 6 6 5 3 7 6 9 5 5 . . . . . . . . . . . . . 2 4 9 8 1 2 1 9 1 4 7 9 0 " " 1 1, , 4 5 3 3 3 1 1 7 9 5 8 2 0 4 1 2 2 1 9 9 8 4 8 8 8 7 9 2 7 . . . . . . . . . . . . . 0 5 6 4 5 9 4 2 2 6 9 7 0 1 1 , , 4 5 3 3 3 1 1 9 7 9 7 6 8 3 1 1 2 2 1 7 6 3 9 8 2 5 8 3 9 . . . . . . . . . . . . . 0 4 6 7 4 0 3 3 5 9 3 7 6 All sectors 53 Total credit market debt, domestic and foreign 13,536.5 14,169.3 15,002.7 15,894.5 14,782.8 15,002.7 15,124.9" 15,341.4r 15,602.4" 15,894.5 5 5 4 5 T U a . x S - . e g x o e v m e p rn t m se e c n u t r i s t e ie c s u rities 3 1 , , 9 0 1 6 1 2. .7 1 4 1 , , 3 1 3 3 5 1 . . 7 6 4 1 , , 7 1 9 9 5 7 . . 5 3 5 1 , , 2 2 0 5 8 7 . . 8 8 4 1 , . 6 1 7 8 7 6 . . 6 4 4 1 , , 7 1 9 9 5 7. . 3 5 4 1 . , 8 2 9 1 1 0 . . 2 0 4 1 , , 9 2 7 2 0 5 . . 9 7 , ,2 0 4 8 1 4 . . 8 7 5 1 , , 2 2 0 5 8 7 . . 8 8 5 5 6 5 5 6 8 6 7 0 9 1 C C M O B O o o a p t o h n n r e r p e s k t n g u o r a l m r m l o a g o a t e a e a e n r r s n k s a s c e n r n t e d . d p e f i a .c t o p r e e r i gn bonds 3 1 , , 7 9 8 8 6 6 1 2 1 1 0 7 9 8 8 3 9 3 . . . . . . 7 4 3 0 9 5 3 1 , , 8 7 7 5 8 8 8 9 6 9 3 2 5 9 5 1 5 3 . . . . . . 5 9 7 9 8 1 4 1 , , 0 8 7 5 9 8 0 0 8 7 7 5 6 9 3 9 9 1 . . . . . . 7 2 7 0 5 7 2 4 , ,1 1 8 7 5 8 8 7 7 5 5 8 6 2 9 8 1 0 . . . . . . 1 6 2 3 8 0 3 1 . , 9 7 7 5 8 9 8 8 4 8 8 4 4 0 0 4 3 5 . . . . . . 5 2 6 5 6 5 4 1 , , 0 9 8 7 5 8 0 7 0 8 5 7 6 9 9 3 1 9 . . . . . . 7 5 2 7 7 0 2 4 , . 0 0 7 7 5 8 3 2 9 6 6 4 3 3 3 4 5 3 . . . . . . 5 3 7 3 4 7 " r 2 4 , , 0 0 8 7 5 8 7 7 7 0 4 7 6 2 3 7 2 2 . . . . . . 9 9 0 5 3 0 " " " , , 8 7 5 8 1 1 7 4 2 6 4 3 0 5 1 0 0 8 . . . . . . 5 3 1 1 7 2 " " " " 2 4 , ,1 1 8 7 5 8 8 7 7 5 5 8 6 2 9 8 1 0 . . . . . . 1 2 6 8 0 3 Digitized for F1R. ADSatEa Rin 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 DomesticN onfinancial Statistics • August 1994 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 1992 1993 1994 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999900 11999911 11999922 11999933 Q3 Q4 Ql Q2 Q3 Q4* Ql CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 13,536.5 14,169.3 15,002.7 15,894.5 14,782.8 15,002.7 15,124.9" 15,341.4R 15,602.4R 15,894.5 16,125.0 2 Private domestic nonfinancial sectors 2,246.8 2,205.8 2,288.3 2,251.9 2,209.1 2,288.3 2,266.3r 2,221.9 2,208.2r 2,251.9 2,312.1 3 Households 1,454.6 1,380.0 1,434.2 1,392.7 1,369.4 1,434.2 l,419.8r l,375.4r l,358.4r 1,392.7 1,450.7 4 Nonfarm noncorporate business 54.9 50.7 48.3 45.8 48.1 48.3 47.0 46.3 45.6 45.8 44.4 5 Nonfinancial corporate business 175.8 180.1 216.4 228.8 199.5 216.4 208.lr 214.9* 220.9r 228.8 226.6 6 State and local governments 561.5 595.1 589.4 584.6 592.1 589.4 591.5 591.4 583.4 584.6 590.4 7 U.S. government 239.1 247.0 235.0 216.4 239.2 235.0 229.2 223.0* 218.6r 216.4 206.3 8 9 F F o in r a e n ig c n ia l sectors 10, 8 1 9 5 7 3 . . 5 1 10, 9 7 3 8 6 0 . . 2 3 1 1 1 , , 0 4 3 4 1 7 . . 6 8 1 1 2 , , 1 2 5 7 1 4 . . 4 8 1 1 1 , , 0 3 1 1 5 9 . . 5 0 1 1 1 , , 0 4 3 4 1 7 . . 6 8 ll 1 , , 5 0 8 41 7 . . 7 R r ll i , , 8 06 2 5 5 . . 0 4 * r 12 l, , 0 0 9 75 9 . . 9 6 R r 1 1 2 , , 1 2 5 7 1 4 . . 4 8 1 1 2 , , 1 4 7 2 9 7 . . 5 1 10 Government-sponsored enterprises 371.8 397.7 466.7 551.0 446.3 466.7 464.1 496.7 532.0* 551.0 570.5 11 Federally related mortgage pools 1,019.9 1,156.5 1,272.0 1,348.6 1,244.0 1,272.0 1,299.8 1,301.3 1,327.1 1,348.6 1,388.4 12 Monetary authority 241.4 272.5 300.4 336.7 285.2 300.4 303.6 318.2 324.2 336.7 341.5 13 Commercial banking 2,772.5 2,856.8 2,951.6 3,094.8 2,928.2 2,951.6 2,960.9 3,003.2 3,040.2 3,094.8 3,125.8 14 U.S. commercial banks 2,466.7 2,506.0 2,575.7 2,726.2 2,560.0 2,575.7 2,594.6 2,633.8 2,674.7 2,726.2 2,748.3 15 Foreign banking offices 270.8 319.2 335.8 326.0 328.9 335.8 326.7 327.1 322.3 326.0 332.3 16 Bank holding companies 13.4 11.9 17.5 17.4 17.5 17.5 16.4 18.4 18.6 17.4 19.6 17 Banks in U.S. affiliated areas 21.6 19.7 22.5 25.1 21.8 22.5 23.3 23.9 24.5 25.1 25.6 18 Private nonbank finance 5,747.4 6,096.7 6,457.1 6,943.7 6,415.3 6,457.1 6,559.2* 6,706.0* 6,852.5r 6,943.7 7,000.9 19 Thrift institutions 1,324.6 1,197.3 1,140.9 1,127.7 1,144.9 1,140.9 1,130.0 1,129.8 1,134.0* 1,127.7 1,127.5 20 Insurance 2,473.7 2,708.0 2,874.9 3,067.3 2,854.5 2,874.9 2,943.9 2,992.3 3,057.5 3,067.3 3,086.9 21 Life insurance companies 1,116.5 1,199.6 1,282.0 1,391.5 1,264.7 1,282.0 1,317.3 1,349.5 1,378.6 1,391.5 1,426.5 22 Other insurance companies 344.0 376.3 389.0 398.4 386.9 389.0 391.2 393.8 396.0 398.4 403.4 23 Private pension funds 607.4 692.7 719.0 759.2 728.2 719.0 748.5 751.3 774.3 759.2 733.0 24 State and local government retirement funds... 405.9 439.4 484.9 518.2 474.6 484.9 486.9 497.7 508.7 518.2 524.0 25 Finance n.e.c 1,949.1 2,191.5 2,441.2 2,748.7 2,415.9 2,441.2 2,485.3r 2,584.0r 2,661.0* 2,748.7 2,786.5 26 Finance companies 497.0 484.9 486.6 481.3 477.8 486.6 473.7 473.5 472.0 481.3 492.8 27 Mortgage companies 14.6 25.9 26.1 25.7 29.3 26.1 13.5r 29.7r 29.2* 25.7 22.7 28 Mutual funds 360.2 450.5 574.2 738.2 550.2 574.2 611.4 659.9 703.6 738.2 754.3 29 Closed-end funds 37.1 52.4 64.6 76.0 61.3 64.6 66.9 70.1 72.8 76.0 79.1 30 Money market funds 372.7 402.7 404.1 417.0 408.2 404.1 404.5 403.9 400.6 417.0 422.2 31 Real estate investment trusts (REITs) 7.7 6.8 7.4 8.6 7.4 7.4 8.1 8.3 8.6 8.6 8.8 32 Brokers and dealers 177.9 226.9 267.1 324.2 289.6 267.1 287.0 303.6 320.9 324.2 314.7 33 Asset-backed securities issuers (ABSs) 269.1 318.1 379.9 443.5 365.1 379.9 390.2r 402.6r 422.9* 443.5 456.0 34 Bank personal trusts 212.9 223.3 231.2 234.3 226.9 231.2 230.0r 232.2r 230.4* 234.3 235.8 RELATION OF LIABILITIES TO FINANCIAL ASSETS 35 Total credit market debt 13,536.5 14,169.3 15,002.7 15,894.5 14,782.8 15,002.7 15,124.9* 15,341.4R 15,602.4* 15,894.5 16,125.0 Other liabilities 36 Official foreign exchange 61.3 55.4 51.8 53.4 55.4 51.8 54.5 53.9 55.6 53.4 56.4 37 Treasury currency and special drawing rights certificates 26.3 26.3 24.5 25.0 26.5 24.5 24.6 24.7 24.8 25.0 25.1 38 Life insurance reserves 380.0 405.7 433.0 483.5 426.4 433.0 446.4 456.2 471.1 483.5 495.9 39 Pension fund reserves 3,400.3 4,056.5 4,357.8 4,774.7 4,250.0 4,357.8 4,494.2r 4,557.5r 4,706.0* 4,774.7 4,685.2 40 Interbank claims 64.0 65.2 113.1 146.3 100.7 113.1 M.R 118.LR 137.6* 146.3 177.9 41 Deposits at financial institutions 4,836.8 4,885.2 4,892.1 4,977.9 4,909.3 4,892.1 4,887.8 4,929.3r 4,924.2* 4,977.9 4,983.1 42 Checkable deposits and currency 932.8 1,008.5 1,131.0 1,250.5 1,072.0 1,131.0 1,092.2 1,169.1 1,182.6 1,250.5 1,225.0 43 Small time and savings deposits 2,336.3 2,353.0 2,292.2 2,212.4 2,303.7 2,292.2 2,262.0 2,242.2 2,223.0* 2,212.4 2,215.2 44 Large time deposits 537.7 476.9 397.2 381.1 418.4 397.2 398.3 389.9 379.7 381.1 374.2 45 Money market fund shares 498.4 539.6 543.6 559.4 552.9 543.6 556.6 549.8 547.9 559.4 582.2 46 Security repurchase agreements 372.3 355.8 389.4 456.6 417.6 389.4 443.5 448.4 470.9 456.6 470.6 47 Foreign deposits 159.4 151.3 138.8 117.9 144.6 138.8 135.3 129.8r 120.2* 117.9 115.9 48 Mutual fund shares 602.1 813.9 1,042.1 1,429.3 965.6 1,042.1 1,134.6 1,225.8 1,342.4 1,429.3 1,503.1 49 Security credit 137.4 188.9 217.3 279.3 214.5 217.3 225.1 234.7 254.5 279.3 280.2 50 Trade debt 936.4 926.7 978.1 1,032.1 965.1 978.1 976.4r 985.4r 1,007.5* 1,032.1 1,030.4 51 Taxes payable 77.4 68.9 76.8 80.5 74.6 76.8 79.9* 77.9" 79.3* 80.5 83.6 52 Investment in bank personal trusts 509.9 596.7 619.1 643.9 610.9 619.1 622.5r 629. lr 632.8* 643.9 634.4 53 Miscellaneous 2,732.4 2,884.3 3,053.7 3,273.7 3,026.7 3,053.7 3,069.9" 3,160.3r 3,216.1* 3,273.7 3,365.8 54 Total liabilities 27,300.7 29,143.0 30,862.1 33,093.9 30,408.2 30,862.1 31,251.8R 31,794.3R 32,454.4* 33,093.9 33,446.2 Financial assets not included in liabilities (+) 55 Gold and special drawing rights 22.0 22.3 19.6 20.1 23.2 19.6 19.8 20.0 20.3 20.1 20.4 56 Corporate equities 3,543.7 4,869.4 5,540.6 6,120.7 4,995.4 5,540.6 5,721.3 5,741.9 6,006.6 6,120.7 5,961.9 57 Household equity in noncorporate business 2,440.6 2,344.6 2,274.5 2,228.3 2,320.3 2,274.5 2,259.8r 2,261.0* 2,252.6* 2,228.3 2,179.3 Floats not included in assets (-) 58 U.S. government checkable deposits 15.0 3.8 6.8 5.6 4.0 6.8 3.4 3.5 2.2 5.6 .3 59 Other checkable deposits 28.9 30.9 32.5 28.7 23.3 32.5 27.2 29.6 21.7 28.7 21.8 60 Trade credit -146.0 -144.1 -128.5 -109.2 -149.6 -128.5 -135.7r -140.4r -139.1* -109.2 -114.1 Liabilities not identified as assets (-) 61 Treasury currency -4.1 -4.8 -4.9 -5.1 -4.9 -4.9 -5.0 -5.0 -5.1 -5.1 -5.2 62 Interbank claims -32.0 -4.2 -9.3 -4.7 -5.0 -9.3 -5.6 -5.7 -7.8 -4.7 -7.4 63 Security repurchase agreements -17.7 -12.5 18.6 88.0 33.1 18.6 72. R 79.3r 100.5* 88.0 96.7 64 Taxes payable 17.8 15.5 22.4 29.6 18.2 22.4 u.r 20. lr 19.0* 29.6 21.4 65 Miscellaneous -213.4 -254.6 -254.9 -377.7 -273.2 -254.9 -309.5r -301.5r -342.3* -377.7 -317.8 66 Total identified to sectors as assets 33,658.6 36,749.2 39,014.1 41,807.8 38,101.2 39,014.1 39,594.7' 40,137.4R 41,084.7* 41,807.8 41,912.2 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 Measure 1992 1993 Sept. Oct. Dec. Jan.r Feb.r Mar.r 1 Industrial production1 104.1 106.5 110.9 111.3 111.9 112.8 114.0 114.6 115.0 115.7 Market groupings 2 Products, total 103.2 105.7 110.2 110.6 111.2 112.1 113.0 113.6 114.2 114.6 3 Final, total 105.3 108.0 112.7 113.1 113.8 114.6 115.4 116.2 117.2 117.4 4 Consumer goods 102.8 105.7 108.7 108.5 109.2 109.7 110.1 110.9 111.6 111.8 5 Equipment 108.9 111.2 118.5 119.8 120.4 121.8 123.1 123.9 125.3 125.5 6 Intermediate 96.8 99.0 102.6 103.0 103.5 104.3 105.4 105.7 105.1 105.9 7 Materials 105.4 107.7 111.9 112.2 112.8 113.9 115.5 116.0 116.2 117.5 Industry groupings 8 Manufacturing 103.7 106.8 111.7 112.1 112.9 114.0 115.4 115.6 116.1 117.0 9 Capacity utilization, manufacturing 77.8 78.6 81.5 82.3 82.2 82.4 82.8 (percent)2 89.7 97.7 100.8r 101.0 103.0 105.0 102.0 103.0 107.0 110.0 10 Construction contracts3 106.2 106.4 108.1 108.8r 109.07 109.2r 109.5r 109.6 109.8 110.1 11 Nonagricultural employment, total4 96.6 94.9 93.1 94. lr 94.2r 94.4r 94.4r 94.5 94.5 94.8 12 Goods-producing, total 97.1 95.8 93.7 94.4r 94.4r 94.5r 94.4r 94.6 94.6 94.6 13 Manufacturing, total 96.0 94.5 93.7 94.6r 94.7r 94.8r 94 95.1 95.3 95.4 14 Manufacturing, production workers 109.4 110.5 112.8 113.51 113.71 114.01 114.3r 114.4 114.6 115.0 15 Service-producing 127.6 135.3 141.7 143.1 144.1 145.0 145.9 144.7 147.3 148.1 16 Personal income, total 124.5 131.5 136.2 138.0 138.8 139.2 139.9 141.2 141.5 142.1 17 Wages and salary disbursements 113.7 117.8 117.8 119.1 119.1 119.9 120.7 120.8 121.8 121.9 18 Manufacturing 128.6 136.8 143.1 144.4 145.4 146.3 147.3 145.5 148.5 149.3 19 Disposable personal income3 121.1 126.9 135.2 136.0 138.7 139.6 141.1 139.3 141.9 144.5 20 Retail sales6 Prices7 21 Consumer (1982-84=100) 136.2 140.3 144.5 145.1 145.7 145.8 145.8 146.2 146.7 147.2 22 Producer finished goods (1982=100).... 121.7 123.2 124.7 123.8 124.6 124.5 124.1 124.5 124.8 125.0 1. Data in this table also appear in the Board's G.17 (419) monthly statistical 5. Based on data from U.S. Department of Commerce, Survey of Current release. For the ordering address, see the inside front cover. The latest historical Business. revision of the industrial production index and the capacity utilization rates was 6. Based on data from U.S. Department of Commerce, Survey of Current released in February 1994. See "Industrial Production and Capacity Utilization Business. since 1990: A Revision," Federal Reserve Bulletin, vol. 80 (March 1994), pp. 7. Based on data not seasonally adjusted. Seasonally adjusted data for changes 220-26. For a detailed description of the industrial production index, see in the price indexes can be obtained from the U.S. Department of Labor, Bureau "Industrial Production: 1989 Developments and Historical Revision," Federal of Labor Statistics, Monthly Labor Review. Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. NOTE. Basic data (not indexes) for series mentioned in notes 4, 5,and 6, and 2. Ratio of index of production to index of capacity. Based on data from the indexes for series mentioned in notes 3 and 7 can also be found in the Survey of Federal Reserve, DRI McGraw-Hill, U.S. Department of Commerce, and other Current Business. sources. Figures for industrial production for the latest month are preliminary, and many 3. Index of dollar value of total construction contracts, including residential, figures for the three months preceding the latest month have been revised. See nonresidential, and heavy engineering, from McGraw-Hill Information Systems "Recent Developments in Industrial Capacity and Utilization," Federal Reserve Company, F.W. Dodge Division. Bulletin, vol. 76 (June 1990), pp. 411-35. See also "Industrial Production Capacity 4. Based on data from U.S. Department of Labor, Employment and Earnings. and Capacity Utilization since 1987," Federal Reserve Bulletin, vol. 79, (June Series covers employees only, excluding personnel in the armed forces. 1993), pp. 590-605. 2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data seasonally adjusted except as noted 1993r 1994 Category 1991 1992 1993 Oct. Nov. Dec Jan.r Feb.r Mar.r Apr, HOUSEHOLD SURVEY DATA1 1 Civilian labor force2 125,303 126,982 128,040 128,580 128,662 128,898 130,667 130,776 130,580 130,747 Employment 2 Nonagricultural industries3 114,644 114,391 116,232 116,920 117,218 117,565 118,639 118,867 118,611 118,880 3 Agriculture 3,233 3,207 3,074 3,021 3,114 3,096 3,331 3,391 3,426 3,459 Unemployment 4 Number 8,426 9,384 8,734 8,639 8,330 8,237 8,696 8,518 8,543 8,408 5 Rate (percent of civilian labor force) 6.7 7.4 6.8 6.7 6.5 6.4 6.7 6.5 6.5 6.4 ESTABLISHMENT SURVEY DATA 6 Nonagricultural payroll employment4 . 108,256 108,519 110,171 111,112 111,366 111,610 111,711 111,919 112,298 112,656 7 Manufacturing 18,455 18,192 17,804 17,940 17,944 17,942 17,968 17,970 17,980 17,992 1 1 1 1 1 8 9 1 0 4 2 3 T T C G M F S r r i e o o n i a a r n n v n v a d i t e n n i s e r c r a p c g n e c o e m t r t e c a n o ti t n o s n t ru an ct d i o p n u blic utilities 2 2 1 4 5 6 5 8 8 , , , , , , 7 3 6 6 3 4 6 6 6 5 4 3 0 8 2 5 0 6 6 2 9 2 2 1 4 5 5 6 9 8 , , , , , , 3 7 4 0 5 6 6 9 0 7 5 7 5 3 1 9 1 3 1 3 1 2 3 1 5 5 4 6 0 8 , , , , , , 7 8 6 5 1 8 5 4 0 1 9 7 4 9 9 5 0 3 1 1 9 2 3 1 5 4 5 6 0 8 , , , , , , 7 7 7 7 6 8 6 8 9 4 0 6 7 0 7 8 8 0 1 3 5 2 3 1 5 5 4 6 0 8 , , , , , , 8 8 7 7 8 8 6 1 0 3 6 1 8 0 9 0 3 3 6 7 4 2 3 1 5 6 5 4 0 8 , , , , , , 7 9 7 7 9 9 6 0 9 6 3 2 1 1 7 2 9 8 6 8 8 2 3 1 6 5 4 5 1 8 , , , , , , 9 7 7 7 0 6 9 1 4 0 7 9 1 0 4 4 4 1 3 6 1 2 3 1 4 5 6 5 1 8 , , , , , , 9 8 7 7 1 6 9 6 0 4 7 2 1 1 8 2 3 5 6 9 6 2 3 1 5 6 4 6 1 8 , , , , , , 8 7 0 8 3 9 6 3 1 8 0 2 4 0 9 6 1 6 6 1 9 2 3 1 5 6 6 4 1 8 , , , , , , 7 7 8 4 1 9 6 5 9 8 9 6 7 0 8 0 0 5 3 2 6 1. Beginning January 1994, reflects redesign of current population survey and 4. 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 3. 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 • August 1994 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1993 1994 1993 1994 1993 1994 Q2 Q3 Q4 Qlr Q2 Q3 Q4 Q1 Q2 Q3 Q4 Ql1 Output (1987=100) Capacity (percent of 1987 output) Capacity utilization rate (percent)2 1 Total industry 110.3 111.1 112.9 115.1 135.9 136.5 137.2 138.0 81.2 81.4 82.3 83.4 2 Manufacturing 111.2 111.8 114.1 116.2 138.4 139.2 140.0 140.9 80.3 80.3 81.5 82.5 3 Primary processing3.. 107.0 107.7 109.9 110.7 127.9 128.3 128.6 129.0 83.6 83.9 85.5 85.8 4 Advanced processing 113.2 113.8 116.1 118.9 143.4 144.4 145.4 146.6 78.9 78.8 79.9 81.1 5 Durable goods 113.2 114.2 118.1 121.0 144.5 145.4 146.3 147.6 78.4 78.5 80.7 82.0 6 Lumber and products 98.0 100.8 104.9 103.8 114.8 115.0 115.2 115.4 85.4 87.6 91.1 89.9 7 Primary metals 105.2 106.7 109.6 109.7 123.3 123.0 122.6 122.4 85.3 86.8 89.4 89.6 8 Iron and steel 109.7 112.3 115.6 114.9 127.4 126.9 126.3 126.0 86.1 88.6 91.5 91.2 9 Nonferrous 99.0 98.9 101.4 102.6 117.6 117.6 117.6 117.5 84.1 84.1 86.2 87.3 10 Nonelectrical machinery 141.7 147.2 152.7 158.6 173.1 175.7 178.2 181.7 81.8 83.8 85.7 87.3 11 Electrical machinery 125.9 129.7 132.6 136.3 153.8 155.7 157.7 160.3 81.9 83.2 84.1 85.0 12 Motor vehicles and parts 118.1 112.0 131.7 142.7 153.4 154.8 156.1 157.8 76.9 72.3 84.4 90.5 13 Aerospace and miscellaneous transportation equipment 90.3 87.4 85.2 82.5 133.7 133.2 132.8 132.2 67.6 65.6 64.2 62.4 14 Nondurable goods 108.7 108.9 109.2 110.4 131.0 131.6 132.1 132.7 83.0 82.8 82.6 83.2 15 Textile mill products 108.4 108.0 107.7 108.8 118.8 119.4 119.9 120.5 91.3 90.5 89.8 90.3 16 Paper and products 113.2 111.7 114.2 114.4 124.3 124.8 125.3 125.8 91.1 89.6 91.2 90.9 17 Chemicals and products 117.7 118.6 118.6 120.2 145.1 145.9 146.8 147.7 81.2 81.2 80.8 81.4 18 Plastics materials 112.8 111.5 114.4 117.6 130.1 131.1 132.0 133.0 86.7 85.1 86.6 88.4 19 Petroleum products 104.0 104.0 107.7 104.5 115.8 115.7 115.6 115.4 89.8 89.9 93.2 90.6 20 Mining 97.5 96.8 97.3 98.4 111.4 111.1 110.8 110.6 87.5 87.1 87.8 89.0 21 Utilities 114.1 117.5 115.6 119.9 133.6 134.0 134.3 134.7 85.4 87.8 86.1 89.0 22 Electric 114.8 118.0 114.8 118.2 130.8 131.2 131.7 132.2 87.7 89.9 87.2 89.4 1973 1975 Previous cycle5 Latest cycle6 1993 1993 1994 High Low High Low High Low May Dec. Jan. Feb/ Mar.r Apr/ Mayp Capacity utilization rate (percent)2 1 Total industry 89.2 72.6 87.3 71.8 84.8 78.1 81.0 82.9 83.2r 83.3 83.7 83.6 83.5 2 Manufacturing 88.9 70.8 87.3 70.0 85.1 76.7 80.2 82.3 82.2 82.4 82.8 82.8 82.8 3 Primary processing3 92.2 68.9 89.7 66.8 89.1 78.0 83.5 86.4 ss^ 85.3 86.2 86.4 86.6 4 Advanced processing 87.5 72.0 86.3 71.4 83.3 76.0 78.8 80.6 80.7 81.2 81.4 81.3 81.2 5 Durable goods 88.8 68.5 86.9 65.0 83.9 73.8 78.3 81.9 81.9 82.0 82.1 82.2 82.1 6 Lumber and products 90.1 62.2 87.6 60.9 93.3 76.2 85.5 91.3 91.2r 89.1 89.4 89.9 90.5 7 Primary metals 100.6 66.2 102.4 46.8 92.9 74.4 85.1 92.2 90.3r 87.9 90.7 91.6 92.1 8 Iron and steel 105.8 66.6 110.4 38.3 95.7 72.2 85.6 94.5 91.9* 88.5 93.1 94.2 94.7 9 Nonferrous 92.9 61.3 90.5 62.2 88.9 75.8 84.3 88.9 87 ..9r 86.9 87.1 87.9 88.4 10 Nonelectrical machinery 96.4 74.5 92.1 64.9 83.7 71.4 81.8 87.0 86 87.4 87.8 88.4 89.4 11 Electrical machinery 87.8 63.8 89.4 71.1 84.9 77.3 81.7 84.8 84.7 84.9 85.6 86.2 86.1 12 Motor vehicles and parts 93.4 51.1 93.0 44.5 84.5 57.3 77.3 88.5 90.5r 92.6 88.3 86.6 82.9 13 Aerospace and miscellaneous (f transportation equipment. 77.0 66.6 81.1 66.9 88.3 78.5 67.9 63.7 63. 62.0 62.3 62.2 62.2 14 Nondurable goods 87.9 71.8 87.0 76.9 86.8 80.4 82.8 82.9 82.7 83.0 83.8 83.6 83.7 15 Textile mill products 92.0 60.4 91.7 73.8 92.1 78.5 91.5 89.4 89.6r 90.2 91.1 92.4 92.1 16 Paper and products 96.9 69.0 94.2 82.0 94.9 86.3 90.2 92.1 90.4r 91.3 91.1 90.1 90.2 17 Chemicals and products 87.9 69.9 85.1 70.1 85.9 79.4 81.1 81.2 81.(f 81.2 81.9 81.1 81.4 18 Plastics materials 102.0 50.6 90.9 63.4 97.0 75.3 86.2 90.3 87.3 88.2 89.8 19 Petroleum products 96.7 81.1 89.5 68.2 88.5 84.5 89.5 92.7 90.8r 90.6 90.4 93.4 93.6 20 Mining 94.4 88.4 96.6 80.6 87.0 86.8 87.2 87.5 87.6r 89.3 89.9 89.6 90.0 21 Utilities 95.6 82.5 88.3 76.2 92.6 83.1 84.1 86.2 90.6r 89.0 87.5 87.0 86.6 22 Electric 99.0 82.7 88.3 78.7 94.8 86.3 87.3 87.6 90.2 89.3 88.7 88.3 88.1 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 the ordering address, see the inside front cover. The latest historical petroleum refining; rubber and plastics; stone, clay, and glass; and primary and revision of the industrial production index and the capacity utilization rates was fabricated metals. released in February 1994. See "Industrial Production and Capacity Utilization 4. Advanced processing includes food, tobacco, apparel, furniture, printing, since 1990: A Revision," Federal Reserve Bulletin, vol. 80 (March 1994), pp. chemical products such as drugs and toiletries, leather and products, machinery, 220-26. For a detailed description of the industrial production index, see transportation equipment, instruments, miscellaneous manufacturing, and ord- "Industrial Production: 1989 Developments and Historical Revision," Federal nance. Reserve Bulletin, vol. 76, (April 1990), pp. 187-204. 5. Monthly highs, 1978 through 1980; monthly lows, 1982. 2. Capacity utilization is calculated as the ratio of the Federal Reserve's 6. Monthly highs, 1988-89; monthly lows, 1990-91. seasonally adjusted index of industrial production to the corresponding index of capacity. 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 1993 1994 pro- 1993 Group por- avg. tion May June July Aug. Sept. Oct. Nov. Dec. Jan.r Feb.r Mar.r Apr.r May" Index (1987 = 100) MAJOR MARKETS 1 Total index 100.0 110.9 110.0 110.4 110.9 111.1 111.3 111.9 112.8 114.0 114.6 115.0 115.7 115.9 116.1 2 Products 59.5 110.2 109.3 109.6 110.4 110.4 110.6 111.2 112.1 113.0 113.6 114.2 114.6 114.8 115.0 1 4 5 6 9 3 7 8 0 Fin C a o l D n p u s A r u r o a m u A d A b t e u o l u u e T A r c m t t o t r o g c u s o u s o o t t p c o i n o a k a v s s d n r s , e u s t d , s c m , p c o t t a r o r e n o o n u r n s t d d c a s u g u k u l m o a c s m l o t e l s i d e r e r s d goods.. 4 2 5 4 2 6 1 1 1 . . . . . . . . 8 8 6 5 7 0 7 1 1 1 1 1 1 1 1 8 1 1 5 1 1 0 1 6 0 0 2 7 2 8 1 . . . . . . . . 1 6 2 7 7 5 3 6 1 1 1 1 1 1 1 8 1 1 0 5 1 0 1 6 0 1 9 0 0 7 0 . . . . . . . . 5 8 4 8 0 9 8 1 1 1 1 1 1 1 1 8 0 0 1 4 0 0 0 3 7 9 2 2 5 6 8 . . . . . . . . 5 2 1 1 3 0 5 1 1 1 1 1 1 1 1 7 1 0 0 1 3 0 0 8 1 8 4 2 8 8 0 . . . . . . . . 2 0 2 3 8 6 9 3 1 1 1 1 1 1 9 7 1 1 0 0 4 0 9 1 1 2 7 8 6 3 . . . . . . . . 2 8 8 7 3 7 6 9 1 1 1 1 1 1 1 7 0 1 0 1 5 0 0 5 8 1 8 3 3 6 4 . . . . . . . . 4 7 1 7 5 1 9 1 1 1 1 1 1 1 1 8 1 1 6 0 1 1 1 5 1 2 6 9 4 3 3 . . . . . . . . 2 9 7 4 2 9 8 8 1 1 1 1 1 1 1 9 1 1 2 0 7 1 2 5 2 5 0 9 6 4 4 . . . . . . . . 4 3 8 2 7 0 6 9 1 1 1 1 1 1 1 9 1 1 1 1 8 3 2 8 8 3 5 0 8 1 4 . . . . . . . . 8 2 9 4 1 0 5 9 1 1 1 1 1 1 1 1 1 1 2 1 1 0 9 3 9 6 7 6 0 2 1 4 . . . . . . . . 2 0 7 3 9 0 0 6 2 1 1 1 1 1 1 1 0 1 1 2 3 0 4 1 0 6 7 0 1 6 1 1 . . . . . . . . 4 2 2 7 7 9 0 6 1 1 1 1 1 1 1 1 1 1 8 0 1 2 1 3 5 8 3 1 7 5 1 1 . . . . . . . . 4 2 4 3 0 3 8 1 1 1 1 1 1 1 1 9 1 1 8 2 1 1 2 8 5 8 1 3 1 7 8 . . . . . . . . 3 4 2 0 7 8 6 6 1 1 1 1 1 1 1 9 1 1 1 1 2 7 1 2 5 5 9 1 1 1 7 . . . . . . . . 3 6 1 2 2 5 3 6 11 Other 3.1 109.5 107.8 107.7 111.6 110.2 110.4 111.8 112.0 112.2 111.3 111.5 112.1 113.0 112.3 12 Appliances, A/C, and TV .8 122.9 116.6 115.5 130.6 124.9 126.4 130.4 130.7 130.5 123.7 123.4 125.7 128.0 124.5 13 Carpeting and furniture .9 102.2 101.6 103.3 103.8 103.2 102.4 104.1 102.5 102.8 104.0 105.5 104.5 105.9 107.0 14 Miscellaneous home goods .. 1.4 106.7 106.7 106.1 105.8 106.4 106.4 106.3 107.5 108.0 109.1 108.6 109.3 109.2 108.9 15 Nondurable consumer goods 20.7 108.2 107.4 108.3 109.1 109.0 108.4 108.2 107.9 107.9 108.6 109.0 110.0 110.0 110.0 16 Foods and tobacco 9.1 106.1 105.9 106.2 107.0 107.0 105.9 105.9 105.2 105.8 106.1 106.9 108.7 108.8 108.8 17 Clothing 2.6 94.9 95.8 96.0 95.2 94.3 93.3 93.3 94.3 95.1 93.8 94.4 95.7 96.4 96.5 18 Chemical products 3.6 122.5 122.2 123.0 123.9 123.7 124.1 122.6 122.3 122.0 121.6 123.3 125.3 123.5 123.7 19 Paper products 2.6 103.2 103.7 104.7 103.7 103.1 103.2 104.0 103.3 102.6 102.6 102.3 102.5 103.4 103.8 20 Energy 22..77 113.7 107.6 111.1 114.8 115.8 115.3 114.6 115.2 113.1 119.7 117.1 114.5 115.0 114.7 21 Fuels ..88 106.6 104.9 104.7 104.0 103.8 108.0 111.3 110.6 108.6 105.1 104.3 105.3 107.8 108.1 22 Residential utilities 2.0 116.5 108.6 113.6 119.0 120.4 118.2 115.9 117.0 114.9 125.4 122.1 118.1 117.8 117.3 23 Equipment 18.3 118.5 117.7 118.0 118.5 118.6 119.8 120.4 121.8 123.1 123.9 125.3 125.5 126.0 126.9 24 Business equipment 13.2 134.6 133.5 133.9 134.6 134.8 136.3 137.7 139.7 141.8 142.9 145.0 145.3 146.1 147.4 25 Information processing and related . 5.5 155.8 153.5 155.6 158.1 158.2 160.6 162.0 164.5 167.2 170.1 173.5 175.0 176.2 180.3 26 Office and computing 1.9 223.1 215.6 221.4 226.5 230.6 234.8 241.8 248.6 256.1 261.5 269.5 271.2 276.6 285.3 27 Industrial 3.9 112.2 111.8 112.4 113.6 113.3 113.2 112.5 113.0 114.8 114.0 114.6 116.2 117.4 118.0 28 Transit 2.0 136.7 138.2 133.0 127.5 126.2 129.8 136.1 141.5 142.8 145.2 147.5 141.2 139.7 135.2 29 Autos and trucks 11..00 134.5 133.1 127.2 118.9 119.6 126.5 139.6 150.5 154.9 161.0 166.7 156.1 153.7 145.9 30 Other 11..88 115.6 113.2 114.8 116.2 119.1 119.1 119.4 119.3 120.8 119.4 120.7 121.5 122.4 123.5 31 Defense and space equipment 4.4 74.8 75.6 74.9 74.6 74.0 73.7 72.7 72.5 71.5 71.0 69.9 69.9 69.8 69.6 32 Oil and gas well drilling .6 82.5 78.2 81.2 83.5 87.0 89.7 86.5 82.9 82.3 82.4 87.4 88.6 89.6 89.1 33 Manufactured homes .2 118.9 110.7 111.6 115.8 115.5 120.7 123.4 130.4 141.1 145.3 139.7 143.6 136.2 34 Intermediate products, total 14.7 102.6 101.7 101.8 102.9 103.3 103.0 103.5 104.3 105.4 105.7 105.1 105.9 106.4 106.8 35 Construction supplies 55..99 96.8 95.9 95.3 96.4 97.3 97.8 98.6 99.5 101.3 100.5 98.9 100.1 101.8 102.8 36 Business supplies 88..88 106.5 105.5 106.1 107.3 107.2 106.4 106.7 107.5 108.1 109.2 109.3 109.7 109.5 109.4 37 Materials 40.5 111.9 Ul.l 111.7 111.7 112.1 112.2 112.8 113.9 115.5 116.0 116.2 117.5 117.4 117.8 38 Durable goods materials 20.5 115.5 114.4 114.5 115.1 115.6 116.5 117.5 119.1 121.5 122.2 121.9 123.8 124.3 124.6 39 Durable consumer parts 4.1 113.9 111.7 111.0 110.3 111.4 112.6 116.0 120.4 125.7 126.7 126.0 127.1 126.0 124.9 40 Equipment parts 7.4 123.4 122.4 123.0 123.8 124.7 126.0 127.0 127.5 128.6 130.7 131.6 133.6 135.1 136.2 41 Other 9.0 109.7 109.1 109.0 110.1 109.9 110.4 110.3 111.6 113.6 113.2 112.0 114.3 114.6 115.0 42 Basic metal materials 3.1 112.5 112.1 112.0 112.0 111.2 111.7 112.9 114.7 117.6 116.2 113.1 115.1 116.7 117.2 43 Nondurable goods materials 9.0 113.8 113.7 114.3 113.7 114.6 113.6 114.1 115.3 116.6 115.4 116.2 117.6 117.1 118.0 44 Textile materials 1.2 104.2 104.7 104.9 105.5 106.1 103.1 104.0 103.7 102.1 103.2 104.4 106.2 107.1 107.0 45 Pulp and paper materials 2.0 113.7 114.2 115.7 112.4 111.5 112.7 113.2 115.2 115.2 114.0 116.1 117.6 115.5 116.5 46 Chemical materials 3.8 116.9 116.7 117.3 116.9 118.6 117.1 117.2 119.1 119.9 119.7 120.4 121.5 121.5 123.0 47 Other 2.0 113.8 112.8 112.6 113.8 114.9 114.1 115.1 114.9 120.2 115.6 115.1 116.7 116.2 116.6 48 Enei^y materials 11.0 103.7 102.9 104.4 103.6 103.7 103.1 103.0 103.1 103.2 104.8 105.6 105.4 104.7 104.8 49 Primary energy 7.3 99.1 101.0 100.7 98.0 98.0 98.4 98.2 97.6 97.5 97.3 100.2 101.1 100.4 100.5 50 Converted fuel materials 3.7 112.7 106.6 111.9 114.4 114.9 112.3 112.6 113.8 114.5 119.6 116.1 113.8 113.2 113.2 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.3 110.6 109.8 110.3 111.0 111.2 111.2 111.5 112.2 113.2 113.7 114.0 115.0 115.2 115.7 52 Total excluding motor vehicles and parts .. 95.2 110.4 109.6 110.2 110.9 111.1 111.1 111.3 111.8 112.7 113.2 113.4 114.5 114.8 115.3 53 Total excluding office and computing machines 97.7 108.2 107.5 107.8 108.1 108.2 108.3 108.8 109.6 110.6 111.1 111.3 112.0 112.0 112.1 54 Consumer goods excluding autos and trucks 24.8 108.5 107.6 108.3 109.5 109.3 108.8 108.8 108.6 108.7 109.3 109.6 110.5 110.6 110.5 55 Consumer goods excluding energy 23.8 108.2 107.8 107.7 108.2 107.8 107.7 108.6 109.0 109.8 109.9 111.0 111.5 111.4 110.8 56 Business equipment excluding autos and trucks 12.8 134.6 133.5 134.5 136.0 136.1 137.2 137.5 138.7 140.6 141.3 143.2 144.4 145.4 147.6 57 Business equipment excluding office and computing equipment 11.3 119.7 119.6 119.2 119.2 118.7 119.8 120.2 121.3 122.5 123.0 124.1 124.1 124.1 124.3 58 Materials excluding energy 29.5 115.0 114.2 114.4 114.7 115.3 115.6 116.5 118.0 120.0 120.1 120.1 121.9 122.1 122.6 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • August 1994 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued 1987 1993 1994 GGrroouupp c S o I d C e 2 p p r o o r - - aa 1 vv 99 gg 3 .. tion May lune July Aug. Sept. Oct. Nov. Dec. Jan.r Feb.r Mar.r Apr/ MMaayypp Index (1987 = 100) MAJOR INDUSTRIES 59 Total index 100.0 110.9 110.0 110.4 110.9 111.1 111.3 111.9 112.8 114.0 114.6 115.0 115.7 115.9 116.1 60 Manufacturing 84.3 111.7 111.1 111.2 111.6 111.8 112.1 112.9 114.0 115.4 115.6 116.1 117.0 117.3 117.6 61 Primary processing 27.1 107.6 106.9 107.3 107.4 107.9 107.7 108.5 109.9 111.3 110.7 110.0 111.3 111.7 112.1 62 Advanced processing 57.1 113.7 113.1 113.0 113.6 113.6 114.2 115.0 116.0 117.4 117.9 119.0 119.7 120.0 120.1 63 Durable goods 46.5 114.3 113.2 113.0 113.7 113.9 115.0 116.2 118.0 120.1 120.4 120.9 121.6 122.1 122.3 64 Lumber and products... "'24 2.1 100.6 98.2 97.6 99.6 100.9 101.8 104.6 104.9 105.2 105.2 102.8 103.3 104.0 104.7 65 Furniture and fixtures... 25 1.5 103.3 101.5 102.7 103.5 105.2 105.2 104.8 104.2 106.3 105.4 107.4 107.9 107.1 108.3 66 Gay, glass, and stone products 32 2.4 98.7 97.9 98.2 98.8 98.4 99.9 99.7 100.5 104.6 101.1 100.0 102.2 101.2 101.9 67 Primary metals 33 3.3 106.5 105.0 105.6 105.6 107.2 107.3 106.1 109.8 113.0 110.5 107.6 111.0 112.2 112.8 68 Iron and steel 333311,,22 1.9 111.6 109.1 111.1 111.9 112.8 112.4 113.3 114.4 119.1 115.8 111.5 117.3 118.6 119.3 69 Raw steel .1 105.7 105.5 106.6 106.9 106.3 105.9 107.2 106.2 110.9 102.0 105.8 106.0 105.3 70 Nonferrous 333333--66,,99 1.4 99.5 99.2 98.1 97.0 99.4 100.3 96.2 103.5 104.5 103.3 102.1 102.4 103.3 103.9 71 Fabricated metal products 34 5.4 99.5 98.5 98.3 99.6 99.6 99.6 100.7 102.1 102.6 103.9 103.0 103.9 104.4 104.3 72 Industrial and commercial machinery and computer equipment . 35 8.5 144.1 141.6 143.3 146.1 147.1 148.4 150.3 152.0 155.7 156.3 158.8 160.8 163.3 166.5 73 Office and computing machines 357 2.3 223.1 215.6 221.4 226.5 230.6 234.8 241.8 248.6 256.1 261.5 269.5 271.2 276.6 285.3 74 Electrical machinery 36 6.9 127.5 125.7 126.4 128.6 129.5 130.9 131.4 132.1 134.3 134.8 136.1 138.0 139.9 140.6 75 Transportation equipment 37 9.9 104.2 104.2 101.2 98.9 98.5 100.4 104.2 108.3 110.7 111.9 113.0 110.1 109.0 106.3 76 Motor vehicles and parts 371 4.8 120.7 118.5 114.7 110.2 110.6 115.1 124.1 132.4 138.5 142.1 146.1 139.9 137.8 132.4 77 Autos and light trucks 2.5 118.4 116.4 111.2 106.0 104.0 109.2 120.8 131.7 138.4 141.8 148.5 138.4 135.7 127.8 78 Aerospace and miscellaneous transportation equipment... 372-6,9 5.1 88.7 90.7 88.6 88.3 87.2 86.7 85.5 85.7 84.5 83.4 82.0 82.2 81.9 81.8 79 Instruments 38 5.1 104.0 104.6 104.4 104.8 103.2 104.0 102.7 102.4 102.3 103.7 104.1 104.5 103.7 103.8 80 Miscellaneous 39 1.3 109.3 109.4 108.5 108.8 108.8 110.3 109.6 110.1 110.3 110.7 109.9 110.9 111.7 111.4 81 Nondurable goods 37.8 108.7 108.5 108.9 109.1 109.2 108.5 108.8 109.1 109.7 109.6 110.1 111.5 111.4 111.7 82 Foods "'20 8.8 108.6 107.9 108.8 108.8 109.6 109.0 109.0 108.4 109.0 109.2 110.1 112.0 112.0 111.8 83 Tobacco products 21 1.0 91.0 94.1 89.4 97.3 90.3 85.4 86.4 83.3 84.3 88.2 86.7 88.5 89.5 90.8 84 Textile mill products — 22 1.8 107.8 108.7 109.3 108.5 108.8 106.6 107.7 108.0 107.4 107.8 108.7 110.0 111.7 111.5 85 Apparel products 23 2.3 93.1 93.5 93.6 93.6 93.2 92.1 92.1 92.6 93.1 92.4 92.9 94.2 94.6 94.9 86 Paper and products 26 3.6 112.3 112.1 114.1 111.7 112.1 111.4 112.7 114.5 115.5 113.5 114.9 114.8 113.6 113.9 87 Printing and publishing.. 27 6.5 101.3 101.1 101.3 101.6 100.9 101.1 101.6 101.7 101.9 101.7 102.3 103.3 103.1 103.6 88 Chemicals and products. 28 8.8 117.8 117.6 118.3 118.6 118.8 118.3 117.8 118.8 119.3 119.3 119.9 121.3 120.3 121.1 89 Petroleum products 29 1.3 104.9 103.7 104.2 103.2 103.5 105.3 108.2 107.8 107.1 104.8 104.5 104.3 107.7 108.0 90 Rubber and plastic products 30 3.2 115.9 115.4 115.1 116.9 117.5 116.7 116.5 117.8 119.3 120.3 119.7 122.5 122.6 123.2 91 Leather and products ... 31 .3 85.0 85.6 84.7 83.8 83.6 83.5 83.9 83.5 85.1 84.8 83.1 85.1 85.5 84.1 92 Mining 8.0 97.3 97.1 97.9 96.4 96.6 97.4 98.0 96.9 96.9 97.0 98.8 99.5 99.1 99.5 93 Metal "lO .3 167.6 171.2 169.7 170.4 152.9 159.4 175.8 168.5 177.3 177.8 167.4 166.6 167.0 168.8 94 Coal 12 1.2 103.8 102.9 106.9 100.9 98.5 104.4 104.4 101.1 104.7 104.0 114.4 120.4 119.8 116.1 95 Oil and gas extraction 13 5.8 92.2 92.1 92.6 91.6 93.3 92.6 92.6 91.8 90.9 91.0 91.8 91.5 90.9 92.0 96 Stone and earth minerals .. 14 .7 93.8 93.4 91.3 92.7 94.1 94.5 94.1 98.2 93.9 94.9 97.1 96.3 98.0 99.6 97 Utilities 7.7 116.2 112.4 115.4 118.0 118.4 116.2 114.9 116.1 115.8 121.9 119.8 118.0 117.4 117.1 96 Electric 49i,3PT 6.1 115.9 114.2 115.5 118.8 119.5 115.8 113.7 115.2 115.5 119.1 118.1 117.4 117.1 116.9 99 Gas 492,3PT 1.6 117.2 105.7 115.1 115.0 114.4 118.0 119.1 119.4 117.0 132.6 126.4 120.1 118.7 117.7 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 79.5 111.2 110.6 110.9 111.7 111.8 111.9 112.2 112.9 114.0 114.0 114.3 115.6 116.0 116.7 101 Manufacturing excluding office and computing machines 81.9 108.6 108.1 108.0 108.3 108.4 108.6 109.2 110.2 111.4 111.4 111.7 112.6 112.7 112.8 Gross value (billions of 1987 dollars, annual rates) MAJOR MARKETS 102 Products, total 1,707.0 1,886.9 1,868.0 1,871.8 1,878.8 1,878.2 1,886.3 1,908.8 1,928.2 1,943.9 1,955.4 1,964.1 1,961.4 1,970.6 1,964.5 103 Final 1,314.6 1,480.7 1,466.1 1,468.2 1,471.4 1,470.0 1,479.5 1,498.9 1,514.9 1,525.7 1,535.0 1,547.9 1,543.1 1,548.2 1,541.2 104 Consumer goods 866.6 944.1 933.6 936.1 939.2 937.3 940.2 953.1 960.2 963.7 968.7 974.0 971.8 975.1 967.3 105 Equipment 448.0 536.7 532.5 532.1 532.2 532.7 539.2 545.7 554.7 561.9 566.3 573.9 571.3 573.1 573.9 106 Intermediate 392.5 406.1 401.9 403.7 407.4 408.2 406.9 410.0 413.3 418.2 420.4 416.2 418.3 422.4 423.3 1. Data in this table also appear in the Board's G.17 (419) monthly statistical 220-26. For a detailed description of the industrial production index, see release. For the ordering address, see the inside front cover. The latest historical "Industrial Production: 1989 Developments and Historical Revision," Federal revision of the industrial production index and the capacity utilization rates was Reserve Bulletin, vol. 76, (April 1990), pp. 187-204. released in February 1994. See "Industrial Production and Capacity Utilization 2. Standard industrial classification. since 1990: A Revision," Federal Reserve Bulletin, vol. 80 (March 1994), pp. 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 1994 IItteemm 11999911 11999922 11999933 July Aug. Sept. Oct. Nov. Dec. Jan.r Feb.r Mar. Apr. Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 949 1,095 1,19^ 1.1691 l,234r l,265r l,298r l,363r l,474r 1,312 1,252 1,313 1,380 2 One-family 754 911 986r 973r l,004r l,036r l,078r l,132r . l,181r 1,071 1,054 1,068 1,069 3 Two-or-more-family 195 184 213r 196r 230r 229 220" 23 lr 293r 241 198 245 311 4 Started 1,014 1,200 1,288 1,245 1,319 1,359 1,409 1,406 1,612 1,271 1,328 1,519 1,472 5 One-family 840 1,030 1,126 1,076 1,178 1,160 1,231 1,248 1,383 1,125 1,121 1,271 1,208 6 Two-or-more-family . 174 169 162 169 141 199 178 158 229 146 207 248 264 7 Under construction at end of period' 606 612 680 658 662 678 686 699 713 716 720 734 743 8 One-family 434 473 543 526 534 544 551 564 574 577 578 587 588 9 Two-or-more-family 173 140 137 132 128 134 135 135 139 139 142 147 155 10 Completed 1,091 1,158 1,193 1,097 1,248 1,172 1,248 1,248 1,289 1,216 1,334 1,263 1,359 11 One-family 838 964 1,040 955 1,068 1,041 1,081 1,107 1,139 1,075 1,185 1,106 1,200 12 Two-or-more-family 253 194 153 142 180 131 167 141 150 141 149 157 159 13 Mobile homes shipped 171 210 254 246 247 254 260 283 308 316 301 308 290 Merchant builder activity in one-family units 1 1 4 5 N N u u m m b b e e r r f s o o r l d s ale at end of period . 5 2 0 8 7 4 6 2 1 6 0 6 6 2 6 94 6 r 6 2 4 7 7 7 6 2 4 8 5 6 7 2 3 8 8 8 7 2 2 9 3 1 7 29 6 4 6 8 2 1 9 7 4 r r 6 2 4 % 2 6 2 8 9 9 9 7 3 3 0 3 0 6 3 8 0 3 2 Price of units sold (thousands of dollars)2 1 1 6 7 A M v e e d r i a a g n e 1 14 2 7 0 . . 0 0 1 14 2 4 1 . . 9 3 1 14 2 7 6 . . 6 1 1 14 2 3 3 . . 4 9 1 1 2 5 6 0 . . 6 6 1 1 2 5 9 0 . . 4 1 1 1 4 2 6 5 . . 9 0 1 1 3 5 0 2 . . 0 5 1 1 2 4 5 6 . .4 0 r 1 15 2 3 6 . . 4 0 1 15 2 0 9 . . 4 5 1 1 3 5 2 4 . . 0 1 1 15 2 3 9 . . 9 0 EXISTING UNITS (one-family) 18 Number sold 3,219 3,520 3,800 3,850 3,860 3,990 4,030 4,120 4,350 4,250 3,840 4,070 4,120 Price of units sold (thousands of dollars)2 19 Median 99.7 103.6 106.5 108.4 108.8 107.2 106.6 107.1 107.4 107.9 107.2 107.6 108.9 20 Average 127.4 130.8 133.1 135.8 135.4 133.6 133.0 133.1 133.7 134.6 133.3 134.4 135.5 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 403,439 436,043 470,118 466,593 468,547 477,125 488,661 497,875 508,720 496,907 496,122 505,363 508,531 22 Private 293,536 317,256 342,953 337,909 341,351 345,572 354,506 364,512 371,444 366,146 365,707 376,228 382,676 2 2 2 2 2 2 4 5 6 3 7 8 N Re o I C P O s n n u i o t r d d h b e m u e e l s n i s m i r c t d t r i b e e a i u a r u n l t c l i i t i l l i a d i b a t l i u l i n e i b g l s d u s a i i n l n d g d i s n o g t s h er 1 1 4 2 4 2 3 5 8 2 4 0 5 7 , , , , , , 4 1 7 6 2 8 8 9 3 9 8 3 2 7 9 1 9 7 1 1 4 2 4 2 2 8 1 0 5 1 9 7 , , , , , , 5 7 6 4 4 8 2 2 9 9 3 2 3 0 9 4 6 0 2 1 4 2 4 2 0 3 3 0 7 3 8 4 , , , , , , 1 6 6 4 8 0 4 5 5 6 0 9 5 4 7 1 5 2 2 1 4 2 4 0 1 3 1 3 8 4 9 3 , , , , , , 5 8 1 6 2 7 2 1 3 7 9 3 4 7 8 8 9 1 2 1 2 4 2 4 0 3 0 2 7 5 6 4 , , , , , , 1 3 2 0 5 7 2 4 9 4 4 5 6 2 4 2 7 7 2 1 4 2 4 2 0 3 2 7 1 4 9 6 , , , , , , 2 9 3 4 0 5 2 9 4 5 8 2 5 4 6 2 7 0 2 1 4 2 4 1 2 3 4 1 8 5 4 8 , , , , , , 2 2 4 9 6 5 2 5 7 8 3 0 4 1 2 8 4 9 2 1 4 2 4 2 2 4 5 2 9 3 2 1 , , , , , , 9 1 5 9 7 7 6 9 5 9 9 1 7 4 6 7 8 5 2 1 4 2 4 2 2 4 8 1 8 4 9 2 , , , , , , 1 7 1 1 2 1 6 6 3 4 9 4 0 7 2 0 9 5 2 1 2 4 2 4 3 3 1 5 2 6 0 5 , , , , , , 2 4 9 1 3 9 6 0 3 5 9 4 5 7 6 6 0 8 2 1 4 2 4 2 3 3 1 0 6 4 2 1 , , , , , , 9 6 5 6 0 5 9 5 1 3 5 1 0 2 3 6 5 3 2 1 2 4 4 3 2 3 6 0 6 8 3 7 , , , , , , 9 5 5 7 4 7 2 5 3 4 7 5 8 7 2 0 1 7 2 1 4 2 4 2 4 4 6 1 8 4 1 1 , , , , , , 4 9 5 5 1 5 9 4 2 3 7 0 7 5 6 4 4 2 29 Public 109,900 118,784 127,166 128,684 127,196 131,553 134,155 133,362 137,276 130,761 130,414 129,136 125,855 30 Military 1,837 2,502 2,448 2,493 2,583 2,492 2,315 2,237 2.310 2,759 2,448 2,253 2,215 31 Highway 32,026 34,929 37,299 37,376 35,148 39,147 40,644 41,341 40,857 40,966 38,515 39,810 38,787 32 Conservation and development... 4,861 5,918 5,937 5,661 5,620 6,307 5,951 5,249 5.311 5,681 6,812 4,983 5,164 33 Other 71,176 75,435 81,482 83,154 83,845 83,607 85,245 84,535 88,798 81,355 82,639 82,090 79,689 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 • August 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 IIIttteeemmm 1993 1994 19941 lll MMM eeevvv aaa eee yyy lll,,, 11999933 11999944 111999999444111 MMaayy MMaayy June Sept.r Dec.r Mar.r Jan. Feb. Mar. Apr. May CONSUMER PRICES2 (1982-84=100) 1 All items 3.2 2.3 2.5 2.0 3.3 2.5 .0 .3 .3 .1 .2 147.5 2 Food 2.7 1.7 2.3 2.6 4.9 -1.1 -.1 -.3 .1 .1 .3 143.5 3 Energy items 2.0 -1.4 -3.8 -4.2 1.2 4.7 -.8 1.6 .4 -.4 -1.0 102.9 4 All items less food and energy 3.4 2.8 3.2 2.1 3.4 2.9 .1 .3 .3 ..22 .3 156.0 5 Commodities 2.3 1.3 .9 .0 2.4 .6 .0 -.1 .3 ..11 .4 137.5 6 Services 4.0 3.5 4.1 3.5 3.7 4.2 .2 .4 .4 .2 .2 166.6 PRODUCER PRICES (1982=100) 7 Finished goods 2.1 -.4 .0 -2.5 -.3 3.9 .3r ,4r .2 -.1 -.1 125.3 8 Consumer foods 3.1 -.3 1.3 3.2 5.2 -.9 -,4r -,3r .5 -.5 -.9 126.5 9 Consumer energy 2.3 -4.3 -5.4 -7.4 -15.6 16.6 I.R 2.8 .0 -.1 -1.0 76.2 10 Other consumer goods 1.8 -.7 .6 -6.4 1.5 2.3 ,4r .(f .1 -.1 .4 139.0 11 Capital equipment 1.7 2.4 .6 2.2 .3 4.6 ,7r ,2r .3 .4 .4 134.4 Intermediate materials 12 Excluding foods and feeds 1.6 .7 .3 -1.0 -.3 2.8 .R .4 .2 .0 .2 117.3 13 Excluding energy 1.6 1.5 .0 1.0 1.6 1.6 .2 .0 .2 .2 .3 125.7 Crude materials 14 Foods 3.5 -2.0 -3.0 13.1 18.4 -4.8 -.9 .6r -1.0 -1.1 -3.4 110.0 15 Energy 5.0 -9.3 17.5 -28.1 -22.1 18.9 4.1r -8.2r 9.3 -.1 1.0 73.7 16 Other 9.6 6.6 11.2 -4.5 15.4 23.4 i.r 1.7r .9 -.3 -1.1 151.6 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 1993 1994 AAccccoouunntt 11999911 11999922 11999933 QL Q2 Q3 Q4r Ql GROSS DOMESTIC PRODUCT 1 5,722.9 6,038.5 6,377.9 6,261.6 6,327.6 6,395.9 6,526.5 6,617.6 By source 2 Personal consumption expenditures 3,906.4 4,139.9 4,391.8 4,296.2 4,359.9 4,419.1 44,,449922..00 44,,555588..00 3 Durable goods 457.8 497.3 537.9 515.3 531.6 541.9 562.8 578.0 4 Nondurable goods 1,257.9 1,300.9 1,350.0 1,335.3 1,344.8 1,352.4 1,367.5 1,382.1 5 Services 2,190.7 2,341.6 2,503.9 2,445.5 2,483.4 2,524.8 2,561.8 2,597.9 6 Gross private domestic investment 736.9 796.5 891.7 874.1 874.1 884.0 934.5 966.7 7 Fixed investment 745.5 789.1 876.1 839.5 861.0 876.3 927.6 946.6 8 Nonresidential 555.9 565.5 623.7 594.7 619.1 624.9 656.0 666.6 9 Structures 182.6 172.6 178.7 172.4 177.6 179.1 185.8 176.9 10 Producers' durable equipment 373.3 392.9 445.0 422.2 441.6 445.8 470.2 489.7 11 Residential structures 189.6 223.6 252.4 244.9 241.9 251.3 271.6 280.0 1? Change in business inventories -8.6 7.3 15.6 34.6 13.1 7.7 6.9 20.1 13 -8.6 2.3 21.1 33.0 16.8 22.6 12.0 21.7 14 Net exports of goods and services -19.6 -29.6 -63.6 -48.3 -65.1 -71.9 -69.1 -79.7 15 601.5 640.5 661.7 651.3 660.0 653.2 682.4 681.6 16 Imports 621.1 670.1 725.3 699.6 725.0 725.1 751.5 761.3 17 Government purchases of goods and services 1,099.3 1,131.8 1,158.1 1,139.7 1,158.6 1,164.8 1,169.1 1,172.6 18 445.9 448.8 443.4 442.7 447.5 443.6 440.0 441.8 19 State and local 653.4 683.0 714.6 697.0 711.1 721.2 729.2 730.8 By major type of product 70 5,731.6 6,031.2 6,362.3 6,227.1 6,314.5 66,,338888..22 66,,551199..66 66,,559977..55 ?1 2,227.0 2,305.5 2,406.4 2,362.9 2,395.0 2,401.7 2,465.8 2,501.6 ?? 934.3 975.8 1,037.0 1,003.5 1,037.8 1,032.9 1,073.7 1,097.4 ?3 Nondurable 1,292.8 1,329.6 1,369.3 ' 1,359.3 1,357.1 1,368.8 1,392.1 1,404.2 ?4 3,032.7 3,221.1 3,410.5 3,341.8 3,388.1 3,437.8 3,474.3 3,524.7 25 Structures 471.9 504.7 545.5 522.4 531.5 548.7 579.5 571.2 26 Change in business inventories -8.6 7.3 15.6 34.6 13.1 7.7 6.9 20.1 27 Durable goods -12.9 2.1 10.9 15.0 2.7 14.8 11.0 21.7 28 Nondurable goods 4.3 5.3 4.7 19.5 10.4 -7.2 -4.1 -1.6 MEMO 29 Total GDP in 1987 dollars 4,861.4 4,986.3 5,136.0 5,078.2 5,102.1 5,138.3 5,225.6 55,,226644..11 NATIONAL INCOME 30 4,598.3 4,836.6 5,140.3R 5,038.9 5,104.0 5,143.2 5,275.0R 5,309.8 31 Compensation of employees 3,402.4 3,582.0 3,772.2 3,705.1 3,750.6 3,793.9 3,839.2 3,908.5 37 Wages and salaries 2,814.9 2,953.1 3,100.5 3,054.3 3,082.7 3,115.4 3,149.6 3,201.9 33 Government and government enterprises 545.3 567.5 589.7 584.1 586.3 592.8 595.4 603.0 34 Other 2,269.6 2,385.6 2,510.8 2,470.2 2,496.3 2,522.6 2,554.2 2,598.9 35 Supplement to wages and salaries 587.5 629.0 671.7 650.7 668.0 678.5 689.6 706.6 36 Employer contributions for social insurance 290.6 306.3 321.0 312.2 321.4 323.8 326.7 334.7 37 Other labor income 296.9 322.7 350.7 338.5 346.6 354.7 362.9 371.9 38 Proprietors'income1 376.4 414.3 443.2 444.1 439.4 422.5 467.0 474.6 39 Business and professional 339.5 370.6 397.3 388.4 392.4 397.6 410.6 416.6 40 Farm1 36.8 43.7 46.0 55.7 47.0 24.8 56.4 57.9 41 Rental income of persons2 -12.8 -8.9 12.6 7.5 12.7 13.7 16.4 2.5 4? Corporate profits1 369.5 407.2 466.6r 432.1 458.1 468.5 507.9" 474.4 43 Profits before tax3 362.3 395.4 449.4r 419.8 445.6 443.8 488.4r 470.3 44 Inventory valuation adjustment 4.9 -5.3 -7.1 -12.7 -12.2 1.0 -4.3 -16.0 45 Capital consumption adjustment 2.2 17.1 24.3 25.1 24.7 23.8 23.9 20.1 46 462.8 442.0 445.6 450.1 443.2 444.6 444.5 449.7 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 • August 1994 2.17 PERSONAL INCOME AND SAVING Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1993 1994 AAccccoouunntt 11999911 11999922 11999933 Ql Q2 Q3 Q4 Ql PERSONAL INCOME AND SAVING 1 Total personal income 4,850.9 5,144.9 5,388.3 5,254.7 5,373.2 5,412.7 5,512.7 5,576.8 2 Wage and salary disbursements 2,815.0 2,973.1 3,080.5 2,974.3 3,082.7 3,115.4 3,149.6 3,201.9 3 Commodity-producing industries 738.1 756.5 763.6 740.7 765.1 769.4 779.3 789.6 557.2 577.6 577.3 559.7 580.3 581.5 587.8 595.6 5 Distributive industries 648.0 682.0 706.6 682.9 709.1 714.4 720.1 733.4 6 Service industries 883.5 967.0 1,020.6 966.6 1,022.2 1,038.8 1,054.7 1,075.9 7 Government and government enterprises 545.4 567.5 589.7 584.1 586.3 592.8 595.4 603.0 8 Other labor income 296.9 322.7 350.7 338.5 346.6 354.7 362.9 371.9 9 Proprietors' income 376.4 414.3 443.2 444.1 439.4 422.5 467.0 474.6 10 Business and professional1 339.5 370.6 397.3 388.4 392.4 397.6 410.6 416.6 36.8 43.7 46.0 55.7 47.0 24.8 56.4 57.9 12 Rental income of persons2 -12.8 -8.9 12.6 7.5 12.7 13.7 16.4 2.5 13 Dividends 127.9 140.4 158.3 157.0 157.8 159.0 159.4 160.7 14 Personal interest income 715.6 694.3 695.2 695.4 693.1 695.7 696.7 700.2 15 Transfer payments 769.9 858.4 912.1 894.4 905.5 918.5 929.8 944.3 16 Old-age survivors, disability, and health insurance benefits ... 382.3 413.9 438.4 433.1 435.0 439.4 446.1 457.8 17 LESS: Personal contributions for social insurance 237.8 249.3 264.3 256.6 264.5 266.8 269.2 279.3 18 EQUALS: Personal income 4,850.9 5,144.9 5,388.3 5,254.7 5,373.2 5,412.7 5,512.7 5,576.8 19 LESS: Personal tax and nontax payments 620.4 644.8 681.6 657.1 681.0 689.0 699.2 715.8 20 EQUALS: Disposable personal income 4,230.5 4,500.2 4,706.7 4,597.5 4,692.2 4,723.7 4,813.5 4,860.9 21 LESS: Personal outlays 4,029.0 4,261.5 4,516.8 4,419.7 4,483.6 4,544.0 4,620.1 4,689.2 22 EQUALS: Personal saving 201.5 238.7 189.9 177.9 208.7 179.7 193.4 171.8 MEMO Per capita (1987 dollars) 23 Gross domestic product 19,237.9 19,518.0 19,887.4 19,744.4 19,785.4 19,868.8 2200,,115500..11 2200,,225500..44 24 Personal consumption expenditures 12,895.2 13,080.9 13,371.3 13,234.2 13,311.6 13,416.2 13,522.7 13,642.2 25 Disposable personal income 13,965.0 14,219.0 14,330.0 14,163.0 14,326.0 14,341.0 14,491.0 14,549.0 26 Saving rate (percent) 4.8 5.3 4.0 3.9 4.4 3.8 4.0 3.5 GROSS SAVING 27 Gross saving 733.7 717.8 780.2R 762.0 766.7 774.3 817.8R 858.4 28 Gross private saving 929.9 986.9 l,004.8r 1,024.8 988.3 988.7 l,017.5r 1,024.9 29 Personal saving 201.5 238.7 189.9 177.9 208.7 179.7 193.4 171.8 30 Undistributed corporate profits 102.3 110.4 123.6r 103.7 116.3 129.3 145.lr 117.3 31 Corporate inventory valuation adjustment 4.9 -5.3 -7.1 -12.7 -12.2 1.0 -4.3 -16.0 Capital consumption allowances 383.2 396.6 408.8 440022..22 405.2 414.0 441133..99 443333..33 33 Noncorporate 242.8 261.3 262.5 261.0 258.1 265.7 265.1 302.5 34 Government surplus, or deficit (-), national income and product accounts -196.2 -269.1 -224.6r -262.8 -221.5 -214.4 —199.7r --116666..55 35 Federal -203.4 -276.3 -226.4r -263.5 -222.6 -212.7 -207.0r -164.7 36 State and local 7.3 7.2 1.8r .8 1.1 -1.7 7.2r -1.8 37 Gross investment 743.3 741.4 795.4 796.5 778.7 787.6 819.0 853.7 38 Gross private domestic 736.9 796.5 891.7 874.1 874.1 884.0 934.5 966.7 6.4 -55.1 -96.2 -77.6 -95.4 -96.4 -115.5 -113.0 40 Statistical discrepancy 9.6 23.6 15.2R 34.4 12.0 13.3 1.2R -4.7 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 1993r 1994 Item credits or debits 1991r 1992r 1993r Ql Q2 Q3 Q4 Qlp 1 Balance on current account -6,952 -67,886 -103,896 -19,850 -25,602 -27,856 -30,587 -31,901 2 Merchandise trade balance -74,068 -96,097 -132,575 -29,191 -33,727 -36,488 -33,169 -36,%5 3 Merchandise exports 416,913 440,361 456,866 111,664 113,787 111,736 119,679 118,012 4 Merchandise imports -490,981 -536,458 -589,441 -140,855 -147,514 -148,224 -152,848 -154,977 5 Military transactions, net -5,485 -3,034 -763 -105 -129 -87 —444 -391 6 Other service transactions, net 51,082 58,747 57,613 14,874 14,786 14,317 13,637 13,091 7 Investment income, net 14,832 4,540 3,946 1,855 668 2,015 -590 -367 8 U.S. government grants 23,959 -15,010 -14,620 -3,186 -2,730 -3,114 -5,591 -2,427 9 U.S. government pensions and other transfers -3,461 -3,735 -3,785 -827 -985 -986 -987 -966 10 Private remittances and other transfers -13,811 -13,297 -13,712 -3,270 -3,486 -3,513 -3,443 -3,876 11 Change in U.S. government assets other than official reserve assets, net (increase, -) 2,900 -1,652 -306 488 -281 -192 -321 446 1 1 2 3 Ch G an o g ld e in U.S. official reserve assets (increase, -) 5,763 0 3,901 0 -1,379 0 -983 0 82 0 2 -545 0 -673 0 -59 0 14 Special drawing rights (SDRs) -177 2,316 -537 -140 -166 -118 -113 -101 15 Reserve position in International Monetary Fund -367 -2,692 -44 -228 313 -48 -80 -3 16 Foreign currencies 6,307 4,277 -797 -615 675 -378 -480 45 17 Change in U.S. private assets abroad (increase, -) -60,175 -63,759 -146,213 -12,164 -36,507 -34,915 -62,628 -56,325 18 Bank-reported claims3 4,763 22,314 32,238 28,601 5,595 7,335 -9,293 -9,062 19 Nonbank-reported claims 11,097 45 -598 -5,046 -87 4,838 -303 20 U.S. purchases of foreign securities, net -44,740 -45,114 -119,983 -24,517 -24,340 -40,777 -30,349 -26,904 21 U.S. direct investments abroad, net -31,295 -41,004 -57,870 -11,202 -17,675 -6,311 -22,683 -20,359 22 Change in foreign official assets in United States (increase, +) .. 17,199 40,858 71,681 10,968 17,492 19,259 23,%2 11,353 23 U.S. Treasury securities 14,846 18,454 48,702 1,080 5,668 19,098 22,856 1,361 24 Other U.S. government obligations 1,301 3,949 4,062 665 1,082 1,345 970 50 25 Other U.S. government liabilities4 ^ 1,177 2,572 1,666 -438 158 1,121 825 1,0% 26 Other U.S. liabilities reported by U.S. banks3 -1,484 16,571 14,666 8,257 9,485 -2,489 -587 9,636 27 Other foreign official assets3 1,359 -688 2,585 1,404 1,099 184 -102 -790 28 Change in foreign private assets in United States (increase, +).. 80,935 105,646 159,017 5,804 34,337 52,675 66,200 71,774 29 U.S. bank-reported liabilities3 3,994 15,461 18,452 -19,995 3,459 27,618 7,370 34,118 30 U.S. nonbank-reported liabilities -3,115 13,573 14,282 774 7,606 1,169 4,733 31 Foreign private purchases of U.S. Treasury securities, net 18,826 36,857 24,849 14,001 -622 3,474 7,9% ' 9,243 32 Foreign purchases of other U.S. securities, net 35,144 29,867 80,068 9,590 15,025 17,445 38,008 20,340 33 Foreign direct investments in United States, net 26,086 9,888 21,366 1,434 8,869 2,%9 8,093 8,073 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 -39,670 -17,108 21,0% 1 6 5 , , 1 7 0 3 5 7 9,7 4 3 3 9 5 - -6 8 , , 6 4 4 2 3 7 4,0 1 4 0 7 3 4 5 , , 7 7 1 1 2 9 37 Before seasonal adjustment -39,670 -17,108 21,096 9,632 9,304 -1,785 3,944 -1,007 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) 5,763 3,901 -1,379 -983 822 -545 -673 -59 39 Foreign official assets in United States, excluding line 25 (increase, +) 16,022 38,286 70,015 11,406 17,334 18,138 23,137 10,257 40 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) -4,882 5,942 -3,847 445 -869 -3,194 -229 -1,937 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 • August 1994 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data seasonally adjusted 1993r 1994 IItteemm 11999911rr 11999922rr 11999933rr Oct. Nov. Dec. Jan.r Feb/ Mar/ Apr." 1 Goods and services, balance -28,472 -40,384 -75,725 -7,919 -7,534 -4,526 -7,780 -9,609 -6,875 -8,395 2 Merchandise -74,068 -96,097 -132,575 -12,534 -11,522 -9,115 -11,971 -13,541 -11,450 -13,304 3 Services 45,596 55,713 56,850 4,615 3,988 4,589 4,191 3,932 4,575 4,909 4 Goods and services, exports 580,127 616,924 641,677 55,086 54,464 56,727 53,479 52,645 58,072 56,183 5 Merchandise 416,913 440,361 456,866 39,361 39,364 40,953 38,530 37,426 42,060 40,292 6 Services 163,214 176,563 184,811 15,725 15,100 15,774 14,949 15,219 16,012 15,891 7 Goods and services, imports -608,599 -657,308 -717,402 -63,005 -61,998 -61,253 -61,259 -62,254 -64,947 -64,578 8 Merchandise -490,981 -536,458 -589,441 -51,895 -50,886 -50,068 -50,501 -50,967 -53,510 -53,596 9 Services -117,618 -120,850 -127,961 -11,110 -11,112 -11,185 -10,758 -11,287 -11,437 -10,982 MEMO 10 Balance on merchandise trade, Census basis -66,723 -84,501 -115,568 -10,830 -9,895 -7,782 -10,850 -12,072 -9,583 -12,003 1. Data show monthly values consistent with quarterly figures in the U.S. SOURCE. FT900, U.S. Department of Commerce, Bureau of the Census and balance of payments accounts. Bureau of Economic Analysis. 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1993 1994 Asset Feb. Apr. 1 Total 83,316 77,719 71,323 74,042 73,442 74,243 75,766 76,809 76,565 2 Gold stock, including Exchange Stabilization Fund 11,058 11,057 11,056 11,054 11,053 11,053 11,053 11,052 11,053 3 Special drawing rights2,3 10,989 11,240 8,503 9,091 9,039 9,070 9,295 9,383 9,440 4 Reserve position in International Monetary Fund2 9,076 9,488 11,759 11,827 11,818 11,906 11,974 12,135 11,899 5 Foreign currencies4 52,193 45,934 40,005 42,070 41,532 42,214 43,444 44,239 44,173 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 Nov. Dec. Jan. Feb. Mar. Apr. Mayp 1 Deposits 369 968 205 596 386 257 190 454 171 174 Held in custody 2 U.S. Treasury securities2 278,499 281,107 314,481 373,864 379,394 388,065 393,238 399,817 396,495 402,170 3 Earmarked gold 13,387 13,303 13,118 12,381 12,327 12,302 12,238 12,145 12,104 12,065 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 at face value. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A55 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1993 1994 IItteemm 11999911 11999922 Oct. Nov. Dec. Jan. Feb. Mar. Apr." 1 Total1 360,530 398,816 444,107 457,129 468,825 478,608 477,993r 479,602 466,689 By type 2 Liabilities reported by banks in the United States^ 38,3% 54,%7 65,668 67,964 69,633 78,546 77,998r 79,786 74,581 3 U.S. Treasury bills and certificates 92,692 104,5% 140,525 144,865 150,900 146,940 143,222 148,707 140,653 U.S. Treasury bonds and notes 4 Marketable 203,677 210,553 201,965 208,188 211,825 216,109 220,154 215,271 215,856 5 Nonmarketable 4,858 4,532 5,579 5,615 5,652 5,689 5,725 5,763 5,799 6 U.S. securities other than U.S. Treasury securities 20,907 24,168 30,370 30,497 30,815 31,324 30,894 30,075 29,800 By area 7 Europe1 171,317 191,708 193,676 208,790 209,229 216,794 210,751 217,444 212,675 8 Canada 7,460 7,920 9,441 8,657 9,505 10,084 9,844 8,328 8,462 9 Latin America and Caribbean 33,554 40,025 54,275 50,410 57,950 57,661 61,303r 55,441 46,517 10 Asia 139,465 152,276 178,889 182,437 185,289 187,337 189,025 191,705 192,076 11 Africa 2,092 3,565 3,665 3,650 3,894 3,681 4,043 3,559 3,549 12 Other countries 6,640 3,320 4,159 3,183 2,956 3,049 3,025 3,123 3,408 1. Includes the Bank for International Settlements. 5. Debt securities of U.S. government coiporations 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 1993 IItteemm 11999900 11999911 11999922 June Sept. Dec. Mar. 1 Banks' liabilities 70,477 75,129 72,7% 75,206 81,205 77,627 85,445 2 Banks' claims 66,7% 73,195 62,799 55,533 59,116 60,271 72,126 3 Deposits 29,672 26,192 24,240 20,464 20,930 19,379 18,118 4 Other claims 37,124 47,003 38,559 35,069 38,186 40,892 54,008 5 Claims of banks' domestic customers2 6,309 3,398 4,432 3,234 2,640 3,145 3,492 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

