Federal Reserve Bulletin, 1995-04

VOLUME 81 • NUMBER 4 • APRIL 1995 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 323 HOUSEHOLD SECTOR BORROWING AND 349 Chairman Greenspan presents the views of the THE BURDEN OF DEBT Board on expanding permissible affiliations between banks and other financial services The debt of the household sector has increased providers in the context of the proposed substantially since the early 1980s, a develop- "Financial Services Competitiveness Act of ment that has raised concerns about the ability 1995," and says that the Board believes that of households to manage their obligations. the risks from securities and most other finan- Various aggregate measures of household cial activities are manageable within the financial positions suggest that the sector holding company framework; the Board also emerged from this period of expansion, recesbelieves that it would be prudent to delay sion, and recovery on a relatively sound footenacting the authority to link commerce and ing. Household survey data indicate that much banking until we have gained some actual of the debt is owed by households with ample experience with wider financial ownership of, resources to service it and that for many and wider activities for, banking organizahouseholds, heavy indebtedness relative to tions, before the House Committee on Bankincome is a transitory situation. ing and Financial Services, February 28, 1995. 339 INDUSTRIAL PRODUCTION 355 ANNOUNCEMENTS AND CAPACITY UTILIZATION FOR FEBRUARY 1995 Publication of the eighth edition of Purposes and Functions. Industrial production rose 0.5 percent in February; the January increase was revised down, Modification of the increase scheduled for the to 0.2 percent, and the December increase was fee charged for daylight overdrafts. revised up, to 1.1 percent. Capacity utilization Publication of a new index for the Legal increased 0.2 percentage point, to 85.7 per- Developments section of the Federal Reserve cent, its highest level since October 1979. Bulletin. 342 STATEMENTS TO THE CONGRESS Revisions to the money stock data. Alan Greenspan, Chairman, Board of Governors, discusses the Federal Reserve's conduct 361 MINUTES OF THE FEDERAL OPEN of monetary policy as detailed in the semi- MARKET COMMITTEE MEETING annual "Monetary Policy Report to the Con- At its meeting on December 20, 1994, the gress" and says that a key ingredient in Committee adopted a directive that called for achieving the highest possible levels of promaintaining the existing degree of pressure ductivity, real incomes, and living standards is on reserve positions and that included a bias the achievement of price stability, before the toward the possible firming of reserve condi- Senate Committee on Banking, Housing, and tions during the intermeeting period. Urban Affairs, February 22, 1995. (Chairman Greenspan presented identical testimony 371 LEGAL DEVELOPMENTS before the Subcommittee on Domestic and International Monetary Policy of the House Various bank holding company, bank service Committee on Banking and Financial Ser- corporation, and bank merger orders; and vices, February 23, 1995.) pending cases. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 FINANCIAL AND BUSINESS STATISTICS A70 BOARD OF GOVERNORS AND STAFF These tables reflect data available as of A72 FEDERAL OPEN MARKET COMMITTEE February 24, 1995. AND STAFF; ADVISORY COUNCILS A3 GUIDE TO TABULAR PRESENTATION A74 FEDERAL RESERVE BOARD A4 Domestic Financial Statistics PUBLICATIONS A45 Domestic Nonfinancial Statistics A53 International Statistics A76 MAPS OF THE FEDERAL RESERVE SYSTEM A67 GUIDE TO STATISTICAL RELEASES AND SPECIAL TABLES A78 FEDERAL RESERVE BANKS, BRANCHES, AND OFFICES A68 INDEX TO STATISTICAL TABLES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Household Sector Borrowing and the Burden of Debt Glenn B. Canner, Arthur B. Kennickell, and Reserve Board's periodic Survey of Consumer Charles A. Luckett, of the Board's Division of Finances. Research and Statistics, prepared this article. The aggregate data show that after the surge of Wayne C. Cook and Todd W. King provided debt accumulation from 1983 to 1989 had elevated research assistance. some indicators of debt payment problems, the household sector's financial condition began to The household sector incurred substantial amounts strengthen: Ratios of scheduled debt payments to of home mortgage and consumer installment debt household income declined after 1989, and delinduring the economic expansion of 1983-89. House- quency rates on mortgage and consumer debt hold debts grew considerably faster than income, dropped markedly. The household survey data, coland aggregate debt outstanding relative to dispos- lected in 1983, 1989, and 1992, generally show the able personal income rose from 56 percent to same broad trends. They also indicate that debt 78 percent, which at that time was a record high. is concentrated among higher-income households During the next three years, a time of recession and and those with greater net worth and that between subdued recovery, debt accumulation slowed 1989 and 1992, the share of debt owed by housesharply. It began to pick up again in 1993 and by holds with high ratios of debt payments to income year-end 1994 had climbed to 81 percent of dispos- declined sharply. The surveys further suggest that able income. At that point, home mortgage debt for many households with high ratios, the conoutstanding stood at $3.15 trillion and consumer dition is transitory: Most households with high installment credit exceeded $900 billion.1 payments-to-income ratios appear to reduce them The earlier buildup of debt and the recent resur- over time. gence have prompted questions about the financial strength of the household sector—its vulnerability to economic slowdowns and its ability to sustain AGGREGATE STATISTICS spending levels that support economic growth. Aggregate statistics, such as measures of the Appraising the size and growth of household household sector's loan-payment performance and indebtedness is difficult without reference to other balance sheet ratios, shed some light on these economic aggregates. The ratio of the stock of debt issues. Their usefulness is limited, however, to disposable personal income, for example, is a because they provide no information on how debt common measure that serves to "rescale" debt is distributed among