Federal Reserve Bulletin, 1994-09

VOLUME 80 • NUMBER 9 • SEPTEMBER 1994 FEDERAL RESERVE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D.C. PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman • S. David Frost • Griffith L. Garwood • Donald L. Kohn • J. Virgil Mattingly, Jr. • Michael J. Prell • Richard Spillenkothen • Edwin M. Truman The Federal Reserve Bulletin is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressed except in official statements and signed articles. It is assisted by the Economic Editing Section headed by S. Ellen Dykes, the Graphics Center under the direction of Peter G. Thomas, and Publications Services supervised by Linda C. Kyles. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Table of Contents 771 RECENT TRENDS IN RETAIL FEES AND the United States has the benefit of a vigorous, SERVICES OF DEPOSITORY INSTITUTIONS and highly effective, enforcement of counterfeiting laws by the U.S. Secret Service and an Concern over the potentially adverse effect on effective currency design, the security features consumers of increased insurance premiums of the current design are probably not adepaid by depository institutions led the Conquate to deal with the counterfeiting threat of gress in 1989 to require the Board to conduct the future, which seems likely to be domia survey and report annually on discernible nated by rapidly improving reprographic changes in the availability of retail banking technologies, and that the Federal Reserve services and in the level of their fees. This strongly supports the Treasury Department's article discusses the results of the five annual efforts to incorporate additional security feasurveys conducted so far, covering the years tures to currency now to be better prepared for 1989-93. Overall, the results show that the the threats of the future, before the House availability of consumer services in general Committee on Banking, Finance and Urban did not decline and that observed changes in Affairs, July 13, 1994. consumer fees varied substantially by type of fee. 791 Alan Greenspan, Chairman, Board of Governors, discusses the long-term federal budget problem and says that long-term interest rates 782 TREASURY AND FEDERAL RESERVE are higher now because markets are anticipat- FOREIGN EXCHANGE OPERATIONS ing rising deficits in the next century and that During the May-June period under review, further delay in coming to grips with our the dollar declined 4.0 percent against the long-term budget problem will only raise the German mark, 3.0 percent against the Japa- total size of the bill that will eventually come nese yen, and 2.7 percent on a trade-weighted due, before the Bipartisan Commission on basis. Entitlement and Tax Reform, Washington, D.C. July 15, 1994. 786 INDUSTRIAL PRODUCTION AND 793 Chairman Greenspan discusses recent eco- CAPACITY UTILIZATION FOR JULY 1994 nomic developments and the Federal Re- Industrial production advanced 0.2 percent in serve's conduct of monetary policy and says July, after an increase of 0.5 percent in June, that our nation has made considerable to 117.2 percent of its 1987 average. The progress in putting the economy on a sound utilization of total industrial capacity, which footing in the past few years and that to prehas changed little since March, remained at serve and extend these advances, our mone- 83.9 percent. tary and fiscal policies will need to remain disciplined and focused on our long-term objectives, before the Senate Committee on 789 STATEMENTS TO THE CONGRESS Banking, Housing, and Urban Affairs, July 20, Edward W. Kelley, Jr., member, Board of 1994. (Chairman Greenspan presented similar Governors, presents the Federal Reserve's testimony before the Subcommittee on Ecoviews on plans by the Department of the Trea- nomic Growth and Credit Formation of the sury to further protect U.S. currency from the House Committee on Banking, Finance and threat of counterfeiting and says that although Urban Affairs, July 22, 1994.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

800 ANNOUNCEMENTS slightly lesser reserve restraint might be acceptable during the intermeeting period. Appointment of Janet L. Yellen as a member The reserve conditions associated with this of the Board of Governors. directive were expected to be consistent with Approval of applications by seven U.S. bank- modest growth of M2 and M3 over coming ing organizations to establish operations in months. Mexico. 811 LEGAL DEVELOPMENTS Adoption of supervisory statement to help ease financial stress in areas affected by Various bank holding company, bank service flooding. corporation, and bank merger orders; and pending cases. Decision by the Board that the Federal Reserve Banks will not participate in the Electronic Federal Tax Payment System. 859 MEMBERSHIP OF THE BOARD OF GOVERNORS OF THE FEDERAL Final amendments and proposal for an addi- RESERVE SYSTEM, 1913-94 tional amendment to Regulation Y. List of appointive and ex officio members. Extension of comment period on a proposal to amend Regulation DD; proposal to provide an A1 FINANCIAL AND BUSINESS STATISTICS alternative to the current test used to measure whether a section 20 subsidiary is in compli- These tables reflect data available as of ance with the "engaged principally" criterion July 27, 1994. of section 20 of the Glass-Steagall Act; proposal to update current policies and integrate A3 GUIDE TO TABULAR PRESENTATION them into a single policy statement on "Pri- A4 Domestic Financial Statistics vately Operated Large-Dollar Multilateral A45 Domestic Nonfinancial Statistics Netting Systems." A53 International Statistics Publication of revised Lists of OTC Stocks and of Foreign Margin Stocks A67 GUIDE TO STATISTICAL RELEASES AND Changes in Board staff. SPECIAL TABLES 803 MINUTES OF THE FEDERAL OPEN A69 INDEX TO STATISTICAL TABLES MARKET COMMITTEE MEETING A70 BOARD OF GOVERNORS AND STAFF At its meeting on May 17, 1994, the Committee adopted a directive that called for increas- A72 FEDERAL OPEN MARKET COMMITTEE ing somewhat the degree of pressure on AND STAFF; ADVISORY COUNCILS reserve positions, taking account of a possible increase in the discount rate. The directive did A74 FEDERAL RESERVE BOARD not include a presumption about the likely PUBLICATIONS direction of any adjustment to policy during the intermeeting period. The directive stated that, in the context of the Committee's long- A76 MAPS OF THE FEDERAL RESERVE run objectives for price stability and sustain- SYSTEM able economic growth, and giving careful consideration to economic, financial, and A78 FEDERAL RESERVE BANKS, BRANCHES, monetary developments, slightly greater or AND OFFICES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Trends in Retail Fees and Services of Depository Institutions Timothy H. Hannan, of the Board's Division of the Savings Association Insurance Fund (mostly Research and Statistics, prepared this article. Ben savings and loan associations) were chosen for Takahashi provided research assistance. each survey; they were picked randomly each year from each of seven regions of the country encom- The availability of retail banking services and the passing all fifty states and the District of Columbia fees that depository institutions charge consumers and from five size groupings covering all institufor them have received increased attention in recent tion sizes (see the appendix for more detail). years. This attention may have been prompted by Statistical analysis of the survey results prothe trend toward the separate pricing of services duced, for the entire population of banks and savand changes in the environment in which deposit ings associations in the United States, estimates of tory institutions operate. Concern over the poten- the level of service availability and the level and tially adverse effect of one particular change in the incidence of fees at the time of each annual survey. regulatory environment—that of increased premi- This article reports a selection of those estimates ums paid for deposit insurance by depository for the 1989-93 period. In most cases, the change institutions—led the Congress, in section 1002 of that occurred between the first and the last survey the Financial Institutions Reform, Recovery, and is also reported, along with an indication of the Enforcement Act of 1989, to require the Board of statistical significance of the change.2 Governors of the Federal Reserve System to report Several findings are noteworthy. First, the availannually on discernible changes in the availability ability of consumer services in general has not of retail banking services and in the level of their declined. Indeed, the availability of a few increased fees. Section 1002 further specified that the annual sharply. Second, observed changes in consumer reports to the Congress be based on annual surveys fees varied substantially by type of fee. Fees assoof samples of insured depository institutions that ciated with special actions, such as those imposed are representative of all such institutions in terms on checks returned for insufficient funds, on overof size and location. drafts, and on stop-payment orders, exhibited con- The Federal Reserve has commissioned a survey sistently large increases that exceeded the rate of and issued a report for each of the five years from inflation; the evidence for other types of fees is 1989 to 1993.1 All of these surveys were conducted more mixed (see box for data from another source by telephone with the same procedures and by the on trends in overall revenue from fees on both same private survey organization operating under consumer and business deposit accounts). contract with the Federal Reserve Board. To keep the length of the interviews manageable and to improve the accuracy of the results, they were TRENDS IN THE AVAILABILITY OF SERVICES conducted for only one product category at a time. With some variation in numbers from year to year, Survey information on the proportion of banks and roughly 150 members of the Bank Insurance Fund savings associations that offered various retail ser- (mostly commercial banks) and 180 members of 2. Broadly speaking, the levels of statistical significance indicate the minimum probability that, given the change observed for 1. The surveys of automated teller machine services and safe the sampled institutions, a change in the same direction occurred deposit box services were conducted in 1988 instead of 1989. for the entire population of such institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

772 Federal Reserve Bulletin • September 1994 vices over time is available for the following ser- the period, one-fourth of banks still did not offer vices: auto loans, non-interest-bearing checking them in 1993. The availability of NOW accounts accounts, negotiable order of withdrawal (NOW) rose a statistically significant 7 percentage points accounts (which are interest-bearing checking over the period, and the estimated proportion of accounts), savings accounts, money orders and banks that offered them during the past two years cashiers checks, the return of canceled checks, exceeded 90 percent. automated teller machines (ATMs), and safe During the survey period, the no-fee version of deposit boxes. each of the three deposit accounts shown in table 1 Data on checking and savings accounts include was offered by only a small minority of banks. The the availability of no-fee versions of those availability of no-fee noninterest checking was the accounts. Cashiers checks are close substitutes for only one of the three to have changed a statistically money orders, so the reported data cover the pro- significant amount over the period, rising 5 percentportion of banks and savings associations offering age points. either of these instruments rather than the propor- Overall, the availability of four of the eight broad tion offering each. service categories for banks rose a statistically significant amount—new-car loans, NOW accounts, money orders or cashiers checks, and ATM ser- Services at Banks vices; and no banking service showed a statistically significant decline in availability. Throughout the five-year period, most of the above retail services were offered by more than 90 percent of banks (table 1). The exceptions are ATM Services at Savings Associations services and NOW accounts. ATMs began appearing in significant numbers in the 1970s, and NOW For savings associations, the only surveyed seraccounts were not authorized for banks until 1980. vices consistently offered by more than 90 percent Although the availability of ATMs at banks was up of all institutions throughout the period were sava statistically significant 16 percentage points over ings accounts and money orders or cashiers checks. 1. The proportion of banks and savings associations that offer selected retail services, 1989-93 Percent except as noted Banks Savings associations SSeerrvviiccee Change, Change, 1989 1990 1991 1992 1993 1989-931 1989 1990 1991 1992 1993 1989-931 New-car loans 94.6 96.1 98.5 91.0 98.1 3.5* 58.6 60.0 61.1 58.4 72.7 14.1** Noninterest checking accounts 96.8 99.4 98.8 97.0 98.6 1.8 37.1 48.9 48.0 52.2 51.3 14.2** No-fee account ... 3.2 4.4 4.9 3.0 8.4 5.2** 6.0 9.7 7.4 12.8 12.0 6.0** NOW accounts 83.6 81.5 81.6 91.3 90.7 7.1** 88.8 85.9 75.5 83.8 84.7 -4.1 No-fee account ... 2.5 1.4 1.5 3.3 2.0 -.5 6.7 3.4 3.1 2.0 3.7 -3.0 Savings accounts 100.0 99.8 99.8 98.3 99.9 -.1 99.7 98.3 92.6 99.1 99.4 -.3 No-fee account ... 12.8 7.1 3.5 8.4 11.1 -1.7 15.6 6.4 7.9 1.3 1.5 -14.1** Money orders or cashiers checks . 95.2 100.0 98.8 99.6 99.9 4.7** 93.2 96.9 94.5 90.3 91.0 -2.2 Return of canceled checks 99.1 98.0 91.6 87.7 96.6 -2.5 90.2 85.3 78.8 89.0 89.0 -1.2 ATM (automated teller machine) services2 56.9 63.6 62.3 58.4 73.2 16.3** 44.7 45.0 56.6 57.9 45.4 .7 Safe deposit boxes2 . 95.0 98.3 92.9 91.6 96.2 1.2 43.7 48.7 42.7 47.7 50.8 7.1** NOTE. * Significant at the 90 percent confidence level. 1. Percentage points. ** Significant at the 95 percent confidence level. 2. Data reported for 1989 gathered in 1988. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Trends in Retail Fees and Services of Depository Institutions 773 Relative to the availability observed at banks, the Deposit Accounts estimated proportions of savings associations offering noninterest checking, ATM services, and safe Analysis of the fees charged in connection with deposit boxes were particularly low, barely rising deposit accounts must, at the very least, account for above 50 percent during the period. the distinctions among noninterest checking The smaller proportion of savings associations accounts, NOW accounts, and savings accounts. offering noninterest checking accounts may stem Even within these categories, however, accounts from the fact that savings associations, unlike can differ considerably. In the case of noninterest banks, were generally restricted from providing checking, for example, accounts can differ in terms these accounts before the 1980s; their availability of the nonchecking services provided, the minirose a statistically significant 14 percentage points mum balances that depositors must maintain to over the five survey years, a change that, along qualify for various fee levels, and the mix of fees with other factors, may reflect a reaction to the charged. In the case of savings accounts, to take previous restriction. Other services whose avail- another example, fees can depend on whether the ability changed statistically significant amounts account is a passbook savings account or a stateover the five years were new-car loans (a rise of ment savings account and on minimum balance 14 percentage points) and safe deposit boxes requirements. Therefore, the characteristics of (a rise of 7 percentage points). The increased accounts must be specified when comparing the availability of car loans and safe deposit boxes levels of fees over time. The following discussion suggests that the offerings of savings associations presents information on three types of noninterest are in some respects becoming more like those of checking accounts, one type of NOW account, and banks. two types of savings accounts. Data on the propor- As they were at banks, accounts entailing no fees tion of institutions offering each of these accounts were rare at savings associations. Statistically sig- is included to indicate prevalence. nificant changes in the availability of the accounts were, however, more pronounced at savings institutions, where the proportion offering no-fee non- Noninterest Checking interest checking rose 6 percentage points and the proportion offering no-fee savings accounts The following three fee structures are reported for fell 14 percentage points. These data suggest that, noninterest checking accounts: (1) a monthly fee to the extent that savings associations offer no- when balances fall below a minimum, (2) a fee accounts, they are switching such offerings monthly fee and a per-check charge when balances away from savings toward noninterest checking fall below a minimum, and (3) a monthly fee and, accounts. in some versions, also a charge per check, regardless of the account balance (table 2). Single-balance, single-fee. A single-balance, single-fee account involves no fee if a minimum THE INCIDENCE AND LEVEL balance is maintained; otherwise the account incurs OF SERVICE FEES a single monthly fee with no other charges. The estimated proportion of institutions offering this The fees charged for various types of retail banking account has changed sharply from one year to the services and changes in them over time differ con- next, perhaps because of changes in the structure of siderably. Dividing service fees into three different fees that would cause the account to be reclassified. types provides a manageable way to deal with the At least at banks, however, it is one of the more variations; these types are (1) fees associated with common types of noninterest checking accounts. maintaining and using various kinds of deposit For banks, the average monthly fee and the averaccounts, (2) fees associated with specialized ser- age minimum balance required to avoid the fee did vices or actions such as stop-payment orders, and not change a statistically significant amount over (3) fees charged for the use of ATM services. the period, and the average minimum balance Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

774 Federal Reserve Bulletin • September 1994 required to open the account dropped a statistically or to open the account at savings associations significant 46 percent. At savings associations, varied sharply during the period, but the differhowever, where this type of account appears to be ences between the 1989 and 1993 levels were not less common, the average monthly fee rose a statis- statistically significant. tically significant 17 percent over the period, compared with a 16 percent rise in the consumer price Single-balance, single-fee, check-charge. A index (CPI) in the same period.3 The estimated single-balance, single-fee, check-charge account average minimum balance needed to avoid the fee has a monthly fee and a charge per check for balances below a defined minimum, and no fee or check charge for balances above the minimum. 3. The CPI used throughout is the urban index, all items. Com- Thus, this account differs from the single-balance, parisons with the CPI are intended to indicate how fees and single-fee account in that failure to maintain a minimum balances changed in relation to changes in the prices of prescribed minimum balance brings a charge per other common consumer items. 2. Average fees and average minimum balances for selected checkable accounts at banks and savings associations, 1989-93 Dollars except as noted Banks Savings associations Account Percent Percent 1989 1990 1991 1992 1993 change, 1989 1990 1991 1992 1993 change. 1989-93 1989-93 NONINTEREST CHECKING Single balance and fee1 Percent offering 30.5 27.1 50.9 54.4 38.0 12.4 15.9 25.4 16.6 22.9 Monthly fee 6.02 5.69 5.68 5.34 5.90 -2.0 4.70 4.73 5.53 5.46 5.50 17.0** Minimum balance To avoid fee 499.76 463.41 461.85 455.36 426.68 -14.6 440.62 305.96 564.17 482.15 335.35 -23.9 To open 232.48 147.37 125.06 245.70 125.91 -45.8* 111.41 125.94 128.08 176.39 101.80 -8.6 Single balance, single fee, and a check charge2 Percent offering 28.8 29.3 11.4 8.2 23.7 1.6 4.2 1.8 5.0 3.9 Monthly fee 3.24 3.93 3.47 3.16 4.02 24.1 4.99 Check charge .21 .20 .24 .21 .20 -4.8 .20 Minimum balance To avoid fee 382.74 362.53 312.59 416.13 421.64 10.2 314.65 To open 123.93 116.09 101.63 211.46 103.99 -16.1 70.99 Fee-only 3 Percent offering 16.9 22.3 29.6 21.3 41.7 7.9 11.7 10.4 16.9 18.4 Monthly fee 3.32 3.09 3.75 3.60 4.81 44.9** 4.29 4.14 3.60 4.02 3.51 -18.2* Percent, of those offering, charging a check charge ... 68.6 76.6 62.1 77.6 50.2 17.7 26.5 79.9 21.9 44.4 Check charge .35 .27 .30 .37 .35 .0 .40 .45 Minimum balance to open 60.13 65.42 79.68 80.17 73.86 22.8 140.60 76.68 265.83 75.69 46.32 -67.1** NOW ACCOUNTS Single balance and jee Percent offering 43.7 43.2 49.0 52.0 50.4 44.5 55.0 45.0 44.2 49.5 Average monthly fee 7.05 7.67 7.84 7.32 7.78 1100..44** 5.31 6.00 6.99 6.26 6.50 22.4** Minimum balance To avoid fee 1,098.62 1,111.03 1,090.70 1,307.69 971.10 -11.6* 498.44 493.16 865.34 648.67 633.54 27.1** To open 803.53 606.62 711.85 1,037.98 686.41 -14.6 289.78 278.74 340.03 315.34 306.55 5.8 NOTE. The change in the consumer price index between August 1989 and 1. A monthly fee for balances below the minimum, no monthly fee for December 1993 was 16.1 percent. Average fees are calculated only for those balances above the minimum, and no other charges, institutions that offer the account. 2. A monthly fee for balances below the minimum, no monthly fee for . . . Data are not applicable or are insufficient to report. balances above the minimum, and a charge per check. * Significant at the 90 percent confidence level. 3. A monthly fee, no minimum balance to eliminate the fee, and a charge ** Significant at the 95 percent confidence level. per check in some cases. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Trends in Retail Fees and Services of Depository Institutions 775 check as well as a monthly fee. The proportion of declined a statistically significant 18 percent during banks offering this kind of account, which has the same period. varied considerably from one year to the next, has These sharp changes in the observed monthly fee sometimes approached 30 percent; the variability exaggerate the change in overall fees charged the may be a result of changes in account characteris- account holder, because the estimated proportion of tics that cause the account to be reclassified. institutions levying a charge per check changed in The average monthly fee charged holders of this the opposite direction during the same period. At type of account at banks is considerably smaller banks, it declined from about 70 percent to about than that charged account holders when a charge 50 percent, while it increased from about 18 perper check is not levied. This circumstance illus- cent to about 45 percent at savings associations. trates the importance of defining accounts narrowly These countertrends again illustrate some of the so that changes in different aspects of an account's problems involved in assessing fee changes assofee structure do not mask the true trend in any ciated with maintaining and using accounts of given type of fee over time. various types. In the case of this account, the estimated average monthly fee charged at banks increased substantially, from $3.24 in 1989 to $4.02 in 1993. This NOW Accounts 24 percent increase is greater than the 16 percent increase in the CPI during the period, but, like NOW (negotiable order of withdrawal) accounts changes in the other reported features of the are checking accounts that pay interest and, as a account, is not statistically significant. Because result, can have fees that differ from those observed of the small number of savings associations found for noninterest checking. Like noninterest accounts, to offer accounts with this fee structure, reliable they can differ considerably in terms of the balinformation on the fees and minimum balances ances that depositors must maintain to qualify for associated with this account at savings associations various fee levels and the mix of fees charged the cannot be reported for most years during this account holder. The most common type of fee period. structure associated with NOW accounts, both at banks and at savings associations, is one in which Fee-only. The fee-only noninterest checking the institution charges no fee if the account holder account levies a monthly fee regardless of the maintains a minimum balance; otherwise, the instiaccount balance and may also impose a per-check tution levies one monthly fee with no per-check charge. From one-half to three-fourths of the banks charge. that offered the account over the five survey years The estimated proportion of banks and savings imposed the check charge. The fee-only account associations offering this type of account has not appears to be one of the more common of the changed by a statistically significant amount over noninterest checking accounts offered at banks, the survey years (table 2). Statistically significant where approximately 40 percent are estimated to changes did occur over the period, however, in the have offered it in 1993. It appears to be increasing average monthly fee charged account holders who in popularity at savings associations as well, where failed to maintain sufficient balances; it rose about nearly 20 percent of institutions were offering it in 10 percent at banks and about 22 percent at savings 1993 and where the average minimum balance to associations, compared with the 16 percent rise in open dropped a statistically significant 67 percent the CPI over the same period. The average miniover the period. mum balance to avoid this fee fell a statistically The trends in the monthly fees charged for this significant 12 percent at banks and rose a statistiaccount differ considerably between banks and sav- cally significant 27 percent at savings associations. ings associations. At banks, average fees increased The monthly fee, minimum balance to avoid a by a statistically significant 45 percent, from $3.32 fee, and minimum balance to open for NOW in 1989 to $4.81 in 1993, a change that is nearly accounts have long been higher at banks than at three times that of the CPI during the period. At savings associations. Over the survey period, savsavings associations, however, the monthly fees ings associations appear to have been catching up Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

776 Federal Reserve Bulletin • September 1994 with banks in terms of the monthly fee and average $2 at the beginning and end of the period. The minimum balance to avoid a fee on this account. average minimum balance required to open the At both types of institution, monthly fees and aver- account rose sharply at savings associations, but age minimum balances are clearly higher for this the change was not statistically significant. type of account than they are for any of the listed The proportion of institutions offering passbook noninterest checking accounts. The fact that NOW savings accounts with the "single-balance and fee" accounts pay the account holder interest is likely a structure rose by small and statistically insignifimajor reason for this difference. cant amounts during the period. The average monthly fee charged passbook account holders that do not maintain balances sufficient to avoid the fee Savings Accounts was about equal at banks and savings associations in 1990 and about 15 percent to 20 percent lower The 1989 survey of savings accounts was not com- than the fee for the statement savings account. By patible with later surveys, so information on sav- 1993 the fee for the passbook account was up ings accounts is presented only for the 1990-93 somewhat at banks but had risen a statistically period (table 3). The two major types of savings significant 38 percent at savings associations, four accounts are the passbook account and the state- times the 8.9 percent change in the CPI during the ment savings account. The most common fee struc- 1990-93 period. By 1993 the spread at banks ture imposes one monthly fee if a specified mini- between the average fees estimated for passbook mum balance is not maintained; otherwise, no fee and statement savings accounts had narrowed, is assessed. while at savings associations, the average fee for The proportion of institutions offering statement passbook accounts actually surpassed the average savings accounts with this fee structure increased fee for statement accounts. by statistically significant amounts between 1990 and 1993: from about 40 percent to more than 50 percent at banks and from less than 30 percent Summary to about 40 percent at savings associations (statistical significance not shown in table). The estimated The data on fees for deposit accounts present a average monthly fee charged account holders who mixed picture, with charges up sharply over the did not maintain a minimum balance was roughly five years for some types of accounts but not 3. Average fees and average minimum balances for selected "single-balance and fee" savings accounts at banks and savings associations, 1990-93 Dollars except as noted Banks Savings associations Savings account Percent Percent 1990 1991 1992 1993 change, 1990 1991 1992 1993 change, 1990-93 1990-93 Statement Percent offering 39.3 39.1 34.5 52.2 26.2 22.2 31.9 38.8 Monthly fee 1.92 2.46 2.04 1.89 -1.6 2.02 2.41 2.00 2.18 7.9 Minimum balance To avoid fee 190.56 206.08 171.96 188.89 -.9 157.52 215.27 164.07 187.56 19.1 To open 116.75 96.49 100.31 125.56 7.5 77.62 109.50 128.72 135.07 74.0 Passbook Percent offering 26.3 30.8 35.2 34.3 32.8 29.8 35.7 38.6 Monthly fee 1.62 1.73 1.45 1.74 7.4 1.73 2.05 2.37 2.38 37.6** Minimum balance To avoid fee 124.84 165.36 98.03 122.07 -2.2 148.54 166.27 139.88 147.41 -.8 To open 98.87 104.91 67.05 86.05 -13.0 97.85 115.45 105.36 101.65 3.9 NOTE. Single-balance and fee accounts impose a monthly fee for balances . . . Not applicable, below the minimum, no monthly fee for balances above the minimum, and ** Significant at the 95 percent confidence level, no other charges. Average fees are calculated only for those institutions that offer the account. The change in the consumer price index between December 1990 and December 1993 was 8.9 percent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Trends in Retail Fees and Services of Depository Institutions 10 The Growth in Service Charges on Deposits: Evidence from Another Source The changes over time in the fee income received by These data show that bank revenues from service depository institutions depend in a complex way on charges on deposits increased substantially between 1989 changes in the fees charged, changes in the proportion of and 1993, rising from about $10 billion in 1989 to about institutions charging fees, changes in minimum balance $15 billion in 1993. Scaling these figures by the consolirequirements, and changes in the mix and usage of ser- dated assets of banks can help correct for the changing vices offered, which may in turn reflect changes in fees, size of the banking industry; as a proportion of assets, minimum balance requirements, and other factors. Data bank revenues from service charges on deposits increased on the total revenue that banks receive through service from 0.32 percent to 0.42 percent during the period. charges on deposits are available from the income state- Measured this way, such revenue was more important to ments filed by banks (see table). These data are collected smaller banks than larger ones, but the increase over the for all insured domestic commercial banks and nonde- period was more pronounced for larger banks. posit trust companies and include revenues obtained from Other types of revenues and the costs, both interest and many of the fees presented in tables 2 though 5, including noninterest, that depository institutions must incur to the fees associated with account maintenance and use, provide deposit services are not included in these figures. fees for NSF checks and deposit items returned, and Thus, while the information is useful in documenting the ATM transaction fees. These data, however, do not distin- growing importance of revenue from service fees on guish between revenues from service charges on business deposits, it does not indicate the profits earned by deposaccounts and revenues from service charges on consumer itory institutions from providing deposit services. accounts. Revenues from service fees on deposits, all insured domestic commercial banks and nondeposit trust companies, 1989-93 Measure 1989 1990 1991 1992 1993 Total (millions of dollars) 10,235 11,423 12,818 14,117 14,869 As a percentage of average net consolidated assets AH banks .32 .34 .38 .41 .42 Banks ranked by assets Ten largest .21 .23 .26 .30 .30 11th through 100th .30 .34 .40 .44 .46 101st through 1,000th .35 .37 .40 .44 .44 Smaller than 1,000th .41 .42 .44 .45 .45 SOURCE. William B. English and Brian K. Reid, "Profits and Balance Sheet Developments at U.S. Commercial Banks in 1993," Federal Reserve Bulletin, vol. 80 (June 1994), pp. 497-507. others. The picture for minimum balance require- deal more uniform (table 4), with average fees ments is clearer, with little evidence of a substantial rising by statistically significant percentages and general increase over the survey period; indeed, faster than the change in the CPI in most cases. such requirements appear to have fallen in some cases, although estimates exhibit substantial volatility from one year to the next. Money Orders For money orders, the proportion of institutions Specialized Services or Actions that charge and the average charge can differ, depending on whether the purchaser is a customer The evidence on fees associated with specialized of the institution, that is, on whether the purchaser services or actions is quite different from that on has an account there. During the period from 1989 deposit accounts. The trend appears to be a good to 1993, a small and declining minority of banks Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

778 Federal Reserve Bulletin • September 1994 and savings associations offered their customers Stop-Payment Orders money orders free of charge, and virtually all of them charged noncustomers. In general, fees By 1993, virtually all banks and savings associacharged noncustomers by both banks and savings tions charged their customers for stop-payment orassociations in 1993 averaged about $2.25, com- ders, at an average of about $13. As in the case of pared with an average of about $1.75 for customers money orders, the average fee at savings associain that year. tions, initially lower than that at banks, rose faster Between 1989 and 1993, fees for money orders than at banks and significantly faster than the CPI, rose fairly steadily at both types of institution. At catching up to the average bank fee by the end of banks, where the prices for money orders were the period. higher than at savings associations at the beginning of the period, estimated average fees rose about the same percentage as the CPI; by rising at two to NSF Checks and Overdrafts three times the rate of inflation, average fees at savings associations nearly caught up to those at A check drawn on an account with insufficient banks by 1993.4 funds may or may not be honored by the paying bank. When not honored, it is called an NSF (not sufficient funds) check; when honored, it is called 4. In table 4, any increase of at least 22 percent in the average an overdraft and represents an extension of credit. fee is greater, by a statistically significant amount, than the 15.7 per- Throughout the period, virtually all depository cent increase in the CPI during the period; the confidence level in institutions charged for NSF checks, and although each case is at least 90 percent. 4. Incidence and average level of fees for selected special services and actions at banks and savings associations, 1989-93 Dollars except as noted Banks Savings associations Item Percent Percent 1989 1990 1991 1992 1993 change, 1989 1990 1991 1992 1993 change, 1989-93 1989-93 Money orders For own customers Percent charging .. 96.3 98.2 95.9 99.1 99.4 89.3 86.7 96.3 92.1 93.3 Fee 1.56 1.63 1.74 1.74 1.80 15.4** 1.24 1.28 1.56 1.64 1.70 37.1** For noncustomers Percent charging .. 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 97.3 100.0 Fee 1.96 2.21 2.37 2.01 2.27 15.8** 1.47 1.49 2.02 1.91 2.31 57.i** Stop-payment orders Percent charging 97.8 97.2 98.4 100.0 100.0 99.6 99.9 100.0 100.0 99.5 Fee 10.88 11.21 12.35 11.81 12.91 18.7** 10.07 10.73 12.11 12.01 13.27 31.8** NSF checks Percent charging 98.4 100.0 99.0 100.0 100.0 99.8 98.7 99.7 100.0 100.0 Fee 12.62 13.00 14.17 14.26 15.65 24.0** 13.23 14.25 15.41 14.95 16.36 23.7** Overdrafts Percent charging 93.0 96.5 95.3 92.3 100.0 91.8 92.8 93.6 98.0 99.6 Fee 12.06 12.49 13.87 14.27 15.54 28.9** 12.70 13.97 15.03 15.18 15.39 21.2** Deposit items returned Percent charging 47.3 47.1 34.6 55.6 65.5 68.1 61.8 61.1 70.4 71.2 Fee 5.38 4.61 5.49 4.97 6.08 iio 8.19 8.03 6.97 7.52 7.97 -2.7 Safe deposit box (3 x 5-inch face) Yearly fee1 13.88 15.59 16.95 17.07 15.94 14.8** 16.57 17.45 17.05 18.05 18.56 12.0* NOTE. Average fees are calculated only for those institutions that charge. * Significant at the 90 percent confidence level. The change in the consumer price index between December 1989 and ** Significant at the 95 percent confidence level. December 1993 was 15.7 percent. NSF Not sufficient funds. . . . Not applicable. 1. Data reported for 1989 gathered in 1988. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Trends in Retail Fees and Services of Depository Institutions 779 a small minority of institutions did not charge for each of which can carry a different fee. So that overdrafts at the beginning of the period, virtually annual rental fees can be compared for the same all did at the end. box size over time, fee estimates are reported only The increases in the fees charged for NSF checks for the most common type of box, which has a face and overdrafts at both banks and savings associa- measuring approximately 3 inches by 5 inches. tions were statistically significant and greater in In 1993, fees charged by banks for the yearly percentage terms than the change in the CPI during rental of such boxes averaged about $16, while the period. By 1993, average fees were about $16. they averaged about $18.50 at savings associations. Between 1988 and 1993, these fees appear to have risen at rates that were somewhat smaller than the Deposit Items Returned change in the CPI during the period.5 When a customer deposits a check that is returned by the paying bank (because of insufficient funds, ATM Services for example), the bank in which it was deposited may charge the customer a fee. The levying of such A multiplicity of fees may be assessed for services charges is controversial. Many have argued that it rendered by automated teller machines. Depository is not the depositor's fault that the check is drawn institutions may levy a yearly fee as well as impose on insufficient funds and that charging the deposifees for various types of ATM transactions. Transtor in such cases is therefore unreasonable. Others action fees may differ depending on whether the argue that such fees may provide a useful incentive transaction is a withdrawal, a deposit, or a balance for depositors not to accept checks thought likely inquiry and, most importantly, on whether the custo be returned for insufficient funds and that depostomer uses the institution's own ATM (an "on us" itory institutions have a right to recover their costs transaction) or another institution's ATM (an "on in ways available to them. others" transaction). The surveys elicited informa- Whatever the merits of these arguments, the tion on all of these aspects of ATM fees; data were percentage of banks charging for the return of collected for the years 1988 and 1990-93. deposit items rose a statistically significant amount, Survey results indicate that only a fairly small from 47 percent in 1989 to 65 percent in 1993 minority of institutions charge their customers (statistical significance not shown in table). Savan annual fee for the use of ATM services ings associations exhibited a much smaller, statisti- (table 5)—an estimated 14 percent of banks and cally insignificant increase. Of those institutions 9 percent of savings associations in 1993. In recent that levied a fee, the average charge at banks in years, this fee has been in the neighborhood of $10 1993 was less than half of the charge for NSF to $12 per year. Because so few surveyed instituchecks, while it was about half of the NSF charge tions charged this fee, the sharp declines in the at savings associations. Among the special fees average fee at both banks and savings associations surveyed, this was the only one whose average did are not statistically significant. not rise a statistically significant amount; indeed, at Transaction fees have been the most important savings associations, the estimated average charge area of change in the pricing of ATM services. The did not rise at all over the period. most striking change over the past few years has been the substantial, statistically significant increase in the proportion of institutions charging Safe Deposit Boxes for "on others" transactions (statistical significance not shown in table). The estimated propor- Although the provision of safe deposit boxes to tion of institutions charging for withdrawals "on customers for the safekeeping of valuables is not the primary function of depository institutions, the service is a tradition, particularly at banks. A major 5. Because the first survey of safe deposit boxes was conducted problem in reporting the fees for the rental of safe in July 1988, rather than in 1989, the percentage change in the CPI deposit boxes is the many sizes typically offered, from December 1988 to December 1993,21.9 percent, is used here. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

780 Federal Reserve Bulletin • September 1994 others," for example, increased by half, in the case The number of banks and savings associations of banks, from 1988 to 1993 and doubled, in the found to charge for "on us" transactions was too case of savings associations, over the same period. small to permit reliable estimates of the average fee Other types of "on others" transactions exhibit for these transactions for many of the years examsimilar increases. ined. What evidence is available, however, sug- In contrast, a relatively small and declining pro- gests that fees charged for "on us" transactions portion of institutions charge for "on us" transac- were substantially lower than for "on others" transtions.6 The distinction between the fees charged for actions, particularly at banks. "on others" and "on us" transactions may be Except in the case of withdrawals "on others" at partly explained by the fact that an "on others" savings associations, estimated average ATM transtransaction typically requires the customer's insti- action fees did not rise as much as the CPI, which tution to pay the ATM network as well as the increased about 22 percent between the dates of the owner of the ATM, neither of which payment is earliest and latest surveys.7 Savings associations required in the case of "on us" transactions. appear to have been catching up to banks for fees The average fee for "on others" transactions in charged for withdrawals "on others"—their fees 1993 was about 90 cents at banks and between were lower than those charged by banks in 1988 80 cents and 90 cents at savings associations. and grew at a faster rate over the period. 6. The declines in the proportion of institutions charging for 7. The registered 29 percent increase in the average fee for withdrawals "on us" are statistically significant for both banks and withdrawals "on others" at savings associations is not statistically savings associations. greater than the 21.9 percent increase in the CPI during the period. 5. Incidence and average level of fees for automated teller machine services at banks and savings associations, 1988-93 Dollars except as noted Banks Savings associations Fee Percent Percent 1988 1990 1991 1992 1993 change, 1988 1990 1991 1992 1993 change, 1988-93 1988-93 Yearly fee Percent charging 12.4 5.8 10.3 19.5 14.1 5.3 16.1 23.0 15.6 8.6 Fee 19.45 10.95 9.97 8.10 10.52 -45.9 17.96 11.41 9.39 11.64 Fee for transactions on others Withdrawals Percent charging .. 50.1 61.7 79.6 65.8 76.4 33.5 40.3 63.2 81.1 68.0 Fee .85 .90 .92 .91 .92 ' 8.2 .69 .85 .87 .81 .89 29.0** Deposits Percent charging .. 34.5 50.2 67.0 42.7 71.0 23.6 34.9 46.5 66.6 59.7 Fee .88 .87 .88 .93 .90 ' 2.3 .70 .81 .95 .79 .82 17.1* Balance inquiry Percent charging .. 51.6 72.5 52.0 71.9 30.4 54.4 69.8 61.3 Fee .87 .91 .84 .90 .74 .84 .82 .82 Fee for transactions on us Withdrawals Percent charging .. 10.9 9.4 8.3 8.5 3.6 17.6 19.3 13.7 11.9 8.7 Fee .27 .51 .39 .51 .64 Deposits Percent charging .. 3.9 5.7 4.7 3.4 2.8 1122..22 18.5 9.4 8.5 7.9 Fee .38 Balance Inquiries Percent charging .. 3.3 6.3 3.2 2.8 14.1 10.4 8.5 6.2 Fee .34 NOTE. NO data were collected for 1989. Transactions are "on others" . . . Data are not applicable, or are insufficient to report, or are not when the machine used is not that of the customer's institution. Average fees comparable across surveys. are calculated only for those institutions that charge. The change in the * Significant at the 90 percent confidence level. consumer price index between July 1988 and December 1993 was ** Significant at the 95 percent confidence level. 21.9 percent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Trends in Retail Fees and Services of Depository Institutions 781 SUMMARY APPENDIX: DESIGN OF THE SURVEYS To date, the Federal Reserve has sponsored five The data employed in this article were obtained annual surveys of the availability of retail services through telephone interviews conducted by Moebs at depository institutions and the fees charged for Services, of Lake Bluff, Illinois, under contract these services. An analysis of the resulting data with the Board of Governors of the Federal Reserve yields several generalizations. First, there is little System. As in all surveys, errors in reporting are evidence that the availability of retail banking ser- possible. To minimize these errors, results obtained vices as measured has declined during the period by trained interviewers were, after every ten interbetween 1989 and 1993, and for a few services, views, submitted to one of the several officials in availability has increased sharply. Second, the trend Moebs Services with extensive experience in retail in fees charged for these services depends on the banking. A discrepancy or suspected error resulted category of fee. in a second phone call to the surveyed institution. For fees associated with the maintenance and use The statistical design of the survey, developed of deposit accounts, substantial increases can be for Moebs by Professor George Easton, of the observed for some types of accounts but not others. University of Chicago, consists of a stratified sys- For most of the accounts examined, there is little tematic sample, treated as a stratified random samevidence of a substantial, general increase in the ple, with seven geographic regions and five size minimum balances required to avoid fees or open classifications serving as the strata. Because selecthe account. tion probabilities differ by region and size class, For fees associated with specialized services or the inverses of the selection probabilities were actions, the overall picture is a good deal more employed as weights. These weights were then uniform, with average fees rising faster in percent- employed to obtain the population estimates age terms than the change in the CPI in most cases. reported in tables 1 through 5. • For most items examined, the estimated proportion of depository institutions charging such fees also rose over the period. For ATM fees, the most striking development has been the increase in the proportion of institutions charging for "on others" transactions, rather than the changes in average fees, which, with one exception, do not appear to have exceeded the change in the CPI during the period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

782 Treasury and Federal Reserve Foreign Exchange Operations This report describes Treasury and System foreign strong an appreciation of the mark against the exchange operations for the period from May dollar was not in the interest of the German econthrough June 1994. It was prepared by Peter R. omy. At about 8:30 a.m., the Desk, joined by Fisher, Senior Vice President, Federal Reserve eighteen other central banks, entered the market to Bank of New York, and Manager for Foreign Oper- purchase dollars against the yen and the mark. ations, System Open Market Account. LadanArchin Shortly after this initial round of intervention, Treawas primarily responsible for preparation of the sury Secretary Bentsen released the following statereport.1 ment confirming the intervention: I am concerned by recent developments in the During the May-June period, the dollar declined exchange markets. This Administration sees no advan- 4.0 percent against the German mark, 3.0 percent tage in an undervalued currency. against the Japanese yen, and 2.7 percent on a The monetary authorities of the major countries are trade-weighted basis.2 The dollar opened the period joining this morning in concerted intervention. These at DM1.6548 and ¥101.75, and closed the period at operations reflect our view that recent movements in exchange markets have gone beyond what is justified by DM1.5869 and ¥98.50. The Federal Reserve Bank economic fundamentals. of New York's Foreign Exchange Desk intervened twice during the period on behalf of the U.S. mone- After the Secretary's statement, the dollar tary authorities, purchasing $1,250 million on reached its intraday highs of DM1.6645 and May 4 and $1,560 million on June 24. On both ¥102.40. The Desk continued to purchase dollars occasions, the Desk intervened as part of a con- against the mark and the yen throughout the morncerted operation to support the dollar. ing, concluding the operation at midday. The dollar closed the day at DM1.6530 and ¥101.83. In total, the Desk purchased $1,250 million, of which THE UNITED STATES INITIATES $750 million was against the mark and $500 mil- A CONCERTED OPERATION lion was against the yen. These amounts were equally divided between the Federal Reserve and In the weeks leading up to the reporting period, the the U.S. Treasury's Exchange Stabilization Fund dollar declined against the mark and the yen in (ESF). increasingly volatile trading. On the last business day of the previous period, the U.S. monetary EXPECTATIONS OF FUTURE INTEREST RATES authorities intervened in the foreign exchange BEGIN TO CHANGE market. On May 4, in early European trading, the dollar In the week after the intervention, the dollar gradureached a new six-month low of DM1.6330, before ally firmed against both the mark and the yen. This recovering to approximately DM1.6470 afterfinning occurred as market participants came to Bundesbank President Tietmeyer stated that too expect that central banks would follow up on their intervention operations with interest rate changes 1. The charts for the report are available on request from Publithat would also have the effect of supporting the cations Services, Mail Stop 127, Board of Governors of the Federal Reserve System, Washington, DC 20551. dollar. 2. The dollar's movements on a trade-weighted basis are mea- In early May, the Bank of Japan was more sured using an index developed by staff at the Board of Governors of the Federal Reserve System. accommodative in its money market operations, as Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

783 reflected in a decline in the overnight call money ment of a range of trade issues between the United rate to an historical low of 2.03 percent. On States and Japan as more likely. As this view May 11, the Bundesbank reduced its discount and became increasingly widespread, the dollar Lombard rates 50 basis points to 4.5 percent and strengthened against the yen, reaching its period 6.0 percent respectively. On May 17, the Federal high of ¥105.50 on June 6. Reserve announced the Board of Governors' deci- However, the yen appreciated after comments on sion to raise the discount rate 50 basis points. At June 7 and 8 by senior Administration officials the same time, the Federal Reserve announced a indicating that the United States had not changed decision by the Federal Open Market Committee its goals in the trade talks and was prepared to (FOMC) to provide a corresponding increase of impose trade sanctions if the framework talks pressure on bank reserves, resulting in an increase failed. Several other factors also appeared to of 50 basis points in the federal funds rate. The strengthen the yen. First, although the accommoda- Federal Reserve Board's statement that the interest tive money market operations by the Bank of Japan rate changes made up to this date in 1994 had in May had led some market participants to expect "substantially remove[d] the degree of monetary a reduction in the Bank of Japan's Official Disaccommodation which prevailed throughout 1993" count Rate (ODR), these expectations started to reduced market participants' expectations for fur- unwind by the first week of June, as Japanese ther near-term rate increases in the United States. government bond yields rose and the Bank of Similarly, the size of the Bundesbank's interest rate Japan returned to a more neutral stance. Moreover, cuts lowered expectations for further official reduc- the June 10 release of the Tankan business survey, tions in interest rates in Germany. Thus, after these as well as subsequent comments by Japanese offiofficial interest rate changes, expected interest rate cials, suggested that the Japanese economy had differentials, which had widened quite substantially bottomed out and was poised for a recovery. Also in the dollar's favor in early May, began to narrow in early June, expectations grew that the Hata govrapidly. ernment would face a no-confidence vote as soon The dollar subsequently moved lower against the as the budget process for fiscal year 1994-95 was mark and traded in a narrow range for the rest of completed and, consequently, that the Japanese the month as market participants reassessed the political situation would further delay trade negotilikelihood that interest rate changes would lead to ations and the implementation of fiscal measures in dollar appreciation. This period of reassessment Japan. was encouraged by the comments of various Bundesbank officials, who indicated that further changes in official interest rates might not occur. At THE MARK AND THE SWISS FRANC BEGIN the same time, several data releases in Germany, TO STRENGTHEN particularly the figures on industrial production for April and first-quarter gross domestic product, With the dollar declining against the yen and the encouraged market participants to view the outlook market reassessing the prospects of dollar apprefor the German economy more optimistically. ciation against the mark, a series of events in mid-June caused a sudden strengthening of the mark and the Swiss franc. Over the weekend of THE DOLLAR STRENGTHENS AGAINST THE June 11-12, tensions with North Korea mounted, YEN, BUT THEN MOVES LOWER leading to market anxiety about Japan's proximity to the peninsula and uncertainty about the likely In late May and early June, the dollar posted mod- U.S. policy response. On Sunday, June 12, German est gains against the yen when U.S-Japanese trade Chancellor Kohl's party, the Christian Democratic relations showed signs of progress. On May 24, the Union (CDU), performed better than expected in United States and Japan reopened the framework elections for the European parliament, a developtrade talks that were suspended on February 11. In ment that appeared to promise greater continuity in subsequent days, press reports and various official German policies after the fall national elections. comments led market participants to regard settle- Then, on Monday, June 13, Swiss National Bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

784 Federal Reserve Bulletin • September 1994 President Lusser said that further interest rate cuts outlook. We are now in the midst of the first investmentin Switzerland would not be forthcoming, even led recovery from a low-inflation base in 30 years. And there is increased evidence of recovery abroad. We share though inflationary pressures in the Swiss economy with the Fed and with our G-7 partners the common goal remained muted. This combination of events of sustaining recovery with low inflation. prompted substantial flows into Swiss francs and German marks, leading to a broad-based apprecia- On the same day, Federal Reserve Chairman tion of those currencies. After initially breaking Greenspan, testifying before the House Budget lower against the Swiss franc, the U.S. currency Committee, said that the U.S. monetary authorities soon came under selling pressure against the mark "cannot be indifferent to major movements in our and eventually against the yen. In this environment, currency." market participants became increasingly anxious On Thursday, June 23, however, there was about the dollar's near-term prospects and began to renewed selling pressure on the dollar. Market question the U.S. Administration's level of concern anxiety about the risk of a rapid downward moveabout the U.S. currency. ment of the dollar, especially against the yen, was On Friday, June 17, in extremely thin market reflected in options markets, where dollar puts conditions, the dollar fell more than two pfennigs began to trade at an extraordinarily high premium after the breach of DM1.6280, an important techni- over equally out-of-the-money dollar calls. The cal level, and on headlines reporting views of a dollar closed that day at DM1.6024 and ¥101.22. private sector research economist that, in the On Friday, June 24, during Asian and European absence of a high real interest rate policy in the trading, the dollar again began to move lower United States, the dollar could fall 10 percent against the mark and the yen, reaching lows of against the mark over the next eighteen months. DM1.5855 and ¥99.93, while U.S. and European During the day, the dollar dropped to DM1.6065, bond yields rose and European stock markets its lowest level since October 1993. The dollar's declined. sharp price adjustment took place in a very short On Friday morning, the Desk entered the market period, giving market participants little opportunity shortly before 9:30 a.m. to purchase dollars against to adjust their positions and putting added pressure the mark and the yen. Sixteen other central banks on the dollar as the next week began. joined the Desk in a concerted intervention. Soon after the Desk entered the market, Treasury Secretary Bentsen confirmed the intervention, stating the THE DOLLAR FALLS SHARPLY following: AGAINST THE YEN Our actions today in cooperation with our G-7 partners and other monetary authorities reflect a shared Liquidations of long-dollar positions against the concern about recent developments in financial markets. yen abruptly pushed the dollar down by more than We look forward to continued cooperation to maintain two yen to a new low of ¥99.85 during Tuesday, the conditions necessary for sustained economic expansion with low inflation. June 21. As the dollar reached new lows, a negative sentiment and technical conditions became The Desk continued purchasing dollars through self-reinforcing with market participants increaslate morning. However, market participants sold ingly interpreting the dollar's movements as reflecting a lack of confidence in U.S. economic 1. Foreign exchange holdings of U.S. monetary policies. The dollar was supported briefly by Secre- authorities at period-end tary Bentsen's statement on June 22: Millions of dollars U.S. Treasury I am concerned by recent movements in the exchange Item Federal Exchange Reserve markets. We are carefully monitoring developments. We Stabilization Fund continue to be in close communication with our G-7 German marks 13,350.0 7,753.3 partners, and we continue to be prepared to act as Japanese yen 8,996.6 12,466.9 appropriate. Total 22,346.5 20,220.2 Ultimately, what is important is the fundamental strength of our economy, and I am very confident in the NOTE. Figures may not sum to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Treasury and Federal Reserve Foreign Exchange Operations 785 2. Net profits or losses (-) on U.S. Treasury 3. Federal Reserve reciprocal currency arrangements and Federal Reserve foreign exchange operations, Millions of dollars based on historical cost-of-acquisition exchange rates Amount of Millions of dollars Institution facility, Drawings during period June 30, 1994 U.S. Treasury Federal Exchange Period and item Austrian National Bank 250 0 Reserve Stabilization National Bank of Belgium 1,000 ki . Fund Bank of Canada 2,000 National Bank of Denmark 250 Valuation profits and losses on Bank of England 3,000 outstanding assets and liabilities Bank of France 2,000 as of April 29, 1994 4,163.4 3,804.9 Deutsche Bundesbank 6,000 Bank of Italy 3,000 Realized profits and losses, April 29-June 30, 1994 310.41 229.8" Bank of Japan 5,000 Valuation profits and losses on Bank of Mexico 3,000 outstanding assets and liabilities Netherlands Bank 500 as of June 30, 1994 4,458.2 4,253.8 Bank of Norway 250 Bank of Sweden 300 NOTE. Data are on a value-date basis. Swiss National Bank 4,000 1. This figure represents net realized profit on intervention sales of German marks and Japanese yen. Bank for International Settlements Dollars against Swiss francs 600 \ Dollars against other authorized European currencies 1,250 0 the dollar aggressively during the operation, espe- Total 32,400 0 cially against the mark, and at noon the dollar traded at DM1.5855 and ¥100.40. Shortly after 12:30 p.m., the Desk entered the market for a final round of intervention, purchasing dollars against RESERVE POSITION both marks and yen. In total, the Desk purchased $1,560 million, of which $950 million was against Intervention operations during the May-June the German mark and $610 million was against the period totaled $2.81 billion, divided equally Japanese yen. These amounts were equally divided between the Federal Reserve and the U.S. Treabetween the Federal Reserve and the ESF. The sury's Exchange Stabilization Fund (ESF). Howdollar closed the day at DM1.5835 and ¥100.35. ever, because operations conducted on the last busi- U.S. bond and stock prices closed the day sharply ness day of April settled in early May, intervention lower as market participants perceived that the risk operations settling in May and June totaled of interest rate changes in the aftermath of the $3.51 billion. This full settlement amount was also intervention had increased. divided equally between the Federal Reserve and In the week after the intervention, the dollar the ESF. During the period, the Federal Reserve steadied against most European currencies, and and the ESF realized total profits of $310.4 million U.S. stock and bond markets initially regained and $229.8 million respectively on intervention some of the losses recorded on Friday. The dollar sales based on historical cost-of-acquisition traded in a range of ¥98 to ¥101. The resignation of exchange rates. Prime Minister Hata on June 25 and the subsequent At the end of the period, the current value of the election of Tomiichi Murayama, the head of the foreign exchange reserve holdings of the Federal Socialist party, as the new prime minister on Reserve and the ESF were $22.3 billion and June 29 buoyed the yen, as market participants $20.2 billion respectively. The U.S. monetary anticipated that political uncertainty in Japan would authorities regularly invest their foreign currency delay progress in bilateral trade negotiations on balances in a variety of instruments that yield both trade disputes with the United States and the market-related rates of return and have a high enactment of further economic stimulus measures degree of liquidity and credit quality. A portion of in Japan. On June 30, the final day of the period, the balance is invested in foreign government secuthe dollar traded to a new post-World War II low rities. As of June 30, the Federal Reserve and the of ¥98.35 before rebounding slightly to close the ESF each held, either directly or under repurchase period at ¥98.50. Against the mark, the dollar agreements, $12.0 billion in foreign government closed the period at DM1.5869. securities. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

786 Industrial Production and Capacity Utilization for July 1994 Released for publication August 15 goods other than motor vehicles. A decline in the generation of electricity from its unusually high Industrial production advanced 0.2 percent in July level in June, coupled with some strike activity, after an increase of 0.5 percent in June. The most reduced the July gain in the total index about significant gains occurred in business equipment 0.2 percentage point. At 117.2 percent of its 1987 and related parts as well as in durable consumer average, industrial production was 5.6 percent 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, July. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

787 Industrial production and capacity utilization, July 1994 Industrial production, index, 1987 = 100 Percentage change CCCaaattteeegggooorrryyy 11999944 19941 JJuullyy 11999933 ttoo Apr.r Mayr June' JulyP Apr/ May' June' July? JJuullyy 11999944 Total 116.0 116.3 116.9 117.2 .1 .3 .5 .2 5.6 Previous estimate 116.1 116.3 116.8 .2 .1 .5 Major market groups Products, total2 114.7 114.9 115.4 115.7 .0 .2 .5 .2 4.8 Consumer goods 111.2 111.3 112.3 112.7 -.7 .1 .9 .4 3.5 Business equipment 146.3 146.7 147.3 147.9 .5 .3 .4 .5 9.9 Construction supplies 101.8 102.5 102.4 102.3 2.1 .7 -.1 -.1 6.1 Materials 117.9 118.4 119.1 119.3 .2 .4 .6 .2 6.8 Major industry groups Manufacturing 117.7 118.1 118.3 118.7 .4 .3 .1 .4 6.3 Durable 122.5 122.5 122.6 123.3 .6 .0 .2 .5 8.5 Nondurable 111.8 112.7 112.9 113.1 .1 .8 .1 .2 3.6 Mining 99.9 99.1 99.5 98.6 .4 -.8 .3 -.9 2.3 Utilities 114.4 114.7 120.6 119.2 -3.0 .2 5.2 -1.2 1.0 Capacity utilization, percent MEMO Capacity, cceennttaaggee 1993 1994 Average, Low, High, cchhaannggee,, 1967-93 1982 1988-89 JJuullyy 11999933 July Apr.' May' June' Julyp ttoo JJuullyy 11999944 Total 81.9 71.8 84.8 81.3 83.7 83.7 83.9 83.9 2.4 Manufacturing 81.2 70.0 85.1 80.3 83.1 83.1 83.0 83.1 2.8 Advanced processing 80.6 71.4 83.3 78.9 81.5 81.3 81.3 81.5 3.4 Primary processing . 82.2 66.8 89.1 83.8 86.9 87.5 87.2 87.1 1.2 Mining 87.4 80.6 87.0 86.6 90.3 89.6 90.0 89.2 -.6 Utilities 86.7 76.2 92.6 88.2 84.8 84.8 89.2 88.0 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. higher in July than it was a year earlier. The utiliza- production, the strike at a major producer of contion of total industrial capacity, which has changed struction and mining equipment, and the continulittle since March, remained at 83.9 percent. ing weakness in the aircraft industry. The gains in When analyzed by market group, the data show information processing and related equipment and that the output of consumer goods increased in sectors of industrial equipment that were not 0.4 percent in July, even though the production affected by the strike were widespread and substanof automotive products declined 1.3 percent. The tial. The output of defense and space equipment output of other consumer durables rose 2.9 percent, again declined significantly. with gains in the output of appliances, television The production of construction supplies, which sets, and other household durables. Drops in the had risen sharply during the spring, edged down for production of gasoline and residential electricity a second month. The output of business supplies, held the overall rise in consumer nondurables to held down by a partial retreat in sales of commer- 0.3 percent. Falling sales of residential electricity cial electricity, was little changed. reversed only a fraction of the double-digit gain The increases in the output of materials, which that had accounted for much of the overall increase had been very rapid through March, have been in the production of consumer goods in June. slowed by declines in the production of consumer The output of business equipment, which durable parts used to make vehicles. Gains in advanced 0.5 percent, continues to be a source of equipment parts, however, especially semiconducstrength, despite the flattening in motor vehicle tors and computer parts, have been robust and have Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

788 Federal Reserve Bulletin • September 1994 accounted for much of the 0.7 percent rise in the paper and products and food rose noticeably. With output of durable goods materials in July. The output growth approximately equaling estimated production of nondurable goods materials advanced capacity growth in recent months, the rate of capac- 0.3 percent, after a 0.3 percent decline in June; ity utilization in manufacturing has remained at gains in the output of paper and paperboard about 83 percent since March. Utilization rates in accounted for the rise. Declines in coal production primary-processing industries, such as textiles, and electricity generation caused the output of lumber, petroleum products, and iron and steel, energy materials to fall about 1 percent, thereby remained well above their 1967-93 averages. In reversing half its gain in June. general, utilization rates in advanced-processing When analyzed by industry group, the data show industries were closer to their long-run averages that manufacturing production rose 0.4 percent in than the rates in primary-processing industries. July, with much of the gain in durable goods such The output in mining fell 0.9 percent, with as machinery, instruments, and furniture and fix- declines in coal and oil and gas well drilling. tures; the output of transportation equipment fell Production at utilities fell 1.2 percent. • 1.6 percent. Among nondurables, the production of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

789 Statements to the Congress Statement by Edward W. Kelley, Jr., Member, discernible impact on the overall economy and Board of Governors of the Federal Reserve Sys- places no constraint on the formulation or impletem, before the Committee on Banking, Finance mentation of monetary policy. and Urban Affairs, U.S. House of Representa- Nevertheless, the security features of the tives, July 13, 1994 current design are probably not adequate to deal with the counterfeiting threat of the future, Thank you for the opportunity to present the which seems likely to be dominated by rapidly Federal Reserve's views on the plans of the improving reprographic technologies, espe- Department of the Treasury to further protect cially computer-based scanners, printers, and U.S. currency from the threat of future counter- copiers, that will be available to large numbers feiting. I have attached to my statement re- of people and that will require little operator sponses to the questions raised in your letter of skill. We are also concerned about increasingly invitation.1 I would request that they become sophisticated counterfeiting by dedicated crimpart of the record. My remarks this morning will inals and by a greater proportion of this activity focus on the reasons the Federal Reserve fully taking place outside the United States. Accordsupports the design improvements being consid- ingly, the Federal Reserve strongly supports ered by the Treasury. the Treasury Department's efforts to incorpo- Counterfeiting is foremost a serious crime— rate additional security features to currency but one with a special dimension. For if counter- now to be better prepared for threats of the feiting were to take place in very large volumes, future. it might undermine public confidence in the gen- To provide some context for the committee's uine currency and might, in extreme circum- consideration of this design-improvement effort, stances, also threaten the nation's economic sta- I would like to comment on three related matters: bility. For these reasons, our government must (1) the importance to the Treasury and to taxpaybe ever alert to opportunities to improve both its ers, in financial terms, of the Federal Reserve's enforcement of anticounterfeiting laws and the currency-issue function, (2) the worldwide role design of its currency. of U.S. currency and therefore the importance of The United States has the benefit of a vigor- maintaining worldwide confidence in it, and (3) ous, and highly effective, enforcement of coun- steps that the Federal Reserve might take to terfeiting laws by the U.S. Secret Service. We ensure prompt distribution of the newly designed have also had a largely effective currency design, notes. particularly with the addition in 1991 of two Currency issuing is highly profitable for govadditional security features aimed at reducing the ernments because the issuance of non-interestthreat of color-copier counterfeiting. Thanks to bearing central bank currency liabilities gives good law enforcement and to a good design, as rise, correspondingly, to comparable holdings of well as to a watchful public, the current level of earning assets by the central bank. The Federal counterfeiting activity is only about $20 million Reserve System's balance sheet shows currency per year, or only about 10 cents per capita passed liabilities, and corresponding earning assets, of on to the U.S. public. Thus counterfeiting has no about $357 billion. At a portfolio return of about 5.3 percent in 1993, the assets associated with currency outstanding generated about $18 billion 1. The attachment to this statement is available from in gross income for the Federal Reserve System Publications Services, Board of Governors of the Federal and therefore accounted for most of the approx- Reserve System, Washington, DC 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

790 Federal Reserve Bulletin • September 1994 imately $16 billion of 1993 net Federal Reserve they become available and a prompt replacement earnings paid to the Treasury. of the Federal Reserve notes currently in circu- The needs of the domestic U.S. economy, lation—on a worldwide basis. however, do not account for all, or even most, Let me not be misunderstood, however. The of the $357 billion dollars of Federal Reserve Federal Reserve would not support, and has no notes in circulation. Our currency is widely plans for, a recall, demonetization, cancellation, accepted and used outside the United States, or any other cessation of legal tender status of and in a few nations it even plays a leading role U.S. currency. All genuine U.S. currency now in as a substitute for the domestic currency. We circulation, whenever issued, is legal tender and do not have hard data on the amount of cur- should continue to be legal tender. rency held abroad, and estimates are necessar- For replacing Federal Reserve notes in circuily imprecise. Research by Board staff members lation within the United States, it is likely that indicates that probably more than half, and the Federal Reserve will follow the general apperhaps in excess of 60 percent, of the $357 proach it has used in issuing the Series-1990 billion of U.S. currency may be in use outside $100, $50, $20, $10, and $5 notes, which, as you the United States. Evidence also suggests that know, provided improved counterfeit deterrence the percentage of U.S. currency held abroad in the form of a security thread and microprinthas tended to increase in recent years. The ing. worldwide demand for our currency contributes In the case of $100 and $50 notes, which have in a very important way to the direct financial an average life of more than five years, we knew benefits that taxpayers derive from the issuance that we would need to replace the outstanding of Federal Reserve notes—perhaps to the ex- Federal Reserve notes more promptly than on a tent of 60 percent, or $10 billion annually, of the business-as-usual basis. For those denominaapproximately $16 billion earned through cur- tions, the Federal Reserve began paying into rency issuance. In effect, by holding our cur- circulation only the Series-1990 notes as soon as rency, citizens of the rest of the world are the Bureau of Engraving and Printing had making an interest-free loan to the United shipped a sufficient inventory of them to each of States. the Federal Reserve banks and branches (which We cannot take for granted the choice of U.S. was in August 1991 for $100 notes and in Februcurrency as both a store of value and a medium ary 1992 for $50 notes). That is, all pre-1990 $100 of exchange in nations whose economic or polit- and $50 notes deposited at Federal Reserve ical situations make their own currencies less Banks were withdrawn from circulation even if attractive for those purposes. There are other their quality level might ordinarily have permitcurrencies and other instruments that would ted their reissuance. As a result of that proceserve the purpose. The choice of U.S. currency dure, Series-1990 notes now comprise more than is most of all a consequence of the esteem and 80 percent of the receipts of $100 and $50 notes at confidence in which the U.S. government, its Federal Reserve Banks and therefore more than political traditions, and its economic perfor- 80 percent of the general domestic circulation of mance are held. Whether that esteem and confi- those denominations. dence are maintained in the future depends pri- Series-1990 notes of the $20 and $10 denomimarily on the fiscal and monetary policies that nations were first paid into circulation by Reare pursued here over the long term. The prefer- serve Banks in October 1992 and November 1992 ence for U.S. currency abroad, however, and the respectively. Because those denominations have associated financial benefits also depend on con- an average life of only two and one-half to three fidence in the Federal Reserve notes themselves years, the Federal Reserve has retired the preand could be diminished by widespread concern 1990 notes on a business-as-usual basis; that is, about the genuineness of U.S. currency. they are withdrawn only when they are judged to Against this background, the Federal Reserve be too worn or soiled for further circulation. As is preparing now for the challenges of active a result of this procedure, we have achieved a distribution of the newly designed notes when replacement rate comparable to that of the $100 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 791 and $50 notes. Series-1990 notes now comprise present replacement procedure may not be conabout 60 percent of those denominations in de- sidered sufficient for the newly designed notes. posits at Federal Reserve Banks and therefore in The Federal Reserve is therefore considering the general domestic circulation. benefits and costs of a number of available op- For replacing Federal Reserve notes used out- tions for expediting the replacement of notes that side the United States, a more active approach are outside the United States when the newly may be required for the newly designed series. In designed notes become available. No decisions contrast with the 80 percent replacement rate have been made, except that there will be no domestically, we estimate, for example, that only recall or demonetization of existing currency. 50 percent of the $100 notes circulating abroad In conclusion, I would like to thank the comand only 65 percent of the $50 notes abroad are mittee for this opportunity, and again let me Series-1990 notes. Even though these lower re- reiterate that the Federal Reserve fully supports placement rates may, to some extent, be attrib- the design improvements being considered by the utable to the 1990-Series not being visibly very Treasury. It would further the interests of the different from the earlier series, and the more United States to enhance its currency by making visible changes in the newly designed notes may it as secure from counterfeiting in the future as it generate a greater public demand for them, the has been in the past. • Statement by Alan Greenspan, Chairman, Board and have lowered the trajectory of deficit of Governors of the Federal Reserve System, growth. But much remains to be done. The deep before the Bipartisan Commission on Entitle- reduction in defense spending will come to an ment and Tax Reform, Washington, D.C., July end later in this decade. At that point the 15, 1994 underlying trend of civilian spending, mainly entitlements, will emerge as the dominant bud- The U.S. economy has recently been experienc- get force. On the basis of current law and ing the ideal combination of rising activity, falling policy, entitlements are programmed to grow at unemployment, and slowing inflation. But we a rate that will surely exceed growth of the tax cannot let this good behavior lull us into neglect- base, threatening a destabilizing escalation of ing the underlying problems of our economy that deficits as a percentage of nominal gross domesmay prevent it from reaching its fullest potential tic product. over the longer run. One of the most important of Increasing the tax base or tax rates cannot these problems is the prospect for federal budget solve this problem, for it would take enormous deficits to begin rising once again as we move increases to fund the rising outlays, and even into the next century. The effects of these deficits such increases would only postpone the inevitamay not be obvious to every observer, but they ble because growth in tax revenue cannot indefare there, they are serious, and they will get initely exceed the growth in income. Moreover, worse the longer we take to address them. the disincentive effects of rising tax rates would Since we veered away, in the early 1960s, from eventually choke off economic growth and rethe allegedly simplistic notion that budget bal- duce the tax base. Therefore, there is no alternaance should be the hallmark of sound fiscal tive to scaling back growth in federal spending if policy, we have been struggling with deficits that we are to avoid growing deficits as we move into have no precedent in our peacetime history. The the next century. Those deficits would cause large structural federal budget deficits that have financial stress and instability that would create emerged in recent decades seem to persist de- great hardship. spite considerable efforts to reduce them. Deficits are damaging because they pull re- Some of these recent efforts by the executive sources away from private investment, reducing and legislative branches, especially the imposi- the rate of growth of the nation's capital stock. tion of spending caps, in fact have been helpful This, in turn, means less capital per worker than Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

792 Federal Reserve Bulletin • September 1994 would otherwise be the case and engenders, over the resultant high real interest rates will curtail the long run, a slower growth in labor productiv- the growth in living standards. ity and, with it, a slower growth in our standard The process by which government deficits of living. divert resources from private investment is only To some degree, the effects of federal budget one of the many ways that the activities of the deficits over the past decade or so have been federal government inevitably preempt or redimuted by two circumstances that are unlikely to rect the use of private-sector resources. Apart persist in the future. First, to the extent that from deficit spending, on- or off-budget, the most these budget deficits could not be financed from important ways the government can reallocate our meager level of savings, we imported savings resources are tax-financed spending; regulation from abroad. But it has become increasingly mandating private activities, such as pollution clear that reliance on foreign sources of savings control or safety equipment installation, that are is not desirable—or perhaps even possible—over financed by industry through the issuance of debt extended periods. As these sources are reduced, instruments; and government guarantees of priother sources must be found, or demands on vate borrowing. domestic savings must be curtailed. When the government finances its activities Second, we may be undergoing a once-in-a- with taxes, the capacity of individuals and busigeneration improvement in the way we use our nesses to spend is directly reduced, thereby scarce domestic savings. As I have outlined diverting resources from private purchases. The elsewhere, the extraordinary advances in com- other financing methods divert resources in a puter software and hardware appear to be en- more indirect manner and operate mainly abling us to employ our resources, both capital through their effects on interest rates. When the and labor, more efficiently. This development federal government finances its budget deficit, may be imparting a decided uptilt to the growth for example, it increases the demands for scarce of labor productivity, obscuring, at least for a savings, thereby pushing up interest rates. Simiwhile, the effect of the shortfall in capital in- larly, the demand for credit increases and intervestment on the growth of our standard of est rates rise when a business needs to borrow to living. finance a government-mandated activity, or Of course, the government should pursue op- when the government reduces the costs of borportunities to encourage the private sector to rowing to certain investors by guaranteeing their sustain this faster pace of improvement in pro- loans. Government and government-mandated ductivity. It can remove impediments to prudent spending is insensitive to these higher interest risk-taking, reverse inappropriate regulation that rates. undermines investment incentives, seek to lower Purely private activities, on the other hand, international trade barriers to foster growth in are, to a greater or lesser extent, responsive to global income, and improve the functioning of interest rates. The demand for housing, for exour labor markets. These initiatives will mean ample, falls off as mortgage interest rates rise. higher standards of living at any given level of the Inventory demand is a function of short-term structural budget deficit. interest rates, and the level of interest rates, as But these measures will not substitute for a they are reflected in the cost of capital, is a key direct approach to resolving the underlying defi- element in the decision about whether to expand cit problem. This problem has become too severe or modernize productive capacity. Thus, to the to grow our way out of it. As our population extent that more resources are demanded in an continues to age over the coming decades, enti- economy than are available to be financed, intertlements will become an increasing share of our est rates will rise until sufficient excess demand is budget outlays and of our national income. finally crowded out. The crowded-out demand Taken separately, these programs have wide will not, of course, be that of the federal governsupport among the American people. But, in ment, directly or indirectly, because government total, they are far more costly than people rec- demand does not respond to rising interest rates. ognize. If we continue to borrow to pay for them, Rather, real interest rates will rise to the point Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 793 that purely private borrowing is reduced suffi- for government expenditures as the next century ciently to allow the entire requirements of the unfolds. Allowing this to happen courts a marked federal on- and off-budget deficit, and all its sapping of our economy's vitality. The longer we collateral guarantees and mandated activities, to wait, the more draconian the remedies will have be met. to be. We must particularly eschew moving our How much rates must rise to bring the demand programs off-budget. This is mere bookkeeping. and supply for savings into balance depends on There is no way around the need to deal with the how responsive the demand of private borrowers allocation of real resources, and we must address is to those rates. Whatever the responsiveness of that fact head-on. private demand, rates must rise enough to crowd I recognize that it is difficult to deal with a out a sufficient amount of private-sector invest- problem whose symptoms are hard to detect ment. There is no alternative to a diversion of and whose full-blown effects seem to be years real resources from the private to the public or decades away. But financial markets have a sector. In the short run, interest rates can be held way of bringing future problems into the predown if the Federal Reserve accommodates the sent. Long-term interest rates are higher now excess demand for funds through a more expan- because markets are anticipating rising deficits sionary monetary policy. But this will only foster in the next century. Those higher long-term greater inflation and economic instability; ulti- rates reflect both a greater inflation premium mately, it will have little, if any, effect on the and an expectation of higher real short-term allocation of real resources between the private rates in the future as government spending and public sectors. increasingly crowds out private spending. As I Let me conclude by emphasizing that time is noted earlier, higher interest rates hinder capino longer on our side. Any presumption that the tal formation and leave future generations deficit is benign is clearly false. This is especially poorer. the case with so low a private saving rate. Under We are already paying for our failure to come current law, the deficit will begin to climb again fully to grips with our long-term budget problem. by the end of the decade. Moreover, demo- Further delay will only raise the total size of the graphic trends imply an inexorable upward path bill that will eventually come due. • Statement by Alan Greenspan, Chairman, Board Our actions this year can be understood by of Governors of the Federal Reserve System, reference to policy over the previous several before the Committee on Banking, Housing, and years. Through that period, the Federal Reserve Urban Affairs, U.S. Senate, July 20, 1994 moved toward and then maintained for a considerable time a purposefully accommodative I appreciate this opportunity to discuss with you stance of policy. During 1993, that stance was recent economic developments and the Federal associated with low levels of real short-term Reserve's conduct of monetary policy.1 interest rates—around zero. We judged that low The favorable performance of the economy interest rates would be necessary for a time to continued in the first half of 1994. Economic overcome the effects of a number of factors that growth was strong, unemployment fell apprecia- were restraining the economic expansion, includbly, and inflation remained subdued. To sustain ing heavy debt burdens of households and businesses and tighter credit policies of many lendthe expansion, the Federal Reserve adjusted ers. By early this year, however, it became clear monetary policy over recent months so as to that many of these impediments had diminished contain potential inflation pressures. and that the economy had consequently gained considerable momentum. In these circumstances, it was no longer appropriate to maintain 1. See "Monetary Policy Report to the Congress," in the an accommodative policy. Indeed, history August 1994 issue, pp. 681-701. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