A56 International Statistics • August 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 1994 IItteemm 11999911 11999922 11999933 Oct. Nov. Dec. Jan. Feb/ Mar. Apr.p HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 756,066 810,259 906,003 877,062 893,284 906,003 889,604 918,745 949,767 956,972 2 Banks' own liabilities 575,374 606,444 620,689 610,744 616,209 620,689 608,947 631,065 649,309 666,791 3 Demand deposits 20,321 21,828 21,576 22,014 25,462 21,576 23,488 24,217 22,905 23,509 4 Time deposits 159,649 160,385 174,984 159,375 156,994 174,984 158,943 159,613 176,684 177,760 5 Other. 66,305 93,237 109,873 128,942 126,845 109,873 129,423 136,126 112,768 124,572 6 Own foreign offices 329,099 330,994 314,256 300,413 306,908 314,256 297,093 311,109 336,952 340,950 7 Banks' custodial liabilities5 180,692 203,815 285,314 266,318 277,075 285,314 280,657 287,680 300,458 290,181 8 U.S. Treasury bills and certificates 111100,,773344 127,644 117766,,443300 164,365 169,729 176,430 170,694 166,980 173,137 167,891 9 Other negotiable and readily transferable instruments 18,664 21,974 36,078 37,562 38,555 36,078 37,329 41,892 41,727 3388,,115511 10 Other 51,294 54,197 72,806 64,391 68,791 72,806 72,634 78,808 85,594 84,139 11 Nonmonetary international and regional organizations 8,981 9,350 10,846 10,994 12,965 1100,,884466 10,869 77,,009999 8,088 55,,991144 12 Banks' own liabilities 6,827 6,951 5,550 6,790 9,091 5,550 6,855 5,724 5,643 4,330 13 Demand deposits 43 46 15 71 34 15 21 120 209 26 14 Time deposits 2,714 3,214 2,780 2,978 2,863 2,780 3,305 2,503 2,424 2,361 15 Other. 4,070 3,691 2,755 3,741 6,194 2,755 3,529 3,101 3,010 1,943 16 Banks' custodial liabilities5 2,154 2,399 5,296 4,204 3,874 5,296 4,014 1,375 2,445 1,584 17 U.S. Treasury bills and certificates6 1,730 1,908 4,275 3,566 3,201 4,275 3,497 1,321 2,097 1,358 18 Other negotiable and readily transferable instruments 424 486 1,021 638 672 1,021 517 54 338 222266 19 Other 0 5 0 0 1 0 0 0 10 0 20 Official institutions9 131,088 159,563 220,533 206,193 212,829 220,533 225,486 221,220 228,493 215,234 21 Banks' own liabilities 34,411 51,202 64,056 60,995 62,168 64,056 71,531 67,369 67,085 64,568 22 Demand deposits 2,626 1,302 1,601 2,121 2,089 1,601 1,631 1,406 1,758 1,504 23 Time deposits 16,504 17,939 21,634 14,885 17,188 21,634 20,237 20,028 23,923 21,951 24 Other. 15,281 31,961 40,821 43,989 42,891 40,821 49,663 45,935 41,404 41,113 25 Banks' custodial liabilities5 96,677 108,361 156,477 145,198 150,661 156,477 153,955 153,851 161,408 150,666 26 U.S. Treasury bills and certificates6 92,692 104,596 150,900 140,525 144,865 150,900 146,940 143,222 148,707 140,653 27 Other negotiable and readily transferable instruments 3,879 3,726 5,482 4,491 5,614 5,482 6,855 10,527 12,414 9,969 28 Other 106 39 95 182 182 95 160 102 287 44 29 Banks10 522,265 547,320 573,924 553,351 562,372 573,924 549,192 583,425 608,055 621,119 30 Banks' own liabilities 459,335 476,117 474,642 461,827 468,526 474,642 451,260 478,941 497,382 514,477 31 Unaffiliated foreign banks 130,236 145,123 160,386 161,414 161,618 160,386 154,167 167,832 160,430 173,527 32 Demand deposits 8,648 10,170 9,719 9,948 13,369 9,719 11,025 11,986 10,609 11,656 33 Time deposits 82,857 90,296 105,192 95,704 92,265 105,192 87,788 92,301 104,661 107,433 34 Other5 38,731 44,657 45,475 55,762 55,984 45,475 55,354 63,545 45,160 54,438 35 Own foreign offices 329,099 330,994 314,256 300,413 306,908 314,256 297,093 311,109 336,952 340,950 36 Banks' custodial liabilities5 62,930 71,203 99,282 91,524 93,846 99,282 97,932 104,484 110,673 106,642 37 U.S. Treasury bills and certificates6 7,471 11,087 10,707 10,046 10,539 10,707 9,832 11,051 10,745 10,079 38 Other negotiable and readily transferable instruments 5,694 7,555 16,810 19,106 17,124 16,810 17,136 17,010 17,383 15,684 39 Other 49,765 52,561 71,765 62,372 66,183 71,765 70,964 76,423 82,545 80,879 40 Other foreigners 93,732 94,026 100,700 106,524 105,118 100,700 104,057 107,001 105,131 114,705 41 Banks' own liabilities 74,801 72,174 76,441 81,132 76,424 76,441 79,301 79,031 79,199 83,416 47 Demand deposits 9,004 10,310 10,241 9,874 9,970 10,241 10,811 10,705 10,329 10,323 43 Time deposits 57,574 48,936 45,378 45,808 44,678 45,378 47,613 44,781 45,676 46,015 44 Other. 8,223 12,928 20,822 25,450 21,776 20,822 20,877 23,545 23,194 27,078 45 Banks' custodial liabilities5 18,931 21,852 24,259 25,392 28,694 24,259 24,756 27,970 25,932 31,289 46 U.S. Treasury bills and certificates 8,841 10,053 10,548 10,228 11,124 10,548 10,425 11,386 11,588 15,801 47 Other negotiable and readily transferable instruments 8,667 10,207 12,765 13,327 15,145 12,765 12,821 14,301 11,592 12,272 48 Other 1,423 1,592 946 1,837 2,425 946 1,510 2,283 2,752 3,216 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 7,456 9,111 17,567 17,533 17,089 17,567 17,509 17,929 19,209 1177,,996611 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-Amencan 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