households that differ eco- relative to one indicator of the resources available nomically and demographically and how these dis- to households for debt management (chart 1). tributions change over time. To enhance the inter- The aggregate debt-to-income ratio has several pretation of the aggregate debt statistics, this article analytical limitations, however. For instance, it has draws on data on the debt obligations and charac- serious shortcomings as an indicator of the drain teristics of individual households at various points on current income imposed by debt obligations, as from 1983 to 1992, obtained through the Federal discussed below. Also, by taking account of only debt and income, it excludes information on asset holdings, which also affect the ability of house- 1. The composition of the debt aggregates as well as the households to service debt. In addition, the debt-tohold survey data discussed in this article are described in the appendix. income ratio provides no direct indication of actual Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

324 Federal Reserve Bulletin • April 1995 1. Household debt as a proportion of disposable estimates that can be derived from available data personal income, by type of debt, 1970-94 on debt stocks, interest rates, and loan maturities. One such estimate—a measure of required debtservice payments relative to disposable personal income developed at the Federal Reserve Bank of New York—is regularly updated by staff at the Federal Reserve Board. The measure targets scheduled rather than actual payments and includes both interest and principal. Payments for consumer and mortgage debt are calculated separately and then combined into a total measure.3 The ratio of scheduled total debt-service payments to disposable personal income (chart 2) gives a picture of household debt burden somewhat NOTE. In this and subsequent charts, shading indicates periods of reces- different from that suggested by the ratio of the sion as defined by the National Bureau of Economic Research. stock of debt relative to disposable personal loan-payment performance.2 Examination of other income. Both measures rose substantially during aggregate measures is essential to a better understanding of the household sector's financial situation. Three such measures are discussed below. 3. For both consumer and mortgage debt, the first step in estimating scheduled payments is to generate historical quarterly estimates of gross loan originations. From data on interest rates and average maturities for loans made in each quarter, schedules are Debt-Service Burden derived of payments flowing from loan originations in each quarter that are due in subsequent quarters. Total scheduled payments for any one quarter are then obtained by summing across the appropri- Because debt maturities generally range beyond ate segments of the scheduled payment streams associated with several months—often to five years for automobile each previous quarter. A necessary adjustment is to alter the scheduled payment streams to reflect estimated loan prepayments, by loans and to as long as thirty or even forty years for subtracting the amount of prepaid loans from the initial loan home mortgages—a relatively small portion of the volume for its quarter of origination and then recalculating the stock of debt is payable within a one-year period. stream of scheduled payments associated with that quarter. As new data on loan volume, interest rates, and maturities become available As maturities for specific types of loans change each quarter, estimates of scheduled payments for the current over time or the composition of debt by maturity quarter are made. For a detailed description of the methodology, class shifts, the near-term payments associated with see Lynn Paquette, "Estimating Household Debt Service Payments," Federal Reserve Bank of New York, Quarterly Review a given level of the debt-to-income ratio will vary (Summer 1986), pp. 12-23. as well. Also, fluctuations over time in the average interest rate payable on the stock of debt can greatly affect the degree of burden implied by that 2. Scheduled household debt-service payments debt. Thus, the amount of interest and principal due as a proportion of disposable personal income, annually relative to income would be a better mea- by type of debt, 1970-94 sure of the burden of debt payments than is the stock of debt relative to income. Unfortunately, no comprehensive data series on debt-service payments is available, necessitating reliance on rough If — 15 2. Moreover, because the widely used measure of disposable 10 personal income constructed by the Department of Commerce includes income not directly available to households—employer contributions to pension plans, for example—and because it _ 5 excludes other income received—payments from pension plans, for | example—changes in the ratio may sometimes reflect movements in income that seem unrelated to the ability of households to 1 1 1 t t service their debts in the short run. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Household Sector Borrowing and the Burden of Debt 325 the 1983-89 expansion, but the payments-to- 3. Ratio of household assets to debt, income ratio dropped back over the next three by type of assets, 1970-94 years to a level in 1992 well below its high point in i Ratio 1989. Although outstanding debt has risen relative to — 8 income since 1992, the debt payments-to-income ratio has changed very little. One reason for the recent stability is that the average interest rate on ':§tt: the stock of debt has continued to decline, offsetting the effect of the recent more rapid growth in outstanding debt. Even though interest rates on $M newly originated loans rose through most of last I 4 year, rates on many new loans were still below the ! ! : 1 i I average rate on existing loans being paid down, so 1970 1974 1978 1982 1986 990 1994 the replacement of old debt by new debt had the effect of lowering the average rate paid. In the consumer credit market, rate increases for new lending have lagged increases in interest rates gen- As household debt surged in the mid-1980s, erally, partly reflecting aggressive marketing asset holdings increased sharply as well. The efforts in auto loans and credit cards. In the mort- household sector as a whole has considerably more gage market, homebuyers last year opted more assets than debt, and