794 Federal Reserve Bulletin • September 1994 strongly suggests that maintenance of real short- our moves, the Federal Reserve has announced term rates at levels prevailing last year ultimately each action and, in relevant instances, provided would have fueled inflationary pressures. an explanation. At its meeting in early July, the Accordingly, the Federal Open Market Com- FOMC faced considerable uncertainty about the mittee (FOMC) at its meeting in early February pace of expansion and pressures on prices going decided to move away from its accommodative forward, and it made no further adjustment in its posture by tightening reserve market conditions. policy stance. Given the level of real short-term rates and the Nonetheless, it is an open question whether evident momentum in the economy, it seemed our actions to date have been sufficient to head likely that a substantial cumulative adjustment of off inflationary pressures and thus maintain fapolicy would be needed. However, Committee vorable trends in the economy. Labor demand members recognized that financial markets were has been quite strong, pointing to robust growth not fully prepared for this action. About five years in production and incomes. To be sure, some had passed since the previous episode of mone- hints of moderation in the growth of domestic tary firming, and a number of market participants final demand have appeared, and the recent in designing their investment strategies seemed to indications of accelerating inventory accumulagive little weight to the possibility that interest tion may suggest an unwanted backing up of rates would rise; instead, many apparently extrap- stocks. Conversely, the inventory accumulation olated the then-recent, but highly unusual, ex- may reflect pressures on firms that had brought tended period of low short-term interest rates, inventories down to suboptimal levels and now fairly steady capital gains on long-term invest- need to replenish them. In the latter case, stock ments, and relatively stable conditions in financial building may continue at an above-normal rate, markets. Many Committee members were con- supporting production for quite some time. cerned that a marked shift in the stance of policy, Moreover, the improving economic conditions of though necessary, could precipitate an exagger- our trading partners should add impetus to aggreated reaction in financial markets. gate demand from the external sector. With this in mind, we initially tightened reserve How these forces balance out in the coming conditions only slightly—just enough to raise the months could be critical in determining whether federal funds rate lA percentage point. And the inflation will remain in check, for the amount of financial markets did indeed react sharply, with slack in the economy, though difficult to judge, substantial increases in longer-term interest rates appears to have become relatively small. Conand declines in stock prices. Markets remained cerns that productive capacity could come ununsettled for several months, and we continued to der pressure and prices accelerate are already move cautiously in March and April in the process evident in commodity and financial markets, of moving away from our accommodative stance. including the foreign exchange market. An in- By mid-May, however, a considerable portion of crease of inflation would come at considerable the adjustment in portfolios to the new rate envi- cost: We would lose hard-won ground in the ronment appeared to have taken place. With fi- fight against inflation expectations—ground that nancial markets evidently better prepared to ab- would be difficult to recapture later; our longsorb a larger move, the Federal Reserve could run economic performance would be impaired substantially complete the removal of the degree by the inefficiencies associated with higher inof monetary accommodation that prevailed flation if it persisted; and harsher policy actions throughout 1993. The Board raised the discount would eventually be necessary to reverse the rate Vi percentage point, a move that was fully upsurge in inflationary instabilities. We are depassed through to reserve market conditions by termined to prevent such an outcome and are the FOMC. Overall, the federal funds rate in- currently monitoring economic and financial creased 1V4 percentage points during the first half data carefully to assess whether additional adof the year, and real short-term rates likely rose a justments are appropriate. similar amount. Partly to minimize any market The economic figures that have formed the confusion about the extent of, and rationale for, backdrop for our policy actions so far this year Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 795 confirm that a rapid expansion has been in prog- seemed to make further near-term progress ress. Following growth at an annual rate of 7 against inflation less likely and raised questions percent in the fourth quarter of last year, real about whether price pressures might intensify. gross domestic product rose at nearly a 31/2 To a degree, the very volatility of markets percent rate in the first quarter. A conceptually probably augmented the backup in long-term equivalent measure of aggregate output, gross interest rates. One of the effects of the extended domestic income, exhibited even larger gains in market rallies of recent years was to promote a the fourth and first quarters. At this stage, avail- rather complacent view among investors about able data leave some uncertainty regarding the the risks of holding long-term assets. In repace of economic activity over the past three sponse, they gradually increased the proportions months. Nonetheless, the evidence in hand of their portfolios devoted to stocks and bonds, makes it reasonably clear that growth remained driving up their prices still further and narrowing appreciably above its longer-run trend. The ro- risk spreads. But when developments earlier this bust expansion over the first half of 1994 has year surprised investors and diminished their been reflected in substantial increases in employ- confidence in predicting future market condiment. Since last December, nonfarm payrolls tions, they pulled back from long positions in have risen by l3A million workers, bringing the securities until returns rose to compensate them gain in jobs since the expansion got under way to for the additional price risk. 5 million. Reflecting this hiring, the civilian un- The recent weakness in bond prices was not employment rate has fallen to 6 percent. limited to the United States but was accompa- Although labor markets have tightened consid- nied by a surge in foreign interest rates. This erably in recent months, aggregate measures of surge was particularly informative; ordinarily wage and compensation rates have not yet evi- one would expect that as interest rates go up in denced persuasive signs of acceleration. Simi- one nation, they would not increase to the same larly, the increases in the consumer price index extent in others because exchange rates also excluding food and energy, at about a 3 percent would be expected to adjust. The initial jump in rate over the past six months, have remained near foreign interest rates was a sign of the extraordilast year's pace, although the overall CPI has nary increase in uncertainty as, evidently, invesrisen at a reduced rate of about 2Vz percent. To be tors attempted to reduce their price-sensitive sure, price pressures have been manifest at earlier long positions by selling stocks and bonds restages of processing: Costs of many commodities gardless of currency denomination or economic and materials have been climbing, in some cases conditions in the nation of issuance. Roughly reflecting the tightening of industrial capacity uti- concurrently, moreover, signs that the slump in lization, which is now at its highest level in five some foreign industrial economies was ending years. But these pressures have been offset by were also becoming apparent. As a result, marfavorable trends in unit labor costs resulting from ket participants anticipated stronger credit demarked improvements in productivity—especially mands abroad and a reduced likelihood of further in manufacturing—in recent years. easing by some foreign central banks, and inter- The accumulating evidence of stronger-than- mediate- and longer-term rates in many of our expected economic growth here and abroad, trading partners rose as much as or more than in combined with changing expectations of policy the United States. actions by the Federal Reserve as well as other Rising foreign interest rates and concerns in central banks, prompted considerable increases markets about the prospects for reduced trade in long-term interest rates in occasionally volatile tensions and about U.S. inflation contributed to markets over the first half of the year. Market considerable activity directed at rebalancing inparticipants concluded that, with aggregate de- ternational investment portfolios. One effect of mand stronger, higher real rates would be neces- this activity appears to have been a substantial sary to hold growth to a sustainable pace. Infla- decline of the foreign exchange value of the tion expectations may also have been revised dollar on net over the past six months. Foreign higher, as the performance of the economy exchange rates are key prices in the U.S. econ- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

796 Federal Reserve Bulletin • September 1994 omy, with significant implications for the vol- picked up as well. Nonetheless, growth of the umes of exports and imports as well as for the monetary aggregates remains damped, as banks prices of imports and domestically produced have relied heavily on nondeposit sources of items that compete with imports. The foreign funds to finance loan growth. exchange value of the dollar can also provide Expansion of M2 has been quite slow this year, useful insights into inflation expectations. If we leaving this aggregate near the lower end of its 1 conduct an appropriate monetary policy—and percent to 5 percent annual range. M3 actually appropriate economic policies more general- has edged down, and thus is just below its 0 ly—we shall achieve our goals of solid economic percent to 4 percent range for 1994. The weakgrowth and price stability, and such economic ness in the broader aggregates has not been results will ensure that dollar-denominated assets reflected in the growth of income again this year, remain attractive to global investors, which is representing a continuation of the substantial essential to the dollar's continuing role as the increases in velocity that we have experienced world's principal reserve currency. over the past few years. The factors behind this Rising interest rates and considerable volatility behavior, however, have changed somewhat. in financial markets do not seem to have slowed The diversion of savings funds from deposits to overall credit flows this year. At an annual rate of bond and stock mutual funds, which sharply about 5Va percent through May, domestic nonfi- depressed money growth in past years, seems to nancial sector debt has increased within its 4 have slowed substantially; the experience with percent to 8 percent monitoring range. The com- capital losses this spring apparently has heightposition of debt growth, however, has differed ened some investors' appreciation of the risks of from the patterns of the previous few years. such instruments. On the other hand, rising Expansion of federal debt has slowed as the short-term market interest rates, combined with actions of the Congress and the Administration the usual lag in the adjustment of deposit rates, as well as cyclical forces have narrowed the have been a significant restraint on growth of the budget deficit considerably. The total debt of aggregates this year, in contrast with 1992 and businesses, households, and state and local gov- 1993. ernments, by contrast, has risen this year at a The increases in market rates this year have brisker pace, though growth has remained quite exerted a particular drag on the narrower monemoderate in comparison with the average expe- tary aggregates, as well as on the closely related rience of recent decades. The pickup this year reserves and monetary base measures. Ml has indicates both that private borrowers have be- expanded at only a 4 percent rate so far this year, come less cautious about taking on debt and that compared with IOV2 percent increases in each of lenders have become more comfortable lending the previous two years. Mi's velocity has conto them. Although household debt-income ratios tinued to fluctuate sharply, limiting its usefulness remain high, debt-service burdens have fallen in formulating and interpreting monetary policy. appreciably, partly reflecting the refinancing of The growth of Ml this year would have been mortgages at lower interest rates. The lower debt even lower were it not for continued heavy burdens evidently have fostered a more favor- demands for U.S. currency abroad. Flows of able attitude toward credit among households, currency overseas have an even greater effect and consumer installment borrowing has accel- proportionately on the monetary base, which has erated, with strong growth of consumer loans at grown rapidly this year despite declines in the banks. Banks have been increasingly willing to reserves of depository institutions. extend credit, easing their terms and standards In reviewing its ranges for money growth in on business loans considerably. In addition, 1994, the FOMC noted that further increases in some firms have turned to banks for financing velocity of M2 and M3 were likely. Although because of the turbulence in bond and stock yields on deposits will probably continue to rise markets this spring. Total bank lending has further in lagged response to increases in market strengthened materially and, with continued acrates, the wider rate disadvantage of deposits is quisitions of securities, total bank credit has likely to persist, and savers will continue to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 797 redirect flows into market instruments. As a regarding adjustments to the stance of monetary result, growth of both aggregates near the lower policy. bounds of their 1994 ranges is considered to be We expect that expansion of money and credit consistent with achieving our objectives for eco- within the ranges we have established will be nomic performance, and the ranges were left consistent with continuation of good economic unchanged. performance. With appropriate monetary poli- The Committee also decided on a provisional cies, the Board members and Reserve Bank basis to carry forward the current ranges for the presidents see the economy settling into more monetary aggregates to 1995. We were not con- moderate rates of growth over the next six quarfident that we could predict with sufficient accu- ters and inflation remaining relatively subdued. racy the money-income relationships that were Specifically, the central tendencies of our forelikely to prevail next year to modify the ranges. casts are for real GDP to expand 3 percent to 3!/4 Moreover, further permanent reductions of the percent over 1994 and 2Vi percent to 23/4 percent monetary ranges did not seem necessary, as next year. The consumer price index is projected those ranges are already low enough to be con- to increase 23/t percent to 3 percent this year. In sistent with the goal of price stability and maxi- 1995, inflation may be about the same as in 1994 mum sustainable economic growth, assuming an or slightly higher; the recent depreciation in the eventual return to more stable velocity behavior. dollar is likely to put upward pressure on infla- From that point of view, we felt that maintenance tion over the next year if it is not reversed. With of the current monetary ranges would give the the pace of hiring likely to about match that of clearest indication of the long-run intentions of labor force growth, the unemployment rate is policy. expected to remain close to its recent level. Regarding domestic nonfinancial sector debt, You also asked for economic projections for we made no adjustment to this year's monitoring 1996. I fully appreciate your purpose in requestrange but elected to set a provisional monitoring ing this information. However, my colleagues range for 1995 of 3 percent to 7 percent, a and I do not think we can best communicate our percentage point lower than this year's. A lower policy intentions through additional numerical range would conform with some deceleration in forecasts. Rather, we believe our intentions are nominal income, in the process of containing best conveyed in terms of our declared objective inflation and ultimately making progress toward of fostering as much growth of output and emprice stability. The reduction is not intended to ployment as can be achieved without placing signal an increased emphasis on the debt mea- destabilizing inflationary pressures on productive sure, but it is supported by our view that rapid resources. There is considerable uncertainty debt growth, if sustained, can eventually lead to about what that goal implies for the expansion of significant imbalances that are inimical to stable, GDP and rates of unemployment. noninflationary growth. As usual, we shall re- That said, it may be useful to note that the view carefully all of the provisional ranges for assumptions underlying the medium-term projec- 1995 in February. tions provided to you by the Administration and Given the rapid pace of financial change, con- the Congressional Budget Office (CBO) are siderable uncertainties continue to attend the within the mainstream of thinking among acarelationships of all of the aggregates to the per- demics and private business economists. These formance of the economy and inflation, and we projections do not attempt to anticipate cyclical do not expect in the near term to increase the movements but instead represent estimates of weight accorded in policy formulation to these the likely performance of the economy in the measures. However, the processes of portfolio neighborhood of its potential. The Administrareallocation that have generated these recent tion, for example, projected in its most recent shifts may be slowing. We shall continue to forecast that the economy will expand at a 2.5 monitor monetary growth, and financial flows percent rate in the second half of the 1990s and more generally, for information about the course unemployment will average 6.1 percent. These of the economy and prices in coming to decisions projections are consistent with common esti- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

798 Federal Reserve Bulletin • September 1994 mates of the economy's potential growth rate and perienced difficulty in expanding production to fall within the range of typical estimates of the meet rising demand, we would also expect to see so-called "natural rate" of unemployment. increasingly frequent signs of shortages of goods Uncertainties around these estimates arise be- as well as labor. Businesses might have difficulty cause identifying economic relationships is al- in obtaining certain materials. Vendor perforways difficult, partly owing to limitations of the mance would deteriorate, and lead times on delivdata. But more fundamentally, all policymakers eries of new orders would increase. Pressures on recognize that notions of potential GDP growth supplies of materials and commodities would be and the natural rate of unemployment are consid- reflected in rising prices of these items. erable simplifications, useful in conceptual mod- Of course, we would not expect to see these els but subject to a variety of real world compli- phenomena occur simultaneously throughout the cations. Our economy is a complex, dynamic economy—quite the contrary. And, to a degree, system, comprising countless and diverse house- these symptoms occur in a few sectors even in holds, firms, services, products, and prices, inter- noninflationary economies. But a noticeable acting in a multitude of markets. Estimates of step-up in their incidence could constitute evimacroeconomic relationships, as best we can dence of an incipient inflationary process. make them, are useful starting points for analy- In recent months, we have seen some of these sis—but they are just starting points. signs. There are reports of shortages of some Given questions about the aggregate relation- types of labor—construction workers and truck ships, policymakers need to look below the sur- drivers, for instance. Indexes of vendor perforface, in markets themselves, for evidence of tight- mance have deteriorated considerably, and manness that might indicate whether inflationary ufacturers are paying higher prices for materials pressures are indeed building. One important used in their production processes. As yet, these source of such evidence is the reports we receive sorts of indications do not seem to be widespread from our Reserve Banks through their extensive across the economy. Nonetheless, we shall need contacts in their communities. These reports are to be particularly alert to these emerging signs in released to the public in the "beige book" and are considering further adjustments to policy in the updated—frequently on the basis of confidential period ahead. information from individual firms and financial Financial flows may also impart useful warnings institutions—by the Reserve Bank officials at our of price pressures. For example, persistent unsusmeetings and through normal intermeeting com- tainably low real interest rates might prompt very munications. Another source of useful informa- rapid credit growth, as expectations of price intion is individual industries and trade groups, creases led households and firms to accelerate which provide many timely indicators that are purchases of durable goods and equipment and sensitive to supply-demand conditions in particu- finance these expenditures by stepping up the lar sectors. pace of borrowing. Although consumer borrowing If the economy were nearing capacity, we has accelerated considerably of late, overall debt would expect to see certain patterns in the statis- growth has so far remained moderate. tical and anecdotal information with increasing In light of the uncertainties about aggregate frequency and intensity. Reports of shortages of measures of our economic potential, the Federal skilled labor, strikes, and instances of difficulties Reserve cannot rely heavily on any one estimate in finding workers in specific regions all would be of either the natural rate of unemployment or more likely. To attract additional workers, em- potential GDP growth. Most important, we have ployers would presumably step up their use of no intention of setting artificial limits on employwant ads and might begin to use nonstandard ment or growth. Indeed, the Federal Reserve techniques, such as signing or recruiting bonuses. would be pleased to see more rapid output growth More firms might choose to bring on less skilled and lower unemployment than projected by foreworkers and train them on the job. All of these casters such as the CBO and the Administration— steps in themselves could add to costs and suggest provided they were sustainable and consistent developing inflationary imbalances. As firms ex- with approaching price stability. I should note, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 799 however, that most Federal Reserve policymak- in last year's budget agreement was a significant ers would not regard the inflation projections of step in putting fiscal policy on a more sustainable these other forecasters, which generally do not long-run path. Budget deficit reduction has foresee further progress toward price stability proved to be particularly timely, by reducing the over the medium term, as a desirable outcome. government's claim on savings just as households A more significant issue for economic policy- and firms are seeking more capital to finance makers than the precise values of such estimates investments. But under current law, the deficit as is what can be done to maximize sustainable a percentage of GDP will begin to expand again as employment and economic growth. We need, for we move into the next century, with unacceptable example, to give careful attention to the problem consequences for financial stability and economic of unemployment, as noted by the Group of Seven growth. The primary cause of this increase will be leaders at their recent summit. We could raise federal outlays, which will almost surely again be output and living standards around the world and rising at a pace that will exceed the growth of our at the same time ease many social problems if tax base. Only by reducing the growth in spending more people were working. Here at home, nearly is ultimate balance achievable. 8 million Americans are looking for work. At this As I have emphasized many times, the Federal stage of the business cycle—having experienced Reserve can also contribute to the achievement almost forty months of expansion and particularly of our overriding goal—maximum sustainable strong growth recently—most of this unemploy- economic growth—by pursuing and ultimately ment probably is not due to a shortfall in aggregate achieving a stable price level. Without the uncerdemand. Rather, a good deal of it is likely "fric- tainties engendered by inflation, households and tional," reflecting the ordinary process of workers firms are better able to plan for the future. And moving between jobs, or "structural," resulting firms focus on maximizing profitability by holdfrom longer-term mismatches between workers ing down costs and increasing productivity rather and available jobs. Monetary policy, which works than by using inflationary conditions to support mainly by influencing aggregate demand, is not price increases. There is some evidence to sugsuited to addressing such problems. But we ought gest that the stronger trend of productivity to be encouraging other measures to increase the growth we have witnessed over the recent past is flexibility of our workforce and labor markets. due, at least partly, to the beneficial effects of Improving education and training and facilitating low rates of inflation. better and more rapid matching of workers with Our nation has made considerable progress in jobs are essential elements in making more effec- putting the economy on a sound footing in the tive use of the U.S. labor force. Just as important, past few years. To preserve and extend these the Congress should avoid enacting policies that advances, our monetary and fiscal policies will create impediments to the efficient movement of need to remain disciplined and focused on our individuals across regions, industries, and occu- long-term objectives; we would be foolish to pations, or that unduly discourage the hiring of squander our recent gains for near-term benefits those seeking work. Competitive markets have that would prove ephemeral. Indeed, by fostershown a remarkable ability to create rising stan- ing progress toward price stability, achieving dards of living when left free to function. lower federal budget deficits, and encouraging The Congress and the Administration also can competitive markets both here and abroad, we continue to contribute to the growth of our econ- will help ensure the continued vitality of our omy's capital and productivity through a sound nation's economy now and for many years into fiscal policy. The extension of the spending caps the future. • Chairman Greenspan presented similar testimony before the Subcommittee on Economic Growth and Credit Formation of the Committee on Banking, Finance and Urban Affairs, U.S. House of Representatives, July 22, 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

800 Announcements JANET L. YELLEN: APPOINTMENT AS A • Republic National Bank of New York, to MEMBER OF THE BOARD OF GOVERNORS establish a commercial bank subsidiary, Republic National Bank of New York (Mexico) • Chase Manhattan Overseas Banking Corp., On April 22, 1994, President Clinton announced Wilmington, Delaware, to establish a commercial his intention to nominate Janet L. Yellen as a bank subsidiary, Chase Manhattan,Bank (Mexico) member of the Board of Governors. Dr. Yellen • NationsBank Overseas Corp., Charlotte, North was subsequently confirmed by the Senate on Carolina, to establish a commercial bank subsidi- August 11 and took the oath of office, administered ary, NationsBank de Mexico by Chairman Greenspan, on August 12. The text • BankAmerica International Financial Corp., of the White House announcement appears on San Francisco, to establish a commercial bank subpage 724 of the August 1994 Federal Reserve sidiary, Bank of America Mexico, S.A. Bulletin. ADOPTION OF SUPERVISORY STATEMENT APPROVAL OF APPLICATIONS BY SEVEN U.S. TO HELP EASE FINANCIAL STRESS IN AREAS BANKING ORGANIZATIONS TO ESTABLISH AFFECTED BY FLOODING OPERATIONS IN MEXICO The Federal Reserve Board on July 29, 1994, The Federal Reserve Board on July 27, 1994, announced a series of steps designed to help ease approved applications of seven U.S. banking orga- financial stress in areas affected by recent flooding nizations to establish operations in Mexico under in Alabama, Florida, and Georgia. provisions of the North American Free Trade A supervisory statement adopted by the Board Agreement (NAFTA). encourages financial institutions to work construc- NAFTA permits a U.S. or Canadian investor to tively with borrowers who are experiencing diffiacquire a Mexican bank subsidiary or to form a culty because of the flooding. financial group. Mexican regulations provide that The statement says that banks may find it approapplications to establish banking subsidiaries or priate to ease credit terms to help new borrowers groups must be submitted by July 31. Additional restore their financial strength, consistent with pruapplications could also be accepted later. dent banking practices, and to restructure debt or Applications approved by the Board were the extend repayment terms for existing borrowers. following: The Board also waived appraisal regulations for real estate related transactions affected by the • Citibank Overseas Investment Corp., New flooding and temporarily amended its Regulation Z Castle, Delaware, to establish a financial holding (Truth in Lending) to provide relief under waiver company, Grupo Financiero Citibank, S.A. rules so that borrowers may gain ready access to • Morgan Guaranty International Finance Corp., loan funds when they use their primary dwelling as New York, to establish a financial holding com- collateral for a loan. pany, J.P. Morgan Grupo Financiero, S.A. Under the right of rescission, a borrower nor- • Chemical International Finance, Ltd., mally has three business days to cancel a loan New York, to establish a financial holding com- contract when it is secured by the borrower's prinpany, Grupo Financiero Chemical, S.A. cipal dwelling. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

801 DECISION BY THE BOARD ON THE tional bank product (a loan, discount, deposit, or PARTICIPATION OF THE FEDERAL RESERVE trust service) from that bank. BANKS IN THE ELECTRONIC FEDERAL TAX The final rule extends this statutory exception to PAYMENT SYSTEM allow bank holding company affiliates, bank and nonbank, to offer package discounts on traditional The Federal Reserve Board determined that the bank products. The final rule also permits bank responsibilities for the development and operation holding company affiliates to offer a discount on of the new Electronic Federal Tax Payment System securities brokerage services on condition that a (EFTPS) do not represent the best role for the customer obtain a traditional bank product from central bank. Consequently, the Federal Reserve itself or from an affiliate. The final rule becomes Banks will not submit a formal response to the effective September 2, 1994. Treasury's Invitation for Expressions of Interest The proposed rule would permit a bank holding (IEI) for the EFTPS. company or its nonbank subsidiary to offer a dis- As fiscal agents of the United States, the Federal count on its products on condition that a customer Reserve Banks will continue to work closely with obtain any other product from that company or the Treasury to improve the tax collection mecha- subsidiary or from any of its nonbank affiliates. nism and to support the Treasury's implementa- This exception would apply only when none of the tion of the new system. The new electronic tax packaged products is being offered by a bank. system will not affect the Federal Reserve's current Comments on the proposed rule are due Septemresponsibility to operate the Treasury tax and loan ber 17, 1994. program. EFTPS is designed to modernize the federal tax payment system by collecting electronically more PROPOSED ACTIONS than 100 million tax payments per year from businesses and quarterly estimated filers. It also will The Federal Reserve Board on July 5, 1994, provide the Treasury and the Federal Reserve with extended the comment period on its proposal to the information needed to manage the Treasury's amend Regulation DD (Truth in Savings) dealing cash flows and to carry out monetary policy. with crediting and compounding practices that Responses to the IEI were due July 13. would produce an annual percentage yield (APY) reflecting the time value of money. At the same time, the Board published an alternative approach REGULATION Y: FINAL AMENDMENTS AND for APY calculations that would allow institutions PROPOSAL FOR AN ADDITIONAL to disclose an APY equal to the contract interest AMENDMENT rate on time accounts with maturities greater than one year that do not compound interest but The Federal Reserve Board on July 27, 1994, pay interest at least annually. Comments on both announced adoption of final amendments to the the proposal and the alternative approach were antitying provisions of Regulation Y (Bank Hold- requested by September 6. ing Companies and Change in Bank Control). The The Federal Reserve Board on July 6, 1994, Board also proposed for public comment an addi- requested public comment on a proposal to provide tional amendment to the antitying provisions. an alternative to the current test used to measure Section 106(b) of the Bank Holding Company whether a section 20 subsidiary is in compliance Act Amendments of 1970 generally prohibits a with the "engaged principally" criterion of secbank from tying its own products, or tying its tion 20 of the Glass-Steagall Act. Section 20 proproducts to those of an affiliate. The Board's Regu- hibits a member bank from being affiliated with a lation Y applies section 106 to bank holding com- company that is "engaged principally" in underpanies and their nonbank subsidiaries as if they writing and dealing in ineligible securities. Comwere banks. A statutory exception to these require- ments were requested by August 12, 1994. ments allows a bank to discount any product or The Federal Reserve Board on July 13, 1994, service on condition that a customer obtain a tradi- requested public comment on a proposal to update Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

802 Federal Reserve Bulletin • September 1994 its policies on "Privately Operated Large-Dollar includes OTC stocks qualifying under Board Funds Transfer Networks" and "Offshore Dollar- criteria and also includes all OTC stocks desig- Clearing and Netting Systems" and integrate those nated as NMS securities. Additional NMS securipolicies into a single policy statement on "Pri- ties may be added in the interim between quarterly vately Operated Large-Dollar Multilateral Netting Board publications; these securities are immedi- Systems." Comments are requested by October 17, ately marginable upon designation as NMS 1994. securities. The Foreign List specifies those foreign equity securities that are eligible for margin treatment at PUBLICATION OF REVISED LISTS OF OTC broker-dealers. There was one addition but no STOCKS AND OF FOREIGN MARGIN STOCKS deletions to the Foreign List, which now contains 684 foreign equity securities. The Federal Reserve Board on July 22, 1994, published a revised list of over-the-counter (OTC) stocks that are subject to its margin regulations CHANGES IN BOARD STAFF (OTC List). Also published was a revised List of Foreign Margin Stocks (Foreign List) for foreign The Board of Governors announced on August 4, equity securities that meet the criteria in Regula- 1994, the appointments of Thomas A. Connors and tion T (Credit by Brokers and Dealers). These lists Catherine L. Mann to the official staff as Assistant are published for the information of lenders and the Directors in the Division of International Finance. general public. They were effective August 8, 1994, Mr. Connors joined the Board's staff in Septemand supersede the previous lists that were effective ber 1977 as an economist in the International May 9, 1994. The next publication of the lists is Development Section. In 1982-83, he was on leave scheduled for October 1994. as an adviser and assistant to the U.S. Executive The changes that have been made to the revised Director at the International Monetary Fund. After OTC List, which now contains 3,992 OTC stocks, returning to the Board, he became a senior econoare as follows: mist in the International Development Section and was named chief in 1987. Mr. Connors received his • Two hundred twenty-six stocks have been Ph.D. from the University of Michigan. included for the first time, 174 under National Ms. Mann first joined the Board's staff in 1984 Market System (NMS) designation as an economist in the US. International Transac- • Thirty-five stocks previously on the List have tions Section. In 1991-92, she was on leave as a been removed for substantially failing to meet the Senior Staff Economist at the Council of Economic requirements for continued listing Advisers. She returned to the Board as a senior • Sixty-four stocks have been removed for economist in the U.S. International Transactions reasons such as listing on a national securities Section. She received her Ph.D. from the Massaexchange or involvement in an acquisition. chusetts Institute of Technology. The Board of Governors announced on The OTC List is composed of OTC stocks that August 5, 1994, the promotion of Louise L. Rosehave been determined by the Board to be subject to man from Assistant Director to Associate Director margin requirements in Regulations G (Securities in the Division of Reserve Bank Operations and Credit by Persons Other than Banks, Brokers, or Payment Systems. Ms. Roseman joined the Board's Dealers) T, and U (Credit by Banks for the Purpose staff in 1985 and was promoted to the official staff of Purchasing or Carrying Margin Stocks). It as Assistant Director in 1987. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

803 Minutes of the Federal Open Market Committee Meeting Held on May 17,1994 A meeting of the Federal Open Market Committee Mr. Ettin, Deputy Director, Division of Research was held in the offices of the Board of Governors and Statistics, Board of Governors Mr. Slifman, Associate Director, Division of of the Federal Reserve System in Washing- Research and Statistics, Board of Governors ton, D.C., on Tuesday, May 17, 1994, at 9:00 a.m. Mr. Madigan, Associate Director, Division of Monetary Affairs, Board of Governors Present: Ms. Johnson, Assistant Director, Division of Mr. Greenspan, Chairman International Finance Mr. McDonough, Vice Chairman Ms. Low, Open Market Secretariat Assistant, Mr. Broaddus Division of Monetary Affairs, Board of Mr. Forrestal Governors Mr. Jordan Mr. Kelley Mr. Bennett, Ms. Browne, Messrs. Davis, Mr. La Ware Lang, Rolnick, Rosenblum, and Scheld, Mr. Lindsey Senior Vice Presidents, Federal Reserve Mr. Parry Banks of New York, Boston, Kansas City, Ms. Phillips Philadelphia, Minneapolis, Dallas, and Chicago respectively Messrs. Hoenig, Keehn, and Melzer, Alternate Members of the Federal Open Market Committee Mr. Judd and Ms. White, Vice Presidents, Federal Reserve Banks of San Francisco and Messrs. Boehne, McTeer, and Stern, Presidents of New York respectively the Federal Reserve Banks of Philadelphia, Messrs. Altig and Coughlin, Assistant Vice Dallas, and Minneapolis respectively Presidents, Federal Reserve Banks of Cleveland and St. Louis respectively Ms. Minehan, First Vice President, Federal Reserve Bank of Boston By unanimous vote, the minutes of the meeting of the Federal Open Market Committee held on Mr. Kohn, Secretary and Economist March 22, 1994, were approved. Mr. Bernard, Deputy Secretary Mr. Coyne, Assistant Secretary The Manager for Foreign Operations reported on Mr. Gillum, Assistant Secretary developments in foreign exchange markets and on Mr. Mattingly, General Counsel System open market transactions in foreign curren- Mr. Patrikis, Deputy General Counsel cies during the period March 22, 1994, through Mr. Prell, Economist May 16, 1994. By unanimous vote, the Committee Mr. Truman, Economist ratified these transactions. Messrs. Goodfriend, Lindsey, Promisel, Simpson, The Manager for Domestic Operations reported Stockton, and Ms. Tschinkel, Associate on developments in domestic financial markets and Economists on System open market transactions in government securities and federal agency obligations during the Ms. Lovett, Manager for Domestic Operations, period March 22, 1994, through May 16, 1994. By System Open Market Account unanimous vote, the Committee ratified these Mr. Fisher, Manager for Foreign Operations, transactions. System Open Market Account Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

804 Federal Reserve Bulletin • September 1994 The Committee then turned to a discussion of the Retail sales were estimated to have fallen in economic and financial outlook and the implemen- April after two months of very large increases. tation of monetary policy over the intermeeting Despite the April decline, which was widespread period ahead. A summary of the economic and by type of retail outlet, outlays were considerably financial information available at the time of the above the first-quarter average. Sales of new and meeting and of the Committee's discussion is pro- existing homes posted significant gains in March vided below, followed by the domestic policy although they remained below their fourth-quarter directive that was approved by the Committee and averages. Housing starts decreased slightly in April issued to the Federal Reserve Bank of New York. but were well above the depressed winter pace. The The information reviewed at this meeting sug- third consecutive monthly gain in multifamily starts gested that economic activity had expanded sub- was more than offset by a decline in single-family stantially on balance thus far in 1994. Favorable starts. business expectations and buoyant consumer senti- Real business fixed investment continued to ment in the context of stronger gains in employ- increase rapidly in the first quarter, but at a less ment appeared to have sustained strong growth in robust pace than in the fourth quarter of 1993. domestic final demand. Broad measures of inflation Outlays for producers durable equipment posted had remained subdued and labor cost increases had another sizable advance, spending for computing been moderate, though prices of industrial materi- equipment surged again, and purchases of most als had continued to rise. other types of equipment also continued to trend Nonfarm payroll employment increased sharply up. Moreover, business demand for automobiles in March and April, in part reflecting a rebound in and trucks remained strong. Outlays for nonresiindustries affected by earlier severe winter weather; dential structures declined sharply in the first quarfor the first four months of the year, the average ter, although construction activity showed some monthly rise exceeded the improved pace of the recovery in March after the disruptions associated fourth quarter. Further large advances in employ- with severe weather during January and February. ment in the March-April period were recorded in Business inventories declined in March, reversthe services sector, notably at personnel supply ing part of the large run-up in stocks that had services firms; hiring in construction was strong occurred in the first two months of the year. For the after earlier weather-related losses; and the number first quarter as a whole, inventories rose at a of jobs in manufacturing continued to expand, slightly slower pace than in the second half of last although at a somewhat slower pace than in previ- year. In manufacturing, the accumulation in the ous months. The civilian unemployment rate regis- first quarter retraced much of the drawdown that tered another slight decline in April, to 6.4 percent, had taken place in previous months; the inventoryand the average workweek of production or nonsu- to-shipments ratio, already at a low level, edged pervisory workers remained at an unusually high still lower. Wholesale inventories were down on level. balance over the first quarter, with a large March Industrial production was up appreciably further decline more than retracing increases earlier in the in April, with increases widespread across sectors. year; the ratio of inventories to sales was well The pace of motor vehicle assemblies slowed, but below the range prevailing over the last several much of the indicated slowdown reflected the years. Retail inventories expanded modestly in the effects of seasonal adjustment, which called for first quarter, and the inventory-to-sales ratio fell increases at a time when manufacturing operations slightly. already were at levels close to capacity. Output of The nominal deficit on U.S. trade in goods and public utilities fell again, as electricity generation services was larger on average in January and dropped with the return to less severe weather February than it had been in the fourth quarter. The patterns. Rates of industrial capacity utilization had value of exports in the January-February period risen rapidly in recent months and were at very was sharply below the unusually strong level in the high levels in many industries—especially in motor fourth quarter but was slightly higher than the vehicles, petroleum refining, lumber, and primary levels recorded in the first three quarters of 1993. metals. Exports were down in virtually all major trade Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee Meeting 805 categories; one important exception was semicon- during the intermeeting period. The directive stated ductors, for which exports continued to trend that in the context of the Committee's long-run higher. Imports in the two-month period fell by less objectives for price stability and sustainable ecothan exports; nearly all of the decline reflected nomic growth, and giving careful consideration to reduced oil imports. Available indicators for the economic, financial, and monetary developments, first quarter pointed to recovery in economic activ- slightly greater or slightly lesser reserve restraint ity at a moderate pace on average in the major might be acceptable during the intermeeting foreign industrial countries. Signs of recovery period. The reserve conditions associated with this ranged from quite tentative in Japan to relatively directive were expected to be consistent with modwell established in the United Kingdom and erate growth of M2 and M3 over the first half of Canada. 1994. Indexes of consumer and producer prices had Immediately after the meeting, open market increased slightly thus far in 1994. In April, con- operations were directed toward implementing the sumer prices posted their smallest rise since Janu- slightly less accommodative degree of reserve presary; food prices were up a bit further, but energy sure sought by the Committee. Subsequently, on prices retraced their March run-up. Excluding the April 18, against the background of incoming data food and energy components of the index, con- suggesting considerable momentum and diminishsumer prices edged up in April, and over the twelve ing slack in the economy and of indications that months ending in April these prices increased less financial markets were less likely to be destabilized than they had over the previous twelve months. by a further policy action, the degree of accommo- Producer prices of finished goods declined a little dation in reserve pressures was reduced a little in April as prices of finished foods and energy further. The federal funds rate rose XA percentage moved down; for items other than food and energy, point, to 3Vi percent, after the initial policy action; prices were up slightly in April and for the twelve following the second policy move, the funds rate months ending in April. At earlier stages of pro- went up another XA percentage point and generally cessing, the index of producer prices of crude mate- remained near 33A percent. Over the intermeeting rials other than food and energy was substantially period, adjustment plus seasonal borrowing averabove its year-ago level, despite a small drop in aged slightly above anticipated levels. April. At the intermediate stage, the prices of some Most market interest rates increased by more important construction materials had increased than the federal funds rate over the period since the sharply although, overall, prices of nonfood, non- March meeting, with the largest increases occurenergy goods had risen only modestly over the past ring at intermediate maturities. Weakness in the twelve months. dollar as well as the release of data suggesting Increases in labor costs continued to moderate in considerable vigor in economic activity appeared early 1994. The employment cost index for private to have contributed to the upward pressure on industry workers rose more slowly in the first quar- market rates. The bank prime rate was raised ter of 1994 than in any quarter of 1993. The slow- 3A percentage point, to 63A percent, while major down reflected more moderate growth in both indexes of stock prices fell substantially. wages and salaries and benefit costs. Hourly com- In foreign exchange markets, the trade-weighted pensation increased at a slightly slower pace over value of the dollar in terms of the other G-10 curthe twelve months ending in March 1994 than over rencies declined somewhat further on balance over the previous year. In April, average hourly earnings the intermeeting period. The dollar's depreciation of production or nonsupervisory workers on non- occurred despite the implementation of less accomfarm payrolls increased moderately after having modative policy actions in the United States and changed little over February and March. monetary easing moves in several key foreign At its meeting on March 22, 1994, the Commit- countries. Market concerns about political developtee adopted a directive that called for a slight ments in Japan as well as a worsened outlook for increase in the degree of pressure on reserve posi- progress toward more open trading relationships tions and that did not include a presumption about and for a more stimulative fiscal policy in that the likely direction of any adjustment to policy country contributed to downward pressure on the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

806 Federal Reserve Bulletin • September 1994 dollar. Against the backdrop of a falling dollar, U.S. limited margins of slack in labor and product authorities conducted intervention operations on markets over the forecast horizon, little or no fur- April 29 and again on May 4. The latter operations ther reduction in the core rate of inflation was were coupled with a statement by Treasury Secre- anticipated. tary Bentsen indicating that intervention was being In the Committee's discussion of current and undertaken in response to recent movements in prospective developments, members commented exchange markets that had gone beyond what could on widespread indications, both statistical and be justified by economic fundamentals and was anecdotal, of considerable momentum in the ecobeing conducted in concert with operations by nomic expansion. Business activity seemed to be other major countries. Subsequent to these actions, rebounding smartly from the disruptive effects of the dollar retraced part of its earlier decline. unusually severe winter weather, and it appeared Growth of M2 and M3 turned up, on balance, in that the expansion over the first half of the year was March and April despite the rising short-term likely to be a little stronger than had been expected opportunity costs of holding deposits. The strength- at the time of the March meeting. A deceleration in ening of these aggregates seemed to be related to a activity still seemed to be in train for the second reassessment by households of the relative attrac- half, but the extent of such a slowing was an tiveness of investing in capital market instruments; important source of uncertainty in the outlook. The capital losses sparked substantial net redemptions members continued to see moderate growth at a at bond mutual funds over March and April that rate in line with or slightly above the economy's were accompanied by a surge in flows to retail potential as the most likely prospect, but the overall money market funds and slower runoffs of small momentum of the expansion and the still accomtime deposits. For the year through April, M2 modative stance of monetary policy suggested that expanded at a rate somewhat below the middle of there was an appreciable risk of faster growth for a its range for 1994, and M3 at a pace somewhat period, with consequent implications for greater above the lower end of its range. Total domestic pressures on resources. At the same time, the nonfinancial debt continued to expand at a moder- members saw relatively few signs of the kinds of ate rate over recent months. imbalances that would pose a significant downside The staff forecast prepared for this meeting sug- potential for the economy, although some caugested that economic activity, after rebounding tioned that the rise in long-term interest rates, from the disruptions caused by adverse weather recently weaker data on production and sales, and conditions earlier in the year, would expand in the continuing anxiety about job security in an environsecond half of 1994 at a rate close to the growth of ment of corporate restructuring contributed elethe economy's potential. Consumer spending, ments of fragility to what was otherwise a healthy which had outpaced gains in household income for outlook. The near-term prospects for inflation some time, was projected to slow to a growth rate were favorable. Wage and price trends generally more in line with the expansion of income; with remained moderate; the persisting high rate of busipent-up demands apparently reduced and some- ness investment bode well for further enhancewhat higher interest rates exerting a damping effect, ments of productivity; and competitive pressures, much of the slowing was expected to be centered including those from imported goods, were on outlays for durable goods. Business fixed invest- restraining efforts by firms to raise prices. The ment would be restrained by the slower growth of members were concerned, however, that in an envibusiness output and the associated moderation of ronment in which slack in the economy already had corporate cash flows but would continue to advance been reduced to a fairly low level and could decline at a faster rate than overall economic activity. further in the quarters ahead, inflation could begin Homebuilding was projected to remain at a pace to rise unless monetary policy were adjusted furthat was relatively robust compared with the rate of ther from its accommodative stance. recent years, though a bit below that of the fourth In their comments about developments across quarter. The restraint on output growth from fed- the nation, members took note of the considerable eral spending cutbacks and weak export demand strength in economic conditions in many parts of was expected to diminish somewhat. In light of the country. However, they also recognized that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee Meeting 807 some parts of the nation were experiencing rela- recently increased cost of external capital associtively subdued growth and that economic activity ated with higher interest rates and lower equity remained depressed in other areas such as Southern prices. It was noted in this connection that order California and Hawaii. The strong forward momen- books at producers of capital equipment had grown tum in the economy was most clearly evident in considerably. Nonresidential construction appeared interest-sensitive sectors, including motor vehicles, to be rebounding from the disruptive effects of other durable goods, and housing. The rise in inter- unusually severe winter weather conditions; howest rates over the course of recent months was cited ever, the pattern of construction activity across the by business contacts as a potential source of nation was mixed, with some areas of the country restraint on interest-sensitive expenditures, but thus displaying considerable strength in activity and far relatively few contacts had reported actual other areas still depressed. The construction of examples of adverse interest rate effects on spend- office buildings for the most part remained at very ing. While higher rates would constrain aggregate low levels, but anecdotal reports indicated that demand going forward, their effects probably markets for office space, especially those that had would be offset in part by more aggressive lending been hard hit in recent years, seemed to be improvpractices at banks and other institutions. At the ing considerably in some locales. Business inventosame time, reports of industries that were operating ries remained quite lean by historical standards, at or near capacity limits were becoming more and some reports suggested that efforts to augment numerous, and capacity constraints were said to be stocks had been negated by strong sales. With limiting some sales. survey reports indicating that order backlogs had With regard to the outlook for key sectors of the grown and lead times on materials deliveries had economy, consumer expenditures were viewed by lengthened, the possibility was increasing that many members as likely to be well maintained, desired inventory ratios might be adjusted upward particularly for motor vehicles and other consumer and some pickup in inventory investment might get durables. Reports from various parts of the country under way, especially in manufacturing where indicated that sales had tended in many areas to stocks-to-sales ratios recently had fallen to new exceed retailers' expectations by a considerable lows. margin in recent months. Some members noted, Residential construction was indicated to be however, that sales had been less ebullient since robust across much of the country, with activity late winter and cited factors that might work to picking up rapidly in the aftermath of the unusually restrain somewhat the growth of consumer spend- severe winter. The affordability of housing ing. These included high and rising debt levels, remained high by historical standards, and the declines in household wealth owing to the drop in appeal of home ownership had been enhanced stock and bond prices, and the effects on consumer somewhat by the apparent firming of house prices confidence of ongoing workforce reductions associ- over the past year. In these circumstances, housing ated with business restructuring. Higher interest activity had been well sustained, although there rates also might limit the pace at which pent-up were some indications that the higher mortgage demands would continue to be satisfied. On bal- rates now prevailing had begun to damp residential ance, in the view of a number of members, growth investment. in consumer spending seemed likely to moderate to The foreign trade sector was expected to cona pace close to the growth in incomes. tinue to exert some drag on economic growth, but Members expected business fixed investment to the members saw this as likely to lessen as an continue to expand at a pace substantially above anticipated gradual pickup in economic activity that of the economy as a whole. With production among key trading partners bolstered demand for straining capacity limits in a number of industries U.S. exports while imports were restrained by a and firms striving for cost savings and productivity projected moderation in the growth of U.S. domesimprovements to maintain their competitiveness, tic demand. In the view of one member, the export real outlays for producers' durable equipment were sector would tend to sustain and perhaps become likely to stay on a strong upward trend despite an an important stimulus to growth in the United anticipated deceleration in business output and the States as earlier declines in the dollar, taken in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

808 Federal Reserve Bulletin • September 1994 conjunction with technological improvements and apparent—especially in business purchases of higher product quality, enhanced the competitive- capital equipment and consumer spending on housness of U.S. exports. ing, motor vehicles, and other consumer durables. In their discussion of the outlook for prices and At the same time, the constraints on economic wages, the members noted that broad measures of expansion that had been associated with business inflation remained subdued and increases in labor restructuring activities, widespread efforts to costs had been moderate. Nevertheless, they contin- strengthen balance sheets, and other retarding ued to be concerned that inflation could begin to forces had diminished considerably. The financial rise if growth in excess of potential were to persist health of the banking system was greatly improved, and margins of unutilized production resources and banking institutions had evidenced a growing were to shrink further, or even disappear. Produc- willingness to make new loans. Moreover, the tion already had reached capacity limits in a num- demand for bank loans, which had been sluggish ber of industries, including motor vehicles and for several years, now appeared to be on the rise. steel, and prices of some raw materials and inter- While a series of small steps earlier this year had mediate goods had risen substantially over the past already reduced the degree of accommodation year. Ongoing efforts to expand production capac- in monetary policy and inflation was subdued ity through productivity-enhancing investment and for the time being, the members were concerned the hiring of additional workers were likely to be of that continued policy accommodation could be some help in meeting growing demands, but an expected to lead before long to growing pressures increasing number of contacts were reporting that on production resources and to a fresh outbreak of business firms were taking advantage of opportuni- inflation. ties to adjust prices upward. There also were indi- In the circumstances, all the members agreed cations of shortages of qualified workers in some that a further tightening action was needed at this labor markets or industries, but to date there were point; and, in order to better ensure that the remainonly limited signs of upward wage pressures and ing degree of policy accommodation had been these did not seem to signal a near-term emergence largely removed, the adjustment should fully reflect of general upward cost pressures on prices. Indeed, the V2 percentage point increase in the discount rate even with sales strong, many business contacts that the Board of Governors was expected to were reporting that intense competition, in part approve later in the day. The actions taken earlier from imports, was curbing or negating efforts to in the year had been modest in size because of raise prices. Firms were continuing to look prima- concerns that more aggressive steps might generate rily to improvements in productivity and quality to substantial uncertainty and undue disruptions in bolster their profit margins, although there also financial markets, with adverse consequences for were reports that price discounting was lessening the economy. Even though financial markets and that sales promotions were becoming less fre- remained volatile, speculative sentiment and holdquent. Price and wage pressures were most clearly ings seemed to have been reduced to a marked evident and widespread in the construction indus- extent, and financial markets appeared to be in a try, where resource constraints appeared to be most much better position to absorb needed policy pronounced. adjustments. Accordingly, a stronger action proba- In the Committee's discussion of monetary pol- bly would not produce an unduly adverse market icy for the period until the meeting in early July, response and could well have a settling effect on the members favored prompt further action to the markets. A number of members cautioned that remove much of the remaining accommodation the Committee could not be sure that today's polin the stance of monetary policy, at least as mea- icy actions, along with those implemented earlier sured by real short-term interest rates. Many mem- this year, had produced a policy stance that would bers commented that the expansion was on a solid foster economic growth at a sustainable, nonand self-sustaining basis and appeared to have inflationary pace. Thus, the Committee would have more underlying strength than they had foreseen to remain alert to economic and financial develearlier. The stimulative effects of an expansion- opments that might signal the need for further ary monetary policy had become increasingly tightening. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee Meeting 809 In the Committee's discussion of possible inter- increased sharply in March and April, in part reflecting a meeting adjustments to the degree of reserve rebound in sectors affected by severe winter weather; the civilian unemployment rate fell slightly further in April, pressure, all but one of the members indicated a to 6.4 percent. Industrial production was up appreciably preference for retaining a symmetric directive. in April after a strong rise over the previous two quar- Symmetry would be consistent with a judgment ters. Advance data on retail sales indicate a decline in that further policy adjustment likely would not be April, after very large increases in February and March. needed during the intermeeting period ahead and, Housing starts fell slightly in April but remained well above the depressed winter pace. Orders for nondefense in particular, that additional tightening would not capital goods point to a continued strong uptrend in be triggered unless inflation pressures greater than spending on business equipment, while nonresidential those currently anticipated were to emerge. The building has shown some recovery after severe weather adoption of a symmetric directive would not pre- disrupted construction during January and February. The clude an intermeeting consultation and possible nominal deficit on U.S. trade in goods and services widened on average in January and February from the adjustment by the Chairman on behalf of the fourth-quarter rate. Increases in broad indexes of con- Committee if such were warranted by intermeeting sumer and producer prices remained moderate through developments. One member expressed a preference April, though prices of industrial materials continued to for an asymmetric directive. In his view, a sym- rise. metric directive might be mistakenly interpreted Market interest rates have posted large additional increases since the Committee meeting on March 22, both in the United States and abroad as a signal 1994. In foreign exchange markets, the trade-weighted that the Committee believed that policy neutrality value of the dollar in terms of the other G-10 currencies definitely had been achieved and that there was declined somewhat further on balance over the interno need to allow for the possibility of further meeting period. tightening. Growth of M2 and M3 picked up on average in March and April; for the year through April, M2 expanded at a At the conclusion of the Committee's policy rate somewhat below the middle of its range for 1994 discussion, all the members indicated they could and M3 at a pace somewhat above the bottom of its support a directive that called for increasing some- range. Total domestic nonfinancial debt has expanded at what the degree of pressure on reserve positions, a moderate rate in recent months. The Federal Open Market Committee seeks monetary taking account of a possible increase in the disand financial conditions that will foster price stability count rate, and that did not include a presumption and promote sustainable growth in output. In furtherance about the likely direction of any adjustment to of these objectives, the Committee at its meeting in policy during the intermeeting period. Accordingly, February established ranges for growth of M2 and M3 of in the context of the Committee's long-run objec- 1 to 5 percent and 0 to 4 percent respectively, measured from the fourth quarter of 1993 to the fourth quarter of tives for price stability and sustainable economic 1994. The Committee anticipated that developments growth, and giving careful consideration to ecocontributing to unusual velocity increases could persist nomic, financial, and monetary developments, the during the year and that money growth within these Committee decided that slightly greater or slightly ranges would be consistent with its broad policy objeclesser reserve restraint might be acceptable during tives. The monitoring range for growth of total domestic nonfinancial debt was set at 4 to 8 percent for the year. the intermeeting period. According to a staff analy- The behavior of the monetary aggregates will continue sis, the reserve conditions contemplated at this to be evaluated in the light of progress toward price level meeting would be consistent with modest growth stability, movements in their velocities, and developin M2 and M3 over coming months. ments in the economy and financial markets. At the conclusion of the meeting, the Federal In the implementation of policy for the immediate future, the Committee seeks to increase somewhat the Reserve Bank of New York was authorized and existing degree of pressure on reserve positions, taking directed, until instructed otherwise by the Commitaccount of a possible increase in the discount rate. In the tee, to execute transactions in the System Account context of the Committee's long-run objectives for price in accordance with the following domestic policy stability and sustainable economic growth, and giving directive: careful consideration to economic, financial, and monetary developments, slightly greater reserve restraint or slightly lesser reserve restraint might be acceptable in the intermeeting period. The contemplated reserve con- The information reviewed at this meeting suggests ditions are expected to be consistent with modest growth that economic activity has expanded substantially on in M2 and M3 over coming months. balance thus far in 1994. Nonfarm payroll employment Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

810 Federal Reserve Bulletin • September 1994 Votes for this action: Messrs. Greenspan, It was agreed that the next meeting of the Com- McDonough, Broaddus, Forrestal, Jordan, Kelley, mittee would be held on Tuesday-Wednesday, LaWare, Lindsey, Parry, and Ms. Phillips. Votes July 5-6, 1994. against this action: None. The meeting adjourned at 12:45 p.m. Donald L. Kohn Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

811 Legal Developments FINAL RULE—AMENDMENTS TO REGULATIONS Comptronix Corporation: $.01 par common; G, T, U, AND X 63/4% convertible subordinated debentures The Board of Governors is amending 12 C.F.R. Parts Excel Technology, Inc.: Class A, Warrants (expire 207, 220, 221, and 224, its Regulations G, T, U, and X (Securities Credit Transactions; List of Marginable 09-30-97) OTC Stocks; List of Foreign Margin Stocks). The List of Marginable OTC Stocks (OTC List) is composed of Fibronics International, Inc.: $.05 par common stocks traded over-the-counter (OTC) in the United Geonex Corporation: $.01 par common States that have been determined by the Board of Governors of the Federal Reserve System to be sub- Healthwatch, Inc.: $.01 par common; Class A, Warject to the margin requirements under certain Federal rants (expire 10-31-94); Class B, Warrants (expire Reserve regulations. The List of Foreign Margin 10-31-94) Stocks (Foreign List) is composed of foreign equity securities that have met the Board's eligibility criteria Innovo Group, Inc.: $.01 par common under Regulation T. The OTC List and the Foreign Interpharm Laboratories, Ltd.: Ordinary Shares, NIS; List are published four times a year by the Board. This $.001 par value document sets forth additions to and deletions from the previous OTC List and an addition to the Foreign Lidak Pharmaceuticals: Class B, Warrants (expire List. 05-08-95) Effective August 8, 1994, accordingly, pursuant to Lunn Industries, Inc.: $.01 par common the authority of sections 7 and 23 of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78g and Medical Imaging Centers of America, Inc.: No par 78w), and in accordance with 12 C.F.R. 207.2(k) and common 207.6 (Regulation G), 12 C.F.R. 220.2(u) and 220.17 Mutual Federal Savings Bank: $1.00 par common (Regulation T), and 12 C.F.R. 221.2(j) and 221.7 (Regulation U), there is set forth below a listing of deletions New England Realty Associates Limited Partnership: from and additions to the OTC and an addition to the Depositary receipts evidencing units of limited part- Foreign List. nership interest Deletions from the List of Marginable OTC Quadrex Corporation: $.01 par common Stocks Regal Communications Corporation: $.001 par com- Stocks Removed for Failing Continued Listing mon Requirements Regent Bancshares Corporation: Series A, $.10 par convertible preferred Ampex Corporation: Class A, $.01 par common Reliable Life Insurance Company: Class A, $1.00 par common Biogen, Inc.: Warrants (expire 06-30-94) Sanborn, Inc.: $.01 par common Science Dynamics Corporation: $.01 par common Cambridge Biotech Corporation: $.01 par common Shopsmith, Inc.: No par common CAPX Corporation: Class A, Warrants (07-30-95) Sym-Tek Systems, Inc.: No par common Chariot Entertainment, Inc.: No par common Chemdesign Corporation: $.01 par common USA Classic, Inc.: $.01 par common Chester Holdings Limited: $.001 par common Community Bancshares, Inc.: $1.00 par common Wetterau Properites, Inc.: $.01 par common Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

812 Federal Reserve Bulletin • September 1994 Williams Industries, Inc.: $.10 par common Johnstown Savings Bank (Pennsylvania): $1.00 par common Xsirius Inc.: $.01 par common Kaydon Corporation: $.10 par common Stocks Removed for Listing on a National Securities Exchange or Being Involved in an Lake Shore Bancorp, Inc. (Illinois): No par common Acquisition LGF Bancorp, Inc. (Illinois): $.01 par common Advanced Interventional Systems, Inc.: No par com- Marcus Corporation, The: $1.00 par common mon Mark Controls Corporation: $.01 par common Allied Clinical Laboratories, Inc.: $.01 par common Medisys, Inc.: $.01 par common Alpine Meadows of Tahoe, Inc.: $.25 par common Neworld Bancorp, Inc. (Massachusetts): $1.00 par Bankworcester Corporation (Massachusetts): $.10 par common common Omni Films International, Inc.: $.01 par common Carl Karcher Enterprises, Inc.: No par common On the Border Cafes, Inc.: $.02 par common Centex Telemanagement, Inc.: $.01 par common Citizens, Inc.: Class A, $1.00 par common Park National Corporation: $4.00 par common CMS/Data Corporation: $.01 par common Pennsylvania Enterprises, Inc.: No par common Cooker Restaurant Corporation: No par common Peoples Bancorp of Worcester, Inc.: $.10 par common Cragin Financial Corporation: $.01 par common Peoples Westchester Savings Bank (New York): Curaflex Health Services, Inc.: $.001 par common $1.00 par common Pinpoint Retail Solutions, Inc.: No par common Digital Communications Technology Corporation: $.000025 par common Radiation Systems, Inc.: $1.00 par common Republic Pictures Corporation: $.01 par common Electromedics, Inc.: $.05 par common Energy Ventures, Inc.: $1.00 par common Security Savings Bank, FSB (Michigan): $1.00 par Envirofil, Inc.: $.001 par common common Softimage Inc.: No par common Farm & Home Financial Corp.: $.01 par common Software Toolworks, Inc., The: $.01 par common Federal Savings Bank, The (Connecticut): $.01 par Star Banc Corporation (Ohio): $5.00 par common common Stephen Company, The: $.01 par common First Eastern Corporation: $10.00 par common Summit Health Ltd.: No par common Fortune Bancorp, Inc. (Florida): $.01 par common; Series A, 8% par convertible preferred Takecare, Inc.: $.10 par common Franklin Electronic Publishers, Inc.: No par common Termiflex Corporation: $.10 par common Gateway Financial Corporation: $.01 par common Uniflex, Inc.: $.10 par common General Cable Corporation: $1.00 par common United Wisconsin Services, Inc.: No par common Globalink, Inc.: $.01 par common Grand Casinos, Inc.: $.01 par common Valley Bancorporation (Wisconsin): $.50 par common Grand Valley Gas Company: $.0125 par common VSB Bancorp, Inc. (New Jersey): $.01 par common GWC Corporation: $.01 par common Washington Bancorp, Inc. (New Jersey): $.10 par Healthinfusion, Inc.: $.01 par common common Home Federal Bancorp of Missouri Inc.: $.01 par West Mass Bankshares, Inc. (Massachusetts): $.10 par common common Home Nutritional Services, Inc.: No par common HS Resources, Inc.: $.001 par common Additions to the List of Marginable OTC Stocks Independence Bancorp, Inc. (Pennsylvania): $2.50 par common ABC Bancorp (Georgia): $1.00 par common Interspec, Inc.: $.001 par common Able Telcom Holding Corporation: $.001 par common Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 813 ABR Information Services, Inc.: $.01 par common CNB Financial Corporation: $5.00 par common Acres Gaming Incorporated: $.01 par common Coherent Communications Systems Corporation: Activision, Inc.: $.0001 par common $.01 par common All American Communications, Inc.: $.0001 par com- Cole Taylor Financial Group, Inc.: $.01 par common mon Community First Bankshares, Inc. (North Dakota): Allegiance Banc Corporation (Maryland): $1.00 par Depositary shares common Computalog Ltd.: No par common Alternative Resources Corporation: $.01 par common Consolidated Graphics, Inc.: $.01 par common American Buildings Company: $.01 par common Consolidated Ramrod Gold Corporation: No par com- American Eagle Outfitters, Inc.: No par common mon American Electronic Components, Inc.: No par com- Consolidated Technology Group Ltd.: $.01 par common mon American Homestar Corporation: $.05 par common Continental Waste Industries, Inc.: $.001 par common American National Savings Bank, F.S.B. (Maryland): Credit Depot Corporation: $.001 par common $1.00 par common Crop Growers Corporation: $.01 par common American Publishing Company: Class A, $.01 par Crown Casino Corporation: $.01 par common common Cypros Pharmaceutical Corporation: Class A, American Resource Corporation, Inc.: $.01 par com- Warrants (expire 11-03-97) mon Apogee, Inc.: $.01 par common Data Broadcasting Corporation: $.01 par common Applied Laser Systems: Class A; No par common Daw Technologies, Inc.: $.01 par common Ariad Pharmaceuticals, Inc.: Units (expire 05-20-99) Deeptech International Inc.: $.01 par common Ascend Communications, Inc.: $.001 par common Designatronics Incorporated: $.04 par common Atria Software, Inc.: $.01 par common DeWolfe Companies Inc., The: $.01 par common Aurtex, Inc.: $.001 par common Diametrics Medical, Inc.: $.01 par common Automated Telephone Management Systems, Inc.: Diplomat Corporation: $.0001 par common Series A, $1.00 par cumulative convertible preferred Doubletree Corporation: $.01 par common DT Industries, Inc.: $.01 par common Banponce Corporation: Series A, No par 8.35% noncumulative preferred Educational Development Corporation: $.20 par com- BCB Financial Services Corporation: $2.50 par com- mon mon Emco Limited: No par common Bellwether Exploration Company: No par common Bettis Corporation: $.01 par common Fairfax Bank & Trust Company (Virginia): $1.25 par Bio-Plexus, Inc.: No par common common Boyd Bros. Transportation Inc.: $.001 par common FHP International Corporation: Series A, $.05 par Bradley Pharmaceuticals, Inc.: Class A, No par com- cumulative convertible preferred mon; Class A, Warrants (expire 11-12-96); Class B, Financing for Science International, Inc.: $.01 par Warrants (expire 11-12-96); Class D, Warrants common; Warrants (expire 05-19-99) (expire 12-09-96) First State Corporation: $1.00 par common Brooklyn Bancorp, Inc. (New York): $.01 par com- Fluoroscan Imaging Systems, Inc.: $.0001 par common mon; Warrants (expire 07-11-99) Buckhead America Corporation: $.01 par common FNB Corp.: $2.50 par common Foilmark, Inc.: $.01 par common C-Cube Microsystems, Inc.: $.001 par common Fore Systems, Inc.: $.01 par common Cadiz Land Company, Inc.: $.01 par common Fresh America Corporation: $.01 par common Cambridge Soundworks, Inc.: No par common Frontier Natural Gas Corporation: 12% par convert- Careerstaff Unlimited, Inc.: $.0001 par common ible preferred Carrollton Bancorp (Maryland): $10.00 par common Fusion Systems Corporation: $.01 par common Cascade Bancorp (Oregon): No par common CDP Technologies, Inc.: $.01 par common Gaming World International, Inc.: $.01 par common; CFW Communications Company: No par common Class A, redeemable purchase warrants (expire Chinatek, Inc.: $.001 par common 05-10-99) Cinar Films, Inc.: No par common Gardner Denver Machinery Inc.: $.01 par common Cinergi Pictures Entertainment Inc.: $.01 par common Geerlings & Wade, Inc.: $.01 par common Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

814 Federal Reserve Bulletin • September 1994 Genemedicine Inc.: $.001 par common Merix Corporation: No par common Geoworks: No par common Metrotrans Corporation: $.01 par common GFS Bancorp, Inc. (Iowa): $.01 par common Micom Communications Corporation: $.0000001 par Gold Enterprises, Inc.: $.01 par common common Group Technologies Corporation: $.01 par common Micro-Integration Corporation: $.01 par common Guilford Pharmaceuticals Inc.: $.01 par common Microelectronic Packaging Inc.: No par common Mid Continent Bancshares, Inc. (Kansas): $.10 par HMG Worldwide Corporation: $.01 par common common HMN Financial Inc.: $.01 par common Midisoft Corporation: No par common Hummingbird Communications, Ltd.: No par com- Mity-Lite, Inc.: $.01 par common mon MK Rail Corporation: $.01 par common MLX Corporation: $.01 par common Imax Corporation: No par common Model Imperial, Inc.: $.01 par common Indigo N.V.: NLG $.04 par common Monroe, Inc.: $.01 par common Inhale Therapeutic Systems: No par common Moviefone, Inc.: Class A, $.01 par common Integrity Music Inc.: Class A, $.01 par common Moxham Bank Corporation (Pennsylvania): $2.00 par International Microcomputer Software, Inc.: No par common common MTL, Inc.: $.01 par common Internet Communications Corporation: No par com- Multicare Companies, Inc.: $.01 par common mon Interscience Computer Corporation: No par common; Nam Tai Electronics, Inc.: Redeemable common Warrants (expire 11-15-%) share purchase warrants (expire 09-29-96) Investment Technology Group, Inc.: $.01 par common Network Peripherals, Inc.: $.001 par common New West Eyeworks, Inc.: $.01 par common Jefferson Smurfit Corporation: $.01 par common Noble Roman's, Inc.: No par common Jos. A. Bank Clothiers, Inc.: $.01 par common North American Palladium Ltd.: No par common Northfield Laboratories, Inc.: $.01 par common KBK Capital Corporation: $.01 par common Norwalk Savings Society (Connecticut): $.01 par Kelley Oil Corporation: $1.50 par convertible ex- common changeable preferred NPS Pharmaceuticals Inc.: $.001 par common Kenetech Corporation: Depositary shares Numar Corporation: $.01 par common Lajolla Pharmaceutical Company: $.01 par common; Octagon, Inc.: $.01 par common; Class A, Warrants Warrants (expire 06-03-99) (expire 02-16-99) Lake Ariel Bancorp, Inc. (Pennsylvania): $.42 par Odwalla, Inc.: No par common common Oxigene, Inc.: $.01 par common Lazer-Tron Corporation: No par common Leeds Federal Savings Bank (Maryland): $1.00 par Pacific Rehabilitation & Sports Medicine Inc.: $.01 par common common Long Island Bancorp, Inc. (New York): $.01 par Packaging Research Corporation: $.01 par common common Parallel Petroleum Corporation: $.01 par common PC Docs Group International: No par common MacKenzie Financial Corporation: No par common PDS Financial Corporation: $.01 par common Marisa Christina, Incorporated: $.01 par common Pediatric Services of America, Inc.: $.01 par common Mark Solutions, Inc.: $.01 par common Penn National Gaming, Inc.: $.01 par common Mastec Inc.: $.10 par common Petromet Resources Limited: No par common Matewan Bancshares, Inc. (West Virginia): $1.00 par Pharmacia Corporation: American Depositary common Receipts Maxwell Shoe Company, Inc.: Class A, $.01 par Physician Sales & Service, Inc.: $.01 par common common PM Agri-Nutrition Group Limited: $.01 par common McMoran Oil & Gas Company: $.01 par common Positive Response Television, Inc.: No par common Medical Control, Inc.: $.01 par common; Warrants Potters Savings & Loan Company, The (Ohio): (expire 05-13-96) $1.00 par common Medisense, Inc.: $.01 par common Project Software & Development Inc.: $.01 par com- Medmarco, Inc.: $.001 par common mon Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 815 Proxymed Pharmacy, Inc.: $.001 par common United Federal Savings Bank (North Carolina): $.01 par common Q-Steaks, Inc.: $1.00 par common United Services Advisors, Inc.: Non-voting, $.05 par Quintiles Transnational Corporation: $.01 par com- preferred mon Quizno's Franchise Corporation: $.001 par common Valujet Airlines, Inc.: $.01 par common Quorum Health Group Inc.: $.01 par common Variflex, Inc.: $.001 par common Radica Games Limited: $.01 par common Vermont Teddy Bear Co., Inc.: $.05 par common Rawlings Sporting Goods Company, Inc.: $.01 par Vitamin Specialties Corporation: $.001 par common common Reddi Brake Supply Corporation: $.0001 par common Wavefront Technologies, Inc.: No par common Richey Electronics, Inc.: $.001 par common West Coast Bancorp (Oregon): $2.00 par common Rocky Mountain Chocolate Factory, Inc.: $.03 par West America Bancorporation (California): No par common common Royal Gold, Inc.: $.01 par common WFS Bancorp, Inc. (Kansas): $.01 par common Saber Software Corporation: $.01 par common Winstar Communications, Inc.: $.01 par common Safety Components International, Inc.: $.01 par com- Winston Hotels, Inc.: $.01 par common mon WSB Bancorp, Inc. (Missouri): $.01 par common SBC Technologies, Inc.: $.10 par common Scott's Liquid Gold, Inc.: $.10 par common Seven Hills Financial Corporation: No par common Xenova Group pic: American Depositary Receipts Sho-Me Financial Corporation: $.01 par common (Units expire 07-08-95) Sigma Circuits, Inc.: $.001 par common Addition to the List of Foreign Margin Stocks Simpson Manufacturing Co., Inc.: No par common Software Professionals, Inc.: No par common Southern Financial Federal Savings Bank (Virginia): Sino Land Co., Ltd: HK $1.00 par ordinary shares $8.00 par common Southern Security Life Insurance Company: Class A, $1.00 par common FINAL RULE—AMENDMENT TO REGULATION Y Statefed Financial Corporation: $.01 par common Sterling Financial Corporation: Series A, $1.00 par The Board of Governors is amending 12 C.F.R. Part cumulative convertible preferred 225, its Regulation Y (Bank Holding Companies and Stratosphere Corporation: $.01 par common; War- Change in Bank Control). The Board is adopting a rants (expire 02-22-99) final rule amending the anti-tying provision of Regu- Sun International Hotels Limited: Series A, No par lation Y to permit a bank or a bank holding company common to offer a discount on a loan, discount, deposit, or Sunstates Corporation: $.33V3 par common; $3.75 par trust service (a "traditional bank product"), or on cumulative preferred securities brokerage services, on condition that the Supertel Hospitality, Inc.: $.01 par common customer obtain a traditional bank product from an affiliate. Targeted Genetics Corporation: $.01 par common Effective September 2, 1994, 12 C.F.R. Part 225 is Telepanel Systems, Inc.: No par common amended as follows: Telescan, Inc.: $.01 par common TF Financial Corporation: $.10 par common Theratx, Incorporated: $.001 par common Part 225—Bank Holding Companies and Thermodyne Holdings Corporation: $.01 par common Change in Bank Control (Regulation Y) Transaction Network Services, Inc.: $.01 par common Trans world Home Healthcare, Inc.: Warrants (expire 1. The authority citation for 12 C.F.R. Part 225 con- 12-07-97) tinues to read as follows: Trend-Lines, Inc.: $.01 par common Tripos, Inc.: $.01 par common Authority: 12 U.S.C. 1817(j)(13), 1818, 1831i, 1831p-l, Troy Hill Bancorp, Inc. (Pennsylvania): $.01 par com- 1843(c)(8), 1844(b), 1972(1), 3106, 3108, 3907, 3909, mon 3310, and 3331-3351. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

816 Federal Reserve Bulletin • September 1994 2. In section 225.4, paragraph (d) is removed and tion 225.25(b)(15) of Regulation Y (12 C.F.R. paragraphs (e) through (f) are redesignated as para- 225.25(b)(15)). graphs (d) through (e). 3. A new section 225.7 is added to part 225 to read as ORDERS ISSUED UNDER BANK HOLDING follows: COMPANY ACT Section 225.7—Tying restrictions. Orders Issued Under Section 3 of the Bank Holding Company Act (a) Applicability to nonbanks. A bank holding company and any nonbanking subsidiary conducting an The 1855 Bancorp activity authorized under section 225.23 of this regu- New Bedford, Massachusetts lation may not in any manner extend credit, lease or sell property of any kind, provide any service, or fix or Order Approving the Formation of a Bank Holding vary the consideration for any of these transactions Company subject to any condition or requirement that, if imposed by a bank, would constitute an unlawful tie-in The 1855 Bancorp, New Bedford, Massachusetts arrangement under section 106 of the Bank Holding ("Bancorp"),1 has applied under section 3(a)(1) of the Company Act Amendments of 1970 (12 U.S.C. 1971, Bank Holding Company Act (12 U.S.C. § 1842(a)(1)) 1972(1)). ("BHC Act"), to become a bank holding company by (b) Exceptions. Subject to the limitations of para- acquiring all the voting shares of Compass Bank for graph (c), the Board has adopted the following excep- Savings, New Bedford, Massachusetts ("CBS").2 Notions to the anti-tying restrictions of section 106 of the tice of these applications, affording interested persons Bank Holding Company Act Amendments of 1970 and an opportunity to submit comments, has been pubparagraph (a) of this section. lished (59 Federal Register 24,158 (1994)). The time for (1) Traditional bank products. A bank holding com- filing comments has expired, and the Board has conpany or any bank or nonbank subsidiary thereof sidered these applications and all comments received may vary the consideration charged for a traditional in light of the factors set forth in section 3(c) of the bank product on the condition or requirement that a BHC Act.^ customer also obtain a traditional bank product from Bancorp is a nonoperating company formed for the an affiliate. purpose of acquiring CBS. CBS is the 26th largest (2) Securities brokerage services. A bank holding commercial banking organization in Massachusetts, company or any bank or nonbank subsidiary thereof controlling deposits of $617 million, representing less may vary the consideration charged for securities than 1 percent of total deposits in financial institutions brokerage services on the condition or requirement in the state.4 Bancorp and CBS do not compete that a customer also obtain a traditional bank prod- directly in any banking market. Based on all the facts uct from that bank holding company or bank or of record, the Board believes that consummation of nonbank subsidiary, or from any affiliate of such the proposal would not result in any significantly company or subsidiary. (c) Limitations on exceptions. 1. During the processing of this application, Bancorp changed its (1) The exceptions of this section shall apply only if name from Compass Bancorp to The 1855 Bancorp. all products involved in the tying arrangement are 2. The proposed transaction is a corporate reorganization of CBS from a Massachusetts-chartered mutual savings bank into a mutual separately available for purchase. holding company, as permitted by section 3(g) of the BHC Act. (2) Any exception granted pursuant to this section Bancorp also has applied pursuant to section 3(a)(3) of the BHC Act shall terminate upon a finding by the Board that the for prior approval to retain direct ownership of approximately 9.74 percent of the voting shares of Mayflower Co-operative Bank, arrangement is resulting in anticompetitive prac- Middleborough, Massachusetts. tices. 3. The Board notes that CBS currently acts as agent in the sale of (d) Definitions. For purposes of this section: savings bank life insurance in Massachusetts, and, as a necessary predicate thereto, holds less than 5 percent of the voting stock in the (1) Traditional bank product means a loan, discount, Savings Bank Life Insurance Company of Massachusetts, a domestic deposit, or trust service. stock life insurance company established by the Commonwealth of (2) Affiliate has the meaning given such term in Massachusetts (collectively, "SBLI activities"). See Mass. Gen. Laws Ann. ch. 178A, §§ 2 and 4 (West Supp. 1993). Upon consumsection 2(k) of the Bank Holding Company Act mation of the proposed transaction, Bancorp would continue to (12 U.S.C. 1841(k)). engage through CBS in SBLI activities in accordance with Massachusetts law and section 24(e) of the Federal Deposit Insurance Act (3) Securities brokerage services means those activ- (12 U.S.C. § 1831a(e)). ities authorized by the Board pursuant to sec- 4. State data are as of June 30, 1993. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 817 adverse effects on competition or the concentration of Based on the foregoing and all the facts of record, banking resources in any relevant banking market. the Board has determined that these applications Accordingly, the Board concludes that competitive should be, and hereby are, approved. The Board's considerations are consistent with approval. approval is specifically conditioned upon compliance The Board has carefully considered comments from with all the commitments made by Bancorp in connec- Compass Bancshares, Inc., Birmingham, Alabama tion with these applications. For purposes of this ("Protestant"), maintaining that the name "Compass action, the commitments and conditions relied on in Bank for Savings" illegally infringes on its subsid- reaching this decision shall be deemed to be conditions iary's trademarked name "Compass Bank." Protes- imposed in writing by the Board and, as such, may be tant believes that the similar names would cause enforced in proceedings under applicable law. investor confusion in securities markets and the bank- This transaction should not be consummated before ing industry. the thirtieth calendar day following the effective date In reviewing applications filed under section 3 of the of this order, or later than three months after the BHC Act, the Board is limited to considering the effective date of this order, unless such period is specific factors set forth in the BHC Act.5 Neither the extended for good cause by the Federal Reserve Bank language of the BHC Act nor its legislative history of Boston, acting pursuant to delegated authority. indicates that the similarity of names of banking orga- By order of the Board of Governors, effective nizations is a consideration under the BHC Act. Leg- July 7, 1994. islation outside the context of the BHC Act suggests that this issue should be addressed through laws not Voting for this action: Chairman Greenspan, Vice Chairadministered by federal banking agencies.6 man Blinder, and Governors Kelley, Lindsey, and Phillips. State banking regulators have indicated that the Absent and not voting: Governor La Ware. name of Applicant's subsidiary bank is consistent with JENNIFER J. JOHNSON Massachusetts banking law. Moreover, Applicant and Associate Secretary of the Board Protestant compete in banking markets that are distant from each other, and the names of the two bank Falcon Bancorp, Inc. holding companies are distinctly different. Applicant's Anadarko, Oklahoma securities are not registered under federal securities laws, and if they are registered in the future, the Order Approving Formation of a Bank Holding Securities and Exchange Commission has the statu- Company tory authority to address issues of potential investor confusion. Finally, the Lanham Trademark Act Falcon Bancorp, Inc., Anadarko, Oklahoma ("Fal- (15 U.S.C. § 1051 et seq.) provides Protestant with con"), has applied under section 3(a)(1) of the Bank adequate remedies if Protestant can establish that Holding Company Act ("BHC Act") (12 U.S.C. Applicant has, in fact, violated the use of Protestant's § 1842(a)(1)) to become a bank holding company by registered trademark. Based on all the facts in this acquiring all the voting shares of Anadarko Banccase, the Board does not believe that Protestant's shares, Inc., Anadarko, Oklahoma ("Anadarko"), and comments warrant denial of this proposal. thereby indirectly acquire Anadarko Bank and Trust The Board also concludes that the financial and Company, Anadarko, Oklahoma ("Bank"). managerial resources and future prospects of Bancorp Notice of the application, affording interested perand CBS, and the convenience and needs and other sons an opportunity to submit comments, has been supervisory factors that the Board is required to duly published (59 Federal Register 23,206 (1994)). consider under section 3 of the BHC Act, are consis- The time for filing comments has expired, and the tent with approval of this proposal. Board has considered the application and all comments received in light of the factors set forth in section 3(c) of the BHC Act. 5. See Western Bancshares, Inc. v. Board of Governors, 480 F.2d Falcon is a non-operating company formed for the 749 (8th Cir. 1973). The BHC Act requires the Board to consider the competitive effects of a proposal, the financial and managerial re- purpose of acquiring Anadarko. Bank is the 168th sources and future prospects of the organizations involved, the largest banking organization in Oklahoma, controlling convenience and needs of the communities to be served and other approximately $36.9 million in deposits, representing supervisory factors. 6. In repealing the statutory authority of the Office of the Comp- less than 1 percent of total deposits in commercial troller of the Currency to approve the names of national banks in 1982, banks in the state.1 Based on all the facts of record, the Congress noted that "Any confusion between bank names shall be resolved under other laws, including the federal Lanham [Trademark] Act and state statutory and common law principles of unfair competition." S. Rpt. No. 97-536, 97th Cong., 2d Sess. at 28. 1. State banking data are as of March 31, 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