Bank-Reported Data A57 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1—Continued 1993 1994 Item 1991 1992 1993 Oct. Nov. Dec. Jan. Feb.r Mar. Apr." AREA 1 Total, all foreigners 756,066 810,259 906,003 877,062 893,284 906,003 889,604 918,745 949,767 956,972 2 Foreign countries 747,085 800,909 895,157 866,068 880,319 895,157 878,735 911,646 941,679 951,058 3 Europe ,097 307,670 376,642 357,848 369,534 376,642 368,736 393,466 399,154 406,195 8 9 4 6 7 5 G A F D F B r i e e u e n a l r n s l g n m t a m i r c n u i a e a a d m n r y k a nd Luxembourg , , , , , 9 6 3 1 3 8 3 1 3 0 9 4 8 7 9 7 3 1 4 2 1 1 0 3 1 8 1 , , , , , , 4 5 0 6 2 6 1 6 6 3 9 1 1 0 7 0 9 1 2 3 2 4 6 8 9 1 1 , , , , , , 5 6 6 7 9 8 1 1 0 5 0 7 7 7 7 0 5 2 4 2 2 3 2 4 2 5 1 , , , , , , 0 8 0 7 6 8 3 2 8 1 4 0 4 0 4 2 1 8 2 3 2 6 7 2 4 7 1 , , , , , , 6 0 1 2 5 7 3 2 5 5 4 9 8 5 1 0 1 7 2 3 2 6 9 4 8 1 1 , , , , , , 6 7 5 6 9 8 1 0 1 5 0 7 7 5 7 0 7 2 2 3 2 7 2 2 9 5 1 , , , , , , 5 5 2 4 0 8 6 7 4 0 8 4 7 6 4 2 9 3 3 3 3 4 2 0 8 0 1 , , , , , , 1 2 4 8 6 7 5 4 2 1 2 3 9 1 6 7 9 7 4 3 3 2 2 1 1 3 1 , , , , , , 5 7 0 8 0 4 1 7 2 1 9 9 5 1 7 0 3 5 4 3 3 3 2 2 2 3 1 , , , , , , 7 1 7 3 0 9 0 3 1 4 4 3 4 7 9 2 3 2 10 Greece 765 913 1,530 1,366 1,704 1,530 1,361 1,463 1,425 1,160 11 Italy ,541 10,041 11,561 10,466 10,734 11,561 10,702 12,741 12,786 11,914 12 Netherlands ,161 7,365 16,031 13,368 14,737 16,031 17,532 17,083 17,686 16,330 13 Norway ,866 3,314 2,975 2,796 3,199 2,975 2,533 2,340 2,429 2,537 14 Portugal ,184 2,465 3,366 3,215 3,229 3,366 3,131 3,170 3,131 4,061 15 Russia 241 577 2,511 2,623 2,530 2,511 2,208 2,017 1,971 3,041 16 Spain ,391 9,793 20,494 20,182 19,705 20,494 19,652 18,119 19,619 18,317 17 Sweden ,222 2,953 2,573 2,355 2,672 2,573 2,301 2,428 1,067 2,532 18 Switzerland ,238 39,440 41,588 43,195 42,506 41,588 40,854 41,000 39,244 41,438 19 Turkey ,598 2,666 3,228 2,897 2,947 3,228 3,120 3,241 2,922 2,972 20 United Kingdom ,292 111,805 133,788 130,941 135,712 133,788 130,778 148,150 150,632 154,533 21 Yugoslavia" 622 504 570 541 546 570 549 428 414 407 22 Other Europe and former U.S.S.R. ... ,741 29,256 33,159 23,804 29,911 33,159 35,294 33,283 33,117 31,076 23 Canada 21,605 22,420 20,228 27,452 24,152 20,228 20,589 23,200 21,404 22,510 24 Latin America and Caribbean 345,529 317,228 342,781 327,666 331,875 342,781 338,524 345,190 358,224 361,059 25 Argentina 7,753 9,477 14,493 14,320 13,695 14,493 14,495 14,435 13,991 13,246 26 Bahamas 100,622 82,284 73,077 76,557 78,354 73,077 71,687 72,430 77,449 80,821 27 Bermuda 3,178 7.079 7,875 8,021 7,287 7,875 7,794 6,697 6,181 7,614 28 Brazil 5,704 5,584 5.307 5,057 5,069 5,307 5,127 5,386 5,244 4,867 29 British West Indies 163,620 153,033 175,710 159,434 166,637 175,710 171,892 175,181 188,044 192,343 30 Chile 3,283 3,035 3,197 3,952 3,455 3,197 3,576 3,726 3,572 3,829 31 Colombia 4,661 4,580 3,173 3,025 3,101 3,173 3,587 3,363 3,427 3,992 32 Cuba 2 3 33 7 7 33 34 30 38 9 33 Ecuador 1,232 993 881 868 851 881 891 858 822 844 34 Guatemala 1,594 1,377 1,207 1,275 1,243 1,207 1,258 1,230 1,169 1,155 35 Jamaica 231 371 410 376 401 410 387 421 419 495 36 Mexico 19,957 19,454 28,060 24,249 21,947 28,060 27,667 30,616 27,804 22,358 37 Netherlands Antilles 5,592 5,205 4,206 5,283 4,725 4,206 5,139 6,230 5,311 5,006 38 Panama 4,695 4,177 3,625 3,567 3,468 3,625 3,592 3,429 3,388 3,509 39 Peru 1,249 1.080 926 873 890 926 880 913 873 893 40 Uruguay 2,096 1,955 1,617 1,716 1,643 1,617 1,727 1,534 1,492 1,408 41 Venezuela 13,181 11,387 12,806 12,903 13,076 12,806 12,460 12,598 12,968 12,307 42 Other 6,879 6,154 6,178 6,183 6,026 6,178 6,331 6,113 6,032 6,363 43 Asia 120,462 143,540 144,653 141,363 144,476 144,653 140,096 139,562 152,460 149,208 China 44 People's Republic of China 2,626 3,202 4,011 3,280 3,187 4,011 4,075 4,565 5,294 6,058 45 Republic of China (Taiwan) 11,491 8,408 10,634 9,804 10,960 10,634 9,960 9,475 9,306 8,696 46 Hong Kong 14,269 18,499 17,233 16,389 18,673 17,233 18,675 17,730 18,688 19,092 47 India 2,418 1,399 1,113 1,251 1,425 1,113 1,436 1,127 1,658 1,466 48 Indonesia 1.463 1,480 1,986 1,504 1,674 1,986 1,807 1,659 2,345 1,873 49 Israel 2,015 3,773 4,436 5,450 4,582 4,436 4,138 4,628 4,580 4,099 50 Japan 47,069 58,435 61,483 60,171 58,866 61,483 58,606 60,112 66,403 62,274 5 5 5 5 5 2 3 1 4 5 T P M K O h h o t i i h a d r l i e i d e l p r a a l p e n ( i d n E S e o a s u s t t e h r ) n oil-exporting countries13 1 1 2 2 2 5 6 , , , , , 2 4 5 7 0 5 4 8 5 7 2 9 7 2 1 2 1 5 1 2 3 5 , , , , , 5 4 2 3 7 8 3 3 7 1 2 7 7 5 3 1 1 6 4 2 5 4 , , , , , 1 0 9 8 8 3 3 2 1 4 7 5 5 3 7 1 1 6 2 3 4 6 , , , , , 4 1 8 6 3 9 4 8 8 0 2 6 9 1 6 1 1 6 4 5 1 7 , , , , , 2 4 4 9 0 3 8 0 0 7 1 9 9 2 8 1 1 6 2 4 5 4 , , , , , 1 0 9 8 8 3 3 1 2 4 7 5 3 5 7 1 1 6 4 3 1 5 , , , , , 1 7 9 1 4 5 2 1 3 7 6 1 2 1 9 1 1 5 4 1 1 5 , , , , , 8 8 9 8 8 3 1 5 3 2 8 9 6 3 0 1 1 5 2 4 3 7 , , , , , 9 5 8 3 5 8 4 0 0 4 5 2 8 5 6 1 1 5 2 4 3 9 , , , , , 5 6 6 6 1 5 1 4 5 8 0 6 6 5 3 56 Africa 4,825 5,884 6,638 6,179 5,762 6,638 5,823 6,327 5,748 5,812 57 Egypt 1,621 2,472 2,209 2,220 2,089 2,209 1,961 2,058 1,658 1,687 58 Morocco 79 76 99 87 110 99 94 73 89 76 59 South Africa 228 190 451 367 272 451 214 294 285 331 60 Zaire 31 19 12 15 10 12 13 8 11 11 61 Oil-exporting countries 1,082 1,346 1,303 1,271 1,446 1,303 1,186 1,433 1,139 983 62 Other 1,784 1,781 2,564 2,219 1,835 2,564 2,355 2,461 2,566 2,724 63 Other 5,567 4,167 4,215 5,560 4,520 4,215 4,967 3,901 4,689 6,274 64 Australia 4.464 3,043 3.308 4,434 3,317 3,308 3,809 2,511 3,006 2,991 65 Other 1,103 1,124 907 1,126 1,203 907 1,158 1,390 1,683 3,283 66 Nonmonetary international and regional organizations 8,981 9,350 10,846 10,994 12,965 10,846 10,869 7,099 8,088 5,914 67 International15 6,485 7,434 6,761 7,350 9,094 6,761 6,357 5,860 6,375 4,249 68 Latin American regional16 1,181 1,415 3,218 2,539 3,050 3,218 3,402 357 332 395 69 Other regional17 1,315 501 867 1,105 821 867 1,110 882 1,381 1,270 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