although debt grew at a faster frequently for adjustable rate mortgages (ARMs), rate than assets from 1983 through 1989, the dollar on which initial rates were typically well below increase in assets was larger. As a result, the net those on fixed rate mortgages, thus helping to hold worth (assets less debt) of the household sector down the average rate on the stock of mortgage grew significantly. Financial net worth (that is, debt even as rates on originations of both types of excluding tangible assets) nearly doubled from the mortgage were rising. end of 1982 through 1989 as assets increased from $7.3 trillion to $13.8 trillion and liabilities rose from $1.6 trillion to $3.5 trillion. Households Assets and Net Worth became somewhat more leveraged in the process: Looking at the assets held by the household sector Financial assets were about four and one-half also helps clarify the sector's financial situation. times as large as household debt at the start of the Much of the sector's debt is used for investment period and slightly less than four times as large at in physical assets (mainly homes) or, to a lesser the end of the period (chart 3). With the market extent, for direct investment in financial assets. value of real estate and other tangible assets added Debt also supports financial investments indirectly, in (about $5.3 trillion at the end of 1982 and as many households that use debt to make major $8.7 trillion at the end of 1989), the pattern purchases could instead draw down financial assets remained the same: Net worth recorded a large if they so chose. When households accumulate dollar increase even as the amount of assets per assets alongside debt, the burden of that debt is dollar of debt declined. mitigated to the extent that the assets can be readily During the 1990-91 recession and the next few liquidated to retire some or all of the debt.4 quarters, the increase in total debt was quite small. Asset growth also slowed, but it nonetheless was large enough to continue building net worth and to 4. Not all assets, particularly tangible assets such as homes, or even some financial assets, can be easily liquidated. Funds in nudge the ratio of financial assets to debt up from retirement accounts, for example, are generally not available for its 1990 low. In 1994, the acceleration in the use without substantial penalty. Likewise, the selling of assets that growth of debt pulled the assets-to-debt ratio back would establish taxable capital gains would be disadvantageous, in effect reducing the liquidity of such assets. In any case, including down again. On balance, the ratio changed little them in measures of available assets at their full market value from 1989 to 1994 while net worth expanded would overstate (by the amount of the tax liability) the degree of $3 trillion, or about 30 percent. debt coverage they afford. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

326 Federal Reserve Bulletin • April 1995 Loan-Payment Performance about increasing consumer debt during the first several quarters of the recovery.5 Measures of loan-payment problems, such as delinquency and charge-off rates, are another means of evaluating the financial health of the household FINDINGS FROM THE sector. Most such measures suggest that house- SURVEY OF CONSUMER FINANCES holds had relatively fewer payment problems in 1994 than at virtually any other time in the past two Aggregate statistics provide an overview of the decades. For example, the proportion of closed-end household sector's financial position but leave consumer loans past due thirty days or more, as unaddressed crucial questions about the distribureported by the American Bankers Association tion of assets and liabilities. Information on how (ABA), had dropped to a twenty-two-year low of 1.7 percent by the third quarter of 1994, from a high of 2.8 percent three years earlier (chart 4). 5. The recent resurgence of consumer debt growth—to a pace Delinquency rates for consumer credit derived from close to that at the high points of earlier credit expansions— contributed to the further decline in delinquency rates in 1994. The the Reports of Condition filed by commercial initial effect of rapid debt growth on delinquency rates is to push banks, available since 1983, indicate a comparable them down: Because loans typically do not become delinquent in decline over the past several quarters. Home mort- their first few months, the proportion of delinquent loans tends to fall initially when the number of loans and amount of debt outstandgages past due sixty days or more, tracked by the ing grow rapidly. Mortgage Bankers Association, fell to a fifteenyear low in 1994. 1. Distribution of U.S. households, by selected The recent pattern of consumer loan delinquen- characteristics, 1983, 1989, and 19921 cies deviates from historical patterns. Within two Percent years of the start of the economic expansion that began in 1983, the delinquency rate for consumer Characteristic 1983 1989 1992 loans (ABA series) had begun to rise. The more Income (1992 dollars) extended decline in delinquency rates during the Less than 10,000 15.2 16.9 17.6 10,000-19,999 19.9 19.0 19.6 current economic expansion may be due partly to 20,000-29,999 17.9 15.9 15.3 30,000-49,999 23.8 21.7 the much more gradual upturn in consumer spend- 50,000-99,999 18.6 19.6 19:3 100.000-249,999 3.8 5.8 6.1 ing and associated borrowing that occurred this 250,000 or more .7 1.1 1.3 time, as both borrowers and lenders were cautious Total 100 100 100 Net worth (1992 dollars) Zero or less 8.1 ti.4 10.0 1-9,999 20.3 17.5 16.8 4. Delinquency rates on consumer and mortgage debt, 10,000-24,999 ... 9.6 9.6 10.8 25,000-49,999 ... 12.4 10.7 11.6 1970-94 50,000-99,999 ... 17.7 14.9 14.1 100,000-499,999 .... 26.1 29.1 27.7 500,000 or more 5.9 6.7 9.0 Total 100 100 100 Age of head (years) Less than 35 30.6 27.2 35-44 19.5 23.4 45-54 15.5 14.4 S16.2 i 55-64 15.0 13.9 65-74 12.2 12.0 Sf:£ 75 or more 7.2 9.0 9.4 Total 100 100 Housing status Owner 63.4 63.8 63.8 Renter or other .. 36.6 36.2 Total 100 100 100 2 Race or ethnicity of head ... Non-Hispanic white 82.3 75. t 77.9 Nonwhite or Hispanic ... 