818 Federal Reserve Bulletin • September 1994 Board has concluded that consummation of this pro- Fleet Financial Group, Inc. posal would not result in a significantly adverse effect Providence, Rhode Island on competition in any relevant banking market. The Board also concludes that the financial and managerial Order Approving Acquisition of a Bank Holding resources and future prospects of Falcon, Anadarko, Company and Bank, and the convenience and needs and other supervisory factors the Board must consider under Fleet Financial Group, Inc., Providence, Rhode Island section 3(c) of the BHC Act, also are consistent with ("Fleet"), a bank holding company within the meanapproval.2 ing of the Bank Holding Company Act ("BHC Act"), Based on the foregoing and other facts of record, the has applied for the Board's approval under section 3 of Board has determined that the application should be, the BHC Act (12 U.S.C. § 1842) to acquire Sterling and hereby is, approved. The Board's approval is Bancshares Corporation ("Sterling") and thereby inspecifically conditioned upon compliance by Falcon directly acquire Sterling's subsidiary bank, Sterling with all the commitments made in connection with this Bank ("Bank"), an FDIC-insured savings bank, both application and with the conditions in this order. For of Waltham, Massachusetts.1 purposes of this action, the commitments and condi- Notice of the applications, affording interested pertions relied on in reaching this decision shall be sons an opportunity to submit comments, has been deemed to be conditions imposed in writing by the published (59 Federal Register 11,078 (1994)). The Board and, as such, may be enforced in proceedings time for filing comments has expired, and the Board under applicable law. has considered the applications and all comments The proposal shall not be consummated before the received in light of the factors set forth in section 3(c) thirtieth calendar day following the effective date of of the BHC Act. this order, or later than three months after the effective Fleet is the fifth largest commercial banking organidate of this order, unless such period is extended for zation in Massachusetts, controlling approximately good cause by the Board or by the Federal Reserve $6.2 billion in deposits, representing 6.1 percent of the Bank of Kansas City, acting pursuant to delegated total deposits in commercial banking organizations in authority. the state.2 Sterling is the 24th largest commercial By order of the Board of Governors, effective banking organization in Massachusetts, controlling July 25, 1994. approximately $638 million in deposits, representing less than 1 percent of the total deposits in commercial Voting for this action: Chairman Greenspan, Vice Chair- banking organizations in the state. Upon consummaman Blinder, and Governors Kelley, LaWare, and Lindsey. tion of this transaction, Fleet would remain the fifth Absent and not voting: Governor Phillips. largest commercial banking organization in Massachusetts, controlling approximately $6.8 billion in depos- JENNIFER J. JOHNSON its, representing 6.7 percent of the total deposits in Deputy Secretary of the Board commercial banking organizations in the state. Douglas Amendment Analysis Section 3(d) of the BHC Act, the Douglas Amendment, prohibits a bank holding company from acquiring a bank outside its home state "unless the acquisi- 2. In connection with this proposal, the Board received comments on behalf of a minority shareholder of Anadarko ("Protestants") maintaining that the proposal would adversely affect the financial condition of Bank. The Board has carefully reviewed Protestants' 1. Fleet proposes to merge with Sterling, with Fleet to be the comments in light of information from relevant reports of examination surviving entity. Immediately thereafter, Fleet proposes to transfer regarding Bank's current financial condition. In addition, the Board the common stock of Bank to Fleet Banking Group, Inc., Providence, notes that Falcon's debt service projections and pro forma debt-to- Rhode Island ("FBG"), a subsidiary bank holding company of Fleet equity ratio are reasonable and consistent with the Board's guidelines. that owns all outstanding shares of Fleet Bank of Massachusetts, Protestants also contend that the minority stockholders who would National Association ("Fleet-MA"), and to merge Bank into Fleetreceive payment in preferred stock would realize less economic MA. In connection with this proposal, FBG has applied under section benefit than the majority stockholders who would have their debt 3 of the BHC Act to acquire Bank, and Fleet-MA has applied to the assumed by Falcon. Courts have held that the Board does not have the Office of the Comptroller of the Currency ("OCC") to acquire Bank authority under the BHC Act to deny an application on the basis of the under the Bank Merger Act (12 U.S.C. § 1828(c)). valuation of an offer to shareholders, which in this case is governed by Fleet also has requested approval to acquire an option to purchase Oklahoma State law. Western Bancshares, Inc. v. Board of Gover- up to 17 percent of the outstanding shares of Sterling upon the nors, 480 F.2d 749 (10th Cir. 1973). Therefore, based on all facts of occurrence of certain triggering events. This option will expire upon record, the Board concludes that Protestants' comments do not consummation of this proposal. warrant denial of this application. 2. Deposit data are as of June 30, 1993. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 819 tion of . .. a State bank by an out-of-State bank deposits in depository institutions in the market,7 and holding company is specifically authorized by the the market would remain unconcentrated as measured statute laws of the State in which such bank is located, by the Herfindahl-Hirschman Index ("HHI").8 After by language to that effect and not merely by implica- considering Fleet's resulting market share, the number tion." For purposes of the Douglas Amendment, of competitors remaining in the market, the relatively Fleet's home state is Rhode Island.3 small increase in concentration as measured by the Massachusetts and Rhode Island have enacted HHI, and all other facts of record, the Board conbanking statutes that permit out-of-state bank holding cludes that consummation of the proposal would not companies to acquire banks in these states provided result in a significantly adverse effect on competition that the home state of the acquiring bank holding or concentration of banking resources in the Boston company permits the acquisition of banks in that state banking market or any other relevant banking market. on a reciprocal basis.4 The Board has previously determined that Massachusetts law authorizes a Convenience and Needs Factors Rhode Island bank holding company to acquire a Massachusetts bank or bank holding company.5 The The Board received several comments concerning Massachusetts and Rhode Island banking supervisors Fleet's performance in serving the convenience and have preliminarily indicated that the reciprocity re- needs of its local communities. Union Neighborhood quirements under their respective statutes are satisfied Assistance Corporation, Boston, Massachusetts, supin this case. In light of the foregoing, and based on an ports Fleet's application on the basis of the INCITY analysis of the interstate banking statutes involved, lending program that Fleet has instituted, which the Board has determined that its approval of this includes lending programs targeted to low- and proposal is not prohibited by the Douglas Amendment. moderate-income families and families without access Approval of this proposal is conditioned upon Fleet to conventional sources of credit, and the additional receiving all required state regulatory approvals. commitments Fleet has made to address criticisms of certain mortgage lending practices of Fleet Finance, Competitive Factors Inc., Atlanta, Georgia ("Fleet Finance"), a nonbanking mortgage subsidiary. Massachusetts Affordable Fleet and Sterling compete directly in the Boston Housing Alliance, Boston, Massachusetts, noted banking market.6 Upon consummation of this pro- Fleet-MA's participation in Massachusetts' Soft Secposal, Fleet would remain the fifth largest commercial ond program, which offers state subsidies and flexible or thrift organization ("depository institution") in the underwriting criteria for second mortgage loans to be market, controlling deposits in the market of approx- used to provide the down payment for low- and imately $4.9 billion, representing 8 percent of total moderate-income homebuyers, but expressed concern over Fleet's decision to reduce its participation in this program in favor of Fleet's INCITY program. In response to these comments, Fleet has committed 3. 12 U.S.C. § 1842(d). A bank holding company's home state is that state in which the operations of the bank holding company's banking subsidiaries were principally located on July 1, 1966, or the date on which the company became a bank holding company, whichever is later. The operations of a bank holding company are considered principally conducted in that state in which the total deposits of 7. Market share deposit data are based on calculations in which such banking subsidiaries are largest. deposits of thrift institutions are included at 50 percent. The Board 4. See Mass. Gen. L. ch. 167A § 2 (1993); R.I. Gen. Laws previously has indicated that thrift institutions have become, or have § 19-30-02 (1987). Both states include savings banks in their defini- the potential to become, significant competitors of commercial banks. tion of bank. Mass. Gen. L. ch. 167A § 1(a) (1993); R.I. Gen. See Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); Laws § 19-30-l(a) (1987). Massachusetts law also prohibits an out- National City Corporation, 70 Federal Reserve Bulletin 743 (1984). of-state bank holding company from controlling more than 25 percent Market share data are as of June 30, 1993. of deposits held by all state and federally chartered banks in Massa- 8. Under the revised Department of Justice Merger Guidelines, 49 chusetts. Mass. Gen. L. ch. 167A § 2 (1993). In this case, Fleet would Federal Register 26,823 (June 29, 1984), a market in which the control less than 7 percent of the deposits held by Massachusetts post-merger HHI is below 1000 is considered unconcentrated. The banks. Justice Department has informed the Board that a bank merger or 5. See Citizens Financial Group, Inc., 74 Federal Reserve Bulletin acquisition generally will not be challenged (in the absence of other 4% (1988); Fleet Financial Group, Inc., 70 Federal Reserve Bulletin factors indicating anti-competitive effects) unless the post-merger 834 (1984). The Board also has previously determined that Rhode HHI is at least 1800 and the merger increases the HHI by 200 points. Island law authorizes a Massachusetts bank holding company to The Justice Department has stated that the higher than normal HHI acquire a Rhode Island bank or bank holding company. See Bank of thresholds for screening bank mergers for anti-competitive effects Boston Corporation, 70 Federal Reserve Bulletin 737 (1984). implicitly recognize the competitive effect of limited purpose lenders 6. The Boston banking market is approximated by the Boston and other non-depository financial entities. After consummation of the Metropolitan Statistical Area ("MSA"), together with the townships proposed transaction, the HHI in the Boston banking market would of Greenville, Lyndeboro, and New Ipswich in New Hampshire. increase by 6 points to 826. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

820 Federal Reserve Bulletin • September 1994 $15 million to the Soft Second program for the next tices of Fleet Finance in Georgia and elsewhere, as three years.9 well as the steps taken by Fleet to address them.12 As One commenter ("Massachusetts Protestant") op- noted in the Fleet Order, Fleet has taken a number of poses Fleet's proposal, alleging that the loan collection steps to address the issues raised by these allegations, practices of an indirect nonbanking subsidiary of including discontinuing its practice of purchasing indi- Fleet, RECOLL Management Corporation, Boston, vidual loans from third parties (except for packages in Massachusetts ("RECOLL"), are harmful to the com- bulk from regulated financial institutions or the Resomunities in which RECOLL operates, and that Fleet lution Trust Corporation), and instituted significant has earned profits from the improper mortgage lending changes in senior management and management pracpractices of its Georgia subsidiary, Fleet Finance. tices. In addition, Fleet has entered into a substantial Another commenter ("Georgia Protestant") has as- settlement agreement with the Georgia attorney genserted that all claims were not satisfied by Fleet in its eral. The Board has previously directed Fleet to settlement of claims against Fleet Finance.10 inform it promptly of each material development in The Board notes that RECOLL serves as agent for Fleet Finance's pending litigation, and of any future the Federal Deposit Insurance Corporation ("FDIC") claims or lawsuits involving similar allegations, and Fleet has done so. for the collection of loans that the FDIC acquired upon the failure of certain New England banks. RECOLL In addition, the Board has reviewed Fleet's record and the FDIC have taken steps to address many of the of performance under the Community Reinvestment criticisms of Massachusetts Protestant, including insti- Act ("CRA") in assisting to meet the credit needs of tuting a formal program to pursue loan workout op- its local communities in relation to the convenience portunities before commencing collection efforts. The and needs of the communities to be served, and the operations and policies of RECOLL also are subject to comments submitted by community organizations review and approval by an oversight panel consisting commending certain aspects of Fleet's CRA perforof two FDIC and one Fleet representative, and RE- mance record. The Board also has carefully reviewed COLL is subject to examination by an internal audit all the allegations of the Protestants in light of the committee that reports to the oversight panel and is results of the most recent CRA and safety and subject to visitation by FDIC examiners, the FDIC's soundness examinations of Fleet by the Federal inspector general, and the United States General Ac- Reserve Bank of Boston and of Fleet's subsidiary counting Office. The FDIC has determined that RE- banks in Massachusetts, Rhode Island, and Connect- COLL's collection activities satisfy all applicable icut by the OCC, their primary federal banking FDIC guidelines.11 regulator.13 Based on this information and all the The Board also has previously considered the issues facts of record in this case, the Board concludes that raised by the alleged improper mortgage lending prac- these comments do not warrant denial of these applications and that the convenience and needs and managerial considerations are consistent with approval of these applications. The financial resources 9. Fleet proposes to allocate $9 million of its commitment to Boston and the remaining $6 million to the rest of the state. As the rationale for this allocation, Fleet notes that it also has committed under its INCITY program to provide $75 million over three years to Boston residents for home mortgage loans with flexible underwriting and 12. See Fleet Bank of New York, 80 Federal Reserve Bulletin 170 reduced down payment requirements, and believes that the INCITY (1994) ("Fleet Order"). program will achieve greater market penetration than the Soft Second 13. Massachusetts Protestant also alleges that RECOLL has emprogram will. ployed improper mortgage foreclosure and loan collection practices 10. The Board received a comment maintaining that the interest rate against him and his business interests. Another commenter ("Rhode Fleet charges on the funds it makes available to the Massachusetts Island Protestant") has made similar allegations against another Fleet Housing Partnership Fund ("MHP") is too high. In response to this subsidiary, Fleet National Bank, Providence, Rhode Island. Fleet has comment, Fleet has committed to make these funds available on terms denied any wrongdoing in its dealings with Massachusetts Protestant comparable to those offered to MHP by major out-of-state financial and Rhode Island Protestant. The Board notes that Massachusetts institutions that have recently entered the state. In addition, the Board Protestant and Rhode Island Protestant have raised, or have had the notes that MHP has advised the Massachusetts Commissioner of opportunity to raise, these allegations before courts with the jurisdic- Banks that the terms of Fleet's provision of additional funds to MHP, tion to provide them a remedy, if appropriate. An additional comwhich Fleet is required under the Massachusetts interstate banking menter ( Connecticut Protestant") alleges, on the basis of his unsuclaw to make in connection with this proposal, are satisfactory. See cessful attempt to obtain certain trust services from another Fleet Mass. Gen. L. ch. 167A § 4 (1993). subsidiary, Fleet Bank, N.A., Hartford, Connecticut, that Fleet lacks 11. Massachusetts Protestant further alleges that RECOLL has the managerial resources to serve the convenience and needs of its made insufficient efforts to employ firms owned by women and communities. Fleet contends that its personnel exercised reasonable minorities. In awarding subcontracts, RECOLL is required to carry business judgment by requiring Connecticut Protestant to provide out the women-and minority-owned firm contracting policies of the additional information and by seeking review by legal counsel as a FDIC as mandated by the Financial Institutions Reform, Recovery, prerequisite to accepting Connecticut Protestant's account. Finally, and Enforcement Act of 1989. See 12 C.F.R. 361.10; Rhode Island Protestant and Connecticut Protestant express concern 12 U.S.C. § 1833e(c). The FDIC has determined that RECOLL's that Fleet's managerial resources may be impaired as a result of its subcontracting policies satisfy all applicable FDIC guidelines. program to reduce personnel and operating expenses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 821 of Fleet; the future prospects of Fleet, Sterling, and G.B. Financial Services, Inc. their subsidiaries; and other supervisory factors the Greenbush, Minnesota Board must consider under section 3 of the BHC Act also are consistent with approval of this proposal. Order Approving Formation of a Bank Holding Based on the foregoing and other facts of record, Company the Board has determined that the application should be, and hereby is, approved.14 The Board's approval G.B. Financial Services, Inc. ("G.B. Financial"), has of this application is specifically conditioned upon applied under section 3(a)(1) of the Bank Holding compliance with all of the commitments made in Company Act ("BHC Act") (12 U.S.C. § 1842(a)(1)) connection with this application. For purposes of this to become a bank holding company by acquiring an action, these commitments will be considered condi- additional 40 percent, for a total of 60 percent, of the tions imposed in writing by the Board in connection voting shares of Greenbush Bancshares, Inc., with the Board's findings and decision and, as such, ("Greenbush"), a one-bank holding company that may be enforced in proceedings under applicable controls 97 percent of the voting shares of Greenbush laws. The transaction approved in this order shall not State Bank ("Greenbush Bank"), all of Greenbush, be consummated before the thirtieth calendar day Minnesota.1 following the effective date of this order, or later than Notice of the application, affording interested perthree months after the effective date of this order, sons an opportunity to submit comments, has been unless such period is extended for good cause by the published (59 Federal Register 18,410 (1994)). The Board or by the Federal Reserve Bank of Boston, time for filing comments has expired, and the Board acting pursuant to delegated authority. has considered the application and all comments re- By order of the Board of Governors, effective ceived in light of the factors set forth in section 3(c) of July 7, 1994. the BHC Act. G.B. Financial currently owns approximately 20 percent of the voting shares of Greenbush. Green- Voting for this action: Chairman Greenspan and Governors bush is the 216th largest commercial banking organi- Kelley, Lindsey, and Phillips. Abstaining from this action: zation in Minnesota, controlling deposits of $29 mil- Vice Chairman Blinder. Absent and not voting: Governor La Ware. lion, representing less than 1 percent of total deposits in commercial banks in the state.2 Greenbush is the third largest commercial banking organization in the JENNIFER J. JOHNSON Roseau, Minnesota, banking market, controlling de- Associate Secretary of the Board posits of $25.5 million, representing approximately 14.6 percent of total deposits in commercial banks in the market.3 This proposal represents the formation of a onebank holding company, which generally does not raise competitive concerns.4 Since August 1993, the directors of G.B. Financial and Greenbush also have served as directors of Border Bancshares, Inc., ("Border"), a one-bank holding company that controls Badger State 14. Rhode Island Protestant has requested that the Board hold a Bank, ("Badger Bank"), which also operates in the public hearing to consider Fleet's record of fulfilling its community development related commitments. Section 3(b) of the BHC Act does Roseau banking market.5 The Board has considered not require the Board to hold a hearing or meeting on an application unless the appropriate supervisory authority of the bank to be acquired makes a timely written recommendation of denial of the application. In this case, the Board has not received such a recom- 1. G.B. Financial also proposes to acquire 2 percent of Greenbush mendation. Bank, which it will sell to Greenbush as part of this transaction. Generally, under the Board's rules, the Board may, in its discre- 2. State deposit data are as of December 31, 1993. tion, hold a public hearing or meeting on an application to clarify 3. Market data are as of June 30, 1993. The Roseau banking market factual issues related to the application and to provide an opportu- is approximated by Roseau County, Minnesota. No thrift institutions nity for testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). operate in the market. The Board has carefully considered this request. In the Board's 4. If the proposal involved a merger or acquisition of a bank holding view, Rhode Island Protestant has had an opportunity to present company, an analysis of competitive effect would be required. written submissions, and has submitted substantial written com- 5. In addition, eight shareholders currently control 59.7 percent and ments that have been considered by the Board. In light of all the 32.4 percent of the voting shares of Greenbush and Border, respecfacts of record, the Board has determined that a public hearing or tively. There is no indication in this case that the common shareholdmeeting is not necessary to clarify the factual record in this ers of G.B. Financial were acting in concert under circumstances that application, or otherwise warranted in this case. Accordingly, would require a notice under the Change in Bank Control Act, or that Rhode Island Protestant's request for a public hearing or meeting on Border in any manner controlled the election of the directors at G.B. this application is denied. Financial within the prior approval requirements of the BHC Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

822 Federal Reserve Bulletin • September 1994 this fact in light of the other facts in this case.6 The reaching its decision are deemed to be conditions Board notes that a substantial number of Greenbush's imposed in writing by the Board in connection with its shares would be owned by shareholders who would findings and decision, and, as such, may be enforced in not be shareholders of G.B. Financial and would not, proceedings under applicable law. therefore, receive the benefits associated with the The acquisition shall not be consummated before formation of a holding company. Approximately the thirtieth calendar day following the effective date 37 percent of the shares of G.B Financial would be of this order, or later than three months after the owned by new shareholders who are unaffiliated with effective date of this order, unless such period is Border, and the shareholders who own the largest extended for good cause by the Board, or by the number of shares of G.B. Financial are not the largest Federal Reserve Bank of Minneapolis, acting pursuant shareholders of Border and own less than 15 percent of to delegated authority. Border. Moreover, this proposal represents only the By order of the Board of Governors, effective formation of a shell bank holding company over one of July 13, 1994. the banks.7 Thus, unlike in certain previous cases, this proposal would not appear to strengthen or solidify the Voting for this action: Chairman Greenspan, Vice Chairaffiliation of Greenbush and Border.8 man Blinder, and Governors Kelley, and Lindsey. Absent In view of all the facts of record, the Board con- and not voting: Governors La Ware and Phillips. cludes that consummation of this proposal would not JENNIFER J. JOHNSON have a significantly adverse effect on competition or Associate Secretary of the Board the concentration of banking resources in this or any relevant banking market.9 Mark Twain Bancshares, Inc. The financial and managerial resources and future St. Louis, Missouri prospects of G.B. Financial, Greenbush, and Greenbush Bank are consistent with approval of this pro- Order Approving the Acquisition of a Bank Holding posal. Considerations relating to the convenience and Company needs of the communities to be served and the other factors the Board must consider under section 3 of the Mark Twain Bancshares, Inc., St. Louis, Missouri BHC Act are also consistent with approval. ("Applicant"), a bank holding company within the Based on all the facts of record, the Board has meaning of the Bank Holding Company Act ("BHC determined that this application should be, and hereby Act"), has applied under section 3 of the BHC Act is, approved. The Board's approval is specifically (12 U.S.C. § 1842) to acquire up to 100 percent of the conditioned upon compliance by G.B. Financial with voting shares of C.B. Bancshares, Inc., St. Louis, all the commitments made in connection with this Missouri ("C.B. Bancshares"), and thereby indirectly application. For the purpose of this action, the comacquire Century Bank, Des Peres, Missouri ("Century mitments and conditions relied upon by the Board in Bank").1 Notice of the application, affording interested per- 6. In other cases involving common share ownership and/or inter- sons an opportunity to submit comments, has been locking directorates of banking organizations, the Board has consid- published (59 Federal Register 8478 (1994)). The time ered the competitive effects of a proposal at the time of the application for filing comments has expired, and the Board has and at the time that the banking organizations came under common share ownership or interlocking directorates. See Mid-Nebraska considered the application and all comments received Bancshares, Inc., 64 Federal Reserve Bulletin 589 (1978), affd, in light of the factors set forth in section 3(c) of the Mid-Nebraska Bancshares, Inc. v. Board of Governors of the Federal BHC Act. Reserve System, 627 F.2d 266 (D.C. Cir. 1980). 7. The Board expresses no opinion on the competitive effects of Applicant, with total consolidated assets of combining the two banks under a single bank holding company. $2.4 billion, controls subsidiary banks in Missouri, 8. See Mid-Nebraska Bancshares, Inc., 64 Federal Reserve Bulletin Illinois, and Kansas.2 Applicant is the sixth largest 589 (1978), ajfd, Mid-Nebraska Bancshares, Inc. v. Board of Governors of the Federal Reserve System, 627 F.2d 266 (D.C. Cir. 1980). commercial banking organization in Missouri, control- 9. The level of concentration as measured by the Herfindahl- Hirschman Index ("HHI") in the Roseau banking market increased 255 points to 3988 as a result of the August 1993 affiliation. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 1. Applicant proposes to merge its non-operating subsidiary ("In- 26,823 (June 29, 1984), a market in which the post-merger HHI is terim Subsidiary") with C.B. Bancshares. Following consummation above 1800 is considered highly concentrated. The Justice Depart- of this proposal, Interim Subsidiary would be merged into Applicant. ment has informed the Board that a bank merger or acquisition In addition, Applicant anticipates merging Century Bank with Appligenerally will not be challenged, in the absence of other factors cant's lead bank, Mark Twain Bank, Ladue, Missouri ("Mark Twain indicating anticompetitive effects, unless the post-merger HHI is at Bank"). Mark Twain Bank's primary regulator, the Federal Deposit least 1800 and the merger increases the HHI by more than 200 points. Insurance Corporation ("FDIC"), has approved this bank merger The Department of Justice views the proposal as a corporate reorga- under the Bank Merger Act (12 U.S.C. § 1828(c)). nization and has no objection to the application. 2. Asset data are as of December 31, 1993. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 823 ling deposits of $1.7 billion, representing 3.1 percent of The FDIC's examination of Mark Twain Bank noted total deposits in commercial banks in the state.3 C.B. a number of violations of the Bank Secrecy Act.7 Bancshares is the 91st largest commercial banking While this matter continues to be under review by the organization in Missouri, controlling deposits of $63.5 relevant agencies, Mark Twain Bank has taken a million, representing less than 1 percent of total depos- number of steps to address these violations, including its in commercial banks in the state. Upon consumma- making improvements in its training and auditing protion of this proposal, Applicant would remain the sixth cedures. The FDIC believes that these improvements, largest commercial banking organization in Missouri, when fully implemented, would be adequate, and, on controlling deposits of $1.7 billion, representing 3.2 this basis, has approved the merger of Mark Twain percent of total deposits in commercial banks in the state. Bank and Century Bank. The Board expects that Mark Applicant and C.B. Bancshares compete directly in Twain Bank and Applicant will fully implement these the St. Louis, Missouri, banking market.4 Upon con- programs and take any other steps necessary to ensure summation of this proposal, Applicant would remain compliance with the Bank Secrecy Act. The FDIC will the fifth largest commercial bank or thrift institution monitor the implementation and success of these pro- ("depository institution") in the market, controlling grams at Mark Twain Bank through the examination deposits of $1.6 billion, representing 5.9 percent of process to ensure Mark Twain Bank's compliance total deposits in depository institutions in the market.5 with the Bank Secrecy Act. In addition, the Federal After considering the number of competitors remain- Reserve Bank of St. Louis will monitor Applicant's ing in the market, the relatively small increase in procedures designed to ensure compliance with the concentration as measured by the Herfindahl- Bank Secrecy Act at its subsidiary banks. Hirschman Index ("HHI"),6 market shares, and all In light of the primary regulator's review and deciother facts of record, the Board concludes that con- sion in this matter, and all other facts of record, the summation of this proposal would not result in a Board concludes that the financial and managerial significantly adverse effect on competition or concen- resources and future prospects of Applicant, C.B. tration of banking resources in the St. Louis, Missouri, Bancshares, and their subsidiary banks are consistent banking market or any other relevant banking market. with approval. Factors relating to the convenience and needs of the community to be served and other supervisory factors the Board must consider under section 3 of the BHC Act also are consistent with approval. 3. State deposit data are as of June 30, 1992. Based on all the facts of record, the Board has 4. The St. Louis, Missouri, banking market is approximated by the city of St. Louis; St. Louis, Jefferson, and St. Charles Counties, determined that this application should be, and hereby Missouri; St. Clair County, Illinois, excluding Lenzburg and Marissa is, approved. The Board's approval is specifically townships; plus portions of Franklin County, Missouri (Boles and conditioned upon compliance by Applicant with all the Calvey townships), Madison County, Illinois (Godfrey, Foster, Alton, Wood River, Fort Russell, Chouteau, Edwardsville, Venice, Granite commitments made in connection with this applica- City, Nameoki, Collinsville, Jarvis, Pin Oak, and Hamel townships), tion. For the purpose of this action, these commitand Monroe County, Illinois (Columbia, Moredock, New Harmony, ments and conditions will both be considered condi- Waterloo, Harrisonville, and Bluff townships). 5. Market data are as of June 30, 1992. Market share data are based tions imposed in writing and, as such, may be enforced on calculations in which the deposits of thrift institutions are included in proceedings under applicable law. at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to become, major competi- This acquisition shall not be consummated before tors of commercial banks. See Midwest Financial Group, 75 Federal the thirtieth calendar day following the effective date Reserve Bulletin 386 (1989); National City Corporation, 70 Federal of this order, or later than three months after the Reserve Bulletin 743 (1984). Thus, the Board regularly has included thrift deposits in the calculation of market share on a 50 percent effective date of this order, unless such period is weighted basis. See, e.g., First Hawaiian Inc., 77 Federal Reserve extended for good cause by the Board or by the Bulletin 52 (1991). Federal Reserve Bank of St. Louis, acting pursuant to 6. The HHI in this market would increase 3 points to 1037. Under the revised Department of Justice Merger Guidelines, 49 Federal delegated authority. Register 26,823 (June 29, 1984), a market in which the post-merger By order of the Board of Governors, effective HHI is between 1000 and 1800 is considered moderately concentrated. A market in which the post-merger HHI is above 1800 is considered to July 13, 1994. be highly concentrated. In such markets, the Justice Department is likely to challenge a merger that increases the HHI by more than 50 Voting for this action: Chairman Greenspan, Vice Chairpoints. The Justice Department has informed the Board that a bank man Blinder, and Governors Kelley, and Lindsey. Absent merger or acquisition generally will not be challenged (in the absence and not voting: Governors La Ware and Phillips. of other factors indicating anti-competitive effects) unless the postmerger HHI is at least 1800 and the merger or acquisition increases the JENNIFER J. JOHNSON HHI by at least 200 points. The Justice Department has stated that the Associate Secretary of the Board higher than normal threshold for an increase in the HHI when screening bank mergers and acquisitions for anti-competitive effects implicitly recognizes the competitive effect of limited-purpose lenders and other non-depository financial entities. 1. See 31 U.S.C. § 5311 et seq. and 31 C.F.R. 103.11 et seq. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

824 Federal Reserve Bulletin • September 1994 NorthWest Indiana Bancorp the Board believes that consummation of the proposal Munster, Indiana would not result in any significantly adverse effects on competition or the concentration of banking resources Order Approving the Formation of a Bank Holding in any relevant banking market. Accordingly, the Company Board concludes that competitive considerations are consistent with approval. NorthWest Indiana Bancorp, Munster, Indiana ("NorthWest Indiana"), has applied under section Convenience and Needs Considerations 3(a)(1) of the Bank Holding Company Act (12 U.S.C. § 1842(a)(1) et seq.) ("BHC Act") to become a bank holding company by acquiring all the voting shares of In acting on an application to acquire a depository Peoples Bank SB, Munster, Indiana ("Peoples institution under the BHC Act, the Board must con- Bank"). Peoples Bank will be formed as successor to sider the convenience and needs of the communities to Peoples Bank, A Federal Savings Bank, Munster, be served, and take into account the record of the Indiana ("Peoples FSB"), by converting from a fed- depository institution under the Community Reinvesteral stock savings bank to an Indiana-chartered stock ment Act (12 U.S.C. § 2901 et seq.) ("CRA"). The savings bank pursuant to section 5(d)(2)(G) of the CRA requires the federal financial supervisory agen- Federal Deposit Insurance Act (12 U.S.C. cies to encourage financial institutions to help meet § 1815(d)(2)(G)).1 the credit needs of the local communities in which Notice of the application, affording interested per- they operate, consistent with the safe and sound sons an opportunity to submit comments, has been operation of such institutions. To accomplish this published (59 Federal Register 22,852 (1994)). The end, the CRA requires the appropriate federal supertime for filing comments has expired, and the Board visory authority to "assess the institution's record of has considered the application and all comments re- meeting the credit needs of its entire community, ceived in light of the factors set forth in section 3(c) of including low- and moderate-income neighborhoods, the BHC Act. consistent with the safe and sound operation of such NorthWest Indiana is a nonoperating company institution," and to take that record into account in formed for the purpose of acquiring Peoples Bank. its evaluation of applications.5 Peoples FSB is the 35th largest depository institution The Board has received comments in favor of and in Indiana, controlling deposits of approximately opposing this proposal. A number of comments from $201 million, representing less than 1 percent of total community development organizations, developers deposits in banking and thrift organizations ("deposi- of low- and moderate-income housing, and governtory institutions") in the state.2 Peoples FSB operates ment officials commended Peoples FSB's efforts in in the Gary-Hammond banking market,3 controlling its community. These commenters noted with ap- 2.2 percent of the total deposits in depository institu- proval the leadership role that officers of Peoples tions in the market.4 Based on all the facts of record, FSB have played on advisory committees, the initiative that Peoples FSB has shown in its support of housing developers' applications for public grants, 1. This provision of the Financial Institutions Reform, Recovery, tax credits, and subsidies, and its responsiveness as and Enforcement Act of 1989 permits a savings association to convert a lender. The Board also has received comments to a bank charter provided the resulting bank remains a Savings from the Northwest Indiana Community Reinvest- Association Insurance Fund ("SAIF") member. Following the conversion, Peoples Bank will continue to be SAIF insured. The Office of ment Alliance ("Protestant") criticizing Peoples Thrift Supervision ("OTS") and the Indiana Department of Financial FSB's efforts to meet local credit needs through Institutions have approved this conversion. 2. Deposit data are as of March 31, 1994. reinvestment, particularly in Gary and Hammond, 3. The Gary-Hammond banking market is approximated by Lake Indiana. County, Porter County with the exception of Pine Township, and In assessing the impact of this proposal under the Cass, Clinton, Dewey, New Durham, and Prairie Townships in La Porte County, all in Indiana. convenience and needs factor, the Board has carefully 4. Market data are as of June 30, 1993. Market share data are based reviewed all relevant facts of record, including comon calculations in which the deposits of thrift institutions are included ments from Protestant, Peoples FSB, and other comat 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to become, major competi- menters, in light of Peoples FSB's record of perfortors of commercial banks. See Midwest Financial Group, 75 Federal mance under the CRA. Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Because the deposits of Peoples FSB will be transferred to a chartered bank under the proposal, those deposits are included at 100 percent in the calculation of pro forma market share. See First Banks, Inc., 76 Federal Reserve Bulletin 669, 670 n.9 (1990); Norwest Corporation, 78 Federal Reserve Bulletin 452 (1992). 5. See 12 U.S.C. § 2903. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 825 CRA Performance Record of Peoples FSB The Board also has carefully reviewed the 1992 and 1993 Home Mortgage Disclosure Act ("HMDA") data Initially, the Board notes that Peoples FSB received for Peoples FSB. These data show a low percentage of an "outstanding" rating from the Office of Thrift HMDA-related loan applications from African-Amer- Supervision, its primary federal banking regulator, at icans, who represent approximately 24 percent of the its most recent examination for CRA performance as population in Peoples FSB's delineated community. of June 21, 1993 (the "1993 Examination").6 Examin- These data also show that the denial rate for loans to ers found that Peoples FSB's performance in originat- purchase one-to-four-family housing units in low- and ing residential mortgage loans, housing rehabilitation moderate-income census tracts is significantly lower loans, and home improvement loans throughout its than the denial rate for such loans by lenders in the delineated community was "very good." The 1993 aggregate, and that Peoples FSB's percentage of loan Examination also characterized Peoples FSB's partic- applications by and loan originations among low- and ipation in governmentally insured or guaranteed loan moderate-income borrowers increased from 1992 to programs for housing,7 its marketing and outreach 1993 and is comparable to the percentage of such loan programs,8 and its participation and investments in applications and originations for lenders in the aggrelocal community development and redevelopment pro- gate. grams all as "very good." For example, the institution The 1993 Examination found no evidence of any assisted Northwest Indiana Habitat for Humanity to illegal discriminatory credit practices or other pracobtain the first grants for housing rehabilitation made tices intended to discourage credit applicants. In by the Federal Home Loan Bank of Indianapolis addition, Peoples FSB has initiated steps to through its Affordable Housing Program. Peoples FSB strengthen its outreach and its lending performance also has loaned $1.1 million to the East Chicago Urban in communities with predominantly minority popula- Enterprise Association, Inc., a state government en- tions. For example, the thrift will replace its branch tity created to revitalize areas of East Chicago, and in East Chicago with a new facility that has been helped obtain additional grants to build a joint child designed with the assistance of community leaders in and senior day care facility in an economically de- order to increase its accessibility to minority and pressed area of East Chicago. In addition, the thrift lower- income customers in Gary and Hammond, as has pledged $180,000 to fund the rehabilitation of a well as East Chicago, who traditionally have had 12-unit apartment building near downtown Hammond, limited contact with financial institutions. Peoples and has provided long-term financial support to the FSB also plans to introduce a new home mortgage Local Initiative Support Coalition in Gary. Peoples product featuring a 5 percent down payment require- FSB also has provided over $1 million of the financing ment as part of a mailing targeted to low- and required by the Community Reinvestment Project of moderate-income census tracts in Gary, Hammond, East Chicago to rehabilitate 1,780 housing units in and East Chicago. Management of Northwest Indi- East Chicago. ana expects that these steps will help improve lending by Peoples FSB in minority and low- and moderate-income communities. NorthWest Indiana 6. The Statement of the Federal Financial Supervisory Agencies must submit reports semiannually to the Federal Regarding the Community Reinvestment Act provides that a CRA examination is an important and often controlling factor in the Reserve Bank of Chicago for the next year describing consideration of an institution's CRA record, and that these reports its progress in strengthening its performance in will be given great weight in the applications process. 54 Federal HMDA-related lending. Its progress will be assessed Register 13,742, 13,745 (1989). Protestant contends that this rating is too high in light of the alleged deficiencies in Peoples FSB's commu- in connection with future applications to expand its nity reinvestment efforts. deposit-taking facilities. 7. These programs included loans for rehabilitating existing housing through local community development groups, subsidies for the The Board has carefully considered all the facts of construction of new housing for low- and moderate-income families, record, including the comments filed in this case, in participation in the Indiana Housing Authority's Mortgage Credit reviewing the convenience and needs factors under the Certificate Program, and sponsorship of programs under the Federal Home Loan Bank Affordable Housing Program. Peoples FSB also BHC Act. Based on a review of the entire record of supports the Community Reinvestment Project of East Chicago's this application, including the most recent CRA perprogram to make home mortgages for amounts as low as $10,000, with down payments as low as 5 percent. formance examination of Peoples FSB, the Board 8. Examiners found that the institution's marketing efforts reach believes that the efforts of Peoples FSB to help meet throughout its delineated community by a variety of media advertis- the credit needs of all segments of the community it ing, including newspapers targeted to minority readers. In addition, serves, including minority and low- and moderate- Peoples FSB sponsors an annual homebuyers seminar, offers financial workshops in low- and moderate-income neighborhoods upon re- income neighborhoods, and all other convenience and quest, and distributes its seminar materials to realtors. Peoples FSB needs considerations, are consistent with approval of plans to expand its homebuyers seminar to include separate presentations in each of its major market areas. this application. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

826 Federal Reserve Bulletin • September 1994 Other Considerations through Probursa International Incorporated, New York, New York ("Company"),1 in the following The Board also finds that the financial and managerial securities-related activities: resources and future prospects of Northwest Indiana (1) Providing investment advisory services pursuant and Peoples Bank and the other supervisory factors to section 225.25(b)(4) of Regulation Y (12 C.F.R. the Board must consider under section 3 of the BHC 225.25(b)(4)); Act are consistent with approval of this proposal. (2) Providing securities brokerage services, related Based on the foregoing and all the facts of record, securities credit activities consistent with the the Board has determined that this application should Board's Regulation T (12 C.F.R. 220), and incidenbe, and hereby is, approved. The Board's approval is tal activities, such as, offering custodial services, specifically conditioned upon compliance with all the individual retirement accounts, and cash managecommitments made by NorthWest Indiana in connec- ment services pursuant to section 225.25(b)(15) of tion with this application and upon the receipt by Regulation Y (12 C.F.R. 225.25(b)(15)); NorthWest Indiana and Peoples Bank of all required (3) Providing securities brokerage and investment regulatory approval. The Board's approval also is advisory services on a combined basis ("full service conditioned upon NorthWest Indiana submitting re- brokerage") pursuant to section 225.25(b)(15) of ports semiannually to the Federal Reserve Bank of Regulation Y (12 C.F.R. 225.25(b)(15)), including Chicago as described above. The commitments and exercising investment discretion on behalf of insticonditions relied on in reaching this decision shall be tutional customers; deemed to be conditions imposed in writing by the (4) Purchasing and selling, on the order of custom- Board and, as such, may be enforced in proceedings ers, all types of securities as a "riskless principal"; under applicable law. and This transaction shall not be consummated before (5) Acting as agent in the private placement of all the thirtieth calendar day following the effective date types of securities and providing related advisory of this order, or later than three months after the services. effective date of this order, unless such period is extended for good cause by the Board or the Federal Notice of the application, affording interested per- Reserve Bank of Chicago, acting pursuant to delegated sons an opportunity to submit comments, has been authority. published (59 Federal Register 1947 (1994)). The time By order of the Board of Governors, effective for filing comments has expired, and the Board has July 1, 1994. considered the application and all comments received in light of the public interest factors set forth in section Voting for this action: Chairman Greenspan, Vice Chair- 4(c)(8) of the BHC Act. man Blinder, and Governors Kelley, Lindsey, and Phillips. Applicant, with total consolidated assets equiva- Absent and not voting: Governor La Ware. lent to approximately $80.5 billion, is the largest commercial banking organization in Spain.2 In the JENNIFER J. JOHNSON United States, Applicant controls a bank in May- Associate Secretary of the Board aguez, Puerto Rico; a bank in Santa Fe, New Mexico; a branch in New York, New York; and an Orders Issued Under Section 4 of the Bank agency in Miami, Florida. Company is, and will Holding Company Act continue to be, a broker-dealer registered with the Securities and Exchange Commission ("SEC"), and a member of the National Association of Securities Banco Bilbao Vizcaya, S.A. Dealers ("NASD"). As such, Company is subject to Bilbao, Spain the recordkeeping, reporting, fiduciary standards, and other requirements of the Securities Exchange Order Approving an Application to Engage in Act of 1934 (15 U.S.C. § 78a et seq.), the SEC, and Securities-Related Activities the NASD. Banco Bilbao Vizcaya, S.A., Bilbao, Spain ("Applicant"), a foreign bank subject to the provisions of the Bank Holding Company Act (12 U.S.C. § 1843(c)(8)) ("BHC Act"), has applied pursuant to section 4(c)(8) 1. Company is a wholly owned subsidiary of Grupo Financiero Probursa, S.A. de C.V., Mexico City, Mexico, a subsidiary of of the BHC Act and section 225.23 of the Board's Applicant that engages in various activities outside the United States. Regulation Y (12 C.F.R. 225.23), to engage indirectly, 2. Asset data are as of December 31, 1993. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 827 Investment Advisory and Securities Brokerage ties are so closely related to banking as to be a proper Activities incident thereto within the meaning of section 4(c)(8) of the BHC Act.5 The Board also previously has The Board has previously determined by regulation determined that acting as agent in the private placethat the proposed investment advisory, securities bro- ment of securities, and purchasing and selling securikerage, and full service brokerage activities are closely ties on the order of investors as a "riskless principal", related to banking for purposes of section 4(c)(8) of the do not constitute underwriting or dealing in securities BHC Act.3 Applicant has committed that it will con- for purposes of section 20 of the Glass-Steagall Act, duct these activities in accordance with the Board's and, accordingly, that revenue derived from these regulations and orders approving these activities for activities is not subject to the 10 percent revenue bank holding companies. limitation on underwriting and dealing in ineligible securities.6 In order to address the potential for con- Private Placement and "Riskless Principal" flicts of interests, unsound banking practices, or other Activities adverse effects, Applicant has committed that Company will conduct its private placement and "riskless Private placement involves the placement of new principal" activities using the same methods and proissues of securities with a limited number of sophisti- cedures, and subject to the same prudential limitations cated purchasers in a nonpublic offering. A financial established by the Board in the Bankers Trust Order intermediary in a private placement transaction acts and the J.P. Morgan Order,7 as modified to reflect solely as an agent for the issuer in soliciting purchas- Applicant's status as a foreign bank.8 ers, and does not purchase the securities and attempt to resell them. Securities that are privately placed are Financial Factors, Managerial Resources, and Other not subject to the registration requirements of the Considerations Securities Act of 1933, and are offered only to financially sophisticated institutions and individuals and not In every application under section 4 of the BHC Act, to the public. Applicant has committed that Company the Board considers the financial condition and rewould not privately place registered securities, and sources of the applicant and its subsidiaries and the would only place securities with "institutional custom- effect of the transaction on these resources.9 In this ers" as defined in section 225.2(g) of Regulation Y case, the Board notes that Applicant meets the rele- (12 C.F.R. 225.2(g)). "Riskless principal" refers to a transaction in which a broker-dealer, after receiving an order to buy (or 5. See Bankers Trust New York Corporation, 75 Federal Reserve Bulletin 829 (1989) ("Bankers Trust Order"); J.P. Morgan & Comsell) a security from a customer, purchases (or sells) pany Incorporated, 76 Federal Reserve Bulletin 26 (1990) ("J.P. the security for its own account to offset a contempo- Morgan Order"). raneous sale to (or purchase from) the customer.4 6. See Bankers Trust Order. 7. See J.P. Morgan Order; Bankers Trust Order, 75 Federal Reserve "Riskless principal" transactions are understood in Bulletin at 829. Among the prudential limitations detailed more fully in the industry to include only transactions in the sec- those orders are that Company will maintain specific records that will ondary market. Thus, under this proposal, Company clearly identify all "riskless principal" transactions, and Company will not engage in any "riskless principal" transactions for any would not act as a "riskless principal" in selling securities carried in its inventory. When acting as a "riskless princisecurities at the order of a customer that is the issuer pal," Company will engage only in transactions in the secondary market, and not at the order of a customer that is the issuer of the of the securities to be sold, or in any transaction in securities to be sold, will not act as "riskless principal" in any which Company has a contractual agreement to place transaction involving a security for which it makes a market, nor hold the securities as agent of the issuer. Company also itself out as making a market in the securities that it buys and sells as a "riskless principal." Moreover, Company will not engage in "riskwould not act as a "riskless principal" in any transless principal" transactions on behalf of any foreign affiliates that action involving a security for which it makes a engage in securities dealing activities outside the United States, and market. will not act as "riskless principal" for registered investment company securities. In addition, Company will not act as a "riskless principal" The Board previously has determined by order that, with respect to any securities of investment companies that are subject to a number of prudential limitations that advised by Applicant or any of its affiliates. With respect to private placement activities, Applicant has committed that Company will not address the potential for conflicts of interests, unsound privately place registered investment company securities or securities banking practices, and other adverse effects, the pro- of investment companies that are advised by Applicant or any of its posed private placement and riskless principal activi- affiliates. 8. See Sumitomo Bank, Limited, 77 Federal Reserve Bulletin 339 (1991); Creditanstalt-Bankverein, 77 Federal Reserve Bulletin 183 (1991); The Royal Bank of Scotland Group PLC, 76 Federal Reserve 3. See 12 C.F.R. 225.25(b)(4)(i)-(iv) and (b)(15). Bulletin 886 (1990); Canadian Imperial Bank of Commerce, et al., 4. See Securities and Exchange Commission Rule 10b-10. 76 Federal Reserve Bulletin 158 (1990). 17 C.F.R. 240.10b-10(a)(8)(i). 9. See 12 C.F.R. 225.24. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

828 Federal Reserve Bulletin • September 1994 vant risk-based capital standards consistent with the and may be enforced in proceedings under applicable Basle Accord, and has capital equivalent to that which law. would be required of a United States banking organi- This transaction shall not be consummated later zation. Based on the facts of this case, the Board than three months after the effective date of this order, concludes that financial considerations are consistent unless such period is extended for good cause by the with approval of this application. The managerial Board or by the Federal Reserve Bank of New York resources of Applicant also are consistent with ap- pursuant to delegated authority. proval. By order of the Board of Governors, effective In order to approve this application, the Board is July 7, 1994. required to determine that the performance of the proposed activities by Applicant can reasonably be Voting for this action: Chairman Greenspan, Vice Chairexpected to produce public benefits that outweigh man Blinder, and Governors Kelley, Lindsey, and Phillips. adverse effects under the proper incident to banking Absent and not voting: Governor La Ware. standard of section (4)(c)(8) of the BHC Act. Under JENNIFER J. JOHNSON the framework established in this order and prior Associate Secretary of the Board decisions, consummation of this proposal is not likely to result in any significant adverse effects, such as Creditanstalt-Bankverein undue concentration of resources, decreased or unfair Vienna, Austria competition, conflicts of interests, or unsound banking practices. The record in this case indicates that ap- Order Approving an Application to Engage in proval of this proposal should provide added conve- Investment Advisory Services nience to Applicant's customers, and contribute to continued competition among providers of these ser- Creditanstalt-Bankverein, Vienna, Austria ("Applivices. Accordingly, the Board has determined that the cant"), a foreign bank subject to the provisions of the performance of the proposed activities by Applicant Bank Holding Company Act ("BHC Act"), has apcan reasonably be expected to produce public benefits plied pursuant to section 4(c)(8) of the BHC Act that would outweigh possible adverse effects under the (12 U.S.C. § 1843(c)(8)) and section 225.23(a)(3) of the proper incident to banking standard of section 4(c)(8) Board's Regulation Y (12 C.F.R. 225.23(a)(3)) to enof the BHC Act. gage through a joint venture in investment advisory Based on the foregoing and other facts of record, activities pursuant to section 225.25(b)(4) of Regulaand subject to the commitments made by Applicant, tion Y (12 C.F.R. 225.25(b)(4)).1 Applicant proposes the Board has determined that the balance of public to become a limited partner through its wholly owned interest factors it is required to consider under section subsidiary, Creditanstalt International Advisers 4(c)(8) is favorable. Accordingly, the Board has deter- Group, Inc., New York, New York, in Gulfstream mined that the application should be, and hereby is, Global Investors, Ltd., Dallas, Texas ("Company"), a approved, subject to all the terms and conditions set partnership in which Tull, Doud, Marsh & Triltsch, forth in this order, and in the above noted Board Inc., Dallas, Texas ("TDMT"), serves as general regulations and orders that relate to these activities. partner and The Sail Company, Dallas, Texas The Board's determination is also subject to all the ("Sail"), serves as limited partner. Company would terms and conditions set forth in the Board's Regula- conduct the proposed activities throughout the United tion Y, including those in sections 225.4(d) and States and abroad.2 225.23(b), and to the Board's authority to require modification or termination of the activities of a bank holding company or any of its subsidiaries as the Board finds necessary to assure compliance with, and 1. Specifically, Company would: (1) Serve as investment adviser (as defined in section 2(a)(20) of the prevent evasion of, the provisions of the BHC Act, Investment Company Act of 1940, 15 U.S.C. § 80a-2(a)(20)) to an and the Board's regulations and orders issued there- investment company registered under that act, including sponsorunder. The Board's decision is specifically conditioned ing, organizing, and managing a closed-end investment company; (2) Provide portfolio investment advice to any other person; and on compliance with all the commitments made in this (3) Furnish general economic information and advice, general application, including the commitments discussed in economic statistical forecasting services and industry studies. this order and the conditions set forth in this order and See 12 C.F.R. 225.25(b)(4)(ii), (iii), and (iv). This proposal is similar to Applicant's proposal to engage in investment advisory activities in the above noted Board regulations and orders. through a joint venture with Steinberg Asset Management, Inc., These commitments and conditions shall both be previously approved by the Board. See Creditanstalt-Bankverein, deemed to be conditions imposed in writing by the 80 Federal Reserve Bulletin 143 (1994). 2. Sail currently owns a 49 percent interest in Company. Applicant Board in connection with its findings and decisions, would acquire a 24.5 percent limited partnership interest in Company Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 829 Notice of the application, affording interested per- employee, officer, or director of Sail or any of its sons an opportunity to submit comments, has been affiliates would serve as an employee, officer, or published (59 Federal Register 26,500 (1994)). The director of Applicant or any affiliate of Applicant, time for filing comments has expired, and the Board including Company. In addition, Applicant has comhas considered the application and all comments re- mitted to notify the Federal Reserve Bank of New ceived in light of the factors set forth in section 4(c)(8) York if Company, Sail or TDMT determines to engage of the BHC Act. in any activity that is impermissible for a bank holding Applicant, with total consolidated assets of company under the BHC Act, or if Company, TDMT, $48.4 billion, is the 97th largest banking organization in Sail, or any affiliate of Sail determines to engage in any the world.3 In the United States, Applicant operates a securities underwriting or dealing activity that is imbranch in New York, New York, and representative permissible for a state member bank under the Glassoffices in Atlanta, Georgia, and San Francisco, Cali- Steagall Act. Furthermore, Applicant has committed fornia.4 Applicant also engages in permissible non- to seek Board approval of Applicant's retention of its banking activities in the United States and abroad. interest in Company should the activities of TDMT, The Board previously has determined by regulation Sail, or their affiliates be inconsistent with the Board's that providing investment advisory services is closely order approving this application. Based on these and related to banking and permissible for bank holding other commitments, the Board believes that the struccompanies under section 4(c)(8) of the BHC Act.5 ture of the joint venture in this case is consistent with Applicant has stated that Company will engage in the provisions of section 4 of the BHC Act and prior these activities in accordance with the Board's regu- Board cases. lations. In order to approve this application, the Board also In prior decisions, the Board has expressed concern is required to determine that the performance of the that joint ventures could potentially lead to a matrix of proposed activities by Applicant can reasonably be relationships between co-venturers and their affiliates expected to produce benefits to the public that would that could break down the legally mandated separation outweigh possible adverse effects under the proper of banking and commerce, create the possibility of incident to banking standard of section 4(c)(8) of the conflicts of interests and other adverse effects that the BHC Act.8 Under the framework established in this BHC Act was designed to prevent, or impair or give and other Board decisions, consummation of this the appearance of impairing the ability of the banking proposal is not likely to result in any significantly organization to function effectively as an independent adverse effects, such as an undue concentration of and impartial provider of credit.6 Further, joint ven- resources, decreased or unfair competition, conflicts tures must be carefully analyzed for any possible of interests, or unsound banking practices. Moreover, adverse effects on competition and on the financial the Board has determined that performance of the condition of the banking organization involved in the proposed activities by Applicant can reasonably be proposal. expected to produce public benefits that would out- Currently, TDMT and Sail engage only in invest- weigh any adverse effects under the proper incident to ment advisory activities that are permissible for a bank banking standard of section 4(c)(8) of the BHC Act. holding company, but affiliates of Sail engage in a In weighing these factors under section 4 of the variety of activities that are not permissible for a bank BHC Act, the Board considers the financial condition holding company.7 Applicant has committed that no and resources of Applicant and its subsidiaries and the effect of the proposal on these resources. In this case, the Board notes that Applicant meets the relevant risk-based capital standards consistent with the Basle from Sail, and TDMT would remain general partner with a 51 percent interest in Company. Accord, and has capital equivalent to that which 3. Asset data are as of June 30, 1993. would be required for United States banking organi- 4. Under section 8(a) of the International Banking Act of 1978 zations. In view of these and other facts of record, the (12 U.S.C. § 3106(a)), a foreign bank that operates a branch, agency, or commercial lending company subsidiary in the United States is Board has determined that the financial factors are subject to the BHC Act as if it were a bank holding company. consistent with approval of this application. The man- 5. See 12 C.F.R. 225.25(b)(4). agerial resources of Applicant and its subsidiaries also 6. See, e.g., The Fuji Bank, Limited, 75 Federal Reserve Bulletin 577 (1989); Amsterdam-Rotterdam Bank, N.V., 70 Federal Reserve are consistent with approval. Bulletin 835 (1984). Based on the foregoing and all the facts of record, 7. Sail is an indirect wholly owned subsidiary of the Rosewood the Board has determined to, and hereby does, ap- Corporation ("Rosewood"), which engages through several subsidiaries in a variety of commercial and industrial activities that are impermissible for a bank holding company. Neither Rosewood nor any of its affiliates engages in any securities underwriting or dealing activities. 8. 12 U.S.C. § 1843(c)(8). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

830 Federal Reserve Bulletin • September 1994 prove the application subject to the terms and condi- Florida pursuant to section 5(d)(3) of the Federal tions set forth in this order, and in the Board regula- Deposit Insurance Act, 12 U.S.C. § 1815(d)(3)(A)(ii) tions and orders noted above. The Board's (the "FDI Act"), as amended by the Federal Deposit determination also is subject to all the terms and Insurance Corporation Improvement Act of 1991, Pub. conditions set forth in its Regulation Y, including L. No. 102-242, § 501, 105 Stat. 2236, 2388 (1991).1 those in sections 225.4(d) and 225.23(b), and to the Section 5(d)(3) of the FDI Act requires the Board to Board's authority to require modification or termina- review any proposed merger between a Savings Assotion of the activities of a bank holding company or any ciation Insurance Fund member and any Bank Insurof its subsidiaries as it finds necessary to assure ance Fund ("BIF") member, if the acquiring or resultcompliance with, and to prevent evasion of, the pro- ing institution is a BIF-insured subsidiary of a bank visions of the BHC Act and the Board's regulations holding company, and in reviewing these proposals, to and orders issued thereunder. The Board's decision is follow the procedures and consider the factors set specifically conditioned on compliance with all the forth in section 18(c) of the FDI Act, the "Bank commitments made in this application, including the Merger Act" (12 U.S.C. § 1828(c)).2 This transaction commitments discussed in this order and the condi- is also subject to review under the Bank Merger Act by tions set forth in the orders noted above. These the Office of the Comptroller of the Currency commitments and conditions shall be deemed to be ("OCC"), the primary regulator for Bank.3 conditions imposed in writing by the Board in connec- Notice of the applications, affording interested pertion with its findings and decision, and, as such, may sons an opportunity to submit comments, has been be enforced in proceedings under applicable law. published (59 Federal Register 23,206 (1994)). As This transaction shall not be consummated later required by the Bank Merger Act and the Board's than three months after the effective date of this order, Rules of Procedure (12 C.F.R. 262.3(b)), reports on unless such period is extended for good cause by the the competitive effects of the mergers were requested Board or by the Federal Reserve Bank of New York, from the United States Attorney General, the OCC, pursuant to delegated authority. and the Federal Deposit Insurance Corporation. The By order of the Board of Governors, effective time for filing comments has expired, and the Board July 27, 1994. has considered the applications and all comments received in light of the factors set forth in section Voting for this action: Chairman Greenspan, Vice Chair- 4(c)(8) of the BHC Act, the Bank Merger Act and man Blinder, and Governors Kelley, La Ware, and Lindsey. section 5(d)(3) of the FDI Act. Absent and not voting: Governor Phillips. The Board has determined that the operation of a savings association by a bank holding company is JENNIFER J. JOHNSON closely related to banking for purposes of section Deputy Secretary of the Board 4(c)(8) of the BHC Act.4 In making this determination, the Board required that savings associations acquired First Union Corporation by bank holding companies conform their direct and Charlotte, North Carolina indirect activities to those permissible for bank holding companies under section 4(c)(8) of the BHC Act. First Order Approving Applications to Acquire and Merge Union has committed to conform all activities of a Savings Association Into a Subsidiary Bank BancFlorida to the requirements of section 4 of the BHC Act and Regulation Y.5 First Union Corporation, Charlotte, North Carolina ("First Union"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC 1. First Union proposes that BFC will be acquired by, and merged Act"), has applied for the Board's approval under into, First Union's wholly owned subsidiary, First Union Corporation of Florida, prior to the merger of BancFlorida into Bank. section 4(c)(8) of the BHC Act (12 U.S.C. 2. 12 U.S.C. § 1815(d)(3)(E). These factors include considerations § 1843(c)(8)) and section 225.23 of the Board's Regu- relating to competition, the financial and managerial resources and lation Y (12 C.F.R. 225.23), to acquire BancFlorida future prospects of the existing and proposed institutions, and the convenience and needs of the communities to be served. 12 U.S.C. Financial Corporation, a savings and loan holding § 1828(c). company ("BFC"), and its subsidiary savings associ- 3. The OCC has preliminarily approved this proposal. ation, BancFlorida, a Federal Savings Bank ("Banc- 4. See 12 C.F.R. 225.25(b)(9). 5. BancFlorida engages through subsidiaries in real estate activities Florida"), both of Naples, Florida. First Union also that would not be permissible for a bank holding company under the has requested Board approval for its subsidiary bank, BHC Act. First Union has committed to terminate all impermissible real estate activities within two years of consummation of the pro- First Union National Bank of Florida, Jacksonville, posal, and not to undertake any new real estate projects during this Florida ("Bank"), to acquire through merger Banc- time. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 831 First Union, with consolidated assets of $72.3 bil- competition or the concentration of banking resources lion, controls eight banks in North Carolina; Georgia; in these or any relevant banking markets. South Carolina; Florida; Virginia; Washington, D.C.; The financial and managerial resources and future Maryland; and Tennessee.6 First Union is the second prospects of First Union and its bank subsidiaries and largest commercial banking organization in Florida, BancFlorida are consistent with approval. Considerwith its subsidiary depository institutions controlling ations relating to the convenience and needs of the $21.4 billion in deposits, representing approximately communities to be served, including the record of 12.3 percent of the total deposits in depository institu- Bank under the Community Reinvestment Act tions in the state.7 BancFirst controls $1.18 billion in (12 U.S.C. § 2901 et seq.),w also are consistent with deposits, representing less than one percent of the approval of this proposal under the factors the Board total deposits in depository institutions in Florida. is required to consider under the Bank Merger Act. Upon consummation of this proposal, First Union In addition, the record does not indicate that conwould remain the second largest commercial banking summation of this proposal is likely to result in any organization in the state, controlling deposits of significantly adverse effects, such as undue concentra- $22.6 billion, representing approximately 13 percent of tion of resources, decreased or unfair competition, the total deposits in depository institutions in Florida. conflicts of interests, or unsound banking practices First Union and BancFlorida compete directly in that are not likely to be outweighed by the public five banking markets in Florida.8 The Board has care- benefits of this proposal. Accordingly, the Board has fully reviewed the competitive effects of this proposal determined that the balance of public interest factors it in light of the number of remaining competitors, the must consider under section 4(c)(8) of the BHC Act is market share of each competitor, and the relatively favorable and consistent with approval of First small increase in market concentration in each of these Union's application to acquire BancFlorida. markets as measured by the Herfindahl-Hirschman The Board also has considered the additional factors Index ("HHI").9 Based on all the facts of record, the it must review under section 5(d)(3) of the FDI Act. In Board concludes that consummation of this proposal this regard, the record in this case reflects that: would not result in significantly adverse effects on (1) The transaction will not result in the transfer of any federally insured depository institution's federal deposit insurance from one federal deposit insurance fund to the other; (2) First Union and Bank currently meet, and upon 6. Asset data are as of March 31, 1994. 7. State and market deposit data are as of June 30, 1993. In this consummation of the proposed transaction will concontext, depository institutions include commercial banks, savings tinue to meet, all applicable capital standards; and banks, and savings associations. Market share data before consum- (3) Because Bank is located in Florida and is mergmation are based on calculations in which the deposits of thrift institutions are included at 50 percent. Bank previously has indicated ing with a Florida savings association, the proposed that thrift institutions have become, or have the potential to become, transaction would comply with the Douglas Amendsignificant competitors of commercial banks. See WM Bancorp, 76 ment if BancFlorida were a state bank that First Federal Reserve Bulletin 788 (1990); Natural City Corporation, 70 Federal Reserve Bulletin 743 (1984). Because the deposits of Banc- Union was applying to acquire directly. See Florida would be transferred to a commercial bank under this pro- 12 U.S.C. § 1815(d)(3). posal, those deposits are included at 100 percent in the calculation of First Union's pro forma market share. See Norwest Corporation, 78 Federal Reserve Bulletin 452 (1992); First Bank, Inc., 76 Federal Reserve Bulletin 669, 670 n. 9 (1990). 8. These markets are the Fort Myers, Highlands County, Naples, Port Charlotte, and Sarasota banking markets. 9. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in which the 10. The Board received a comment from a minority contractor post-merger HHI is above 1800 is considered to be highly concen- ("Protestant"), who claims that Bank discriminated against him in its trated. In such markets, the Justice Department is likely to challenge administration of a loan to finance the renovation of a church. Bank a merger that increases the HHI by more than 50 points. The Justice claims that it eventually funded the entire loan, and that its dispute Department has informed the Board that a bank merger or acquisition with Protestant derived from the work performed and not from any generally will not be challenged (in the absence of other factors illegal or discriminatory action. This matter is currently the subject of indicating anticompetitive effects) unless the post-merger HHI is at pending litigation. least 1800 and the merger increases the HHI by more than 200 points. In considering this comment, the Board notes that Bank received a The Justice Department has stated that the higher than normal HHI "satisfactory" rating for CRA performance from its primary federal thresholds for screening bank mergers for anticompetitive effects regulator, the OCC, at its most recent examination in April 1992. This implicitly recognize the competitive effect of limited-purpose lenders examination noted that Bank had not engaged in any illegal discrimiand other non-depository financial entities. In all markets except the natory credit practices, and that Bank had a satisfactory record of Highland County banking market, consummation of this proposal investing in community development projects. The OCC has indicated would not result in a highly concentrated market above 1800 points, or that its inquiry into this matter, initiated at the request of Protestant, cause the HHI to increase by more than 50 points. The post-merger is ongoing. For these reasons, and based on all the facts of record, the HHI in the Highland County banking market would increase 9 points Board concludes that Protestant's comments do not warrant denial of to 2389. this proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

832 Federal Reserve Bulletin • September 1994 Based on the foregoing and all the facts of record, Orders Issued Under Sections 3 and 4 of the the Board has determined that the applications should Bank Holding Company Act be, and hereby are, approved.11 The Board's approval of this proposal is specifically conditioned on compli- BankAmerica Corporation ance by First Union with the commitments made in San Francisco, California connection with these applications and upon First Union and Bank receiving all necessary federal and Order Approving the Merger of Bank Holding state approvals, including the approval of the OCC Companies under the Bank Merger Act. The commitments and conditions relied on by the Board in reaching this BankAmerica Corporation, San Francisco, California decision are deemed to be conditions imposed in ("BankAmerica"), a bank holding company within the writing by the Board in connection with its findings meaning of the Bank Holding Company Act ("BHC and decision and, as such, may be enforced in pro- Act"), has applied under section 3 of the BHC Act ceedings under applicable law. (12 U.S.C. § 1842) to merge with Continental Bank The Board's determination also is subject to all of Corporation, Chicago, Illinois ("Continental"), also a the conditions set forth in Regulation Y, including bank holding company, and thereby indirectly acquire those in sections 225.4(d) and 225.23(b)(3), and to the Continental Bank, Chicago, Illinois ("Continental Board's authority to require modification or termina- Bank").1 BankAmerica also has applied under section tion of the activities of a bank holding company or any 4(c)(8) of the BHC Act to acquire the lending, trust of its subsidiaries as the Board finds necessary to company, and asset management and collection subassure compliance with, and to prevent evasion of, the sidiaries of Continental.2 provisions and purposes of the BHC Act and the In addition, BankAmerica has requested approval Board's regulations and orders issued thereunder. under section 4(c)(13) of the BHC Act (12 U.S.C. The merger of Bank and BancFlorida shall not be § 1843(c)(13)) and section 211.5(c) of Regulation K consummated before the thirtieth calendar day follow- (12 C.F.R. 211.5(c)) to acquire all the foreign subsiding the effective date of this order, and neither trans- iaries, joint ventures, and portfolio investments of action shall be consummated later than three months Continental held under section 4(c)(13) of the BHC after the effective date of this order, unless such period Act. BankAmerica also has requested approval under is extended for good cause by the Board or by the section 25A of the Federal Reserve Act (12 U.S.C. Federal Reserve Bank of Richmond, acting pursuant §611 et seq.) ("Edge Act") to acquire Continental to delegated authority. International Finance Corporation, Chicago, Illinois, By order of the Board of Governors, effective and Continental Bank International, Chicago, Illinois, July 1, 1994. each a corporation chartered under the Edge Act, and all the foreign subsidiaries, joint ventures, and portfo- Voting for this action: Chairman Greenspan, Vice Chair- lio investments of those corporations. man Blinder, and Governors Kelley, Lindsey, and Phillips. Notice of the applications, affording interested per- Absent and not voting: Governor La Ware. sons an opportunity to submit comments on the proposal, has been published (59 Federal Register 22,851 JENNIFER J. JOHNSON (1994)). The time for filing comments has expired, and Associate Secretary of the Board the Board has considered the applications and all 11. Protestant has requested that the Board hold a public hearing or meeting on this proposal. The Board's rules provide that a hearing is 1. In connection with this proposed merger, BankAmerica also has required under section 4 of the BHC Act only if there are disputed requested Board approval under section 3 of the BHC Act to exercise issues of material fact that cannot be resolved in some other manner. an option to acquire up to 19.9 percent of the voting shares of In addition, the Board may, in its discretion, hold a public hearing or Continental. This option would become moot upon consummation of meeting on an application to clarify factual issues related to the the proposed merger. application and to provide an opportunity for testimony, if appropri- 2. In particular, BankAmerica has applied to acquire Continental ate. 12 C.F.R. 262.3(e) and 262.25(d). The Board has carefully con- Equity Capital Corporation, Continental Illinois Commercial Corposidered this request. In the Board's view, Protestant has had sufficient ration, and Continental Illinois Energy Development Corporation, all opportunity to present written submissions, and has submitted sub- of Chicago, Illinois, and thereby engage in lending activities pursuant stantial written comments that have been considered by the Board. to section 225.25(b)(1) of the Board's Regulation Y (12 C.F.R. The merits of the dispute regarding Protestant's loan is already the 225.25(b)(1)); Continental Illinois Trust Company of Florida, N.A., subject of a public hearing in a court with full authority to resolve that Boca Raton, Florida, and thereby engage in trust company functions matter. On the basis of all the facts of record, the Board has pursuant to section 225.25(b)(3) of Regulation Y (12 C.F.R. determined that a public meeting or hearing is not necessary to clarify 225.25(b)(3)); and Repechage Partners Ltd., Chicago, Illinois ("Rethe factual record in these applications, or otherwise warranted in this pechage"), and thereby engage in asset management, servicing, and case. Accordingly, the request for a public meeting or hearing on these collection activities. See Continental Bank Corporation, 79 Federal applications is hereby denied. Reserve Bulletin 888 (1993). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 833 comments received in light of the factors set forth in satisfied.6 California law also permits the acquisition of the BHC Act and the Edge Act. California banks and bank holding companies by out- BankAmerica, with total consolidated assets of ap- of-state organizations, if, among other things, there is proximately $197.2 billion,3 is the second largest com- substantial reciprocity between California and the mercial banking organization in the United States, and home state of the acquiring company.7 The Illinois controls banking subsidiaries in Alaska, Arizona, Cal- Commissioner's Office and California banking authoriifornia, Idaho, Nevada, New Mexico, New York, ties have indicated generally that their respective stat- Oregon, Texas, and Washington. In addition, Bank- utes satisfy these reciprocity requirements.8 In light of America controls a thrift subsidiary, Bank of America, the foregoing, and based on all the facts of record, the FSB, Portland, Oregon ("FSB"), which has substan- Board has concluded that approval of this proposal is tial operations in Hawaii. BankAmerica also engages not prohibited by the Douglas Amendment. Approval through subsidiaries in a broad range of permissible of this proposal is specifically conditioned, however, nonbanking activities in the United States, and main- upon BankAmerica's receipt of all required state regutains various banking and nonbanking operations latory approvals. abroad. Continental, with total consolidated assets of approximately $22.8 billion, is the 34th largest com- Convenience and Needs Considerations mercial banking organization in the United States and the second largest commercial banking organization in In acting on an application under the BHC Act to Illinois. Upon consummation of this proposal, Bank- acquire a depository institution, the Board must con- America would become the second largest commercial sider the convenience and needs of the communities to banking organization in Illinois, controlling domestic be served, and take into account the records of the deposits of $8.9 billion, representing approximately relevant depository institutions under the Community 6.4 percent of total deposits in commercial banks in Reinvestment Act (12 U.S.C. § 2901 et seq.) the state. ("CRA"). The CRA requires the federal financial supervisory agencies to encourage financial institu- Douglas Amendment Analysis tions to help meet the credit needs of the local communities in which they operate consistently with the Section 3(d) of the BHC Act ("Douglas Amendment") safe and sound operation of such institutions. To prohibits the Board from approving an application by a accomplish this end, the CRA requires the appropriate bank holding company to acquire any interest in a federal supervisory authority to "assess the institubank located outside the applicant's home state4 un- tion's record of meeting the credit needs of its entire less the acquisition "is specifically authorized by the community, including low- and moderate-income statute laws of the State in which such bank is located, neighborhoods, consistent with the safe and sound by language to that effect and not merely by implica- operation of such institution," and to take that record tion."5 For purposes of the Douglas Amendment, the into account in its evaluation of applications.9 home state of BankAmerica is California and the home The Board has received comments relating to this state of Continental is Illinois. proposal from a number of organizations, including The statute laws of Illinois permit an out-of-state community and economic development groups. Sevbank holding company, such as BankAmerica, to merge eral commenters have expressed support for the with an Illinois bank holding company and acquire merger of BankAmerica and Continental, and have control of an Illinois bank, provided that the out-of- indicated their belief that BankAmerica would mainstate bank holding company's home state would permit tain and strengthen Continental's commitment to lowthe acquisition by an Illinois bank holding company of and moderate-income neighborhoods and community banks and bank holding companies located in that state development initiatives. Two local business organizaon a reciprocal basis, and certain other conditions are tions ("Protestants") have objected to this proposal. 6. See 111. Rev. Stat. ch. 205, para. 10/3.02, 10/3.071 (Smith-Hurd 1993). 3. Asset, deposit, and ranking data are as of March 31, 1994. 7. See Cal. Fin. Code §§ 3753, 3756 (West Supp. 1994). 4. Under the Douglas Amendment, a bank holding company's home 8. Illinois law also requires, among other things, that the bank state is the state in which the operations of its banking subsidiaries commissioner make certain findings, including a determination that were principally conducted on July 1, 1966, or the date on which it net public benefits would result from the acquisition. See 111. Rev. became a bank holding company, whichever is later. 12 U.S.C. Stat. ch. 205, para. 10/3.02, 3.071 (Smith-Hurd 1993). The Board notes § 1842(d). The operations of a bank holding company are considered that the Illinois interstate banking statute was recently amended to principally conducted in that state in which the total deposits of all its eliminate a number of previously existing requirements. See Illinois banking subsidiaries are largest. House Bill 4096, §§ 15, 20 (effective June 29, 1994). 5. 12 U.S.C. § 1842(d). 9. 12 U.S.C. § 2903. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