A58 International Statistics • August 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 1994 Area and country 11999911 11999922 11999933 Oct. Nov. Dec. Jan. Feb/ Mar. Apr.p 1 Total, all foreigners 514,339 499,437 483,152 465,861 468,770 483,152 470,679 477,308 474,180 475,590 2 Foreign countries 508,056 494,355 480,747 464,618 466,569 480,747 467,566 475,714 472,260 474,406 3 Europe 114,310 123,377 121,036 124,593 120,650 121,036 114,390 124,655 129,703 124,693 4 Austria 327 331 413 568 501 413 720 598 489 420 5 Belgium and Luxembourg 6,158 6,404 6,535 5,516 5,911 6,535 5,169 6,327 6,761 6,765 6 Denmark 686 707 382 1,056 1,261 382 507 600 612 8% 7 Finland 1,907 1,418 598 730 606 598 699 725 570 647 8 France 15,112 14,723 11,490 11,516 11,622 11,490 11,705 11,033 11,481 11,398 9 Germany 3,371 4,222 7,683 7,570 6,961 7,683 7,364 7,966 8,164 9,374 10 Greece 553 717 679 592 684 679 653 669 736 720 11 Italy 8,242 9,047 8,876 8,035 8,402 8,876 8,950 8,477 7,658 6,370 12 Netherlands 2,546 2,468 3,064 3,163 3,607 3,064 3,878 2,821 2,945 2,575 13 Norway 669 355 396 779 598 396 738 777 531 598 14 Portugal 344 325 720 826 787 720 805 918 936 846 15 Russia 1,970 3,147 2,295 2,581 2,295 2,295 2,142 2,005 1,957 1,857 16 Spain 1,881 2,755 2,763 4,747 4,388 2,763 3,299 2,688 2,666 1,859 17 Sweden 2,335 4,923 4,100 4,111 3,531 4,100 3,704 3,608 3,443 3,313 18 Switzerland 4,540 4,717 6,567 4,647 5,946 6,567 7,177 4,535 8,602 5,577 19 Turkey 1,063 962 1,287 1,638 1,790 1,287 1,118 1,565 1,559 1,542 20 United Kirwdom 60,395 63,430 60,930 64,044 59,403 60,930 53,219 66,989 68,166 67,318 21 Yugoslavia^ 825 569 536 535 549 536 470 414 376 386 22 Other Europe and former U.S.S.R.3 .. 1,386 2,157 1,722 1,939 1,808 1,722 2,073 1,940 2,051 2,232 23 Canada 15,113 13,845 18,432 15,697 15,478 18,432 19,126 16,864 16,984 17,953 24 Latin America and Caribbean 246,137 218,078 223,967 212,002 216,687 223,967 226,041 226,303 219,723 219,528 25 Argentina 5,869 4,958 4,425 4,390 4,518 4,425 4,569 4,459 4,640 5,133 26 Bahamas 87,138 60,835 65,045 60,350 63,242 65,045 66,411 65,439 66,020 66,234 27 Bermuda 2,270 5,935 8,032 8,915 7,565 8,032 10,234 9,969 8,342 8,837 28 Brazil 11,894 10,773 11,803 11,675 11,677 11,803 12,719 12,841 12,916 11,455 29 British West Indies 107,846 101,507 97,930 90,041 92,621 97,930 94,348 95,230 91,780 91,343 30 Chile 2,805 3,397 3,614 3,857 3,728 3,614 3,546 3,763 3,640 3,455 31 Colombia 2,425 2,750 3,179 2,957 3,040 3,179 3,241 3,053 3,057 3,263 32 Cuba 0 0 0 0 0 0 0 2 0 0 33 Ecuador 1,053 884 673 707 704 673 679 722 703 679 34 Guatemala 228 262 286 269 286 286 316 294 289 273 35 Jamaica 158 162 195 175 186 195 180 176 163 191 36 Mexico 16,567 14,991 15,833 16,155 16,073 15,833 16,466 16,902 16,162 16,267 37 Netherlands Antilles 1,207 1,379 2,367 3,310 3,048 2,367 3,115 3,093 2,391 2,749 38 Panama 1,560 4,654 2,913 2,491 2,625 2,913 2,843 2,983 2,490 2,538 39 Peru 739 730 651 636 620 651 693 726 751 807 40 Uruguay 599 936 951 926 918 951 793 742 530 491 41 Venezuela 2,516 2,525 2,904 2,815 3,054 2,904 2,763 2,709 2,662 2,532 42 Other 1,263 1,400 3,166 2,333 2,782 3,166 3,125 3,200 3,187 3,281 43 Asia 125,262 131,789 110,684 105,497 107,541 110,684 101,406 101,516 98,839 105,222 China 44 People's Republic of China 747 906 2,299 773 706 2,299 881 842 796 843 45 Republic of China (Taiwan) 2,087 2,046 2,628 1,674 2,003 2,628 2,611 1,487 2,159 1,815 46 Hong Kong 9,617 9,642 10,864 9,640 10,449 10,864 10,224 9,990 11,666 9,903 47 India 441 529 589 635 657 589 638 664 737 684 48 Indonesia 952 1,189 1,522 1,268 1,474 1,522 1,556 1,532 1,605 1,506 49 Israel 860 820 826 752 787 826 947 798 664 676 50 Japan 84,807 79,172 59,576 60,283 59,934 59,576 54,164 54,583 49,771 54,905 51 Korea (South) 6,048 6,179 7,556 7,133 7,148 7,556 7,373 7,518 7,479 7,441 52 Philippines 1,910 2,145 1,408 1,168 1,265 1,408 1,132 1,183 1,307 924 53 Thailand 1,713 1,867 2,154 2,145 2,110 2,154 2,375 2,543 2,658 2,638 54 Middle Eastern oil-exporting countries4 8,284 18,540 14,398 13,580 13,853 14,398 12,903 13,190 14,153 16,387 55 Other 7,796 8,754 6,864 6,446 7,155 6,864 6,602 7,186 5,844 7,500 56 Africa 4,928 4,279 3,819 3,919 3,799 3,819 3,746 3,775 3,691 3,673 57 Egypt 294 186 196 160 218 196 198 227 205 206 58 Morocco 575 441 444 433 437 444 489 521 511 465 59 South Africa 11,,223355 1,041 633 663 664 633 581 558 565 557 60 Zaire 44 4 4 3 4 4 4 6 4 5 61 Oil-exporting countries5 1,298 1,002 1,128 1,187 1,119 1,128 1,169 1,197 1,210 1,207 62 Other 1,522 1,605 1,414 1,473 1,357 1,414 1,305 1,266 1,196 1,233 63 Other 2,306 2,987 2,809 2,910 2,414 2,809 2,857 2,601 3,320 3,337 64 Australia 1,665 2,243 2,072 2,401 1,873 2,072 2,030 1,692 1,684 1,859 65 Other 641 744 737 509 541 737 827 909 1,636 1,478 66 Nonmonetary international and regional organizations6 6,283 5,082 2,405 1,243 2,201 2,405 3,113 1,594 1,920 1,184 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 A59 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 1994 CCllaaiimm 11999911 11999922 11999933 Oct. Nov. Dec. Jan. Feb/ Mar. Apr." 11 TToottaall 579,683 559,495 523,562 523,562 521,963 22 BBaannkkss'' ccllaaiimmss 514,339 499,437 483,152 465,861 468,770 483,152 470,679 477,308 474,180 475,590 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 37,126 31,367 28,814 31,320 29,761 28,814 30,677 26,554 25,731 25,121 44 OOwwnn ffoorreeiiggnn ooffffiicceess 318,800 303,991 286,848 269,968 279,876 286,848 275,478 273,611 280,469 280,072 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 116,602 109,342 98,018 91,888 92,030 98,018 90,994 97,724 94,439 96,608 66 DDeeppoossiittss 69,018 61,550 46,875 43,777 44,005 46,875 40,662 45,813 44,050 47,907 77 OOtthheerr 47,584 47,792 51,143 48,111 48,025 51,143 50,332 51,911 50,389 48,701 88 AAllll ootthheerr ffoorreeiiggnneerrss 41,811 54,737 69,472 72,685 67,103 69,472 73,530 79,419 73,541 73,789 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss33...... 65,344 60,058 40,410 40,410 47,783 1100 DDeeppoossiittss 15,280 15,452 9,619 9,619 14,022 1111 NNeeggoottiiaabbllee aanndd rreeaaddiillyy ttrraannssffeerraabbllee iinnssttrruummeennttss44 37,125 31,474 17,155 17,155 20,340 1122 OOuuttssttaannddiinngg ccoolllleeccttiioonnss aanndd ootthheerr ccllaaiimmss 12,939 13,132 13,636 13,636 13,421 MMEEMMOO 1133 CCuussttoommeerr lliiaabbiilliittyy oonn aacccceeppttaanncceess 8,974 8,655 7,871 7,871 7,562 1144 DDoollllaarr ddeeppoossiittss iinn bbaannkkss aabbrrooaadd,, rreeppoorrtteedd bbyy nnoonnbbaannkkiinngg bbuussiinneessss eenntteerrpprriisseess iinn tthhee UUnniitteedd SSttaatteess 43,024 36,213 22,733 27,002 21,830 22,733 21,622 21,284 21,863 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 1993 1994 MMaattuurriittyy,, bbyy bboorrrroowweerr aanndd aarreeaa22 11999900 11999911 11999922 June Sept. Dec. Mar." 1 Total 206,903 195,302 195,119 182,975 189,716 194,838 192,894 By borrower 2 Maturity of one year or less 165,985 162,573 163,325 154,312 162,005 166,288 166,092 3 Foreign public borrowers 19,305 21,050 17,813 17,962 21,211 17,447 15,885 4 All other foreigners 146,680 141,523 145,512 136,350 140,794 148,841 150,207 5 Maturity of more than one year 40,918 32,729 31,794 28,663 27,711 28,550 26,802 6 Foreign public borrowers 22,269 15,859 13,266 11,255 10,507 10,828 9,555 7 All other foreigners 18,649 16,870 18,528 17,408 17,204 17,722 17,247 By area Maturity of one year or less 8 Europe 49,184 51,835 53,300 54,372 57,238 56,273 58,831 9 Canada 5,450 6,444 6,091 7,893 9,833 7,564 7,274 10 Latin America and Caribbean 49,782 43,597 50,376 48,552 51,619 56,686 58,586 11 Asia 53,258 51,059 45,709 38,654 37,624 40,274 35,817 12 Africa 3,040 2,549 1,784 1,712 1,916 1,783 1,604 13 All other3 5,272 7,089 6,065 3,129 3,775 3,708 3,980 Maturity of more than one year 14 Europe 3,859 3,878 5,367 4,579 4,433 4,327 3,779 15 Canada 3,290 3,595 3,287 2,909 2,549 2,553 2,555 16 Latin America and Caribbean 25,774 18,277 15,312 13,828 13,519 13,877 13,313 17 Asia 5,165 4,459 5,038 4,808 4,732 5,412 4,705 18 Africa 2,374 2,335 2,380 2,050 2,049 1,934 2,001 19 All other3 456 185 410 489 429 447 449 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