17.7 24.9 22.1 NOTE. Delinquency rates are calculated as the number of loans delinquent Total 100 100 100 as a percentage of the number of loans outstanding. For consumer debt, delinquency is defined as past due thirty days or more; source, American 1. In this and subsequent tables, components may not sum to totals Bankers Association. For mortgage debt, delinquency is defined as past due because of rounding. Data in all tables are from the Survey of Consumer sixty days or more; source, Mortgage Bankers Association. Finances. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Household Sector Borrowing and the Burden of Debt 327 broadly or narrowly household debt is distributed Incidence of Debt across various income and asset groups helps in assessing the burden of debt within the sector. The Most U.S. households have some type of debt, and Survey of Consumer Finances, a nationally repre- the proportion with debt has increased since 1983 sentative survey of households, makes it possible (table 2). Nearly all the increase took place between to examine such questions. The 1983 and 1992 1983 and 1989: The proportion of households with surveys provide a snapshot of household debt dis- debt of any type increased from 70 percent to tribution at the early stage of two different eco- 73 percent between 1983 and 1989 but changed nomic expansions, and the 1989 survey provides a little between 1989 and 1992. view at the late stage of an expansion.6 For pur- Although debt is widely held among the populaposes of comparison, the distribution of all house- tion at large, the proportion of households with holds (regardless of debt status) by income and debt differs markedly by household financial and other characteristics, for each of these years, is demographic characteristics, and in some cases shown in table 1. these proportions have changed over time. Lowerincome households are much less likely than middle- and upper-income households to have debt of any type: In 1992, fewer than half of households 6. For a more detailed discussion of the types of debts held by with incomes below $10,000 had debt, compared households and the amounts owed on such debts, see Arthur B. Kennickell and Martha Starr-McCluer, "Changes in Family with more than four-fifths of those with incomes Finances from 1989 to 1992: Evidence from the Survey of Con- above $30,000. Nevertheless, the differences sumer Finances," Federal Reserve Bulletin, vol. 80 (October 1994), among income groups were less pronounced in pp. 861-82. Proportion of all households having debt, by selected household characteristics and type of debt, 1983, 1989, and 1992 Percent 1983 1989 1991 debt *7X 5ST; AH 62.5 70.0 73.0 64.4 WUk Income <1992 dollars) Less than 10,000 36.3 42.1 45.2 44.5 47.5 10,000-19,999 48.5 50.3 54.2 61.5 65.6 20,000-29,999 66.0 68.9 77.7 72.2 79.6 30,000-49,999 74.2 76.8 84.4 75.5 83.1 50.000-99.999 78.5 81.2 92.9 69.7 84.6 100,000-249,999 71.7 71.7 90.4 59.7 85.7 250,000 or more 59.2 58.7 85.8 50.0 82.0 Net worth (1992 dollars) Zero or less 63.7 64.4 64.4 70.8 71 1 1-9,999 58.0 59.5 61.4 64.2 65.2 10,000-24,999 67.3 75.4 78.1 77.6 80.0 25,000-49,999 68.8 73.8 79.3 69.8 75.9 65.7 69.4 79.2 67.6 75.1 60.8 62.3 76.0 59.1 74.5 52.3 53.2 73.4 45.8 73.0 Age of head (years) 73.9 76.3 79.7 76.6 82.1 S T" 79.1 81.0 89.5 77.0 86.5 45-54 71.1 75.2 85.8 69.3 85.8 55-64 57.0 57.9 72.3 59.3 69.2 31.6 39.4 49.5 43.3 51.9 75 or more 13.7 18.5 21.9 27.3 30.2 sss.rr:. 64.3 67.0 79.1 64.7 78.1 59.2 61.6 62.2 63.9 64.9 62.9 65.9 74.5 64.2 74.2 Nonwhite or Hispanic 60.6 62.4 68.5 65.1 70.2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

328 Federal Reserve Bulletin • April 1995 1992 than they were in 1989. Although the overall Amount of Debt proportion of households with debt changed little from 1989 to 1992, the proportion with incomes The rise in the incidence of debt among households above $30,000 that had debt fell whereas the pro- has been accompanied by an increase, in real terms, portion with incomes below that level that had debt in the amounts owed (table 3).8 In 1983, the rose. median amount owed by households with debt was The use of debt by households is closely linked $15,200. By 1989, the median amount owed had to their stage in the life cycle. At different stages, risen 16 percent, to $17,600. Between 1989 and a household's current income and desired expen- 1992, the median amount owed remained about the ditures may not match. Most households headed same. The composition of that debt did change, by younger individuals, for example, have incomes however: The median amount owed on consumer below their long-term average, yet many such debt decreased, whereas mortgage obligations families must bear the costs of housing, child- increased. The shift in the composition of debt rearing, or their own higher education. These reflected the decline in the use of consumer credit households often bridge the temporary gap between associated with reduced outlays for durable goods current income and desired expenditures by bor- during the 1990-91 recession; it may also have rowing. In contrast, many households near or in reflected some shift toward reliance on home equity retirement have accumulated savings and have credit (classified as mortgage debt) in place of eliminated or sharply reduced their debt obliga- traditional consumer loan instruments, especially tions. Although their incomes tend to decline after among higher-income households.9 retirement, these households can often finance As with the incidence of debt, the amounts owed expenditures in excess of their income by drawing vary with household characteristics. In particular, on savings rather than by borrowing. The surveys the median amounts of debt owed by highershow that most households headed by younger or income households and those with greater net middle-aged individuals have debt but that the worth far exceed the median amounts owed by proportion having debt begins to fall off sharply lower-income households and those with less net after age fifty-four. The incidence of indebtedness worth. For example, in 1992, indebted households among older households has trended upward since with incomes below $30,000 typically owed less 1983, however, with sizable increases from survey than $10,000 but those with incomes above to survey in the proportion of those older than $100,000 typically owed more than $100,000. sixty-four having debt. Nearly all the larger debt burdens of higher-income As might be expected, homeowners are more households are attributable to their mortgage oblilikely than renters to have debt. Virtually all the gations; differences across income groups in the