834 Federal Reserve Bulletin • September 1994 One of these commenters, based in San Francisco, The Board recently reviewed the CRA performance criticized BankAmerica's record of home mortgage record of the BankAmerica organization, including lending to African-Americans and investments in eco- Bank of America-California, in connection with Banknomic development organizations in the African- America's application to acquire Liberty Bank, Hono- American community. The other Protestant, based in lulu, Hawaii, and concluded that this record was Chicago, criticized Continental's record of providing consistent with approval of the proposal.13 As noted in banking services and products to low- and moderate- the Liberty Order, Bank of America-California offers a income minority communities, and maintains that variety of credit products and services designed Continental has a poor record of investment involving to assist in meeting the credit needs of low- and these communities, minority residents, and minority moderate-income and minority neighborhoods within business owners. its delineated community, including the "Neighbor- In its consideration of the convenience and needs hood Advantage" and "BASIC" loan programs for factor under the BHC Act, the Board has carefully housing and consumer credit. The bank also particireviewed the entire record of CRA performance of pates in a number of government-sponsored credit BankAmerica, its subsidiary banks, Continental, and programs, including offering Farmers Home Adminis- Continental Bank, all comments received with respect tration and Small Business Administration ("SBA") to these applications, BankAmerica's responses to loans for small businesses. In addition, as noted in the those comments, and all the other facts of record, in Liberty Order, the bank recently introduced a loan light of the CRA, the Board's regulations, and the program offering flexible underwriting criteria and a Statement of the Federal Financial Supervisory Agen- simplified application process for minority and women cies Regarding the Community Reinvestment Act business owners. ("Agency CRA Statement").10 B. HMD A Data and CRA-Related Lending Record of CRA Performance Record A. Evaluations of CRA Performance The Board has carefully reviewed the 1992 and preliminary 1993 data filed by Bank of America- The Agency CRA Statement provides that a CRA California under the Home Mortgage Disclosure Act examination is an important and often controlling (12 U.S.C. § 2801 et seq.) ("HMDA") in light of factor in the consideration of an institution's CRA allegations by the San Francisco-based Protestant record, and that these reports will be given great that the bank has an inadequate record of home weight in the applications process.11 In this case, the mortgage lending in the African-American communi- Board notes that all of BankAmerica's subsidiary ty.14 These data indicate that Bank of Americabanks that were evaluated for CRA performance re- California made a substantial number of home mortceived "outstanding" or "satisfactory" ratings from gage loans to African-Americans in California.15 their primary regulators during their most recent ex- However, these data also reveal some disparities in aminations. In particular, BankAmerica's lead subsid- lending and denial rates for African-American appliiary bank, Bank of America National Trust and Sav- cants compared with other groups. ings Association, San Francisco, California ("Bank of The Board is concerned when an institution's record America-California"), representing approximately indicates disparities in lending to minority applicants, 74 percent of the total consolidated assets of Bank- and believes that all banks are obligated to ensure that America and its principal banking subsidiary in Cali- their lending practices are based on criteria that ensure fornia, received an "outstanding" rating from its pri- not only safe and sound lending, but also equal access mary federal regulator, the Office of the Comptroller of to credit by creditworthy applicants regardless of race. the Currency ("OCC"), at its most recent examination for CRA performance as of January 1994 ("1994 Exam"). Continental Bank received a "satisfactory" 13. See BankAmerica Corporation, 80 Federal Reserve Bulletin 623 rating from the OCC at its most recent examination for (1994) ("Liberty Order"). CRA performance as of March 1992.12 14. In addition to general allegations regarding Bank of America- California's home lending record in California, this Protestant has raised questions about the lending practices of the bank in specific neighborhoods, including Bayview/Hunters Point and East Oakland. In 1993, Bank of America-California originated mortgage loans to low- 10. 54 Federal Register 13,742 (1989). and moderate-income African-American borrowers in each of these 11. Id. at 13,745. neighborhoods. 12. Continental Bank was chartered as a national bank until June 29, 15. In particular, Bank of America-California made over 5,000 1994, when it became an Illinois-chartered bank with membership in housing-related loans to African-Americans in California in 1992 and the Federal Reserve System. 1993 combined. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 835 The Board recognizes, however, that HMD A data loans of less than $50,000, for a total of over $90 milalone provide an incomplete measure of an institu- lion, and more than 2,800 conventional small business tion's lending in its community. The Board also rec- loans, totalling $492 million. In the area of consumer ognizes that HMDA data have limitations that make installment credit, during the first three quarters of the data an inadequate basis, absent other information, 1993, Bank of America-California made over 5,400 for conclusively determining that an institution has loans under its "BASIC" program for middle-income engaged in illegal discrimination in making lending borrowers and low- and moderate-income borrowers decisions. and neighborhoods, totalling $123 million, and an In this regard, the 1994 Exam included a fair lending additional 16,000 loans to low- and moderate-income examination of residential loan files. The OCC found borrowers in the aggregate amount of $290 million. no evidence of illegal discrimination or other illegal The record also indicates that the bank approved over credit practices, or any other practices designed to 20,000 housing-related loans in 1992 and 1993 in lowdiscourage applications for credit, and concluded that and moderate-income census tracts.16 the bank did not engage in disparate treatment of Bank of America-California has also participated in minority applications. The OCC also determined that a variety of community and economic development the board of directors and senior management of the initiatives to benefit low- and moderate-income neighbank had developed effective written policies and borhoods in California. The OCC concluded in the procedures to support nondiscriminatory lending de- 1994 Exam that the performance of Bank of Americacisions, and that these policies and procedures were California in this area was "excellent," and noted that implemented through objective underwriting criteria, the combined efforts of this bank and Bank of America the bank's compliance and audit program, and regular Community Development Bank ("BACDB") had retraining of bank personnel at all levels on fair lending sulted in significant contributions to residential and laws and regulations. economic development in California. The bank's com- Bank of America-California has taken a number of munity and economic development efforts focus on steps to assist in meeting the housing-related credit small business lending programs, including programs specifically designed for women- and minority-owned needs of low- and moderate-income and minority businesses,17 and the provision and arrangement of borrowers. For example, the bank's "Neighborhood municipal government financing. Advantage" program to provide affordable home mortgage financing, including financing for low- and In addition to SBA programs and more traditional moderate-income borrowers and neighborhoods, small business lending efforts, the bank has initiated which OCC examiners noted had been strongly mar- special programs such as the Small Business Investketed and was effective in broadening the bank's ment Program in Los Angeles. This $25 million prolending base, generated over 30,000 loans in 1992 and gram was created and developed in a very short period 1993 for a total of more than $3.5 billion. These and of time after the civil disturbances in that city in April other initiatives are part of BankAmerica's 1992 cor- 1992, and was designed to provide long-term financing porate-wide commitment to provide $12 billion over a for small businesses adversely affected by those ten-year period for housing loans in low- and events. Loans of less than $100,000 were made availmoderate-income census tracts and for lower-income and minority borrowers, funding for the development and long-term financing of low-income housing, con- 16. In general, the record indicates that Bank of America-California has made tangible efforts to lend in low- and moderate-income and sumer loans for lower-income households, and gov- minority communities. In addition to special lending programs tarernment-guaranteed and conventional small business geted to low- and moderate-income and minority borrowers, the OCC found that the bank had ongoing, productive communications with a loans. BankAmerica has allocated $8 billion of this wide range of community-based and social service organizations and commitment to California and $4 billion to all other small business associations. In addition, the OCC indicated that the states. bank's marketing programs are designed to reach wide segments of the delineated community, and include multilingual advertisements This initiative has assisted Bank of America- appearing in general circulation newspapers and magazines, as well as California in providing a number of lending programs community and ethnic newspapers. In 1991, the bank introduced a Spanish language promotional kit including posters, print advertisedesigned to assist in meeting the full range of credit ments, brochures, and video materials for use in bank branches. The needs in low- and moderate-income communities. For bank also has targeted advertising campaigns directed to the Africanexample, under its "Advantage Business Credit" pro- American community. gram, which offers loans of up to $50,000 and credit 17. For example, the bank has established the Minority- and Women-Owned Business Enterprise Financing Program, which prolines of up to $75,000 to small businesses, the bank vides loans and credit lines of up to $100,000 to small businesses made 3,300 loans through the first three quarters of owned by women and minorities. The record of this application also indicates that BACDB made 114 SBA loans in California in 1993, 1993, totalling over $100 million. In the same period, totalling approximately $35 million. Approximately 44 percent of the bank also made over 4,000 other small business these loans were made to women-or minority-owned businesses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

836 Federal Reserve Bulletin • September 1994 able to locally owned businesses and to businesses providing funding for affordable housing,20 and engagthat principally employed local residents. A total of ing in community development activities.21 In general, more than $20 million in loan balances was outstanding the OCC found that the bank solicited credit applicaunder this program at the time of the 1994 Exam. tions from all segments of its delineated community, These efforts of Bank of America-California have including low- and moderate-income areas, and noted been supplemented by the community development that a significant portion of the bank's 1991 loans were efforts of BACDB, which in 1993 provided more than extended to businesses located in these areas. The $125 million in financing for low-income housing 1992 Exam did not find any practices to discourage projects, and made major contributions to other orga- applications for the types of credit offered by the bank, nizations engaged in the development of affordable or any other illegal discriminatory practices.22 housing. The OCC particularly noted BACDB's Although Continental Bank would continue its strat- $70 million equity investment in the Local Initiatives egy of primarily servicing business customers after Support Coalition and its creation of a $3 million consummation, BankAmerica will implement a numcommunity housing fund, which is designed to provide ber of its CRA policies at this institution. For example, pre-development financing for non-profit developers of Continental Bank would become subject to Bankaffordable housing. The record of this application also America's continuing board resolution establishing for indicates that BankAmerica has made substantial in- all of its banking subsidiaries the goal of achieving and vestments in organizations engaged in minority busi- maintaining an "outstanding" rating for CRA perforness development, including Opportunity Capital Part- mance. In addition, BankAmerica's ten-year quantitaners ($15 million), the Minority Enterprise Fund tive CRA funding goals would be expanded to incor- ($3 million), and Founders National Bank of Los porate goals established for Continental Bank's Angeles ($1 million), as well as investments in the delineated community. Annual lending goals for this California Community Reinvestment Corp. and other community would be established by the organization, multi-bank consortia. and would be undertaken jointly by Continental Bank and by a newly opened Chicago branch of Bank- C. Record of Performance of Continental Bank America's thrift subsidiary, FSB. The record indicates that this branch of FSB would function as a special The Chicago-based Protestant criticized the CRA purpose facility devoted to community development record of Continental Bank, particularly on invest- and other CRA-related activities.23 ments in minority communities, residents, and businesses. The Board notes that Continental Bank focuses on providing credit and other banking services 20. Continental Bank and CCDC, in addition to providing direct to business customers, and does not engage in residenloans for home improvement and housing rehabilitation, and particitial or other consumer lending, or other retail banking pating in government-sponsored programs for multifamily real estate businesses. While the CRA does not require a bank to projects, also support affordable housing initiatives through loans to and equity investments in developers of low- and moderate-income extend any particular type of credit, an institution such housing. Since the 1992 Exam, the bank has increased its funding as Continental Bank is not relieved of its obligation to commitments to home improvement and rehabilitation efforts coordicomply with the CRA.18 nated through organizations such as the Community Investment Corporation (to a total of $60 million) and the Chicago Home Improve- Continental Bank, together with its subsidiary, Con- ment Program (to a total of $27 million). In addition, affordable tinental Community Development Corporation, Chi- housing loans (other than loans through these two organizations) increased from $4.3 million in 1991 to $24.3 million in 1993. cago, Illinois ("CCDC"), achieved a "satisfactory" 21. The OCC stated that these community development activities rating from the OCC for its record of CRA perfor- included lending and equity investments made directly by CCDC, mance primarily through lending to small businesses,19 participation in loan programs implemented through communitybased organizations, and technical assistance to organizations involved in community development activities. The OCC also stated that the Continental Foundation played a significant role in the bank's community development activities by providing grants to community organizations involved in economic development and affordable hous- 18. See Continental Bank Corporation, 75 Federal Reserve Bulletin ing activities. Economic development lending for 1991, 1992, and 1993 304 (1989). combined totalled more than $40 million. 19. The OCC noted in the 1992 Examination that lending to small 22. The OCC also noted that the bank provided adequate training to businesses was coordinated through the bank's Community Business support nondiscrimination in lending and credit practices, and per- Team. This division, like CCDC, was created in 1990 in response to formed periodic reviews to assess the adequacy of its training, identified needs in the bank's community. The OCC also noted that, in policies, and practices in this area. addition to coordinating targeted ascertainment and marketing efforts, 23. FSB would provide community development loans and investthe Community Business Team devoted significant efforts to assisting ments, loans for affordable housing projects, loans offered through prospective borrowers in understanding, applying for, and obtaining local government-assisted rehabilitation programs, and loans offered credit under traditional underwriting standards. As a result, small through government-sponsored small business lending programs, inbusiness lending has increased from loans totalling $8.6 million in 1991 cluding the SBA's 7A and 504 loan programs for small businesses to loans totalling $18.1 million in 1993. (including minority-owned small businesses). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 837 Moreover, Continental Bank's CRA program, Other Considerations plans, and activities would be monitored by the Corporate Community Development Department of Bank BankAmerica and Continental do not compete in any of America-California (which has organization-wide banking market. Based on this consideration and all CRA oversight responsibilities) ("CCDD"), and the other facts of record, the Board has concluded that would become subject to other CRA program review consummation of this proposal would not have a procedures of the BankAmerica organization (includ- significantly adverse effect on competition or the coning periodic on-site reviews). Management of Conti- centration of banking resources in any relevant banknental Bank would also receive support and assistance ing market. On the basis of all the facts of record, from CCDD for the development and execution of its including the representations and commitments fur- CRA program. BankAmerica also would continue nished by BankAmerica, the Board also has concluded Continental Bank's efforts to increase lending in low- that the financial and managerial resources and future and moderate-income and minority neighborhoods. prospects of BankAmerica, Continental, and their Moreover, BankAmerica specifically intends to in- respective subsidiaries, and all other supervisory faccrease Continental Bank's volume of small business tors the Board must consider under section 3 of the lending. BHC Act, are consistent with approval of this proposal. Conclusion Regarding Convenience and Needs BankAmerica also has applied, pursuant to section Factor 4(c)(8) of the BHC Act, to acquire certain domestic nonbanking subsidiaries of Continental. These subsid- In considering the overall CRA performance records iaries are engaged in activities that the Board has of BankAmerica, its subsidiary banks, Continental, determined, by regulation or order, to be closely and Continental Bank, the Board has carefully consid- related to banking within the meaning of section 4(c)(8) ered the entire record in this case, including the public of the BHC Act.25 BankAmerica proposes to conduct comments received. Based on a review of the entire these activities in accordance with the Board's regurecord of performance, including Protestants' com- lations and orders, and the commitments previously ments, BankAmerica's responses to those comments, furnished by Continental with respect to the asset and relevant reports of examination, the Board has management and related activities of Repechage.26 concluded that convenience and needs considerations, In order to approve this proposal, the Board also including relevant CRA performance records, are con- must find that the performance of the proposed activsistent with approval of these applications. As dis- ities by these subsidiaries "can reasonably be excussed in this order, BankAmerica plans to enhance pected to produce benefits to the public . . . that the CRA-related activities of Continental Bank and outweigh possible adverse effects, such as undue FSB in the bank's delineated community. The Board concentration of resources, decreased or unfair combelieves that these plans, when viewed in the context petition, conflicts of interests, or unsound banking of the outstanding or satisfactory CRA performance practices." 12 U.S.C. § 1843(c)(8). The Board expects ratings of BankAmerica's subsidiary banks, support that the continuance of these activities by these entiapproval of this proposal.24 ties would maintain the level of competition among providers of these services. In addition, there is no evidence in the record that consummation of this proposal would result in any significantly adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, 24. One Protestant has asked that the Board hold a public hearing on or unsound banking practices. Accordingly, the Board this application. The Board is not required under section 3 of the BHC Act to hold a public hearing unless the primary supervisor for the bank has concluded that the balance of the public interest to be acquired disapproves the proposal, which has not occurred in factors it is required to consider under section 4(c)(8) this case. of the BHC Act is favorable, and consistent with Generally, under the Board's rules, the Board may, in its discretion, hold a public meeting or hearing on an application to clarify factual approval of BankAmerica's section 4 applications. issues related to the application and to provide an opportunity for testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). The Board has carefully considered Protestant's request. In the Board's view, Protestant has had ample opportunity to present written sub- 25. See 12 C.F.R. 225.25(b)(1) and (b)(3) (certain lending and trust missions, and has, in fact, submitted written comments that have been company activities); Continental Bank Corporation, 79 Federal Reconsidered by the Board. In light of these and other considerations, serve Bulletin 888 (1994) (asset management, servicing, and collection the Board has determined that a public hearing is not necessary to activities). clarify the factual record in this application, or otherwise warranted in 26. See Continental Bank Corporation, 79 Federal Reserve Bulletin this case. Accordingly, the request for a public hearing in this case is 888 (1993). BankAmerica also has agreed to abide by all the conditions denied. and limitations set forth in this order. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

838 Federal Reserve Bulletin • September 1994 The Board has also considered BankAmerica's pro- tive date of this order, unless such period is extended posal to acquire Continental International Finance for good cause by the Board or by the Federal Reserve Corporation and Continental Bank International, and Bank of San Francisco, acting pursuant to delegated all of their respective investments under the Edge Act. authority. Based on all the facts of record, and for the reasons By order of the Board of Governors, effective discussed in this order, the Board believes that all of July 18, 1994. the factors it must consider under the Edge Act and Regulation K are consistent with approval of this Voting for this action: Chairman Greenspan, Vice Chairproposal. man Blinder, and Governors Kelley and La Ware. Absent and not voting: Governors Lindsey and Phillips. In addition, the Board has considered Bank- America's proposal to acquire the investments held JENNIFER J. JOHNSON by Continental pursuant to section 4(c)(13) of the Deputy Secretary of the Board BHC Act. On the basis of all the facts of record, the Board has determined that all relevant factors it must Fifth Third Bancorp consider under the BHC Act and Regulation K are Cincinnati, Ohio consistent with approval of this proposal. Based on the foregoing and all the other facts of Fifth Third Kentucky Bank Holding Company record, the Board has determined that the applications Louisville, Kentucky should be, and hereby are, approved.27 This approval is specifically conditioned upon compliance by Bank- The Fifth Third Bank of Central Kentucky, America with all of the commitments made in connec- Inc. tion with this application and with the conditions Chamberland, Kentucky referenced in this order. The Board's determination with respect to the proposed domestic nonbanking Order Approving the Acquisition of a Savings activities also is subject to all the conditions set forth Association, Formation of a Bank Holding in Regulation Y, including those in sections 225.4(d) Company, and Application to Become a Member of and 225.23(b) of Regulation Y, and to the Board's the Federal Reserve System authority to require such modification or termination of the activities of a bank holding company or any of Fifth Third Bancorp, Cincinnati, Ohio ("Fifth its subsidiaries as the Board finds necessary to ensure Third"), proposes to acquire The Cumberland Federal compliance with, and to prevent evasion of, the pro- Savings Bank, Louisville, Kentucky ("Cumberland"), visions of the BHC Act and the Board's regulations and transfer a portion of Cumberland's assets and and orders issued thereunder. For purposes of this action, these commitments and conditions shall be liabilities to Fifth Third's bank subsidiary, The Fifth deemed to be conditions imposed in writing by the Third Bank of Central Kentucky, Inc., Lexington, Board in connection with its findings and decision, Kentucky ("Bank"), which would be renamed The and, as such, may be enforced in proceedings under Fifth Third Bank of Kentucky, Inc., and would reloapplicable law. cate its main office to Louisville, Kentucky. The remainder of Cumberland's assets and liabilities would The banking acquisitions shall not be consummated be retained by Cumberland, which would be renamed before the thirtieth calendar day after the effective The Fifth Third Savings Bank of Western Kentucky, date of this order, and the proposal shall not be F.S.B., and would relocate its main office to May field, consummated later than three months after the effec- Kentucky. Fifth Third proposes to accomplish this acquisition through a series of transactions, and has filed several 27. The San Francisco Protestant has criticized BankAmerica's record with respect to the use of African-American contractors and applications with the Board. Fifth Third has applied the hiring and promotion of African-American employees. In this under section 4(c)(8) of the Bank Holding Company regard, the Board notes that because Bank of America-California Act ("BHC Act") (12 U.S.C. § 1843(c)(8)) and section employs more than 50 people, serves as a depository of government funds, and acts as agent in selling or redeeming U.S. savings bonds 225.23 of the Board's Regulation Y (12 C.F.R. 225.23) and notes, it is required by Department of Labor regulations to: to acquire Cumberland.1 Bank has applied under sec- (1) File annual reports with the Equal Employment Opportunity Commission; and (2) Have in place a written affirmative action compliance program which states its efforts and plans to achieve equal opportunity in the employment, hiring, promotion, and separation of personnel. 1. Fifth Third also has acquired an option to purchase up to See 41 C.F.R. 60-1.7(a), 60-1.40. The record also indicates that 19.9 percent of the voting shares of The Cumberland Federal Bancor- BankAmerica and its other subsidiaries are subject to these equal poration, Inc., Louisville, Kentucky, the holding company for Cumopportunity and affirmative action requirements. berland, which would expire upon consummation of this proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 839 tion 18(c) of the Federal Deposit Insurance Act ("FDI tion of the proposed transaction, Fifth Third would Act") (12 U.S.C. § 1828(c)) ("Bank Merger Act") to become the fifth largest depository institution in Kenacquire certain assets and assume certain liabilities of tucky, controlling deposits of $1.4 billion, representing Cumberland, and under section 9 of the Federal Re- approximately 3.5 percent of total deposits in deposiserve Act (12 U.S.C. § 321 et seq.) to become a tory institutions in the state. member of the Federal Reserve System and to establish branches at several locations at which Cumber- Competitive Considerations land operates branches.2 Bank and Cumberland would be controlled by an Bank and Cumberland compete directly in the Lexingintermediate holding company, Fifth Third Kentucky ton, Kentucky, banking market ("Lexington banking Bank Holding Company, Louisville, Kentucky ("Fifth market").6 Bank is the eighth largest depository insti- Third Kentucky"), and Fifth Third Kentucky has tution in the market,7 controlling deposits of applied under sections 3 and 4 of the BHC Act to $110.1 million, representing approximately 3.1 percent control these institutions. Because these proposed of total deposits in depository institutions in the martransactions involve the acquisition of assets from a ket ("market deposits"). Cumberland is the 23rd larg- Savings Association Insurance Fund member by a est depository institution in the market, controlling Bank Insurance Fund subsidiary of a bank holding deposits of $27.7 million, representing less than 1 company, Fifth Third, Fifth Third Kentucky, and percent of market deposits. Upon consummation of Bank also have applied under section 5(d)(3) of the this proposal, Fifth Third would remain the eighth FDI Act (12 U.S.C. § 1815(d)(3)), as amended by the largest depository institution in the market, controlling Federal Deposit Insurance Corporation Improvement deposits of $137.8 million, representing approximately Act of 1991, Pub. L. No. 102-242, § 501, 105 Stat. 3.9 percent of market deposits. The Lexington banking 2236, 2388 (1991), to acquire the Cumberland assets.3 market would remain moderately concentrated as Notice of the applications, affording interested per- measured by the Herfindahl-Hirschman Index sons an opportunity to submit comments, has been ("HHI"),8 and 25 depository institutions would comgiven in accordance with the Bank Merger Act and the pete in the market following the acquisition. Based on Board's Rules of Procedure (12 C.F.R. 262.3(b)). Re- all the facts of record in this case, including the level of ports on the competitive effects of the merger were market concentration and the number of competitors requested from the United States Attorney General, that would remain in the market, the Board believes the Office of the Comptroller of the Currency, the that consummation of this proposal would not have a Federal Deposit Insurance Corporation ("FDIC"), and the Office of Thrift Supervision ("OTS"). The time for filing comments has expired, and the Board 6. The Lexington banking market comprises Bourbon, Clark, Fayhas considered the applications and all comments ette, Jessamine, Powell, Scott, and Woodford Counties in Kentucky. received in light of the factors set forth in the BHC 7. Market share data are as of June 30, 1993. In this context, depository institutions include commercial banks, savings banks, and Act, the Bank Merger Act, and the Federal Reserve savings associations. Market share data before consummation are Act. based on calculations in which the deposits of thrift institutions that are not controlled by a commercial banking organization are included Fifth Third, with total consolidated assets of at 50 percent. The Board previously has indicated that thrift institu- $12 billion, controls nine commercial banks in Ohio, tions have become, or have the potential to become, significant Indiana, and Kentucky and a savings bank in Florida.4 competitors of commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin 788 (1990); National City Corporation, 70 Federal Fifth Third is the 14th largest depository institution5 in Reserve Bulletin 743 (1984). Because the deposits of Cumberland Kentucky, controlling total deposits of $556 million, would be controlled by a commercial banking organization upon representing approximately 1.4 percent of total depos- consummation of this proposal, these deposits are included at 100 percent in the calculation of Fifth Third's post-consummation share of its in depository institutions in the state. Cumberland market deposits. See Norwest Corporation, 78 Federal Reserve is the seventh largest depository organization in Ken- Bulletin 452 (1992); First Banks, Inc., 76 Federal Reserve Bulletin 669, 670 n.9 (1990). tucky, controlling deposits of $850 million, represent- 8. Under the Revised Department of Justice Merger Guidelines, ing approximately 2.1 percent of total deposits in 49 Federal Register 26,823 (June 29, 1984), a market in which the depository institutions in the state. Upon consumma- post-merger HHI is between 1000 and 1800 is 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 merger increases the HHI by 2. These branches are set forth in the Appendix. more than 200 points. The Justice Department has stated that the 3. In reviewing such proposals, the Board is required to follow the higher than normal HHI thresholds for screening bank mergers for procedures and consider the factors set forth in the Bank Merger Act. anticompetitive effects implicitly recognize the competitive effect of 4. Asset and deposit data are as of December 31, 1993. limited-purpose lenders and other non-depository financial institu- 5. Depository institutions include commercial banks, savings banks, tions. The resulting HHI in the Lexington banking market would be and savings associations. 1566, and the change caused by this proposal would be de minimis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

840 Federal Reserve Bulletin • September 1994 significantly adverse effect on competition or the con- CRA performance as of April 1993. In addition, Cumcentration of banking resources in the Lexington bank- berland received an "outstanding" rating for CRA ing market or in any other relevant banking market. performance from the OTS as of December 1993. Examiners found no evidence of illegal discrimination Convenience and Needs Considerations or illegal credit practices at either Bank or Cumberland.12 In acting on these applications under the relevant Examiners found that Bank affirmatively solicits banking statutes, the Board must consider the records credit applications from all segments of the community of performance of the institutions involved under the it serves and specifically focuses on low- and Community Reinvestment Act (12 U.S.C. § 2901 moderate-income areas. The FDIC report noted that et seq.) ("CRA"). The CRA requires the federal Bank made over 90 percent of its loans to residents of financial supervisory agencies to encourage financial its delineated community and approved 90 percent of institutions to help meet the credit needs of the local the applications it received from minority applicants communities in which they operate, consistent with for Home Mortgage Disclosure Act ("HMDA") rethe safe and sound operation of such institutions. To lated loans. Through its Good Neighbor Program, accomplish this end, the CRA requires the appropriate introduced in March 1992, Bank offers home mortgage federal supervisory authority to "assess the institu- loans to low- and moderate-income borrowers featurtion's record of meeting the credit needs of its entire ing below-market interest rates, reduced down paycommunity, including low- and moderate-income ment requirements, no points, financed closing costs, neighborhoods, consistent with the safe and sound and nontraditional underwriting requirements. From operation of such institution," and to take that record March 1992 through June 1994, Bank made 3,244 loans into account in its evaluation of bank holding company totalling approximately $180 million under this proapplications.9 gram. Bank also participates in a variety of community In this regard, the Board has reviewed comments development programs, including lending $715,000 for submitted by the Community Reinvestment Alliance the construction of 30 low- and moderate-income of Lexington, Inc., Lexington, Kentucky ("Protes- single-family homes in Bourbon County, Kentucky, tant"). Protestant alleges generally that Bank and and participating in the Bluegrass Micro-Enterprise Cumberland should increase their efforts to serve the Fund to provide flexible, nontraditional financing to credit needs of low- and moderate-income individuals small businesses in Fayette County, Kentucky. through agreements with community groups like Prot- Examiners also concluded that Cumberland made a estant. high percentage of its home mortgage, home improve- In light of these comments, the Board has carefully ment, and consumer loans within its delineated comconsidered Fifth Third's and Cumberland's record of munity and offered or participated in a number of performance under the CRA and the programs that programs that assisted in meeting the community they have in place to serve community needs. Initially, credit needs for housing and consumer-related loans. the Board notes that all of Fifth Third's subsidiary The examination found that Cumberland participated banks and its savings bank received "outstanding" or extensively in goveramentally insured, guaranteed, or "satisfactory" ratings from their primary regulators in subsidized housing loan programs. During 1992, Cumtheir most recent examinations for CRA performance.10 In particular, Bank, which will acquire ap- 12. Protestant alleges that Cumberland discriminated against a proximately 75 percent of Cumberland's assets11 and specific physically disabled borrower on the basis of race in conneccontinue to serve the Lexington, Kentucky commu- tion with an application made through Cumberland for a low interest nity from Cumberland's current locations, received an rate mortgage loan offered by the Kentucky Housing Corporation ("KHC"), a state agency, under a program to provide financial "outstanding" rating from its primary federal regula- assistance to low-income borrowers with unique housing needs. Fifth tor, the FDIC, in its most recent examinations for Third responds that all underwriting and interest rate decisions in this transaction were made by KHC (and not by Cumberland) and that Cumberland submitted the loan to KHC with the interest rate requested by the borrower. Cumberland's primary federal regulator, the 9. 12 U.S.C. § 2903. OTS, investigated Protestant's allegations and found no evidence that 10. The Statement of the Federal Financial Supervisory Agencies Cumberland engaged in any illegal discriminatory credit practices. Regarding the Community Reinvestment Act ("Interagency Policy Protestant also believes that Cumberland illegally discriminated Statement") provides that a CRA exam is an important and often against another home mortgage applicant, but the record indicates that controlling factor in the consideration of an institution's CRA record, this case was heard by the Lexington-Fayette Urban County Human and that these reports will be given great weight in the applications Rights Commission, which found that this individual did not present a process (54 Federal Register 13,742, 13,745 (1989)). prima facie case of discrimination and dismissed the complaint. The 11. Approximately $900 million of Cumberland's assets will be individual has taken no further action against Cumberland. Based on acquired by Bank. The remaining assets of approximately $300 million all the facts of record, including information in relevant examination will be retained by Cumberland, which will be relocated to Mayfield, reports, the Board concludes that these comments do not warrant Kentucky. denial of these applications. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 841 berland made $6.7 million of FHA loans, $2.7 million The Board also concludes that the financial and of VA loans, and $4.4 million of loans through KHC, managerial resources and future prospects of Fifth and the volume of its lending under these programs Third, Fifth Third Kentucky, Bank, and Cumberland increased 18 percent during the first eleven months of are consistent with approval of these applications. 1993. The examination also found that Cumberland Other supervisory factors that the Board is required to participated in a number of projects to benefit low- and consider under section 3 of the BHC Act also are moderate-income members of the community, includ- consistent with approval. The Board also has considing obtaining funds from the Federal Home Loan Bank ered the specific factors it must review under section of Cincinnati through its Affordable Housing Program 5(d)(3) of the FDI Act, and the record in this case to lend at a reduced rate to Habitat for Humanity to shows that: purchase and rehabilitate homes in Lexington for (1) The transaction will not result in the transfer of low-income homebuyers. any federally insured depository institution's federal The Board has indicated in previous orders and in deposit insurance from one federal deposit insurthe Interagency Policy Statement that communication ance fund to the other; by depository institutions with community groups (2) Fifth Third, Fifth Third Kentucky, Bank, and provides a valuable method of assessing and determin- Cumberland currently meet, and upon consummaing how best to address the credit needs of the tion of the proposed transaction will continue to community. However, neither the CRA nor the Inter- meet, all applicable capital standards; and agency Policy Statement require depository institu- (3) The proposed transaction would comply with the tions to enter into agreements with particular organi- interstate banking provision of the BHC Act if zations. Accordingly, the Board's review has focused Cumberland were a state bank that Fifth Third was on the programs and policies Bank and Cumberland applying to acquire directly. See 12 U.S.C. have in place to serve the credit needs of their com- § 1815(d)(3).15 munity. In this case, the facts discussed above and the other facts of record indicate that Bank, Cumberland, The Board also has considered the factors it is and the other depository institution subsidiaries of required to consider when reviewing applications for Fifth Third have programs to help serve the credit membership pursuant to section 9 of the Federal needs of their communities. Reserve Act and section 208.4 of the Board's Regula- For the foregoing reasons, and based on all the facts tion H, and finds those factors, including capital reof record in this case, including Protestant's comments quirements and considerations related to management and Fifth Third's response, the Board concludes that character and quality, to be consistent with approv- Protestant's comments do not warrant denial of these al.16 The Board also believes that all the factors applications, and that convenience and needs consid- required to be considered for the establishment and erations, including the CRA records of Bank and operation of branches under the Federal Reserve Act Cumberland, are consistent with approval of this ap- are consistent with approval. plication. Based on the foregoing and other facts of record, the Board has determined that these applications should Other Considerations be, and hereby are, approved. The Board's approval is The Board has determined that the operation of a impermissible projects or investments will be undertaken during this savings association by a bank holding company is period, and that capital adequacy guidelines will be met excluding closely related to banking for purposes of section specified real estate investments. Fifth Third and Fifth Third Ken- 4(c)(8) of the BHC Act.13 In making this determina- tucky also have committed that any impermissible securities or insurance activities conducted by Cumberland will cease on or before tion, the Board requires savings associations acquired consummation of this proposal. Cumberland may continue to service by bank holding companies to conform their direct and any impermissible insurance policies for two years after the consummation of this proposal, but may not renew policies. indirect activities to those permissible for bank holding 15. See Section 3(d) of the BHC Act (12 U.S.C. § 1842(d)), the companies under section 4 of the BHC Act and Reg- Douglas Amendment, requiring that the statutory laws of the state ulation Y. Fifth Third and Fifth Third Kentucky have where the acquired bank is located expressly authorize the proposed acquisition. The Board previously has concluded that the laws of committed to conform all activities of Cumberland to Kentucky expressly authorize the acquisition of Kentucky banks by these requirements.14 Ohio bank holding companies. See Fifth Third Bancorp, 72 Federal Reserve Bulletin 47 (1986). See also Cooperative Agreement and Determination of Reciprocity between the Commonwealth of Kentucky and the State of Ohio, dated October 17, 1985. The Kentucky 13. See 12 C.F.R. 225.25(b)(9). Commissioner of Financial Institutions has approved the acquisition 14. Fifth Third and Fifth Third Kentucky have committed that all of assets and assumption of liabilities by Bank from Cumberland and impermissible real estate activities will be divested or terminated the establishment by Bank of additional branches. within two years of consummation of the proposal, that no new 16. See 12 U.S.C. §§ 322 and 1816; 12 C.F.R. 208.4. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

842 Federal Reserve Bulletin • September 1994 specifically conditioned upon compliance by Fifth 4700 Bardstown Road, Louisville, Kentucky Third, Fifth Third Kentucky, Bank, and Cumberland 6900 Bardstown Road, Louisville, Kentucky with the commitments made in connection with these 2040 Bashford Manor Lane, Louisville, Kentucky applications. The Board's determination also is sub- 3039 Breckenridge Lane, Louisville, Kentucky ject to all the conditions set forth in Regulation Y, 200 West Broadway, Louisville, Kentucky including those in sections 225.4(d) and 225.23(b) of 3640 Brownsboro Road, Louisville, Kentucky Regulation Y, and to the Board's authority to require 8700 Dixie Highway, Louisville, Kentucky such modification or termination of the activities of a 10437 Dixie Highway, Louisville, Kentucky bank holding company or any of its subsidiaries as the 4008 Dutchmans Lane, Louisville, Kentucky Board finds necessary to ensure compliance with, and 3014 South Fourth Street, Louisville, Kentucky to prevent evasion of, the provisions of the BHC Act 1812 Heaton Road, Louisville, Kentucky and the Board's regulations and orders issued there- 220 Holiday Manor, Louisville, Kentucky under. For purposes of this action, the commitments 291 Hubbards Lane, Louisville, Kentucky and conditions relied on in reaching this decision are 101 North Hurstbourne Lane, Louisville, Kentucky both conditions imposed in writing by the Board and, 515 West Market Street, Louisville, Kentucky as such, may be enforced in proceedings under appli- 5393 New Cut Road, Louisville, Kentucky cable law. 5533 New Cut Road, Louisville, Kentucky The acquisition of Bank by Fifth Third Kentucky 8003 Preston Highway, Louisville, Kentucky may not be consummated before the thirtieth calendar 2312 South Preston Street, Louisville, Kentucky day after the effective date of this order, and the 3905 Seventh Street Road, Louisville, Kentucky transaction may not be consummated later than three 4090 Shelbyville Road, Louisville, Kentucky months after the effective date of this order, unless 10400 Shelby ville Road, Louisville, Kentucky such period is extended by the Board or the Federal 12501 Shelby ville Road, Louisville, Kentucky Reserve Bank of Cleveland, acting pursuant to dele- 4026 Taylors ville Road, Louisville, Kentucky gated authority. 9080 Taylors ville Road, Louisville, Kentucky By order of the Board of Governors, effective 101 East Second Street, Maysville, Kentucky July 27, 1994. 305 North Twelfth Street, Suite D, Murray, Kentucky 531 Frederica Street, Owensboro, Kentucky Voting for this action: Chairman Greenspan, Vice Chairman Blinder, and Governors Kelley, LaWare, and Lindsey. 3205 Frederica Street, Owensboro, Kentucky Absent and not voting: Governor Phillips. 1691 Gallatin Road, Scottsville, Kentucky 529 Main Street, Shelby ville, Kentucky JENNIFER J. JOHNSON Deputy Secretary of the Board Norwest Corporation Minneapolis, Minnesota Appendix Order Approving the Acquisition of a Bank Holding Branches of The Cumberland Federal Savings Bank Company to Be Acquired by The Fifth Third Bank of Central Kentucky, Inc. Norwest Corporation, Minneapolis, Minnesota ("Norwest"), a bank holding company within the meaning of 1960 Cave Mill Road, Bowling Green, Kentucky the Bank Holding Company Act ("BHC Act"), has 1148 College Street, Bowling Green, Kentucky applied under section 3 of the BHC Act (12 U.S.C. 2600 Ring Road, Elizabethtown, Kentucky § 1842) to acquire all the voting shares of Copper 1269 U.S. 127 Bypass, Frankfort, Kentucky Bancshares, Inc. ("Copper"), and thereby indirectly 475 Versailles Road, Frankfort, Kentucky acquire American National Bank of Silver City 628 South College Street, Harrodsburg, Kentucky ("American National"), both of Silver City, New 606 North Lincoln Boulevard, Hodgenville, Kentucky Mexico. Norwest also has applied under section 2034 South Highway 53, LaGrange, Kentucky 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) and 901 East Main Street, Lexington, Kentucky section 225.23 of the Board's Regulation Y (12 C.F.R. 501 Southland Drive, Lexington, Kentucky 225.23) for its subsidiary, Norwest Mortgage, Inc., 2600 Bank Street, Louisville, Kentucky Minneapolis, Minnesota, to acquire the mortgage orig- 1270 Bardstown Road, Louisville, Kentucky ination and servicing assets of American National 2443 Bardstown Road, Louisville, Kentucky pursuant to section 4(c)(8) of the BHC Act and section Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 843 225.25(b)(1) of the Board's Regulation Y (12 C.F.R. that these activities are permissible for bank holding 225.25 (b)(1)). companies under section 4(c)(8) of the BHC Act and Notice of the applications, affording interested per- the Board's Regulation Y, and Norwest proposes to sons an opportunity to submit comments, has been conduct these activities in accordance with the published (59 Federal Register 24,158 and 30,005 Board's regulations. In addition, the record in this (1994)). The time for filing comments has expired and case indicates that there are numerous providers of the Board has considered the applications and all these nonbanking services, and there is no evidence in comments received in light of the factors set forth in the record to indicate that consummation of this prosections 3 and 4 of the BHC Act. posal is likely to result in any significantly adverse Norwest, with total consolidated assets of approxi- effects, such as undue concentration of resources, mately $56.2 billion, operates 88 banks in 15 states.1 decreased or unfair competition, conflicts of interests, Norwest is the second largest commercial banking or unsound banking practices that would outweigh the organization in New Mexico, controlling deposits of public benefits of this proposal. Accordingly, the $1.6 billion, representing approximately 14.7 percent Board has determined that the balance of public interof total deposits in commercial banking organizations est factors it must consider under section 4(c)(8) of the in the state. Copper is the 26th largest commercial BHC Act is favorable and consistent with approval. banking organization in New Mexico, controlling de- Based on all the facts of record, the Board has posits of $89.1 million, representing less than 1 percent determined that these applications should be, and of total deposits in commercial banking organizations hereby are, approved. The Board's approval is specifin the state. Upon consummation of this proposal, ically conditioned upon compliance by Norwest with Norwest would remain the second largest commercial all the commitments made in connection with these banking organization in New Mexico, controlling de- applications. The determinations as to the nonbanking posits of $1.7 billion, representing approximately activities are subject to all the conditions set forth in 15.5 percent of total deposits in commercial banking the Board's Regulation Y, including those in sections organizations in the state.2 225.4(d) and 225.23(b)(3) (12 C.F.R. 225.4(d) and Norwest and Copper do not compete directly in any 225.23(b)(3)), and to the Board's authority to require relevant banking markets. Based on all the facts of such modification or termination of the activities of a record, the Board concludes that the acquisition of holding company or any of its subsidiaries as the Copper and its subsidiary bank would not result in any Board finds necessary to assure compliance with, or to significantly adverse effects on competition in any prevent evasion of, the provisions and purposes of the relevant banking market. The Board also concludes BHC Act and the Board's regulations and orders that the financial and managerial resources and future issued thereunder. For the purpose of this action, prospects of Norwest, Copper, and their respective these commitments and conditions relied upon by the subsidiaries, and other supervisory factors the Board Board in reaching its decision are deemed to be must consider under section 3 of the BHC Act, are conditions imposed in writing by the Board in connecconsistent with approval. Considerations relating to tion with its findings and decision and, as such, may be the convenience and needs of the communities to be enforced in proceedings under applicable law. served are also consistent with approval of this appli- The acquisition of Copper shall not be consummated cation.3 before the thirtieth calendar day following the effective Norwest also has applied for approval to acquire the date of this order, and neither transaction shall be mortgage origination and servicing assets of American consummated later than three months after the effec- National pursuant to section 4 of the BHC Act. As tive date of this order, unless such period is extended noted above, the Board previously has determined for good cause by the Board or by the Federal Reserve Bank of Minneapolis, acting pursuant to delegated authority. 1. Asset and state deposit data are as of December 31, 1993. By order of the Board of Governors, effective 2. The Board has previously determined that the interstate banking July 1, 1994. statute of New Mexico permits a Minnesota bank holding company to acquire banking organizations in New Mexico (see Norwest Corporation, 80 Federal Reserve Bulletin 160 (1994)), and Norwest currently Voting for this action: Chairman Greenspan, Vice Chairoperates a commercial bank in New Mexico. Thus, consummation of man Blinder and Governors Kelley, Lindsey, and Phillips. this transaction is not barred by section 3(d) of the BHC Act Absent and not voting: Governor LaWare. (12 U.S.C. § 1842(d)). 3. The Board adopts the findings and conditions relating to this factor discussed in the Board's order regarding Norwest's acquisition JENNIFER J. JOHNSON of LaPorte Bancorp, Hammond, Indiana, 80 Federal Reserve Bulletin 844 (1994). Associate Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

844 Federal Reserve Bulletin • September 1994 Norwest Corporation Norwest and LaPorte compete directly in the La- Minneapolis, Minnesota Porte, Indiana, banking market.3 Norwest is the 13th largest banking or thrift organization ("depository Order Approving the Acquisition of a Bank Holding institution"), in this market controlling deposits of $17 Company million, representing approximately 1.6 percent of total deposits in depository institutions in the market Norwest Corporation, Minneapolis, Minnesota ("Nor- ("market deposits").4 LaPorte is the fourth largest west"), a bank holding company within the meaning of depository institution in the market, controlling deposthe Bank Holding Company Act ("BHC Act"), has its of $129.4 million, representing approximately applied under section 3 of the BHC Act (12 U.S.C. 12.2 percent of market deposits. Upon consummation § 1842) to acquire all the voting shares of LaPorte of this proposal, Norwest would become the third Bancorp, Hammond, Indiana ("LaPorte"), and largest depository institution in the LaPorte banking thereby indirectly acquire LaPorte Bank and Trust market, controlling deposits of $146.4 million, repre- Company, LaPorte, Indiana ("LaPorte Bank"). Nor- senting approximately 13.8 percent of the market west also has applied under section 4(c)(8) of the BHC deposits. The Herfindahl-Hirschman Index ("HHI") Act (12 U.S.C. § 1843(c)(8)) and section 225.23 of the would increase by 39 points to 1409.5 Board's Regulation Y (12 C.F.R. 225.23) to acquire, Based on all the facts of record, including the through certain nonbanking subsidiaries of Norwest, number of competitors that would remain in the Lathe mortgage origination and servicing, discount bro- Porte banking market, and the relatively small inkerage, and government securities underwriting oper- crease in the market concentration and market share, ations of LaPorte Bank pursuant to section 4(c)(8) of the Board has concluded that consummation of Northe BHC Act and sections 225.25(b)(1), (15), and (16) west's proposal would not result in any significantly of the Board's Regulation Y (12 C.F.R. 225.25(b)(1), adverse effects on competition in the LaPorte banking (15), and (16)). market or any other relevant banking market. Notice of the applications, affording interested persons an opportunity to submit comments, has been Convenience and Needs Considerations published (59 Federal Register 17,377 and 30,004 (1994)). The time for filing comments has expired and In reviewing every application to acquire a bank under the Board has considered the applications and all the BHC Act, the Board is required to consider the comments received in light of the factors set forth in convenience and needs of the communities to be sections 3 and 4 of the BHC Act. served, and to take into account the record of the Norwest, with total consolidated assets of $56.2 billion, operates 88 banks in 15 states.1 Norwest is the sixth largest commercial banking organization in 3. The LaPorte banking market consists of LaPorte County except Indiana, controlling deposits of $1.7 billion, represent- for Cass, Clinton, Dewey, New Durham, and Prairie townships; Pine township in Porter County; Olive and Warren townships in St. Joseph ing approximately 3.4 percent of the total deposits County, all in Indiana; and Galien, New Buffalo, Three Oaks, and in commercial banking organizations in the state. Weesaw townships in Berrien County, Michigan. 4. Market data are as of June 30, 1993. Market share data are based LaPorte, with total consolidated assets of $141.6 milon calculations in which the deposits of thrift institutions are included lion, is the 50th largest commercial banking organiza- at 50 percent. The Board previously has indicated that thrift institution in Indiana, controlling deposits of $128.8 million, tions have become, or have the potential to become, significant competitors of commercial banks. See Midwest Financial Group, representing less than 1 percent of total deposits in 75 Federal Reserve Bulletin 386 (1989); National City Corporation, commercial banking organizations in the state. Upon 70 Federal Reserve Bulletin 743 (1984). Thus, the Board has regularly included thrift deposits in the calculation of market share on a 50 consummation of this proposal, Norwest would repercent-weighted basis. See, e.g., First Hawaiian Inc., 11 Federal main the sixth largest commercial banking organiza- Reserve Bulletin 52 (1991). tion in Indiana, controlling deposits of $1.9 billion, 5. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in which the representing approximately 3.6 percent of total depospost-merger HHI is between 1000 and 1800 is considered moderately its in commercial banking organizations in the state.2 concentrated. A market in which the post-merger HHI is above 1800 is considered to be highly concentrated. In such markets, the Justice Department is likely to challenge a merger that increases the HHI by more than 50 points. The Justice Department has informed the Board 1. Asset and state deposit data are as of December 31, 1993. that a bank merger or acquisition generally will not be challenged (in 2. The Board has previously determined that the interstate banking the absence of other factors indicating anticompetitive effects) unless statute of Indiana permits a Minnesota bank holding company to the post-merger HHI is at least 1800 and the merger increases the HHI acquire banking organizations in Indiana (see Norwest Corporation, by more than 200 points. The Justice Department has stated that the 76 Federal Reserve Bulletin 386 (1990)), and Norwest currently higher than normal threshold for an increase in the HHI when operates a commercial bank in Indiana. Thus, consummation of this screening bank mergers and acquisitions for anticompetitive effects transaction is not barred by section 3(d) of the BHC Act (12 U.S.C. implicitly recognizes the competitive effect of limited-purpose lenders § 1842(d)). and other non-depository financial entities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 845 relevant depository institution under the Community In addition, the OCC noted that Norwest Denver Reinvestment Act (12 U.S.C. § 2901 et seq.) participates in loans with other governmental and ("CRA"). The Board has received comments from nonprofit organizations, such as the Mayor's Office Legal and Safety Employer Research (Division of the of Economic Development, Greater Denver Local Western States Pipe Trades) ("Protestant") maintain- Development Corporation, Community Developing that Norwest's lending policies in Colorado have ment Agency, and the State of Colorado, that prosupported out-of-state businesses with deposits col- vide funds for start-up businesses and businesses lected in Colorado at the expense of small businesses with special financial needs. in its local lending community.6 Specifically, Protes- Norwest acquired its Indiana subsidiary bank, tant alleges that Norwest's small-business lending Norwest Bank Indiana, N.A. ("Norwest Indiana"), policies have adversely affected small businesses in in February 1993. The bank's commercial lending is the Denver, Colorado, area,7 and contends that these primarily to small businesses and agricultural propolicies would have an adverse effect on small busi- ducers within its delineated CRA markets. Approxinesses in Indiana if Norwest acquires LaPorte. The mately 82 percent of Norwest Indiana's $475.9 mil- Board has carefully reviewed all the facts of record, lion in commercial loans has been extended to small including these comments and responses from Nor- businesses as of March 31, 1994. Norwest Indiana is west, in light of Norwest's record of performance an SBA-Approved Lender, and also participates in under the CRA. the Indiana Statewide Certified Development Corpo- Norwest has policies in place at its affiliated banks ration, which is designed to stimulate commercial that encourage meeting the credit needs of local and industrial expansion. In addition, Norwest Indibusinesses whose access to credit may be limited to ana has committed $250,000 to the City of Fort local sources. For example, Norwest banks direct Wayne Community Development Corporation, their business lending activities to their delineated which provides loans to small businesses that do not service communities, and lending decisions are made meet traditional bank requirements. Norwest Indiana by each affiliate bank. The 1993 CRA performance also actively participates in several organizations examination of Norwest Denver ("1993 Examina- that provide funding and counseling to minority small tion"), conducted by the Office of the Comptroller of business owners. Norwest will apply its CRA polithe Currency ("OCC") (Norwest Denver's primary cies and programs to LaPorte Bank, including its regulator), concluded that the bank affirmatively Community Marketing Initiative, which requires addresses the credit needs of small businesses in its each subsidiary bank to develop an outreach program delineated community.8 Examiners noted that ap- to provide for an ongoing assessment of community proximately 71 percent of Norwest Denver's $429 financial service needs. million in commercial loans were extended to small The Board has carefully considered the entire businesses as of December 31, 1992. The OCC also record, including Protestant's comments in this case, characterized Norwest Denver as occupying a lead- in reviewing the convenience and needs factor under ership role in identifying and participating in govern- the BHC Act. Based on all the facts of record, the ment-insured loan programs for small businesses.9 Board does not believe that these comments warrant denial of these applications and the Board concludes that convenience and needs considerations, including 6. The Board approved the acquisition by Norwest of United Banks the record of Norwest and its subsidiary banks in of Colorado, Inc., Denver, Colorado, in 1991. Norwest Corporation, meeting the credit needs of all segments of the com- 77 Federal Reserve Bulletin 343 (1991). On January 1, 1994, 16 Norwest affiliated banks in the Denver metropolitan area merged munities served, including low- and moderate-income into Norwest Bank Denver, N.A., Denver, Colorado ("Norwest neighborhoods, are consistent with approval of this Denver"). The new entity was renamed Norwest Bank Colorado, proposal. N.A. ("Norwest Colorado"). All 16 of these banks had received satisfactory or outstanding CRA rating from their primary regulators at their most recent examinations for CRA performance. Other Considerations 7. Protestant cites a commercial loan to a Colorado construction company that does business outside the state as an example of Norwest's policies of supporting out-of-state investments with locally The Board also concludes that the financial and manobtained deposits. Norwest notes that the loan was made prior to agerial resources and future prospects of Norwest, Norwest's acquisition of United Banks. 8. Norwest Denver received an "outstanding" rating from the OCC for CRA performance as of March 4, 1993. Norwest Denver was the largest Norwest bank serving the Denver metropolitan area and accounted for approximately 50 percent of the assets of Norwest SBA's "Number 1 Preferred Lender" in Colorado based on its Colorado after the 1994 consolidation. volume of SBA loans. As of the SBA's fiscal year ending in September 9. Norwest Denver was a certified Small Business Administration 1993, Norwest Denver approved $7.4 million in SBA loans. Norwest ("SBA") lender, and in 1992, had $2.9 million in outstanding SBA expects to retain Norwest Denver's SBA Preferred Lender designaloans to customers. In 1993, Norwest Denver was designated the tion for Norwest Colorado. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

846 Federal Reserve Bulletin • September 1994 LaPorte, and their respective subsidiaries, and other Voting for this action: Chairman Greenspan, Vice Chairsupervisory factors the Board must consider under man Blinder and Governors Kelley, Lindsey, and Phillips. Absent and not voting: Governor La Ware. section 3 of the BHC Act, are consistent with approval. JENNIFER J. JOHNSON Norwest has applied for approval to engage in Associate Secretary of the Board certain nonbanking activities pursuant to section 4 of the BHC Act. As noted above, the Board previously has determined that these activities are permissible for bank holding companies under section 4(c)(8) of the ORDERS ISSUED UNDER INTERNATIONAL BHC Act and the Board's Regulation Y, and Norwest BANKING ACT proposes to conduct these activities in accordance with the Board's regulations. The record in this case Banco de Galicia y Buenos Aires indicates that there are numerous providers of these Buenos Aires, Argentina nonbanking services, and there is no evidence in the record to indicate that consummation of this proposal Order Approving Establishment of a Branch is likely to result in any significantly adverse effects, or unfair competition, conflicts of interests, or unsound Banco de Galicia ("Bank"), Buenos Aires, Argentina, banking practices that would outweigh the public a foreign bank within the meaning of the International benefits of this proposal. Accordingly, the Board has Banking Act ("IBA"), has applied under section 7(d) determined that the balance of public interest factors it of the IBA (12 U.S.C. § 3105(d)) to establish a federmust consider under section 4(c)(8) of the BHC Act is ally licensed branch in New York, New York. A favorable and consistent with approval. foreign bank must obtain the approval of the Board to Based on all the facts of record, including the establish a branch, agency, commercial lending comcommitments made by Norwest, the Board has deter- pany, or representative office in the United States mined that these applications should be, and hereby under the Foreign Bank Supervision Enhancement are, approved. The Board's approval is specifically Act of 1991 ("FBSEA"), which amended the IBA. conditioned upon compliance by Norwest with all the Notice of the application, affording interested percommitments made in connection with these applica- sons an opportunity to submit comments, has been tions. The determinations as to the nonbanking activ- published in a newspaper of general circulation in New ities are subject to all the conditions set forth in the York, New York (New York Post, August 28, 1992). Board's Regulation Y, including those in sections The time for filing comments has expired and the 225.4(d) and 225.23(b)(3) (12 C.F.R. 225.4(d) and Board has considered all comments received. 225.23(b)(3)), and to the Board's authority to require Bank is the second largest private commercial bank such modification or termination of the activities of a in Argentina with consolidated assets of $4.4 billion as holding company or any of its subsidiaries as the of December 31, 1993. Two-thirds of Bank's shares are Board finds it necessary to assure compliance with, or held by eleven companies and the other shares are to prevent evasion of, the provisions and purposes of widely held. Bank provides a full range of retail and the BHC Act and the Board's regulations and orders wholesale banking services in Argentina, as well as issued thereunder. For the purpose of this action, the securities trading and investment banking services. commitments and conditions relied upon by the Board Bank has three nonbank subsidiaries in Argentina, a in reaching its decision are deemed to be conditions subsidiary in Uruguay engaged in financial services imposed in writing by the Board in connection with its and an indirect subsidiary in the Cayman Islands. findings and decision, and, as such, may be enforced in Bank maintains representative offices in Brazil and proceedings under applicable law. Chile. Bank's foreign operations are controlled from The acquisition of LaPorte Bank shall not be con- its head office in Buenos Aires. Bank also has a summated before the thirtieth calendar day following representative office in New York, which would be the effective date of this order, and the acquisition of closed upon the opening of the proposed branch. LaPorte and LaPorte Bank's nonbanking businesses Bank does not engage in nonbanking activities in the shall not be consummated later than three months United States and would be a qualifying foreign bankafter the effective date of this order, unless such period ing organization under Regulation K after establishing is extended for good cause by the Board, or by the the proposed branch. 12 C.F.R. 211.23(b). Federal Reserve Bank of Minneapolis, acting pursuant In order to approve an application by a foreign bank to delegated authority. to establish a branch in the United States, the IBA and By order of the Board of Governors, effective Regulation K require the Board to determine that the July 1, 1994. foreign bank engages directly in the business of bank- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 847 ing outside the United States and has furnished to the changes and enhancements of its system were made. Board the information it needs to assess adequately Under the enhanced system, the Central Bank obtains the application. The Board also must determine that information on Bank's operations through on-site exthe foreign bank applicant is subject to comprehensive aminations and its review of audit and financial reports supervision or regulation on a consolidated basis by its submitted by Bank. Bank is subject to two types of home country supervisor. 12 U.S.C. § 3105(d)(2), on-site reviews, comprehensive inspections and partial 12 C.F.R. 211.24(c)(1). The IBA and Regulation K inspections. Comprehensive inspections include a realso permit the Board to take into account addi- view of internal controls, credit policy, portfolio risk, tional standards. 12 U.S.C. § 3105(d)(3)-(4), 12 C.F.R. capital and reserve requirements, transactions with § 211.24(c)(2). related institutions, and foreign exchange operations Bank engages directly in the business of banking and foreign currency transactions. Comprehensive inoutside the United States through its banking opera- spections also include an analysis of the independent tions in Argentina. Bank also has provided the Board external auditor's review of Bank's operations and an with the information necessary to assess the application evaluation of management's ability to operate the bank through submissions that address the relevant issues. in a safe and sound manner. Partial inspections have a Regulation K provides that a foreign bank will be more specific scope and are used to evaluate potential considered to be subject to comprehensive supervision weaknesses that may need more immediate attention. or regulation on a consolidated basis if the Board Bank is scheduled for a comprehensive inspection at determines that the bank is supervised and regulated in least once a year. such a manner that its home country supervisor re- In addition to the on-site inspections conducted by ceives sufficient information on the bank's worldwide the Central Bank, complete external audits are conoperations, including its relationship to any affiliate, to ducted annually of Bank's operations, including the assess the bank's overall financial condition and its operations of its subsidiaries, focusing on areas such compliance with law and regulation.1 12 C.F.R. as asset quality, internal controls, the preparation of 211.24(c)(1). In making its determination on this appli- financial statements and compliance with Central cation, the Board considered the following information. Bank regulations. Bank's external auditor is also re- The Argentine Central Bank ("Central Bank") is the quired to prepare quarterly financial reports. bank supervisory authority in Argentina and, as such, Bank is also required by the Central Bank to have is the home country supervisor of Bank. The Central adequate internal control procedures in order effec- Bank performs its supervisory function through the tively to monitor and control its world wide activities. Superintendency of Financial Entities. The Central Bank conducts annual internal audits of its domestic Bank is authorized to approve and revoke bank li- and foreign operations, including the operations of its censes, set capital and liquidity requirements, approve foreign subsidiaries, and prepares periodic reports on the establishment of domestic or overseas offices or the results of such audits. These reports are reviewed subsidiaries, and approve new banking activities. The by Central Bank examiners. Bank also uses quarterly Central Bank is also responsible for enforcement of and annual audits conducted by its external and interlaws regulating banking activities. nal auditors to monitor the operations of its Uru- In the last several years, the Central Bank undertook guayan and Cayman subsidiaries. As noted above, a comprehensive review of its system of bank supervi- Bank's internal controls are reviewed by Bank's exsion and, following that review, a number of significant ternal auditor and by Central Bank examiners. The Central Bank receives information and monitors the condition of Bank and its affiliates through financial reporting requirements and the imposition of 1. In assessing this standard, the Board considers, among other factors, the extent to which the home country supervisor: investment restrictions and lending limits. Bank files (i) Ensures that the bank has adequate procedures for monitoring daily, monthly, quarterly, and annual reports with the and controlling its activities worldwide; Central Bank, which address matters such as asset (ii) Obtains information on the condition of the bank and its subsidiaries and offices outside the home country through regular balances, earnings performance, asset and liability examination reports, audit reports, or otherwise; structure, credit risk of large borrowers, and financial (iii) Obtains information on the dealings with and relationship transactions with affiliates. Bank's monthly, quarterly, between the bank and its affiliates, both foreign and domestic; (iv) Receives from the bank financial reports that are consolidated and annual financial statements are consolidated to on a worldwide basis, or comparable information that permits include the operations of its domestic and foreign analysis of the bank's financial condition on a worldwide consolisubsidiaries. As noted above, Bank's external audidated basis; (v) Evaluates prudential standards, such as capital adequacy and tors, in their annual audit, review Bank's preparation risk asset exposure, on a worldwide basis. These are indicia of of its financial statements and compliance with the comprehensive, consolidated supervision. No single factor is essential and other elements may inform the Board's determination. Central Bank's regulations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

848 Federal Reserve Bulletin • September 1994 The Central Bank imposes certain investment and mation on the operations of Bank and its affiliates lending limits on Bank in its dealings with its affili- that the Board deems necessary to determine and ates, senior management and directors. As a general enforce compliance with the IBA, the Bank Holding matter, Bank's equity participations in, together with Company Act of 1956, as amended, and other appliloans to, any affiliate may not exceed five percent of cable Federal law. To the extent that the provision of Bank's capital, nor more than 20 percent of its capital such information may be prohibited by law, Bank has when aggregated with all loans granted to its direc- committed to cooperate with the Board in obtaining tors and senior management. Lending restrictions any necessary consents or waivers that might be are monitored by the Central Bank through monthly required from third parties in connection with discloreporting requirements and inspections. An indepen- sure of certain necessary information. In light of dent auditor must review and verify the information these commitments and other facts of record, and set out in such reports and provide a statement to the subject to the condition described below, the Board Central Bank on the reasonableness of the financing concludes that Bank has provided adequate assurdisclosed. ances of access to any necessary information the Based on all the facts of record, which include the Board may request. information described above, the Board concludes On the basis of all the facts of record, and subject that Bank is subject to comprehensive supervision on to the commitments made by Bank, as well as the a consolidated basis by its home country supervisor. terms and conditions set forth in this order, the In considering this application, the Board also has Board has determined that Bank's application to taken into account the additional standards set forth in establish a branch should be, and hereby is, apthe section 7 of the IB A and in Regulation K. proved. Should any restrictions on access to infor- 12 U.S.C. § 3105(d)(3)-(4), 12 C.F.R. 211.24(c)(2). mation about the operations or activities of Bank and Bank has received the consent of its home country any of its affiliates subsequently interfere with the supervisor to establish the proposed branch. In addi- Board's ability to determine the safety and soundtion, the Central Bank has agreed to cooperate in ness of Bank's U.S. operations or the compliance by providing the Board with information on Bank's oper- Bank or its affiliates with applicable federal statutes, ations. the Board may require termination of any of Bank's Argentina has not adopted the risk-based capital direct or indirect activities in the United States. standards of the Basle Capital Accord. Minimum Approval of this application is also specifically concapital requirements that are similar to the Basle ditioned on compliance by Bank with the commitcapital standards, however, are established by the ments made in connection with this application, and with the conditions contained in this order.2 The Central Bank for all Argentine banks based, in part, on commitments and conditions referred to above are the rating assigned to the bank by the Central Bank. conditions imposed in writing by the Board in con- Bank has provided information on its capital as it nection with its decision, and may be enforced in would be calculated under the Basle standards. Bank's proceedings under 12 U.S.C. § 1818 or 12 U.S.C. capital is in excess of the minimum levels that would § 1847 against Bank, its offices and its affiliates. be required by the Basle Capital Accord and is considered equivalent to capital that would be required of By order of the Board of Governors, effective a U.S. banking organization. Managerial and financial July 18, 1994. resources of Bank are also considered consistent with approval of the proposed branch. Bank appears to Voting for this action: Chairman Greenspan, Vice Chairhave the experience and capacity to conduct banking man Blinder, and Governors Kelley and La Ware. Absent and not voting: Governors Lindsey and Phillips. operations in the United States through the proposed branch. In addition, Bank has established controls and JENNIFER J. JOHNSON procedures for its U.S. office to ensure compliance Deputy Secretary of the Board with U.S. law. Finally, with respect to access to information about Bank's operations, the Board has reviewed the relevant provisions of law in the jurisdictions in 2. The Board's authority to approve the establishment of the proposed branch office parallels the continuing authority of the Office which Bank has material operations and has commu- of the Comptroller of the Currency ("OCC") to license offices of a nicated with appropriate government authorities con- foreign bank. The Board's approval of this application does not supplant the authority of the OCC to license the proposed branch cerning access to information. Bank has committed office of Bank in accordance with any terms or conditions that the that it will make available to the Board such infor- OCC may impose. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 849 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 Keystone Financial, Inc., Citizens Savings Northern Central July 1, 1994 Harrisburg, Pennsylvania Association, Bank, Clarks Summit, Williamsport, Pennsylvania Pennsylvania 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 Benz Holding Company, United Federal Savings Melvin Savings Bank, June 24, 1994 Melvin, Iowa Association of Iowa, Melvin, Iowa Des Moines, Iowa Decatur Corporation, United Federal Savings Citizens Bank, June 24, 1994 Leon, Iowa Association of Iowa, Leon, Iowa Des Moines, Iowa Dunn Shares, Inc., United Federal Savings Security Savings June 24, 1994 Eagle Grove, Iowa Association of Iowa, Bank, Des Moines, Iowa Eagle Grove, Iowa Farmers and Merchants Bancorp, United Federal Savings Farmers and June 24, 1994 Winterset, Iowa Association of Iowa, Merchants State Des Moines, Iowa Bank, Winterset, Iowa FDH Bancshares, Inc., Grant Federal Savings Citizens First Bank, June 27, 1994 Little Rock, Arkansas Bank, Little Rock, Sheridan, Arkansas Arkansas Firstar Corporation, United Federal Savings Firstar Bank Des June 24, 1994 Milwaukee, Wisconsin Association of Iowa, Moines, N.A., Firstar Corporation of Iowa, Des Moines, Iowa Des Moines, Iowa Des Moines, Iowa First National Security United Federal Savings Bank of Ashdown, July 14, 1994 Company, Bank, N.A., DeQueen, Arkansas Springdale, Arkansas Ashdown, Arkansas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

850 Federal Reserve Bulletin • September 1994 FDICIA Orders—Continued Acquired Acquiring Approval Bank Holding Company Thrift Bank(s) Date F & M Shares Corp., United Federal Savings Farmers & Merchants June 24, 1994 Eagle Grove, Iowa Association of Iowa, Savings Bank, Des Moines, Iowa Manchester, Iowa F.N.B. Corporation, Dollar Savings First National Bank June 29, 1994 Hermitage, Pennsylvania Association, of Pennsylvania, New Castle, Hermitage, Pennsylvania Pennsylvania FSB Bancorp, Inc., Standard Federal Bank, Farmers State Bank July 1, 1994 Breckenridge, Michigan Troy, Michigan of Breckenridge, Breckenridge, Michigan GNB Bancorporation, United Federal Savings Grundy National June 24, 1994 Grundy Center, Iowa Association of Iowa, Bank, Des Moines, Iowa Grundy Center, Iowa Greene Investment Company, United Federal Savings Home State Bank, June 24, 1994 Coon Rapids, Iowa Association of Iowa, Jefferson, Iowa Des Moines, Iowa Hawkeye Bancorporation, United Federal Savings Hawkeye Bank of June 24, 1994 Des Moines, Iowa Association of Iowa, Centerville, N.A., Des Moines, Iowa Centerville, Iowa Hawkeye Bancorporation, United Federal Savings Hawkeye Bank of June 24, 1994 Des Moines, Iowa Association of Iowa, Des Moines, Des Moines, Iowa Des Moines, Iowa Henderson Citizens Bancshares, Pacific Southwest Bank, Citizens National July 13, 1994 Inc., F.S.B., Bank of Henderson, Texas Corpus Christi, Texas Henderson, Henderson Citizens Delaware Henderson, Texas Bancshares, Inc., Dover, Delaware Heritage Bancshares Group, Inc. United Federal Savings Heritage Bank, N.A., June 24, 1994 Minneapolis, Minnesota Association of Iowa, Holstein, Iowa Geiger Corporation, Des Moines, Iowa Minneapolis, Minnesota Liberty Bancorporation, United Federal Savings Bennett State Bank, June 24, 1994 Durant, Iowa Association of Iowa, Bennett, Iowa Des Moines, Iowa Loof Investment Company, United Federal Savings Peoples Trust & June 24, 1994 Grand Junction, Iowa Association of Iowa, Savings Bank, Des Moines, Iowa Grand Junction, Iowa Mahaska Investment Company, United Federal Savings Mahaska State Bank, June 24, 1994 Oskaloosa, Iowa Association of Iowa, Oskaloosa, Iowa Des Moines, Iowa M&I Mid-State Bank, N.A., Valley Bank Western, M&I Marshall & July 19, 1994 Stevens Point, Wisconsin F.S.B., Ilsley Corporation, Sparta, Wisconsin Milwaukee, Wisconsin Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 851 FDICIA Orders—Continued Acquired Acquiring Approval Bank Holding Company Thrift Bank(s) Date Norwest Corporation, United Federal Savings Norwest Bank Iowa, June 24, 1994 Minneapolis, Minnesota Association of Iowa, N.A., Des Moines, Iowa Des Moines, Iowa Peoples Bancorporation of United Federal Savings Peoples Bank & June 24, 1994 Northwest Iowa, Inc., Association of Iowa, Trust, Rock Valley, Iowa Des Moines, Iowa Rock Valley, Iowa Royal Bank of Scotland Group Old Stone Federal Citizens Trust July 8, 1994 pic, Savings Bank, Company, Edinburgh, United Kingdom Providence, Rhode Providence, Rhode Royal Bank of Scotland pic, Island Island Edinburgh, United Kingdom Citizens Savings Citizens (U.K.) Limited, Bank, Edinburgh, United Kingdom Providence, Rhode Citizens Financial Group, Inc., Island Providence, Rhode Island Citizens Corporation, Providence, Rhode Island Van Buren Bancorporation United Federal Savings Van Buren June 24, 1994 Employee Stock Ownership Association of Iowa, Bancorporation, Plan, Des Moines, Iowa Keosauqua, Iowa Keosauqua, Iowa West Bancorporation, Inc., United Federal Savings West Des Moines June 24, 1994 West Des Moines, Iowa Association of Iowa, State Bank, Des Moines, Iowa West Des Moines, Iowa 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) ^^ West One Bancorp, National Security Bank July 12, 1994 Boise, Idaho Holding Company, Newport, Oregon Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

852 Federal Reserve Bulletin • September 1994 Section 4 Effective Applicant(s) Bank(s) Date HSBC Holdings, PLC, Government Pricing Information July 20, 1994 London, United Kingdom System, Inc., HSBC Holdings BV, New York, New York Amsterdam, The Netherlands Marine Midland Banks, Inc., Buffalo, New York APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Section 3 Reserve Effective Applicant(s) Bank(s) Bank Date Arvest Bank Group, Inc., First Bancshares, Inc., St. Louis July 1, 1994 Bentonville, Arkansas Bartlesville, Oklahoma The Bank Holding Company, First Community Bank of Atlanta July 20, 1994 Griffin, Georgia Henry County, McDonough, Georgia Capital Commerce Bancorp, Inc., Milwaukee Western Chicago July 14, 1994 Milwaukee, Wisconsin Bank, Milwaukee, Wisconsin Central Financial Bancorp, Inc., Bank of Troy, Dallas July 6, 1994 Lorena, Texas Troy, Texas Central Delaware Financial Bancorp, Inc., Dover, Delaware Commercial BancShares, Hometown Bancshares, Richmond June 30, 1994 Incorporated, Inc., Parkersburg, West Virginia Middlebourne, West Virginia CoreStates Financial Corp, New Clayton Bank, Philadelphia July 1, 1994 Philadelphia, Pennsylvania Wilmington, Delaware Erick Bancshares, Inc., Erick Bancorporation, Kansas City June 30, 1994 Erick, Oklahoma Inc., Erick, Oklahoma First Citizens BancShares, Inc., Bank of Marlinton, Richmond July 19, 1994 Raleigh, North Carolina Marlinton, West Virginia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 853 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank Date First Holding Company of Park Lamb's Bancorporation, Minneapolis July 8, 1994 River, Inc., Inc., Michigan, Park River, North Dakota North Dakota First National Bancorp, Barrow Bancshares, Inc. Atlanta June 30, 1994 Gainesville, Georgia Winder, Georgia GNB Bancshares, Inc., Lake Cities Financial Dallas July 18, 1994 Gainesville, Texas Corporation, Guaranty National Bancshares, Lake Dallas, Texas Inc., Wilmington, Delaware Hibernia Corporation, First Bancorp of Atlanta July 1, 1994 New Orleans, Louisiana Louisiana, Inc., West Monroe, Louisiana Hibernia Corporation, First Continental Atlanta July 1, 1994 New Orleans, Louisiana Bancshares, Inc., Gretna, Louisiana Mellon Bank Corporation, Glendale Bancorporation, Cleveland July 12, 1994 Pittsburgh, Pennsylvania Voorhees Township, New Jersey Potomac Bancshares, Inc., Bank of Charles Town, Richmond June 29, 1994 Charles Town, West Virginia Charles Town, West Virginia Republic Bancorp, Inc., Horizon Savings Bank, Chicago June 30, 1994 Owosso, Michigan Beach wood, Ohio Regions Financial Corporation, First Community Atlanta July 1, 1994 Birmingham, Alabama Bancshares, Inc., Rome, Georgia Southwest Banks, Inc., Cape Coral National Atlanta July 7, 1994 Naples, Florida Bank, Cape Coral, Florida Summit Bancshares, Ltd., First National Bank in St. Louis July 1, 1994 Olney, Illinois Olney, Olney, Illinois Triangle Bancorporation, The Bank of Carbon Hill, Atlanta July 1, 1994 Berry, Alabama Carbon Hill, Alabama Bank of Berry, Berry, Alabama Bank of Parrish, Parrish, Alabama Vancouver Bancorp, Bank of Vancouver, San Francisco July 7, 1994 Vancouver, Washington Vancouver, Washington Williamsburg Bancorp, Inc., Williamsburg National Cleveland July 6, 1994 Corbin, Kentucky Bank, Williamsburg, Kentucky Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