A60 International Statistics • August 1994 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. and Foreign Offices of U.S. Banks1 Billions of dollars, end of period 1992 1993 1994 AArreeaa oorr ccoouunnttrryy 11999900 11999911 Mar. June Sept. Dec. Mar. June Sept. Dec. Mar.p 1 Total 320.1 343.6 351.7 358.7 344.5 346.5 361. lr 377.0r 388.1 403.7r 496.7 2 G-10 countries and Switzerland 132.2 137.6 130.9 135.6 136.0 132.9 142.4 iso.o1 153.3r 161 .(P 177.8 3 Belgium and Luxembourg 5.9 6.0 5.3 6.2 6.2 5.6 6.1 7.0 7.1 7.4 8.0 4 France 10.4 11.0 10.0 11.9 15.3 15.3 13.5 14.0 12.3 11.7 16.4 5 Germany 10.6 8.3 8.4 8.8 10.9 9.3 9.9 10.8 12.4 12.6 28.7 6 Italy 5.0 5.6 5.4 8.0 6.4 6.5 6.7 7.9 8.7 7.6 15.5 7 Netherlands 3.0 4.7 4.3 3.3 3.7 2.8 3.6 3.7 3.7 4.7 4.1 8 Sweden 2.2 1.9 2.0 1.9 2.2 2.3 3.0 2.5 2.5 2.5 2.8 9 Switzerland 4.4 3.4 3.2 4.6 5.2 4.8 5.3 4.7 5.6 5.9 6.3 10 United Kingdom 60.9 68.5 64.7 65.6 61.0 60.8 65.7 73.5 74.7 84.5r 69.8 11 Canada 5.9 5.8 6.5 6.5 6.3 6.3 8.2 8.<y 9.7 6.7r 7.7 12 Japan 24.0 22.6 21.1 18.7 18.9 19.3 20.4 17.9 16.8r 17.4 18.5 13 Other industrialized countries 22.9 22.8 21.4 25.5 25.0 24.0 25.4 27.2 26.0 24.6 41.2 14 Austria 1.4 .6 .8 .8 .7 1.2 1.2 1.3 .6 .4 1.0 15 Denmark 1.1 .9 .8 1.3 1.5 .9 .8 1.0 1.1 1.0 1.1 16 Finland .7 .7 .8 .8 1.0 .7 .7 .9 .6 .4 1.0 17 Greece 2.7 2.6 2.3 2.8 3.0 3.0 2.7 3.1 3.2 3.2 3.8 18 Norway 1.6 1.4 1.5 1.7 1.6 1.2 1.8 1.8 2.1 1.7 1.6 19 Portugal .6 .6 .5 .5 .5 .4 .7 .9 1.0 .8 1.2 20 Spain 8.3 8.3 7.7 10.1 9.7 8.9 9.5 10.5 9.3 8.9 12.3 21 Turkey 1.7 1.4 1.2 1.5 1.5 1.3 1.4 2.1 2.1 2.1 2.4 22 Other Western Europe 1.2 1.8 1.5 2.0 1.5 1.7 2.0 1.7 2.2 2.6 3.0 23 South Africa 1.8 1.9 1.8 1.7 1.7 1.7 1.6 1.3 1.2 1.1 1.2 24 Australia 1.8 2.7 2.3 2.2 2.3 2.9 2.9 2.5 2.8 2.3 12.7 25 OPEC2 12.8 14.5 15.8 16.2 15.9 16.1 16.8 15.9 14.9 16.7r 22.1 26 Ecuador 1.0 .7 .7 .7 .7 .6 .6 .6 .5 .5 .5 27 Venezuela 5.0 5.4 5.4 5.3 5.4 5.2 5.3 5.6 5.6 5.r 4.7 28 Indonesia 2.7 2.7 3.0 3.0 3.0 3.0 3.1 3.1 2.8 3.2 3.0 29 Middle East countries 2.5 4.2 5.3 5.9 5.4 6.2 6.6 5.4 4.9 6.7 12.8 30 African countries 1.7 1.5 1.4 1.4 1.4 1.1 1.1 1.1 1.1 1.2 1.0 31 Non-OPEC developing countries 65.4 63.9 69.7 68.1 72.8 72.1 74.4 76.6 77.(f 82.5 93.6 Latin America 32 Argentina 5.0 4.8 5.0 5.1 6.2 6.6 7.0 6.6 7.2 7.7 8.6 33 Brazil 14.4 9.6 10.8 10.6 10.8 10.8 11.6 12.3 11.7r 12.0 12.5 34 Chile 3.5 3.6 3.9 4.0 4.2 4.4 4.6 4.6 4.7 4.7 5.1 35 Colombia 1.8 1.7 1.6 1.6 1.7 1.8 1.9 1.9 2.0 2.1 2.2 36 Mexico 13.0 15.5 17.7 16.3 17.1 16.0 16.8 16.8 17.5 17.7 18.7 37 Peru .5 .4 .4 .4 .5 .5 .4 .4 .3 .4 .5 38 Other 2.3 2.1 2.2 2.2 2.5 2.6 2.6 2.7 2.6 3.0 2.6 Asia China 39 Peoples Republic of China .2 .3 .3 .3 .3 .7 .6 1.6 .5 2.0 .8 40 Republic of China (Taiwan) 3.5 4.1 4.8 4.6 5.0 5.2 5.3 5.9 6.4 7.3 7.5 41 India 3.3 3.0 3.6 3.8 3.6 3.2 3.1 3.1 2.9 3.2 3.9 42 Israel .5 .5 .4 .4 .4 .4 .5 .4 .4 .5 .4 43 Korea (South) 6.2 6.8 6.9 6.9 7.4 6.6 6.5 6.9 6.5 6.7 13.9 44 Malaysia 1.9 2.3 2.5 2.7 3.0 3.1 3.4 3.7 4.1 4.4 5.2 45 Philippines 3.8 3.7 3.6 3.1 3.6 3.6 3.4 2.9 2.6 3.1 3.4 46 Thailand 1.5 1.7 1.7 1.9 2.2 2.2 2.2 2.4 2.8 3.1 2.9 47 Other Asia 1.7 2.0 2.3 2.5 2.7 2.7 2.7 2.6 3.0 2.9 3.1 Africa 48 Egypt .4 ..44 .3 .5 .3 .2 .2 .2 .2 .4 .4 49 Morocco .8 .7 .7 .7 .6 .6 .5 .6 .6 .6 .7 50 Zaire .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 51 Other Africa* 1.0 .7 .7 .6 .9 1.0 .8 .9 .8 .8 1.0 52 Eastern Europe 2.3 2.4 2.9 3.0 3.1 3.1 2.9 3.2 3.0 3.0 3.3 53 Russia4 .2 .9 1.4 1.7 1.8 1.9 1.7 1.9 1.7 1.6 1.5 54 Yugoslavia5 1.2 .9 .8 .7 .7 .6 .6 .6 .6 .6 .5 55 Other .9 .7 .6 .6 .7 .6 .7 .7 .7 .9 1.4 56 Offshore banking centers 44.7 54.2 63.0 61.4 54.5 58.3 60.1 57.8 67.5 72.5r 79.7 57 Bahamas 2.9 11.9 15.3 12.9 8.9 6.9 9.6 6.9 12.4 12.6 15.4 58 Bermuda 4.4 2.3 3.9 5.1 3.8 6.2 4.1 4.5 5.5 8.1 8.4 59 Cayman Islands and other British West Indies 11.7 15.8 18.6 19.3 16.9 21.8 17.6 15.6 15.1 16.9r 16.7 60 Netherlands Antilles 7.9 1.2 1.0 .8 .7 1.1 1.6 2.5 2.8 2.3 2.7 61 Panama6 1.4 1.4 1.6 1.9 2.0 1.9 2.0 2.1 2.1 2.4 2.0 62 Lebanon .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 63 Hong Kong 9.7 14.4 14.0 14.9 15.2 13.8 16.7 16.9 19.1 18.7 21.7 64 Singapore 6.6 7.1 8.5 6.4 6.8 6.5 8.4 9.3 10.4 11.2 12.7 65 Other' .0 .0 .0 .0 .0 .0 .0 .0 .0 .1 .0 66 Miscellaneous and unallocated8 39.9 48.0 47.8 48.6 36.8 39.7 38.8 46.2 46.3 43.3 78.7 1. The banking offices covered by these data include U.S. offices and foreign Saudi Arabia, and United Arab Emirates); and Bahrain and Oman (not formally branches of U.S. banks, including U.S. banks that are subsidiaries of foreign members of OPEC). banks. Offices not covered include U.S. agencies and branches of foreign banks. 3. Excludes Liberia. Beginning March 1994 includes Namibia. Beginning March 1994, the data include large foreign subsidiaries of U.S. banks. 4. As of December 1992, excludes other republics of the former Soviet Union. The data also include other types of U.S. depository institutions as well as some 5. As of December 1992, excludes Croatia, Bosnia and Hercegovinia, and types of brokers and dealers. To eliminate duplication, the data are adjusted to Slovenia. exclude the claims on foreign branches held by a U.S. office or another foreign 6. Includes Canal Zone. branch of the same banking institution. 7. Foreign branch claims only. 2. Organization of Petroleum Exporting Countries, shown individually; other 8. Includes New Zealand, Liberia, and international and regional members of OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A61 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1992 1993 Type of liability and area or country 11999900 11999911 11999922 Sept. Dec. Mar. June Sept. Dec. 1 Total 46,043 44,708 45,351 47,089 45,351 46,181 46,424 48,674 49,452 2 Payable in dollars 40,786 39,029 37,209 38,344 37,209 37,823 37,014 39,280 37,803 3 Payable in foreign currencies 5,257 5,679 8,142 8,745 8,142 8,358 9,410 9,394 11,649 By type 4 Financial liabilities 21,066 22,518 23,380 24,518 23,380 23,947 24,714 26,067 27,445 5 Payable in dollars 16,979 18,104 16,623 17,453 16,623 17,021 16,870 18,635 18,112 6 Payable in foreign currencies 4,087 4,414 6,757 7,065 6,757 6,926 7,844 7,432 9,333 7 Commercial liabilities 24,977 22,190 21,971 22,571 21,971 22,234 21,710 22,607 22,007 8 Trade payables 10,683 9,252 9,886 10,234 9,886 10,005 9,687 9,483 9,007 9 Advance receipts and other liabilities 14,294 12,938 12,085 12,337 12,085 12,229 12,023 13,124 13,000 10 Payable in dollars 23,807 20,925 20,586 20,891 20,586 20,802 20,144 20,645 19,691 11 Payable in foreign currencies 1,170 1,265 1,385 1,680 1,385 1,432 1,566 1,962 2,316 By area or country Financial liabilities 12 Europe 10,978 12,003 13,101 14,334 13,101 13,461 14,060 16,341 17,862 13 Belgium and Luxembourg 394 216 414 256 414 306 268 278 175 14 France 975 2,106 1,608 2,785 1,608 1,610 2,216 2,074 2,323 15 Germany 621 682 810 738 810 820 787 779 902 1 1 1 6 7 8 N S U w e n t i i h t t e z e d e r r la l K a n n i d n d s g dom 6 1 , , 3 0 5 5 8 4 7 1 5 6 1 , , 5 4 0 2 0 5 8 8 6 8,4 6 5 2 0 6 4 6 9 8,1 9 6 4 2 8 6 7 0 8,4 6 5 2 0 6 4 6 9 9,0 6 5 2 0 3 9 3 9 9,0 5 4 5 8 9 8 5 1 11, 5 6 3 6 7 7 9 3 8 12, 5 6 6 3 3 9 4 4 0 19 Canada 229 292 516 345 516 576 492 663 859 20 Latin America and Caribbean 4,153 4,784 4,053 3,997 4,053 4,299 4,199 3,719 3,359 21 Bahamas 371 537 369 230 369 521 426 1,301 1,148 22 Bermuda 0 114 114 115 114 114 124 114 0 2 2 2 2 3 4 5 6 B V B M r r e e a i n t x z i e s i i c z l h o u e W la e st Indies 3,16 0 5 4 0 3,52 6 7 4 4 2,86 1 1 6 0 9 2 2,93 1 1 5 3 2 8 2,86 1 1 6 0 2 9 2,97 1 1 5 0 8 3 2,95 1 1 1 5 1 8 1,60 1 1 5 0 8 5 1,53 1 1 5 3 8 7 27 Asia 5,295 5,381 5,676 5,752 5,676 5,550 5,793 5,194 5,203 28 Japan 4,065 4,116 4,608 4,678 4,608 4,539 4,611 4,165 4,134 29 Middle East oil-exporting countries2 5 13 19 17 19 24 19 23 23 30 Africa 2 6 6 5 6 6 130 132 133 0 4 0 0 0 0 123 124 123 31 Oil-exporting countries3 409 52 28 85 28 55 40 18 29 32 All other4 Commercial liabilities 10,310 8,701 7,377 7,478 7,377 6,985 6,801 7,045 6,815 33 Europe 275 248 296 173 296 262 267 255 240 34 Belgium and Luxembourg 1,218 1,039 697 756 697 705 773 640 648 35 France 1,270 1,052 717 851 717 650 603 571 684 36 Germany 844 710 535 601 535 537 577 601 687 37 Netherlands 775 575 349 482 349 471 440 535 375 38 Switzerland 2,792 2,297 2,503 2,268 2,503 2,117 2,185 2,319 2,053 39 United Kingdom 40 Canada 1,261 1,014 1,002 1,114 1,002 1,005 941 847 881 41 Latin America and Caribbean 1,672 1,355 1,532 1,515 1,532 1,776 1,828 1,759 1,661 42 Bahamas 12 3 3 3 3 11 6 4 21 43 Bermuda 538 310 307 325 307 429 356 340 348 44 Brazil 145 219 209 121 209 236 226 214 216 45 British West Indies 30 107 33 85 33 34 16 36 26 46 Mexico 475 307 457 326 457 553 659 577 485 47 Venezuela 130 94 142 147 142 171 172 173 126 48 Asia 9,483 9,334 10,917 11,026 10,917 11,067 10,823 11,736 11,613 4 5 9 0 J M ap id a d n l e Eastern oil-exporting countries y< ^ 3 2 , , 6 0 5 1 1 6 3 1 , , 7 4 2 9 1 8 3 1 , , 9 8 5 8 1 9 3 1 , , 9 8 1 1 8 3 3 1 , , 9 8 5 8 1 9 4 1 , , 0 7 3 9 5 6 3 1 , , 7 8 1 1 5 5 4 1 , , 5 9 4 3 6 4 5 1 , , 0 5 9 4 0 3 51 Africa . 844 715 568 675 568 675 665 641 445 52 Oil-exporting countries3 422 327 309 335 309 322 378 320 153 53 Other4 1,406 1,071 575 763 575 726 652 579 592 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