difference is attributable to the holding of mortgage median amounts of consumer debt owed are reladebt by homeowners; the proportions of owners tively small. Changes over the period in the median and renters with consumer debt are quite close. The debt of the various income and wealth groups were differences in the proportions of households with mixed. debt grouped by racial or ethnic characteristics of Although the proportions of non-Hispanic white the head of household are relatively small: In 1992, households and nonwhite or Hispanic households the proportion for non-Hispanic whites exceeded with debt do not differ greatly, die differences in the proportion for nonwhites and Hispanics by the median amounts owed by these two groups are 4 percentage points.7 comparatively large. In 1992, the median amount 7. In the 1983 survey, race was based on the survey interview- 8. All dollar figures from the Surveys of Consumer Finances er's observation, whereas in later surveys the respondent reported have been adjusted to 1992 dollars using the consumer price index his or her own race, the procedure routinely followed by the Census for all urban consumers. Bureau. Although the 1989 and 1992 surveys match external esti- 9. For a discussion of the growth and characteristics of home mates, the 1983 data understate the proportion of nonwhites and equity debt, see Glenn B. Canner, Thomas A. Durkin, and Hispanics. Because of this difference, comparisons between 1983 Charles A. Luckett, "Home Equity Lending: Evidence from and later survey results based on race classifications should be Recent Surveys," Federal Reserve Bulletin, vol. 80 (July 1994), made with caution. pp.571-83. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Household Sector Borrowing and the Burden of Debt 329 3. Median amount of debt owed by households with debt, by selected household characteristics and type of debt, 1983, 1989, and 1992 Thousands of 1992 dollars 1983 1989 1992 Consumer All types Consumer All types Consumer AU types debt of debt debt of debt debt of debt All households with debt 14 15.2 5S 17.6 4.4 17.6 H1HHH Income (1992 dollars) Less than 10,000 .9 1.0 M M P M iK 2.0 10.000-19,999 1.7 3.5 3.0 4.8 2.1 4.0 20,000-29,999 23 8.3 4.0 9.8 4.0 10.0 30,000-49,999 4 2 16.4 6.4 22.8 6.0 25.1 50,000-99.999 6.3 42.2 9.2 49.3 7.2 57.2 100.000-249,999 117 84.0 12.3 U8.0 10.2 121.0 250,000 or more 35.2 140.8 13.4 184.3 10.0 157.0 Net worth (1992 dollars) Zero or less 3.7 3.8 5.7 7.3 7.1 7 2 1-9,999 1.7 2.1 23 2.5 2.2 25 2.8 8.9 5.7 9.7 3.4 12.8 25,000-49 999 3.9 214 4.4 19.1 3.9 16.3 50,000-99999 3.6 22.2 5.7 30.2 4.6 26.9 100 000-499 999 4.8 32.2 7.6 38.1 52 36.2 7.7 67.6 11.1 98.1 8.7 90.0 Age of heed (years) Less than 35 3.2 9.4 5.1 1122..77 44..77 10.2 35-44 4.2 28.7 7.9 37.4 5.4 33.3 45-54 4.4 18.7 7.5 26.5 5.1 30.9 55-64 2.5 11.5 3.5 12.1 4.2 20.8 65-74 1.1 6.0 1.5 5.6 1.9 5.6 75 or more.... .5 1.4 1.0 2.4 .8 2.3 Housing status Owner 4.4 28.9 6.9 37.5 5.0 38.0 Renter or other 2.2 2J5 3.4 3.5 3.4 Non-Hispanic white 3.6 17.8 6.1 22.1 5.0 21.1 Nonwhite or Hispanic 2.5 6.3 3.2 8.0 2.9 7.6 of consumer debt owed by non-Hispanic white debt obligations are shifting among household households with debt was nearly twice the median groups better or less able to service such debt. amount owed by nonwhite or Hispanic households, Most of the debt of the household sector is owed and the amount of total debt owed was nearly three by upper-income households, by households with times as large. The larger gap in total debt com- greater net worths, by households headed by pared with consumer debt reflects the higher inci- younger or middle-aged individuals, and by homedence of homeownership and mortgage debt among owners (table 4). In 1992, two-thirds of the debt non-Hispanic white households and their owner- was owed by households with incomes above ship of generally more expensive homes. $50,000 (chart 5); a similar proportion was owed by households with net worths exceeding $100,000. Share of Debt Nearly 80 percent of the debt was owed by households headed by individuals younger than fifty- Survey data on the incidence and median amounts five, and homeowners owed 93 percent of all of debt held by households with different character- household debt. In each case the proportion far istics provide perspective on how broadly or nar- exceeds the share of all households in the group rowly household debt is distributed. Estimates of (see table 1). For example, upper-income housethe shares of outstanding debt owed by households holds (incomes of $50,000 or more) accounted for of different types, and of changes in those shares only 27 percent of all households in 1992 though over time, provide additional information on the they owed two-thirds of the debt, about the same as distribution of debt and some indication of whether their share of income. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

330 Federal Reserve Bulletin • April 1995 4. Distribution of debt among households with selected characteristics, by type of debt, 1983, 1989, and 1992 Percent 1983 1989 1992 Consumer Consumer typccs debt of debt — ^— —,— — Income (1992 dollars) H H HH lijj Less than 10,(XXI 3.3 2.1 3.1 •HHMI iMmsfWf 5.1 2.2 10000-19,999 7.6 S.I 63 3.5 12.2 4.7 20,000-29,999 .. 12.2 9.1 10.6 6.8 14.6 7.7 30,000-49,999 18.9 21.0 25.7 18.1 24.2 19.3 50,000-99,999 26.4 37.0 31.3 32.1 25.2 32.6 100 (XX>-249 999 17.7 17.0 13.8 23.8 12.9 22.9 250,000 or more 13.9 8.8 8.6 14.0 5.7 10.6 m Total 100 too 100 100 100 too Net worth (1992 dollars) Zero or less 7.8 2.0 13.5 4.6 14.4 3.3 1-9,999 9.3 4.1 62 2.8 9.7 3.0 10,000-24,999 6.1 5.5 8.0 4.4 10.0 6.8 25,000-49,999 9.8 U.O 9.5 7.3 8.8 7.9 50,000-99,999 12.7 16.1 14.1 13.5 13.5 11.9 100.000-499.999 27.0 35.1 29.9 34.7 25.6 36.1 500,000 of more 27.4 26.2 18.7 32.7 18.0 31.0 fift Total 100 100 100 100 100 100 mi is® Age of head (years) Less than 35 24.6 25.6 26.7 21.8 28.0 20.5 35-44 28.2 32.3 32.9 36.6 29.4 32.5 45-54 17.4 21.0 21.1 23.1 18.9 26.4 55-64 20.2 15.2 11.8 13.8 13.3 12.5 65-74 5.6 4.4 6.1 3.9 7-8 6.4 75 or more 4.0 1.4 M 2.6 1.7 m Total too 100 100 too 100 100 gt§gi! Housing status Owner 77.9 92.9 78.4 94.2 72.4 93.3 Renter or other , 22.! 