854 Federal Reserve Bulletin • September 1994 Section 4 Nonbanking Activity/ Reserve Effective Applicant(s) Company Bank Date Banco Santander, S.A., First Inter-Bancorp, Inc., New York July 1, 1994 Santander, Spain Fishkill, New York Bank of Montreal, Government Pricing Chicago July 20, 1994 Toronto, Ontario, Canada Information System, Bankmont Financial Corp., Inc., Chicago, Illinois New York, New York The Bank of New York to engage de novo in New York July 20, 1994 Company, Inc., making, acquiring, or New York, New York servicing loans or other extensions of credit BNCCorp, Inc., to engage de novo in Minneapolis July 8, 1994 Bismarck, North Dakota providing management consulting to nonaffiliated bank and nonbank depository institutions BWC Financial Corp., BWC Mortgage Services, San Francisco July 18, 1994 Walnut Creek, California San Ramon, California Carolina First Corporation, to engage de novo in Richmond July 6, 1994 Greenville, South Carolina constructing and operating a low-income housing project for elderly persons through a 50% interest in a limited partnership Cherokee Bancorp, Inc., TexasEast Bank Services, Dallas July 6, 1994 Jacksonville, Texas Inc., Long view, Texas FDH Bancshares, Inc., New Federal Savings St. Louis June 27, 1994 Little Rock, Arkansas Bank, Sheridan, Arkansas First Alliance Bancorp, Inc., Interim Alliance Atlanta July 7, 1994 Marietta, Georgia Corporation D/B/A Alliance Finance, Smyrna, Georgia First Fidelity Bancorporation, First Inter-Bancorp Inc., Philadelphia July 1, 1994 Newark, New Jersey Lawrenceville, New Jersey First of America Bank First of America Chicago June 30, 1994 Corporation, Securities, Inc., Kalamazoo, Michigan Kalamazoo, Michigan J.P. Morgan & Co. Incorporated, Big City Forest, Inc., New York June 24, 1994 New York, New York New York, New York Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 855 Section 4—Continued Nonbanking Activity/ Reserve Effective Applicant(s) Company Bank Date Mahaska Investment Company, United Savings Chicago June 24, 1994 Oskaloosa, Iowa Association of Iowa, Des Moines, Iowa Central Valley Savings, FSB, Ottumwa, Iowa Mellon Bank Corporation, Stone Trust Company, Cleveland July 8, 1994 Pittsburgh, Pennsylvania Tipton, Pennsylvania National Commerce NBC Bank, FSB, St. Louis July 12, 1994 Bancorporation, Knoxville, Tennessee Memphis, Tennessee Norwest Corporation, Legacy Mortgage, Minneapolis July 21, 1994 Minneapolis, Minnesota Centerville, Ohio Heritage Realtors, Centerville, Ohio Norwest Corporation, to engage de novo in real Minneapolis July 8, 1994 Minneapolis, Minnesota estate and personal property appraising activities Rock Rivers Bancorp, United Federal Savings Chicago June 24, 1994 Rock Rapids, Iowa Association of Iowa, Des Moines, Iowa Midwest Federal Savings Bank, Rock Rapids, Iowa Stichting Prioriteit ABN AMRO Lease Plan (U.S.A.) Inc., Chicago July 1, 1994 Holding, Atlanta, Georgia Amsterdam, The Netherlands Stichting Administratiekantoor ABN AMRO Holding, Amsterdam, The Netherlands ABN AMRO Holding N.V., Amsterdam, The Netherlands ABS AMRO Bank N.V., Amsterdam, The Netherlands Sections 3 and 4 Nonbanking Activity/ Reserve Effective Applicant(s) Company Bank Date Horizon Bancorp Employee Horizon Bancorp, Chicago July 15, 1994 Stock Ownership Plan, Michigan City, Indiana Michigan City, Indiana Norwest Financial Special Norwest Financial, Inc., Minneapolis July 21, 1994 Services, Inc., Des Moines, Iowa Des Moines, Iowa Dial National Bank, Des Moines, Iowa Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

856 Federal Reserve Bulletin • September 1994 APPLICATIONS APPROVED UNDER BANK MERGER ACT 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. Effective Applicant(s) Bank(s) ^ Sun Bank of Ocala, Sun Bank of Gainesville, July 18, 1994 Ocala, Florida Gainesville, Florida 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 Ambassador Bank of the Lafayette Bank, Philadelphia July 6, 1994 Commonwealth, Easton, Pennsylvania Allentown, Pennsylvania M&I Marshall & Ilsley Bank, Valley Bank Milwaukee, Chicago June 28, 1994 Milwaukee, Wisconsin Milwaukee, Wisconsin M&I Greater Milwaukee Bank, Milwaukee, Wisconsin M&I Wauwatosa State Bank, Wauwatosa, Wisconsin OMNIBANK Southeast, OMNIBANK Arvada, Kansas City July 11, 1994 Denver, Colorado Arvada, Colorado OMNIBANK University Hills, Denver, Colorado United Bank of Philadelphia, Ukainian Federal Savings Philadelphia June 24, 1994 Philadelphia, Pennsylvania and Loan Association, Philadelphia, Pennsylvania Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 857 PENDING CASES INVOLVING THE BOARD OF Scott v. Board of Governors, No. 94-0104 (D. D.C., GOVERNORS filed January 21, 1994). Petition for review of a Board order approving the application of Society Corporation, Cleveland, Ohio, to merge with Key- This list of pending cases does not include suits Corp, Albany, New York (80 Federal Reserve Bulagainst the Federal Reserve Banks in which the Board letin 253 (1994)). of Governors is not named a party. Board of Governors v. Oppegard, No. 93-3706 (8th Cir., filed November 1, 1993). Appeal of district National Title Resource Agency v. Board of Gover- court order ordering appellant Oppegard to comply nors, No. 94-2050 (8th Cir., filed April 28, 1994). with prior order requiring compliance with Board Petition for review of Board's order, issued under prohibition and civil money penalty orders. Oral section 4 of the Bank Holding Company Act, ap- argument was held June 16, 1994. On July 6, 1994, proving the application of Norwest Corp., Minneap- the Court of Appeals affirmed the district court olis, Minnesota, to acquire Double Eagle Financial order. Corp., Phoenix, Arizona, and its subsidiary, United Jackson v. Board of Governors, No. CV-N-93-401- Title Agency, Inc., and thereby engage in title ECR (D. Nev., filed June 14,1993). Pro se action for insurance agency activities and real estate settle- violation of a prisoner's civil rights. On Novemment services (80 Federal Reserve Bulletin 453). ber 26, 1993, the Board filed a motion to dismiss. The Board's brief was filed July 7, 1994. First National Bank ofBellaire v. Board of Governors, Scott v. Board of Governors, No. 94-4117 (10th Cir.), No. H-93-1708 (S.D. Texas, filed June 8, 1993). filed April 28, 1994. Appeal of dismissal of action Action to enjoin possible enforcement actions by against Board and others for damages and injunctive Board of Governors and other bank regulatory agenrelief for alleged constitutional and statutory viola- cies. On March 8, 1994, the district court granted the tions caused by issuance of Federal Reserve notes. agencies' motion to dismiss; on June 20, 1994, the Beckman v. Greenspan, No. CV 94-41-BCG-RWA court denied plaintiff's motion for reconsideration. (D. Mont., filed April 13, 1994). Action against Kubany v. Board of Governors, et al., No. 93-1428 (D. Board and others seeking damages for alleged vio- D.C., filed July 9, 1993). Action challenging Board lations of constitutional and common law rights. The determination under the Freedom of Information Board's motion to dismiss was filed May 19, 1994. Act. On July 19, 1994, the court granted the Board's DLG Financial Corp. v. Board of Governors, No. motion to dismiss. 94-10078 (5th Cir., filed January 20, 1994). Appeal Bennett v. Greenspan, No. 93-1813 (D. D.C., filed of district court dismissal of appellants' action to April 20, 1993). Employment discrimination action. enjoin the Board and the Federal Reserve Bank of Amann v. Prudential Home Mortgage Co., et al., No. Dallas from taking certain enforcement actions, and 93-10320 WD (D. Massachusetts, filed February 12, for money damages on a variety of tort and contract 1993). Action for fraud and breach of contract theories. The case has been consolidated on appeal arising out of a home mortgage. On April 17, 1993, with Board of Governors v. DLG Financial Corp., the Board filed a motion to dismiss. Nos. 93-2944 and 94-20013 (5th Cir., filed Decem- Adams v. Greenspan, No. 93-0167 (D. D.C., filed ber 14, 1993 and December 31, 1993), an appeal of a January 27, 1993). Action by former employee under temporary restraining order and a preliminary in- the Civil Rights Act of 1964 and the Rehabilitation junction obtained by the Board freezing assets of a Act of 1973 concerning termination of employment. corporation and an individual pending administra- The Board's motion for partial summary judgment tive adjudication of civil money penalty assessments was filed on January 4, 1994. by the Board. Oral argument on the consolidated CBC, Inc. v. Board of Governors, No. 93-1458 (U.S. appeal was held June 1, 1994. Supreme Court, filed March 17, 1994). Petition for Richardson v. Board of Governors, et al., No. 94- review of civil money penalty assessment against a 4020 (10th Cir.), filed January 14, 1994. Appeal of bank holding company and three of its officers and dismissal of action against Board and others for directors for failure to comply with reporting redamages and injunctive relief for alleged constitu- quirements. On November 30, 1993, the Court of tional and statutory violations caused by issuance of Appeals for the 10th Circuit denied the petition for Federal Reserve notes. The Board's brief was filed review, and the plaintiffs' petition for certiorari was June 3, 1994. denied on June 6, 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

858 Federal Reserve Bulletin • September 1994 Zemel v. Board of Governors, No. 92-1056 (D. D.C., FINAL ENFORCEMENT ORDER ISSUED BY THE filed May 4, 1992). Age Discrimination in Employ- BOARD OF GOVERNORS ment Act case. The parties' cross-motions for sum- Donald R. Horton mary judgment are pending. Dallas, Texas Board of Governors v. Ghaith R. Pharaon, No. 91-CIV-6250 (S.D. New York, filed September 17, The Federal Reserve Board announced on July 12, 1991). Action to freeze assets of individual pending 1994, the issuance of a combined Consent Order to administrative adjudication of civil money penalty Cease and Desist and of Assessment of a Civil Money assessment by the Board. On September 17, Penalty against Donald R. Horton, the majority share- 1991, the court issued an order temporarily re- holder and a former director of Provident Bancorp of straining the transfer or disposition of the individ- Texas, Inc., Dallas, Texas, a registered bank holding ual's assets. company. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

859 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

860 Federal Reserve Bulletin • September 1994 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 Janet L. Yellen San Francisco Aug. 12, 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