A62 International Statistics • August 1994 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1992 1993 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11999900 11999911 11999922 Sept. Dec. Mar. June Sept. Dec. 1 Total 35,348 45,262 41,894 46,271 41,894 45,784 41,470 42,003 42,689" 2 Payable in dollars 32,760 42,564 39,287 43,297 39,287 42,904 38,346 38,732 39,113" 3 Payable in foreign currencies 2,589 2,698 2,607 2,974 2,607 2,880 3,124 3,271 3,576" By type 4 Financial claims 19,874 27,882 23,532 28,573 23,532 26,064 21,808 23,324 23,166" 5 Deposits 13,577 20,080 15,100 19,524 15,100 16,508 11,646 13,286 13,049" 6 Payable in dollars 12,552 19,080 14,302 18,387 14,302 15,450 10,728 12,307 12,215" 7 Payable in foreign currencies 1,025 1,000 798 1,137 798 1,058 918 979 834" 8 Other financial claims 6,297 7,802 8,432 9,049 8,432 9,556 10,162 10,038 10,117" 9 Payable in dollars 5,280 6,910 7,667 8,028 7,667 8,803 9,238 9,279 9,125" 10 Payable in foreign currencies 1,017 892 765 1,021 765 753 924 759 992" 11 Commercial claims 15,475 17,380 18,362 17,698 18,362 19,720 19,662 18,679 19,523" 12 Trade receivables 13,657 14,468 15,804 14,755 15,804 17,364 17,180 15,698 16,308" 13 Advance payments and other claims 1,817 2,912 2,558 2,943 2,558 2,356 2,482 2,981 3,215" 14 Payable in dollars 14,927 16,574 17,318 16,882 17,318 18,651 18,380 17,146 17,773" 15 Payable in foreign currencies 548 806 1,044 816 1,044 1,069 1,282 1,533 1,750 By area or country Financial claims 16 Europe 9,645 13,441 9,310 11,301 9,310 10,321 9,620 8,251 8,042 17 Belgium and Luxembourg 76 13 8 16 8 6 13 9 131 18 France 371 269 762 768 762 905 781 708 749 19 Germany 367 283 326 292 326 388 383 361 472 20 Netherlands 265 334 515 750 515 544 499 485 483 21 Switzerland 357 581 490 587 490 478 460 454 506 22 United Kingdom 7,971 11,534 6,234 8,078 6,234 6,968 6,550 5,227 4,538" 23 Canada 2,934 2,642 1,709 2,281 1,709 2,007 1,781 1,593 1,851" 24 Latin America and Caribbean 6,201 10,717 11,122 13,837 11,122 9,718 6,704 10,067 10,918" 25 Bahamas 1,090 827 658 1,248 658 320 697 494 496" 26 Bermuda 3 8 40 65 40 79 258 197 125 27 Brazil 68 351 686 589 686 592 590 590 599 28 British West Indies 4,635 9,056 9,266 11,492 9,266 8,266 4,650 8,109 8,620" 29 Mexico 177 212 286 239 286 235 270 385 634 30 Venezuela 25 40 29 26 29 23 24 25 161 31 Asia 860 640 807 717 807 3,263 2,961 2,709 1,779" 32 Japan 523 350 643 471 643 3,066 2,444 2,199 1,063 33 Middle East oil-exporting countries2 8 5 3 4 3 3 10 5 3 34 Africa 37 57 79 71 79 128 125 88 99 35 Oil-exporting countries3 0 1 9 1 9 1 1 1 1 36 All other4 195 385 505 366 505 627 617 616 477 Commercial claims 37 Europe 7,044 8,193 8,401 8,196 8,401 8,744 8,885 7,975 8,422" 38 Belgium and Luxembourg 212 194 189 174 189 170 172 163 182 39 France 1,240 1,585 1,525 1,825 1,525 1,476 1,488 11,,339944 1,755" 40 Germany 807 955 931 900 931 974 979 889988 953 41 Netherlands 555 645 551 589 551 730 560 399 387 42 Switzerland 301 295 362 308 362 436 442 376 417 43 United Kingdom 1,775 2,086 2,081 2,011 2,081 2,326 2,514 2,213 2,176 44 Canada 1,074 1,121 1,258 1,155 1,258 1,312 1,330 1,326 1,284 45 Latin America and Caribbean 2,375 2,655 3,024 3,225 3,024 3,431 3,414 3,023 3,148" 46 Bahamas 14 13 28 12 28 18 17 20 11 47 Bermuda 246 264 255 256 255 195 239 225 173 48 Brazil 326 427 356 410 356 834 786 406 442 49 British West Indies 40 41 40 43 40 17 43 39 69 50 Mexico 661 842 920 977 920 985 898 848 925 51 Venezuela 192 203 344 307 344 341 314 282 293 52 Asia 4,127 4,591 4,764 4,328 4,764 5,360 5,113 5,439 5,699" 53 Japan 1,460 1,899 1,879 1,779 1,879 2,145 1,853 2,496 2,346" 54 Middle Eastern oil-exporting countries 460 620 682 513 682 761 659 446 645 55 Africa 488 430 552 439 552 457 510 487 488 56 Oil-exporting countries 67 95 78 60 78 75 98 107 71 57 Other4 367 390 363 355 363 416 410 429 482" 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 A63 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1994 1993 1994 Transaction and area or country 1992 1993 J A a p n r .- . Oct. Nov. Dec. Jan. Feb. Mar.r Apr.P U.S. corporate securities STOCKS 1 Foreign purchases 221,367 319,449 132,820 32,350 31,924 32,843 32,238 34,428 36,340 29,814 2 Foreign sales 226,503 297,913 128,406 27,840 28,755 28,362 28,965 30,709 37,079 31,653 3 Net purchases or sales (—) -5,136 21,536 4,414 4,510 3,169 4,481 3,273 3,719 -739 -1,839 4 Foreign countries -5,169 21,264 4,485 4,598 3,099 4,457 3,273 3,786 -737 -1,837 5 Europe -4,927 10,615 7,545 3,095 1,407 2,415 2,951 3,447 379 768 6 France -1,350 -103 -361 198 45 61 119 190 -587 -83 7 Germany -80 1,647 2,194 328 130 266 1,170 440 332 252 8 Netherlands -262 -603 306 134 -767 183 169 210 -155 82 9 Switzerland 168 2,986 1,011 409 205 338 254 505 79 173 10 United Kingdom -3,301 4,510 2,387 1,709 1,470 1,078 614 1,215 389 169 11 Canada 1,407 -3,213 261 -300 11 -110 314 -284 -59 290 12 Latin America and Caribbean 2,203 5,709 -35 1,245 941 1,058 948 910 -31 -1,862 13 Middle East* -88 -311 -49 -77 53 11 -100 -17 64 4 14 Other Asia -3,943 8,199 -3,779 602 601 965 -911 -379 -1,295 -1,194 15 Japan -3,598 3,826 -2,025 349 488 681 -800 -447 -117 -661 16 Africa 10 63 39 5 6 20 10 -17 13 33 17 Other countries 169 202 503 28 80 98 61 126 192 124 18 Nonmonetary international and regional organizations 33 272 -71 -88 70 24 0 -67 -2 -2 BONDS2 19 Foreign purchases 214,922 283,745 107,632 27,565 28,947 28,395 24,607 22,271r 30,384 30,370 20 Foreign sales 175,842 217,481 90,082 18,938 21,545 17,427 19,418 18,263r 25,147 27,254 21 Net purchases or sales (-) 39,080 66,264 17,550 8,627 7,402 10,968 5,189 4,008r 5,237 3,116 22 Foreign countries 37,964 65,726 17,463 8,488 7,375 10,901 5,205 3,9771 5,150 3,131 23 Europe 17,435 22,055 9,038 3,973 1,534 3,118 2,742 2,1 (A1 2,647 885 24 France 1,203 2,346 517 512 110 145 53 -57 32 489 25 Germany 2,480 883 -28 913 -231 -62 -101 90 -64 47 26 Netherlands 540 -290 895 -518 49 95 75 99 330 391 27 Switzerland -579 -627 241 203 -80 28 176 57 131 -123 28 United Kingdom 12,421 19,158 8,093 2,666 2,300 2,853 1,676 2,799r 3,036 582 29 Canada 237 1,653 259 95 54 319 23 -141 101 276 30 Latin America and Caribbean 9,300 16,493 5,272 1,727 2,650 3,681 1,638 909 1,850 875 31 Middle East1 3,166 3,257 144 375 432 383 161 -83 59 7 32 Other Asia 7,545 20,846 2,470 2,256 2,765 3,137 670 480 417 903 33 Japan -450 11,569 102 1,574 1,478 2,477 -95 37 -363 523 34 Africa 354 1,149 4 47 -2 119 -51 10 -10 55 35 Other countries -73 273 276 15 -58 144 22 38 86 130 36 Nonmonetary international and regional organizations 1,116 538 87 139 27 67 -16 31 87 -15 Foreign securities 37 Stocks, net purchases or sales (-)3 -32,259 -63,320 -19,159 -7,474 -6,931 -6,503 -5,860 -6,248 -5,985 -1,066 38 Foreign purchases 150,051 246,011 140,904 24,740 28,408 31,135 32,432 38,374 37,067 33,031 39 Foreign sales 182,310 309,331 160,063 32,214 35,339 37,638 38,292 44,622 43,052 34,097 40 Bonds, net purchases or sales (-) -15,605 -61,023 -14,874 -2,479 -54 -8,158 -9,483r —4,756r 5,194 -5,829 41 Foreign purchases 513,589 839,118 356,856 76,034 87,459 79,334 84,223 85,903r 118,674 68,056 42 Foreign sales 529,194 900,141 371,730 78,513 87,513 87,492 93,706r 90,659r 113,480 73,885 43 Net purchases or sales (—), of stocks and bonds -47,864 -124,343 -34,033 -9,953 -6,985 -14,661 -15,343r -ll,004r -791 -6,895 44 Foreign countries -51,274 -124,504 -33,877 -10,302 -6,994 -14,691 — 15,386r —10,872r -768 -6,851 45 Europe -31,350 -81,175 -1,243 -5,004 -4,530 -4,351 -5,512 -3,568r 8,082 -245 46 Canada -6,893 -14,649 -4,762 -949 709 -1,733 -2,741 -2,416 648 -253 47 Latin America and Caribbean -4,340 -9,549 -13,417 -1,280 -2,248 -4,566 -3,124r -327 -3,314 -6,652 48 Asia -7,923 -15,044 -13,637 -2,002 -502 -3,555 -3,171r -4,449r -6,598 581 49 Africa -13 -185 -188 14 0 13 -60 18 -118 -28 50 Other countries -755 -3,902 -630 -1,081 -423 -499 -778 -130r 532 -254 51 Nonmonetary international and regional organizations 3,410 161 -156 349 9 30 43 -132 -23 -44 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

A64 International Statistics • August 1994 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1994 1993 1994 Country or area 1992 1993 J A an pr .- . Oct. Nov. Dec. Jan. Feb. Mar.r Apr.p Transactions, net purchases or sales (-) during period1 1 Estimated total 39,288 24,294 -197 3,925 15,203 507 1,853 12,995 -1,430 -13,615 2 Foreign countries 37,935 24,091 184 5,055 14,584 696 1,592 12,884 -1,446 -12,846 3 Europe 19,625 -2,311 591 3,500 -841 499 114 3,552 2,281 -5,356 4 Belgium and Luxembourg 1,985 1,218 159 -205 22 -65 -63 128 269 -175 5 Germany 2,076 -9,977 78 1,176 -750 571 2,327 -1,055 -729 -465 6 Netherlands -2,959 -515 -314 -506 206 -189 52 418 -971 187 7 Sweden -804 1,421 105 47 141 -31 -4 229 34 -154 8 Switzerland 488 -1,501 2,256 448 573 -70 313 555 1,385 3 9 United Kingdom 24,184 6,266 -2,655 833 -1,900 -412 -1,888 2,455 688 -3,910 10 Other Europe and former U.S.S.R -5,345 777 962 1,707 867 695 -623 822 1,605 -842 11 Canada 562 11,252 -1,105 -342 1,358 846 32 168 357 -1,662 12 Latin America and Caribbean -3,222 -4,692 1,768 3,701 2,070 -4,830 3,677 7,512 -3,428 -5,993 13 Venezuela 539 389 -176 -102 19 56 -358 235 93 -146 14 Other Latin America and Caribbean -1,956 -5,925 -5,128 676 -36 -1,061 3,118 2,860 -4,204 -6,902 15 Netherlands Antilles -1,805 844 7,072 3,127 2,087 -3,825 917 4,417 683 1,055 16 Asia 23,517 20,532 -374 -2,034 11,771 4,029 -2,152 1,191 151 436 17 Japan 9,817 17,070 1,451 156 5,661 649 -3,074 -1,403 2,914 3,014 18 Africa 1,103 1,156 -223 74 35 115 -135 -120 -18 50 19 Other -3,650 -1,846 -473 156 191 37 56 581 -789 -321 20 Nonmonetary international and regional organizations 1,353 203 -381 -1,130 619 -189 261 111 16 -769 21 International 1,018 -302 -248 -874 855 124 455 1 61 -765 22 Latin American regional 533 654 107 -23 40 -1 7 116 -37 21 MEMO 23 Foreign countries 37,935 24,091 184 5,055 14,584 696 1,592 12,884 -1,446 -12,846 24 Official institutions 6,876 1,272 4,031 1,619 6,223 3,637 4,284 4,045 -4,883 585 25 Other foreign2 31,059 22,819 -3,847 3,436 8,361 -2,941 -2,692 8,839 3,437 -13,431 Oil-exporting countries 26 Middle East2 4,317 -8,836 -441 -820 -6 84 -1,518 900 33 144 27 Africa3 11 -5 0 0 0 -9 0 0 0 0 1. Official and private transactions in marketable U.S. Treasury securities 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and having an original maturity of more than one year. Data are based on monthly United Arab Emirates (Trucial States). transactions reports. Excludes nonmarketable U.S. Treasury bonds and notes 3. Comprises Algeria, Gabon, Libya, and Nigeria. held by official institutions of foreign countries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Interest and Exchange Rates A65 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS1 Percent per year Rate on June 30, 1994 Rate on June 30, 1994 Rate on June 30, 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 Percent e M ffe o c n t t i h v e Austria.. 4.5 May 1994 Germany... 4.5 May 1994 Norway 4.75 Feb. 1994 Belgium . 4.5 May 1994 Italy 7.0 May 1994 Switzerland 3.5 Apr. 1994 Canada.. 6.92 June 1994 Japan 1.75 Sept. 1993 United Kingdom 12.0 Sept. 1992 Denmark 5.0 May 1994 Netherlands 4.5 May 1994 France2.. 5.1 June 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 Dec. Jan. Feb. Mar. Apr. May June 5.86 3.70 3.18 3.26 3.15 3.43 3.75 4.00 4.51 4.51 11.47 9.56 5.88 5.29 5.34 5.15 5.12 5.14 5.13 5.13 9.07 6.76 5.14 4.09 3.89 3.89 4.45 6.07 6.38 6.50 9.15 9.42 7.17 5.99 5.76 5.78 5.73 5.48 5.07 4.95 8.01 7.67 4.79 4.10 3.90 4.04 3.99 3.% 3.94 4.21 9.19 9.25 6.73 5.50 5.12 5.19 5.23 5.22 5.04 4.95 9.49 10.14 8.30 6.39 6.19 6.18 6.11 5.89 5.52 5.44 8 Italy 12.04 13.91 10.09 8.56 8.38 8.42 8.36 8.07 7.76 8.04 9.30 9.31 8.10 7.03 6.88 6.39 6.10 5.84 5.27 5.33 7.33 4.39 2.96 2.06 2.13 2.21 2.26 2.26 2.17 2.12 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

A66 International Statistics • August 1994 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar except as noted 1994 Country/currency unit 11999911 11999922 11999933 Jan. Feb. Mar. Apr. May June 1 Australia/dollar2 77.872 73.521 67.993 69.608 71.611 71.087 71.565 72.433 73.291 2 Austria/schilling 11.686 10.992 11.639 12.252 12.200 11.8% 11.948 11.651 11.446 3 Belgium/franc 34.195 32.148 34.581 36.206 35.768 34.862 34.979 34.108 33.514 4 Canada/dollar . 1.1460 1.2085 1.2902 1.3173 1.3424 1.3644 1.3830 1.3808 1.3836 5 China, P.R./yuan 5.3337 5.5206 5.7795 8.7219 8.7249 8.7241 8.7251 8.6859 8.6836 6 Denmark/krone . 6.4038 6.0372 6.4863 6.7697 6.7668 6.62% 6.6642 6.4857 6.3786 7 Finland/markka 4.0521 4.4865 5.7251 5.7004 5.5930 5.5436 5.4997 5.4194 5.4241 8 France/franc 5.6468 5.2935 5.6669 5.9207 5.8955 5.7647 5.8170 5.6728 5.5597 9 Germany/deutsche mark 1.6610 1.5618 1.6545 1.7426 1.7355 1.6909 1.6984 1.6565 1.6271 10 Greece/drachma 182.63 190.81 229.64 250.29 250.48 246.71 249.08 245.41 244.77 11 Hong Kong/dollar 7.7712 7.7402 7.7357 7.7251 7.7353 7.7268 7.7269 7.7262 7.7309 12 India/rupee .. 22.712 28.156 31.291 31.440 31.449 31.415 31.391 31.375 31.385 13 Ireland/pound 161.39 170.42 146.47 143.03 141.91 143.40 143.42 147.12 149.54 14 Italy/lira 1,241.28 1,232.17 1,573.41 1,699.45 1,685.% 1,666.63 1,626.07 1,594.56 1,592.22 15 Japan/yen 134.59 126.78 111.08 111.44 106.30 105.10 103.48 103.75 102.53 16 Malaysia/ringgit 2.7503 2.5463 2.5738 2.7160 2.7624 2.7171 2.6887 2.6169 2.5942 17 Netherlands/guilder 1.8720 1.7587 1.8585 1.9516 1.9464 1.9006 1.9074 1.8597 1.8242 18 New Zealand/dollar2 57.832 53.792 54.127 56.263 57.436 57.093 56.908 58.347 59.121 19 Norway/krone 6.4912 6.2142 7.0979 7.5064 7.4885 7.3419 7.3680 7.1789 7.0686 20 Portugal/escudo 144.77 135.07 161.08 176.04 175.15 174.00 173.54 171.15 168.76 21 Singapore/dollar 1.7283 1.6294 1.6158 1.6037 1.5873 1.5819 1.5628 1.5464 1.5310 22 South Africa/rand 2.7633 2.8524 3.2729 3.4107 3.4520 3.4586 3.5789 3.6346 3.6318 23 South Korea/won 736.73 784.58 805.75 813.55 812.24 810.69 811.71 809.79 809.86 24 Spain/peseta 104.01 102.38 127.48 143.04 141.08 138.78 138.14 136.62 134.23 25 Sri Lanka/rupee 41.200 44.013 48.205 49.460 49.113 48.931 48.925 49.067 49.232 26 Sweden/krona 6.0521 5.8258 7.7956 8.1184 7.9869 7.9156 7.8850 7.7181 7.7968 27 Switzerland/franc 1.4356 1.4064 1.4781 1.4716 1.4565 1.4292 1.4383 1.4125 1.3727 28 Taiwan/dollar 26.759 25.160 26.416 26.495 26.440 26.414 26.389 26.792 27.018 29 Thailand/baht 25.528 25.411 25.333 25.543 25.382 25.325 25.268 25.212 25.137 30 United Kingdom/pound 176.74 176.63 150.16 149.23 147.92 149.19 148.23 150.42 152.62 MEMO 31 United States/dollar3 89.84 86.61 93.18 96.54 95.79 94.35 94.39 92.79 91.60 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

67 Guide to Statistical Releases and Special Tables STATISTICAL RELEASES—List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases June 1994 A76 SPECIAL TABLES—Quarterly Data Published Irregularly, with Latest Bulletin Reference Title and Date Issue Page Assets and liabilities of commercial banks March 31, 1993 August 1993 A70 June 30, 1993 November 1993 A70 September 30, 1993 February 1994 A70 December 31, 1993 May 1994 A68 Terms of lending at commercial banks August 1993 November 1993 A76 November 1993 February 1994 A76 February 1994 May 1994 A74 May 1994 August 1994 A68 Assets and liabilities of U.S. branches and agencies of foreign banks June 30, 1993 November 1993 A80 September 30, 1993 February 1994 A80 December 31, 1993 May 1994 A78 March 31, 1994 August 1994 A72 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