7.1 21.6 5.8 27.6 6.7 Total 100 too 100 100 100 100 Race or ethnicity of head Non-Hispanic white 88.9 91.5 81.8 82.9 83.6 11.1 8.5 18.2 17.1 16.4 100 100 100 100 100 100 ________ Consumer debt is spread much more evenly Ability to Repay Debt Obligations across the population than is total debt (table 4). In 1992, households with incomes above $50,000 and The burden of debt on households is reflected in those with net worths above $100,000 each held measures of their ability to repay their loans. This 44 percent of the consumer debt; homeowners ability can be evaluated indirectly—by examining had 72 percent of the consumer debt, a few per- various ratios of payment obligations to income, centage points above their proportion in the changes in those ratios over time, and characpopulation. teristics of households with high ratios—and more The share of total debt held by upper-income directly—by looking at actual difficulty in handling households increased rather sharply between 1983 debt payments. and 1989, from 63 percent to 70 percent, but then fell back some in 1992, to 66 percent. The decrease Ratios of Debt Payments to Income in share between 1989 and 1992 reflects a large decline in the upper-income group's share of con- Scheduled payment obligations were estimated sumer debt. In contrast, the share of total debt held from information provided by survey respondents. by households with high net worth increased Ratios relating debt payments to income were then between 1983 and 1989 but changed little between calculated for each household, for each income and 1989 and 1992. demographic group, and for all households. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Household Sector Borrowing and the Burden of Debt 331 5. Distribution of debt among households grouped 5. Median ratio of debt payments to income for by income, 1983, 1989, and 1992 households with debt, by selected household characteristics, 1983, 1989, and 1992 Percent Household characteristic 1983 1989 1992 All households with debt.... 11.8 15.2 15.4 Income (1992 dollars) Less than 10,000 10.1 13.4 11.6 10,000-19,999 11.8 15.7 14.7 20,000-29,999 12.3 14.5 15.3 30,000-49.999 11.8 15.7 17.1 50,000-99,999 11.8 15.8 16.2 100,000-249,999 9.0 13.8 14.9 250,000 or more 5.1 6.2 6.2 Net worth (1992 dollars) Zero or less 7.4 9.0 9.3 1-9,999 8.2 10.0 8.8 10,000-24,999 12.1 16.1 17.2 25,000—19.999 14.7 18.1 18.2 50,000-99,999 . . .. 13.7 18.4 18.0 100,000-499,999 11.9 15.7 16.2 550000,,000000 oorr mmoorree 10.4 16.9 15.7 tilslw35yearS) 12.4 15.0 15.2 13.4 17.4 18.1 11.7 16.4 16.5 8.7 12.4 14.2 65-74. 7.4 11.6 9.7 75 or more 3.8 8.5 2.6 Housing status Income Income Income 13.9 18.9 19.2 less than $20,000 to $50,000 or Renter or other 6.5 7.3 6.3 $20,000 $50,000 more Race or ethnicin• of head Non-Hispanic white 11.8 15.1 15.9 Nonwhite or Hispanic 11.8 15.3 12.7 Median Ratios. For most groups of households with debt, the median debt payments-to-income ratio falls within a fairly narrow range, although The three surveys show that the median debt households at the extremes of the income, net payments-to-income ratio for indebted households worth, and age distributions tend to have lower as a group increased markedly between 1983 and ratios (table 5). For example, the median debt 1989 but changed little between 1989 and 1992. payments-to-income ratio tends to increase with The median ratio for each income and demographic income for households with moderate incomes and group examined increased from 1983 to 1989. The then to decline for the upper-income categories, a changes between 1989 and 1992 were far less conpattern that has been fairly consistent over time. A sistent. For example, the ratio increased for housesimilar relationship holds for households grouped holds with incomes above $20,000 but fell for by net worth. Older households have much lower lower-income households; changes for households debt payments-to-income ratios than do younger grouped by net worth show no consistent pattern. households, a finding that mirrors the incidence of debt and median amounts owed by age category. Group Ratios. Summing the debt payments owed Reflecting their mortgage obligations, homeowners by all households and dividing by the combined have substantially higher debt payments-to-income income of all households (including those with ratios than do renters.10 no debt) gives a ratio that is conceptually comparable to the aggregate payments-to-income ratio. Although the level of the survey-based ratio for households as a group is lower than the ratio based 10. Renters, of course, have monthly rental payments that may be comparable in size to the mortgage payments of households with on aggregate data, in part because of differences in similar age and income characteristics. However, mortgage and definitions, the trend evident in the survey data rent payments are not entirely comparable because mortgage payfollows the aggregate pattern very closely: a sharp ments include an investment component. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

332 Federal Reserve Bulletin • April 1995 Distribution of income among all households, and ratio of total debt payments to income of all households, by selected household characteristics, 1983, 1989, and 1992 Percent Distribution of income Ratio of debt payments to income1 Household characteristic 1983 1989 1992 1983 1989 1992 All households 100 100 100 11.5 16.5 15.1 Income (1992 dollars) Less than 10,000 2.5 2.2 2.4 10.9 15.2 16.0 10,000-19,999 7.6 6.1 6.5 9.4 12.0 14.8 11.4 8.8 8.5 11.0 15.8 15.6 30^000-49^999 ^ ^^ 23.8 18.4 18.1 11.4 16.9 20.4 31.8 28.7 29.2 12.8 17.7 15.9 100,000-249,999 !" " !! 13.7 18.0 20.2 11.9 20.5 14.0 250,000 or more 9.3 17.9 15.2 8.7 12.5 8.9 Total 100 100 100 Net worth (1992 dollars) Zero or less 3.1 4.1 4.0 9.5 18.2 12.7 1-9,999 10.2 7.3 7.5 7.6 9.1 10.3 10,000-24,999 6.4 5.7 6.9 11.3 14.9 16.6 25,000-49,999 10.0 7.2 7.7 13.7 18.4 16.8 50,000-99.999 15.6 12.5 10.5 12.5 17.9 18.6 100,000-499,999 33.4 34.7 34.2 11.7 16.6 15.8 500,000 or mote 21.3 28.6 29.3 11.4 17.4 13.9 Total 100 100 100 Age of head (vears) Less than 35 23.6 19.4 19.5 13.4 18.9 17.4 35-44 23.9 29.0 26.5 14.9 18.9 17.1 45-54 19.4 22.4 22.4 12.8 18.1 17.6 55-64 18.2 14.7 16.2 9.1 17.3 13.7 65-74 10.9 9.3 9.8 4.2 7.1 8.7 75 or more 4.0 5.2 5.7 2.9 2.6 3.6 Total 100 100 100 Housing status Owner 77.4 80.4 78.0 13.1 18.5 17.5 Renter or other 22.6 19.6 22.0 5.9 8.5 6.8 Total 100 100 100 Race or ethnicity of head Non-Hispanic white 88.7 85.7 85.5 11.5 16.0 15.1 Nonwhite 11.3 14.3 14.5 11.1 19.6 15.4 Total . 