1 Financial and Business Statistics CONTENTS WEEKLY REPORTING COMMERCIAL BANKS Assets and liabilities A3 Guide to Tabular Presentation A21 Large reporting banks A23 Branches and agencies of foreign banks Domestic Financial Statistics MONEY STOCK AND BANK CREDIT FINANCIAL MARKETS A24 Commercial paper and bankers dollar A4 Reserves, money stock, liquid assets, and debt measures acceptances outstanding A25 Prime rate charged by banks on short-term A5 Reserves of depository institutions, Reserve Bank credit business loans A26 Interest rates—money and capital markets A6 Reserves and borrowings—Depository institutions A27 Stock market—Selected statistics A7 Selected borrowings in immediately available funds—Large member banks FEDERAL FINANCE POLICY INSTRUMENTS A28 Federal fiscal and financing operations 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 A35 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 • September 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 CONSUMER INSTALLMENT CREDIT IN THE UNITED STATES A39 Total outstanding A55 Liabilities to and claims on foreigners A39 Terms A56 Liabilities to foreigners A58 Banks' own claims on foreigners FLOW OF FUNDS A59 Banks' own and domestic customers' claims on foreigners A40 Funds raised in U.S. credit markets A59 Banks' own claims on unaffiliated foreigners A42 Summary of financial transactions A60 Claims on foreign countries—Combined A43 Summary of credit market debt outstanding domestic offices and foreign branches A44 Summary of financial assets and liabilities Domestic Nonfinancial Statistics REPORTED BY NONBANKING BUSINESS ENTERPRISES IN THE UNITED STATES SELECTED MEASURES A61 Liabilities to unaffiliated foreigners A45 Nonfinancial business activity—Selected A62 Claims on unaffiliated foreigners measures A45 Labor force, employment, and unemployment A46 Output, capacity, and capacity utilization SECURITIES HOLDINGS AND TRANSACTIONS A47 Industrial production—Indexes and gross value A49 Housing and construction A63 Foreign transactions in securities A50 Consumer and producer prices A64 Marketable U.S. Treasury bonds and A51 Gross domestic product and income notes—Foreign transactions A52 Personal income and saving INTEREST AND EXCHANGE RATES International Statistics A65 Discount rates of foreign central banks SUMMARY STATISTICS A65 Foreign short-term interest rates A66 Foreign exchange rates A53 U.S. international transactions—Summary A67 Guide to Statistical Releases and A54 U.S. foreign trade A54 U.S. reserve assets Special Tables 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 NonfinancialS tatistics • September 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 Q3 Q4 Q1 Q2 Feb. Mar. Apr. May June Reserves of depository institutions2 1 Total 12.5 14.2 3.1 -4.3 3.2 -3.4 -7.4 -3.9 -5.3 2 Required 12.4 14.1 2.5 -3.6 9.5 .0 -11.2 .8 -9.3 3 Nonborrowed 11.0 15.6 3.7 -5.3 3.3 -3.1 -8.8 -5.4 -8.0 4 Monetary base 10.6 9.8 10.2 8.4 13.4 9.3 6.3 8.2 7.6 Concepts of money, liquid assets, and debt4 5 Ml 12.0 9.4 6.0 2.0 5.3r 4.1r -1.2 2.0 3.9 6 M2 2.5 2.3 1.8 1.5 -1.3 4.7 2.4r A' -3.0 7 M3 1.0 2.6' .2 -.1 -7.7r 2.2r 2.4r -1.8r -.9 8 L 1.0 1.9 2.3r n.a. -2.9r -.r 4.2r -1.0 n.a. 9 Debt 6.01 5.1r 5.8r n.a. 4.7 5.5r 4.4 4.2 n.a. Nontrqnsaction components 10 In M25 -1.7 -.8 -.1 1.2 -4.4 5.0 4.1r -.3r -6.2 11 In M3 only6 -6.7 4.0r -8.8r -8.7 -42.3r -12.0r 2.1r —14.2r 11.1 Time and savings deposits Commercial banks 12 Savings, including MMDAs 4.9 3.6 4.3 -3.3 1.5 — 1.4r -6.1r -7.3 13 Small time7 -10.6 -7.4 -5.2 .1 -4.1 -3.4 -2.6 6.2 7.0 14 Large time ' -7.7 -.4 -3.6 -3.3 -23.6 -17.5 -3.1 19.6r .0 Thrift institutions 15 Savings, including MMDAs 2.3 -.4 .5r .2 -l.lr 5.3 2.2 -2.21 -10.0 16 Small time -14.0 -9.5 -11.5 -7.3 -13.4 -7.3 -6.2 -7.0 -5.1 17 Large time8,9 -4.5 -6.7 -9.3 -7.6 -5.8 -15.6 5.9 -27.5 6.0 Money market mutual funds 18 General purpose and broker-dealer -1.8 1.2 -.1 17.7 -14.1 16.4 45.1 12.0 -19.1 19 Institution-only -10.5 8.8 -26.7 -22.8 -98.4 3.4 -2.7 -52.2 1.4 Debt components4 20 Federal 9.2 5.5 7.1 n.a. 5.2 9.0 2.9 4.2 n.a. 21 Nonfederal 4.8r 4.9r 5.4r n.a. 4.6 4.2r 4.9r 4.3 n.a. 1. Unless otherwise noted, rates of change are calculated from average tax-exempt, institution-only money market funds. Excludes amounts held by amounts outstanding during preceding month or quarter. depository institutions, the U.S. government, money market funds, and foreign 2. Figures incorporate adjustments for discontinuities, or "breaks," associ- banks and official institutions. Also excluded is the estimated amount of overnight ated with regulatory changes in reserve requirements. (See also table 1.20.) RPs and Eurodollars held by institution-only money market funds. Seasonally 3. The seasonally adjusted, break-adjusted monetary base consists of (1) adjusted M3 is computed by adjusting its non-M2 component as a whole and then seasonally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adding this result to seasonally adjusted M2. adjusted currency component of the money stock, plus (3) (for all quarterly L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term reporters on the "Report of Transaction Accounts, Other Deposits, and Vault Treasury securities, commercial paper, and bankers acceptances, net of money Cash" and for all weekly reporters whose vault cash exceeds their required market fund holdings of these assets. Seasonally adjusted L is computed by reserves) the seasonally adjusted, break-adjusted difference between current vault summing U.S. savings bonds, short-term Treasury securities, commercial paper, cash and the amount applied to satisfy current reserve requirements. and bankers acceptances, each seasonally adjusted separately, and then adding 4. Composition of the money stock measures and debt is as follows: this result to M3. Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the Debt: Debt of domestic nonfinancial sectors consists of outstanding credit vaults of depository institutions, (2) travelers checks of nonbank issuers, (3) market debt of the U.S. government, state and local governments, and private demand deposits at all commercial banks other than those owed to depository nonfinancial sectors. Private debt consists of corporate bonds, mortgages, coninstitutions, the U.S. government, and foreign banks and official institutions, less sumer credit (including bank loans), other bank loans, commercial paper, bankers cash items in the process of collection and Federal Reserve float, and (4) other acceptances, and other debt instruments. Data are derived from the Federal checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW) Reserve Board's flow of funds accounts. Data on debt of domestic nonfinancial and automatic transfer service (ATS) accounts at depository institutions, credit sectors are monthly averages, derived by averaging adjacent month-end levels. union share draft accounts, and demand deposits at thrift institutions. Seasonally Growth rates for debt reflect adjustments for discontinuities over time in the levels adjusted Ml is computed by summing currency, travelers checks, demand of debt presented in other tables. deposits, and OCDs, each seasonally adjusted separately. 5. Sum of (1) overnight RPs and Eurodollars, (2) money market fund balances M2: Ml plus (1) overnight (and continuing-contract) repurchase agreements (general purpose and broker-dealer), (3) savings deposits (including MMDAs), (RPs) issued by all depository institutions and overnight Eurodollars issued to and (4) small time deposits. U.S. residents by foreign branches of U.S. banks worldwide, (2) savings (includ- 6. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S. ing MMDAs) and small time deposits (time deposits—including retail RPs—in residents, and (4) money market 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 fl) 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 Apr. May June May 18 May 25 June 1 June 8 June 15 June 22 June 29 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 382,420 382,772' 387,309 382,315 382,564' 384,024 386,677 385,440 388,362 387,367 U.S. government securities 2 Bought outright—System account 341,226 343,765 349,265 343,419 344,147 343,723 350,047 348,867 350,769 348,221 3 Held under repurchase agreements 2,452 1,376 880 1,449 1,716 2,905 0 0 0 1,705 Federal agency obligations 4 Bought outright 4,115 4,019 3,955 4,022 4,016 3,977 3,977 3,955 3,952 3,938 5 Held under repurchase agreements 99 414 93 136 942 836 0 0 0 129 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 61 65 69 122 30 57 27 13 84 107 8 Seasonal credit 55 134 224 133 148 172 180 192 242 278 9 Extended credit 0 0 0 0 0 0 0 0 0 0 10 Float .' 628 398' 606 446 21' 501 541 300 962 526 11 Other Federal Reserve assets 33,783 32,60c 32,219 32,588 31,543' 31,852 31,904 32,112 32,353 32,463 12 Gold stock 11,052 11,052 11,052 11,052 11,052 11,053 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 22,350' 22,424' 22,496 22,421' 22,441' 22,461 22,475 22,489 22,503 22,517 ABSORBING RESERVE FUNDS 15 Currency in circulation 370,762' 374,200' 378,795 374,068' 374,057' 377,210 378,370 378,639 378,545 379,136 16 Treasury cash holdings 376 373 357 375 373 361 358 358 357 355 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 5,701 6,174 6,120 5,997 5,287 4,683 4,993 4,826 7,064 7,561 18 Foreign 248 185 192 205 215 166 184 176 172 182 19 Service-related balances and adjustments 6,371 6,089r 5,890 6,055' 6,015' 5,975 5,878 5,839 5,926 5,871 20 Other 311 304 296 318 282 292 300 300 314 274 21 Other Federal Reserve liabilities and capital 10,386 10,426 10,781 10,440 10,489 10,566 10,791 10,756 10,712 10,758 22 Reserve balances wjth Federal Reserve Banks 29,685 26,516' 26,443 26,349' 27,358' 26,303 27,348 26,106 26,844 24,817 End-of-month figures Wednesday figures Apr. May June May 18 May 25 June 1 June 8 June 15 June 22 June 29 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 381,576 386,797' 396,534 381,730 383,882' 387,823 386,066 387,637 388,715 388,927 U.S. government securities2 2 Bought outright—System account 343,079 344,365 347,644 342,512 346,899 344,960 349,019 351,146 351,581 347,643 3 Held under repurchase agreements ... 0 4,405 10,059 2,016 375 4,405 0 0 0 3,979 Federal agency obligations 4 Bought outright 4,047 3,977 3,920 4,022 3,977 3,977 3,977 3,952 3,952 3,920 5 Held under repurchase agreements ... 0 1,300 580 955 725 1,300 0 0 0 300 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 151 76 415 48 35 40 19 19 319 96 8 Seasonal credit 82 164 286 140 165 178 178 205 263 284 9 Extended credit 0 0 0 0 0 0 0 0 0 0 10 Float 47' 473' 869 638 41' 994 836 95 123 482 11 Other Federal Reserve assets 34,169' 32,038' 32,762 31,400 31,665' 31,969 32,037 32,220 32,477 32,223 12 Gold stock 11,053 11,052 11,052 11,052 11,053 11,052 11,052 11,053 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 22,382' 22,461' 22,531 22,421' 22,441' 22,461 22,475 22,489 22,503 22,517 ABSORBING RESERVE FUNDS 15 Currency in circulation 370,701' 377,939' 382,156 374,618' 375,736' 378,861 379,184 379,353 379,094 381,560 16 Treasury cash holdings 378 361 353 373 361 358 358 357 356 353 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 7,965 5,675 9,356 5,131 5,594 3,126 5,229 5,530 6,682 6,435 18 Foreign 171 174 604 178 222 177 163 178 166 163 19 Service-related balances and adjustments 6,322 5,975' 6,141 6,055' 6,015' 5,975 5,878 5,839 5,926 5,871 20 Other 312 278 286 314 297 295 345 307 393 270 21 Other Federal Reserve liabilities and capital 10,189 10,836 11,825 10,295 10,291 10,506 10,586 10,553 10,530 10,634 22 Reserve balances with Federal Reserve Banks 26,990 27,091' 27,414 26,258' 26,879' 30,058 25,867 27,078 27,140 25,226 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 DomesticN onfinancialS tatistics • September 1994 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RReesseerrvvee ccllaassssiiffiiccaattiioonn 1991 1992 1993 1993 1994 Dec. Dec. Dec. Dec. Jan. Feb. Mar. Apr. Ma/ June 1 Reserve balances with Reserve Banks 26,659 25,368 29,374 29,374 27,817 26,922 27,396 29,614 26,790 26,504 2 Total vault cash 32,509 34,542 36,812 36,812 37,907 36,295 35,585 35,215 35,892 36,898 3 Applied vault cash , 28,872 31,172 33,484 33,484 34,254 32,671 32,208 32,027 32,483 33,422 4 Surplus vault cash5 3,637 3,370 3,328 3,328 3,653 3,624 3,377 3,188 3,409 3,476 5 Total reserves6 55,532 56,540 62,858 62,858 62,072 59,593 59,605 61,641 59,273 59,927 6 Required reserves i ... 54,553 55,385 61,795 61,795 60,624 58,454 58,638 60,489 58,358 58,821 7 Excess reserve balances at Reserve Banks ... 979 1,155 1,063 1,063 1,448 1,140 967 1,151 915 1,106 8 Total borrowings at Reserve Banks8 192 124 82 82 73 70 55 124 200 333 9 Seasonal borrowings 38 18 31 31 15 15 24 57 134 226 10 Extended credit 1 1 0 0 0 0 0 0 0 0 Biweekly averages of daily figures for weeks ending on date indicated 1994 Mar. 2 Mar. 16 Mar. 30 Apr. 13 Apr. 27 May 11 May 25 June 8r June 22 July 6 1 Reserve balances with Reserve Banks 27,811 27,139 27,434 29,641 -30,212 26,702 26,848 26,816 26,473 26,248 2 Total vault cash 34,617 36,654 34,667 35,434 34,748 36,447 35,320 36,209 37,227 37,012 3 Applied vault cash 31,282 33,105 31,440 32,268 31,599 32,983 31,952 32,806 33,689 33,572 4 Surplus vault cash5 3,335 3,549 3,227 3,167 3,150 3,464 3,368 3,403 3,538 3,440 5 Total reserves 59,093 60,244 58,874 61,909 61,810 59,684 58,800 59,622 60,162 59,819 6 Required reserves 57,942 59,192 58,013 61,012 60,350 58,871 57,881 58,531 5599,,226644 58,335 7 Excess reserve balances at Reserve Banks ... 1,151 1,052 861 897 1,460 814 919 1,092 889988 1,484 8 Total borrowings at Reserve Banks8 45 39 68 125 114 170 216 218 266 568 9 Seasonal borrowings 15 17 32 40 64 102 141 176 217 292 10 Extended credit9 0 0 0 0 0 0 0 0 0 0 1. Data in this table also appear in the Board's H.3 (502) weekly statistical institutions (that is, those whose vault cash exceeds their required reserves) to release. For ordering address, see inside front cover. satisfy current reserve requirements. 2. Excludes required clearing balances and adjustments to compensate for float 5. Total vault cash (line 2) less applied vault cash (line 3). and includes other off-balance-sheet "as-of" adjustments. 6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash 3. Total "lagged" vault cash held by depository institutions subject to reserve (line 3). requirements. Dates refer to the maintenance periods during which the vault cash 7. Total reserves (line 5) less required reserves (line 6). can be used to satisfy reserve requirements. The maintenance period for weekly 8. Also includes adjustment credit. reporters ends sixteen days after the lagged computation period during which the 9. Consists of borrowing at the discount window under the terms and condivault cash is held. Before Nov. 25,1992, the maintenance period ended thirty days tions established for the extended credit program to help depository institutions after the lagged computation period. deal with sustained liquidity pressures. Because there is not the same need to 4. All vault cash held during the lagged computation period by "bound" repay such borrowing promptly as with traditional short-term adjustment credit, institutions (that is, those whose required reserves exceed their vault cash) plus the money market impact of extended credit is similar to that of nonborrowed the amount of vault cash applied during the maintenance period by "nonbound" reserves. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit A7 1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS Large Banks1 Millions of dollars, averages of daily figures 1994, week ending Monday SSoouurrccee aanndd mmaattuurriittyy May 2 May 9 May 16 May 23 May 30 June 6 June 13 June 20 June 27 Federal funds purchased, repurchase agreements, and other selected borrowings From commercial banks in the United States 1 For one day or under continuing contract 65,833 68,573 68,148 66,700 66,665 67,500 67,573 65,141 6655,,668822 2 For all other maturities 12,976 12,781 12,765 12,498 12,504 12,187 12,150 12,166 12,446 From other depository institutions, foreign banks and official institutions, and U.S. government agencies 3 For one day or under continuing contract 18,933 18,210 20,401 23,418 20,452 20,999 2222,,333300 2244,,339922 2233,,223388 4 For all other maturities 19,425 20,093 21,017 21,742 21,704 21,848 22,032 22,501 23,410 Repurchase agreements on U.S. government and federal agency securities Brokers and nonbank dealers in securities 5 For one day or under continuing contract 20,226 22,298 23,630 24,001 22,351 22,637 21,846 22,452 2211,,449999 6 For all other maturities 33,846 33,538 29,969 29,841 34,067 33,957 35,588 33,263 31,207 All other customers 7 For one day or under continuing contract 30,306 29,046 30,238 31,458 31,843 30,919 31,013 30,298 3300,,118844 8 For all other maturities 16,845 15,869 15,570 16,644 16,442 16,620 16,842 17,076 16,695 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 52,788 48,864 53,700 50,909 5500,,337733 5522,,225533 4499,,999922 4499,,889988 5544,,886688 10 To all other specified customers 22,402 21,618 24,802 23,001 23,592 23,430 20,999 21,942 19,863 1. Banks with assets of $4 billion or more as of Dec. 31, 1988. 2. Brokers and nonbank dealers in securities, other depository institutions, Data in this table also appear in the Board's H.5 (507) weekly statistical release. foreign banks and official institutions, and U.S. government agencies. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic NonfinancialS tatistics • September 1994 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels Adjustment credit1 Seasonal credit2 Extended credit3 FFeeddeerraall RReesseerrvvee BBaannkk 8/ O 5/ n 9 4 Effective date Previous rate 8/ O 5/ n 9 4 Effective date Previous rate 8/ O 5/ n 9 4 Effective date Previous rate Boston 3.5 5/17/94 3.0 4.50 8/4/94 4.50 5.00 8/4/94 5.00 New York 5/17/94 8/4/94 8/4/94 Philadelphia 5/17/94 8/4/94 8/4/94 Cleveland 5/18/94 8/4/94 8/4/94 Richmond 5/17/94 8/4/94 8/4/94 Atlanta 5/17/94 8/4/94 8/4/94 Chicago 5/17/94 8/4/94 8/4/94 St. Louis 5/17/94 8/4/94 8/4/94 Minneapolis 5/17/94 8/4/94 8/4/94 Kansas City 5/17/94 8/4/94 8/4/94 Dallas 5/17/94 8/4/94 8/4/94 San Francisco ... 3.5 5/17/94 3.0 4.50 8/4/94 4.50 5.00 8/4/94 5.00 Range of rates for adjustment credit in recent years4 Range (or F.R. Range (or F.R. Range (or F.R. Effective date A le l v l e F l) . — R. Ba o n f k Effective date A le l v l e F l) . — R. B o an f k Effective date A le l v l e F l) . — R. Ba o n f k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1977 6 6 1981---MMaayy 5 13-14 14 1986—Aug. 21 5.5-6 5.5 8 14 14 22 5.5 5.5 1978—Jan. 9 6-6.5 6.5 Nov. 2 13-14 13 20 6.5 6.5 6 13 13 1987—Sept. 4 5.5-6 6 May 11 6.5-7 7 Dec. 4 12 12 11 6 6 12 7 7 July 3 7-7.25 7.25 1982---JJuullyy 20 11.5-12 11.5 1988—Aug. 9 6-6.5 6.5 10 7.25 7.25 23 11.5 11.5 11 6.5 6.5 Aug. 21 7.75 7.75 AAuugg.. 2 11-11.5 11 Sept. 22 8 8 3 11 11 1989—Feb. 24 6.5-7 7 Oct. 16 8-8.5 8.5 16 10.5 10.5 7 7 20 8.5 8.5 27 10-10.5 10 27 Nov. 1 8.5-9.5 9.5 30 10 10 6.5 6.5 3 9.5 9.5 Oct. 12 9.5-10 9.5 1990—Dec. 19 13 9.5 9.5 6-6.5 6 1979—July 20 10 10 Nov. 22 9-9.5 9 1991—Feb. 1 6 6 Aug. 17 10-10.5 10.5 26 9 9 4 5.5-6 5.5 20 10.5 10.5 Dec. 14 8.5-9 9 Apr. 30 5.5 5.5 Sept. 19 10.5-11 11 15 8.5-9 8.5 May 2 5-5.5 5 21 11 11 17 8.5 8.5 Sept. 13 5 5 Oct. 8 11-12 12 17 4.5-5 4.5 10 12 12 1984-——AApprr.. 9 8.5-9 9 Nov. 6 4.5 4.5 13 9 9 7 3.5-4.5 3.5 1980—Feb. 15 12-13 13 Nov. 21 8.5-9 8.5 Dec. 20 3.5 3.5 19 13 13 26 8.5 8.5 24 May 29 12-13 13 Dec. 24 8 8 1992—July 2 3-3.5 3 30 12 12 7 3 3 June 13 11-12 11 1985-——MMaayy 20 7.5-8 7.5 16 11 11 24 7.5 7.5 29 10 10 In effect Aug. 5, 1994 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. 21 6.5-7 6.5 Dec. 5 12-13 13 July 11 6 6 1. Available on a short-term basis to help depository institutions meet tempo- ordinarily is charged on extended-credit loans outstanding less than thirty days; rary needs for funds that cannot be met through reasonable alternative sources. however, at the discretion of the Federal Reserve Bank, this time period may be The highest rate established for loans to depository institutions may be charged on shortened. Beyond this initial period, a flexible rate somewhat above rates on adjustment-credit loans of unusual size that result from a major operating problem market sources of funds is charged. The rate ordinarily is reestablished on the first at the borrower's facility. business day of each two-week reserve maintenance period, but it is never less 2. Available to help relatively small depository institutions meet regular than the discount rate applicable to adjustment credit plus 50 basis points. seasonal needs for funds that arise from a clear pattern of intrayearly movements 4. For earlier data, see the following publications of the Board of Governors: in their deposits and loans and that cannot be met through special industry Banking and Monetary Statistics, 1914-1941, and 1941-1970; and the Annual lenders. The discount rate on seasonal credit takes into account rates on market Statistical Digest, 1970-1979. sources of funds and ordinarily is reestablished on the first business day of each In 1980 and 1981, the Federal Reserve applied a surcharge to short-term two-week reserve maintenance period; however, it is never less than the discount adjustment-credit borrowings by institutions with deposits of $500 million or more rate applicable to adjustment credit. that had borrowed in successive weeks or in more than four weeks in a calendar 3. May be made available to depository institutions when similar assistance is quarter. A 3 percent surcharge was in effect from Mar. 17,1980, through May 7, not reasonably available from other sources, including special industry lenders. 1980. A surcharge of 2 percent was reimposed on Nov. 17, 1980; the surcharge Such credit may be provided when exceptional circumstances (including sus- was subsequently raised to 3 percent on Dec. 5,1980, and to 4 percent on May 5, tained deposit drains, impaired access to money market funds, or sudden 1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981, and to 2 deterioration in loan repayment performance) or practices involve only a partic- percent effective Oct. 12, 1981. As of Oct. 1, 1981, the formula for applying the ular institution, or to meet the needs of institutions experiencing difficulties surcharge was changed from a calendar quarter to a moving thirteen-week period. adjusting to changing market conditions over a longer period (particularly at times The surcharge was eliminated on Nov. 17, 1981. of deposit disintermediation). The discount rate applicable to adjustment credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Type of deposit Net transaction accounts3 1 $0 million-$51.9 million... 12/21/93 2 More than $51.9 million4.. 12/21/93 3 Nonpersonal time deposits1 12/27/90 4 Eurocurrency liabilities6. . 12/27/90 1. Required reserves must be held in the form of deposits with Federal Reserve 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 1VS years was reduced from 3 increase in the total reservable liabilities of aU depository institutions, measured percent to 1V5 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 l'/i 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 1 Vz 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 1V5 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 NonfinancialS tatistics • September 1994 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 1993 1994 TTyyppee ooff ttrraannssaaccttiioonn aanndd mmaattuurriittyy 11999911 11999922 11999933 Nov. Dec. Jan. Feb. Mar. Apr. May U.S. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 20,158 14,714 17,717 5,911 1,394 0 1,264 900 1,101 1,395 2 Gross sales 120 1,628 0 0 0 0 0 0 0 0 3 Exchanges 277,314 308,699 332,229 27,641 33,536 28,986 28,709 33,163 28,881 29,807 4 Redemptions 1,000 1,600 468 0 0 0 0 0 0 0 Others within one year 5 Gross purchases 3,043 1,096 1,223 0 189 0 0 147 209 155 6 Gross sales 0 0 0 0 0 0 0 0 0 0 7 Maturity shifts 24,454 36,662 31,368 5,158 2,910 0 4,063 0 2,316 0 8 Exchanges -28,090 -30,543 -36,582 -7,641 -2,910 -639 -1,985 -3,605 -907 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 10,350 100 2,619 0 0 1,413 2,817 0 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shifts -21,211 -34,478 -27,140 -4,689 -2,910 776 3,447 0 1,607 0 13 Exchanges 24,594 25,811 0 5,341 2,910 639 1,145 3,605 907 0 Five to ten years 14 Gross purchases 1,280 2,818 4,168 0 1,008 0 0 1,103 1,117 0 15 Gross sales 0 0 0 0 0 0 0 0 0 0 16 Maturity shifts -2,037 -1,915 0 -272 0 -776 -616 0 709 0 17 Exchanges 2,894 3,532 0 2,300 0 0 550 0 0 0 More than ten years 18 Gross purchases 375 2,333 3,457 0 826 0 0 618 896 0 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shifts -1,209 -269 0 -197 0 0 0 0 0 0 21 Exchanges 600 1,200 0 0 0 0 325 0 0 0 All maturities 22 Gross purchases 31,439 34,079 36,915 6,011 6,035 0 1,264 4,181 6,140 1,550 23 Gross sales 120 1,628 0 0 0 0 0 0 0 0 24 Redemptions 1,000 1,600 468 0 0 616 0 0 440 0 Matched transactions 25 Gross sales 1,570,456 1,482,467 1,475,085 109,941 137,645 132,872 124,125 155,950 120,393 137,458 26 Gross purchases 1,571,534 1,480,140 1,475,941 112,772 136,821 133,468 124,270 155,625 134,051 137,195 Repurchase agreements 27 Gross purchases 310,084 378,374 475,447 38,493 33,751 25,818 33,693 38,490 19,741 21,517 28 Gross sales 311,752 386,257 470,723 34,072 29,577 29,348 37,425 38,115 25,041 17,112 29 Net change in U.S. Treasury securities 29,729 20,642 42,027 13,263 9,386 -3,550 -2,323 4,232 14,058 5,691 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 15 81 202 102 108 180 70 Repurchase agreements 33 Gross purchases 22,807 14,565 35,063 2,841 2,211 2,600 3,277 3,160 728 4,195 34 Gross sales 23,595 14,486 34,669 2,861 1,615 3,106 3,636 3,170 878 2,895 35 Net change in federal agency obligations -1,085 -554 -678 -35 515 -708 -461 -118 -330 1,230 36 Total net change in System Open Market Acconnt 28,644 20,089 41,348 13,228 9,901 -4,258 -2,784 4,114 13,728 6,921 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 1994 1994 June 1 June 8 June 15 June 22 June 29 Apr. 30 May 31 June 30 Consolidated condition statement ASSETS 1 Gold certificate account 11,052 11,052 11,053 11,052 11,052 11,053 11,052 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 (join 352 343 337 324 302 429 357 301 Loans 4 To depository institutions 218 197 224 582 381 234 240 701 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 3,977 3,977 3,952 3,952 3,920 4,047 3,977 3,920 8 Held under repurchase agreements 1,300 0 0 0 300 0 1,300 580 9 Total U.S. Treasury securities 349,365 349,019 351,146 351,581 351,622 343,079 348,770 357,703 10 Bought outright2 344,960 349,019 351,146 351,581 347,643 343,079 344,365 347,644 11 Bills 165,893 169,951 172,079 172,513 168,575 164,167 165,297 168,576 12 Notes 138,686 138,686 138,686 138,686 138,686 137,445 138,686 138,686 13 Bonds 40,381 40,381 40,381 40,381 40,381 41,467 40,381 40,381 14 Held under repurchase agreements 4,405 0 0 0 3,979 0 4,405 10,059 15 Total loans and securities 354,861 353,194 355,322 356,115 356,222 347,360 354,287 362,903 16 Items in process of collection 8,890 6,178 6,007 5,419 4,998 4,571 2,412 4,537 17 Bank premises 1,058 1,058 1,060 1,061 1,061 1,055 1,058 1,061 Other assets 18 Denominated in foreign currencies3 22,353 22,370 22,386 22,403 21,659 23,149 22,349 22,408 19 All other4 8,548 8,548 8,742 9,049 9,295 9,967 8,673 9,330 20 Total assets 415,131 410,762 412,925 413,441 412,606 405,602 408,207 419,610 LIABILITIES 21 Federal Reserve notes 357,110 357,410 357,559 357,271 359,698 349,127 356,197 360,280 22 Total deposits 39,646 37,642 39,149 40,570 37,732 41,922 39,306 43,604 23 Depository institutions 36,049 31,905 33,134 33,329 30,864 33,474 33,186 33,358 24 U.S. Treasuiy—General account 3,126 5,229 5,530 6,682 6,435 7,965 5,675 9,356 25 Foreign—Official accounts 177 163 178 166 163 171 174 604 26 Other 295 345 307 393 270 312 278 286 27 Deferred credit items 7,869 5,123 5,664 5,069 4,541 4,363 1,868 3,901 3,084 3,176 3,164 3,128 3,230 2,763 3,106 3,626 28 Other liabilities and accrued dividends 407,709 403,351 405,536 406,038 405,202 398,176 400,477 411,411 29 Total liabilities CAPITAL ACCOUNTS 3,518 3,522 3,523 3,521 3,523 3,479 3,517 3,523 3301 SCuarppitlauls paid in 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401 32 Other capital accounts 503 488 465 480 481 546 811 1,275 33 Total liabilities and capital accounts 415,131 410,762 412,925 413,441 412,606 405,602 408,207 419,610 MEMO 34 Marketable U.S. Treasury securities held in custody for foreign and international accounts 373,415 374,763 375,986 380,346 381,850 367,031 372,886 382,449 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to Banks) 421,172 422,358 423,702 425,145 426,742 419,336 420,983 427,534 36 LESS: Held by Federal Reserve Banks 64,062 64,948 66,143 67,874 67,044 70,209 64,787 67,254 37 Federal Reserve notes, net 357,110 357,410 357,559 357,271 359,698 349,127 356,197 360,280 Collateral held against notes, net: 38 Gold certificate account 11,052 11,052 11,053 11,052 11,052 11,053 11,052 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 338,040 338,340 338,488 338,201 340,628 330,056 337,126 341,210 42 Total collateral 357,110 357,410 357,559 357,271 359,698 349,127 356,197 360,280 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. Treasuiy securities in Treasury bills maturing within ninety days. pledged with Federal Reserve Banks—and excludes securities sold and scheduled 5. Includes exchange-translation account reflecting the monthly revaluation at to be bought back under matched sale-purchase transactions. market exchange rates of foreign exchange commitments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic NonfinancialS tatistics • September 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 June 1 June 8 June 15 June 22 June 29 Apr. 29 May 31 June 30 1 Total loans 218 198 224 582 381 234 240 701 2 Within fifteen days1 84 61 151 549 340 196 155 549 3 Sixteen days to ninety days ... 134 137 73 33 40 38 85 152 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.. 349,365 349,019 351,146 351,581 351,622 343,079 344,365 347,644 10 Within fifteen days1 20,510 12,419 21,786 22,166 22,360 11,062 10,423 4,966 11 Sixteen days to ninety days ... 83,033 84,883 77,645 77,819 81,653 89,445 88,120 81,476 12 Ninety-one days to one year .. 103,708 109,604 109,601 109,482 105,494 99,783 103,708 117,289 13 One year to five years 83,725 83,725 83,725 83,725 83,725 84,250 83,725 85,524 14 Five years to ten years 25,264 25,264 25,264 25,264 25,264 24,961 25,264 25,264 15 More than ten years 33,125 33,125 33,125 33,125 33,125 33,578 33,125 33,125 16 Total federal agency obligations 5,277 3,977 3,952 3,952 4,220 4,047 3,977 3,920 17 Within fifteen days1 1,325 24 32 192 465 130 266 165 18 Sixteen days to ninety days ... 386 676 644 484 490 528 386 490 19 Ninety-one days to one year .. 1,132 842 842 842 839 955 891 839 20 One year to five years 1,833 1,833 1,830 1,830 1,826 1,833 1,833 1,826 21 Five years to ten years 577 577 579 579 575 577 577 575 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 IItteemm 11999900 11999911 11999922 11999933 DDeecc.. DDeecc.. DDeecc.. DDeecc.. Nov. Dec. Jan. Feb. Mar. Apr. May June Seasonally adjusted AAAADDDDJJJJUUUUSSSSTTTTEEEEDDDD FFFFOOOORRRR CCCCHHHHAAAANNNNGGGGEEEESSSS IIIINNNN RRRREEEESSSSEEEERRRRVVVVEEEE RRRREEEEQQQQUUUUIIIIRRRREEEEMMMMEEEENNNNTTTTSSSS2222 1111 TTTToooottttaaaallll rrrreeeesssseeeerrrrvvvveeeessss3333 41.77 45.53 54.34 60.48 60.32 60.48 60.60 60.76 60.59 60.22 60.02 59.75 2222 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss4444 41.44 45.34 54.22 60.39 60.23 60.39 60.53 60.69 60.53 60.09 59.82 59.42 3333 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss pppplllluuuussss eeeexxxxtttteeeennnnddddeeeedddd ccccrrrreeeeddddiiiirrrr 41.47 45.34 54.22 60.39 60.23 60.39 60.53 60.69 60.53 60.09 59.82 59.42 4444 RRRReeeeqqqquuuuiiiirrrreeeedddd rrrreeeesssseeeerrrrvvvveeeessss 40.11 44.55 53.19 59.41 59.22 59.41 59.16 59.62 59.62 59.06 59.10 58.65 5555 MMMMoooonnnneeeettttaaaarrrryyyy bbbbaaaasssseeee6666 293.16 317.12 350.61 385.86 384.03 385.86 389.61 393.96 397.01 399.09 401.83 404.36 Not seasonally adjusted 6666 TTTToooottttaaaallll rrrreeeesssseeeerrrrvvvveeeessss7777 43.07 46.98 56.06 62.37 60.67 62.37 62.04 59.53 59.50 61.40 58.97 59.56 7777 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss 42.74 46.78 55.93 62.29 60.58 62.29 61.96 59.46 59.44 61.27 58.77 59.22 8888 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss pppplllluuuussss eeeexxxxtttteeeennnnddddeeeedddd ccccrrrreeeeddddiiiirrrr 42.77 46.78 55.93 62.29 60.58 62.29 61.96 59.46 59.44 61.27 58.77 59.22 9999 RRRReeeeqqqquuuuiiiirrrreeeedddd rrrreeeesssseeeerrrrvvvveeeessss8888 41.40 46.00 54.90 61.31 59.57 61.31 60.59 58.39 58.53 60.25 58.06 58.45 11110000 MMMMoooonnnneeeettttaaaarrrryyyy bbbbaaaasssseeee 296.68 321.07 354.55 390.59 384.29 390.59 391.00 390.86 394.15 399.76 400.26 404.70 NNNNOOOOTTTT AAAADDDDJJJJUUUUSSSSTTTTEEEEDDDD FFFFOOOORRRR CCCCHHHHAAAANNNNGGGGEEEESSSS IIIINNNN RRRREEEESSSSEEEERRRRVVVVEEEE RRRREEEEQQQQUUUUIIIIRRRREEEEMMMMEEEENNNNTTTTSSSS11110000 11111111 TTTToooottttaaaallll rrrreeeesssseeeerrrrvvvveeeessss11111111 59.12 55.53 56.54 62.86 61.30 62.86 62.07 59.59 59.61 61.64 59.27r 59.93 11112222 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss 58.80 55.34 56.42 62.78 61.21 62.78 62.00 59.52 59.55 61.52 59.07r 59.59 11113333 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss pppplllluuuussss eeeexxxxtttteeeennnnddddeeeedddd ccccrrrreeeeddddiiiitttt5555 58.82 55.34 56.42 62.78 61.21 62.78 62.00 59.52 59.55 61.52 59.07r 59.59 11114444 RRRReeeeqqqquuuuiiiirrrreeeedddd rrrreeeesssseeeerrrrvvvveeeessss 57.46 54.55 55.39 61.80 60.20 61.80 60.62 58.45 58.64 60.49 58.36 58.82 11115555 MMMMoooonnnneeeettttaaaarrrryyyy bbbbaaaasssseeee11112222 313.70 333.61 360.90 397.62 391.14 397.62 397.89 397.93 400.78 406.32 406.59 410.93 11116666 EEEExxxxcccceeeessssssss rrrreeeesssseeeerrrrvvvveeeessss11113333 1.66 .98 1.16 1.06 1.10 1.06 1.45 1.14 .97 1.15 .92 1.11 11117777 BBBBoooorrrrrrrroooowwwwiiiinnnnggggssss ffffrrrroooommmm tttthhhheeee FFFFeeeeddddeeeerrrraaaallll RRRReeeesssseeeerrrrvvvveeee .33 .19 .12 .08 .09 .08 .07 .07 .06 .12 .20 .33 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 Monetaiy and reserves against transactions deposits and nonpersonal time and savings deposits Reserves Projections Section, Division of Monetaiy 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-adiusted 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 ana 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 • September 1994 1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES1 Billions of dollars, averages of daily figures 1994 IItteemm 1990 1991 1992 1993 Dec. Dec. Dec. Dec. Mar. Apr. May June Seasonally adjusted Measures 1 Ml 826.4 897.7 1,024.8 1,128.4 1,142.4 1,141.3 1.143.2 1,146.9 2 M2 3,353.0 3.455.3 3,509.0 3,567.4 3,582.7 3,590.0"^ 3,591.3r 3,582.3 3 M3 4.125.7 4.180.4 4,183.1r 4,230.0r 4,214.5r 4,222.9' 4,216.7' 4,213.5 4 L 4.974.8 4,992.9 5,057.2r 5,132.5r 5,139.5r 5,157.7r 5.153.3 n.a. 5 Debt 10,669.5r ll,144.2r ll,722.1r 12,317.3r 12,485.3r 12,530.8r 12,575.0 n.a. Ml components 6 Currency3 . 246.7 267.1 292.2 321.4 332.4 334.8 337.6 340.3 7 Travelers checks 7.8 7.7 8.1 7.9 8.0 8.1 8.1 8.1 8 Demand deposits5 277.9 290.0 339.6 384.8 390.0 388.9 385.91 386.6 9 Other checkable deposits6 294.0 332.8 384.9 414.3 411.9 409.5 411.6 411.8 Nontransaction components 10 In M27 2,526.6 2,557.6 2,484.3 2,439.1 2,440.3 2,448.7r 2,448. lr 2,435.4 11 In M38 772.7 725.2 674. lr 662.6r 631.8r 632.9r 625.4r 631.2 Commercial banks 12 Savings deposits, including MMDAs 582.1 665.5 754.6 785.3 790.2' 788.2 784.2r 779.4 13 Small time deposits 611.3 602.9 508.7 468.5 462.6 461.6 464.0 466.7 14 Large time deposits10' 11 368.6 342.4 292.8 277.1 270.0 269.3 273.7r 273.7 Thrift institutions 15 Savings deposits, including MMDAs 338.3 375.6 429.0 430.2 431.7r 432.5r 431.7 428.1 16 Small time deposits 563.2 464.5 361.8 317.1 308.6 307.0 305.2 303.9 17 Large time deposits10 120.9 83.4 67.5 61.8 60.9 61.2 59.8 60.1 Money market mutual funds 18 General purpose and broker-dealer . 355.5 370.4 352.0 348.8 348.4 361.5 365.1 359.3 19 Institution-only 135.0 181.0 201.5 197.0 177.4 177.0 169.3 169.5 Debt components 20 Federal debt 2,490.7 2,763.8 3,068.4 3,327.6 3,375.4 3,383.6r 3,395.4 n.a. 21 Nonfederal debt 8,178.8r 8,380.4r 8,653.6r 8,989.7r 9,109.9r 9,147.2r 9,179.7 n.a. Not seasonally adjusted Measures2 22 Ml 843.8 916.7 1,046.7 1,153.8 1,131.9 1,153.3 1,133.2 1.143.1 23 M2 3,366.0 3,470.4 3,527.6 3,590.0 3,581.1 3,607.4r 3,576.6r 3.578.2 24 M3 4,135.5 4,191.9 4,198.3r 4,249.4r 4,214.5r 4,238.6r 4,207.7r 4,210.1 25 L 4,997.2 5,018.0 5,087.7r 5,167.4r 5,143.4r 5,166.9r 5,130.0 n.a. 26 Debt 10,667. lr ll,141.5r ll,723.9r 12,319.7r 12,460. lr 12,505.lr 12,545.8 n.a. Ml components 27 Currency3 249.5 269.9 295.0 324.9 330.7 334.4 337.3 340.6 28 Travelers checks'; 7.4 7.4 7.8 7.6 7.8 7.8 7.9 8.3 29 Demand deposits 289.9 303.1 355.1 402.6 380.7 390.3 378.9 383.6 30 Other checkable deposits6 297.0 336.3 388.9 418.6 412.9 420.8 409.0r 410.6 Nontransaction components 31 In M27 2,522.3 2,553.7 2,480.9 2,436.3 2,449.1 2,454.1r 2,443.4r 2,435.1 32 In M38 769.5 721.6 670.6r 659.4r 633.4r 631.3r 631. lr 631.9 Commercial banks 33 Savings deposits, including MMDAs 580.8 664.0 752.9 783.9 791.3 790.6 784.8 782.1 34 Small time deposits 610.5 601.9 507.8 467.6 462.1 461.2 463.0 466.3 35 Large time deposits10' 11 367.7 341.3 291.7 276.0 269.8 268.6 276.0r 275.6 Thrift institutions 36 Savings deposits, including MMDAs 337.6 374.8 428.1 429.4 432.3' 433.8r 432.1r 429.6 37 Small time deposits 562.4 463.8 361.2 316.4 308.3 306.7 304.5 303.6 38 Large time deposits10 120.6 83.1 67.2 61.6 60.9 61.0 60.3 60.6 Money market mutual funds 39 General purpose and broker-dealer 353.8 368.5 350.2 347.2 357.4 367.2 364.5 357.1 40 Institution-only 134.7 180.4 200.4 195.8 180.5 176.2 171.0 166.3 Repurchase agreements and Eurodollars 41 Overnight 77.3 80.6 80.7 91.9 97.8 94.6r 94.6r 96.3 42 Term 158.3 130.1 126.8r 142.3r 138.2r 142.0r 139.4r 143.7 Debt components 43 Federal debt 2,491.3 2,765.0 3,069.8 3,329.5 3,374.4 3,376.8r 3,379.7 n.a. 44 Nonfederal debt 8,175.7r 8,376.5r 8,654.0r 8,990.3r 9,085.7r 9,128.3r 9,166.0 n.a. Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary and Credit Aggregates A13 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 fund balances (institution-only), less (5) a $100,000 or more) issued by all depository institutions, (2) term Eurodollars held consolidation adjustment that represents the estimated amount of overnight RPs by U.S. residents at foreign branches of U.S. banks worldwide and at all banking and Eurodollars held by institution-only money market funds. offices in the United Kingdom and Canada, and (3) balances in both taxable and 9. Small time deposits—including retail RPs—are those issued in amounts of tax-exempt, institution-only money market funds. Excludes amounts held by less than $100,000. All IRAs and Keogh accounts at commercial banks and thrift depositoiy institutions, the U.S. government, money market funds, and foreign institutions are subtracted from small time deposits. banks and official institutions. Also excluded is the estimated amount of overnight 10. Large time deposits are those issued in amounts of $100,000 or more, RPs and Eurodollars held by institution-only money market funds. Seasonally excluding those booked at international banking facilities. adjusted M3 is computed by adjusting its non-M2 component as a whole and then 11. Large time deposits at commercial banks less those held by money market adding this result to seasonally adjusted M2. funds, depository institutions, U.S. government, and foreign banks and official L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term institutions. Treasury securities, commercial paper, and bankers acceptances, net of money Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic NonfinancialS tatistics • September 1994 1.22 DEPOSIT INTEREST RATES AND AMOUNTS OUTSTANDING Commercial and BIF-insured saving banks1 1993 1994 IItteemm 1991 1992 Dec. Dec. Oct. Nov. Dec. Jan. Feb. Mar. Apr. MAY June Interest rates (annual effective yields) INSURED COMMERCIAL BANKS 1 Negotiable order of withdrawal accounts ... 3.76 2.33 1.92 1.89 1.86 1.84 1.82 1.82 1.81 1.83 1.83 2 Savings deposits 4.30 2.88 2.49 2.48 2.46 2.46 2.43 2.43 2.45 2.50 2.54 Interest-bearing time deposits with balances of less than $100,000, by maturity 3 7 to 91 days 4.18 2.90 2.63 2.64 2.65 2.65 2.68 2.76 2.87 2.99 3.08 4 92 to 182 days 4.41 3.16 2.91 2.92 2.91 2.90 2.94 3.02 3.13 3.28 3.36 5 183 days to 1 year 4.59 3.37 3.11 3.13 3.13 3.14 3.18 3.27 3.42 3.64 3.76 b More than 1 year to 2Vl years 4.95 3.88 3.54 3.54 3.55 3.56 3.61 3.69 3.87 4.12 4.26 1 More than 2 Yi years 5.52 4.77 4.27 4.28 4.29 4.31 4.35 4.46 4.67 4.89 5.02 BIF-INSURED SAVINGS BANKS3 8 Negotiable order of withdrawal accounts ... 4.44 2.45 1.98 1.95 1.87 1.89 1.88 1.83 1.86 1.86 1.89 9 Savings deposits 4.97 3.20 2.68 2.65 2.63 2.62 2.64 2.63 2.65 2.67 2.69 Interest-bearing time deposits with balances of less than $100,000, by maturity 1100 7 to 91 days 4.68 3.13 2.75 2.73 2.70 2.69 2.69 2.71 2.72 2.77 2.84 11 92 to 182 days 4.92 3.44 3.05 3.03 3.02 3.03 3.04 3.08 3.13 3.21 3.41 12 183 days to 1 year 4.99 3.61 3.34 3.32 3.31 3.33 3.34 3.37 3.47 3.67 3.92 13 More than 1 year to 2 years 5.23 4.02 3.68 3.69 3.66 3.72 3.76 3.85 3.96 4.12 4.38 14 More than 2 ¥i years 5.98 5.00 4.57 4.60 4.62 4.61 4.66 4.75 4.85 5.08 5.24 Amounts outstanding (millions of dollars) INSURED COMMERCIAL BANKS 1 1 5 6 N Sa e v g i o n t g ia s b d le e p o o r s d i e ts r 2 of withdrawal accounts ... 6 2 5 4 2 4 , , 0 6 5 3 8 7 2 73 8 8 6 , , 2 5 5 4 3 1 2 76 8 5 9 , , 3 8 7 1 2 3 2 7 9 7 7 0 , , 3 6 2 0 9 9 3 7 0 6 5 6 , , 2 4 2 1 3 3 2 7 9 7 3 1 , , 8 5 0 5 6 9 2 77 9 6 5 , , 2 5 0 7 4 3 2 77 9 9 7 , , 3 4 4 9 0 6 2 77 9 1 3 , , 8 8 6 8 9 8 2 77 9 3 2 , , 1 7 7 9 0 7 7 2 6 9 7 0 , , 4 3 8 0 5 1 17 Personal 508,191 578,757 595,715 598,200 597,838 606,615 611,725 615,875 611,720 612,648 608,113 18 Nonpersonal 143,867 159,496 169,657 172,408 168,575 164,944 164,479 163,465 160,149 160,522 159,372 Interest-bearing time deposits with balances of less than $100,000, by maturity 19 7 to 91 days 47,094 38,474 30,022 29,730 29,455 29,312 29,578 29,539 29,467 29,950 28,745 20 92 to 182 days 158,605 127,831 108,504 109,228 110,069 109,110 109,444 107,407 105,615 104,400 102,737 21 183 days to 1 year 209,672 163,098 149,758 147,334 146,565 144,037 143,624 144,022 146,733 148,102 150,959 22 More than 1 year to 2lA years 171,721 152,977 139,042 139,315 141,223 141,204 141,006 139,946 139,313 140,764 144,011 23 More than 2 vi years 158,078 169,708 183,790 180,972 181,528 182,193 181,240 180,973 181,977 180,381 181,640 24 IRA/Keogh Plan deposits 147,266 147,350 144,776 145,002 143,985 143,875 143,409 142,002 142,448 142,047 142,457 BIF-INSURED SAVINGS BANKS3 25 Negotiable order of withdrawal accounts 9,624 10,871 10,548 10,852 11,151 10,796 10,870 11,078 11,051 11,052 10,826 26 Savings deposits 71,215 81,786 77,995 77,948 80,115 78,660 78,016 78,701 78,982 78,817 77,430 27 Personal 68,638 78,695 74,737 74,664 77,035 75,445 74,756 75,444 75,717 75,474 74,250 28 Nonpersonal 2,577 3,091 3,258 3,284 3,079 3,215 3,260 3,257 3,265 3,344 3,179 Interest-bearing time deposits with balances of less than $100,000, by maturity 29 7 to 91 days 4,146 3,867 2,839 2,778 2,793 2,737 2,735 2,671 2,697 2,702 2,617 30 92 to 182 days 21,686 17,345 13,131 12,926 12,946 13,094 13,165 13,177 13,058 12,822 12,545 31 183 days to 1 year 29,715 21,780 17,441 17,178 17,426 17,418 17,436 17,511 17,504 17,444 17,350 32 More than 1 year to 2Vi years 25,379 18,442 16,124 15,995 16,546 16,281 16,338 16,180 16.453 16,477 16,541 33 More than 2Vi years 18,665 18,845 19,657 19,645 20,464 20,630 20,939 21,110 21.454 21,546 21,120 34 IRA/Keogh Plan accounts 23,007 21,713 19,601 19,382 19,356 19,395 19,474 19,447 19,860 19,772 19,511 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 A13 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 1994r Nov. Dec. Jan. Feb. Mar. Apr. DEBITS Seasonally adjusted Demand deposits3 1 All insured banks 277,741.7 313,251.6 334,793.7 358,503.0 367,734.8 349,574.2 371,865.9 393,877.0 349,686.7 2 Major New York City banks 137,337.2 165,484.5 171,312.0 187,022.4 189,024.1 183,245.0 200,050.9 210,684.5 184,377.0 3 Other banks 140,404.5 147,767.2 163,481.7 171,480.6 178,710.7 166,329.2 171,815.0 183,192.5 165,309.7 4 Other checkable deposits4 3,643.1 3,781.5 3,486.8 3,598.6 3,809.5 3,426.9 3,785.2 3,882.2 3,555.4 5 Savings deposits (including MMDAs)5 3,206.4 3,310.6 3,507.3 3,740.5 3,933.6 3,595.3 4,056.9 3,918.6 3,461.5 DEPOSIT TURNOVER Demand deposits3 6 All insured banks 803.7 826.0 786.5 803.0 826.9 771.4 823.3 873.6 771.9 7 Major New York City banks 4,267.1 4,794.5 4,200.6 4,352.2 4,550.0 4,268.2 4,674.4 4,798.4 4,232.5 8 Other banks 448.1 428.9 424.8 425.0 443.3 405.5 420.2 450.1 403.7 9 Other checkable deposits4 16.2 14.4 11.9 12.0 12.6 11.3 12.6 12.9 11.9 10 Savings deposits (including MMDAs)5 5.2 4.7 4.6 4.8 5.1 4.6 5.2 5.0 4.4 DEBITS Not seasonally adjusted Demand deposits3 11 All insured banks 277,752.4 313,416.8 334,775.6 344,140.1 380,187.5 349,669.7 345,587.2 406,826.5 347,130.6 12 Major New York City banks 137,307.2 165,595.0 171,283.5 180,990.2 194,541.0 181,971.7 187,904.4 218,783.5 181,272.6 13 Other banks 140,445.2 147,821.9 163,492.1 163,149.9 185,646.4 167,698.0 157,682.8 188,043.0 165,858.1 14 Other checkable deposits4 3,645.2 3,784.4 3,485.2 3,370.1 3,888.9 3,745.4 3,480.4 3,889.2 3,762.4 15 Savings deposits (including MMDAs)5 3,209.2 3,310.0 3,505.8 3,511.8 4,066.4 3,780.8 3,616.8 3,882.8 3,637.1 DEPOSIT TURNOVER Demand deposits3 16 All insured banks 803.6 826.3 786.5 754.8 820.6 759.5 783.2 923.4 764.8 17 Major New York City banks 4,269.0 4,803.5 4,197.9 4,129.6 4,387.8 4,047.8 4,319.0 5,140.2 4,228.8 18 Other banks 448.1 429.0 424.9 395.9 443.1 403.7 396.4 472.4 403.5 19 Other checkable deposits4 16.2 14.4 11.9 11.2 12.7 12.1 11.6 12.9 12.3 20 Savings deposits (including MMDAs)5 5.2 4.7 4.6 4.5 5.2 4.8 4.6 5.0 4.6 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 • September 1994 1.26 ASSETS AND LIABILITIES OF COMMERCIAL BANKS1 Billions of dollars Monthly averages Wednesday figures Account 1993 1993 1994 1994 June Dec. Jan. Feb. Mar.' Apr.' May1 June June 8 June 15 June 22 June 29 ALL COMMERCIAL BANKING INSTITUTIONS Seasonally adjusted Assets 1 Bank credit 3,037.9 3,104.7 3,124.3r 3,138.4' 3,166.0 3,192.9 3,198.0 3,206.1 3,195.5 3,209.7 3,200.5 3,215.2 2 Securities in bank credit 892.2 910.9 925.0 930.1 950.1 967.0 965.3 967.2 960.8 968.4 966.0 972.2 3 U.S. government securities ... 710.3 726.8r 732.4r 732.4' 747.9 759.4 752.6 753.5 750.0 756.5 751.6 755.0 4 Other securities 181.9 184.2 192.6 197.7 202.2 207.6 212.7 213.6 210.9 211.9 214.4 217.2 5 Loans and leases in bank credit2. 2,145.8r 2,193.8 2,199.3r 2,208.3' 2,215.9 2,225.8 2,232.7 2,239.0 2,234.7 2,241.4 2,234.5 2,243.0 6 Commercial and industrial 592.5 583.4r 588.3r 590.6' 595.3 601.9 606.2 608.6 605.3 609.7 609.5 609.7 7 Real estate 913.2 940.9 942.2r 941.1' 941.1 943.4 944.8 950.6 949.0 949.5 950.6 953.2 8 Revolving home equity 75.1 73.2 73.0 73.1 73.2 73.2 73.6 74.0 73.9 73.9 74.1 74.2 9 Other 838.1 867.7 869.2r 868.0" 868.0 870.2 871.2 876.6 875.1 875.5 876.5 879.0 10 Consumer 371.1' 391. lr 394.(7 397.4' 401.6 407.7 410.9 414.2 411.8 412.5 414.4 417.6 11 Security3 73.0 87.6r 81.1' 82.4' 83.5 77.1 77.7 76.4 79.1 79.8 72.7 74.0 12 Other 196.0 lQO^ 193.7 196.8' 194.4 195.7 193.1 189.1 189.5 189.9 187.3 188.5 13 Interbank loans4 160.6 153.0 153.7 153.4' 145.8 146.0 156.8 157.8 162.9 149.0 160.7 159.4 14 Cash assets5 215.6 219.2 219.6 225.4 216.8 210.4 218.1 217.3 213.6 230.5 215.2 206.0 15 Other assets6 218.3 214.4 220.1' 222.3' 222.7 228.3 232.2 229.4 228.9 230.8 229.5 227.5 16 Total assets7 3,571.7 3,633.0 3,660.0 3,682.2 3,694.2 3,720.1 3,747.6 3,752.9 3,743.4 3,762.4 3,748.2 3,750.1 Liabilities 17 Deposits 2,519.6 2,537.8 2,537.2 2,530.8 2,516.1 2,505.7 2,518.6 2,504.8 2,504.3 2,531.9 2,495.1 2,483.6 18 Transaction 781.8 819.1 815.9 818.1 814.4 801.5 813.4 810.2 806.6 837.0 802.3 791.3 19 Nontransaction 1,737.9 1,718.8 1,721.2' 1,712.7 1,701.8 1,704.2 1,705.2 1,694.6 1,697.8 1,694.9 1,692.8 1,692.3 20 Large time 359.1 349.8 348.1' 339.9 331.7 334.4 337.1 333.4 334.8 334.4 332.1 332.1 21 Other 1,378.8 1,368.9 1,373.1 1,372.8 1,370.0 1,369.8 1,368.0 1,361.3 1,362.9 1,360.5 1,360.7 1,360.2 22 Borrowings 520.5 522.4 543.2 541.1 552.1 576.4 578.6 578.7 567.9 567.4 585.8 591.2 23 From banks in the U.S 160.3 152.4 150.2' 149.7 141.8 144.8 158.7 157.4 164.2 149.8 155.5 159.5 24 From nonbanks in the U.S 360.2 370.0 392.9 391.5' 410.3 431.6 419.9 421.3 403.7 417.6 430.3 431.6 25 Net due to related foreign offices 89.7 119.4 116.0 136.0 157.7 172.5 173.8 185.7 181.9 180.1 192.6 187.9 26 Other liabilities8 152.9 143.1 155.7 162.5 159.7 164.7 168.8 163.9 166.0 164.0 162.5 162.2 27 Total liabilities 3,282.8 3,322.7 3,352.1 3,370.5 3,385.6 3,419.3 3,439.8 3,433.1 3,420.2 3,443.4 3,436.0 3,424.9 28 Residual (assets less liabilities)9 288.9 310.3 307.9 311.8 308.6 300.8 307.8 319.7 323.2 319.0 312.3 325.2 Not seasonally adjusted Assets 29 Bank credit 3,033.8 3,120.4' 3,125.3' 3,137.0' 3,164.8 3,191.3 3,187.0 3,201.0 3,191.2 3,208.7 3,194.4 3,206.8 30 Securities in bank credit 888.9 910.4 920.9 930.0 953.5 968.0 961.2 963.2 960.5 964.5 962.5 964.8 31 U.S. government securities ... 708.3 726.3 728.4' 731.2' 751.6 761.5 749.7 750.9 750.5 753.4 750.2 749.4 32 Other securities 180.6 184.1r 192.5' 196.9 201.9 206.5 211.5 212.3 210.0 211.1 212.3 215.4 33 Loans and leases in bank credit2. 2,144.9 2,209.9 2,204.4' 2,207.0' 2,211.4 2,223.3 2,225.9 2,237.8 2,230.7 2,244.1 2,231.9 2,242.0 34 Commercial and industrial 593.5 585.3r 587.5' 589.8' 598.2 604.9 607.8 609.6 606.4 609.7 610.9 610.9 35 Real estate 913.8 944.0" 940.7 937.7 937.4 941.5 945.1 951.1 949.7 950.6 949.3 954.3 36 Revolving home equity 75.0 73.5 73.1 72.9 72.5 72.7 73.3 73.9 73.6 73.8 74.0 74.2 37 Other 838.8 870.6 867.6 864.8 864.8 868.8 871.8 877.2 876.2 876.8 875.3 880.1 38 Consumer 369.4r 395.4r 398.4' 398.6' 398.8 404.5 409.6 412.3 409.6 410.5 412.9 415.8 39 Security3 71.3r 89.5r 83.4' Sl.ff 85.7 79.8 73.7 74.6 74.3 82.6 71.3 70.6 40 Other 197.0 195.6r 194.4' 193.9 191.3 192.7 189.6 190.2 190.6 190.8 187.4 190.4 41 Interbank loans4 157.9 161.3 157.9 154.2' 145.7 147.4 152.1 155.6 159.2 152.2 151.2 159.1 42 Cash assets5 212.9 232.5 224.6 219.9 211.5 207.7 215.6 215.0 203.9 232.7 203.9 209.9 43 Other assets6 215.9 218.5 222.5' 221.8' 221.3 224.7 229.3 226.8 224.9 227.7 224.0 228.9 44 Total assets7 3,559.9 3,673.7 3,672.7 3,675.3 3,685.6 3,713.9 3,726.3 3,740.7 3,721.5 3,763.3 3,715.8 3,747.1 Liabilities 45 Deposits 2,519.9 2,566.6 2,540.5 2,520.5 2,507.8 2,512.3 2,507.3 2,506.4 2,511.2 2,552.8 2,467.6 2,480.7 46 Transaction 778.3 853.6 825.5 808.9 802.8 809.8 802.0 808.6 803.2 851.9 774.8 791.9 47 Nontransaction 1,741.6 1,713.1 1,714.9' 1,711.6 1,705.0 1,702.5 1,705.3 1,697.9 1,708.0 1,700.9 1,692.7 1,688.9 48 Large time 362.4 346.0 344.6 340.2' 334.3 335.5 341.1 336.2 339.8 338.2 335.2 332.0 49 Other 1,379.2 1,367.0 1,370.3 1,371.3 1,370.7 1,367.0 1,364.2 1,361.6 1,368.2 1,362.7 1,357.6 1,356.9 50 Borrowings 520.6 532.4 545.1 545.5 546.2 561.2 567.6 581.7 564.8 563.8 596.3 601.7 51 From banks in the U.S 158.0 159.6 155.9 152.1 143.2 146.3 152.1 155.6 159.2 152.2 151.2 159.1 52 From nonbanks in the U.S 362.6 372.8 389.3' 393.4 403.0 414.9 415.5 426.1 405.6 411.6 445.1 442.6 53 Net due to related foreign offices 84.1 126.5 124.2 139.0 162.3 171.5 179.4 181.0 172.5 176.7 183.3 191.0 54 Other liabilities8 149.7 146.6 158.0 162.6 159.5 159.1 164.3 160.2 161.5 159.5 157.4 161.7 55 Total liabilities 3,274.3 3,372.1 3,367.6 3,375.8 3,404.0 3,418.6 3,429.3 3,409.9 3,452.8 3,404.6 3,435.1 56 Residual (assets less liabilities)9 285.6 301.6r 305.0 307.7 309.8 309.8 307.7 311.4 311.6 310.5 311.2 311.9 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 Account 1993 1993 1994 1994 June Dec. Jan. Feb. Mar.' Apr.' May1 June June 8 June 15 June 22 June 29 DOMESTICALLY CHARTERED COMMERCIAL BANKS Seasonally adjusted Assets 57 Bank credit 2,699.6 2,772.0" 2,793.0' 2,801.2' 2,826.3 2,841.2 2,847.6 2,856.7 2,847.4 2,858.6 2,854.3 2,863.9 58 Securities in bank credit 818.6 833.6 846.5 850.1 869.3 876.8 874.0 872.3 867.3 872.4 871.4 876.7 fifl U Ot . h S e . r g s o e v c e u r r n i m tie e s n t securities .. 6 1 6 5 0 8 . . 4 2 6 1 7 6 3 0 . . 4 2 r r 6 L 7 ES 8 - . O 5 1 ' 6 1 7 7 6 3 . . 9 3 " 6 1 9 7 1 7 . . 4 9 6 1 9 8 6 0 . . 0 9 6 1 9 8 2 1 . . 1 8 6 1 9 8 0 1 . . 6 7 6 1 8 7 7 9 . . 6 7 6 1 9 7 2 9. . 6 8 6 1 8 8 9 1 . . 6 8 6 1 9 8 1 5 . . 5 2 61 Loans and leases in bank credit2 . 1,881.0 1,938.4' 1,946.5' 1,951.1' 1,957.0 1,964.3 1,973.6 1,984.4 1,980.1 1,986.2 1,982.9 1,987.2 6? Commercial and industrial... 438.7 435.5 440.2' 442.4' 444.2 448.1 451.0 454.3 451.3 454.0 456.0 455.7 63 Real estate 863.3 894.7 897.4' 896.7 897.2 900.9 902.6 908.6 906.9 907.3 908.7 911.3 64 Revolving home equity 75.1 73.2 73.0 73.1 73.1 73.2 73.6 74.0 73.9 73.9 74.1 74.2 65 Other 788.2 821.5 824.4' 823.6 824.1 827.7 829.1 834.6 833.0 833.4 834.7 837.1 66 Consumer 371. lr 391.1' 394.0' 397.4' 401.6 407.7 410.9 414.2 411.8 412.5 414.4 417.6 67 Security3 48.8' 58.1r 54.6' 54.7 55.8 49.8 51.6 50.0 52.3 53.9 47.9 46.4 68 Other 159. lr 159.0' 160.3' 160.0" 158.1 157.9 157.5 157.2 157.8 158.5 155.8 156.2 69 Interbank loans4 136.1 133.5' 135.3 130.4 125.8 124.3 133.2 133.5 134.5 130.4 134.9 134.7 70 Cash assets* 187.9 193.8 194.5 200.9 191.4 184.3 190.9 191.1 186.8 205.5 189.2 179.0 71 Other assets6 172.4 171.7 175.4 175.8' 176.9 182.3 182.8 180.0 179.1 182.8 180.6 177.4 72 Total assets7 3,135.4 3,212.7 3,240.6 3,251.1 3,2633 3,274.7 3,297.0 3,303-6 3,290.4 3,319.7 3,301.3 3,297.1 Liabilities 73 2,361.4 2,379.4 2,381.6 2,381.5 2,375.3 2,362.2 2,374.5 2,367.0 2,364.7 2,394.7 2,359.1 2,345.6 74 Transaction 770.7 808.2 805.0 806.7 802.9 790.7 802.6 799.2 795.7 825.7 791.9 779.9 75 Nontransaction 1,590.7 1,571.2 1,576.6 1,574.9 1,572.4 1,571.5 1,572.0 1,567.8 1,569.0 1,569.0 1,567.2 1,565.8 76 Large time 217.9 208.9 210.3 208.6 207.2 207.5 208.9 209.0 210.3 210.2 209.0 207.0 77 Other 1,372.8 1,362.3 1,366.3 1,366.3 1,365.2 1,364.0 1,363.1 1,358.7 1,358.7 1,358.8 1,358.2 1,358.7 78 Borrowings 396.3 417.2 437.2 440.3 455.6 475.1 474.6 470.7 457.8 461.4 479.3 482.3 79 From banks in the U.S 115.8 121.9 120.2' 121.7 117.3 116.9 127.2 124.0 128.7 117.7 122.7 125.8 80 From nonbanks in the U.S 280.4 295.3 317.0 318.6' 338.3 358.2 347.4 346.7 329.1 343.8 356.6 356.5 81 Net due to related foreign offices -14.6 1.7 3.4 3.2 14.0 21.1 25.2 32.6 2277..99 3322..11 3366..00 3344..66 82 Other liabilities8 110.8 104.7 113.2 119.1 117.9 122.9 125.7 122.0 123.3 122.9 121.4 120.1 83 Total liabilities 2,853.8 2,903.0 2,935.5 2,944.1 2,962.7 2,981.3 3,000.1 2,992.3 2,973.7 3,011.1 2,995.9 2,982.6 84 Residual (assets less liabilities)9... 281.6 309./ 305.1 307.0 300.6 293.5 296.9 311.3 316.7 308.5 305.4 314.5 Not seasonally adjusted Assets 85 Bank credit 2,698.8 2,778.7 2,786.1' 2,797.4' 2,821.2 2,841.8 2,842.7 2,855J 2,847.5 2,861.6 2,850.1 22,,885599..88 86 Securities in bank credit 817.7 830.9 840.1 849.4' 870.0 879.1 871.5 871.4 869.7 872.4 870.7 872.1 8877 U.S. government securities .. 660.0 670.7 672.4' 675.7 693.0 699.6 690.9 690.1 690.2 692.3 689.7 688.0 8888 Other securities 157.6 160.3 167.8 173.6' 177.0 179.5 180.6 181.3 179.5 180.1 181.0 184.2 89 Loans and leases in bank credit2 . 1,881.1 1,947.8' 1,946.0' 1,948.0' 1,951.2 1,962.7 1,971.2 1,983.9 1,977.8 1,989.2 1,979.4 1,987.6 90 Commercial and industrial... 439.8r 435.5 437.7 441.6' 446.2 450.8 453.6 455.4 452.7 455.1 456.9 456.3 91 Real estate 864. lr 898.0 SG^ 893.1 893.4 899.1 903.1 909.3 907.8 908.7 907.4 913.0 9?, Revolving home equity 75.0 73.5 73.1 72.9 72.5 72.7 73.3 73.9 73.6 73.8 74.0 74.2 93 Other 789.2 824.5r 822.9r 820.2 820.9 826.4 829.8 835.5 834.3 834.9 833.5 838.8 94 Consumer 369.4r 395.4' 398.4' 398.6' 398.8 404.5 409.6 412.3 409.6 410.5 412.9 415.8 95 Security3 48.2 57.4' 54.1' 56.8' 56.9 52.3 49.4 49.3 49.8 56.2 46.6 45.1 96 Other 159.6r 161.5' 159.6' 157.8' 155.9 156.1 155.5 157.6 157.9 158.8 155.4 157.5 97 Interbank loans4 134.6 138.8' 138.4 132.6 126.5 126.3 129.1 132.7 134.5 134.6 128.8 132.5 98 Cash assets5 185.1 206.8 199.7 196.0 186.6 182.5 189.4 188.6 177.6 207.2 178.0 182.0 99 Other assets6 171.4 173.8 176.6 175.1 176.0 179.6 181.0 178.9 176.3 180.9 176.8 180.2 100 Total assets7 3,129.4 3,239.4 3,243.3 3,243.3 3,252.7 3,273.1 3,284.6 3,297.9 3,278.4 3,326.5 3,276.0 3,297.0 Liabilities 101 2,357.1 2,411.4 2,386.6 2,370.4 2,363.8 2,367.6 2,360.1 2,364.6 2,367.4 2,411.9 2,327.1 2,339.0 107, Transaction 767.3 842.5 814.3 797.5 791.8 799.2 791.6 797.7 792.7 841.2 764.4 780.0 103 Nontransaction 1,589.8 1,569.0 1,572.2 1,572.8 1,572.1 1,568.4 1,568.5 1,567.0 1,574.7 1,570.7 1,562.7 1,559.1 104 Large time 217.3 207.5 208.8 208.6' 206.6 206.8 209.5 208.5 211.5 210.1 208.6 204.1 105 Other 1,372.4 1,361.4 1,363.4 1,364.2 1,365.4 1,361.6 1,359.0 1,358.4 1,363.3 1,360.5 1,354.1 1,354.9 106 Borrowings 396.9 425.8 439.1 446.2 450.3 461.3 467.9 474.2 455.7 457.2 490.5 493.6 107 From banks in the U.S 115.1 126.7 124.9 124.9 118.6 119.2 123.4 123.7 125.5 120.8 121.4 126.2 108 From nonbanks in the U.S 281.9 299.1 314.2' 321.3' 331.7 342.1 344.6 350.5 330.2 336.4 369.1 367.3 109 Net due to related foreign offices -15.0 -1.8 3.0 5.4 16.0 20.6 31.1 32.9 28.6 31.9 34.3 36.9 110 Other liabilities8 107.9 107.4 114.5 118.6 117.9 118.3 121.8 118.7 564.8 563.8 596.3 601.7 111 Total liabilities 2,846.9 2,942.8 2,943.1 2,940.6 2,948.0 2,967.9 2,980.8 2,990.5 2,970.7 3,020.0 2,968.7 2,989.0 112 Residual (assets less liabilities)9... 282.5 296.6 300.1 302.8 304.6 305.1 303.8 307.5 307.7 306.6 307.3 308.0 Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 DomesticN onfinancial Statistics • September 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 May 4 May 11 May 18 May 25' June 1 June 8 June 15 ASSETS 1 Cash and balances due from depository institutions 108,992 103.871 104,052' 105,717 146,103 103,790 130,236 106,464 2 U.S. Treasury and government securities 314,962 312.872 312,382 308,294 312,391 310,559 312,442 310,030 3 Trading account 26,163 25,766 26,647 23,803 25,362 24,030 24,660 21,900 4 Investment account 288,800 287,106 285,735 284,492 287,029 286,530 287,782 288,130 5 Mortgage-backed securities 87,663r 86,957' 86,273' 87,501 89,633 89,401 89,195 91,367 All others, by maturity 6 One year or less 49,351 48,347 49,534 48,645 49,612 50,283 50,512 50,036 7 One year through five years 79,969r 79,792' 78,372' 77,811 77,031 76,520 78,205 77,820 8 More than five years 71,817 72,011 71,556 70,536 70,753 70,326 69,870 68,907 9 Other securities 92,486 91,418 91,274 92,259 92,320 91,107 91,648 92,852 10 Trading account 1,776 1,806 1,868 2,237 1,980 1,947 1,878 1,902 11 Investment account 57,935 57,857 57,723 57,999 58,194 58,148 58,109 57,818 12 State and political subdivisions, by maturity .. 21,734 21,720 21,692 21,725 21,659 21,640 21,567 21,622 13 One year or less 4,467 4,448 4,437 4,439 4,508 4,534 4,517 4,555 14 More than one year 17,267 17,272 17,256 17,286 17,152 17,106 17,049 17,067 15 Other bonds, corporate stocks, and securities . 36,201 36,137 36,031 36,274 36,535 36,507 36,543 36,196 16 Other trading account assets 32,775 31,754 31,683 32,022 32,146 31,013 31,660 33,132 17 Federal funds sold2 92,311 97,088 96,788 95,067 96,279 97,544 101,158 93,807 18 To commercial banks in the United States 59,730 65,662 62,999 62,466 62,848 64,080 64,358 65,394 19 To nonbank brokers and dealers 26,757 25,995 28,147 27,560 27,376 27,610 31,307 23,411 20 To others3 5,824 5,432 5,642 5,041 6,055 5,854 5,493 5,002 21 Other loans and leases, gross 1,052,720' 1,052,437' 1,052,664' 1,051,333 1,061,310 1,055,742 1,063,641 1,062,945 22 Commercial and industrial 293,567' 291,799' 291,822' 291,695 293,491 291,129 293,611 295,156 23 Bankers acceptances and commercial paper .., 2,964 3,101 3,197 3,100 3,131 3,182 3,264 3,067 24 All other 290,602' 288,698' 288,625' 288,596 290,359 287,947 290,347 292,088 25 U.S. addressees 288,717' 286,871' 286,801' 286,780 288,500 286,151 288,584 290,354 26 Non-U.S. addressees 1,886 1,827 1,823 1,816 1,860 1,797 1,764 1,735 27 Real estate loans 423,994' 425,881' 423,891 423,546 426,275 427,266 426,862 426,021 28 Revolving, home equity 43,856 43,941 44,119 44,161 44,259 44,233 44,380 44,496 29 All other 380,138' 381,940' 379,772 379,385 382,017 383,033 382,482 381,525 30 To individuals for personal expenditures 213,213' 213,538' 214,400' 214,122 215,004 213,342 214,546 216,220 31 To financial institutions 36,692' 36,044' 36,384' 36,320 38,348 37,490 38,584 37,924 32 Commercial banks in the United States 16,832 16,241 17,117 17,205 18,072 17,395 18,601 18,781 33 Banks in foreign countries 2,313' 2,214' 2,563' 2,675 3,168 3,001 3,131 2,969 34 Nonbank financial institutions 17,548' 17,589' 16,705' 16,439 17,108 17,094 16,852 16,174 35 For purchasing and carrying securities 15,86c 16,323' 16,178 17,101 15,943 16,121 18,874 17,604 36 To finance agricultural production 6,141 6,175 6,231 6,254 6,279 6,292 6,328 6,355 37 To states and political subdivisions 12,003' 11,882' 11,857 11,849 11,807 11,748 11,825 11,794 38 To foreign governments and official institutions . 1,015 992 1,112 1,088 1,014 977 952 1,075 39 All other loans4 22,989' 22,522' 23,434' 21,995 25,593 23,741 24,391 22,892 40 Lease-financing receivables 27,245 27,281 27,356 27,363 27,556 27,637 27,669 27,906 41 LESS: Unearned income 1,648' 1,656' 1,657 1,659 1,623 1,622 1,635 1,645 42 Loan and lease reserve5 34,921 35,063 35,054 35,026 34,979 34,991 35,090 34,996 43 Other loans and leases, net 1,016,150 1,015,718 1,015,952' 1,014,648 1,024,708 1,019,129 1,026,916 1,026,305 44 Other assets 168,171 168,066 160,067' 155,517 161,198 157,930 161,648 156,328 45 Total assets 1,793,073 1,789,033 1,780,515' 1,771,502 1,833,000 1,780,060 1,824,048 1,785,786 Footnotes appear on the following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Nonfinancial Statistics • September 1994 1.27 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued Millions of dollars, Wednesday figures Account May 4 May 11 May 18 May 25r June 1 June 8 June 15 June 22 June 29 LIABILITIES 46 Deposits 1,134,591 1,128,951 l,118,666r 1,115,806 1,170,057 1,132,674 1,172,735 1,109,738 1,118,440 47 Demand deposits 292,867 288,046 281,481' 281,056 328,192 288,481 330,438 277,171 289,942 48 Individuals, partnerships, and corporations 243,931 241,927 235,192' 234,799 268,645 243,194 258,220 232,430 243,678 49 Other holders 48,936 46,119 46,289' 46,257 59,548 45,287 72,219 44,741 46,264 50 States and political subdivisions 10,286 8,631 8,633 8,908 9,682 7,547 9,388 8,876 8,632 51 U.S. government 2,093 1,939 1,893 1,736 4,120 1,908 23,161 2,259 2,366 52 Depository institutions in the United States 21,854 20,354 20,363' 21,216 30,459 20,268 24,805 18,692 19,163 53 Banks in foreign countries 5,500 5,282 5,125 4,891 5,432 5,920 5,280 5,017 5,498 54 Foreign governments and official institutions 585 631 795 546 645 583 623 906 724 55 Certified and officers' checks 8,618 9,282 9,479' 8,959 9,210 9,060 8,962 8,990 9,881 56 Transaction balances other than demand deposits4 125,789 123,406 122,636 121,465 125,954 125,768 126,148 121,593 121,265 57 Nontransaction balances 715,935 717,498 714,548' 713,284 715,911 718,425 716,148 710,975 707,233 58 Individuals, partnerships, and corporations 693,148 694,356 691,192' 689,884 692,580 694,911 693,063 688,144 685,756 59 Other holders 22,787 23,142 23,356' 23,401 23,331 23,514 23,084 22,830 21,477 60 States and political subdivisions 17,852 18,113 18,343 18,371 18,298 18,702 18,193 17,958 17,378 61 U.S. government 2,678 2,706 2,684 2,692 2,571 2,551 2,522 2,500 2,151 62 Depository institutions in the United States 1,882 1,940 1,944' 1,961 2,080 1,877 1,942 1,944 1,548 63 Foreign governments, official institutions, and banks 376 383 385 377 382 383 428 428 400 64 Liabilities for borrowed money5 350,074 349,626 343,566 334,060 346,327 335,784 337,125 362,774 362,757 65 Borrowings from Federal Reserve Banks 0 0 0 0 0 0 0 0 0 66 Treasury tax and loan notes 32,497 30,528 13,676 8,823 11,441 2,666 6,500 29,476 33,360 67 Other liabilities for borrowed monejr 317,577 319,098 329,889 325,237 334,886 333,118 330,625 333,298 329,398 68 Other liabilities (including subordinated notes and debentures) 144,649 147,004 154,771' 158,239 150,202 145,632 148,059 146,321 151,061 69 Total liabilities 1,629,314 1,625,581 L,617,002R 1,608,105 1,666,587 1,614,090 1,657,918 1,618,833 1,632,259 70 Residual (total assets less total liabilities)7 163,759 163,452 163,513 163,398 166,413 165,970 166,130 166,953 166,757 MEMO 71 Total loans and leases, gross, adjusted, plus securities8 .. l,475,918r l,471,913r 1,472,991' 1,467,282 1,481,379 1,473,478 1,485,930 1,475,459 1,480,780 72 Time deposits in amounts of $100,000 or more 96,505 96,682 96,112 96,731 95,997 97,953 96,819 95,234 91,349 73 Loans sold outright to affiliates 700 700 699 698 698 693 691 690 681 74 Commercial and industrial 329 328 328 328 328 328 328 328 328 75 Other 371 371 371 370 370 365 363 363 354 76 Foreign branch credit extended to U.S. residents10 22,141 22,283 22,598 22,399 22,395 22,341 22,218 22,104 22,044 77 Net owed to related institutions abroad 15,503 16,963 30,309 35,913 27,070 23,609 26,696 28,948 31,617 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 1994 Account May 4 May 11 May 18 May 25 June 1 June 8 June 15 June 22 June 29 ASSETS 1 Cash and balances due from depository institutions 16,347 16,652 17,210 17,097 17,075 17,032 16,423 16,787 1188,,008822 2 U.S. Treasury and government agency securities 39,482 39,227 38,317 3377,,442299 3388,,669933 3399,,661188 4400,,004422 3399,,880066 4400,,229955 3 Other securities 10,136 10,584 10,725 11,057 10,994 10,608 10,750 10,895 10,830 4 Federal funds sold1 24,474 25,961 23,110' 26,134 27,294 27,435 23,898 26,416 29,026 5 To commercial banks in the United States ... 7,028 8,062 7,152 8,879 5,872 8,299 4,312 7,039 9,419 6 To others2 17,446 17,900 15,958' 17,255 21,422 19,136 19,586 19,377 19,607 7 Other loans and leases, gross 157,997 157,427 158,021' 157,348 156,391 155,440 155,902 155,067 155,954 8 Commercial and industrial 98,363r 98,403' 99,158 99,542 99,268 98,863 99,058 99,014 99,125 9 Bankers acceptances and commercial paper 3,662 3,662 3,444 3,476 3,315 3,246 3,255 3,279 33,,225500 10 All other 94,701r 94,741' 95,714 96,066 95,953 95,617 95,803 95,735 95,875 11 U.S. addressees 91,009r 91,053' 91,896 92,165 92,196 91,891 91,950 91,766 91,920 12 Non-U.S. addressees 3,693 3,688 3,818 3,901 3,757 3,727 3,853 3,969 3,955 13 Loans secured by real estate 27,777 27,750 27,747 27,718 27,689 27,674 27,579 27,646 27,229 14 To financial institutions 23,833r 23,361' 23,318' 22,327 22,139 22,083 21,949 21,779 22,147 15 Commercial banks in the United States.. 5,488 5,322 5,445 5,280 5,206 5,532 5,392 5,444 5,509 16 Banks in foreign countries 1,867 1,795 1,865' 1,847 1,873 1,840 1,647 1,639 1,684 17 Nonbank financial institutions 16,478' 16,244' 16,008 15,200 15,061 14,711 14,910 14,696 14,954 18 For purchasing and carrying securities 3,761 3,755 3,636 3,706 3,260 2,878 3,350 2,798 3,524 19 To foreign governments ana official institutions 570 642 557 528 469 404 396 358 351 20 All other 3,692 3,515 3,606 3,526 3,565 3,538 3,571 3,471 3,579 21 Other assets (claims on nonrelated parties) .. 33,643 35,176 33,620 33,307 34,631 34,257 32,770 33,270 34,250 22 Total assets3 302,571 305,815 302,697 303,449 307,028 307,048 302,720 303,463 309,424 LIABILITIES 23 Deposits or credit balances owed to other than directly-related institutions 92,586 91,598 92,217 93,318 91,960 89,084 88,451 86,928 8888,,880011 24 Demand deposits4 4,194 4,325 4,220 4,433 4,670 4,352 4,559 4,350 5,194 25 Individuals, partnerships, and corporations 3,432 3,405 3,476 3,510 3,697 3,501 3,579 33,,552244 44,,110033 26 Other 762 920 745 923 972 852 980 826 1,091 27 Nontransaction accounts 88,391 87,273 87,997 88,885 87,290 84,732 83,892 82,578 83,607 28 Individuals, partnerships, and corporations 59,778 58,653 58,639 58,783 57,149 55,477 55,092 54,285 5544,,884488 29 Other 28,613 28,619 29,358 30,102 30,141 29,254 28,799 28,293 28,759 30 Borrowings from other than directlyrelated institutions 66,352 70,452 68,569 67,610 72,888 75,676 75,187 7733,,443355 7755,,332200 31 Federal funds purchased5 32,658 34,485 29,976 30,762 36,255 39,093 38,465 36,331 36,586 32 From commercial banks in the United States 6,977 9,392 5,980 6,866 7,676 10,754 9,495 8,007 9,077 33 From others 25,681 25,093 23,996 23,896 28,579 28,339 28,970 28,324 27,508 34 Other liabilities for borrowed money 66,352 70,452 68,569 67,610 72,888 75,676 75,187 73,435 75,320 35 To commercial banks in the United States 6,378 6,776 6,438 6,243 6,764 6,450 6,455 6,480 7,217 36 To others 27,317 29,191 32,156 30,604 29,869 30,133 30,266 30,623 31,518 37 Other liabilities to nonrelated parties 30,459 31,013 30,748 30,359 30,306 30,365 29,271 28,873 30,514 38 Total liabilities6 302,571 305,815 302,697 303,449 307,028 307,048 302,720 303,463 309,424 MEMO 39 Total loans (gross) and securities, adjusted .. 219,574 219,816 217,576 217,810 222,294 219,271 220,887 219,702 222211,,117766 40 Net owed to related institutions abroad 92,683 91,965 89,470 91,087 89,924 89,267 86,876 93,006 93,802 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 • September 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 Dec. Jan. Feb. Mar. Apr. May Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 525,831 562,656 528,832 545,619 555,075 555,075 559,443 560,352 557,129 553,355 559,229 Financial companies1 Dealer-placed paper 2 Total 183,622 214,706 212,999 226,456 221188,,994477 221188,,994477 219,350 221,649 221144,,772222 205,267 221111,,779999 3 Bank-related (not seasonally adjusted) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Directly placed paper4 4 Total 221100,,993300 220000,,003366 118822,,446633 117711,,660055 118800,,338899 180,389 118822,,007755 118866,,331188 119944,,552277 119999,,880033 119977,,881122 5 Bank-related (not seasonally adjusted) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 6 Nonfinancial companies5 131,279 147,914 133,370 147,558 155,739 155,739 158,018 152,385 147,880 148,285 149,618 Bankers dollar acceptances (not seasonally adjusted)6 7 Total 62,972 54,771 43,770 38,194 32,348 32,348 31,792 30,994 31,061 31,775 29,867 By holder 8 Accepting banks 9,433 9,017 11,017 10,555 12,421 12,421 11,410 11,258 11,727 11,643 11,533 9 Own bills 8,510 7,930 9,347 9,097 10,707 10,707 9,953 10,248 10,758 10,888 10,601 10 Bills bought from otljer banks 924 1,087 1,670 1,458 11,,771144 11,,771144 1,457 1,010 969 755 932 Federal Reserve Banks 11 Foreign correspondents 1,066 918 1,739 1,276 725 725 869 753 693 625 465 12 Others 52,473 44,836 31,014 26,364 19,202 19,202 19,513 18,983 18,641 19,507 17,869 By basis 13 Imports into United States 15,651 13,095 12,843 12,209 10,217 10,217 10,649 10,707 10,554 10,834 10,396 14 Exports from United States 13,683 12,703 10,351 8,096 7,293 7,293 7,123 6,872 6,708 6,723 6,367 15 All other 33,638 28,973 20,577 17,890 14,838 14,838 14,020 13,414 13,800 14,217 13,104 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 m 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 Rate Period Av r e a r t a e ge Period Av r e a r t a e ge Av r e a r te a ge 1991— Jan. 1 . 10.00 1991 .. 8.46 1992— 6.50 1993— Apr. 6.00 2 . 9.50 1992 .. 6.25 6.50 May 6.00 Feb. 4 . 9.00 1993 .. 6.00 6.50 June 6.00 May 1 . 8.50 6.50 July 6.00 Sept. 13 8.00 1991— 9.52 6.50 Aug. 6.00 Nov. 6 . 7.50 Feb. 9.05 6.50 Sept. 6.00 Dec. 23 6.50 Mar. 9.00 6.02 Oct. 6.00 Apr. 9.00 6.00 Nov. 6.00 1992— July 2 . 6.00 May . 8.50 6.00 Dec. 6.00 June 8.50 6.00 1994— Mar. 24 . 6.25 July 8.50 6.00 1994— Jan. 6.00 Apr. 19 . 6.75 Aug. 8.50 6.00 Feb. 6.00 May 17 . 7.25 Sept. 8.20 Mar. 6.06 Oct. . 8.00 6.00 AApprr.. 6.45 Nov. 7.58 6.00 MMaayy 6.99 Dec. 7.21 6.00 June 7.25 July .. 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 Domestic Nonfinancial Statistics • September 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 Mar. Apr. May June May 27 June 3 June 10 June 17 June 24 MONEY MARKET INSTRUMENTS 1 Federal funds1,2,3 5.69 3.52 3.02 3.34 3.56 4.01 4.25 4.22 4.27 4.13 4.21 4.19 2 Discount window borrowing^ 5.45 3.25 3.00 3.00 3.00 3.24 3.50 3.50 3.50 3.50 3.50 3.50 Commercial paper3,5,6 3 1-month 5.89 3.71 3.17 3.63 3.81 4.28 4.36 4.33 4.37 4.32 4.34 4.36 4 3-month 5.87 3.75 3.22 3.85 4.05 4.57 4.57 4.55 4.60 4.52 4.53 4.56 5 6-month 5.85 3.80 3.30 4.08 4.40 4.92 4.86 4.89 4.94 4.82 4.79 4.82 Finance paper, directly placed3,5,7 6 1-month 5.73 3.62 3.12 3.53 3.71 4.19 4.27 4.23 4.28 4.23 4.23 4.27 7 3-month 5.71 3.65 3.16 3.71 3.94 4.44 4.44 4.42 4.48 4.40 4.41 4.43 8 6-month 5.60 3.63 3.15 3.70 4.03 4.45 4.50 4.49 4.52 4.48 4.48 4.51 Bankers acceptances3,5,8 9 3-month 5.70 3.62 3.13 3.73 3.96 4.45 4.45 4.41 4.44 4.38 4.39 4.46 10 6-month 5.67 3.67 3.21 3.96 4.27 4.77 4.73 4.72 4.75 4.64 4.65 4.74 Certificates of deposit, secondary marker' 11 1-month 5.82 3.64 3.11 3.56 3.75 4.23 4.30 4.28 4.30 4.26 4.26 4.29 12 3-month 5.83 3.68 3.17 3.77 4.01 4.51 4.52 4.49 4.52 4.43 4.46 4.52 13 6-month 5.91 3.76 3.28 4.03 4.38 4.90 4.85 4.84 4.90 4.75 4.76 4.85 14 Eurodollar deposits, 3-month3,10 5.86 3.70 3.18 3.75 4.00 4.51 4.51 4.49 4.50 4.44 4.45 4.51 U.S. Treasury bills Secondary market • 15 3-month 5.38 3.43 3.00 3.50 3.68 4.14 4.14 4.18 4.15 4.11 4.12 4.16 16 6-month 5.44 3.54 3.12 3.78 4.09 4.60 4.55 4.61 4.61 4.51 4.50 4.57 17 1-year 5.52 3.71 3.29 4.11 4.57 5.03 4.98 5.00 5.04 4.89 4.90 5.00 Auction average ' • 18 3-month 5.42 3.45 3.02 3.52 3.74 4.19 4.18 4.23 4.23 4.15 4.16 4.18 19 6-month 5.49 3.57 3.14 3.79 4.13 4.64 4.58 4.63 4.67 4.53 4.55 4.55 20 1-year 5.54 3.75 3.33 4.03 4.30 4.77 5.03 n.a. 5.01 n.a. n.a. n.a. U.S. TREASURY NOTES AND BONDS Constant maturities12 21 1-year 5.86 3.89 3.43 4.32 4.82 5.31 5.27 5.29 5.31 5.16 5.18 5.30 22 2-year 6.49 4.77 4.05 5.00 5.55 5.97 5.93 5.94 5.94 5.80 5.86 5.99 23 3-year 6.82 5.30 4.44 5.40 5.99 6.34 6.27 6.30 6.29 6.13 6.21 6.32 24 5-year 7.37 6.19 5.14 5.94 6.52 6.78 6.70 6.73 6.70 6.54 6.65 6.76 25 7-year 7.68 6.63 5.54 6.28 6.80 7.01 6.91 6.94 6.90 6.76 6.87 6.97 26 10-year 7.86 7.01 5.87 6.48 6.97 7.18 7.10 7.14 7.09 6.97 7.08 7.17 27 20-year n.a. n.a. 6.29 7.00 7.40 7.54 7.51 7.54 7.50 7.39 7.50 7.57 28 30-year 8.14 7.67 6.59 6.91 7.27 7.41 7.40 7.40 7.36 7.27 7.38 7.46 Composite 29 More than 10 years (long-term) 8.16 7.52 6.45 6.90 7.32 7.47 7.43 7.46 7.42 7.30 7.41 7.50 STATE AND LOCAL NOTES AND BONDS Moody's series13 30 Aaa 6.56 6.09 5.38 5.29 5.44 5.62 5.76 5.72 5.74 5.75 5.76 5.77 31 Baa 6.99 6.48 5.82 5.74 5.87 6.02 6.15 6.11 6.12 6.13 6.15 6.16 32 Bond Buyer series14 6.92 6.44 5.60 5.91 6.23 6.19 6.11 6.13 6.09 5.96 6.04 6.16 CORPORATE BONDS 33 Seasoned issues, all industries15 9.23 8.55 7.54 7.78 8.17 8.28 8.27 8.27 8.26 8.16 8.25 8.33 Rating group 34 Aaa 8.77 8.14 7.22 7.48 7.88 7.99 7.97 7.98 7.96 7.85 7.94 8.02 35 Aa 9.05 8.46 7.40 7.69 8.08 8.19 8.17 8.18 8.16 8.06 8.14 8.23 36 A 9.30 8.62 7.58 7.82 8.22 8.32 8.30 8.31 8.31 8.20 8.27 8.36 37 Baa 9.80 8.98 7.93 8.13 8.52 8.62 8.65 8.62 8.61 8.51 8.63 8.73 38 A-rated, recently offered utility bonds16 9.32 8.52 7.46 7.82 8.20 8.37 8.30 8.30 8.19 8.21 8.32 8.41 MEMO Dividend-price rath17 39 Preferred stocks18 8.17 7.46 6.89 7.07 7.33 7.44 n.a. 7.43 7.43 7.42 7.46 7.46 40 Common stocks 3.24 2.99 2.78 2.78 2.90 2.89 n.a. 2.86 2.85 2.83 2.81 2.85 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 m 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 18. Data for the preferred stock yield was discontinued as of June 29, 1994. indication purposes only. NOTE. Some of the data in this table also appear in the Board's H.15 (519) 11. Auction date for daily data; weekly and monthly averages computed on an weekly and G.13 (415) monthly statistical releases. For ordering address, see issue-date basis. inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A120 1.36 STOCK MARKET Selected Statistics 1993 1994 IInnddiiccaattoorr 11999911 11999922 11999933 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Prices and trading volume (averages of daily figures) Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 206.35 229.00 249.71 257.53 255.93 257.73 262.11 261.97 257.32 247.97 249.56 251.21 2 Industrial 258.16 284.26 300.10 306.61 310.84 313.22 320.92 322.41 318.08 304.48 307.58 308.66 3 Transportation 173.97 201.02 242.68 254.04 262.96 268.11 278.29 276.67 265.68 250.43 244.75 246.64 4 Utility 92.64 99.48 114.55 120.49 115.08 114.97 112.67 116.22 107.72 105.04 102.89 103.27 5 Finance 150.84 179.29 216.55 228.18 214.08 216.00 218.71 217.12 211.02 208.12 211.30 215.89 6 Standard & Poor's Corporation (1941-43 = 10)' 376.20 415.75 451.63 463.90 462.89 465.95 472.99 471.58 463.81 447.23 450.90 454.83 7 American Stock Exchange (Aug. 31, 1973 = 50f 360.32 391.28 438.77 472.73 472.41 465.95 481.14 476.25 465.72 437.01 437.54 436.08 Volume of trading (thousands of shares) 8 New York Stock Exchange 179,411 202,558 263,374 280,503 277,886 259,457 313,223 307,269 311,096 301,242 269,812 226655,,334411 9 American Stock Exchange 12,486 14,171 18,188 21,279 18,436 17,461 19,211 19,630 19,481 15,805 15,727 18,400 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers3 36,660 43,990 60,310 56,690 59,760 60,310 61,250 62,020 61,960 60,700 59,870 59,550 Free credit balarwes at brokers4 11 Margin accounts 8,290 8,970 12,360 10,270 10,940 12,360 12,125 12,890 13,185 13,175 12,715 12,340 12 Cash accounts 19,255 22,510 27,715 22,450 23,560 27,715 26,020 25,665 26,190 24,800 23,265 27,995 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 8a 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 30percent 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 mamtenance margin rules must be approved by 4. Free credit balances are amounts in accounts with no unfulfilled commit- the Securities and Exchange Commission. Effective Jan. 31, 1986, the SEC ments to brokers and are subject to withdrawal by customers on demand. approved new maintenance margin rules, permitting margins to be the price of the 5. New series since June 1984. option plus 15 percent of the market value of the stock underlying the option. 6. These requirements, stated in regulations adopted by the Board of Gover- Effective June 8, 1988, margins were set to be the price of the option plus 20 nors pursuant to the Securities Exchange Act of 1934, limit the amount of credit percent of the market value of the stock underlying the option (or 15 percent in the that can be used to purchase and carry "margin securities" (as defined in the case of stock-index options). regulations) when such credit is collateralized by securities. Margin requirements Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Financial Statistics • September 1994 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Fiscal year Calendar year TTTyyypppeee ooofff aaaccccccooouuunnnttt ooorrr ooopppeeerrraaatttiiiooonnn 1994 11999911 11999922 11999933 Jan. Feb. Mar. Apr. May June U.S. budget1 1 Receipts, total 1,054,272 1,090,453 1,153,226 122,966 72,874 93,108 141,326 83,546 138,124 2 On-budget 760,388 788,027 841,292 94,396 46,879 64,612 104,311 55,367 106,014 3 Off-budget 293,885 302,426 311,934 28,570 25,995 28,496 37,015 28,179 32,110 4 Outlays, total 1,323,793 1,380,856 l,408,484r 107,718 114,440 125,423 123,872 115,600 122,923 5 On-budget 1,082,106 1,128,518 l,141,897r 83,527 88,523 100,260 100,625 89,729 107,966 6 Off-budget 241,687 252,339 266,587 24,191 25,918 25,163 23,247 25,871 14,956 1 Surplus or deficit (-), total -269,521 -290,403 -255,258r 15,248 -41,566 -32,315 17,454 -32,054 15,202 8 On-budget -321,719 -340,490 -300,605r 10,869 -41,644 -35,648 3,686 -34,362 -1,952 9 Off-budget 52,198 50,087 45,347 4,379 77 3,333 13,768 2,308 17,154 Source of financing (total) 10 Borrowing from the public 276,802 310,918 248,619 -6,933 31,633 26,511 -21,801 27,649 1,898 11 Operating cash (decrease, or increase (-)) ... -1,329 -17,305 6,283 -8,089 19,666 -6,461 -4,124 21,537 -23,797 12 Other -5,952 -3,210 356' -226 -9,733 12,265 8,471 -17,132 6,697 MEMO 13 Treasury operating balance (level, end of period} 41,484 58,789 52,506 57,812 38,146 44,607 48,731 27,194 50,991 14 Federal Reserve Banks 7,928 24,586 17,289 21,541 4,886 6,181 7,965 5,675 9,356 15 Tax and loan accounts 33,556 34,203 35,217 36,271 33,259 38,426 40,766 21,519 41,635 1. In accordance with the Balanced Budget and Emergency Deficit Control Act monetary assets; accrued interest payable to the public; allocations of SDRs; of 1985, all former off-budget entries are now presented on-budget. Federal deposit funds; miscellaneous liability (including checks outstanding) and asset Financing Bank (FFB) activities are now shown as separate accounts under the accounts; seigniorage; increment on gold; net gain or loss for U.S. currency agencies that use the FFB to finance their programs. The act has also moved two valuation adjustment; net gain or loss for IMF loan-valuation adjustment; and social security trust funds, (federal old-age survivors insurance and federal profit on sale of gold. disability insurance) off-budget. The Postal Service is included as an off-budget SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of item in the Monthly Treasury Statement beginning in 1990. Receipts and Outlays of the U.S. Government and Office of Management and 2. Includes special drawing rights (SDRs); reserve position on the U.S. quota Budget, Budget of the U.S. Government. in the International Monetary Fund (IMF); loans to the IMF; other cash and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A29 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS1 Millions of dollars Fiscal year Calendar year SSSooouuurrrccceee ooorrr tttyyypppeee 1992 1993 1994 11999922 11999933rr HI H2 HI H2 Apr. May June RECEIPTS 1 All sources 1,090,453 1,153,226 540,484 593,212 582,054 651,944 141,326 83,546 138,124 2 Individual income taxes, net 475,964 509,680 246,938 255,556 262,073 274,736 60,038 24,384 58,123 3 Withheld 408,352 430,217 215,584 209,517r 228,429 225,387 34,979 35,706 37,724 4 Presidential Election Campaign Fund 30 28 10 25 2 63 17 12 9 5 Nonwithheld 149,342 154,982 39,288 113,SIC 41,765 117,928 47,201 5,359 21,985 6 Refunds 81,760 75,546 7,942 67,468 8,114 68,642 22,160 16,692 1,596 Corporation income taxes 7 Gross receipts 117,951 131,548 58,022 69,044 68,266 80,536 21,994 3,847 2299,,881122 8 Refunds 1177,,668800 1144,,002277 7,219 7,198 6,514 6,933 1,408 1,030 697 9 Social insurance taxes and contributions, net 413,689 428,300 192,599 227,177 206,174 248,301 50,323 46,540 41,509 10 Employment taxes and contributions 338855,,449911 339966,,993399 180,758 208,776 192,749 228,714 47,348 3355,,774499 4400,,885533 11 Self-employment taxes and contributions 24,421 20,604 3,988 16,270 4,335 20,762 13,754 11,,557777 33,,881133 12 Unemployment insurance 23,410 26,556 9,397 16,074 11,010 17,301 2,605 10,426 290 13 Other net receipts4 4,788 4,805 2,445 2,326 2,417 2,284 370 364 366 14 Excise taxes 45,569 48,057 23,456 23,398 25,994 26,444 4,050 5,253 4,596 15 Customs deposits 17,359 18,802 9,497 8,860 10,215 9,500 1,479 1,620 1,711 16 Estate and gift taxes 11,143 12,577 5,733 6,494 6,617 8,197 2,378 1,342 1,068 17 Miscellaneous receipts5 26,459 18,273 11,458 9,879 9,227 11,164 2,472 1,589 2,003 OUTLAYS 18 All types 1,380,856 1,408,484 723,527 673,915 728,200 709,976 123,872 115,600 122,923 19 National defense 298,350 291,086 155,231 140,535 146,177 133,739 24,501 19,509 24,197 20 International affairs 16,107 16,826 9,916 6,565 10,534 5,800 1,554 917 582 21 General science, space, and technology 16,409 17,030 8,521 7,996 8,904 8,502 1,238 1,415 1,596 22 Energy 4,500 4,319 3,109 2,462 1,641 2,036 316 325 261 23 Natural resources and environment 20,025 20,239 11,467 8,592 11,077 9,179 1,463 1,519 1,670 24 Agriculture 15,205 20,443 8,852 11,872 7,335 7,451 1,641 1,112 320 25 Commerce and housing credit 10,083 -22,725 -7,697 -14,537 -1,724 -5,114 -702 1,564 1,016 26 Transportation 33,333 35,004 18,425 16,076 20,375 16,772 2,620 2,869 3,151 27 Community and regional development 6,838 9,051 4,464 4,929 5,606 5,592 938 843 1,184 28 Education, training, employment, and social services 45,248 50,012 21,241 24,080r 25,515 18,976 3,694 33,,884411 33,,779977 7.9 Health 89,497 99,415 47,232 49,882 52,631 53,121 8,410 9,074 9,729 30 Social security and Medicare 406,569 435,137 232,109 195,933 223,735 232,777 37,872 37,955 43,367 31 Income security 196,958 207,257 98,382 107,870' 103,163 109,103 20,957 15,796 13,139 32 Veterans benefits and services 34,138 35,720 18,561 16,385 19,848 16,686 3,930 1,666 3,011 33 Administration of justice 14,426 14,955 7,238 7,482 7,448 7,718 1,230 1,277 1,136 34 General government 12,990 13,009 8,223 5,205 6,565 5,076 -148 1,279 1,715 35 Net interest6 199,421 198,811 98,692 99,635 99,963 99,844 17,080 17,671 15,880 36 Undistributed offsetting receipts -39,280 -37,386 -20,628 -17,035 -20,407 -17,308 -2,721 -3,032 -2,827 1. Functional details do not sum to total outlays for calendar year data because 5. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts. revisions to monthly totals have not been distributed among functions. Fiscal year 6. Includes interest received by trust funds. total for outlays does not correspond to calendar year data because revisions from 7. Consists of rents and royalties for the outer continental shelf, 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 DomesticN onfinancial Statistics • September 1994 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1992 1993 1994 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 1 Federal debt outstanding 4,001 4,083 4,196 4,250 4,373 4,436 4,562 4,576 2 Public debt securities 3,985 4,065 4,177 4,231 4,352 4,412 4,536 3 Held by public 2,977 3,048 3,129 3,188 3,252 3,295 3,382 4 Held by agencies 1,008 1,016 1,048 1,043 1,100 1,117 1,154 5 Agency securities 16 18 19 20 21 25 27 6 7 H H e e l l d d b b y y p ag u e b n li c c i es 1 0 6 108 1 0 9 2 0 0 2 0 1 25 0 2 0 7 8 Debt subject to statutory limit. 3,891 3,973 4,086 4,140 4,256 4,316 4,446 4,491 1 9 0 O Pu th b e li r c d d e e b b t t 1 securities 3,890 0 3,972 0 4,085 0 4,139 0 4,256 0 4,315 0 4,445 0 4,491 0 MEMO 11 Statutory debt limit 4,145 4,145 4,145 4,145 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 Type and holder 1990 1991 1993 Q3 Q4 Q1 Q2 1 Total gross public debt 3,364.8 3,801.7 4,177.0 4,535.7 4,411.5 4,535.7 By type 2 Interest-bearing 3,362.0 3,798.9 4,173.9 4,532.3 4.408.6 4,532.3 4.572.6 3 Marketable 2,195.8 2,471.6 2,754.1 2,989.5 2,904.9 2,989.5 3,042.9 4 Bills 527.4 590.4 657.7 714.6 658.4 714.6 721.2 5 Notes 1,265.2 1,430.8 1,608.9 1,764.0 1.734.2 1,764.0 1,802.5 6 Bonds 388.2 435.5 472.5 495.9 497.4 495.9 504.2 7 Nonmarketable1 1,166.2 1,327.2 1,419.8 1,542.9 1.503.7 1,542.9 1.529.7 8 State and local government series 160.8 159.7 153.5 149.5 149.5 149.5 145.5 9 Foreign issues 43.5 41.9 37.4 43.5 42.5 43.5 42.7 10 Government 43.5 41.9 37.4 43.5 42.5 43.5 42.7 11 Public .0 .0 .0 .0 .0 .0 .0 1 1 3 2 G Sa o v v i e n r g n s m b e o n n t d a s c a c n o d u n n t o s te e s r ies3 8 1 1 2 3 4 . . 8 1 9 1 5 3 9 5 . . 2 9 1,0 1 4 5 3 5 . . 5 0 1,1 1 5 6 0 9 . . 0 4 1.1 1 1 6 4 7 . . 3 0 1,1 1 5 6 0 9 . . 0 4 1,1 1 3 7 8 2 . . 4 6 14 Non-interest-bearing 2.8 2.8 3.1 3.4 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 1,116.7 1,153.5 16 Federal Reserve Banks 259.8 281.8 302.5 334.2 325.7 334.2 17 Private investors 2,288.3 2,563.2 2.839.9 3,047.7 2,983.0 3,047.7 18 Commercial banks 171.5 233.4 294.0 316.0 313.3 316.0 19 Money market funds 45.4 80.0 79.4 80.5 75.2 80.5 20 Insurance companies 142.0 168.7 197.5 216.0 215.5 216.0 21 Other companies 108.9 150.8 192.5 213.0 215.6 213.0 22 State and local treasuries 490.4 520.3 534.8 564.0 558.0 564.0 Individuals 23 Savings bonds 126.2 138.1 157.3 171.9 169.1 171.9 24 Other securities 107.6 125.8 131.9 137.9 136.7 137.9 25 Foreign and international3 458.4 491.8 549.7 623.3 592.3 623.3 26 Other miscellaneous investors 637.7 651.3 702.4 725.0 707.2 725.0 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 IItteemm Mar. Apr. May May 4 May 11 May 18 May 25 June 1 June 8 June 15 June 22 June 29 IMMEDIATE TRANSACTIONS2 By type of security U.S. Treasuiy securities 1 Bills 54,077 50,420 53,959 51,478 48,474 60,154 54,849 53,818 50,452 50,648 41,667 56,695 Coupon securities, by maturity 2 Less than 3.5 years 60,771 56,202 64,646 59,398 69,921 70,575 66,277 52,536 49,432 42,344 5522,,220000 4466,,771177 3 3.5 to 7.5 years 45,280 40,471 41,824 39,568 37,687 42,854 48,613 38,913 41,164 33,232 43,648 35,945 4 7.5 to 15 years 31,297 29,625 33,634 32,551 42,686 37,108 29,259 24,255 28,622 23,099 22,888 21,841 5 15 years or more 19,964 15,977 15,926 17,584 17,133 17,484 14,965 12,428 14,911 13,381 14,493 13,484 Federal agency securities Debt, by maturity 6 Less than 3.5 years 12,927 12,901 14,460 13,424 13,393 14,007 15,825 15,430 12,365 12,841 1133,,224400 1144,,997788 7 3.5 to 7.5 years 664 504 526 434 385 553 657 572 630 320 474 573 8 7.5 years or more 536 623 519 513 700 578 444 315 808 468 1,277 718 Mortgage-backed 9 Pass-throughs 24,765 25,873 23,722 22,004 29,273 27,324 18,754 19,778 26,652 25,042 19,329 1188,,559900 10 All others 3,409 3,053 2,400 2,507 3,258 2,425 1,877 1,867 2,308 2,223 2,140 1,709 By type of counterparty Primary dealers and brokers 11 U.S. Treasury securities 137,235 123,507 134,896 125,505 140,471 147,846 140,327 111,996 115,711 103,466 112,026 113,328 Federal agency securities 12 Debt 2,023 2,143 1,916 2,514 2,283 1,502 1,708 1,786 1,710 1,926 2,431 2,178 13 Mortgage-backed 12,317 13,076 11,232 10,880 12,039 13,400 9,479 9,970 11,094 12,688 10,421 9,496 Customers 14 U.S. Treasury securities 74,155 69,188 75,091 75,073 75,429 80,330 73,635 69,952 68,870 59,237 62,870 61,354 Federal agency securities 15 Debt 12,104 11,884 13,588 11,858 12,194 13,636 15,218 14,531 12,093 11,703 12,560 14,091 16 Mortgage-backed 15,857 15,849 14,889 13,631 20,492 16,349 11,151 11,674 17,867 14,577 11,047 10,803 FUTURES AND FORWARD TRANSACTIONS4 By type of deliverable security U.S. Treasury securities 17 Bills 3,733 3,904 3,715 3,281 3,341 3,315 6,166 1,942 3,866 4,513 4,555 2,409 Coupon securities, by maturity 18 Less than 3.5 years 3,399 2,535 3,389 3,034 3,701 3,315 3,522 3,194 2,586 22,,332266 33,,884499 22,,006677 19 3.5 to 7.5 years 2,465 1,941 2,373 2,150 2,282 2,037 3,098 2,166 2,265 2,085 3,298 1,886 20 7.5 to 15 years 5,013 4,367 5,301 5,125 6,416 5,316 5,065 4,316 5,164 3,199 4,392 3,125 21 15 years or more 14,204 12,689 12,982 13,653 14,074 13,297 12,881 10,848 11,618 10,138 13,059 11,880 Federal agency securities Debt, by maturity 22 Less than 3.5 years 181 105 59 100 64 17 55 80 6644 332200 331177 114466 23 3.5 to 7.5 years 133 126 33 31 50 65 3 12 42 61 38 34 24 7.5 years or more 80 35 39 19 58 39 45 22 68 183 283 263 Mortgage-backed 25 Pass-tluoughs 25,161 22,207 19,060 18,605 29,441 20,732 11,611 13,645 19,545 25,616 13,788 11,057 26 Others3 1,522 1,022 789 1,001 691 823 951 510 490 460 535 469 OPTIONS TRANSACTIONS5 By type of underlying security U.S. Treasury, coupon securities, by maturity 27 Less than 3.5 years 3,428 3,767 4,118 3,105 4,717 4,968 4,536 2,544 3,183 2,165 2,818 22,,008833 28 3.5 to 7.5 years 1,253 877 762 570 904 498 1,151 574 1,243 418 679 606 29 7.5 to 15 years 1,297 1,091 1,243 844 1,177 1,368 1,510 1,133 1,551 789 1,151 1,629 30 15 years or more 2,133 1,654 2,343 1,440 2,069 2,732 3,110 1,917 2,240 2,138 2,139 1,522 Federal agency, mortgagebacked securities 31 Pass-throughs 801 747 528 559 705 394 417 589 751 455 253 440 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 m the over-the-counter market that its published list of primary dealers. Averages are based on the number of trading specify delayed delivery. All futures transactions are included regardless of time days in the period. Immediate, forward, and futures transactions are reported at to delivery. Forward contracts for U.S. Treasuiy securities and federal agency principal value, which does not include accrued interest; options transactions are debt securities are included when the time to delivery is more than five business reported at the face value of the underlying securities. days. Forward contracts for mortgage-backed agency securities are included Dealers report cumulative transactions for each week ending Wednesday. when the time to delivery is more than thirty 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 deliveiy 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. Treasuiy securities, bills; corpus. Federal agency securities, debt; and federal agency securities, mortgage-backed, 3. Includes such securities as collateralized mortgage obligations (CMOs), real other than pass-throughs—are no longer available because activity is insufficient. estate mortgage investment conduits (REMICs), interest-only securities (IOs), and principal-only securities (POs). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic NonfinancialS tatistics • September 1994 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 1994 1994, week ending Item Mar. Apr. May May 4 May 11 May 18 May 25 June 1 June 8 June 15 June 22 Positions2 NET IMMEDIATE POSITIONS3 By type of security U.S. Treasury securities 1 Bills 4,792 12,752 8,513 13,755 12,975 4,177 1,746 12,767 9,707 9,922 3,663 Coupon securities, by maturity 2 Less than 3.5 years -18,921 -21,399 -12,383 -16,680 -14,038 -16,886 -7,329 -8,228 -9,538 --1100,,444488 --66,,662255 3 3.5 to 7.5 years -25,482 -26,208 -20,053 -21,939 -23,055 -23,503 -16,796 -15,068 -15,933 -18,156 -12,145 4 7.5 to 15 years -4,212 -7,653 -9,990 -10,052 -6,765 -10,543 -11,699 -11,072 -12,107 -13,105 -14,203 5 15 years or more 2,016 -3,026 -6,375 -5,701 -6,305 -7,376 -5,453 -6,816 -5,884 -5,803 -6,124 Federal agency securities Debt, by maturity 6 Less than 3.5 years 8,925 8,667 8,982 10,178 7,544 7,991 9,582 10,318 8,754 14,472 1100,,991199 7 3.5 to 7.5 years 4,707 5,728 5,204 5,572 5,292 5,575 4,996 4,665 4,879 4,650 4,163 8 7.5 years or more 44,,117744 5,276 4,630 5,404 4,574 4,850 4,462 4,120 4,452 4,390 4,239 Mortgage-backed 9 Pass-throughs 51,257 44,711 36,379 33,569 43,369 36,402 34,541 32,217 47,880 44,700 37,029 10 All others 32,642 33,965 34,307 38,006 35,419 32,901 31,595 35,347 36,017 34,108 33,358 Other money market instruments 11 Certificates of deposit 2,431 2,728 2,756 3,791 2,765 3,240 1,834 2,564 2,493 3,511 3,113 12 Commercial paper 5,489 5,398 5,759 6,451 4,895 5,322 5,545 7,063 4,596 8,740 5,462 13 Bankers acceptances 553 589 548r 574 411 568 514 706 540 589 562 FUTURES AND FORWARD POSITIONS5 By type of deliverable security U.S. Treasury securities 14 Bills 22,,003300 2,133 -1,286 942 -870 -1,975 -2,350 -1,210 -4,384 -5,494 -8,531 Coupon securities, by maturity 15 Less than 3.5 years 2,739 1,579 5 542 -397 -74 192 -10 -679 --665588 11,,776688 16 3.5 to 7.5 years 3,115 2,536 2,118 2,624 2,990 2,790 1,046 1,228 1,879 4,389 1,682 17 7.5 to 15 years 10,710 7,992 5,277r 8,087 6,152 4,449 4,316 4,469 1,955 580 179 18 15 years or more -10,009 -7,551 -5,625r -6,231 -6,168 -4,590 -6,563 -4,699 -3,576 -3,236 -2,950 Federal agency securities Debt, by maturity 19 Less than 3.5 years 126 79 9 -18 -7 23 -15 55 -85 --116688 228866 20 3.5 to 7.5 years 127 91 -27 -2 -25 -18 -47 -32 -11 4 -8 21 7.5 years or more -157 -62 23 14 43 33 26 -12 82 159 495 Mortgage-backed 22 Pass-throughs -39,342 -32,719 -22,553 -22,020 -27,287 -21,996 -20,199 -20,782 -35,875 -32,343 -25,556 23 All others 9,561 7,039 1,052 162 1,416 1,055 2,946 -991 -956 -182 809 24 Certificates of deposit -186,475 -154,901 -148,150 -157,263 -139,404 -176,418 -140,456 -128,274 -108,564 -122,652 -108,843 Financing6 Reverse repurchase agreements 25 Overnight and continuing 292,435 275,469 282,976 267,732 287,508 305,958 273,486 272,112 269,352 226633,,771155 225522,,777777 26 Term 398,126 396,537 377,460 375,066 389,128 358,758 390,249 372,344 403,069 403,414 399,332 Repurchase agreements 27 Overnight ana continuing 479,210 447,713 469,689 452,442 466,892 503,904 451,996 465,177 463,032 470,896 448,108 28 Term 375,510 376,304 351,134 347,232 368,673 322,076 374,982 339,352 374,865 374,335 376,367 Securities borrowed 29 Overnight and continuing 155,484 152,707 160,263 156,096 160,022 162,316 162,109 158,772 158,301 155,653 154,502 30 Term 39,830 35,824 30,886 29,923 30,729 29,800 32,026 31,647 32,292 36,351 40,310 Securities loaned 31 Overnight and continuing 4,579 3,591 3,533 3,061 3,366 3,803 3,617 3,632 2,923 3,019 5,437 32 Term 348 306 573 373 322 415 552 1,208 1,226 1,281 3,489 Collateralized loans 33 Overnight and continuing 20,074 24,153 21,179 21,564 22,206 21,513 18,994 21,886 24,869 28,071 25,600 MEMO: Matched book7 Reverse repurchase agreements 34 Overnigjit and continuing 200,306 197,715 211,581r 197,248 206,664 226,047 214,619 206,451 203,050 220000,,770022 188,304 35 Term 348,058 340,574 327,691r 317,435 335,092 312,477 345,599 322,752 346,464 349,876 350,673 Repurchase agreements 36 Overnight ana continuing 244,375 232,199 244,382r 226,400 239,950 257,419 243,133 247,790 250,586 224411,,114466 224400,,338888 37 Term 286,309 286,839 275,999r 271,650 293,001 254,480 293,725 263,488 286,493 287,330 294,181 1. Data for positions and financing are obtained from reports submitted to the delivery. Forward contracts for U.S. Treasury securities and federal agency debt Federal Reserve Bank of New York by the U.S. government securities dealers on securities are included when the time to delivery is more than five business days. its published list of primary dealers. Weekly figures are close-of-business Wednes- Forward contracts for mortgage-backed agency securities are included when the day data; monthly figures are averages of weekly data. time to delivery is more than thirty business days. 2. Securities positions are reported at market value. 6. Overnight financing refers to agreements made on one business day that 3. Net immediate positions include securities purchased or sold (other than mature on the next business day; continuing contracts are agreements that remain mortgage-backed agency securities) that have been delivered or are scheduled to in effect for more than one business day but have no specific maturity and can be be delivered in five business days or less and "when-issued" securities that settle terminated without advance notice by either party; term agreements have a fixed on the issue date of offering. Net immediate positions of mortgage-backed agency maturity of more than one business day. securities include securities purchased or sold that have been delivered or are 7. Matched-book data reflect financial intermediation activity in which the scheduled to be delivered in thirty business days or less. borrowing and lending transactions are matched. Matched-book data are included 4. Includes such securities as collateralized mortgage obligations (CMOs), real in the financing breakdowns given above. The reverse repurchase and repurchase estate mortgage investment conduits (REMICs), interest-only securities (IOs), numbers are not always equal because of the "matching of securities of different and principal-only securities (POs). values or different types of collateralization. 5. Futures positions reflect standardized agreements arranged on an exchange. NOTE. Data for futures and forward commercial paper and bankers acceptances and Forward positions reflect agreements made in the over-the-counter market that for term financing of collateralized loans are no longer available because of insufficient specify delayed delivery. All futures positions are included regardless of time to activity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A33 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1993 1994 AAggeennccyy 11998899 11999900 11999911 11999922 Dec. Jan. Feb. Mar. Apr. 1 Federal and federally sponsored agencies 411,805 434,668 442,772 483,970 570,711 581,886 592,751 604,421r 0 2 Federal agencies 35,664 42,159 41,035 41,829 45,193 44,988 44,753 44,291 44,390 3 Defense Department 7 7 7 7 6 6 6 6 6 4 Export-Import Bank2, 10,985 11,376 9,809 7,208 5,315 5,315 5,315 4,853 4,853 5 Federal Housing Administration4 328 393 397 374 255 80 99 114 0 6 Government National Mortgage Association certificates of participation 0 0 0 0 0 00 0 00 00 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 29,885 29,855 29,601 29,586 29,676 9 United States Railway Association 0 0 0 0 0 0 0 0 0 10 Federally sponsored agencies7 375,428 392,509 401,737 442,141 525,518 536,898 547,998 560,130 0 11 Federal Home Loan Banks 136,108 117,895 107,543 114,733 141,577 139,241 137,862 147,309 153,539 12 Federal Home Loan Mortgage Corporation 26,148 30,941 30,262 29,631 49,993 61,245 70,482 62,908 65,621 13 Federal National Mortgage Association 116,064 123,403 133,937 166,300 201,112 203,013 206,493 216,430 218,845 14 Farm Credit Banks8 54,864 53,590 52,199 51,910 53,123 52,621 52,839 52,433 52,672 15 Student Loan Marketing Association 28,705 34,194 38,319 39,650 39,784 40,861 40,407 41,120 0 16 Financing Corporation 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 17 Farm Credit Financial Assistance Corporation11 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 29,996 29,996 29,996 29,996 29,996 29,996 29,996 MEMO 19 Federal Financing Bank debt13 134,873 179,083 185,576 154,994 128,187 125,182 123,304 120,103 118,386 Lending to federal and federally sponsored agencies 20 Export-Import Banlr 10,979 11,370 9,803 7,202 5,309 5,309 55,,330099 4,847 44,,884477 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 2,760 1,760 0 0 23 Tennessee Valley Authority 16,519 14,055 10,725 6,975 6,325 6,075 6,075 6,075 6,075 24 United States Railway Association6 0 0 0 0 0 0 0 0 0 Other lending14 25 Farmers Home Administration 53,311 52,324 48,534 42,979 38,619 38,619 3388,,661199 38,209 3377,,883399 26 Rural Electrification Administration 19,265 18,890 18,562 18,172 17,578 17,511 17,512 17,360 17,360 27 Other 23,724 70,896 84,931 64,436 45,864 45,176 43,667 43,880 42,533 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 oy numerous agencies, with the amounts guaranteed by any 8. Excludes borrowing by the Farm Credit Financial Assistance Corporation, one agency generally being small. The Farmers Home Administration entry shown on line 17. consists exclusively of agency assets, whereas the Rural Electrification Admin- 9. Before late 1982, the Association obtained financing through the Federal istration entry consists of both agency assets and guaranteed loans. Financing Bank (FFB). Borrowing excludes that obtained from the FFB, which is shown on line 22. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic NonfinancialS tatistics • September 1994 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1993 1994 TTyyppee ooff ii oo ss rr ss uu uu ee ss ee oo rr iissssuueerr,, 11999911 11999922 11999933 Nov. Dec. Jan. Feb. Mar. Apr. May June 1 All issues, new and refunding1 154,402 215,191 279,945 18,094 24,520 16,560 14,698 15,461 10,129 12,388 14,779 By type of issue 2 General obligation 55,100 78,611 90,599 6,422 6,542 4,622 4,365 7,371 3,469 4,029 5,556 3 Revenue 99,302 136,580 189,346 11,672 17,978 11,000 8,553 8,090 6,660 8,359 9,223 By type of issuer 4 State 24,939 25,295 28,285 885 1,265 1,235 921 3,302 1,013 1,158 1,733 5 Special district or statutory authority2 80,614 129,686 164,169 10,992 16,485 10,672 10,263 6,145 5,235 8,085 9,335 6 Municipality, county, or township 48,849 60,210 84,972 4,528 6,770 4,653 3,514 6,014 3,881 3,145 3,711 7 Issues for new capital 116,953 120,272 91,434 6,734 9,543 5,558 8,774 10,114 8,147 9,125 9,726 By use of proceeds 8 Education 21,121 22,071 17,098 1,416 1,227 1,573 2,292 1,859 2,102 1,933 1,945 9 Transportation 13,395 17,334 9,571 979 429 293 1,223 401 1,453 1,037 2,033 10 Utilities and conservation 21,039 20,058 11,802 687 1,454 480 243 540 707 423 856 11 Social welfare 25,648 21,796 n.a. n.a. 2,171 825 1,660 1,670 1,502 2,099 1,275 12 Industrial aid 8,376 5,424 6,381 673 1,272 392 1,316 470 601 657 935 13 Other purposes 30,275 33,589 29,519 1,820 2,990 5,558 8,774 5,174 1,782 2,976 2,682 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 Oct. Nov. Dec. Jan. Feb." Mar. Apr." May 1 All issues1 465,246 559,827 765,721 55,944r 54,736r 44,344"" 57,803r 47,041 51,852"" 34,197 44,130 2 Bonds2 389,822 471,502 642,543 45,409"" 43,137"" 33,813r 52,076r 39,293 42,649"" 28,774 40,526 By type of offering 3 Public, domestic 286,930 378,058 487,924 42,446" 39,448r 32,232" 46,632" 31,976 40,075" 25,631 33,777 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 2,963 3,689 1,582 5,444 7,317 2,574 3,143 6,749 By industry group 6 Manufacturing 86,628 82,058 88,002 3,273 3,334 3,068 4,785" 3,586 2,416 2,051 2,277 7 Commercial and miscellaneous 36,666 43,111 60,443 6,306 3,078 2,525 2,869 2,153 3,020" 1,040 2,396 8 Transportation 13,598 9,979 10,756 1,416 648 895 693 100 920" 97 150 9 Public utility 23,944 48,055 56,272 2,585 1,763 2,336 2,466" 1,768 1,632" 546 995 10 Communication 9,431 15,394 31,950 2,991 1,015 2,001 2,592" 2,115 2,090 1,298 934 11 Real estate and financial 219,555 272,904 395,121 28,840" 33,299" 22,989" 38,671" 29,572 32,571" 23,742 33,774 12 Stocks2 75,424 88,325 n.a. 10,535 11,599 10,531 5,727 7,748 9,203r 5,423 3,604 By type of offering 13 Public preferred 17,085 21,339 20,533 2,549 1,385 650 1,592 1,318 1,969 2,248 695 14 Common 48,230 57,118 90,559 7,987 10,209 9,881 4,135 6,430 7,234" 3,176 2,910 15 Private placement3 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 2,121 2,169 2,267 1,564 1,807 2,891 2,669 17 Commercial and miscellaneous 19,418 20,231 25,761 1,842 3,061 1,970 1,516 1,682 1,547 785 T 18 Transportation 2,439 2,595 2,237 128 221 162 78 703 980 106 n.a. 19 Public utility 3,474 6,532 7,050 1,103 371 129 293 203 480 75 I 20 Communication 475 2,366 3,439 18 1,074 1,603 n.a. 120 0 0 I 21 Real estate and financial 25,507 33,879 49,889 5,323 4,486 4,381 2,397 3,844 4,381" 1,781 1,375 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. Beginning July 1993, Securities Data Company and the Board of investment companies other than closed-end, intracorporate transactions, equi- 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 Oct. Nov. Dec. Jan. Feb. Mar. Apr/ May 1 Sales of own shares2 647,055 74,490 72,865 89,775 98,679 78,032 87,381 71,164 65,218 2 Redemptions of own shares 447,140 47,168 51,306 62,764 61,829 56,235 73,395 61,925 55,148 3 Net sales3 199,915 27,322 21,559 27,011 36,849 21,797 13,986 9,239 10,070 4 Assets4 1,056,310 n.a. 1,411,628 1,416,841 1,510,047 1,572,907 1,561,705 1,500,745 1,510,827 1,529,547 5 Cash5 73,999 104,301 103,352 100,209 110,022 113,975 112,399 118,221 120,107 6 Other 982,311 1,307,327 1,303,489 1,409,838 1,462,879 1,447,730 1,388,347 1,392,606 1,409,440 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. Treasuiy securities and other short-term debt securities. both money market mutual funds and limited-maturity municipal bond funds. SOURCE. Investment Company Institute. Data based on reports of membership, 2. Includes reinvestment of net income dividends. Excludes reinvestment of which comprises substantially all open-end investment companies registered with capital gains distributions and share issue of conversions from one fund to another the Securities and Exchange Commission. Data reflect underwritings of new in the same group. companies. 3. Excludes sales and redemptions resulting from transfers of shares into or out of money market mutual funds within the same fund family. 1.48 CORPORATE PROFITS AND THEIR DISTRIBUTION Billions of dollars; quarterly data at seasonally adjusted annual rates 1992 1993 1994 AAccccoouunntt 11999911 11999922 11999933 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Qlr 1 Profits with inventory valuation and capital consumption adjustment 369.5 407.2 466.6 411.7 367.5 439.5 432.1 458.1 468.5 507.9 478.0 2 Profits before taxes 362.3 395.4 449.4 409.5 357.9 409.9 419.8 445.6 443.8 488.4 474.2 3 Profits tax liability 129.8 146.3 174.0 153.0 130.1 155.0 160.9 173.3 169.5 192.5 186.7 4 Profits after taxes 232.5 249.1 275.4 256.5 227.8 254.9 258.9 272.3 274.3 295.9 287.5 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 91.4 103.9 104.6 125.6 115.7 7 Inventory valuation 4.9 -5.3 -7.1 -13.7 -7.8 4.9 -12.7 -12.2 1.0 -4.3 -16.2 8 Capital consumption adjustment 2.2 17.1 24.3 16.0 17.4 24.7 25.1 24.7 23.8 23.9 20.0 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 04 Q1 Q2 Q3 Q4 Q1 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 NonfinancialS tatistics • September 1994 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1 Billions of dollars, end of period; not seasonally adjusted 1992 1993 1994 AAccccoouunntt 11999911 11999922 11999933 Q3 Q4 Q1 Q2 Q3 Q4 Q1 ASSETS 1 Accounts receivable, gross2 480.6 482.1 476.1 473.9 482.1 469.6 469.3 467.6 476.1 488.1 2 Consumer 121.9 117.1 117.5 116.7 117.1 111.9 111.3 112.6 117.5 120.1 3 Business 292.9 296.5 290.1 288.5 296.5 289.6 290.7 287.8 290.1 299.0 4 Real estate 65.8 68.4 68.6 68.8 68.4 68.1 67.2 67.2 68.6 69.0 5 LESS: Reserves for unearned income 55.1 50.8 49.0 50.8 50.8 47.4 47.5 47.9 49.0 49.1 6 Reserves for losses 12.9 15.8 11.0 12.0 15.8 15.5 13.8 11.1 11.0 11.4 7 Accounts receivable, net 412.6 415.5 416.1 411.1 415.5 406.6 408.0 408.6 416.1 427.6 8 All other 149.0 150.6 177.3 146.5 150.6 155.0 156.6 169.7 177.3 177.9 9 Total assets 561.6 566.1 593.4 557.6 566.1 561.6 564.6 578.3 593.4 605.5 LIABILITIES AND CAPITAL 10 Bank loans 42.3 37.6 25.3 38.1 37.6 34.1 29.5 25.8 25.3 25.2 11 Commercial paper 159.5 156.4 159.2 153.2 156.4 149.8 144.5 149.9 159.2 165.9 Debt 12 Other short-term 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. 14 Owed to parent 34.5 37.8 46.1 34.9 37.8 41.9 46.4 47.9 46.1 45.2 15 Not elsewhere classified 191.3 195.3 199.9 191.4 195.3 195.1 195.8 198.1 199.9 205.3 16 All other liabilities 69.0 71.2 91.1 73.7 71.2 74.2 81.3 87.6 91.1 94.3 17 Capital, surplus, and undivided profits 64.8 67.8 71.7 68.1 67.8 66.6 67.1 68.9 71.7 69.7 18 Total liabilities and capital 561.2 566.1 593.4 559.4 566.1 561.7 564.6 578.3 593.4 605.6 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'' Dec. Jan. Feb. Mar. Apr. May Seasonally adjusted 11 TToottaall 519,716r 530,603 537,947 537,947 541,123 544,335 554,342 557,121 561,434 22 CCoonnssuummeerr 154,95lr 157,075 162,057 162,057 161,846 161,446 163,493 163,763 164,735 33 RReeaall eessttaattee22 65,925' 68,555 68,731 68,731 68,966 69,438 69,669 69,815 71,402 44 BBuussiinneessss 298,840' 304,972 307,159 307,159 310,312 313,451 321,180 323,543 325,297 Not seasonally adjusted 5 Total 523,354r 534,934 542,700 542,700 541,316 542,894 553,810 558,208 6 Consumer 155,908r 158,398 163,629 163,629 162,140 161,367 163,484 164,257 7 Motor vehicles 63,415 57,605 55,274 55,274 56,509 56,963 57,797 59,458 8 Other consumer 58,522 59,522 62,189 62,189 61,427 61,132 62,264 63,387 9 Securitized motor vehicles' . 23,361r 29,734 36,024 36,024 34,190 33,451 33,173 31,328 10 Securitized other consumer 10,610 11,537 10,141 10,141 10,013 9,821 10,250 10,084 11 Real estate2 65,760 68,410 68,577 68,577 69,385 69,446 69,005 70,114 12 Business 301,686r 308,127 310,495 310,495 309,791 312,081 321,321 323,837 13 Motor vehicles 90,613 87,456 90,172 90,172 88,377 90,668 95,719 97,727 14 Retail5..., 22,957 19,303 16,024 16,024 16,965 17,514 19,162 19,632 15 Wholesale6 31,216 29,962 31,067 31,067 27,975 29,435 31,070 31,059 16 Leasing 36,440 38,191 43,081 43,081 43,437 43,720 45,487 47,036 17 Equipment 141,399 151,607 148,858 148,858 147,915 147,425 149,721 151,150 18 Retail..... 30,962 32,212 33,266 33,266 33,109 33,033 33,861 34,602 19 Wholesale6 9,671 8,669 8,007 8,007 7,996 7,972 8,281 8,295 20 Leasing 100,766 110,726 107,585 107,585 106,810 106,420 107,579 108,253 2 2 1 2 O Se t c h u er r it b i u z s e i d n e b s u s s iness assets k. . 60 8 , , 9 7 0 7 0 4 r 5 1 7 1 , , 4 5 6 9 4 9 5 2 1 0 , , 0 4 5 1 4 1 5 20 1 , , 4 0 1 5 1 4 5 22 0 , , 6 8 7 2 9 1 5 2 1 2 , , 4 4 8 9 9 9 5 22 3 , , 2 5 8 9 5 6 5 2 3 1 , , 3 60 5 7 2 23 Retail 576 1,120 2,483 2,483 2,343 2,245 2,119 2,058 2 2 5 4 L W e h a o si l n e g sa le 5 2 , , 2 9 8 1 5 3 r 5 4 , , 7 7 5 2 6 3 9 8 , ,2 72 0 7 1 8 9 , , 2 7 0 2 1 7 1 7 2 , , 8 4 9 3 9 7 1 7 3 , , 1 0 7 8 0 4 1 7 3 , , 0 0 7 9 6 0 1 6 3 , , 4 09 5 8 1 1. Includes finance company subsidiaries of bank holding companies but not of 5. Passenger car fleets and commercial land vehicles for which licenses are retailers and banks. Data are before deductions for unearned income and losses. required. Data in this table also appear in the Board's G.20 (422) monthly statistical release. 6. Credit arising from transactions between manufacturers and dealers, that is, For ordering address, see inside front cover. floor plan financing. 2. Includes all loans secured by liens on any type of real estate, for example, 7. Includes loans on commercial accounts receivable, factored commercial first and junior mortgages and home equity loans. accounts, and receivable dealer capital; small loans used primarily for business or 3. Includes personal cash loans, mobile home loans, and loans to purchase other farm purposes; and wholesale and lease paper for mobile homes, campers, and types of consumer goods such as appliances, apparel, general merchandise, and travel trailers. recreation vehicles. 4. Outstanding balances of pools upon which securities have been issued; these balances are no longer carried on the balance sheets of the loan originator. Digitized for FRASER 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 Dec. Jan. Feb. Mar. Apr. May June Terms and yields in primary and secondary markets PRIMARY MARKETS Terms1 1 Purchase price (thousands of dollars) 155.0 158.1 163.1 167.9 168.1 157.9 167.8 166.1 171.6 172.6 2 Amount of loan (thousands of dollars) 114.0 118.1 123.0 128.7 127.9 124.1 131.0 127.6 132.2 130.0 3 Loan-to-price ratio (percent) 75.0 76.6 78.0 79.2 78.0 80.2 80.2 79.3 78.5 78.0 4 Maturity (years) ,, 26.8 25.6 26.1 26.8 27.2 27.0 27.6 26.7 27.6 26.5 5 Fees and charges (percent of loan amount) , 1.71 1.60 1.30 1.10 1.18 1.16 1.20 1.16 1.45 1.30 Yield (percent per year) 6 Contract rate , 9.02 7.98 7.02 6.74 6.77 6.67 6.81 7.13 7.20 7.41 7 Effective rate1' 9.30 8.25 7.24 6.92 6.95 6.85 6.99 7.31 7.43 7.62 8 Contract rate (HUD series)4 9.20 8.43 7.37 7.26 7.13 7.54 8.31 8.56 8.61 8.72 SECONDARY MARKETS Yield {percent per year) 9 FHA mortgages (Section 203)5 9.25 8.46 7.46 7.52 7.05 7.59 8.57 8.63 8.63 9.03 10 GNMA securities6 8.59 7.71 6.65 6.58 6.45 6.72 7.40 7.93 8.05 8.01 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings {end of period) 11 Total 122,837 142,833 172,791 190,861 194,441 196,078 197,770 201,542 206,147 208,180 12 FHA/VA insured 21,702 22,168 22,876 23,857 23,796 23,789 24,226 25,088 25,303 25,390 13 Conventional 101,135 120,664 149,914 167,004 170,645 172,289 173,544 176,454 180,844 182,790 Mortgage transactions (during period) 14 Purchases 37,202 75,905 92,037 12,123 7,919 5,427 5,820 6,677 7,238 4,386 Mortgage commitments (during period) 15 Issued 40,010 74,970 92,537 8,461 6,159 4,858 8,683 4,788 3,801 4,268 16 To sell8 7,608 10,493 5,097 209 664 525 136 90 281 1 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of periodf 17 Total 24,131 29,959 42,789 55,012 56,067 57,245 58,498 59,352 60,799 62,232 18 FHA/VA insured 484 408 327 321 319 318 315 309 304 n.a. 19 Conventional 23,283 29,552 42,462 54,691 55,747 56,928 59,184 59,043 60,495 n.a. Mortgage transactions (during period) 20 Purchases 99,965 191,125 229,242 29,396 22,611 17,840 15,970 14,589 10,629 8,341 21 92,478 179,208 208,723 26,607 21,253 16,719 14,486 14,175 10,228 8,097 Mortgage commitments (during periodf 22 Contracted 114,031 261,637 274,599 24,176 31,393 12,880 22,533 22,765 9,586 7,252 1. Weighted averages based on sample surveys of mortgages originated by 6. Average net yields to investors on fully modified pass-through securities major institutional lender groups for purchase of newly built homes; compiled by backed by mortgages and guaranteed by the Government National Mortgage the Federal Housing Finance Board in cooperation with the Federal Deposit Association (GNMA), assuming prepayment in twelve years on pools of thirty- Insurance Corporation. year mortgages insured by the Federal Housing Administration or guaranteed by 2. Includes all fees, commissions, discounts, and "points" paid (by the the Department of Veterans Affairs. borrower or the seller) to obtain a loan. 7. Does not include standby commitments issued, but includes standby com- 3. Average effective interest rate on loans closed for purchase of newly built mitments converted. homes, assuming prepayment at the end of ten years. 8. Includes participation loans as well as whole loans. 4. Average contract rate on new commitments for conventional first mort- 9. Includes conventional and government-underwritten loans. The Federal gages; from U.S. Department of Housing and Urban Development (HUD). Based Home Loan Mortgage Corporation's mortgage commitments and mortgage transon transactions on the first day of the subsequent month. actions include activity under mortgage securities swap programs, whereas the 5. Average gross yield on thirty-year, minimum-downpayment first mort- corresponding data for FNMA exclude swap activity. gages insured by the Federal Housing Administration (FHA) for immediate delivery in the private secondary market. Based on transactions on first day of subsequent month. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Nonfinancial Statistics • September 1994 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1994 Type of holder and property 1991 Q1 Q2 Q3 Q4 1 All holders 3,762,872 3,924,782 4,049,256 4,059,221 4,108,890 4,166,286 4,208,512 By type of property 2 One- to four-family residences 2,616,288 2,780,044 2,959,558 2,975,768 3,034,781 3,096,443 3,146,832 3 Multifamily residences 309,369 306,410 295,417 294,045 291,272 290,679 290,553 4 Commercial 758,313 759,023 713,862 708,966 702,210 698,435 690,388 5 Farm 78,903 79,306 80,419 80,442 80,627 80,730 80,739 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 7 Commercial banks 844,826 876,100 894.513 891,755 910,989 922,596 940,253 8 One- to four-family 455,931 483,623 507,780 507,497 526,817 538,919 558,583 9 Multifamily 37,015 36,935 38,024 37,425 38,058 37,633 38,436 10 Commercial 334,648 337,095 328,826 326,853 325,519 325,201 322,373 11 Farm . 17.231 18,447 19,882 19,980 20,595 20,843 20,862 12 Savings institutions 801,628 705,367 627,972 617,163 612,458 609,563 598,348 13 One- to four-family 600,154 538,358 489,622 480,415 480,722 478,324 469,689 14 Multifamily 91,806 79,881 69,791 70,608 68,303 68,552 67,823 15 Commercial 109,168 86,741 68,235 65,808 63,111 62,367 60,531 16 Farm 500 388 324 332 322 320 305 17 Life insurance companies 267,861 265,258 246,702 244,128 241,729 236,855 228,032 18 One- to four-family 13,005 11,547 11,441 11,316 11,195 10,967 10,534 19 Multifamily 28,979 29,562 27,770 27,466 27,174 26,620 25,568 20 Commercial 215,121 214,105 198,269 196,100 194,012 190,061 182,553 21 Farm 10,756 10,044 9,222 9,246 9,348 9,206 9,376 22 Federal and related agencies 239,003 266,146 286,263 287,081 298,991 309,579 321,486 23 Government National Mortgage Association 20 19 30 45 45 43 22 2 2 4 5 O M n u e l - t if to am fo il u y r -family 2 0 0 1 0 9 3 0 0 37 8 38 7 37 7 1 7 5 26 Farmers Home Administration4 41,439 41,713 41,695 41,529 41,446 41,424 41,386 27 One- to four-family 18,527 18,496 16,912 16,536 16,133 15,714 15,303 28 Multifamily 9,640 10,141 10,575 10,650 10,739 10,830 10,940 29 Commercial 4,690 4,905 5,158 5,187 5,250 5,347 5,406 30 Farm 8,582 8,171 9,050 9,156 9,324 9,533 9,739 31 Federal Housing and Veterans' Administrations 8,801 10,733 12,581 13,027 12,945 11,797 12,215 32 One- to four-family 3,593 4,036 5,153 5,631 5,635 4,850 5,364 33 Multifamily 5,208 6.697 7,428 7,396 7,311 6,947 6,851 34 Resolution Trust Corporation 32,600 45,822 32,045 27,331 21,973 19,925 17,284 35 One- to four-family 15,800 14,535 12,960 11,375 8,955 8,381 7,203 36 Multifamily 8,064 15,018 9,621 8,070 6,743 6,002 5,327 3 3 7 8 F C a o r m m m ercial 8,736 0 16,269 0 9,464 0 7,886 0 6,275 0 5.543 0 4,754 0 39 Federal National Mortgage Association 104,870 112,283 137,584 141,192 151,513 160,721 166,642 40 One- to four-family 94,323 100,387 124,016 127,252 137,340 146,009 151,310 41 Multifamily 10,547 11,896 13,568 13,940 14,173 14,712 15,332 42 Federal Land Banks 29,416 28,767 28.664 28,536 28,592 28,810 28,460 43 One- to four-family 1,838 1,693 1,687 1,679 1,682 1,695 1,675 44 Farm 27,577 27,074 26,977 26,857 26,909 27,115 26,785 45 Federal Home Loan Mortgage Corporation 21,857 26,809 33.665 35,421 42,477 46,859 55,476 46 One- to four-family 19,185 24,125 31,032 32,831 39,905 44,315 52,929 47 Multifamily 2,672 2,684 2,633 2,589 2,572 2.544 2,547 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 49 Government National Mortgage Association 403,613 425,295 419,516 421,514 413,166 415,076 414,066 50 One- to four-family 391,505 415,767 410,675 412,798 404,425 405,963 404,864 51 Multifamily 12,108 9,528 8,841 8,716 8,741 9,113 9,202 52 Federal Home Loan Mortgage Corporation 316,359 359,163 407.514 420,932 422,882 430,089 439,029 53 One- to four-family 308,369 351,906 401,525 415,279 417,646 425,154 434,494 54 Multifamily 7,990 7,257 5,989 5,654 5,236 4,935 4,535 55 Federal National Mortgage Association 299,833 371,984 444,979 457,316 465,220 481,880 495,525 56 One- to four-family 291,194 362,667 435,979 448,483 456,645 473,599 486,804 57 Multifamily 8,639 9,317 9,000 8,833 8,575 8,281 8,721 58 Farmers Home Administration4 66 47 38 34 32 30 28 5 6 9 0 O M n u e l - t if to am fo il u y r -family 1 0 7 101 8 0 7 0 0 6 6 0 5 0 61 Commercial 24 19 17 16 15 14 13 62 Farm 26 17 13 11 11 10 10 63 Private mortgage conduits 59.232 94,177 153,499 162,385 172,023 186,927 198,171 64 One- to four-family 53,335 84,000 132,000 137,000 145,000 158,000 164,000 65 Multifamily 731 3.698 6,305 6,665 7,407 7,991 8,701 6 6 7 6 F C a o r m m m ercial 5,166 0 6,479 0 15,194 0 18,720 0 19,616 0 20,936 0 25,469 0 68 Individuals and others6 530,452 561,244 568,260 556,913 571,400 573,691 573,576 69 One- to four-family 349,491 368,874 378,739 367,632 382,637 384,510 384,060 70 Multifamily 85,969 83,796 85,871 86,026 86,235 86,512 86,565 71 Commercial 80,761 93,410 88,699 88,396 88,412 88,966 89,289 72 Farm 14,232 15,164 14,951 14,859 14,117 13,703 13,662 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 we 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 1994r HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11999911rr 11999922rr 11999933rr Dec/ Jan. Feb. Mar. Apr. May Seasonally adjusted 1 Total 728,398 729,932 795,573 795,573 800,912 805,787 817,173 827,288 837,701 2 Automobile 260,574 257,890 281,504 281,504 283,453 284,388 287,912 292,738 295,617 3 Revolving 245,631 257,453 287,970 287,970 290,807 294,461 299,218 304,381 308,449 4 Other 222,193 214,590 226,099 226,099 226,651 226,938 230,043 230,168 233,635 Not seasonally adjusted 5 Total 744,243 746,452 813,864 813,864 808,010 805,015 812,477 821,754 830,474 By major holder 6 Commercial banks 340,713 330,088 368,549 368,549 367,883 366,712 369,710 376,379 380,456 7 Finance companies 121,904 117,050 117,463 117,463 117,936 118,095 120,061 122,845 120,775 8 Credit unions 90,302 91,693 101,634 101,634 100,554 100,984 102,683 104,153 106,377 9 Retailers 39,832 42,079 47,382 47,382 44,986 43,164 43,088 42,866 n.a. 10 Savings institutions 41,373 37,049 38,078 38,078 38,328 38,578 38,828 39,078 39,255 11 Gasoline companies 4,362 4,365 4,212 4,212 4,189 3,952 3,769 3,980 n.a. 12 Pools of securitized assets 103,293 121,388 130,503 130,503 128,081 127,193 127,785 125,543 129,106 By major type of credit* 13 Automobile 261,046 258,572 282,291 282,291 282,418 283,429 287,476 291,352 294,122 14 Commercial banks 112,666 109,623 123,358 123,358 124,238 124,449 126,949 130,104 132,979 15 Finance companies 63,415 57,605 55,274 55,274 56,509 56,963 57,797 59,458 56,614 16 Pools of securitized assets 28,588 33,888 39,490 39,490 37,426 36,599 36,613 34,531 35,836 17 Revolving 259,001 271,369 303,430 303,430 296,852 294,112 296,023 300,457 304,447 18 Commercial banks 138,005 132,966 149,527 149,527 145,673 144,274 145,701 149,265 149,954 19 Retailers 34,712 36,629 41,378 41,378 39,057 37,293 37,191 36,966 n.a. 20 Gasoline companies 4,362 4,365 4,212 4,212 4,189 3,952 3,769 3,980 n.a. 21 Pools of securitized assets 63,333 74,931 79,887 79,887 79,444 79,597 79,768 79,927 82,064 22 Other 224,196 216,511 228,143 228,143 228,740 227,474 228,978 229,945 231,905 23 Commercial banks 90,042 87,499 95,664 95,664 97,972 97,989 97,060 97,010 97,523 24 Finance companies 58,489 59,445 62,189 62,189 61,427 61,132 62,264 63,387 64,161 25 Retailers 5,120 5,450 6,004 6,004 5,929 5,871 5,897 5,900 n.a. 26 Pools of securitized assets 11,372 12,569 11,126 11,126 11,211 10,997 11,404 11,085 11,206 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 Nov. Dec. Jan. Feb. Mar. Apr. May INTEREST RATES Commercial banks2 1 48-month new car 11.14 9.29 8.09 7.63 n.a. n.a. 7.54 n.a. n.a. 7.76 2 24-month personal 15.18 14.04 13.47 13.22 n.a. n.a. 12.89 n.a. n.a. 12.96 3 120-month mobile home 13.70 12.67 11.87 11.55 n.a. n.a. 11.56 n.a. n.a. 11.60 4 Credit card 18.23 17.78 16.83 16.30 n.a. n.a. 16.06 n.a. n.a. 16.15 Auto finance companies 5 New car 12.41 9.93 99..4488 88..9966 8.80 77..5555 88..9933 99..1133 99..7711 99..9922 6 Used car 15.60 13.80 12.79 12.41 12.33 12.02 12.23 12.68 13.25 13.51 OTHER TERMS3 Maturity (months) 7 New car 55.1 54.0 54.5 5544..55 5544..00 52.9 54.4 54.0 53.8 53.5 8 Used car 47.2 47.9 48.8 48.4 48.3 50.0 50.3 50.1 50.0 50.6 Loan-to-value ratio 9 New car 88 89 91 91 90 91 91 92 92 93 10 Used car 96 97 98 98 98 98 99 99 99 99 Amount financed (dollars) 11 New car 12,494 13,584 14,332 1144,,883399 1155,,009977 15,330 14,904 14,821 15,067 15,194 12 Used car 8,884 9,119 9,875 10,230 10,349 10,434 10,449 10,427 10,477 10,606 1. The Board's series on amounts of credit covers most short- and intermedi- 2. Data are available for only the second month of each quarter, ate-term credit extended to individuals that is scheduled to be repaid (or has the 3. At auto finance companies, option of repayment) in two or more installments. Data in this table also appear in the Board's G.19 (421) monthly statistical release. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic NonfinancialS tatistics • September 1994 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 1992 1993 1994 11998899 11999900 11999911 11999922 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .. 723.0 631.0 475.5 582.4 592.3 611.1 529.5 382.6 719.2 584.2 683.2 620.0 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 576.6 384.1 197.3 278.4 336.2 312.0 289.4 153.1 370.9 407.0 413.6 424.1 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 85.7 75.7 72.6 67.4 51.0 8 Mortgages 269.1 188.7 165.1 120.8 155.4 134.8 94.0 74.9 171.5 206.7 168.6 184.0 9 Home mortgages 212.5 177.2 166.0 176.0 187.1 203.3 172.8 100.1 211.6 229.9 206.7 206.7 10 Multifamily residential 12.0 3.4 -2.5 -11.1 -6.3 -11.2 -27.8 -6.5 -12.0 -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 .1 .7 .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 lb 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 -22.3 -31.6 -11.9 -9.2 69.7 By borrowing sector 17 Household 276.7 207.7 168.4 215.0 247.8 217.9 266.5 109.2 251.1 324.3 306.5 255.2 18 Nonfinancial business 236.3 121.9 -33.4 4.0 23.0 20.6 -12.2 -27.8 50.8 30.6 38.3 96.7 19 Farm .5 1.8 2.4 1.2 1.9 -.2 -1.9 -2.7 3.1 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 7.5 79.1 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 39.3 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 -9.0 -1.5 -2.0 6.7 28 Total domestic plus foreign 733.1 654.9 489.4 606.6 640.0 649.0 528.8 432.9 758.5 666.6 702.2 627.6 Financial sectors 29 Total net borrowing by financial sectors 213.7 193.5 150.4 216.4 239.0 304.1 174.8 145.4 131.5 385.7 293.2 408.7 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 il 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 -20.3 68.8 112.0 166.8 86.0 35 Corporate bonds 37.3 40.8 56.8 65.3 70.8 81.2 79.4 54.6 55.7 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 -20.3 68.8 112.0 166.8 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 41.9 50.7 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 11999933 Q3 Q4 Q1 Q2 Q3 Q4 Q1 All sectors 53 Total net borrowing, all sectors 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 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 75.7 174.2 212.9 174.1 189.4 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 -9.1 -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.S. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Financial Statistics • September 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 Q1 Q2 Q3 Q4 Q1 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 -79.8 -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 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 13 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 452.9 270.0 353.7 361.6 486.0 668.6 250.4 329.9 593.3 613.0 407.9 177.8 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 20 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 28 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 flows through 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 .4 .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 -.2 -.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 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999900 11999911 11999922 11999933 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 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 By lending sector and instrument 2 U.S. government 2,498.1 2,776.4 3,080.3 3,336.5 2,998.9 3,080.3 3,140.2 3,201.2 3,247.3 3,336.5 3,387.7 3 Treasury securities 2,465.8 2,757.8 3,061.6 3,309.9 2,980.7 3,061.6 3,120.6 3,180.6 3,222.6 3,309.9 3,361.4 4 Budget agency issues and mortgages 32.4 18.6 18.8 26.6 18.1 18.8 19.6 20.6 24.7 26.6 26.3 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 By instrument 6 Tax-exempt obligations 1,062.1 1,131.6 1,197.3 1,257.8 1,186.4 1,197.3 1,210.0 1,225.7 1,241.8 1,257.8 1,270.0 7 Corporate bonds 1,008.2 1,086.9 1,154.4 1,229.8 1,140.9 1,154.4 1,175.9 1,194.8 1,212.9 1,229.8 1,242.5 8 Mortgages 3,715.4 3,880.4 4,001.6 4,163.6 3,979.4 4,001.6 4,017.9 4,066.9 4,122.7 4,163.6 4,200.7 9 Home mortgages 2,580.6 2,746.6 2,922.7 3,115.8 2,880.8 2,922.7 2,944.8 3,003.8 3,065.4 3,115.8 3,158.6 10 Multifamily residential 305.5 303.0 291.9 286.0 298.9 291.9 290.7 287.7 286.6 286.0 284.3 11 Commercial 750.8 751.7 706.5 681.0 719.4 706.5 702.0 694.8 689.9 681.0 676.8 12 Farm 78.4 79.1 80.4 80.7 80.3 80.4 80.4 80.6 80.7 80.7 81.0 13 Consumer credit 813.0 799.9 809.2 858.3 784.5 809.2 793.7 802.3 821.7 858.3 849.9 14 Bank loans n.e.c 747.8 701.0 695.6 700.3 686.2 695.6 683.0 691.8 691.5 700.3 707.5 15 Commercial paper 116.9 98.5 107.1 117.8 108.2 107.1 113.9 124.0 123.2 117.8 125.1 16 Other loans 730.6 685.9 701.6 683.0 696.1 701.6 691.5 688.3 681.2 683.0 695.3 By borrowing sector 17 Household 3,594.8 3,762.7 3,978.0 4,231.8 3,900.1 3,978.0 3,981.2 4,054.5 4,143.4 4,231.8 44,,226644..99 18 Nonfinancial business 3,728.5 3,688.7 3,696.7 3,721.0 3,698.6 3,696.7 3,697.4 3,715.9 3,711.3 3,721.0 3,753.4 19 Farm 134.9 134.8 136.0 137.9 137.6 136.0 133.1 136.3 138.3 137.9 136.6 20 Nonfarm noncorporate 1,219.0 1,192.3 1,154.5 1,128.9 1,165.1 1,154.5 1,145.3 1,139.3 1,130.6 1,128.9 1,135.0 21 Corporate 2,374.6 2,361.6 2,406.1 2,454.3 2,395.8 2,406.1 2,419.1 2,440.3 2,442.4 2,454.3 2,481.8 22 State and local government 870.5 932.8 992.2 1,057.7 983.1 992.2 1,007.2 1,023.4 1,040.5 1,057.7 1,072.9 23 Foreign credit market debt held in United States 285.1 298.9 313.8 361.6 312.9 313.8 324.8 336.3 355.6 361.6 361.8 24 Bonds 115.4 129.5 146.9 207.3 141.3 146.9 165.8 176.4 197.5 207.3 218.3 25 Bank loans n.e.c 18.5 21.6 23.9 24.6 26.5 23.9 24.3 25.9 26.2 24.6 26.2 26 Commercial paper 75.3 81.8 77.7 68.7 80.7 77.7 72.3 72.1 71.7 68.7 56.5 27 U.S. government and other loans 75.8 66.0 65.4 60.9 64.4 65.4 62.5 61.9 60.2 60.9 60.9 28 Total credit market debt owed by nonfinancial sectors, domestic and foreign 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 credit market debt owed by financial sectors 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 By instrument 30 U.S. government-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 31 Government-sponsored enterprises securities 393.7 402.9 443.1 523.7 434.7 443.1 451.2 468.4 510.3 523.7 563.7 32 Mortgage pool securities 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 33 Loans from U.S. government 4.9 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 .0 34 Private 1,140.9 1,145.6 1,221.7 1,308.9 1,205.8 1,221.7 1,218.3 1,235.6 1,262.2 1,308.9 1,332.3 35 Corporate bonds 549.9 606.6 678.2 749.0 658.3 678.2 691.8 705.8 730.1 749.0 767.0 36 Mortgages 4.3 5.1 5.1 8.9 5.1 5.1 5.4 6.0 7.6 8.9 10.3 37 Bank loans n.e.c 52.0 69.1 64.2 54.3 67.5 64.2 56.9 55.8 52.4 54.3 54.5 38 Open market paper 417.7 385.7 394.3 393.5 394.6 394.3 379.2 375.9 373.2 393.5 400.1 39 Loans from Federal Home Loan Banks 117.1 79.1 79.9 103.1 80.2 79.9 85.0 92.1 98.9 103.1 100.4 By borrowing sector 40 Government-sponsored enterprises 398.5 407.7 447.9 528.5 439.5 447.9 456.0 473.2 515.1 528.5 563.7 41 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 47 Private financial sectors 1,140.9 1,145.6 1,221.7 1,308.9 1,205.8 1,221.7 1,218.3 1,235.6 1,262.2 1,308.9 1,332.3 43 Commercial banks 76.7 65.0 73.8 79.5 69.0 73.8 73.1 76.6 77.9 79.5 79.0 44 Bank holding companies 114.8 112.3 114.6 122.7 114.4 114.6 119.9 120.2 119.7 122.7 123.7 45 Funding corporations 137.9 124.3 135.2 129.9 143.0 135.2 127.6 129.7 126.4 129.9 129.6 46 Savings institutions 139.1 94.6 87.8 99.0 89.2 87.8 90.3 93.4 96.8 99.0 97.6 47 Credit unions .0 .0 .0 .2 .0 .0 .0 .1 .2 .2 .3 48 Life insurance companies .0 .0 .0 .2 .0 .0 .0 .2 .1 .2 .3 49 Finance companies 374.4 393.0 389.4 384.4 382.7 389.4 379.1 369.8 373.9 384.4 396.4 50 Mortgage companies 7.3 13.0 13.0 17.0 14.6 13.0 10.4 14.4 15.0 17.0 15.5 51 Real estate investment trusts (REITs) 12.4 14.0 14.1 17.4 15.3 14.1 13.7 14.4 15.9 17.4 18.9 52 Issuers of asset-backed securities (ABSs) 278.3 329.4 393.7 458.6 377.5 393.7 404.2 416.9 436.4 458.6 471.0 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 15,341.4 15,602.4 15,894.5 16,125.0 54 U.S. government securities 3,911.7 4,335.7 4,795.5 5,208.8 4,677.6 4,795.5 4,891.2 4,970.9 5,084.7 5,208.8 5,339.8 55 Tax-exempt securities 1,062.1 1,131.6 1,197.3 1,257.8 1,186.4 1,197.3 1,210.0 1,225.7 1,241.8 1,257.8 1,270.0 56 Corporate and foreign bonds 1,673.5 1,823.1 1,979.5 2,186.1 1,940.6 1,979.5 2,033.5 2,076.9 2,140.5 2,186.1 2,227.8 57 Mortgages 3,719.7 3,885.5 4,006.7 4,172.6 3,984.5 4,006.7 4,023.3 4,072.9 4,130.3 4,172.6 4,211.1 58 Consumer credit 813.0 799.9 809.2 858.3 784.5 809.2 793.7 802.3 821.7 858.3 849.9 59 Bank loans n.e.c 818.3 791.7 783.7 779.2 780.2 783.7 764.3 773.5 770.1 779.2 788.1 60 Open market paper 609.9 565.9 579.0 580.0 583.6 579.0 565.4 572.0 568.2 580.0 581.7 61 Other loans 928.4 835.8 851.7 851.8 845.5 851.7 843.7 847.0 845.1 851.8 856.6 Digitized for FR1A. SDaEtaR in this table also appear in the Board's Z.l (780) quarterly statistical http://fraser.srteloleuaisse,f etadb.loesr gL/.2 through L.4. For ordering address, see inside front cover. Federal Reserve Bank of St. Louis