A68 Special Tables • August 1994 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 2-6, 19941 Commercial and Industrial Loans Weighted Loan rate (percent) Loans Loans Amount of Average average secured made Partici- Characteristic ( o th f o l d o u o a s l n a la s n r d s s ) ( o th f o d s u o iz s l a e la n r d s s ) maturity2 W av e e ig ra h g te e d Standard coll b a y te ral co u m m n e d m n e t r i t - (p p l e o a r t a c i n o e s n n t) Days effective3 (percent) (percent) ALL BANKS 1 Overnight6 12,953,765 6,636 4.47 8.6 57.5 5.7 2 One month or less (excluding overnight) 7,644,038 1,071 5.09 20.4 81.2 8.7 3 Fixed rate 4,669,477 2,223 4.63 11.1 76.1 9.9 4 Floating rate 2,974,562 591 5.82 35.0 89.1 6.9 5 More than one month and less than one year 9,750,253 182 152 5.94 50.9 80.1 7.1 6 Fixed rate 4,335,962 187 114 5.19 39.4 80.0 6.0 7 Floating rate 5,414,292 178 183 6.54 60.0 80.2 7.9 8 Demand7 17,480,228 315 5.94 66.2 63.1 4.5 9 Fixed rate 4,593,535 606 4.84 42.0 60.9 4.6 10 Floating rate 12,886,692 269 6.34 74.9 63.8 4.4 11 Total short-term 47,828,284 405 54 5.41 40.2 67.9 6.0 12 Fixed rate (thousands of dollars) ... 26,552,738 764 26 4.68 19.8 65.0 6.3 13 1-99 449,930 16 167 8.01 79.9 40.6 .2 14 100-499 429,298 182 116 6.54 74.0 62.9 2.8 15 500-999 469,352 690 71 5.65 51.8 80.6 7.7 16 1,000-4,999 4,343,805 2,358 34 4.98 24.0 78.9 7.6 17 5,000-9,999 4,875,048 6,527 25 4.73 16.2 74.6 14.6 18 10,000 or more 15,985,305 18,851 18 4.41 15.7 58.6 3.7 19 Floating rate (thousands of dollars). 21,275,545 255 126 6.32 65.5 71.5 5.7 20 1-99 1,555,979 25 181 8.12 83.2 85.8 1.4 21 100-499 3,219,028 202 194 7.59 78.8 87.0 3.6 22 500-999 2,046,157 666 234 7.35 71.9 77.5 4.3 23 1,000-4,999 4,629,115 2,029 141 6.51 56.7 83.7 10.6 24 5,000-9,999 1,786,904 6,144 49 5.55 44.6 74.4 7.1 25 10,000 or more 8,038,362 23,802 66 5.25 64.9 53.4 4.6 Months 26 Total long-term 6,192,762 265 6.48 51.1 65.5 27 Fixed rate (thousands of dollars) .. 1,724,271 147 6.17 57.3 58.9 1.7 28 1-99 183,330 19 8.57 86.5 20.3 .6 29 100-499 292,417 192 8.24 94.4 34.0 1.1 30 500-999 91,290 709 6.68 75.3 53.1 1.1 31 1,000 or more 1,157,233 4,526 5.22 41.9 71.8 2.0 32 Floating rate (thousands of dollars) 4,468,491 383 6.61 48.8 68.0 7.6 33 1-99 246,321 35 8.24 90.2 54.4 6.4 34 100-499 724,135 230 7.67 82.9 69.0 7.8 35 500-999 499,075 680 7.43 71.7 77.8 7.8 36 1,000 or more 2,998,960 4,437 6.08 33.3 67.3 7.7 Loan rate (percent) Days Effective3 Nominal8 LOANS MADE BELOW PRIME10 37 Overnight6 12,658,295 8,431 4.41 4.38 7.6 56.5 5.9 38 One month or less (excluding overnight) 6,220,967 4,300 15 4.56 4.54 15.9 79.3 10.0 39 More than one month and less than 40 Dem o a n n e d 7 v ear 1 6 0 , , 2 0 5 0 0 9 , , 5 4 6 3 4 7 2,1 7 2 4 4 4 11*9 4 4 . . 6 9 6 0 4 4 . . 6 8 1 7 5 3 5 5 . . 6 2 4 8 2 5 . . 9 8 4 9 . . 0 7 41 Total short-term 35,139,264 2,188 34 4.59 4.56 27.6 61.9 42 Fixed rate 25,251,680 2,683 25 4.53 4.50 17.2 64.5 6.4 43 Floating rate 9,887,583 1,486 84 4.77 4.72 54.4 55.3 7.6 Months 44 Total long-term 2,885,723 1,016 39 5.12 5.05 29.9 60.1 3.0 45 Fixed rate 1,082,459 716 4.92 4.86 36.2 72.4 2.5 46 Floating rate ... 1,803,264 1,357 5.24 5.16 26.2 52.8 3.3 Footnotes appear at the end of the table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A69 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 2-6, 1994—Continued Commercial and industrial loans—Continued Characteristic A ( o th f m o l d o o u o a u s l n n a la s n t r d o s s ) f ( o t A h f o v d s u e o iz s r l a a l e a g n r e d s s ) W m av a D e t e i u a g r y r a h i g s t t e y e d 2 W e a f v L f e e e i o g c r a a t h i n g t v e e e r d a 3 te (p S e t r a c n e d n a t) r d c ( s p o L e e l c l o r b a u c a y t r e n e e n r s d a t ) l ( c p o L u m m e m n o r a e c d a m d n e n e e n t i r s t t - ) (p P p l e a o a r r a t c t i i n e o c s n n i - t ) LARGE BANKS 1 Overnight6 9,888,563 6,898 4.51 9.7 57.0 4.6 2 One month or less (excluding overnight) 5,448,142 2,961 4.90 17.3 84.1 9.5 3 Fixed rate 3,696,857 5,833 4.59 10.5 80.1 9.8 4 Floating rate 1,751,285 1,452 5.56 31.7 92.6 9.0 5 More than one month and less than one year 5,629,671 953 121 5.32 38.6 89.7 6.7 6 Fixed rate 2,934,719 2,570 103 4.83 32.3 88.9 6.9 7 Floating rate 2,694,952 566 139 5.84 45.6 90.4 6.6 8 Demand7 12,901,720 648 5.61 65.6 53.8 3.2 9 Fixed rate 3,867,747 3,107 4.63 40.0 56.3 2.8 10 Floating rate 9,033,973 484 6.02 76.5 52.7 3.3 11 Total short-term 33,868,095 1,164 37 5.12 37.0 5.2 12 Fixed rate (thousands of dollars) ... 20,387,886 4,577 4.59 18.8 65.7 5.5 13 1-99 24,392 27 7.07 72.4 66.5 .6 14 100-499 153,125 256 49 5.88 53.1 77.0 5.5 15 500-999 267,278 669 35 5.62 46.0 88.8 5.8 16 1,000-4,999 3,125,361 2,411 27 4.96 22.2 82.5 6.9 17 5,000-9,999 3,676,463 6,450 22 4.79 17.9 72.6 8.2 18 10,000 or more 13,141,266 18,699 21 4.41 17.2 59.1 4.5 19 Floating rate (thousands of dollars). 13,480,210 547 92 5.93 64.5 65.4 4.7 20 1-99 477,554 32 160 7.87 81.6 92.9 1.0 21 100-499 1,427,414 208 148 7.46 75.2 92.4 2.5 22 500-999 882,973 674 144 7.12 66.8 92.5 4.4 23 1,000-4,999 2,525,025 2,032 115 6.49 52.5 83.5 7.9 24 5,000-9,999 1,287,494 6,340 49 5.52 45.4 74.7 6.5 25 10,000 or more 6,879,749 24,500 72 5.19 68.8 46.0 3.9 Months 26 Total long-term 3,291,341 798 6.33 48.3 90.6 8.7 27 Fixed rate (thousands of dollars) ... 749,098 1,192 5.05 50.2 93.2 2.3 28 1-99 10,919 31 7.89 85.4 57.3 1.6 29 100-499 25,654 215 6.97 70.5 84.8 6.7 30 500-999 39,442 719 5.78 55.5 75.2 2.5 31 1,000 or more 673,082 6,608 4.89 48.6 95.2 2.1 32 Floating rate (thousands of dollars). 2,542,243 728 6.70 47.7 89.8 10.6 33 1-99 48,543 39 7.61 79.6 86.0 3.0 34 100-499 304,799 231 7.44 72.6 85.9 8.1 35 500-999 272,004 690 7.22 63.3 90.5 9.4 36 1,000 or more 1,916,897 3,566 6.49 40.7 90.4 11.4 Loan rate (percent) Days Effective3 Nominal8 LOANS MADE BELOW PRIME10 37 Overnight6 9,596,033 8,327 4.43 4.41 8.4 55.8 4.7 38 One month or less (excluding overnight) 4,828,688 6,000 14 4.52 4.50 12.7 83.5 10.7 39 More than one month and less than one .year 4,446,036 3,473 10*9 4.75 4.73 29.3 91.8 7.2 40 Demand7 8,562,143 3,957 4.60 4.55 60.1 35.0 2.4 41 Total short-term 27,432,899 5,079 30 4.55 4.52 60.0 5.5 42 Fixed rate 19,677,448 5,915 22 4.50 4.48 17.3 64.8 5.7 43 Floating rate 7,755,452 3,738 75 4.67 4.62 57.6 48.0 5.0 Months 44 Total long-term 1,475,621 2,624 52 5.04 4.98 41.2 94.6 4.4 45 Fixed rate 646,902 3,298 4.70 4.66 44.3 94.7 2.4 46 Floating rate .. 828,720 2,263 5.30 5.24 38.8 94.5 5.9 Footnotes appear at the end of the table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • August 1994 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 2-6, 1994'—Continued Commercial and industrial loans—Continued Weighted Loan rate (percent) Loans Loans Amount of Average average secured made Partici- Characteristic ( o th f o l d o u o a s l n a la s n r d s s ) ( o th f o d s u o iz s l a l e a n r d s s ) ma D tu a r y i s ty 2 W e a f v f e e e i c g ra t h i g t v e e e d 3 Standard c (p o e ll r b a c y t e e n ra t) l ( c p o u m e m n r e c d m n e e n t r i t t - ) (p p l e o a r t a c i n e o s n n t ) OTHER BANKS 1 Overnight6 3,065,202 5,911 .34 5.1 58.8 9.3 2 One month or less (excluding overnight) 2,195,896 415 5.57 28.1 74.0 6.7 3 Fixed rate 972,620 663 4.79 13.6 61.1 10.4 4 Floating rate 1,223,277 320 6.19 39.7 84.2 3.8 5 More than one month and less than one year 4,120,582 86 1% 6.79 67.6 67.1 7.6 6 Fixed rate 1,401,243 64 138 5.94 54.4 61.2 4.2 7 Floating rate 2,719,340 106 226 7.23 74.3 70.1 9.3 8 Demand7 4,578,507 129 6.89 68.0 89.3 8.2 9 Fixed rate 725,788 115 5.93 52.3 85.6 14.1 10 Floating rate 3,852,719 132 7.07 71.0 90.0 7.1 11 Total short-term 13,960,188 157 6.09 47.8 73.6 8.0 12 Fixed rate (thousands of dollars) 6,164,852 203 39 4.95 23.2 62.9 8.9 13 1-99 425,539 16 169 8.07 80.4 39.2 .2 14 100-499 276,172 157 155 6.90 85.6 55.1 1.3 15 500-999 202,073 720 113 5.68 59.5 69.8 10.1 16 1,000-4,999 1,218,444 2,232 51 5.02 28.7 69.7 9.3 17 5,000-9,999 1,198,585 6,773 33 4.56 11.3 80.7 34.1 18 10,000 or more 2,844,039 19,590 10 4.39 8.7 56.2 .0 19 Floating rate (thousands of dollars)... 7,795,336 133 164 6.99 67.2 82.1 7.3 20 1-99 1,078,425 23 185 8.24 83.8 82.7 1.6 21 100-499 1,791,614 197 216 7.69 81.6 82.7 4.4 22 500-999 1,163,184 659 277 7.53 75.8 66.1 4.3 23 1,000-4,999 2,104,090 2,025 171 6.54 61.7 84.0 13.7 24 5,000-9,999 499,410 5,693 47 5.65 42.3 73.7 8.9 25 10,000 or more 1,158,614 20,361 54 5.60 41.8 97.3 8.2 Months 26 Total long-term 2,901,421 6.66 54.4 37.0 2.9 27 Fixed rate (thousands of dollars) ... 975,173 7.02 62.7 32.6 1.2 28 1-99 172,411 18 8.62 86.6 18.0 .6 29 100-499 266,763 190 8.36 96.7 29.1 .6 30 500-999 51,848 702 7.37 90.3 36.2 .0 31 1,000 or more 484,151 3,147 5.68 32.5 39.3 1.9 32 Floating rate (thousands of dollars). 1,926,248 236 6.48 50.2 39.3 3.7 33 1-99 197,778 34 8.40 92.8 46.6 7.3 34 100-499 419,336 229 7.83 90.4 56.8 7.5 35 500-999 227,071 668 7.68 81.7 62.5 5.9 36 1,000 or more 1,082,063 7,818 5.36 20.2 26.3 1.1 Loan rate (percent) Days Effective3 Nominal8 LOANS MADE BELOW PRIME10 37 Overnight6 3,062,263 8,774 4.32 4.28 5.0 58.8 9.3 38 One month or less (excluding overnight) 1,392,280 2,169 21 4.71 4.66 27.2 64.5 7.7 39 More than one month and less than one vear 1,804,529 253 144 5.29 5.24 49.8 71.2 15.7 40 Demand7 1,447,294 568 5.02 5.00 28.4 89.4 13.0 41 Total short-term 7,706,364 723 47 4.75 4.71 23.9 68.5 11.2 42 Fixed rate 5,574,232 916 33 4.61 4.57 16.7 63.4 8.9 43 Floating rate 2,132,132 466 108 5.11 5.06 42.8 81.7 17.2 Months 44 Total long-term 1,410,101 619 25 5.21 5.11 18.1 24.1 1.6 45 Fixed rate 435,557 331 5.25 5.16 24.0 39.2 2.5 46 Floating rate ... 974,544 1,012 5.19 5.09 15.4 17.3 1.2 Footnotes appear at the end of the table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A71 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 2-6, 1994—Continued NOTES 1. The survey of terms of bank lending to business collects data on gross loan 4. The chances are about two out of three that the average rate shown would extensions made during the first full business week in the mid-month of each differ by less than the amount of the standard error from the average rate that quarter by a sample of 340 commercial banks of all sizes. A sample of 250 banks would be found by a complete survey of lending at all banks. reports loans to farmers. The sample data are blown up to estimate the lending 5. The rate used to price the largest dollar volume of loans. Base pricing rates terms at all insured commercial banks during that week. The estimated terms of include the prime rate (sometimes referred to as a bank's "basic" or "reference" bank lending are not intended for use in collecting the terms of loans extended rate); the federal funds rate; domestic money market rates other than the federal over the entire quarter or residing in the portfolios of those banks. Construction funds nte; foreign money market rates; smoother base rates not included in the and land development loans include both unsecure loans and loans secured by real foregoing classifications. estate. Thus, some of the construction and land development loans would be 6. Overnight loans mature on the following business day. reported on the statement of condition as real estate loans and the remainder as 7. Demand loans have no stated date of maturity. business loans. Mortgage loans, purchased loans, foreign loans, and loans of less 8. Nominal (not compounded) annual interest rate calculated from the stated that $1,000 are excluded from the survey. As of September 30, assets of most of rate and other terms of the loans and weighted by loan size. the large banks were at least $7.0 billion. For all insured banks, total assets 9. Calculated by weighting the prime rate reported by each bank by the volume averaged $275 million. of loans reported by that bank, summing the results, and then averaging over all 2. Average maturities are weighted by loan size; excludes demand loans. reporting banks. 3. Effective (compounded) annual interest rate calculated from the stated rate 10. The proportion of loans made at rates below the prime may vary substanand other terms of the loans and weighted by loan size. tially from the proportion of such loans outstanding in banks' portfolios. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All Special Tables • August 1994 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 19941 Millions of dollars, except as noted All states2 New York California Illinois IItteemm in I c T B l o u F t d a s i l n 3 g o IB nl F y s 3 inc T I l B o u t F d a i s l n g I o B n F ly s inc T I l B o u F t d a i s l n g I o B n F ly s inc T I l B o u F t d a i s l n g I o B n F ly s 1 Total assets4 693,578 314,037 524,498 249,160 76,291 35,571 58,313 21,646 2 Claims on nonrelated parties 618,234 182,826 461,470 148,245 70,517 17,189 57,255 12,306 3 Cash and balances due from depository institutions 140,873 118,174 120,506 99,630 8,003 7,371 10,879 10,270 4 Cash items in process of collection and unposted debits 2,736 0 2,579 0 21 0 103 0 5 Currency and coin (U.S. and foreign) 22 n.a. 15 n.a. 1 n.a. 1 n.a. 6 Balances with depository institutions in United States .. 92,660 74,216 78,994 61,915 5,080 4,497 7,920 7,512 7 U.S. branches and agencies of other foreign banks (including IBFs) 87,392 71,135 74,450 59,112 4,6% 4,324 7,745 7,412 8 Other depository institutions in United States (including IBFs) 5,269 3,081 4,544 2,802 384 173 175 100 9 Balances with banks in foreign countries and with foreign central banks 44,961 43,958 38,495 37,716 2,884 2,874 2,843 2,759 10 Foreign branches of U.S. banks 1,701 1,455 1,577 1,332 42 42 33 33 11 Other banks in foreign countries and foreign central banks 43,260 42,503 36,918 36,384 2,842 2,832 2,811 2,726 12 Balances with Federal Reserve Banks 492 n.a. 423 n.a. 17 n.a. 11 n.a. 13 Total securities and loans 371,569 55,936 253,135 40,926 56,744 9,253 35,654 1,670 14 Total securities, book value 84,323 13,433 76,172 12,213 4,970 786 2,620 421 15 U.S. Treasury 26,623 n.a. 24,677 n.a. 1,609 n.a. 259 n.a. 16 Obligations of U.S. government agencies and corporations 2211,,000088 n.a. 2200,,558866 n.a. 224400 n.a. 4411 n.a. 17 Other bonds, notes, debentures, and corporate stock (including state and local securities) 36,693 13,433 30,909 12,213 3,120 786 2,320 421 18 Federal funds sold and securities purchased under agreements to resell 39,379 3,144 35,378 2,863 648 49 2,926 208 19 U.S. branches and agencies of other foreign banks 10,215 2,349 8,585 2,110 477 39 929 180 20 Commercial banks in United States 5,0% 240 4,747 240 85 0 78 0 21 Other 24,068 556 22,047 513 86 10 1,918 28 22 Total loans, gross 287,360 42,511 177,036 28,717 51,793 8,469 33,043 1,249 23 LESS: Unearned income on loans 114 8 73 5 19 2 9 0 24 EQUALS: Loans, net 287,246 42,503 176,963 28,712 51,774 8,467 33,034 1,248 Total loans, gross, by category 25 Real estate loans 43,264 461 24,117 273 12,789 173 3,886 13 26 Loans to depository institutions 43,297 28,245 28,911 18,153 8,980 6,789 1,885 841 27 Commercial banks in United States (including IBFs) 20,312 10,704 12,379 6,052 6,146 4,062 1,569 553 28 U.S. branches and agencies of other foreign banks ... 18,361 10,475 11,116 5,873 6,069 4,052 1,045 538 29 Other commercial banks in United States 1,951 229 1,264 179 77 10 524 15 30 Other depository institutions in United States (including IBFs) 61 0 61 0 0 0 0 0 31 Banks in foreign countries 22,924 17,542 16,471 12,101 2,834 2,727 316 288 32 Foreign branches of U.S. banks 714 522 499 327 205 195 0 0 33 Other banks in foreign countries 22,210 17,019 15,972 11,775 2,629 2,532 316 288 34 Loans to other financial institutions 21,371 820 17,802 715 1,399 15 1,670 49 35 Commercial and industrial loans 160,010 10,071 90,643 7,055 27,950 1,428 23,551 308 36 U.S. addressees (domicile) 141,307 57 77,284 31 25,680 13 22,891 0 37 Non-U.S. addressees (domicile) 18,703 10,014 13,359 7,024 2,271 1,416 660 308 38 Acceptances of other banks 809 30 532 23 60 0 34 0 39 U.S. banks 339 0 298 0 17 0 1 0 40 Foreign banks 470 30 234 23 43 0 33 0 41 Loans to foreign governments and official institutions (including foreign central banks) 4,192 2,666 3,138 2,312 159 63 187 37 42 Loans for purchasing or carrying securities (secured and unsecured) 9,188 53 8,705 53 271 0 128 0 43 All other loans 4,504 121 2,462 90 183 0 1,701 0 44 All other assets 50,311 5,462 38,792 4,749 4,976 483 5,514 158 45 Customers' liabilities on acceptances outstanding 13,828 n.a. 8,983 n.a. 3,473 n.a. 733 n.a. 46 U.S. addressees (domicile) 10,008 n.a. 6,425 n.a. 2,676 n.a. 594 n.a. 47 Non-U.S. addressees (domicile) 3,820 n.a. 2,558 n.a. 797 n.a. 139 n.a. 48 Other assets including other claims on nonrelated parties 36,483 5,462 29,809 4,749 1,503 483 4,781 158 49 Net due from related depository institutions 75,345 131,211 63,028 100,915 5,774 18,382 1,059 9,340 50 Net due from head office and other related depository institutions5 75,345 n.a. 63,028 n.a. 5,774 n.a. 1,059 n.a. 51 Net due from establishing entity, head offices, and other related depository institutions5 n.a. 131,211 n.a. 100,915 n.a. 18,382 n.a. 9,340 52 Total liabilities4 693,578 314,037 524,498 249,160 76,291 35,571 58,313 21,646 53 Liabilities to nonrelated parties 580,950 294,430 470,%2 235,489 57,523 35,076 37,087 18,289 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A73 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 1994'—Continued Millions of dollars, except as noted All states2 New York California Illinois ex I T c B l o u F t d a s i l 3 n g o IB nl F y s 3 ex T c IB l o u F t d a s i l n g I o B n F ly s ex T c IB l o u F t d a s i l n g I o B n F ly s ex T c IB l o u F t d a s i l n g 54 Total deposits and credit balances 136,572 224,953 119,622 203,672 4,483 6,033 5,064 55 Individuals, partnerships, and corporations 93,253 11,690 79,395 7,589 4,161 360 3,986 56 U.S. addressees (domicile) 79,995 153 71,841 152 2,593 0 3,137 57 Non-U.S. addressees (domicile) 13,257 11,537 7,554 7,436 1,568 360 849 58 Commercial banks in United States (including IBFs). 23,165 69,392 21,233 64,941 76 2,155 935 59 U.S. branches and agencies of other foreign banks 13,199 63,111 12,064 59,341 63 1,873 418 60 Other commercial banks in United States 9,967 6,281 9,169 5,600 13 282 518 6 6 1 2 Ba F n o k r s e i i g n n f o b r r e a i n g c n h c e o s u o n f t r U ie . s S . banks 8 2 , , 5 9 4 5 0 1 12 4 4 , , 5 6 7 7 2 4 8 2 , , 2 9 4 5 1 1 11 4 5 , , 1 2 5 7 7 2 3 0 3 2,7 2 6 6 5 8 6 0 2 63 Other banks in foreign countries 5,589 120,102 5,291 111,115 33 2,497 62 64 Foreign governments and official institutions (including foreign central banks) 3,795 19,146 3,502 15,818 183 753 3 65 All other deposits and credit balances 7,470 52 6,954 52 11 0 72 66 Certified and official checks 349 297 19 7 67 Transaction accounts and credit balances (excluding IBFs) 8,893 7,257 345 323 68 Individuals, partnerships, and corporations 7,104 5,757 279 310 69 U.S. addressees (domicile) 5,260 4,621 217 306 7 7 7 7 0 1 2 3 Co U N O m t o . h m S n e . - e r U b r c c r . i a o S a n m . l c a b m h d a e e d n s r k r c e a s i s a n s i l d n e b e a U a s g n n e ( k d n it s o c e i m d i e n s i S c U o i t l a f n e t i ) e o t e s th d ( e in S r c t f a l o u t r e d e s i i n g g n I b B a F nk s) s . 1,8 9 4 8 1 8 4 3 5 1,1 8 3 7 1 2 6 2 0 6 9 0 9 1 4 0 0 0 7 7 4 5 Ba F n o k r s e i i g n n f o b r r e a i n g c n h c e o s u o n f t r U ie . s S . banks 878 1 71 0 6 2 0 4 0 2 76 Other banks in foreign countries 877 716 24 2 77 Foreign governments and official institutions (including foreign central banks) 365 323 78 All other deposits and credit balances 99 82 79 Certified and official checks 349 297 80 Demand deposits (included in transaction accounts and credit balances) 8,350 7,027 287 309 81 Individuals, partnerships, and corporations 6,686 5,616 236 297 82 U.S. addressees (domicile) 5,124 4,561 189 293 8 8 8 8 5 6 3 4 Co O U N m t o . h S m n e . - e r U b r c c r . i a o S a n m . l c a m b h d a e e d n s r r k c e a s i s a n s i l d n e b e a U a s g n n e ( k n d i s t c o e i m i d e n s i S c U o i t l a n f e t i ) e o t e s th d ( e i S n r c t f a l o u t r e d e s i i n g g n I b B an F k s s ). 1,5 7 6 8 1 2 1 3 1 1,0 7 7 5 7 6 0 5 4 0 0 7 1 0 0 0 4 8 8 8 7 Ba F n o k r s e i i g n n f o b r r e a i n g c n h c e o s u o n f t r U ie . s S . banks 823 1 66 0 8 2 0 4 0 2 89 Other banks in foreign countries 822 668 24 2 90 Foreign governments and official institutions 91 All o ( t in h c e l r u d d e in p g o s f i o t r s e a ig n n d c c e r n e t d r i a t l b b a a l n an k c s) e s 3 7 3 3 5 30 6 5 4 5 3 3 1 92 Certified and official checks 349 297 19 7 93 Nontransaction accounts (including MMDAs, excluding IBFs) 127,679 112,366 4,138 4,741 94 Individuals, partnerships, and corporations 86,149 73,639 3,882 3,675 95 U.S. addressees (domicile) 74,735 67,220 2,376 2,830 96 Non-U.S. addressees (domicile) 11,413 6,418 1,506 845 97 Commercial banks in United States (including IBFs). 23,068 21,151 67 935 1 1 1 9 0 9 0 0 9 2 8 0 1 Ba O F O U n o t k t . h h S r s e e e . i i r r g n b c n b r f o a a o b n m n r r c k e a m h i s n g e e c i n s r n h c a c e i f a n o s o l d u r o e n b f a i t a g g r n U i n e e k n . s c s S c o . i i e u n b s n a U t o n r n i f k e i s o s t e t d h e S r t f a o t r e e s i gn banks 1 9 7 2 4 3 , , , , , 8 6 7 1 9 8 6 8 1 5 3 3 4 2 0 1 9 7 2 4 2 , , , , , 0 5 0 9 5 9 2 5 5 7 7 5 4 0 5 6 4 9 0 3 9 4 5 6 1 1 6 0 0 8 8 0 1 1 0 0 3 4 F A o ll r e o ( i i t g n h n c e l r g u o d d v i e n e p g r o n s f m i o t r s e e n a i t g n s n d a c n c e d r n e t d o r i f a t f l i b c b i a a a l l n a n i k n c s s ) e t s it utions 7 3 , , 3 4 7 3 1 0 6 3 , , 8 1 7 7 2 9 18 0 0 7 0 1 105 IBF deposit liabilities 224,953 203,672 6,033 1 1 0 0 6 7 Ind U iv .S id . u a a d l d s, r e p s a s r e t e n s e r ( s d h o i m ps i , c i a le n ) d corporations 11,6 1 9 5 0 3 7,5 1 8 5 9 2 36 0 0 108 Non-U.S. addressees (domicile) 11,537 7,436 360 109 Commercial banks in United States (including IBFs). 69,392 64,941 2,155 110 U.S. branches and agencies of other foreign banks 63,111 59,341 1,873 111 Other commercial banks in United States 6,281 5,600 282 112 Banks in foreign countries 124,674 115,272 2,765 113 Foreign branches of U.S. banks 4,572 4,157 268 114 Other banks in foreign countries 120,102 111,115 2,497 115 Foreign governments and official institutions (including foreign central banks) 19,146 15,818 753 116 All other deposits and credit balances 52 52 0 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Special Tables • August 1994 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 1994'—Continued Millions of dollars, except as noted All states2 New York California Illinois IItteemm in I c T B l o u F t d a s i l n 3 g o IB nl F y s 3 inc T IB l o u F t d a s i l n g I o B n F ly s inc T IB l o u F t d a s i l n g I o B n F ly s inc T I l B o u F t d a s i l n g I o B n F ly s 117 Federal funds purchased and securities sold under agreements to repurchase 60,117 6,669 49,569 4,100 5,864 2,140 4,482 396 118 U.S. branches and agencies of other foreign banks 12,095 2,339 8,345 961 2,744 1,159 929 1% 119 Other commercial banks in United States 11,163 292 8,427 226 2,006 46 696 20 170 Other 36,859 4,038 32,797 2,913 1,115 935 2,857 180 121 Other borrowed money 114,358 58,534 63,591 24,018 36,654 26,463 11,906 7,200 177 Owed to nonrelated commercial banks in United States (including IBFs) 39,725 21,644 16,288 4,708 18,593 14,358 3,511 2,233 123 Owed to U.S. offices of nonrelated U.S. banks 9,161 1,989 5,741 413 2,134 1,226 972 322 124 Owed to U.S. branches and agencies of nonrelated foreign banks 30,564 19,655 10,547 4,295 16,459 13,131 2,539 1,911 125 Owed to nonrelated banks in foreign countries 36,520 34,292 19,107 17,071 11,948 11,824 4,889 4,T 88 176 Owed to foreign branches of nonrelated U.S. banks ... 1,759 1,710 751 717 674 669 313 313 127 Owed to foreign offices of nonrelated foreign banks 34,760 32,582 18,355 16,354 11,274 11,155 4,576 4,575 128 Owed to others 38,113 2,598 28,196 2,238 6,113 281 3,505 79 129 All other liabilities 44,949 4,273 34,508 3,700 4,489 440 5,049 106 130 Branch or agency liability on acceptances executed and outstanding 14,535 n.a. 99,,770011 n.a. 33,,446677 n.a. 667766 n.a. 131 Other liabilities to nonrelated parties 30,414 4,273 24,807 3,700 1,021 440 4,373 106 132 Net due to related depository institutions5 112,628 19,607 53,536 13,671 18,767 495 21,226 3,357 133 Net owed to head office and other related depository institutions5 112,628 n.a. 53,536 n.a. 18,767 n.a. 21,226 n.a. 134 Net owed to establishing entity, head office, and other related depository institutions5 n.a. 19,607 n.a. 13,671 n.a. 495 n.a. 3,357 MEMO 135 Non-interest-bearing balances with commercial banks in United States 1,146 0 878 0 128 0 42 0 136 Holding of commercial paper included in total loans 940 920 1 10 137 Holding of own acceptances included in commercial and industrial loans 3,199 2,233 720 92 138 Commercial and industrial loans with remaining maturity of one year or less 98,492 54,724 16,963 15,943 139 Predetermined interest rates 55,667 n.a. 30,095 n.a. 10,646 n.a. 11,355 n.a. 140 Floating interest rates 42,825 24,629 6,317 4,588 141 Commercial and industrial loans with remaining maturity of more than one year 61,518 35,919 10,987 7,608 142 Predetermined interest rates 19,332 10,978 4,152 3,039 143 Floating interest rates 42,186 24,941 6,835 4,569 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A75 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 1994'—Continued Millions of dollars, except as noted All states2 New York California Illinois IItteemm ex I T c B l o u F t d a s i l 3 n g o IB nl F y s 3 ex T c IB l o u F t d a s i l n g I o B n F ly s ex T c IB l o u F t d a s i l n g I o B n F ly s ex T c IB l o u F t d a s i l n g I o B n F ly s 111144444444 CCCCoooommmmppppoooonnnneeeennnnttttssss ooooffff ttttoooottttaaaallll nnnnoooonnnnttttrrrraaaannnnssssaaaaccccttttiiiioooonnnn aaaaccccccccoooouuuunnnnttttssss,,,, iiiinnnncccclllluuuuddddeeeedddd iiiinnnn ttttoooottttaaaallll ddddeeeeppppoooossssiiiittttssss aaaannnndddd ccccrrrreeeeddddiiiitttt bbbbaaaallllaaaannnncccceeeessss ooooffff nnnnoooonnnnttttrrrraaaannnnssssaaaaccccttttiiiioooonnnn aaaaccccccccoooouuuunnnnttttssss,,,, iiiinnnncccclllluuuuddddiiiinnnngggg IIIIBBBBFFFFssss 133,181 t 118,060 t 4,949 t 5,189 t 111144445555 TTTTiiiimmmmeeee CCCCDDDDssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee 96,614 86,036 2,884 3,421 111144446666 OOOOtttthhhheeeerrrr ttttiiiimmmmeeee ddddeeeeppppoooossssiiiittttssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee 25,227 n.a. 22,626 n.a. 898 n.a. 1,093 n.a. 111144447777 TTTTiiiimmmmeeee CCCCDDDDssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee \ \ wwwwiiiitttthhhh rrrreeeemmmmaaaaiiiinnnniiiinnnngggg mmmmaaaattttuuuurrrriiiittttyyyy ooooffff mmmmoooorrrreeee tttthhhhaaaannnn 11112222 mmmmoooonnnntttthhhhssss ........ 11,340 9,398 1 1,167 676 1 All states2 New York California Illinois inc T IB l o u F t d a s i l n g I o B n F ly s inc T IB l o u F t d a s i l n g I o B n F ly s inc T IB l o u F t d a s i l n g I o B n F ly s inc T IB l o u F t d a s i l n g I o B n F ly s 111144448888 MMMMaaaarrrrkkkkeeeetttt vvvvaaaalllluuuueeee ooooffff sssseeeeccccuuuurrrriiiittttiiiieeeessss hhhheeeelllldddd 0 0 0 0 0 0 0 0 111144449999 IIIImmmmmmmmeeeeddddiiiiaaaatttteeeellllyyyy aaaavvvvaaaaiiiillllaaaabbbblllleeee ffffuuuunnnnddddssss wwwwiiiitttthhhh aaaa mmmmaaaattttuuuurrrriiiittttyyyy ggggrrrreeeeaaaatttteeeerrrr tttthhhhaaaannnn oooonnnneeee ddddaaaayyyy iiiinnnncccclllluuuuddddeeeedddd iiiinnnn ooootttthhhheeeerrrr bbbboooorrrrrrrroooowwwweeeedddd mmmmoooonnnneeeeyyyy 70,784 n.a. 34,768 n.a. 27,339 n.a. 7,083 n.a. 111155550000 NNNNuuuummmmbbbbeeeerrrr ooooffff rrrreeeeppppoooorrrrttttssss ffffiiiilllleeeedddd5555 551 0 258 0 127 0 49 0 1. Data are aggregates of categories reported on the quarterly form FFIEC 002, item is not an eligible IBF asset or liability or because that level of detail is not "Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign reported for IBFs. From December 1981 through September 1985, IBF data were Banks." The form was first used for reporting data as of June 30, 1980, and was included in all applicable items reported. revised as of December 31, 1985. From November 1972 through May 1980, U.S. 4. Total assets and total liabilities include net balances, if any, due from or branches and agencies of foreign banks had filed a monthly FR 886a report. owed to related banking institutions in the United States and in foreign countries Aggregate data from that report were available through the Federal Reserve (see note 5). On the former monthly branch and agency report, available through statistical release G.ll, last issued on July 10, 1980. Data in this table and in the the G. 11 statistical release, gross balances were included in total assets and total G.ll tables are not strictly comparable because of differences in reporting panels liabilities. Therefore, total asset and total liability figures in this table are not and in definitions of balance sheet items. IBF, international banking faculty. comparable to those in the G.ll tables. 2. Includes the District of Columbia. 5. Related depository institutions includes the foreign head office and other 3. Effective December 1981, the Federal Reserve Board amended Regulations U.S. and foreign branches and agencies of a bank, a bank's parent holding D and Q to permit banking offices located in the United States to operate company, and majority-owned banking subsidiaries of the bank and of its parent international banking facilities (IBFs). Since December 31, 1985, data for IBFs holding company (including subsidiaries owned both directly and indirectly). have been reported in a separate column. These data are either included in or 6. In some cases two or more offices of a foreign bank within the same excluded from the total columns as indicated in the headings. The notation "n.a." metropolitan area file a consolidated report. indicates that no IBF data have been reported for that item, either because the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