100 100 100 1. For each group, ratio is calculated as total debt payments for group divided by total income for group, including households with no debt. rise over the economic expansion between 1983 for each income group. Between 1989 and 1992, in and 1989 and a decline between 1989 and 1992 contrast, the ratio declined some for higher-income (table 6). households but continued to rise slightly for lower- A similar debt payments-to-income ratio was income households, a difference reflecting mainly calculated for each of the income groups and demo- an increased proportion of lower-income housegraphic groups: For each group, debt payments holds having debt. The declines for the higherowed by all households in the group were summed earning households may partly reflect a shift among and that total was divided by total income of all these groups toward use of home equity and other households in the group (including those with no mortgage loans: The generally longer maturities debt).11 These group debt payments-to-income and lower interest rates on mortgage debt would, ratios show few consistent patterns. Between 1983 other things equal, lower the amount of scheduled and 1989, debt payments relative to income rose payments due within a one-year period, thereby lowering the ratio. Comparing across income groups, no consistent relationship between a 11. The ratio for all households can be calculated from these separate group ratios of debt payments to income by weighting group's income level and its debt payments-toeach group's ratio by its share of all household income. Thus, the income ratio is apparent, except that the highest shares of income, also given in table 6, can be used to gauge the income group had a notably lower ratio. importance of each group in determining the overall ratio. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Household Sector Borrowing and the Burden of Debt 333 7. Distribution of debt and assets among households grouped by ratio of debt payments to income, by type of debt, 1983, 1989, and 1992 Percent Ratio of consumer debt payments to income (percent) Year and type of holding No debt Below 10 10-30 Above 30 1983 Consumer debt .0 44.3 39.7 16.0 100 Financial assets 49.8 42.3 6.5 1.4 100 All assets 40.0 47.2 10.8 1.9 100 MEMO: Distribution of households 37.5 45.0 15.1 2.4 100 1989 Consumer debt .0 44.5 41.5 14.1 100 Financial assets 51.2 40.3 6.5 2.0 100 All assets 39.4 46.4 11.2 3.1 100 MEMO: Distribution of households 35.0 41.5 19.6 3.9 100 1992 Consumer debt .0 54.8 36.4 8.9 100 Financial assets 55.6 37.3 5.2 1.7 100 All assets 46.2 43.6 7.7 2.5 100 MEMO: Distribution of households 35.6 44.0 16.7 3.7 100 Ratio of total debt payments to income (percent) No debt Below 10 10-40 Above 40 Total 1983 Total debt .0 14.3 62.6 23.1 100 35.0 40.6 21.3 3.0 100 All 24.5 31.8 35.0 8.7 30.0 31.5 33.9 4.6 Total debt .0 9.5 59.6 30.9 100 33.2 33.1 28.1 5.6 100 AH ^ ^ ^ ^ ^ 20.1 26.5 38.2 15.2 100 27.0 24.6 40.4 8.0 100 1992 Total debt .0 9.7 63.8 26.4 100 33.9 27.4 32.2 6.5 100 An™sassets.::::::::::::::::: 22.7 23.8 40.0 13.5 100 MEMO: Distribution of households 26.7 26.4 38.6 8.3 100 Share of Debt Owed by High-Ratio Households. In the 1983 survey, households with high ratios The overall exposure of households to debt- of consumer debt payments to income accounted payment problems can be assessed by looking at for about 16 percent of all such debt covered in the how much of the sector's debt is borne by house- survey. In 1989, such heavily burdened households holds with high debt payments-to-income ratios held only 14 percent of the consumer debt, suggestand the extent to which such households hold assets ing that the buildup of consumer debt during the that could be drawn upon to supplement income mid- to late 1980s was spread somewhat more in meeting debt-service requirements. Table 7 pre- broadly over households with low to mid-range sents debt and asset distributions for households payments-to-income ratios. In the 1992 survey, the with different debt payments-to-income ratios, for proportion of all consumer debt owed by the highly both consumer debt and total debt. Households are indebted households fell further, to 9 percent. classified as having no debt, a low debt payments- Although the shares of debt held by these heavily to-income ratio (less than 10 percent), a moderate burdened households are relatively small, at the ratio, or a high ratio (more than 30 percent for same time these households also apparently had consumer debt and more than 40 percent for total relatively few assets to support their obligations: debt). The category boundaries are somewhat arbi- All three surveys indicate that these households trary but roughly correspond to industry guidelines held 2 percent or less of all financial assets and for extending credit. about 3 percent or less of total assets. More than Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

334 Federal Reserve Bulletin • April 1995 90 percent of all financial assets were held by groups. Seventy-four percent of the households households that had no consumer debt or had low with high consumer-debt ratios, and 50 percent debt payments relative to income. of the households with high total-debt ratios, had Changes from survey to survey in the proportion incomes below $20,000; in the population as a of households with high total debt payments-to- whole, 37 percent of the households had income income ratios differed somewhat from the findings below that level in 1992 (table 1). for consumer debt. The proportion of households To follow up questions about household income with high ratios for total debt rose between 1983 level in the 1992 survey, each respondent was and 1989, from 23 percent to 31 percent, and asked whether the income level reported was then dropped back in 1992, to 26 percent. These unusually high, unusually low, or about normal. households held about 7 percent of the sector's Forty-two percent of households with high confinancial assets in 1992 and roughly 14 percent of sumer debt payments-to-income ratios, and nearly total assets. 