A44 Domestic NonfinancialS tatistics • September 1994 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 1992 1993 1994 Transaction category or sector 11999900 11999911 11999922 11999933 03 04 Q1 Q2 03 04 Q1 CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 13,536.5 14,169 J 15,002.7 15,894.5 14,782.8 15,002.7 15,124.9 15,341.4 15,602.4 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 2,266.3 2,227.9 2,208.2 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 1,419.8 1,375.4 1,358.4 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 175.8 180.1 216.4 228.8 199.5 216.4 208.1 214.9 220.9 228.8 226.6 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 239.1 247.0 235.0 216.4 239.2 235.0 229.2 223.0 218.6 216.4 206.3 8 Foreign 897.5 936.2 1,031.6 1,151.4 1,015.5 1,031.6 1,041.7 1,065.0 1,099.6 1,151.4 1,179.5 9 Financial sectors 10,153.1 10,780.3 11,447.8 12,274.8 11,319.0 11,447.8 11,587.7 11,825.4 12,075.9 12,274.8 12,427.1 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 6,852.5 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 2,485.3 2,584.0 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 13.5 29.7 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) 269.1 318.1 379.9 443.5 365.1 379.9 390.2 402.6 422.9 443.5 456.0 34 Bank personal trusts 212.9 223.3 231.2 234.3 226.9 231.2 230.0 232.2 230.4 234.3 235.8 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 15,341.4 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 Treasuiy 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 4,494.2 4,557.5 4,706.0 4,774.7 4,685.2 40 Interbank claims 64.0 65.2 113.1 146.3 100.7 113.1 111.1 118.1 137.6 146.3 177.9 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 4,929.3 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 159.4 151.3 138.8 117.9 144.6 138.8 135.3 129.8 120.2 117.9 115.9 48 Mutual nind 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 1,032.1 965.1 978.1 976.4 985.4 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 509.9 596.7 619.1 643.9 610.9 619.1 622.5 629.1 632.8 643.9 634.4 53 Miscellaneous 2,732.4 2,884.3 3,053.7 3,273.7 3,026.7 3,053.7 3,069.9 3,160.3 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 31,251.8 31,794.3 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 2,259.8 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 -135.7 -140.4 -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 72.1 79.3 100.5 88.0 96.7 64 Taxes payable 17.8 15.5 22.4 29.6 18.2 22.4 11.1 20.1 19.0 29.6 21.4 65 Miscellaneous -213.4 -254.6 -254.9 -377.7 -273.2 -254.9 -309.5 -301.5 -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 40,137.4 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 MMeeaassuurree 11999911 11999922 11999933 Oct. Nov. Dec. Jan. Feb. Mar. Apr/ Mayr June 1 Industrial production1 104.1 106.5 110.9 111.9 112.8 114.0 114.6 115.0 115.9r 116.1 116.3 116.8 Market groupings ? 103.2 105.7 110.2 111.2 112.1 113.0 111133..66 114.2 111144..77rr 111144..99 111155..00 111155..66 3 105.3 108.0 112.7 113.8 114.6 115.4 116.2 117.2 117.5r 117.5 117.6 118.2 4 Consumer goods 102.8 105.7 108.7 109.2 109.7 110.1 110.9 111.6 111.9r 111.6 111.5 112.1 5 Equipment 108.9 111.2 118.5 120.4 121.8 123.1 123.9 125.3 125.7r 126.1 126.5 126.9 6 Intermediate 96.8 99.0 102.6 103.5 104.3 105.4 105.7 105.1 105.9 106.8 107.1 107.7 7 Materials 105.4 107.7 111.9 112.8 113.9 115.5 116.0 116.2 117.7r 117.9 118.1 118.7 Industry groupings 8 Manufacturing 103.7 106.8 111.7 112.9 114.0 115.4 111155..66 116.1 111177..22rr 111177..66 111177..88 111188..00 9 Capacity utilization, manufacturing (percent)2 77.8 78.6 80.6 80.8 8811..55 8822..33 8822..22 8822..44 8833..00rr 8833..00 8822..99 8822..88 10 Construction contracts3 89.7 97.7 101.lr 103.0 105.0 102.0 103.0 107.0 110.0 103.0 108.0 105.0 11 Nonagricultural employment, total4 106.2 106.4 108.1 109.0 109.2 109.5 109.6 109.8 110.1 110.5 110.8 111.2 1? Goods-producing, total 96.6 94.9 93.1 94.2 94.4 94.4 94.5 94.5 94.8 95.3 95.3 95.5 n Manufacturing, total 97.1 95.8 93.7 94.4 94.5 94.4 94.6 94.6 94.6 94.8 94.8 94.9 14 Manufacturing, production workers ... 96.0 94.5 93.7 94.7 94.8 94.9 95.1 95.3 95.4 95.7 95.7 95.9 15 Service-producing 109.4 110.5 112.8 113.7 114.0 114.3 114.4 114.6 115.0 115.4 115.7 116.2 16 Personal income, total 127.6 135.3 141.7 144.1 145.0 145.9 144.9r 147.4r 148.3r 149.2 150.2 n.a. 17 Wages and salary disbursements 124.5 131.5 136.2 138.8 139.2 139.9 141.2 141.5 142.1 142.9 144.1 n.a. 18 Manufacturing 113.7 117.8 117.8 119.1 119.9 120.7 120.8 121.8 121.9 121.8 121.7 n.a. 19 Disposable personal income5 128.6 136.8 143.1 145.4 146.3 147.3 145.8r 148.6r 149.5r 149.5 151.4 n.a. 20 Retail sales6 121.1 126.9 135.2 138.7 139.6 141.1 139.3 141.9 144.5 143.1 142.5 143.4 ?1 Consumer (1982 84=100) 136.2 140.3 144.5 145.7 145.8 145.8 146.2 146.7 147.2 147.4 114477..55 114488..00 22 Producer finished goods (1982=100) 121.7 123.2 124.7 124.6 124.5 124.1 124.5 124.8 125.0 125.0 125.3 125.5 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 1993 1994 CCaatteeggoorryy 11999911 11999922 11999933 Nov. Dec. Jan. Feb. Mar. Apr/ Mayr June HOUSEHOLD SURVEY DATA1 1 Civilian labor force2 125,303 126,982 128,040 128,662 128,898 130,667 130,776 130,580 130,747 130,774 130,248 Employment 2 Nonagricultural industries3 114,644 114,391 116,232 117,218 117,565 118,639 118,867 118,611 118,880 119,437 119,195 3 Agriculture 3,233 3,207 3,074 3,114 3,096 3,331 3,391 3,426 3,459 3,435 3,235 Unemployment 4 Number 8,426 9,384 8,734 8,330 8,237 8,696 8,518 8,543 8,408 7,902 7,817 5 Rate (percent of civilian labor force) 6.7 7.4 6.8 6.5 6.4 6.7 6.5 6.5 6.4 6.0 6.0 ESTABLISHMENT SURVEY DATA 6 Nonagricultural payroll employment4 108,256 108,519 110,171 111,366 111,610 111,711 111,919 112,298 112,699 112,951 113,330 18,455 18,192 17,804 17,944 17,942 17,968 17,970 17,980 18,007 18,004 18,038 689 631 599 604 618 616 612 609 606 603 604 9 Contract construction 4,650 4,471 4,571 4,733 4,738 4,744 4,745 4,806 4,893 4,906 4,922 10 Transportation and public utilities 5,762 5,709 5,710 5,800 5,792 5,793 5,803 5,816 5,759 5,859 5,870 11 Trade 25,365 25,391 25,849 25,819 25,907 25,914 25,968 26,039 26,165 26,206 26,316 6,646 6,571 6,605 6,763 6,769 6,771 6,776 6,781 6,791 6,781 6,792 28,336 29,053 30,193 30,816 30,926 31,004 31,129 31,326 31,497 31,577 31,763 14 Government 18,402 18,653 18,841 18,887 18,918 18,901 18,916 18,941 18,981 19,015 19,025 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 • September 1994 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1993 1994 1993 1994 1993 1994 Q3 Q4 Qlr Q2 Q3 Q4 Q1 Q2 Q3 Q4 Qlr Q2 Output (1987=100) Capacity (percent of 1987 output) Capacity utilization rate (percent)2 1 Total industry 111.1 112.9 115.2 116.4 136.5 137.2 138.0 139.0 81.4 82.3 83.4 83.8 2 Manufacturing 111.8 114.1 116.3 117.8 139.2 140.0 140.9 142.0 80.3 81.5 82.5 82.9 3 Primary processing3 107.7 109.9 110.7 112.4 128.3 128.6 129.0 129.5 83.9 85.5 85.8 86.8 4 Advanced processing 113.8 116.1 118.9 120.4 144.4 145.4 146.6 148.0 78.8 79.9 81.2 81.3 5 Durable goods 114.2 118.1 121.0 122.4 145.4 146.3 147.6 149.1 78.5 80.7 82.0 82.1 6 Lumber and products 100.8 104.9 103.6 104.1 115.0 115.2 115.4 115.7 87.6 91.1 89.8 90.0 / Primary metals 106.7 109.6 109.7 114.0 123.0 122.6 122.4 122.4 86.8 89.4 89.6 93.1 8 Iron and steel 112.3 115.6 114.8 121.2 126.9 126.3 126.0 126.0 88.6 91.5 91.1 96.2 9 Nonferrous 98.9 101.4 102.7 104.0 117.6 117.6 117.5 117.5 84.1 86.2 87.4 88.5 10 Nonelectrical machinery 147.2 152.7 158.8 164.8 175.7 178.2 181.7 186.2 83.8 85.7 87.4 88.5 11 Electrical machinery 129.7 132.6 136.4 140.9 155.7 157.7 160.3 163.3 83.2 84.1 85.1 86.3 12 Motor vehicles and parts 112.0 131.7 142.7 133.7 154.8 156.1 157.8 159.7 72.3 84.4 9900..55 8833..77 13 Aerospace and miscellaneous transportation equipment 87.4 85.2 82.5 82.0 133.2 132.8 132.2 131.4 65.6 64.2 62.4 62.4 14 Nondurable goods 108.9 109.2 110.5 112.1 131.6 132.1 132.7 133.4 82.8 82.6 83.2 84.0 15 Textile mill products 108.0 107.7 108.9 111.3 119.4 119.9 120.5 121.2 90.5 89.8 90.3 91.8 16 Paper and products 111.7 114.2 114.4 113.1 124.8 125.3 125.8 126.3 89.6 91.2 90.9 89.6 17 Chemicals and products 118.6 118.6 120.3 121.9 145.9 146.8 147.7 148.7 81.2 80.8 81.5 8822..00 18 Plastics materials 111.5 114.4 117.6 131.1 132.0 133.0 85.1 86.6 88.4 19 Petroleum products 104.0 107.7 104.5 108.5 115.7 115.6 115.4 115.3 89.9 93.2 90.5 94.1 20 96.8 97.3 98.4 99.0 111.1 110.8 110.6 110.6 87.1 87.8 89.0 89.5 21 Utilities 117.5 115.6 119.9 119.1 134.0 134.3 134.7 135.2 87.8 86.1 89.0 88.1 22 Electric 118.0 114.8 118.2 119.2 131.2 131.7 132.2 132.8 89.9 87.2 89.4 89.8 1973 1975 Previous cycle5 Latest cycle6 1993 1994 High Low High Low High Low June Jan. Feb. Mar.r Apr.r May1 JuneP Capacity utilization rate (percent)2 1 Total industry 99.0 82.7 87.3 71.8 84.8 78.1 81.1 83.2 83.3 83.8 83.7 83.6 83.9 2 Manufacturing 99.0 82.7 87.3 70.0 85.1 76.7 80.1 82.2 82.4 83.0 83.0 82.9 82.8 3 Primary processing3 99.0 82.7 89.7 66.8 89.1 78.0 83.8 85.9 85.3 86.3 86.7 87.0 86.8 4 Advanced processing4 99.0 82.7 86.3 71.4 83.3 76.0 78.6 80.7 81.2 81.6 81.5 81.3 81.2 5 Durable goods 99.0 82.7 86.9 65.0 83.9 73.8 78.0 81.9 82.0 82.2 82.3 82.0 82.0 6 Lumber and products 99.0 82.7 87.6 60.9 93.3 76.2 84.9 91.2 89.1 89.0 89.4 90.5 90.2 / Primary metals 99.0 82.7 102.4 46.8 92.9 74.4 85.7 90.3 87.9 90.7 93.5 93.0 92.8 8 Iron and steel 99.0 82.7 110.4 38.3 95.7 72.2 87.3 91.9 88.5 93.0 97.0 95.9 95.7 9 Nonferrous 99.0 82.7 90.5 62.2 88.9 75.2 83.4 87.9 86.9 87.3 88.4 88.6 88.4 10 Nonelectrical machinery 99.0 82.7 92.1 64.9 83.7 71.4 82.4 86.7 87.4 88.1 88.3 88.5 88.7 11 Electrical machinery 99.0 82.7 89.4 71.1 84.9 77.3 81.9 84.7 84.9 85.8 86.5 86.4 86.1 12 Motor vehicles and parts 99.0 82.7 93.0 44.5 84.5 57.3 74.5 90.5 92.6 8888..33 86.5 8822..88 8811..99 13 Aerospace and miscellaneous transportation equipment. 99.0 82.7 81.1 66.9 88.3 78.5 66.3 63.0 62.0 62.2 62.1 62.4 62.6 14 Nondurable goods 99.0 82.7 87.0 76.9 86.8 80.4 83.0 82.7 83.0 84.0 83.9 84.2 84.0 15 Textile mill products 99.0 82.7 91.7 73.8 92.1 78.5 91.9 89.6 90.2 91.2 92.2 91.5 91.8 16 Paper and products 99.0 82.7 94.2 82.0 94.9 86.3 91.7 90.4 91.3 91.1 89.7 90.4 88.6 17 Chemicals and products 99.0 82.7 85.1 70.1 85.9 79.4 81.4 81.0 81.2 8822..22 81.3 8822..44 8822..22 18 Plastics materials 99.0 82.7 90.9 63.4 97.0 75.3 86.6 87.3 88.2 8899..88 88.7 19 Petroleum products 99.0 82.7 89.5 68.2 88.5 84.5 90.0 90.8 90.6 90.2 94.3 94.6 93.6 20 99.0 82.7 96.6 80.6 87.0 86.8 88.0 87.6 89.3 89.9 90.4 89.3 88.8 21 Utilities 99.0 82.7 88.3 76.2 92.6 83.1 86.3 90.6 89.0 87.5 86.1 86.8 91.4 22 Electric 99.0 82.7 88.3 78.7 94.8 86.3 88.2 90.2 89.3 88.7 87.3 88.0 94.1 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 1993 GGrroouupp por- aavvgg.. tion June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.r Apr.r MMaayy11 JJuunneepp Index (1987 = 100) MAJOR MARKETS 1 Total index 100.0 110.9 110.4 110.9 111.1 111.3 111.9 112.8 114.0 114.6 115.0 115.9 116.1 116.3 116.8 2 Products 59.5 110.2 109.6 110.4 110.4 110.6 111.2 112.1 113.0 113.6 114.2 114.7 114.9 115.0 115.6 3 Final products 44.8 112.7 112.1 112.8 112.7 113.1 113.8 114.6 115.4 116.2 117.2 117.5 117.5 117.6 118.2 4 Consumer goods, total 26.5 108.7 108.1 108.9 108.6 108.5 109.2 109.7 110.1 110.9 111.6 111.9 111.6 111.5 112.1 5 Durable consumer goods 5.8 110.5 107.2 108.2 107.3 108.7 112.7 115.8 118.2 119.0 120.9 118.3 117.8 114.6 115.0 6 Automotive products 2.7 111.6 106.5 104.3 103.9 106.7 113.8 120.2 124.9 127.7 131.7 125.3 123.2 118.8 118.4 7 Autos and trucks 1.7 112.2 105.0 100.3 99.2 104.1 114.9 124.9 131.5 134.6 141.0 131.1 128.6 121.2 119.9 8 Autos, consumer 1.1 86.1 83.5 78.2 71.8 75.4 85.2 95.4 98.8 102.0 106.7 101.0 98.3 92.3 89.0 9 Trucks, consumer .6 157.3 142.3 138.6 146.7 153.9 166.4 176.0 188.0 191.0 200.4 183.3 181.2 171.3 173.3 10 Auto parts and allied goods... 1.0 110.6 109.1 111.0 111.8 111.1 111.9 112.3 113.9 116.3 116.2 115.4 114.0 114.7 116.1 11 Other 3.1 109.5 107.7 111.6 110.2 110.4 111.8 112.0 112.2 111.3 111.5 112.1 113.0 110.8 112.0 12 Appliances, A/C, and TV .8 122.9 115.5 130.6 124.9 126.4 130.4 130.7 130.5 123.7 123.4 125.6 127.2 121.6 123.3 13 Carpeting and furniture .9 102.2 103.3 103.8 103.2 102.4 104.1 102.5 102.8 104.0 105.5 104.5 106.1 104.1 105.3 14 Miscellaneous home goods ... 1.4 106.7 106.1 105.8 106.4 106.4 106.3 107.5 108.0 109.1 108.6 109.4 109.4 109.1 110.0 15 Nondurable consumer goods 20.7 108.2 108.3 109.1 109.0 108.4 108.2 107.9 107.9 108.6 109.0 110.1 109.8 110.6 111.3 16 Foods and tobacco 9.1 106.1 106.2 107.0 107.0 105.9 105.9 105.2 105.8 106.1 106.9 109.0 109.3 109.2 109.2 17 Clothing 2.6 94.9 96.0 95.2 94.3 93.3 93.3 94.3 95.1 93.8 94.4 95.8 96.9 96.9 96.1 18 Chemical products 3.6 122.5 123.0 123.9 123.7 124.1 122.6 122.3 122.0 121.6 123.3 125.4 123.6 125.4 125.3 19 Paper products 2.6 103.2 104.7 103.7 103.1 103.2 104.0 103.3 102.6 102.6 102.3 102.5 103.6 103.8 104.7 20 Energy 2.7 113.7 111.1 114.8 115.8 115.3 114.6 115.2 113.1 119.7 117.1 114.4 111.7 115.2 120.6 21 Fuels .8 106.6 104.7 104.0 103.8 108.0 111.3 110.6 108.6 105.1 104.3 105.3 107.7 109.4 107.2 22 Residential utilities 2.0 116.5 113.6 119.0 120.4 118.2 115.9 117.0 114.9 125.4 122.1 117.9 113.2 117.4 125.7 23 Equipment 18.3 118.5 118.0 118.5 118.6 119.8 120.4 121.8 123.1 123.9 125.3 125.7 126.1 126.5 126.9 24 Business equipment 13.2 134.6 133.9 134.6 134.8 136.3 137.7 139.7 141.8 142.9 145.0 145.5 146.2 147.0 147.7 25 Information processing and related .. 5.5 155.8 155.6 158.1 158.2 160.6 162.0 164.5 167.2 170.1 173.5 175.2 175.9 177.9 179.8 26 Office and computing 1.9 223.1 221.4 226.5 230.6 234.8 241.8 248.6 256.1 261.5 269.5 272.1 274.7 277.6 282.3 27 Industrial 3.9 112.2 112.4 113.6 113.3 113.2 112.5 113.0 114.8 114.0 114.6 116.8 117.7 118.9 118.9 28 Transit 2.0 136.7 133.0 127.5 126.2 129.8 136.1 141.5 142.8 145.2 147.5 141.2 139.8 135.6 134.8 29 Autos and trucks 1.0 134.5 127.2 118.9 119.6 126.5 139.6 150.5 154.9 161.0 166.7 156.1 153.7 145.9 145.0 30 Other 1.8 115.6 114.8 116.2 119.1 119.1 119.4 119.3 120.8 119.4 120.7 121.4 123.9 125.8 126.2 31 Defense and space equipment 4.4 74.8 74.9 74.6 74.0 73.7 72.7 72.5 71.5 71.0 69.9 69.9 69.7 69.1 68.7 32 Oil and gas well drilling .6 82.5 81.2 83.5 87.0 89.7 86.5 82.9 82.3 82.4 87.4 88.6 89.6 89.1 88.9 33 Manufactured homes .2 118.9 111.6 115.8 115.5 120.7 123.4 130.4 141.1 145.3 139.7 143.6 136.2 135.9 34 Intermediate products, total 14.7 102.6 101.8 102.9 103.3 103.0 103.5 104.3 105.4 105.7 105.1 105.9 106.8 107.1 107.7 35 Construction supplies 5.9 96.8 95.3 96.4 97.3 97.8 98.6 99.5 101.3 100.5 98.9 99.7 101.6 102.1 102.3 36 Business supplies 8.8 106.5 106.1 107.3 107.2 106.4 106.7 107.5 108.1 109.2 109.3 110.0 110.3 110.4 111.3 37 Materials 40.5 111.9 111.7 111.7 112.1 112.2 112.8 113.9 115.5 116.0 116.2 117.7 117.9 118.1 118.7 38 Durable goods materials 20.5 115.5 114.5 115.1 115.6 116.5 117.5 119.1 121.5 122.2 121.9 124.1 125.0 125.0 125.7 39 Durable consumer parts 4.1 113.9 111.0 110.3 111.4 112.6 116.0 120.4 125.7 126.7 126.0 127.3 125.9 124.9 124.3 40 Equipment parts 7.4 123.4 123.0 123.8 124.7 126.0 127.0 127.5 128.6 130.7 131.6 133.9 135.7 136.6 138.3 41 Other 9.0 109.7 109.0 110.1 109.9 110.4 110.3 111.6 113.6 113.2 112.0 114.6 115.8 115.5 115.9 42 Basic metal materials 3.1 112.5 112.0 112.0 111.2 111.7 112.9 114.7 117.6 116.2 113.1 115.3 119.4 117.3 118.0 43 Nondurable goods materials 9.0 113.8 114.3 113.7 114.6 113.6 114.1 115.3 116.6 115.4 116.2 117.7 116.9 118.3 117.4 44 Textile materials 1.2 104.2 104.9 105.5 106.1 103.1 104.0 103.7 102.1 103.2 104.4 106.2 106.4 106.0 106.3 45 Pulp and paper materials 2.0 113.7 115.7 112.4 111.5 112.7 113.2 115.2 115.2 114.0 116.1 117.6 114.7 116.5 112.4 46 Chemical materials 3.8 116.9 117.3 116.9 118.6 117.1 117.2 119.1 119.9 119.7 120.4 121.6 121.5 123.6 123.5 47 Other 2.0 113.8 112.6 113.8 114.9 114.1 115.1 114.9 120.2 115.6 115.1 116.8 116.2 117.0 117.0 48 Energy materials 11.0 103.7 104.4 103.6 103.7 103.1 103.0 103.1 103.2 104.8 105.6 105.6 105.6 104.9 106.5 49 Primary energy 7.3 99.1 100.7 98.0 98.0 98.4 98.2 97.6 97.5 97.3 100.2 101.1 101.4 100.4 100.9 50 Converted fuel materials 3.7 112.7 111.9 114.4 114.9 112.3 112.6 113.8 114.5 119.6 116.1 114.4 113.7 113.8 117.4 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.3 110.6 110.3 111.0 111.2 111.2 111.5 112.2 113.2 113.7 114.0 115.2 115.5 115.9 116.5 52 Total excluding motor vehicles and parts... 95.2 110.4 110.2 110.9 111.1 111.1 111.3 111.8 112.7 113.2 113.4 114.7 115.0 115.4 116.1 53 Total excluding office and computing machines 97.7 108.2 107.8 108.1 108.2 108.3 108.8 109.6 110.6 111.1 111.3 111122..11 112.3 111122..44 111122..99 54 Consumer goods excluding autos and trucks 24.8 108.5 108.3 109.5 109.3 108.8 108.8 108.6 108.7 109.3 109.6 110.6 110.4 110.8 111.6 55 Consumer goods excluding energy 23.8 108.2 107.7 108.2 107.8 107.7 108.6 109.0 109.8 109.9 111.0 111.6 111.6 111.1 111.2 56 Business equipment excluding autos and trucks 12.8 134.6 134.5 136.0 136.1 137.2 137.5 138.7 140.6 141.3 143.2 144.6 145.6 147.1 148.0 57 Business equipment excluding office and computing equipment 11.3 119.7 119.2 119.2 118.7 119.8 120.2 121.3 122.5 123.0 124.1 124.3 124.6 125.0 125.1 58 Materials excluding energy 29.5 115.0 114.4 114.7 115.3 115.6 116.5 118.0 120.0 120.1 120.1 122.1 122.5 122.9 123.2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • September 1994 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued 1987 1993 1994 roup c S o I d C e2 p p r o o r - - 1 av 99 g 3 . tion June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.r Apr/ Ma/ JuneP Index (1987 = 100) MAJOR INDUSTRIES 59 Total index 100.0 110.9 110.4 110.9 111.1 111.3 111.9 112.8 114.0 114.6 115.0 115.9 116.1 116.3 116.8 60 Manufacturing 84.3 111.7 111.2 111.6 111.8 112.1 112.9 114.0 115.4 115.6 116.1 117.2 117.6 117.8 118.0 61 Primary processing 27.1 107.6 107.3 107.4 107.9 107.7 108.5 109.9 111.3 110.7 110.0 111.4 112.1 112.6 112.5 62 Advanced processing 57.1 113.7 113.0 113.6 113.6 114.2 115.0 116.0 117.4 117.9 119.0 119.9 120.2 120.3 120.6 63 Durable goods 46.5 114.3 113.0 113.7 113.9 115.0 116.2 118.0 120.1 120.4 120.9 121.7 122.3 122.2 122.7 64 Lumber and products... "'24 2.1 100.6 97.6 99.6 100.9 101.8 104.6 104.9 105.2 105.2 102.8 102.9 103.3 104.7 104.4 65 Furniture and fixtures... 25 1.5 103.3 102.7 103.5 105.2 105.2 104.8 104.2 106.3 105.4 107.4 107.6 108.5 107.9 109.4 66 Clay, glass, and stone products 32 2.4 98.7 98.2 98.8 98.4 99.9 99.7 100.5 104.6 101.1 100.0 101.7 101.3 101.9 101.8 67 Primary metals 33 3.3 106.5 105.6 105.6 107.2 107.3 106.1 109.8 113.0 110.5 107.6 111.1 114.4 113.8 113.6 68 Iron and steel 331,2 1.9 111.6 111.1 111.9 112.8 112.4 113.3 114.4 119.1 115.8 111.5 117.2 122.2 120.9 120.6 69 Raw steel .1 105.7 106.6 106.9 106.3 105.9 107.2 106.2 110.9 102.0 105.8 106.0 105.3 105.7 70 Nonferrous 333-6,9 1.4 99.5 98.1 97.0 99.4 100.3 96.2 103.5 104.5 103.3 102.1 102.6 103.8 104.1 103^9 71 Fabricated metal products 34 5.4 99.5 98.3 99.6 99.6 99.6 100.7 102.1 102.6 103.9 103.0 104.1 104.9 110044..88 105.3 72 Industrial and commercial machinery and computer equipment . 35 8.5 144.1 143.3 146.1 147.1 148.4 150.3 152.0 155.7 156.3 158.8 161.4 163.1 116644..99 166.5 73 Office and computing machines 357 2.3 223.1 221.4 226.5 230.6 234.8 241.8 248.6 256.1 261.5 269.5 272.1 274.7 277.6 282.3 74 Electrical machinery 36 6.9 127.5 126.4 128.6 129.5 130.9 131.4 132.1 134.3 134.8 136.1 113388..33 114400..33 114411..00 114411..55 75 Transportation equipment 37 9.9 104.2 101.2 98.9 98.5 100.4 104.2 108.3 110.7 111.9 113.0 111100..11 110088..88 110066..33 110066..00 76 Motor vehicles and parts 371 4.8 120.7 114.7 110.2 110.6 115.1 124.1 132.4 138.5 142.1 146.1 139.9 137.5 113322..22 131.4 77 Autos and light trucks 2.2 118.4 111.2 106.0 104.0 109.2 120.8 131.7 138.4 141.8 148.5 113388..44 113355..77 112277..88 112266..00 78 Aerospace and miscellaneous transportation equipment... 337722--66,,99 5.1 88.7 88.6 88.3 87.2 86.7 85.5 85.7 84.5 83.4 82.0 82.1 81.8 82.1 82.1 7799 Instruments 38 5.1 104.0 104.4 104.8 103.2 104.0 102.7 102.4 102.3 103.7 104.1 104.4 104.0 103.7 104.4 80 Miscellaneous 39 1.3 109.3 108.5 108.8 108.8 110.3 109.6 110.1 110.3 110.7 109.9 111.1 112.1 112.0 111.7 81 Nondurable goods 37.8 108.7 108.9 109.1 109.2 108.5 108.8 109.1 109.7 109.6 110.1 111.7 111.8 112.4 112.2 82 Foods "20 8.8 108.6 108.8 108.8 109.6 109.0 109.0 108.4 109.0 109.2 110.1 112.2 112.2 112.1 112.1 83 Tobacco products 21 1.0 91.0 89.4 97.3 90.3 85.4 86.4 83.3 84.3 88.2 86.7 89.4 91.3 92.0 91.9 84 Textile mill products 22 1.8 107.8 109.3 108.5 108.8 106.6 107.7 108.0 107.4 107.8 108.7 110.1 111.5 110.8 111.5 85 Apparel products 23 2.3 93.1 93.6 93.6 93.2 92.1 92.1 92.6 93.1 92.4 92.9 94.2 94.9 95.2 94.9 86 Paper and products 26 3.6 112.3 114.1 111.7 112.1 111.4 112.7 114.5 115.5 113.5 114.9 114.8 113.1 114.1 112.0 87 Printing and publishing.. 27 6.5 101.3 101.3 101.6 100.9 101.1 101.6 101.7 101.9 101.7 102.3 103.6 104.2 104.3 104.7 88 Chemicals and products. 28 8.8 117.8 118.3 118.6 118.8 118.3 117.8 118.8 119.3 119.3 119.9 121.7 120.6 122.5 122.4 89 Petroleum products 29 1.3 104.9 104.2 103.2 103.5 105.3 108.2 107.8 107.1 104.8 104.5 104.1 110088..77 110099..00 110077..99 90 Rubber and plastic products 30 3.2 115.9 115.1 116.9 117.5 116.7 116.5 117.8 119.3 120.3 119.7 122.5 123.1 123.7 124.4 9911 Leather and products ... 31 .3 85.0 84.7 83.8 83.6 83.5 83.9 83.5 85.1 84.8 83.1 85.1 85.8 84.3 83.2 92 Mining 8.0 97.3 97.9 96.4 96.6 97.4 98.0 96.9 96.9 97.0 98.8 99.5 99.9 98.8 98.2 93 Metal '"lO .3 167.6 169.7 170.4 152.9 159.4 175.8 168.5 177.3 177.8 167.4 167.3 171.3 159.3 166.6 94 Coal 11,12 1.2 103.8 106.9 100.9 98.5 104.4 104.4 101.1 104.7 104.0 114.4 120.4 119.8 113.2 109.1 95 Oil and gas extraction 13 5.8 92.2 92.6 91.6 93.3 92.6 92.6 91.8 90.9 91.0 91.8 91.5 92.0 92.1 91.9 % Stone and earth minerals .. 14 .7 93.8 91.3 92.7 94.1 94.5 94.1 98.2 93.9 94.9 97.1 96.3 96.9 99.2 99.2 97 Utilities 7.7 116.2 115.4 118.0 118.4 116.2 114.9 116.1 115.8 121.9 119.8 118.0 116.3 117.3 123.7 9988 Electric 49i,3PT 6.1 115.9 115.5 118.8 119.5 115.8 113.7 115.2 115.5 119.1 118.1 117.4 115.8 116.9 125.1 9999 Gas 492,3PT 1.6 117.2 115.1 115.0 114.4 118.0 119.1 119.4 117.0 132.6 126.4 120.1 118.0 118.7 118.4 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 79.5 111.2 110.9 111.7 111.8 111.9 112.2 112.9 114.0 114.0 114.3 111155..88 111166..44 111166..99 111177..22 101 Manufacturing excluding office and computing machines 81.9 108.6 108.0 108.3 108.4 108.6 109.2 110.2 111.4 111.4 111.7 112.8 113.1 113.2 113.3 Gross value (billions of 1987 dollars, annual rates) MAJOR MARKETS 102 Products, total 1,707.0 1,886.9 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 1,962.6 1,971.4 1,967.4 1,972.2 103 Final 1,314.6 1,480.7 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 1,544.5 1,547.1 1,542.3 1,545.0 104 Consumer goods 866.6 944.1 936.1 939.2 937.3 940.2 953.1 960.2 963.7 968.7 974.0 972.4 973.5 969.8 971.8 105 Equipment 448.0 536.7 532.1 532.2 532.7 539.2 545.7 554.7 561.9 566.3 573.9 572.0 573.6 572.4 573.2 106 Intermediate 392.5 406.1 403.7 407.4 408.2 406.9 410.0 413.3 418.2 420.4 416.2 418.2 424.3 425.1 427.2 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 Aug. Sept. Oct. Nov. Dec. Jan. Feb.' Mar.' Apr.' May Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 949 1,095 1,199 1,234 1,265 1,298 1,363 1,474 1,312 1,252 1,313 1,380 1,357 2 One-family 754 911 986 1,004 1,036 1,078 1,132 1,181 1,071 1,054 1,068 1,069 1,083 3 Two-or-more-family 195 184 213 230 229 220 231 293 241 198 245 311 274 4 Started 1,014 1,200 1,288 1,319 1,359 1,409 1,406 1,612 1,271 1,328 1,519 1,471 1,497 5 One-family 840 1,030 1,126 1,178 1,160 1,231 1,248 1,383 1,125 1,121 1,271 1,211 1,197 6 Two-or-more-family 174 169 162 141 199 178 158 229 146 207 248 260 300 7 Under construction at end of period1.. 606 612 680 662 678 686 699 713 716 720 732 741 749 8 One-family 434 473 543 534 544 551 564 574 577 578 585 585 584 9 Two-or-more-family 173 140 137 128 134 135 135 139 139 142 147 156 165 10 Completed 1,091 1,158 1,193 1,248 1,172 1,248 1,248 1,289 1,216 1,334 1,273 1,358 1,446 11 One-family 838 964 1,040 1,068 1,041 1,081 1,107 1,139 1,075 1,185 1,115 1,198 1,257 12 Two-or-more-family 253 194 153 180 131 167 141 150 141 149 158 160 189 13 Mobile homes shipped 171 210 254 247 254 260 283 308 316 301 308 290 292 Merchant builder activity in one-family units 14 Number sold 507 610 666 645 738 723 766 817 642 697 733 708 738 15 Number for sale at end of period1 ... 284 266 294 286 288 291 294 294 296 298 297 297 298 Price of units sold (thousands of dollars) 16 Median 120.0 121.3 126.1 126.6 129.4 125.0 130.0 125.0 126.0 129.9 131.0 130.0 127.0 17 Average 147.0 144.9 147.6 150.6 150.1 146.9 152.5 146.4 153.4 150.7 152.1 153.5 152.0 EXISTING UNITS (one-family) 18 Number sold 3,219 3,520 3,800 3,860 3,990 4,030 4,120 4,350 4,250 3,840 4,070 4,120 4,110 Price of units sold (thousands of dollars)2 19 Median 99.7 103.6 106.5 108.8 107.2 106.6 107.1 107.4 107.9 107.2 107.6 108.9 109.8 20 Average 127.4 130.8 133.1 135.4 133.6 133.0 133.1 133.7 134.6 133.3 134.4 135.5 136.6 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 403,644r 435,355r 466,365r 464,680* 470,756r 477,807" 490,176r 499,931r 488,469" 485,894 496,042 499,514 504,204 22 Private 293,536 316,115r 341,101r 339,267r 342,491" 350,164' 360,386' 367,271' 363,852' 361,895 371,681 377,108 379,619 23 Residential 157,837 187,870r 210,455r 208,538r 211,452" 216,559' 222,351' 228,549' 229,775' 233,322 236,767 238,767 240,614 24 Nonresidential 135,699 128,245r 130,646r 130,729r 131,039" 133,605' 138,035' 138,722' 134,077' 128,573 134,914 138,341 139,005 25 Industrial buildings 22,281 20,720 19,533r 19,417r 19,565" 19,239' 19,319' 20,391' 19,682' 19,972 19,905 21,309 21,604 26 Commercial buildings 48,482 41,523 42,627r 41,836r 41,794" 43,422" 46,696' 47,342" 43,261" 42,065 46,602 47,056 46,956 27 Other buildings 20,797 21,494 23,626r 25,600" 24,813" 24,486" 24,071' 24,225' 22,998" 22,258 23,918 23,789 23,950 28 Public utilities and other 44,139 44,508r 44,860' 43,876" 44,867" 46,458" 47,949' 46,764" 48,136' 44,278 44,489 46,187 46,495 29 Public 110,107' 119,238r 125,262' 125,413' 128,264' 127,642' 129,790' 132,659" 124,617' 123,999 124,361 122,407 124,586 30 Military 1,837 2,502 2,454r 2,553" 2,471" 2,289' 2,245' 2,298" 2,911" 2,404 2,231 2,189 2,206 31 Highway 32,041r 34,899" 37,355r 35,047" 39,033" 39,654' 40,742' 40,657' 38,410" 36,329 38,830 39,147 39,215 32 Conservation and development... S.OIO1 6,021r 5,976r 5,619" 6,294' 6,301' 5,218' 5,230" 5,707' 6,731 5,206 5,723 5,424 33 Other 71,219* 75,816' 79,477r 82,194" 80,466' 79,398' 81,585' 84,474' 77,589' 78,535 78,094 75,348 77,741 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 ana 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 • September 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 JJJ eee uuu vvv nnn eee eee lll,,, 11999933 11999944 111999999444111 JJuunnee JJuunnee Sept. Dec. Mar. June Feb. Mar. Apr. May June CONSUMER PRICES2 (1982-84=100) 1 All items 3.0 2.5 2.0 3.3 2.5 2.5 .3 .3 .1 .2 .3 148.0 2 2.2 2.2 2.6 4.9 -1.1 2.8 -.3 .1 .1 . .3 .3 143.5 i Energy items .6 -.8 -4.2 1.2 4.7 -4.9 1.6 .4 -.4 -1.0 .1 105.7 4 All items less food and energy 3.3 2.9 2.1 3.4 2.9 3.1 .3 .3 .2 .3 .3 156.2 5 Commodities 2.0 1.8 .0 2.4 .6 4.2 -.1 .3 .1 .4 .4 137.3 b Services 4.0 3.5 3.5 3.7 4.2 2.4 .4 .4 .2 .2 .2 167.1 PRODUCER PRICES (1982=100) 7 Finished goods 1.3 .0 -2.5 -.3 3.9 -.6 .4 .2 -.1 -.1 .0 125.5 8 Consumer foods 1.9 .4 3.2 5.2 -.9 -5.5 -.3 .5 -.5 -.9 .0 125.9 y Consumer energy -.6 -3.1 -7.4 -15.6 16.6 -3.6 2.8 .0 -.1 -1.0 .3 78.0 10 Other consumer goods 1.6 -.4 -6.4 1.5 2.3 1.2 .0 .1 -.1 .4 -.1 138.9 ii Capital equipment 1.6 2.5 2.2 .3 4.6 3.3 .2 .3 .4 .4 .1 134.3 Intermediate materials 12 Excluding foods and feeds 1.2 1.0 -1.0 -.3 2.8 2.8 .4 .2 .0 .2 .5 118.2 13 Excluding energy 1.4 2.1 1.0 1.6 1.6 4.2 ,lr .2 .2 .3 .6 126.3 Crude materials 14 Foods -.2 .5 13.1 18.4 -4.8 -20.6 .9r — 1.2r -1.1 -3.4 -1.2 107.7 15 Energy 1.0 -5.9 -28.1 -22.1 18.9 17.5 -6.3r 7.0r -.1 1.0 3.3 76.1 lb 9.7 7.3 -4.5 15.4 23.4 -2.6 2.2r ,5r -.3 -1.1 .7 152.0 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 1991 1993 Q1 Q2 Q3 Q4 GROSS DOMESTIC PRODUCT 1 Total 5,722.9 6,038.5 6,377.9 6,261.6 6,327.6 6,395.9 6,526.5 By source 2 Personal consumption expenditures 3,906.4 4,139.9 4.391.8 4.296.2 4,359.9 4,419.1 4.492.0 3 Durable goods 457.8 497.3 537.9 515.3 531.6 541.9 562.8 4 Nondurable goods 1,257.9 1,300.9 1.350.0 1.335.3 1,344.8 1,352.4 1,367.5 5 Services 2,190.7 2,341.6 2.503.9 2,445.5 2,483.4 2,524.8 2,561.8 6 Gross private domestic investment 736.9 796.5 891.7 874.1 874.1 884.0 934.5 7 Fixed investment 745.5 789.1 876.1 839.5 861.0 876.3 927.6 8 Nonresidential 555.9 565.5 623.7 594.7 619.1 624.9 656.0 9 Structures 182.6 172.6 178.7 172.4 177.6 179.1 185.8 10 Producers' durable equipment 373.3 392.9 445.0 422.2 441.6 445.8 470.2 11 Residential structures 189.6 223.6 252.4 244.9 241.9 251.3 271.6 12 Change in business inventories -8.6 7.3 15.6 34.6 13.1 7.7 6.9 13 Nonfarm -8.6 2.3 21.1 33.0 16.8 22.6 12.0 14 Net exports of goods and services -19.6 -29.6 -63.6 -48.3 -65.1 -71.9 -69.1 15 Exports 601.5 640.5 661.7 651.3 660.0 653.2 682.4 16 Imports 621.1 670.1 725.3 699.6 725.0 725.1 751.5 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 18 Federal 445.9 448.8 443.4 442.7 447.5 443.6 440.0 19 State and local 653.4 683.0 714.6 697.0 711.1 721.2 729.2 By major type of product 20 Final sales, total 5.731.6 6,031.2 6.362.3 6,227.1 6,314.5 6,388.2 6.519.6 21 Goods 2,227.0 2.305.5 2.406.4 2,362.9 2.395.0 2.401.7 2,465.8 22 Durable 934.3 975.8 1,037.0 1,003.5 1,037.8 1,032.9 1.073.7 23 Nondurable 1,292.8 1.329.6 1,369.3 1,359.3 1.357.1 1.368.8 1,392.1 24 Services 3.032.7 3,221.1 3.410.5 3,341.8 3,388.1 3,437.8 3,474.3 25 Structures 471.9 504.7 545.5 522.4 531.5 548.7 579.5 2 2 6 7 Ch D an u g ra e b i l n e b g u o s o i d n s e ss inventories -1 -8 2 . . 6 9 7 2. . 1 3 1 1 5 0 . . 6 9 3 1 4 5 . . 6 0 1 2 3 . . 7 1 1 7 4 . . 7 8 1 6 1 . . 9 0 28 Nondurable goods 4.3 5.3 4.7 19.5 10.4 -7.2 -4.1 MEMO 4,861.4 4,986.3 5,136.0 5,078.2 5,102.1 5,138.3 5,225.6 29 Total GDP in 1987 dollars NATIONAL INCOME 4.598.3 4,836.6 5,140.3 5,038.9 5,104.0 5,143.2 5,275.0 30 Total 3.402.4 3.582.0 3,772.2 3.705.1 3.750.6 3,793.9 3,839.2 31 Compensation of employees 2,814.9 2.953.1 3,100.5 3,054.3 3.082.7 3,115.4 3,149.6 32 Wages and salaries 545.3 567.5 589.7 584.1 586.3 592.8 595.4 33 Government and government enterprises .. 2,269.6 2,385.6 2,510.8 2.470.2 2,496.3 2,522.6 2,554.2 34 Other 587.5 629.0 671.7 650.7 668.0 678.5 689.6 35 Supplement to wages and salaries 290.6 306.3 321.0 312.2 321.4 323.8 326.7 36 Employer contributions for social insurance 296.9 322.7 350.7 338.5 346.6 354.7 362.9 37 Other labor income 38 Proprietors' income1 376.4 414.3 443.2 444.1 439.4 422.5 467.0 39 Business and professional1 339.5 370.6 397.3 388.4 392.4 397.6 410.6 40 Farm 36.8 43.7 46.0 55.7 47.0 24.8 56.4 41 Rental income of persons2 -12.8 -8.9 12.6 7.5 12.7 13.7 16.4 42 Corporate profits1 .. 369.5 407.2 466.6 432.1 458.1 468.5 507.9 43 Profits before tax^ 362.3 395.4 449.4 419.8 445.6 443.8 488.4 44 Inventory valuation adjustment 4.9 -5.3 -7.1 -12.7 -12.2 1.0 -4.3 45 Capital consumption adjustment 2.2 17.1 24.3 25.1 24.7 23.8 23.9 46 Net interest 462.8 442.0 445.6 450.1 443.2 444.6 444.5 1. With inventory valuation and capital consumption adjustments. 3. For after-tax profits, dividends, and the like, see table 1.48. 2. With capital consumption adjustment. SOURCE. U.S. Department of Commerce, Survey of Current Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 Domestic Nonfinancial Statistics • September 1994 2.17 PERSONAL INCOME AND SAVING Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1993 1994 Account 11999911 11999922 1993 Q1 Q2 Q3 Q4 Qlr 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 5,583.2 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 3.202.0 3 Commodity-producing industries 738.1 756.5 763.6 740.7 765.1 769.4 779.3 790.0 4 Manufacturing 557.2 577.6 577.3 559.7 580.3 581.5 587.8 595.6 5 Distributive industries 648.0 682.0 706.6 682.9 709.1 714.4 720.1 731.3 6 Service industries 883.5 967.0 1.020.6 966.6 1,022.2 1,038.8 1.054.7 1.077.1 7 Government and government enterprises 545.4 567.5 589.7 584.1 586.3 592.8 595.4 603.5 8 Other labor income 296.9 322.7 350.7 338.5 346.6 354.7 362.9 371.9 9 Proprietors' income1 . 376.4 414.3 443.2 444.1 439.4 422.5 467.0 474.8 10 Business and professional 339.5 370.6 397.3 388.4 392.4 397.6 410.6 416.2 11 Farm1 . 36.8 43.7 46.0 55.7 47.0 24.8 56.4 58.6 12 Rental income of persons -12.8 -8.9 12.6 7.5 12.7 13.7 16.4 3.5 13 Dividends 127.9 140.4 158.3 157.0 157.8 159.0 159.4 160.7 14 Personal interest income 715.6 694.3 695.2 695.4 693.1 695.7 696.7 704.5 15 Transfer payments 769.9 858.4 912.1 894.4 905.5 918.5 929.8 945.0 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 237.8 249.3 264.3 256.6 264.5 266.8 269.2 279.1 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 5,583.2 19 LESS: Personal tax and nontax payments 620.4 644.8 681.6 657.1 681.0 689.0 699.2 715.6 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 4,867.6 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 4,695.3 22 EQUALS: Personal saving 201.5 238.7 189.9 177.9 208.7 179.7 193.4 172.3 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 20,150.1 20,270.9 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 13,663.6 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 14,573.0 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 733.7 717.8 780.2 762.0 766.7 774.3 817.8 860.9 28 Gross private saving 929.9 986.9 1,004.8 1,024.8 988.3 988.7 1,017.5 1,027.7 29 Personal saving 201.5 238.7 189.9 177.9 208.7 179.7 193.4 172.3 30 Undistributed corporate profits 102.3 110.4 123.6 103.7 116.3 129.3 145.1 119.6 31 Corporate inventory valuation adjustment 4.9 -5.3 -7.1 -12.7 -12.2 1.0 -4.3 -16.2 Capital consumption allowances 32 Corporate 383.2 396.6 408.8 402.2 405.2 414.0 413.9 433.4 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 -224.6 -262.8 -221.5 -214.4 -199.7 -166.9 35 Federal -203.4 -276.3 -226.4 -263.5 -222.6 -212.7 -207.0 -163.6 36 State and local 7.3 7.2 1.8 .8 1.1 -1.7 7.2 -3.2 37 Gross investment 743.3 741.4 795.4 796.5 778.7 787.6 819.0 852.3 38 Gross private domestic 736.9 796.5 891.7 874.1 874.1 884.0 934.5 970.0 39 Net foreign 6.4 -55.1 -96.2 -77.6 -95.4 -96.4 -115.5 -117.8 40 Statistical discrepancy 9.6 23.6 15.2 34.4 12.0 13.3 1.2 -8.6 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 Item credits or debits Q1 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 -36,965 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 3,947 1,855 668 2,015 -590 -367 8 U.S. government grants 23,959 -15,010 -14,620 -3,186 -2,729 -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 -281 -192 -321 446 12 Change in U.S. official reserve assets (increase, -) 5,763 3,901 -1,379 -983 822 -544 -673 -59 13 Gold 0 0 0 0 0 0 0 0 1 1 4 5 R Sp e e s c e i r a v l e d p r o aw si i t n io g n ri i g n h I t n s te (S rn D a R ti s o ) n al Monetary Fund - - 1 3 7 6 7 7 -2 2 , , 6 3 9 1 2 6 -5 -4 3 4 7 - - 1 2 4 28 0 -1 3 6 1 6 3 -1 -4 1 8 8 -1 -8 13 0 -1 - 0 3 1 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 -146,214 -12,164 -36,507 -34,915 -62,628 -56,325 18 Bank-reported claims 4,763 22,314 32,238 28,601 5,595 7,335 -9,293 -9,062 19 Nonbanfc-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 -57,871 -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 23,962 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 liabilities 1,177 2,572 1,666 -438 158 1,121 825 1,096 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 assets 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 liabilities 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 7,996 ' 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 2,969 8,093 8,073 34 Allocation of special drawing rights 0 0 0 0 0 0 0 0 35 Discrepancy 15,737 9,739 -8,427 4,047 4,712 36 Due to seasonal adjustment -39,670 -17,108 21,096 6,105 435 -6,643 103 5,719 37 Before seasonal adjustment 9,632 9,304 -1,785 3,944 -1,007 -39,670 -17,108 2i,096 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) 5,763 3,901 -1,379 -983 822 -544 -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 • September 1994 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data seasonally adjusted 1993 1994 IItteemm 11999911 11999922 11999933 Nov. Dec. Jan. Feb. Mar. Apr. MayP 1 Goods and services, balance -28,472 -40,384 -75,725 -7,534 -4,526 -7,780 -9,609 -6,875 -8,528 -9,174 2 Merchandise -74,068 -96,097 -132,575 -11,522 -9,115 -11,971 -13,541 -11,450 -13,337 -14,073 3 Services 45,596 55,713 56,850 3,988 4,589 4,191 3,932 4,575 4,809 4,899 4 Goods and services, exports 580,127 616,924 641,677 54,464 56,727 53,479 52,645 58,072 56,152 56,273 5 Merchandise 416,913 440,361 456,866 39,364 40,953 38,530 37,426 42,060 40,378 40,449 6 Services 163,214 176,563 184,811 15,100 15,774 14,949 15,219 16,012 15,774 15,824 7 Goods and services, imports -608,599 -657,308 -717,402 -61,998 -61,253 -61,259 -62,254 -64,947 -64,680 -65,447 8 Merchandise -490,981 -536,458 -589,441 -50,886 -50,068 -50,501 -50,967 -53,510 -53,715 -54,522 9 Services -117,618 -120,850 -127,961 -11,112 -11,185 -10,758 -11,287 -11,437 -10,965 -10,925 MEMO 10 Balance on merchandise trade, Census basis -66,723 -84,501 -115,568 -9,895 -7,782 -10,850 -12,072 -9,583 -12,045 -12,678 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 AAsssseett 11999900 11999911 11999922 Dec. Jan. Feb. Mar. Apr. May Junep 1 Total 83,316 77,719 71,323 73,442 74,243 75,766 76,809 76,565 74,420 75,732 2 Gold stock, including Exchange Stabilization Fund1 11,058 11,057 11,056 11,053 11,053 11,053 11,052 11,053 11,052 11,052 3 Special drawing rights • 10,989 11,240 8,503 9,039 9,070 9,295 9,383 9,440 9,522 9,731 4 Reserve position in International Monetary Fund 9,076 9,488 11,759 11,818 11,906 11,974 12,135 11,899 11,841 12,184 5 Foreign currencies 52,193 45,934 40,005 41,532 42,214 43,444 44,239 44,173 42,005 42,765 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 Dec. Jan. Feb. Mar. Apr. May Junep 1 Deposits 369 968 205 386 257 190 454 171 174 604 Held in custody 2 U.S. Treasury securities 278,499 281,107 314,481 379,394 388,065 393,238 399,817 396,495 402,170 411,580 3 Earmarked gold 13,387 13,303 13,118 12,327 12,302 12,238 12,145 12,104 12,065 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 Nov. Dec. Jan. Feb. Mar.r Apr. 1 Total1 360,530 398,816 457,075 468,786 478,554 477,939 479,380 465,339 By type 2 Liabilities reported by banks in the United States . 38,396 54,967 67,964 69,648 78,546 77,998 79,786 74,681 3 U.S. Treasury bills and certificates3 92,692 104,596 144,865 150,900 146,940 143,222 148,707 140,653 U.S. Treasury bonds and notes 4 Marketable 203,677 210,553 208,154 211,791 216,075 220,120 215,069 214,429 5 Nonmarketable4 4,858 4,532 5,615 5,652 5,689 5,725 5,763 5,799 6 U.S. securities other than U.S. Treasury securities5 20,907 24,168 30,477 30,795 31,304 30,874 30,055 29,777 By area 7 Europe 171,317 191,708 208,694 209,143 216,698 210,655 217,448 212,799 8 Canada 7,460 7,920 8,657 9,505 10,084 9,844 8,328 8,121 9 Latin America and Caribbean 33,554 40,025 50,420 57,960 57,671 61,313 55,451 46,487 10 Asia 139,465 152,276 182,462 185,319 187,362 189,050 191,421 191,045 11 Africa 2,092 3,565 3,650 3,894 3,681 4,043 3,560 3,533 12 Other countries6 6,640 3,320 3,190 2,963 3,056 3,032 3,170 3,352 1. Includes the Bank for International Settlements. 5. Debt securities of U.S. government corporations and federally sponsored 2. Principally demand deposits, time deposits, bankers acceptances, commer- agencies, and U.S. corporate stocks and bonds. cial paper, negotiable time certificates of deposit, and borrowings under repur- 6. Includes countries in Oceania and Eastern Europe. chase agreements. SOURCE. Based on Treasury Department data and on data reported to the 3. Includes nonmarketable certificates of indebtedness (including those payable Treasury Department by banks (including Federal Reserve Banks) and securities in foreign currencies through 1974) and Treasury bills issued to official institutions dealers in the United States and on the 1984 benchmark survey of foreign portfolio of foreign countries. investment in the United States. 4. Excludes notes issued to foreign official nonreserve agencies. Includes bonds and notes payable in foreign currencies; zero coupon bonds are included at current value. 3.16 LIABILITIES TO, AND CLAIMS ON, FOREIGNERS Reported by Banks in the United States1 Payable in Foreign Currencies Millions of dollars, end of period 1993r 1994 IItteemm 11999900 11999911 11999922 June Sept. Dec. Mar/ 1 Banks' liabilities 70,477 75,129 72,796 75,221 81,225 77,627 85,486 2 Banks' claims 66,796 73,195 62,799 55,549 59,136 59,151 72,187 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 35,085 38,206 39,772 54,069 5 Claims of banks' domestic customers 6,309 3,398 4,432 2,775 2,494 3,058 3,655 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 • September 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 Nov. Dec. Jan.r Feb. Mar. Apr.' Mayp HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 756,066 810,259 911,762r 902,554' 911,762r 895,879 920,638r 951,083r 958,489 959,781 2 Banks' own liabilities 575,374 606,444 620,865r 616,209 620,865r 609,542 631,501r 649,489' 666,899 665,122 3 Demand deposits 20,321 21,828 21,575' 25,466r 21,575r 23,644 24,417r 22,905 23,509 27,749 4 Time deposits 159,649 160,385 175,117r 157,014r 175,117r 159,421 159,743r 176,747' 177,916 182,895 5 Other. 66,305 93,237 109,957r 126,826r 109,957' 129,411 136,096' 112,5191 124,531 123,492 6 Own foreign offices 329,099 330,994 314,216r 306,903r 314,216r 297,066 311,245r 337,318' 340,943 330,986 7 Banks' custodial liabilities5 180,692 203,815 290,897r 286,345r 290,897r 286,337 289,137r 301,594' 291,590 294,659 8 U.S. Treasury bills and certificates6 110,734 127,644 176,430 169,729 176,430 170,694 166,980 173,137 167,891 160,573 9 Other negotiable and readily transferable instruments 18,664 21,974 36,078 38,555 36,078 37,329 41,892 41,727 38,151 48,705 10 Other 51,294 54,197 78,389r 78,061r 78,389r 78,314 80,265r 86,730' 85,548 85,381 11 Nonmonetary international and regional organizations 8,981 9,350 10,935r 12,965 10,935r 11,318 7,299r 8,086' 5,912 8,336 12 Banks' own liabilities 6,827 6,951 5,639r 9,091 5,639r 7,304 5,924r 5,641' 4,328 6,410 13 Demand deposits 43 46 15 34 15 172 yxf 209 26 35 14 Time deposits 2,714 3,214 2,780 2,863 2,780 3,665 2,533r 2,482' 2,411 2,758 15 Other3 4,070 3,691 2,844r 6,194 2,844r 3,467 3,071r 2,950' 1,891 3,617 16 Banks' custodial liabilities5 2,154 2,399 5,296 3,874 5,296 4,014 1,375 2,445 1,584 1,926 17 U.S. Treasury bills and certificates 1,730 1,908 4,275 3,201 4,275 3,497 1,321 22,,009977 11,,335588 857 18 Other negotiable and readily transferable instruments7 424 486 1,021 672 1,021 517 54 338 226 1,069 19 Other 0 5 0 1 0 0 0 10 0 0 20 Official institutions9 131,088 159,563 220,548r 212,829 220,548r 225,486 221,220 228,493 215,334 211,010 21 Banks' own liabilities 34,411 51,202 64,071r 62,168 64,071r 71,531 67,369 67,085 64,668 64,348 22 Demand deposits 2,626 1,302 1,601 2,089 1,601 1,631 1,406 1,758 1,504 1,435 23 Time deposits 16,504 17,939 21,654r 17,208r 21,654r 20,237 20,028 23,923 22,050 24,384 24 Other3 15,281 31,961 40,816r 42,871r 40,816r 49,663 45,935 41,404 41,114 38,529 25 Banks' custodial liabilities5 96,677 108,361 156,477 150,661 156,477 153,955 153,851 161,408 150,666 146,662 26 U.S. Treasuiy bills and certificates 92,692 104,596 115500,,990000 114444,,886655 115500,,990000 114466,,994400 114433,,222222 114488,,770077 114400,,665533 113344,,556688 27 Other negotiable and readily transferable instruments 3,879 3,726 5,482 5,614 5,482 6,855 10,527 12,414 9,969 12,050 28 Other 106 39 95 182 95 160 102 287 44 44 29 Banks10 522,265 547,320 579,467r 571,642' 579,467r 554,851 585,118r 609,371' 622,531 625,685 30 Banks' own liabilities 459,335 476,117 474,602r 468,526 474,602r 451,239 479,177' 497,562' 514,480 510,462 31 Unaffiliated foreign banks 130,236 145,123 160,386 161,623r 160,386 154,173 167,932r 160,244' 173,537 179,476 32 Demand deposits 8,648 10,170 9,719 13,373r 9,719 11,031 11,986 10,609 11,656 15,435 33 Time deposits 82,857 90,296 105,192 92,265 105,192 87,788 92,40lr 104,664' 107,433 108,926 34 Other. 38,731 44,657 45,475 55,985r 45,475 55,354 63,545 44,971' 54,448 55,115 35 Own foreign offices4 329,099 330,994 314,216r 306,903r 314,216r 297,066 311,245' 337,318' 340,943 330,986 36 Banks' custodial liabilities5 62,930 71,203 104,865r 103,116r 104,865r 103,612 105,941' 111,809' 108,051 115,223 37 U.S. Treasury bills and certificates6 7,471 11,087 10,707 10,539 10,707 99,,883322 1111,,005511 1100,,774455 1100,,007799 11,036 38 Other negotiable and readily transferable instruments7 5,694 7,555 16,810 17,124 16,810 17,136 17,010 17,383 15,684 22,021 39 Other 49,765 52,561 77,348r 75,453r 77,348r 76,644 77,88C 83,681' 82,288 82,166 40 Other foreigners 93,732 94,026 100,812r 105,118 100,812r 104,224 107,001 105,133' 114,712 114,750 41 Banks' own liabilities 74,801 72,174 76,553' 76,424 76,553r 79,468 79,031 79,201' 83,423 83,902 42 Demand deposits 9,004 10,310 10,240r 9,970 10,240r 10,810 10,705 10,329 10,323 10,844 43 Time deposits 57,574 48,936 45,491r 44,678 45,491r 47,731 44,781 45,678' 46,022 46,827 44 Other. 8,223 12,928 20,822 21,776 20,822 20,927 23,545 23,194 27,078 26,231 45 Banks' custodial liabilities5 18,931 21,852 24,259 28,694 24,259 24,756 27,970 25,932 31,289 30,848 46 U.S. Treasury bills and certificates 8,841 10,053 10,548 11,124 10,548 1100,,442255 1111,,338866 1111,,558888 1155,,880011 1144,,111122 47 Other negotiable and readily transferable instruments 8,667 10,207 12,765 15,145 12,765 12,821 14,301 11,592 12,272 13,565 48 Other 1,423 1,592 946 2,425 946 1,510 2,283 2,752 3,216 3,171 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 7,456 9,111 17,567 17,089 17,567 17,509 17,929 19,209 17,961 26,385 1. Reporting banks include all types of depository institution, as well as some 6. Includes nonmarketable certificates of indebtedness and Treasury bills brokers and dealers. issued to official institutions of foreign countries. 2. Excludes negotiable time certificates of deposit, which are included in 7. Principally bankers acceptances, commercial paper, and negotiable time "Other negotiable and readily transferable instruments." certificates of deposit. 3. Includes borrowing under repurchase agreements. 8. Principally the International Bank for Reconstruction and Development, the 4. For U.S. banks, includes amounts owed to own foreign branches and foreign Inter-American Development Bank, and the Asian Development Bank. Excludes subsidiaries consolidated in Consolidated Report of Condition filed with bank "holdings of dollars" of the International Monetary Fund. regulatory agencies. For agencies, branches, and majority-owned subsidiaries of 9. Foreign central banks, foreign central governments, and the Bank for foreign banks, consists principally of amounts owed to head office or parent International Settlements. foreign bank, and foreign branches, agencies, or wholly owned subsidiaries of 10. Excludes central banks, which are included in "Official institutions." head office or parent foreign bank. 5. Financial claims on residents of the United States, other than long-term securities, held by or through reporting banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A57 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1—Continued 1992 1993r Nov. Dec. Feb. Mar. Apr. Mayp AREA 1 Total, all foreigners 756,066 810,259 911.762 902,554 911.762 895,879 920,638R 951,083R 958,489' 959,781 2 Foreign countries 747,085 800,909 900,827 889,589 900,827 884,561 913,339' 942,997R 952,577' 951,445 3 Europe 249,097 307,670 376,532 369,394 376,532 368,666 393,566r 399,254' 406,295' 404,745 4 Austria 1,193 1,611 1,917 1,797 1,917 2,567 2,159 2,515 2,719 3,309 5 Belgium and Luxembourg 13,337 20,567 28,627 27,518 28,627 29,395 30,617 31,827 32,043 32,600 6 Denmark 937 3,060 4,517 4,151 4,517 5,089 4,829 3,093 3,342 3,207 7 Finland 1,341 1,299 1,872 2,250 1,872 1,843 1,737 1,495 1,932 1,849 8 France 31,808 41,411 39,704 36,637 39,704 32,243 38,426 42,010 43,137 41,962 9 Germany 8,619 18,630 26,613 27,022 26,613 27,567 30,241 31,771 32,704 27,582 10 Greece 765 913 1,519 1,698 1,519 1,338 1,463 1,425 1,160 1,453 11 Italy 13,541 10,041 11,559 10,732 11,559 10,700 12,741 12,786 11,914 13,014 12 Netherlands 7,161 7,365 16,031 14,737 16,031 17,532 17,083 17,686 16,330 18,493 13 Norway 1,866 3,314 2,966 3,167 2,966 2,533 2,340 2,429 2,537 3,278 14 Portugal 2,184 2,465 3,366 3,229 3,366 3,131 3,170 3,131 4,061 2,852 15 Russia 241 577 2,511 2,530 2,511 2,208 2,017 1,971 3,041 4,016 16 Spain 11,391 9,793 20,493 19,705 20,493 19.650 18,119 19,619 18,317 17,477 17 Sweden 2,222 2,953 2,572 2,671 2,572 2,301 2,528r 1,167' 2,532 3,074 18 Switzerland 37,238 39,440 41,533 42,446 41,533 40,796 41,000 39,244 40,988' 40,163 19 Turkey 1,598 2,666 3,227 2,946 3,227 3,119 3,241 2,922 2,972 2,759 20 United Kingdom 100,292 111,805 133.763 135,687 133.763 130,801 148,139r 150,621' 154,533 159,702 21 Yugoslavia11 622 504 570 546 570 549 428 414 407 424 22 Other Europe and former U.S.S.R.12 12,741 29,256 33,172 29,925 33,172 35,304 33,294r 33,128' 31,626' 27,531 23 Canada 21,605 22,420 20,227 24,150 20,227 20,588 23,200 21,404 22,510 25,847 24 Latin America and Caribbean ,529 317,228 348,586 341,299 348,586 344,462 346,783r 359,440' 362,401' 356,687 25 Argentina ,753 9,477 14,477 13,680 14,477 14,485 14,435 13,991 13,246 13,453 26 Bahamas ,622 82,284 72,964 78,199 72,964 71,547 72,430 77,449 80,821 78,985 27 Bermuda ,178 7.079 7,824 7,240 7,824 7,741 6,697 6,181 7,619' 8,110 28 Brazil ,704 5,584 5,301 5,062 5,301 5,121 5,386 5,244 4,867 5,812 29 British West Indies 620 153,033 181,844 176,418 181,844 178,184 176,774' 189,26C 193,645' 187,086 30 Chile 283 3,035 3,183 3,447 3,183 3,551 3,726 3,512 3,829 3,283 31 Colombia 661 4,580 3,171 3,100 3,171 3,714 3,363 3,427 4,002' 3,863 32 Cuba 2 3 33 7 33 34 30 38 9 11 33 Ecuador ,232 993 880 851 880 888 858 822 844 840 34 Guatemala 594 1,377 1.207 1,243 1.207 1,257 1,230 1,169 1,155 1,135 35 Jamaica 231 371 410 401 410 387 421 419 495 526 36 Mexico ,957 19,454 28,018 21,925 28,018 27,645 30,616 27,804 22,358 21,893 37 Netherlands Antilles ,592 5,205 4,195 4,714 4,195 5,129 6,230 5,311 5,031' 7,018 38 Panama ,695 4,177 3,582 3,421 3,582 3,543 3,429 3,388 3,509 3,803 39 Peru ,249 1.080 926 889 926 885 913 873 893 907 40 Uruguay ,096 1,955 1,611 1,634 1,611 1,723 1,534 1,492 1,408 1,462 41 Venezuela ,181 11,387 12,786 13,045 12,786 12,445 12,598 12,968 12,307 12,008 42 Other ,879 6,154 6,174 6,023 6,174 6,183 6,113 6,032 6,363 6,492 43 Asia 120,462 143,540 144,656 144,469 144,656 140,062 139,562 152,462' 149,123' 152,091 China 44 People's Republic of China 2,626 3,202 4,011 3,187 4,011 4,075 4,565 5,294 6,058 5,278 45 Republic of China (Taiwan) 11,491 8,408 10,633 10,960 10,633 9,959 9,475 9,306 8,696 9,817 46 Hong Kong 14,269 18,499 17,233 18,673 17,233 18.651 17,730 18,688 19,092 21,664 47 India 2,418 1,399 1,114 1,425 1,114 1,435 1,127 1,658 1,45c 1,521 48 Indonesia 1.463 1,480 1,986 1,674 1,986 1,807 1,659 2,345 1,802' 1,537 49 Israel 2,015 3,773 4,435 4,581 4,435 4,137 4,628 4,580 4,099 3,460 50 Japan 47,069 58,435 61,483 58,865 61,483 58,606 60,112 66,403 62,274 63,015 5 5 5 5 5 5 1 2 4 3 O T K P M h h t o i h i a d r l e i e i d l p r a a l p e n ( i d S n E e o a s u s t t e h r ) n oil-exporting countries . 1 1 2 2 2 5 6 , , , , , 4 5 2 7 0 4 8 5 5 7 9 7 2 2 1 2 1 3 2 5 1 5 , , , , , 3 2 5 4 7 3 7 8 3 1 7 5 2 7 3 1 1 4 2 6 5 4 , , , , , 0 9 1 8 8 3 1 3 2 5 5 3 7 4 2 1 1 4 6 1 5 7 , , , , , 4 8 2 4 0 0 9 3 8 7 9 9 1 7 8 1 1 4 2 6 5 4 , , , , , 0 9 1 8 8 3 1 3 2 5 5 3 7 4 2 1 1 4 6 1 3 5 , , , , , 7 1 9 1 4 2 0 5 2 7 1 7 6 9 9 1 1 4 5 1 1 5 , , , , , 8 8 8 9 8 5 2 3 1 3 6 0 8 9 3 1 1 4 2 5 3 7 , , , , , 8 5 9 3 5 0 4 8 0 4 8 2 5 5 8 ' 1 1 4 2 5 3 9 , , , , , 6 6 5 6 1 4 1 5 5 8 6 6 0 5 5 ' 1 1 4 2 5 4 7 , , , , , 5 5 7 9 9 2 8 8 7 2 3 8 8 5 5 56 Africa 4,825 5,884 6,634 5,757 6,634 5,818 6,327 5,748 5,812 6,165 57 Egypt 1,621 2,472 2.208 2,088 2.208 1,959 2,058 11,,665588 1,687 1,983 58 Morocco 79 76 99 110 99 94 73 8899 76 93 59 South Africa 228 190 451 272 451 214 294 285 331 230 60 Zaire 31 19 12 10 12 13 8 11 11 8 61 Oil-exporting countries 1,082 1,346 1,303 1,446 1,303 1,186 1,433 1,139 983 1,057 62 Other 1,784 1,781 2,561 1,831 2,561 2,352 2,461 2,566 2,724 2,794 63 Other 5,567 4,167 4,192 4,520 4,192 4,965 3,901 4,689 6,436' 5,910 64 Australia 4.464 3,043 3,308 3,317 3,308 3,807 2,511 3,006 2,991 2,795 65 Other 1,103 1,124 1,203 884 1,158 1,390 1,683 3,445' 3,115 66 Nonmonetary international and regional organizations 8,981 9,350 10,935 12,965 10,935 11,318 7,299r 8,086' 5,912' 8,336 67 International15 6,485 7,434 6,850 9,094 6,850 6,806 6,06C 6,375 4,249 5,607 68 Latin American regional16 1,181 1,415 3,218 3,050 3,218 3,402 357 33C 393' 909 69 Other regional17 1,315 501 867 821 867 1,110 882 1,381 1,270 1,820 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, ana 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 • September 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 AArreeaa aanndd ccoouunnttrryy 11999911 11999922 11999933 Nov. Dec. Jan.' Feb.' Mar.' Apr.' Mayp 1 Total, ail foreigners 514,339 499,437 483,135r 468,985' 483,135' 470,964 477,605 474,619 475,846 472,153 2 Foreign countries 508,056 494,355 480,730r 466,784' 480,730r 467,810 476,011 472,699 474,662 470,427 3 Europe 114,310 123,377 121,033' 120,647' 121,033' 114,312 124,643 129,788 124,766 123,611 4 Austria 327 331 413 501 413 720 598 489 420 486 5 Belgium and Luxembourg 6,158 6,404 6,535 5,911 6,535 5,169 6,327 6,766 6,765 6,386 6 Denmark 686 707 382 1,261 382 507 600 612 896 1,223 7 Finland 1,907 1,418 598 606 598 699 725 570 647 669 8 France 15,112 14,723 11,490 11,622 11,490 11,705 11,033 11,481 11,398 13,092 9 Germany 3,371 4,222 7,683 6,961 7,683 7,364 7,966 8,164 9,374 8,303 10 Greece 553 717 679 684 679 653 669 736 720 682 11 Italy 8,242 9,047 8,876 8,402 8,876 8,950 8,477 7,658 6,370 6,749 12 Netherlands 2,546 2,468 3,063' 3,606' 3,063' 3,877 2,821 2,945 2,575 3,272 13 Norway 669 355 3% 598 396 738 777 531 598 605 14 Portugal 344 325 720 787 720 805 918 936 846 835 15 Russia 1,970 3,147 2,295 2,295 2,295 2,142 2,005 1,961 1,862 1,642 16 Spain 1,881 2,755 2,763 4,388 2,763 3,299 2,688 2,666 1,859 2,828 17 Sweden 2,335 4,923 4,100 3,531 4,100 3,704 3,608 3,443 3,313 3,420 18 Switzerland 4,540 4,717 6,567 5,946 6,567 7,177 4,535 8,602 5,577 6,486 19 Turkey 1,063 962 1,287 1,790 1,287 1,118 1,565 1,559 1,542 1,320 20 United Kingdom 60,395 63,430 60,928' 59,416' 60,928' 53,142 66,977 68,238 67,404 63,226 21 Yugoslavia2^. 825 569 536 534' 536 470 414 376 364 361 22 Other Europe and former U.S.S.R.3 1,386 2,157 1,722 1,808 1,722 2,073 1,940 2,055 2,236 2,026 23 Canada 15,113 13,845 18,408' 15,456' 18,408' 19,103 16,864 16,966 17,920 17,108 24 Latin America and Caribbean 246,137 218,078 223,977' 216,927' 223,977' 226,236 226,467 219,940 219,592 219,162 25 Argentina 5,869 4,958 4,425 4,518 4,425 4,569 4,459 4,640 5,133 5,136 26 Bahamas 87,138 60,835 65,045 63,242 65,045 66,411 65,439 66,020 66,234 64,974 27 Bermuda 2,270 5,935 8,032 7,565 8,032 10,234 9,969 8,342 8,837 6,591 28 Brazil 11,894 10,773 11,803 11,677 11,803 12,719 13,005 12,916 11,455 11,970 29 British West Indies 107,846 101,507 97,930 93,027' 97,930 94,355 95,230 91,938 91,387 93,834 30 Chile 2,805 3,397 3,614 3,728 3,614 3,546 3,763 3,640 3,455 3,353 31 Colombia 2,425 2,750 3,179 3,040 3,179 3,241 3,053 3,057 3,263 3,228 32 Cuba 0 0 0 0 0 0 2 0 0 0 33 Ecuador 1,053 884 673 704 673 679 722 703 679 674 34 Guatemala 228 262 286 286 286 316 294 289 273 280 35 Jamaica 158 162 195 186 195 180 176 163 191 198 36 Mexico 16,567 14,991 15,843' 16,073 15,843' 16,516 16,902 16,201 16,267 16,444 37 Netherlands Antilles 1,207 1,379 2,367 3,048 2,367 3,115 3,093 2,411 2,769 2,873 38 Panama 1,560 4,654 2,913 2,625 2,913 2,843 2,983 2,490 2,538 2,335 39 Peru 739 730 651 620 651 693 726 751 807 898 40 Uruguay 599 936 951 918 951 793 742 530 491 535 41 Venezuela 2,516 2,525 2,904 2,888' 2,904 2,763 2,709 2,662 2,532 2,459 42 Other 1,263 1,400 3,166 2,782 3,166 3,263 3,200 3,187 3,281 3,380 43 125,262 131,789 110,684 107,541 111100,,668844 110011,,555511 110011,,666611 9988,,998877 110055,,336677 110033,,884433 China 44 People's Republic of China 747 906 2,299 706 2,299 881 842 796 843 802 45 Republic of China (Taiwan) 2,087 2,046 2,628 2,005' 2,628 2,611 1,487 2,159 1,815 2,024 46 Hong Kong 9,617 9,642 10,864 10,449 10,864 10,224 9,990 11,666 9,903 8,996 47 India 441 529 589 657 589 638 664 737 684 738 48 Indonesia 952 1,189 1,522 1,474 1,522 1,595 1,571 1,647 1,545 1,370 49 Israel 860 820 826 787 826 947 798 664 676 711 50 Japan 84,807 79,172 59,576 59,934 59,576 54,164 54,583 49,771 54,905 53,117 51 Korea (South) 6,048 6,179 7,556 7,148 7,556 7,373 7,518 7,479 7,441 7,402 52 Philippines 1,910 2,145 1,408 1,265 1,408 1,132 1,183 1,307 924 913 53 Thailand 1,713 1,867 2,154 2,108' 2,154 2,481 2,649 2,764 2,744 2,925 54 Middle Eastern oil-exporting countries4 8,284 18,540 14,398 13,853 14,398 12,903 13,190 14,153 16,387 18,331 55 Other 7,796 8,754 6,864 7,155 6,864 6,602 7,186 5,844 7,500 6,514 56 Africa 4,928 4,279 3,819 3,799 3,819 3,751 3,775 3,698 3,680 3,692 57 Egypt 294 186 196 218 196 203 227 205 206 219 58 Morocco 575 441 444 437 444 489 521 518 472 470 59 South Africa 1,235 1,041 633 664 633 581 558 565 557 574 60 Zaire 4 4 4 4 4 4 6 4 5 5 61 Oil-exporting countries5 1,298 1,002 1,128 1,119 1,128 1,169 1,197 1,210 1,207 1,211 62 Other 1,522 1,605 1,414 1,357 1,414 1,305 1,266 1,196 1,233 1,213 63 Other 2,306 2,987 2,809 2,414 2,809 2,857 2,601 3,320 3,337 3,011 64 Australia 1,665 2,243 2,072 1,873 2,072 2,030 1,692 1,684 1,859 1,369 65 Other 641 744 737 541 737 827 909 1,636 1,478 1,642 66 Nonmonetary international and regional organizations6 6,283 55,,008822 2,405 2,201 2,405 3,154 1,594 1,920 1,184 1,726 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 1993r 1994 CCllaaiimm 11999911 11999922 11999933rr Nov. Dec. Jan.r Feb/ Mar/ Apr/ Mayp 11 TToottaall 579,683 559,495 523,545 523,545 522,421 22 BBaannkkss'' ccllaaiimmss 514,339 499,437 483,135 468,985 483,135 470,964 477,605 474,619 475,846 472,153 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 37,126 31,367 28,814 29,595 28,814 30,718 26,554 25,742 25,093 22,556 44 OOwwnn ffoorreeiiggnn ooffffiicceess 318,800 303,991 286,819 280,328 286,819 275,549 273,763 280,578 280,113 284,198 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 116,602 109,342 98,012 91,968 98,012 91,129 97,871 94,699 96,773 98,371 66 DDeeppoossiittss 69,018 61,550 46,885 43,959 46,885 40,664 45,813 44,151 47,924 50,317 77 OOtthheerr 47,584 47,792 51,127 48,009 51,127 50,465 52,058 50,548 48,849 48,054 88 AAllll ootthheerr ffoorreeiiggnneerrss 41,811 54,737 69,490 67,094 69,490 73,568 79,417 73,600 73,867 67,028 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss33...... 65,344 60,058 40,410 40,410 47,802 1100 DDeeppoossiittss 15,280 15,452 9,619 9,619 14,022 1111 NNeeggoottiiaabbllee aanndd rreeaaddiillyy ttrraannssffeerraabbllee iinnssttrruummeennttss 37,125 31,474 17,155 17,155 20,340 1122 OOuuttssttaannddiinngg ccoolllleeccttiioonnss aanndd ootthheerr ccllaaiimmss 12,939 13,132 13,636 13,636 13,440 MMEEMMOO 1133 CCuussttoommeerr lliiaabbiilliittyy oonn aacccceeppttaanncceess 8,974 8,655 7,871 7,871 7,568 1144 DDoollllaarr ddeeppoossiittss iinn bbaannkkss aabbrrooaadd,, rreeppoorrtteedd bbyy nnoonnbbaannkkiinngg bbuussiinneessss eenntteerrpprriisseess iinn tthhee UUnniitteedd SSttaatteess 43,024 36,213 22,724 21,919 22,724 21,622 21,294 21,920 21,363 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 ana 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, ana 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 Juner Sept/ Dec. Mar. 1 Total 206,903 195,302 195,119 182,785 189,470 194,776r 193,187 By borrower 2 Maturity of one year or less 165,985 162,573 163,325 154,276 161,925 166,226r 166,343 3 Foreign public borrowers 19,305 21,050 17,813 17,962 21,211 17,447 15,904 4 All other foreigners 146,680 141,523 145,512 136,314 140,714 148,779' 150,439 5 Maturity of more than one year 40,918 32,729 31,794 28,509 27,545 28,550 26,844 6 Foreign public borrowers 22,269 15,859 13,266 11,101 10,341 10,828 9,554 7 All other foreigners 18,649 16,870 18,528 17,408 17,204 17,722 17,290 By area Maturity of one year or less 8 Europe 49,184 51,835 53,300 54,376 57,240 56,299r 58,843 9 Canada 5,450 6,444 6,091 7,878 9,816 7,540" 7,284 10 Latin America and Caribbean 49,782 43,597 50,376 48,532 51,559 56,622' 58,664 11 53,258 51,059 45,709 38,649 37,619 40,274 35,961 12 Africa 3,040 2,549 1,784 1,712 1,916 1,783 1,611 13 All other3 5,272 7,089 6,065 3,129 3,775 33,,770088 3,980 Maturity of more than one year 14 Europe 3,859 3,878 5,367 4,579 4,433 4,327 3,822 15 Canada 3,290 3,595 3,287 2,909 2,549 2,553 2,548 16 Latin America and Caribbean 25,774 18,277 15,312 13,674 13,353 13,877 13,319 17 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 • September 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 320.1 343.6 351.7 358.7 344.5 346.5 361.1 377.0 388.1 403.7 496.7 2 G-10 countries and Switzerland 132.2 137.6 130.9 135.6 136.0 132.9 142.4 150.0 153.3 161.0 177.8 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 84.5 69.8 11 Canada 5.9 5.8 6.5 6.5 6.3 6.3 8.2 8.0 9.7 6.7 7.7 12 Japan 24.0 22.6 21.1 18.7 18.9 19.3 20.4 17.9 16.8 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 IS 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 16.7 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 5.1 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 77.0 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 14.4 9.6 10.8 10.6 10.8 10.8 11.6 12.3 11.7 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 .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 3.3 3.0 3.6 3.8 3.6 3.2 3.1 3.1 2.9 3.2 3.9 42 .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 .4 .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 ..00 .0 51 Other Africa3 1.0 .7 .7 .6 .9 1.0 .8 .9 .8 ..88 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 .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 72.5 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 16.9 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 Type of liability and area or country 1992r Dec. Mar. Sept. Dec. 1 Total 46,043 44,708 44,979 44,979"" 45,832r 46,155r 48,184r 48,596r 2 Payable in dollars 40,786 39,029 37,250 37,250r 37,870r 37,002r 39,286r 37,857r 3 Payable in foreign currencies 5,257 5,679 7,729 1,129 7,962r 9,153r 10,739r By type 4 5 Fin P a a n y c a i b a l l e li i a n b d il o it l i l e a s r s 2 1 1 6 , , 0 9 6 7 6 9 2 1 2 8 , , 5 1 1 0 8 4 2 1 3 6 , , 0 7 9 5 8 4 2 1 3 6 , , 0 7 9 5 8 4 r r 2 1 3 7 , , 6 1 7 5 0 2 r r 2 1 4 6 , ,9 4 1 9 0 7 * r 2 1 6 8 , ,6 1 8 6 0 1r * 2 1 7 8 , , 5 1 0 5 7 2 r r 6 Payable in foreign currencies 4,087 4,414 6,344 6,344r 6,518r 7,587r 7,48 lr 9,355r 7 Commercial liabilities 24,977 22,190 21,881 21,881r 22,162r 21,658r 22,023r 21,089r 8 9 A Tr d a v d a e n p ce a y r a e b c l e e i s p ts and other liabilities 1 14 0 , , 2 6 9 8 4 3 1 9 2 , , 2 9 5 3 2 8 1 9 2 , , 7 1 7 0 7 4 1 9 2 , , 1 1 1 0 1 4 ' r 1 9 2 , , 9 2 1 4 5 7 r r 1 9 2 , , 6 0 1 4 4 4 r r 1 9 2 , , 4 5 5 6 6 7 r r 1 9 2 , ,0 00 8 7 2 r 10 Payable in dollars 23,807 20,925 20,496 20,496r 20,718r 20,092r 20,606r 19,705r 11 Payable in foreign currencies 1,170 1,265 1,385 1,385 l,444r 1,566 l,417r l,384r By area or country Financial liabilities 12 Europe 10,978 12,003 13,128 13,128r 13,488r 14,120r 16,366r 17,884r 13 Belgium and Luxembourg 394 216 414 414 306 268 278 175 14 France 975 2,106 1,623 l,623r l,625r 2,216 2,074 2,323 15 Germany 621 682 810 810 820 787 779 902 16 Netherlands 1,081 1,056 606 606 639 585 573 534 17 Switzerland 545 408 569 569 503 491 378 634 18 United Kingdom 6,357 6,528 8,430 8,430r 9,035r 9,118r ll,694r 12,712r 19 Canada 229 292 544 544r 604r 492 663 859 20 Latin America and Caribbean 4,153 4,784 4,053 4,053 4,299 4,199 3,719 3,359 2 2 2 2 3 1 B B B r e a a r h z m a il m u d a a s 37 0 0 1 5 1 3 1 7 6 4 3 1 6 1 1 9 4 9 3 1 6 1 1 9 4 9 5 1 2 1 1 1 4 8 4 1 2 2 1 6 4 8 1,3 1 0 1 1 1 4 8 1,14 1 8 0 8 24 British West Indies 3,160 3,524 2,860 2,860 2,970 2,951 1,600 1,533 25 Mexico 5 7 12 12 13 11 15 17 26 Venezuela 4 4 6 6 5 5 5 5 27 Asia 5,295 5,381 5,334 5,334r 5,213r 5,516r 5,263r 5,243r 28 Japan 4,065 4,116 4,266 4,266r 4,202r 4,334r 4,234r 4,174r 29 Middle East oil-exporting countries 5 13 19 19 24 19 23 23 30 Africa 0 2 6 4 6 0 6 0 0 6 1 1 3 2 0 3 1 1 3 2 2 4 1 1 3 2 3 3 31 Oil-exporting countries3 32 All other4 Commercial liabilities 10,310 8,701 7,398 7,398r 6,992r 6,807r 7,051r 6,825r 3 3 4 3 Eu B ro el p g e i um and Luxembourg 1,2 2 1 7 8 5 1,0 2 3 4 9 8 7 2 0 9 0 8 2 7 9 0 8 0 r r 1 2 0 6 1 4 ' r u26s9' r 6 2 4 5 3 1 ' ' 6 2 4 4 8 0 3 3 3 3 3 5 6 7 8 9 G F S N U w r e n e a r t i i n h t m t e z c e d a e e r r n l l K a y a n i n n d d s g dom 2 1 , , 7 2 8 7 9 7 7 4 2 0 5 4 2 1 , , 2 0 5 7 9 7 5 1 7 5 2 0 2,5 7 3 5 0 2 5 3 5 9 0 5 2,5 7 3 5 2 0 5 3 9 5 5 0 r r r 2, 6 1 5 4 5 1 3 7 0 7 9 2 r r 2,1 6 5 4 8 0 7 4 3 6 7 1 r r 2,3 5 5 6 1 7 3 0 9 1 6 1 r 2,0 6 3 6 5 8 7 8 4 5 1 7 r 40 Canada 1,261 1,014 1,002 1,002 1,005 942r 847 883' 41 Latin America and Caribbean 1,672 1,355 1,533 l,533r 1,776 1,828 1,759 1,661 42 Bahamas 12 3 3 3 11 6 4 21 43 Bermuda 538 310 307 307 429 356 340 348 44 Brazil 145 219 209 209 236 226 214 216 45 British West Indies 30 107 33 33 34 16 36 26 46 Mexico 475 307 457 457 553 659 577 485 47 Venezuela 130 94 142 142 171 172 173 126 48 Asia 9,483 9,334 10,805 10,805' 10,988r 10,764r ll,146r 10,665r 49 Japan . 3,651 3,721 3,823 3,823r 3,940r 3,634r 3,956r 4,158r 50 Middle Eastern oil-exporting countries2' 2,016 1,498 1,889 1,889 1,796 1,815 l,968r l,525r 51 Africa 844 715 568 568 675 665 641 463r 52 Oil-exporting countries 422 327 309 309 322 378 320 171r 53 Other4 1,406 1,071 575 575 726 652 579 592 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 • September 1994 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1992r 1993r 1994 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11999900 11999911 11999922rr Dec. Mar. June Sept. Dec. Mar.P 1 Total 35,348 45,262 42,312 42,312 46,442 42,203 42,781 43,115 42,732 2 Payable in dollars 32,760 42,564 39,526 39,526 43,337 38,850 39,333 39,805 39,206 3 Payable in foreign currencies 2,589 2,698 2,786 2,786 3,105 3,353 3,448 3,310 3,526 By type 4 Financial claims 19,874 27,882 23,779 23,779 26,436 22,243 23,753 23,191 23,067 5 Deposits 13,577 20,080 15,136 15,136 16,576 11,758 13,361 13,049 13,621 6 Payable in dollars 12,552 19,080 14,313 14,313 15,461 10,799 12,366 12,215 12,722 7 Payable in foreign currencies 1,025 1,000 823 823 1,115 959 995 834 899 8 Other financial claims 6,297 7,802 8,643 8,643 9,860 10,485 10,392 10,142 9,446 9 Payable in dollars 5,280 6,910 7,724 7,724 8,939 9,373 9,472 9,150 8,382 10 Payable in foreign currencies 1,017 892 919 919 921 1,112 920 992 1,064 11 Commercial claims 15,475 17,380 18,533 18,533 20,006 19,960 19,028 19,924 19,665 12 Trade receivables 13,657 14,468 15,976 15,976 17,652 17,477 16,050 16,980 16,829 13 Advance payments and other claims 1,817 2,912 2,557 2,557 2,354 2,483 2,978 2,944 2,836 14 Payable in dollars 14,927 16,574 17,489 17,489 18,937 18,678 17,495 18,440 18,102 15 Payable in foreign currencies 548 806 1,044 1,044 1,069 1,282 1,533 1,484 1,563 By area or country Financial claims 16 Europe 9,645 13,441 9,315 99,,331155 10,382 9,715 8,371 8,042 7,347 17 Belgium and Luxembourg 76 13 8 88 67 74 70 131 122 18 France 371 269 764 764 905 781 708 749 753 19 Germany 367 283 326 326 388 383 362 472 441 20 Netherlands 265 334 515 515 544 499 485 483 503 21 Switzerland 357 581 490 490 478 494 512 506 520 22 United Kingdom 7,971 11,534 6,236 6,236 6,968 6,550 5,227 4,538 3,916 23 Canada 2,934 2,642 1,714 1,714 2,011 1,795 1,617 1,851 2,534 24 Latin America and Caribbean 6,201 10,717 11,302 11,302 9,926 6,976 10,306 10,943 10,108 25 Bahamas 1,090 827 658 658 320 742 550 496 481 26 Bermuda 3 8 40 40 79 258 197 125 34 27 Brazil 68 351 686 686 592 590 590 599 567 28 British West Indies 4,635 9,056 9,297 9,297 8,310 4,692 8,134 8,645 8,049 29 Mexico 177 212 435 435 399 455 543 634 617 30 Venezuela 25 40 29 29 23 24 25 161 26 31 Asia 860 640 864 864 3,362 3,015 2,755 1,779 2,623 32 Japan 523 350 668 668 3,123 2,485 2,215 1,063 1,769 33 Middle East oil-exporting countries2 8 5 3 3 3 10 5 3 5 34 Africa 37 57 79 79 128 125 88 99 76 35 Oil-exporting countries3 0 1 9 9 1 1 1 1 0 36 All other4 195 385 505 505 627 617 616 477 379 Commercial claims 37 Europe 7,044 8,193 8,444 8,444 8,905 9,044 8,177 8,809 8,392 38 Belgium and Luxembourg 212 194 189 189 170 173 163 183 171 39 France 1,240 1,585 1,537 1,537 1,492 1,504 1,429 1,932 1,815 40 Germany 807 955 933 933 1,025 1,042 934 997 918 41 Netherlands 555 645 552 552 734 565 408 415 350 42 Switzerland 301 295 362 362 437 442 376 424 402 43 United Kingdom 1,775 2,086 2,094 2,094 2,360 2,554 2,287 2,239 2,144 44 Canada 1,074 1,121 1,281 1,281 1,329 1,356 1,357 1,350 1,441 45 Latin America and Caribbean 2,375 2,655 3,043 3,043 3,473 3,454 3,063 3,196 3,437 46 Bahamas 14 13 28 28 18 17 20 11 11 47 Bermuda 246 264 255 255 195 239 225 173 212 48 Brazil 326 427 357 357 836 788 407 460 406 49 British West Indies 40 41 40 40 17 43 39 70 58 50 Mexico 661 842 924 924 997 911 858 936 958 51 Venezuela 192 203 345 345 349 317 286 295 308 52 Asia 4,127 4,591 4,847 4,847 5,419 5,178 5,505 5,587 5,483 53 Japan 1,460 1,899 1,900 1,900 2,158 1,858 2,502 2,126 2,274 54 Middle Eastern oil-exporting countries 460 620 693 693 773 673 456 656 617 55 Africa 488 430 554 554 463 515 493 492 492 56 Oil-exporting countries3 67 95 78 78 75 98 107 71 90 57 Other4 367 390 364 364 417 413 433 490 420 1. For a description of the changes in the international statistics tables, see 3. Comprises Algeria, Gabon, Libya, and Nigeria. Federal Reserve Bulletin, vol. 65, (July 1979), p. 550. 4. Includes nonmonetary international and regional organizations. 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Holdings and Transactions A63 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1994 1993 1994 Transaction and area or country 1992 1993 J M an a . y - Nov. Dec. Jan. Feb. Mar. Apr.r MayP U.S. corporate securities STOCKS 1 Foreign purchases 221,367 319,449 159,542 31,924 32,843 32,238 34,428 36,340 29,851 26,685 2 Foreign sales 226,503 297,913 153,524 28,755 28,362 28,965 30,709 37,079 31,653 25,118 3 Net purchases or sales (—) -5,136 21,536 6,018 3,169 4,481 3,273 3,719 -739 -1,802 1,567 4 Foreign countries -5,169 21,264 6,080 3,099 4,457 3,273 3,786 -737 -1,800 1,558 5 Europe -4,927 10,615 8,787 1,407 2,415 2,951 3,447 379 802 1,208 6 -1,350 -103 -151 45 61 119 190 -587 -83 210 7 Germany -80 1,647 2,591 130 266 1,170 440 332 252 397 8 Netherlands -262 -603 482 -767 183 169 210 -155 82 176 9 Switzerland 168 2,986 1,041 205 338 254 505 79 173 30 10 United Kingdom -3,301 4,510 2,620 1,470 1,078 614 1,215 389 230 172 11 Canada 1,407 -3,213 417 11 -110 314 -284 -59 290 156 12 Latin America and Caribbean 2,203 5,709 -242 941 1,058 948 910 -31 -1,862 -207 13 Middle East1 -88 -311 0 53 11 -100 -17 64 4 49 14 Other Asia -3,943 8,199 -3,300 601 965 -911 -379 -1,295 -1,191 476 15 Japan -3,598 3,826 -1,687 488 681 -800 -447 -117 -658 335 16 Africa 10 63 38 6 20 10 -17 13 33 -1 17 Other countries 169 202 380 80 98 61 126 192 124 -123 18 Nonmonetary international and regional organizations 33 272 -62 70 24 0 -67 -2 -2 9 BONDS2 19 Foreign purchases 214,922 283,725' 131,981 28,947 28,395 24,607 22,271 30,607' 29,711 24,785 20 Foreign sales 175,842 217,481 111,085 21,545 17,427 19,418 18,263 25,147 27,409 20,848 21 Net purchases or sales (-) 39,080 66,244r 20,896 7,402 10,968 5,189 4,008 5,460"" 2,302 3,937 22 Foreign countries 37,964 65,706r 20,747 7,375 10,901 5,205 3,977 5,373"" 2,317 3,875 73 Europe 17,435 22,055 9,096 1,534 3,118 2,742 2,764 2,870' 363 357 74 France 1,203 22,,334466 206 110 145 53 -57 32 181 -3 75 Germany 2,480 888833 -236 -231 -62 -101 90 -64 83 -244 26 Netherlands 540 -290 1,078 49 95 75 99 330 216 358 77 Switzerland -579 -627 377 -80 28 176 57 131 -123 136 78 United Kingdom 12,421 19,158 8,964 2,300 2,853 1,676 2,799 3,259' 507 723 29 Canada 237 1,653 253 54 319 23 -141 101 -16 286 30 Latin America and Caribbean 9,300 16,493 6,039 2,650 3,681 1,638 909 1,850 875 767 31 Middle East1 3,166 3,257 177 432 383 161 -83 59 7 33 V Other Asia 7,545 20,826' 4,757 2,765 3,137 670 480 417 903 2,287 33 Japan -450 11,569 1,677 1,478 2,477 -95 37 -363 523 1,575 34 Africa 354 1,149 14 -2 119 -51 10 -10 55 10 35 Other countries -73 273 411 -58 144 22 38 86 130 135 36 Nonmonetary international and regional organizations 1,116 538 149 27 67 -16 31 8877 -15 62 Foreign securities 37 Stocks, net purchases or sales (-)3 -32,259 -63,320 -24,130 -6,931 -6,503 -5,860 -6,248 -6,457' -1,233 -4,332 38 Foreign purchases 150,051 246,011 171,888 28,408 31,135 32,432 38,374 37,032' 33,081 30,969 39 Foreign sales3 182,310 309,331 196,018 35,339 37,638 38,292 44,622 43,489' 34,314 35,301 40 Bonds, net purchases or sales (-) -15,605 -61,023 -13,476 -54 -8,158 -9,483 -4,532' 6,139' -5,572 -28 41 Foreign purchases 513,589 839,118 420,461 87,459 79,334 84,223 85,903 118,931' 68,381 63,023 42 Foreign sales 529,194 900,141 433,937 87,513 87,492 93,706 90,435' 112,792' 73,953 63,051 43 Net purchases or sales (—), of stocks and bonds -47,864 -124,343 -37,606 -6,985 -14,661 —15,343 -10,780r —318r -6,805 -4,360 44 Foreign countries -51,274 -124,504 -37,729 -6,994 -14,691 -15,386 -10,648' —295r -6,761 -4,639 45 Europe -31,350 -81,175 -2,867 -4,530 -4,351 -5,512 -3,568 8,122' -132 -1,777 46 Canada -6,893 -14,649 -4,139 709 -1,733 -2,741 -2,192' 619' -316 491 47 Latin America and Caribbean -4,340 -9,549 -15,051 -2,248 -4,566 -3,124 -327 -2,852' -6,591 -2,157 48 -7,923 -15,044 -14,190 -502 -3,555 -3,171 -4,449 -6,598 565 -537 49 Africa -13 -185 -192 0 13 -60 18 -118 -28 -4 50 Other countries -755 -3,902 -1,290 -423 -499 -778 -130 532 -259 -655 51 Nonmonetary international and regional organizations 3,410 161 123 9 30 43 -132 -23 -44 279 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 • September 1994 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1994 1993 1994 Country or area 1992 1993r Jan.- Nov. Dec. Jan. Feb. Mar. Apr.r MayP May Transactions, net purchases or sales (-) during period1 1 Estimated total 39,288 24,355 19,650 15,203 408r 1,853 12,995 — l,318r -13,607 19,727 2 Foreign countries 37,935 24,159 19,827 14,584 597r 1,592 12,884 -1,446 -12,879 19,676 3 Europe 19,625 -2,712 9,220 -841 400r 114 3,552 2,281 -5,356 8,629 4 Belgium and Luxembourg 1,985 1,218 306 22 -65 -63 128 269 -175 147 5 Germany 2,076 -10,033 2,357 -750 571 2,327 -1,055 -729 -465 2,279 6 Netherlands -2,959 -515 -293 206 -189 52 418 -971 187 21 7 Sweden -804 1,421 255 141 -31 -4 229 34 -154 150 8 Switzerland 488 -1,511 2,045 573 -70 313 555 1,385 3 -211 9 United Kingdom 24,184 6,055 2,157 -1,900 -511r -1,888 2,455 688 -3,910 4,812 10 Other Europe and former U.S.S.R -5,345 653 2,393 867 695 -623 822 1,605 -842 1,431 11 Canada 562 11,252 -1,007 1,358 846 32 168 357 -1,662 98 12 Latin America and Caribbean -3,222 -4,651 -893 2,070 -4,830 3,677 7,512 -3,428 -6,002 -2,652 13 Venezuela 539 389 -306 19 56 -358 235 93 -146 -130 14 Other Latin America and Caribbean -1,956 -5,884 -7,845 -36 -1,061 3,118 2,860 -4,204 -6,911 -2,708 15 Netherlands Antilles -1,805 844 7,258 2,087 -3,825 917 4,417 683 1,055 186 16 Asia 23,517 20,939 12,971 11,771 4,029 -2,152 1,191 151 403 13,378 17 Japan 9,817 17,073 9,598 5,661 649 -3,074 -1,403 2,914 2,976 8,185 18 Africa 1,103 1,156 -243 35 115 -135 -120 -18 59 -29 19 Other -3,650 -1,825 -221 191 37 56 581 -789 -321 252 20 Nonmonetary international and regional organizations 1,353 196 -177 619 -189 261 111 128r -728 51 21 International 1,018 -310 -25 855 124 455 1 173r -724 70 22 Latin American regional 533 654 -4 40 -1 7 116 -37 21 -111 MEMO 23 Foreign countries 37,935 24,159 19,827 14,584 597r 1,592 12,884 -1,446 -12,879 19,676 24 Official institutions 6,876 1,238 13,891 6,223 3,637 4,284 4,045 -5,051r -640 11,253 25 Other foreign2 31,059 22,921 5,936 8,361 -3,040r -2,692 8,839 3,605r -12,239 8,423 Oil-exporting countries 26 Middle East2 4,317 -8,543 -691 -6 84 -1,518 900 33 144 -250 27 Africa3 11 -5 0 0 -9 0 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 July 31,1994 Rate on July 31, 1994 Rate on July 31, 1994 Country Country Country Percent e M ffe o c n t t i h v e Percent e M ffe o c n t t i h v e e M ffe o c n t t i h v e Austria.. 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.. 6.04 July 1994 Japan 1.75 Sept. 1993 United Kingdom 12.0 Sept. 1992 Denmark 5.0 May 1994 Netherlands 4.5 May 1994 France2.. 5.0 July 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 1994 TTyyppee oorr ccoouunnttrryy 11999911 11999922 11999933 Jan. Feb. Mar. Apr. May June July 5.86 3.70 3.18 3.15 3.43 3.75 4.00 4.51 4.51 4.74 11.47 9.56 5.88 5.34 5.15 5.12 5.14 5.13 5.13 5.15 9.07 6.76 5.14 3.89 3.89 4.45 6.07 6.38 6.50 6.28 9.15 9.42 7.17 5.76 5.78 5.73 5.48 5.07 4.95 4.86 8.01 7.67 4.79 3.90 4.04 3.99 3.96 3.94 4.21 4.17 9.19 9.25 6.73 5.12 5.19 5.23 5.22 5.04 4.95 4.84 9.49 10.14 8.30 6.19 6.18 6.11 5.89 5.52 5.44 5.51 8 Italy 12.04 13.91 10.09 8.38 8.42 8.36 8.07 7.76 8.04 8.39 9.30 9.31 8.10 6.88 6.39 6.10 5.84 5.27 5.33 5.53 7.33 4.39 2.96 2.13 2.21 2.26 2.26 2.17 2.12 2.14 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 • September 1994 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar except as noted Country/currency unit 1991 1993 Mar. Apr. May July 1 Australia/dollar^ 77.872 73.521 67.993 71.611 71.087 71.565 72.433 73.291 73.409 2 Austria/schilling 11.686 10.992 11.639 12.200 11.896 11.948 11.651 11.446 11.027 3 Belgium/franc 34.195 32.148 34.581 35.768 34.862 34.979 34.108 33.514 32.315 4 Canada/dollar 1.1460 1.2085 1.2902 1.3424 1.3644 1.3830 1.3808 1.3836 1.3826 5 China, P.R./yuan 5.3337 5.5206 5.7795 8.7249 8.7241 8.7251 8.6859 8.6836 8.6605 6 Denmark/krone 6.4038 6.0372 6.4863 6.7668 6.6296 6.6642 6.4857 6.3786 6.1581 7 Finland/markka 4.0521 4.4865 5.7251 5.5930 5.5436 5.4997 5.4194 5.4241 5.1996 8 France/franc 5.6468 5.2935 5.6669 5.8955 5.7647 5.8170 5.6728 5.5597 5.3702 9 Germany/deutsche mark. 1.6610 1.5618 1.6545 1.7355 1.6909 1.6984 1.6565 1.6271 1.5674 10 Greece/drachma 182.63 190.81 229.64 250.48 246.71 249.08 245.41 244.77 236.92 11 Hong Kong/dollar 7.7712 7.7402 7.7357 7.7353 7.7268 7.7269 7.7262 7.7309 7.7265 12 India/rupee 22.712 28.156 31.291 31.449 31.415 31.391 31.375 31.385 31.376 13 Ireland/pound2 161.39 170.42 146.47 141.91 143.40 143.42 147.12 149.54 152.79 14 Italy/lira 1,241.28 1,232.17 1,573.41 1,685.96 1,666.63 1,626.07 1,594.56 1,592.22 1,562.31 15 Japan/yen 134.59 126.78 111.08 106.30 105.10 103.48 103.75 102.53 98.44 16 Malaysia/ringgit 2.7503 2.5463 2.5738 2.7624 2.7171 2.6887 2.6169 2.5942 2.5948 17 Netherlands/guilder.... 1.8720 1.7587 1.8585 1.9464 1.9006 1.9074 1.8597 1.8242 1.7585 18 New Zealand/dollar2 57.832 53.792 54.127 57.436 57.093 56.908 58.347 59.121 60.063 19 Norway/krone 6.4912 6.2142 7.0979 7.4885 7.3419 7.3680 7.1789 7.0686 6.8560 20 Portugal/escudo 144.77 135.07 161.08 175.15 174.00 173.54 171.15 168.76 160.98 21 Singapore/dollar 1.7283 1.6294 1.6158 1.5873 1.5819 1.5628 1.5464 1.5310 1.5137 22 South Africa/rand 2.7633 2.8524 3.2729 3.4520 3.4586 3.5789 3.6346 3.6318 3.6705 23 South Korea/won 736.73 784.58 805.75 812.24 810.69 811.71 809.79 809.86 808.39 24 Spain/peseta 104.01 102.38 127.48 141.08 138.78 138.14 136.62 134.23 129.31 25 Sri Lanka/rupee 41.200 44.013 48.205 49.113 48.931 48.925 49.067 49.232 49.010 26 Sweden/krona 6.0521 5.8258 7.7956 7.9869 7.9156 7.8850 7.7181 7.7968 7.7471 27 Switzerland/franc 1.4356 1.4064 1.4781 1.4565 1.4292 1.4383 1.4125 1.3727 1.3239 28 Taiwan/dollar 26.759 25.160 26.416 26.440 26.414 26.389 26.792 27.018 26.658 29 Thailand/baht 25.528 25.411 25.333 25.382 25.325 25.268 25.212 25.137 24.977 30 United Kingdom/pound2 176.74 176.63 150.16 147.92 149.19 148.23 150.42 152.62 154.67 MEMO 31 United States/dollar3... 89.84 86.61 93.18 94.35 94.39 92.79 91.60 89.06 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