76 Index to Statistical Tables References are to pages A3-A75 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Demand deposits—Continued Agricultural loans, commercial banks, 21, 22 Ownership by individuals, partnerships, and Assets and liabilities (See also Foreigners) corporations, 23 Banks, by classes, 18-22 Turnover, 17 Domestic finance companies, 36 Depository institutions Federal Reserve Banks, 11 Reserve requirements, 9 Financial institutions, 28 Reserves and related items, 4, 5, 6, 13 Foreign banks, U.S. branches and agencies, 23, 72-75 Deposits (See also specific types) Automobiles Banks, by classes, 4, 18-22, 24 Consumer installment credit, 39 Federal Reserve Banks, 5,11 Production, 47, 48 Interest rates, 16 Turnover, 17 BANKERS acceptances, 10, 22, 26 Discount rates at Reserve Banks and at foreign central banks and Bankers balances, 18-22, 72-75. (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, 23 EMPLOYMENT, 45 Business activity, nonfinancial, 45 Eurodollars, 26 Business expenditures on new plant and equipment, 35 Business loans (See Commercial and industrial loans) FARM mortgage loans, 38 Federal agency obligations, 5, 10, 11, 12, 31, 32 Federal credit agencies, 33 CAPACITY utilization, 46 Federal finance Capital accounts Debt subject to statutory limitation, and types and ownership Federal Reserve Banks, 11 of gross debt, 30 Central banks, discount rates, 65 Receipts and outlays, 28, 29 Certificates of deposit, 26 Treasury financing of surplus, or deficit, 28 Commercial and industrial loans Treasury operating balance, 28 Commercial banks, 21 Federal Financing Bank, 28, 33 Weekly reporting banks, 21-23 Federal funds, 7, 19, 21, 22, 23, 26, 28 Commercial banks Federal Home Loan Banks, 33 Assets and liabilities, 18-22, 68-71 Federal Home Loan Mortgage Corporation, 33, 37, 38 Commercial and industrial loans, 18-23 Federal Housing Administration, 33, 37, 38 Consumer loans held, by type and terms, 39 Federal Land Banks, 38 Deposit interest rates of insured, 16 Federal National Mortgage Association, 33, 37, 38 Loans sold outright, 21 Federal Reserve Banks Nondeposit funds, 72-75 Condition statement, 11 Real estate mortgages held, by holder and property, 38 Discount rates (See Interest rates) Terms of lending, 68-71 U.S. government securities held, 5, 11, 12, 30 Time and savings deposits, 4 Federal Reserve credit, 5, 6, 11, 12 Commercial paper, 24, 26, 36 Federal Reserve notes, 11 Condition statements (See Assets and liabilities) Federally sponsored credit agencies, 33 Construction, 45, 49 Finance companies Consumer installment credit, 39 Assets and liabilities, 36 Consumer prices, 45, 46 Business credit, 36 Consumption expenditures, 52, 53 Loans, 39 Corporations Paper, 24, 26 Nonfinancial, assets and liabilities, 35 Financial institutions, loans to, 21, 22, 23 Profits and their distribution, 35 Float, 51 Security issues, 34,65 Cost of living (See Consumer prices) Flow of funds, 40, 42, 43, 44 Credit unions, 39 Foreign banks, assets and liabilities of U.S. branches and Currency in circulation, 5, 14 agencies, 22, 23, 72-75 Customer credit, stock market, 27 Foreign currency operations, 11 Foreign deposits in U.S. banks, 5, 11,21,22 Foreign exchange rates, 66 DEBITS to deposit accounts, 17 Foreign trade, 54 Debt (See specific types of debt or securities) Foreigners Demand deposits Claims on, 55, 58, 59, 60, 62 Banks, by classes, 18-23 Liabilities to, 22, 54, 55, 56, 61, 63, 64 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All GOLD REAL estate loans Certificate account, 11 Banks, by classes, 21, 22, 38 Stock, 5, 54 Terms, yields, and activity, 37 Government National Mortgage Association, 33, 37, 38 Type of holder and property mortgaged, 38 Gross domestic product, 51 Repurchase agreements, 7, 21-23 Reserve requirements, 9 HOUSING, new and existing units, 49 Reserves Commercial banks, 18 INCOME, personal and national, 45, 51, 52 Depository institutions, 4, 5, 6, 13 Industrial production, 45, 47 Federal Reserve Banks, 11 Installment loans, 39 U.S. reserve assets, 54 Insurance companies, 30, 38 Residential mortgage loans, 37 Interest rates Retail credit and retail sales, 39, 40, 45 Bonds, 26 Commercial banks, 68-71 SAVING Consumer installment credit, 39 Flow of funds, 40, 42, 43, 44 Deposits, 16 National income accounts, 51 Federal Reserve Banks, 8 Savings and loan associations, 38, 39, 40 Foreign central banks and foreign countries, 66 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, 53-65 Foreign transactions, 63 International organizations, 55, 56, 58, 61, 62 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, 18—23 Deposits, 21, 22 Commercial banks, 4, 18-23 Holdings of U.S. government securities, 30 Federal Reserve Banks, 11, 12 New security issues, 34 Financial institutions, 38 Ownership of securities issued by, 21, 22 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, 18-23 Prices, 27 Commercial banks, 4, 18-23 Federal Reserve Banks, 5, 6, 8, 11, 12 Student Loan Marketing Association, 33 Financial institutions, 38 Insured or guaranteed by United States, 37, 38 TAX receipts, federal, 29 Thrift institutions, 4. (See also Credit unions and Savings and MANUFACTURING loan associations) Capacity utilization, 46 Time and savings deposits, 4, 14, 16, 18-23 Production, 46, 48 Trade, foreign, 54 Margin requirements, 27 Treasury cash, Treasury currency, 5 Member banks (See also Depository institutions) Treasury deposits, 5, 11, 28 Federal funds and repurchase agreements, 7 Treasury operating balance, 28 Reserve requirements, 9 UNEMPLOYMENT, 45 Mining production, 48 U.S. government balances Mobile homes shipped, 49 Commercial bank holdings, 18-23 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, 18-23, 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, 64 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, 53-66 Utilities, production, 48 PERSONAL income, 52 Prices VETERANS Administration, 37, 38 Consumer and producer, 45, 50 Stock market, 27 Prime rate, 25 WEEKLY reporting banks, 22-24 Producer prices, 45, 50 Wholesale (producer) prices, 45, 50 Production, 45, 47 Profits, corporate, 35 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

78 Federal Reserve Board of Governors and Official Staff ALAN GREENSPAN, Chairman EDWARD W. KELLEY, JR. ALAN S. BLINDER, Vice Chairman 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, Deputy Congressional Liaison DAVID H. HOWARD, Senior Adviser WINTHROP P. HAMBLEY, Special Assistant to the Board DONALD B. ADAMS, Assistant Director BOB STAHLY MOORE, Special Assistant to the Board PETER HOOPER III, Assistant Director DIANE E. WERNEKE, Special Assistant to the Board KAREN H. JOHNSON, Assistant Director RALPH W. SMITH, JR., Assistant Director LEGAL DIVISION DIVISION OF RESEARCH AND STATISTICS J. VIRGIL MATTINGLY, JR., General Counsel SCOTT G. ALVAREZ, Associate General Counsel MICHAEL J. PRELL, Director RICHARD M. ASHTON, Associate General Counsel EDWARD C. ETTIN, Deputy Director OLIVER IRELAND, Associate General Counsel DAVID J. STOCKTON, Deputy Director KATHLEEN M. O'DAY, Associate General Counsel MARTHA BETHEA, Associate Director ROBERT DEV. FRIERSON, Assistant General Counsel WILLIAM R. JONES, Associate Director KATHERINE H. WHEATLEY, Assistant General Counsel MYRON L. KWAST, Associate Director PATRICK M. PARKINSON, Associate Director OFFICE OF THE SECRETARY THOMAS D. SIMPSON, Associate Director LAWRENCE SLIFMAN, Associate Director WILLIAM W. WILES, Secretary JENNIFER J. JOHNSON, Deputy Secretary MARTHA S. SCANLON, Deputy Associate Director BARBARA R. LOWREY, Associate Secretary PETER A. TINSLEY, Deputy Associate Director FLINT BRAYTON, Assistant Director DIVISION OF BANKING DAVID S. JONES, Assistant Director SUPERVISION AND REGULATION STEPHEN A. RHOADES, Assistant Director CHARLES S. STRUCKMEYER, Assistant Director RICHARD SPILLENKOTHEN, Director ALICE PATRICIA WHITE, Assistant Director STEPHEN C. SCHEMERING, Deputy Director JOYCE K. ZICKLER, Assistant Director DON E. KLINE, Associate Director JOHN J. MINGO, Senior Adviser WILLIAM A. RYBACK, Associate Director GLENN B. CANNER, Adviser FREDERICK M. STRUBLE, Associate Director LEVON H. GARABEDIAN, Assistant Director HERBERT A. BIERN, Deputy Associate Director (Administration ) ROGER T. COLE, Deputy Associate Director JAMES I. GARNER, Deputy Associate Director DIVISION OF MONETARY AFFAIRS HOWARD A. AMER, Assistant Director GERALD A. EDWARDS, JR., Assistant Director DONALD L. KOHN, Director JAMES D. GOETZINGER, Assistant Director DAVID E. LINDSEY, Deputy Director STEPHEN M. HOFFMAN, JR., Assistant Director BRIAN F. MADIGAN, Associate Director LAURA M. HOMER, Assistant Director RICHARD D. PORTER, Deputy Associate Director JAMES V. HOUPT, Assistant Director VINCENT R. REINHART, Assistant Director JACK P. JENNINGS, Assistant Director NORMAND R.V. BERNARD, Special Assistant to the Board MICHAEL G. MARTINSON, Assistant Director DIVISION OF CONSUMER RHOGER H PUGH, Assistant Director SIDNEY M. SUSSAN, Assistant Director AND COMMUNITY AFFAIRS MOLLY S. WASSOM, Assistant Director GRIFFITH L. GARWOOD, Director WILLIAM SCHNEIDER, Project Director, GLENN E. LONEY, Associate Director National Information Center DOLORES S. SMITH, Associate Director MAUREEN P. ENGLISH, Assistant Director IRENE SHAWN MCNULTY, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

79 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 DAVID L. SHANNON, Director JEFFREY C. MARQUARDT, Assistant Director JOHN H. PARRISH, Assistant Director JOHN R. WEIS, Associate Director ANTHONY V. DIGIOIA, Assistant Director LOUISE L. ROSEMAN, Assistant Director JOSEPH H. HAYES, JR., Assistant Director FLORENCE M. YOUNG, Assistant Director FRED HOROWITZ, Assistant Director OFFICE OF THE INSPECTOR GENERAL OFFICE OF THE CONTROLLER BRENT L. BOWEN, Inspector General GEORGE E. LIVINGSTON, Controller DONALD L. ROBINSON, Assistant Inspector General STEPHEN J. CLARK, Assistant Controller {Programs and BARRY R. SNYDER, Assistant Inspector General 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 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

80 Federal Reserve Bulletin • August 1994 Federal Open Market Committee and Advisory Councils FEDERAL OPEN MARKET COMMITTEE MEMBERS ALAN GREENSPAN, Chairman WILLIAM J. MCDONOUGH, Vice Chairman ALAN S. BLINDER JERRY L. JORDAN LAWRENCE B. LINDSEY J. ALFRED BROADDUS, JR. EDWARD W. KELLEY, JR. ROBERT T. PARRY ROBERT P. FORRESTAL JOHN P. LAWARE SUSAN M. PHILLIPS ALTERNATE MEMBERS THOMAS M. HOENIG THOMAS C. MELZER JAMES H. OLTMAN WILLIAM C. CONRAD STAFF DONALD L. KOHN, Secretary and Economist JACK H. BEEBE, 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 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

81 CONSUMER ADVISORY COUNCIL JEAN POGGE, Chicago, Illinois, Chairman JAMES L. WEST, Tijeras, New Mexico, Vice Chairman BARRY A. ABBOTT, San Francisco, California RONALD HOMER, Boston, Massachusetts JOHN R. ADAMS, Philadelphia, Pennsylvania THOMAS L. HOUSTON, Dallas, Texas JOHN A. BAKER, Atlanta, Georgia KATHARINE W. MCKEE, Durham, North Carolina MULUGETTA BIRRU, Pittsburgh, Pennsylvania EDMUND MIERZWINSKI, Washington, D.C. DOUGLAS D. BLANKE, St. Paul, Minnesota ANNE B. SHLAY, Philadelphia, Pennsylvania GENEVIEVE BROOKS, Bronx, New York JOHN V. SKINNER, Irving, Texas CATHY CLOUD, Washington, D.C. REGINALD J. SMITH, Kansas City, Missouri ALVIN J. COWANS, Orlando, Florida LOWELL N. SWANSON, Portland, Oregon MICHAEL D. EDWARDS, Yelm, Washington JOHN E. TAYLOR, Washington, D.C. 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 GARY S. HATTEM, New York, New York 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, Newport Beach, 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

82 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 or may be ordered $75.00 per year. via Mastercard or Visa. Payment from foreign residents should Securities Credit Transactions Handbook. $75.00 per year. be drawn on a U.S. bank. 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, and Mexico. Elsewhere, $35.00 per year or $3.00 each. THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A MULTI- ANNUAL STATISTICAL DIGEST: period covered, release date, COUNTRY MODEL, May 1984. 590 pp. $14.50 each. number of pages, and price. WELCOME TO THE FEDERAL RESERVE. March 1989. 14 pp. 1981 October 1982 239 pp. $ 6.50 INDUSTRIAL PRODUCTION—1986 EDITION. December 1986. 440 pp. $9.00 each. 1982 December 1983 266 pp. $ 7.50 1983 October 1984 264 pp. $11.50 FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY. December 1986. 264 pp. $10.00 each. 1984 October 1985 254 pp. $12.50 1985 October 1986 231 pp. $15.00 FINANCIAL SECTORS IN OPEN ECONOMIES: EMPIRICAL ANALY- 1986 November 1987 288 pp. $15.00 SIS AND POLICY ISSUES. August 1990. 608 pp. $25.00 each. 1987 October 1988 272 pp. $15.00 1988 November 1989 256 pp. $25.00 CONSUMER EDUCATION PAMPHLETS 1980-89 March 1991 712 pp. $25.00 Short pamphlets suitable for classroom use. Multiple copies are 1990 November 1991 185 pp. $25.00 available without charge. 1991 November 1992 215 pp. $25.00 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 OF CHARTS. Weekly. $30.00 per year or $.70 each in the A Guide to Business Credit for Women, Minorities, and Small United States, its possessions, Canada, and Mexico. Else- Businesses where, $35.00 per year or $.80 each. 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

83 STAFF STUDIES: Only Summaries Printed in the 161. A REVIEW OF CORPORATE RESTRUCTURING ACTIVITY, 1980-90, by Margaret Hastings Pickering. May 1991. BULLETIN 21pp. Studies and papers on economic and financial subjects that are of general interest. Requests to obtain single copies of the full 162. EVIDENCE ON THE SIZE OF BANKING MARKETS FROM text or to be added to the mailing list for the series may be sent MORTGAGE LOAN RATES IN TWENTY CITIES, by Stephen A. Rhoades. February 1992. 11 pp. to Publications Services. 163. CLEARANCE AND SETTLEMENT IN U.S. SECURITIES MAR- KETS, by Patrick Parkinson, Adam Gilbert, Emily Gollob, Staff Studies 1-157 are out of print. Lauren Hargraves, Richard Mead, Jeff Stehm, and Mary Ann Taylor. March 1992. 37 pp. 158. THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIRE- 164. THE 1989-92 CREDIT CRUNCH FOR REAL ESTATE, by MENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE James T. Fergus and John L. Goodman, Jr. July 1993. PRODUCTS, by Mark J. Warshawsky with the assistance of 20 pp. Dietrich Earnhart. September 1989. 23 pp. 165. THE DEMAND FOR TRADE CREDIT: AN INVESTIGATION OF 159. NEW DATA ON THE PERFORMANCE OF NONBANK SUBSID- MOTIVES FOR TRADE CREDIT USE BY SMALL BUSINESSES, IARIES OF BANK HOLDING COMPANIES, by Nellie Liang by Gregory E. Elliehausen and John D. Wolken. Septemand Donald Savage. February 1990. 12 pp. ber 1993. 18 pp. 160. BANKING MARKETS AND THE USE OF FINANCIAL SER- 166. THE ECONOMICS OF THE PRIVATE PLACEMENT MARKET, VICES BY SMALL AND MEDIUM-SIZED BUSINESSES, by by Mark Carey, Stephen Prowse, John Rea, and Gregory Gregory E. Elliehausen and John D. Wolken. September Udell. January 1994. Ill pp. 1990. 35 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

84 Maps of the Federal Reserve System 1 1WMKK^^^ 2 BO"STO N MINNEAPOLIS • III • w s s yB 12 • 3 _ - • NEW YORK CCHHIICCAAGGOO •• CLEVELAND • PHILADELPHIA 4 o • SAN FRANCISCO ^ nIFJ. I WWNSEEA AAIG G1 P,P1RR1R RYVVBFF LL SSSnir' f8SM? LoKuis §P RI5CHM OND aillMlMl ft 6 m ATLANTA DAR* ALASKA HAWAII LEGEND Both pages Facing page • Federal Reserve Bank city • Federal Reserve Branch city • Board of Governors of the Federal — Branch boundary Reserve System, Washington, D.C. NOTE The Federal Reserve officially identifies Districts Commonwealth of Puerto Rico and the U.S. Virgin by number and Reserve Bank city (shown on both Islands; the San Francisco Bank serves American pages) and by letter (shown on the facing page). Samoa, Guam, and the Commonwealth of the In the 12th District, the Seattle Branch serves Northern Mariana Islands. The Board of Governors Alaska, and the San Francisco Bank serves Hawaii. revised the branch boundaries of the System most The System serves commonwealths and terri- recently in December 1991. Digitized for FRtAoSriEeRs as follows: the New York Bank serves the http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

85 1-A 2-B 3-C 4-D 5_E Baltimore Pittsburgh NY OH / NH ® Cincinnati Buffalo • " \ KY CT NJ NY BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F 7-G 8-H • Nashville TN Birmingham, AL \ _ MO Wl MI • J IN MS OA IA Detroit • ( yv^ K f Y L ouisville y-m LA m —£ J acksonville ^^rn^^^ 1 m 1 . • m /BM • Memphis New Orleans Uttl? > MS Hock/ JY Miami • ATLANTA CHICAGO ST. LOUIS 9-1 • Helena l A M MR MI MINNEAPOLIS 10-J WY 12-L CO L Omaha* De*ver M • O ALASKA , Seattle / /ID • L^—V/ NM |— Portland Oklahoma City • or c OK KANSAS CITY CA NV7 11-K 1 ™ • A 1 Salt Lake City • S B LA EL Paso R * AZ ' • < Houston * Los Angeles San Antonio C HAWAII Digitized for FRASER DALLAS SAN FRANCISCO http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

86 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 Cathy E. Minehan Warren B. Rudman Temporarily Vacant NEW YORK* 10045 Maurice R. Greenberg William J. McDonough David A. Hamburg James H. Oltman Buffalo 14240 Joseph J. Castiglia Carl W. Turnipseed1 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 Richard K. Rasdall Denver 80217 Barbara B. Grogan Kent M. Scott1 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. Digitized for FRAS1E. RSe nior Vice President. 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. Business A Consumer's Credit Guide to Mortgage Lock-Ins 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

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