68 Index to Statistical Tables References are to pages A3-A66 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 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 Discount rates at Reserve Banks and at foreign central banks and BANKERS acceptances, 10, 22, 26 foreign countries (See Interest rates) Bankers balances, 18-22. (See also Foreigners) Discounts and advances by Reserve Banks (See Loans) Bonds (See also U.S. government securities) Dividends, corporate, 35 New issues, 35 Rates, 26 EMPLOYMENT, 45 Branch banks, 23 Eurodollars, 26 Business activity, nonfinancial, 45 Business expenditures on new plant and equipment, 35 FARM mortgage loans, 38 Business loans (See Commercial and industrial loans) Federal agency obligations, 5, 10, 11, 12, 31, 32 Federal credit agencies, 33 Federal finance CAPACITY utilization, 46 Capital accounts Debt subject to statutory limitation, and types and ownership Banks, by classes, 18, 69, 71, 73 of gross debt, 30 Federal Reserve Banks, 11 Receipts and outlays, 28, 29 Central banks, discount rates, 65 Treasury financing of surplus, or deficit, 28 Certificates of deposit, 26 Treasury operating balance, 28 Commercial and industrial loans Federal Financing Bank, 28, 33 Commercial banks, 21 Federal funds, 7, 19, 21, 22, 23, 26, 28 Weekly reporting banks, 21-23 Federal Home Loan Banks, 33 Commercial banks Federal Home Loan Mortgage Corporation, 33, 37, 38 Assets and liabilities, 18-22 Federal Housing Administration, 33, 37, 38 Commercial and industrial loans, 18-23 Federal Land Banks, 38 Consumer loans held, by type and terms, 39 Federal National Mortgage Association, 33, 37, 38 Deposit interest rates of insured, 16 Federal Reserve Banks Loans sold outright, 21 Condition statement, 11 Real estate mortgages held, by holder and property, 38 Discount rates (See Interest rates) Time and savings deposits, 4 U.S. government securities held, 5, 11, 12, 30 Commercial paper, 24, 26, 36 Federal Reserve credit, 5, 6, 11, 12 Condition statements (See Assets and liabilities) Federal Reserve notes, 11 Construction, 45,49 Federally sponsored credit agencies, 33 Consumer installment credit, 39 Finance companies Consumer prices, 45, 46 Assets and liabilities, 36 Consumption expenditures, 52, 53 Business credit, 36 Corporations Loans, 39 Nonfinancial, assets and liabilities, 35 Paper, 24, 26 Profits and their distribution, 35 Financial institutions, loans to, 21, 22, 23 Security issues, 34,65 Float, 5 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 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

69 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 Consumer installment credit, 39 SAVING Deposits, 16 Flow of funds, 40, 42, 43, 44 Federal Reserve Banks, 8 National income accounts, 51 Foreign central banks and foreign countries, 66 Savings and loan associations, 38, 39, 40 Money and capital markets, 26 Savings banks, 38, 39 Mortgages, 37 Savings deposits (See Time and savings deposits) Prime rate, 25 Securities (See also specific types) International capital transactions of United States, 53-65 Federal and federally sponsored credit agencies, 33 International organizations, 55, 56, 58, 61, 62 Foreign transactions, 63 Inventories, 51 New issues, 34 Investment companies, issues and assets, 35 Prices, 27 Investments (See also specific types) Special drawing rights, 5, 11, 53, 54 Banks, by classes, 18-23 State and local governments Commercial banks, 4, 18-23 Deposits, 21, 22 Federal Reserve Banks, 11, 12 Holdings of U.S. government securities, 30 Financial institutions, 38 New security issues, 34 Ownership of securities issued by, 21, 22 LABOR force, 45 Rates on securities, 26 Life insurance companies (See Insurance companies) Stock market, selected statistics, 27 Loans (See also specific types) Stocks (See also Securities) Banks, by classes, 18-23 New issues, 34 Commercial banks, 4, 18-23 Prices, 27 Federal Reserve Banks, 5, 6, 8, 11, 12 Financial institutions, 38 Student Loan Marketing Association, 33 Insured or guaranteed by United States, 37, 38 TAX receipts, federal, 29 MANUFACTURING Thrift institutions, 4. (See also Credit unions and Savings and Capacity utilization, 46 loan associations) Production, 46, 48 Time and savings deposits, 4, 14, 16, 18-23 Margin requirements, 27 Trade, foreign, 54 Member banks (See also Depository institutions) Treasury cash, Treasury currency, 5 Federal funds and repurchase agreements, 7 Treasury deposits, 5, 11, 28 Reserve requirements, 9 Treasury operating balance, 28 Mining production, 48 UNEMPLOYMENT, 45 Mobile homes shipped, 49 U.S. government balances Monetary and credit aggregates, 4, 13 Commercial bank holdings, 18-23 Money and capital market rates, 26 Treasury deposits at Reserve Banks, 5, 11, 28 Money stock measures and components, 4, 14 U.S. government securities Mortgages (See Real estate loans) Bank holdings, 18-23, 30 Mutual funds, 35 Dealer transactions, positions, and financing,3 2 Mutual savings banks (See Thrift institutions) Federal Reserve Bank holdings, 5, 11, 12, 30 Foreign and international holdings and NATIONAL defense outlays, 29 transactions, 11, 30, 64 National income, 51 Open market transactions, 10 Outstanding, by type and holder, 28, 30 OPEN market transactions, 10 Rates, 25 U.S. international transactions, 53-66 Utilities, production, 48 PERSONAL income, 52 Prices Consumer and producer, 45, 50 VETERANS Administration, 37, 38 Stock market, 27 Prime rate, 25 WEEKLY reporting banks, 22-24 Producer prices, 45, 50 Wholesale (producer) prices, 45, 50 Production, 45, 47 Profits, corporate, 35 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

70 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 THOMAS A. CONNORS, Assistant Director DIANE E. WERNEKE, Special Assistant to the Board PETER HOOPER III, Assistant Director KAREN H. JOHNSON, Assistant Director LEGAL DIVISION CATHERINE L. MANN, Assistant Director RALPH W. SMITH, JR., Assistant Director J. VIRGIL MATTINGLY, JR., General Counsel SCOTT G. ALVAREZ, Associate General Counsel DIVISION OF RESEARCH AND STATISTICS RICHARD M. ASHTON, Associate General Counsel OLIVER IRELAND, Associate General Counsel MICHAEL J. PRELL, Director KATHLEEN M. O'DAY, Associate General Counsel EDWARD C. ETTIN, Deputy Director ROBERT DEV. FRIERSON, Assistant General Counsel DAVID J. STOCKTON, Deputy Director KATHERINE H. WHEATLEY, Assistant General Counsel MARTHA BETHEA, Associate Director WILLIAM R. JONES, Associate Director OFFICE OF THE SECRETARY MYRON L. KWAST, Associate Director WILLIAM W. WILES, Secretary PATRICK M. PARKINSON, Associate Director JENNIFER J. JOHNSON, Deputy Secretary THOMAS D. SIMPSON, Associate Director LAWRENCE SLIFMAN, Associate Director BARBARA R. LOWREY, Associate Secretary MARTHA S. SCANLON, Deputy Associate Director DIVISION OF BANKING PETER A. TINSLEY, Deputy Associate Director FLINT BRAYTON, Assistant Director SUPERVISION AND REGULATION DAVID S. JONES, Assistant Director RICHARD SPILLENKOTHEN, Director STEPHEN A. RHOADES, Assistant Director STEPHEN C. SCHEMERING, Deputy Director CHARLES S. STRUCKMEYER, Assistant Director DON E. KLINE, Associate Director ALICE PATRICIA WHITE, Assistant Director WILLIAM A. RYBACK, Associate Director JOYCE K. ZICKLER, Assistant Director FREDERICK M. STRUBLE, Associate Director JOHN J. MINGO, Senior Adviser HERBERT A. BIERN, Deputy Associate Director GLENN B. CANNER, Adviser ROGER T. COLE, Deputy Associate Director LEVON H. GARABEDIAN, Assistant Director JAMES I. GARNER, Deputy Associate Director (Administration) HOWARD A. AMER, Assistant Director GERALD A. EDWARDS, JR., Assistant Director DIVISION OF MONETARY AFFAIRS JAMES D. GOETZINGER, Assistant Director STEPHEN M. HOFFMAN, JR., Assistant Director DONALD L. KOHN, Director LAURA M. HOMER, Assistant Director DAVID E. LINDSEY, Deputy Director JAMES V. HOUPT, Assistant Director BRIAN F. MADIGAN, Associate Director JACK P. JENNINGS, Assistant Director RICHARD D. PORTER, Deputy Associate Director MICHAEL G. MARTINSON, Assistant Director VINCENT R. REINHART, Assistant Director RHOGER H PUGH, Assistant Director NORMAND R. V. BERNARD, Special Assistant to the Board SIDNEY M. SUSSAN, Assistant Director DIVISION OF CONSUMER MOLLY S. WASSOM, Assistant Director AND COMMUNITY AFFAIRS WILLIAM SCHNEIDER, Project Director, National Information Center GRIFFITH L. GARWOOD, Director GLENN E. LONEY, Associate Director 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

71 LAWRENCE B. LINDSEY JANET L. YELLEN 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) LOUISE L. ROSEMAN, Associate Director DIVISION OF HUMAN RESOURCES CHARLES W. BENNETT, Assistant Director MANAGEMENT JACK DENNIS, JR., Assistant Director DAVID L. SHANNON, Director EARL G. HAMILTON, Assistant Director JEFFREY C. MARQUARDT, Assistant Director JOHN R. WEIS, Associate Director JOHN H. PARRISH, Assistant Director ANTHONY V. DIGIOIA, Assistant Director FLORENCE M. YOUNG, Assistant Director JOSEPH H. HAYES, JR., Assistant Director FRED HOROWITZ, Assistant Director OFFICE OF THE INSPECTOR GENERAL 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

72 Federal Reserve Bulletin • September 1994 Federal Open Market Committee and Advisory Councils FEDERAL OPEN MARKET COMMITTEE MEMBERS ALAN GREENSPAN, Chairman WILLIAM J. MCDONOUGH, Vice Chairman ALAN S. BLINDER EDWARD W. KELLEY, JR. ROBERT T. PARRY J. ALFRED BROADDUS, JR. JOHN P. LAWARE SUSAN M. PHILLIPS ROBERT P. FORRESTAL LAWRENCE B. LINDSEY JANET L. YELLEN JERRY L. JORDAN ALTERNATE MEMBERS WILLIAM C. CONRAD THOMAS C. MELZER JAMES H. OLTMAN THOMAS M. HOENIG CATHY E. MINEHAN 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

73 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

74 Federal Reserve Board Publications For ordering assistance, write PUBLICATIONS SERVICES, The Payment System Handbook. $75.00 per year. MS-127, Board of Governors of the Federal Reserve System, Federal Reserve Regulatory Service. Four vols. (Contains all Washington, DC 20551 or telephone (202) 452-3244 or FAX four Handbooks plus substantial additional material.) (202) 728-5886. When a charge is indicated, payment should $200.00 per year. accompany request and be made payable to the Board of Rates for subscribers outside the United States are as follows Governors of the Federal Reserve System or may be ordered and include additional air mail costs: via Mastercard or Visa. Payment from foreign residents should Federal Reserve Regulatory Service, $250.00 per year. be drawn on a U.S. bank. Each Handbook, $90.00 per year. THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A MULTI- COUNTRY MODEL, May 1984. 590 pp. $14.50 each. THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNCTIONS. 1984. 120 pp. WELCOME TO THE FEDERAL RESERVE. March 1989. 14 pp. INDUSTRIAL PRODUCTION—1986 EDITION. December 1986. ANNUAL REPORT. 440 pp. $9.00 each. ANNUAL REPORT: BUDGET REVIEW, 1993-94. FEDERAL RESERVE BULLETIN. Monthly. $25.00 per year or FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY. December 1986. 264 pp. $10.00 each. $2.50 each in the United States, its possessions, Canada, and Mexico. Elsewhere, $35.00 per year or $3.00 each. FINANCIAL SECTORS IN OPEN ECONOMIES: EMPIRICAL ANALY- ANNUAL STATISTICAL DIGEST: period covered, release date, SIS AND POLICY ISSUES. August 1990. 608 pp. $25.00 each. number of pages, and price. 1981 October 1982 239 pp. $ 6.50 CONSUMER EDUCATION PAMPHLETS 1982 December 1983 266 pp. $ 7.50 Short pamphlets suitable for classroom use. Multiple copies are 1983 October 1984 264 pp. $11.50 available without charge. 1984 October 1985 254 pp. $12.50 1985 October 1986 231 pp. $15.00 1986 November 1987 288 pp. $15.00 Consumer Handbook on Adjustable Rate Mortgages 1987 October 1988 272 pp. $15.00 Consumer Handbook to Credit Protection Laws 1988 November 1989 256 pp. $25.00 A Guide to Business Credit for Women, Minorities, and Small 1980-89 March 1991 712 pp. $25.00 Businesses 1990 November 1991 185 pp. $25.00 Series on the Structure of the Federal Reserve System 1991 November 1992 215 pp. $25.00 The Board of Governors of the Federal Reserve System 1992 December 1993 215 pp. $25.00 The Federal Open Market Committee Federal Reserve Bank Board of Directors Federal Reserve Banks SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES OF CHARTS. Weekly. $30.00 per year or $.70 each in the Organization and Advisory Committees United States, its possessions, Canada, and Mexico. Else- A Consumer's Guide to Mortgage Lock-Ins where, $35.00 per year or $.80 each. A Consumer's Guide to Mortgage Settlement Costs A Consumer's Guide to Mortgage Refinancings THE FEDERAL RESERVE ACT and other statutory provisions Home Mortgages: Understanding the Process and Your Right affecting the Federal Reserve System, as amended through to Fair Lending August 1990. 646 pp. $10.00. Making Deposits: When Will Your Money Be Available? REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL Making Sense of Savings RESERVE SYSTEM. When Your Home is on the Line: What You Should Know About Home Equity Lines of Credit ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each volume $2.25; 10 or more of same volume to one address, $2.00 each. GUIDE TO THE FLOW OF FUNDS ACCOUNTS. 672 pp. $8.50 each. FEDERAL RESERVE REGULATORY SERVICE. Loose-leaf; updated monthly. (Requests must be prepaid.) Consumer and Community Affairs Handbook. $75.00 per year. Monetary Policy and Reserve Requirements Handbook. $75.00 per year. Securities Credit Transactions Handbook. $75.00 per year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

75 STAFF STUDIES: Only Summaries Printed in the 162. EVIDENCE ON THE SIZE OF BANKING MARKETS FROM BULLETIN MORTGAGE LOAN RATES IN TWENTY CITIES, by Stephen A. Rhoades. February 1992. 11 pp. Studies and papers on economic and financial subjects that are ^ of general interest. Requests to obtain single copies of the full CLEARANCE AND SETTLEMENT IN U.S. SECURITIES MAR- KETS, by Patrick Parkinson, Adam Gilbert, Emily Gollob, text or to be added to the mailing list for the series may be sent Lauren Hargraves, Richard Mead, Jeff Stehm, and Mary to Publications Services. Ann Taylor. March 1992. 37 pp. 164. THE 1989-92 CREDIT CRUNCH FOR REAL ESTATE, by Staff Studies 1-157 are out of print. James T. Fergus and John L. Goodman, Jr. July 1993. 20 pp. 158. THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIRE- 165. THE DEMAND FOR TRADE CREDIT: AN INVESTIGATION OF MENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE MOTIVES FOR TRADE CREDIT USE BY SMALL BUSINESSES, PRODUCTS, by Mark J. Warshawsky with the assistance of by Gregory E. Elliehausen and John D. Wolken. Septem- Dietrich Earnhart. September 1989. 23 pp. ber 1993.18 pp. 159. NEW DATA ON THE PERFORMANCE OF NONBANK SUBSID- 166. THE ECONOMICS OF THE PRIVATE PLACEMENT MARKET, IARIES OF BANK HOLDING COMPANIES, by Nellie Liang by Mark Carey, Stephen Prowse, John Rea, and Gregory and Donald Savage. February 1990. 12 pp. Udell. January 1994. Ill pp. 160. BANKING MARKETS AND THE USE OF FINANCIAL SER- 167. A SUMMARY OF MERGER PERFORMANCE STUDIES IN VICES BY SMALL AND MEDIUM-SIZED BUSINESSES, by BANKING, 1980-93, AND AN ASSESSMENT OF THE "OPER- Gregory E. Elliehausen and John D. Wolken. September ATING PERFORMANCE" AND "EVENT STUDY" METHOD- 1990. 35 pp. OLOGIES, by Stephen A. Rhoades. July 1994. 37 pp. 161. A REVIEW OF CORPORATE RESTRUCTURING ACTIVITY, 1980-90, by Margaret Hastings Pickering. May 1991. 21 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

All 1-A 2-B 3-C 4-D 5_E Baltimore Pittsburgh 1" i< / ^ wv Charlotte NH • Cincinnati MAB Buffalo /m \ NJ NY BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F • Nashville 7-G 8-H TN Birmingham MO• .^Louisville MS Detroit • LA n.fl AR C J] ij • TN M emphis M New Orleans Little ) MS Rock I CHICAGO ST. LOUIS 9-1 . it • Helena N° MN MI V ^ ^ F B U M S S S S S W KH• fe MINNEAPOLIS 10-J 12-L KANSAS CITY 11-K •tfflL NM DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

78 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 KentM. Scott1 Oklahoma City 73125 Ernest L. Hollo way David J. France Omaha 68102 Sheila Griffin Harold L. Shewmaker DALLAS 75201 Cece Smith Robert D. McTeer, Jr. Roger R. Hemminghaus Tony J. Salvaggio El Paso 79999 Alvin T. Johnson Sammie C. Clay Houston 77252 Judy Ley Allen Robert Smith, III1 San Antonio 78295 Erich Wendl Thomas H. Robertson SAN FRANCISCO 94120 James A. Vohs Robert T. Parry Judith M. Runstad Patrick K. Barron Los Angeles 90051 Anita E. Landecker John F. Moore1 Portland 97208 William A. Hilliard E. Ronald Liggett1 Salt Lake City 84125 Gerald R. Sherratt Andrea P. Wolcott Seattle 98124 George F. Russell, Jr. Gordon Werkema1 * Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; East Rutherford, New Jersey 07016; Jericho, New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202. 1. Senior Vice President. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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 con- by a check or money order payable to the Board of tains Regulations G, T, U, and X, dealing with exten- Governors of the Federal Reserve System. Orders sions of credit for the purchase of securities, together should be addressed to Publications Services, mail with related statutes, Board interpretations, rulings, stop 127, Board of Governors of the Federal Reserve and staff opinions. Also included are the Board's list System, Washington, DC 20551. GUIDE TO THE FLOW OF FUNDS ACCOUNTS A recent Federal Reserve publication, Guide to the dures as seasonal adjustment, extrapolation, and Flow of Funds Accounts, explains in detail how the interpolation. U.S. financial flow accounts are prepared. The The balance of the Guide contains explanatory accounts, which are compiled by the Division of tables corresponding to the tables of financial flows Research and Statistics, are published in the Board's data that appeared in the September 1992 Z.l release. quarterly Z.l statistical release, "Flow of Funds These tables give, for each data series, the source of Accounts, Flows and Outstandings." The Guide the data or the methods of calculation, along with updates and replaces Introduction to Flow of Funds, annual data for 1991 that were published in the published in 1980. September 1992 release. The 670-page Guide begins with an explanation of Guide to the Flow of Funds Accounts is available the organization and uses of the flow of funds for $8.50 per copy from Publications Services, Board accounts and their relationship to the national income of Governors of the Federal Reserve System, Washand product accounts prepared by the U.S. Depart- ington, DC 20551. Orders must include a check or ment of Commerce. Also discussed are the individual money order, in U.S. dollars, made payable to the data series that make up the accounts and such proce- Board of Governors of the Federal Reserve System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Publications of Interest FEDERAL RESERVE CONSUMER CREDIT PUBLICATIONS The Federal Reserve Board publishes a series of Three booklets on the mortgage process are also pamphlets covering individual credit laws and topics, available: A Consumer's Guide to Mortgage Lock-Ins, as pictured below. The series includes such subjects A Consumer's Guide to Mortgage Refinancings, and as how the Equal Credit Opportunity Act protects A Consumer's Guide to Mortgage Settlement Costs. women against discrimination in their credit dealings, These booklets were prepared in conjunction with the how to use a credit card, and how to resolve a billing Federal Home Loan Bank Board and in consultation error. with other federal agencies and trade and consumer The Board also publishes the Consumer Handbook groups. to Credit Protection Laws, a complete guide to con- Copies of consumer publications are available free sumer credit protections. This forty-four-page booklet of charge from Publications Services, mail stop 127, explains how to shop and obtain credit, how to main- Board of Governors of the Federal Reserve System, tain a good credit rating, and how to dispute unfair Washington, DC 20551. Multiple copies for classcredit transactions. room use are also available free of charge. A 9UJ«L« 1O Business A Consumer's Credit Guide to Mortgage for Women, Minorities, and Lock-Ins Small Businesses 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