36 percent of households with high total debt payments-to-income ratios, described themselves Characteristics of High-Ratio Households. The as having income that was unusually low relative implications of high debt payments-to-income to their "normal" income. Thus, the situation of ratios can also be explored by looking at the char- a substantial portion of the households with high acteristics of households with high ratios (table 8). debt-payments ratios might be viewed as transitory, The bulk of the households with high ratios in the with temporarily low income likely to return to a 1992 survey were in the low- to moderate-income normal level. Large proportions of the high-ratio households had total assets of equal or greater value than their debts (nearly 80 percent for consumer debt and 8. Selected characteristics of households with high ratios more than 90 percent for total debt); for many of debt payments to income, 1992 households, the major asset was a home. In con- Percent trast, only 21 percent of the households with high ratios for consumer debt and 14 percent of those with high ratios for total debt had financial assets of equal or greater value than their debts. Thus, generally, the households most heavily indebted relative to their income apparently did not have big cushions of financial assets to help meet their debtservice payments. On the other hand, the proportions of high-ratio households that had missed a scheduled payment within the preceding twelve months—23 percent for consumer debt and 22 percent for total debt—did not differ greatly from the m m m /H proportions of all debtors making late payments, as discussed later. 5.0 3 A 100 100 6^5 Changes in Payment Burdens 79.9 92.0 for Individual Households Examining the behavior of the same set of house- 21.9 10.3 holds over time can give an indication of the degree of permanence of high payment ratios among indi- 1. Debt payments more than 30 percent of income. 2. Debt payments more than 40 percent of income. vidual households. Such information is available 3. Relative to "normal," as characterized by survey respondents. from the 1989 survey, which included a group of * Five or fewer survey respondents. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Household Sector Borrowing and the Burden of Debt 335 9. Changes in households' ratios of total debt payments to income from 1983 to 19891 Percent distribution 1. Based on information from households that participated in both the 1983 and the 1989 Survey of Consumer Finances. Includes only households headed by individuals at least twenty-eight years old in 1989. households that had participated in the 1983 survey fallen behind on any payment sixty days or (table 9).12 more.)13 A large majority of the households that had no Not surprisingly, the proportion of households debt in 1983 still had no debt in 1989. Among the reporting late payments varies over the business 1983 debtors, however, there was considerable cycle. The proportion rose from 17 percent in 1983, shifting in their payments-to-income ratios. For the initial year of a recovery from recession, to instance, of the households that had high ratios in 21 percent in 1989, near the end of a long eco- 1983, only 22 percent were still in that category in nomic expansion that saw a substantial increase in 1989. About 46 percent of the group had shifted household debt. As many consumers cut back on into the moderate-ratio group, and almost 17 per- spending and borrowing in the early 1990s—and cent were completely out of debt. Just under as lenders tightened credit standards and wrote 10 percent of the households that were moderately off bad debts—household financial positions indebted in 1983 had moved into the heavily improved, leading to a lower incidence of late indebted category by 1989, and a small proportion payments in 1992. Only 15 percent of the indebted of those with no debt in 1983 had high ratios in households in the 1992 survey had missed a pay- 1989. On the whole, the picture presented by the ment at least once during the preceding twelve "transition matrix" of table 9 is one of consider- months, a period marking the early stage of an able change over time in the composition of the economic recovery. It is notable that the proportion group with relatively heavy debt burdens. of late-paying households was lower in 1992 than in 1983 even though the surveys were conducted at roughly equivalent points in the business cycle. Late-Payment Measures Although the difference between the proportions of late payers is not particularly large—2 percentage Another indicator of the burden that debt payment points—it nevertheless suggests that households places on households is their record of making were in at least as good financial shape emerging payments on time. Respondents were asked if they had failed to meet a scheduled loan payment during 13. This measure of late-payment experience dilFers conceptually from the aggregate delinquency rate statistics in some respects. the preceding twelve months (table 10). (In 1989 Whereas the delinquency rates reflect only current-period late and 1992, respondents were also asked if they had payments for only a specific type of loan, the survey-based measure reflects any instance of late payment over a period of time for any loan a household has. A household with several loans that missed 12. For a discussion of procedures used to compare results from only one payment on one loan is counted as a "late payer," even if surveys of the same households over time, see Arthur B. Kennick- all loans were paid up at the time of the survey. Given these ell and Douglas A. McManus, "Multiple Imputation of the 1983 criteria, it is neither surprising nor inconsistent with aggregate and 1989 Waves of the SCF," The 1994 Proceedings of the Section delinquency rate data that the proportions of households with late on Survey Research Methods, American Statistical Association payments from the survey are much higher than the rates from the (forthcoming). various delinquency-rate series. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

336 Federal Reserve Bulletin • April 1995 10. Proportion of households with debt making at least survey. The two lowest income groups showed a one late payment during the preceding twelve months, very high incidence of late payment in 1989 but a by selected household characteristics, 1983, 1989, and sharply lower incidence in 1992, with drops of 14 1992 and 9 percentage points. One striking finding was a Percent significant jump between 1989 and 1992 in the proportion of the highest-income households that missed a payment. Corporate restructuring that 17.3 15.3 eliminated some high-level management positions Income (1992 dolh Less than 10,000 and the price weakness in many key real estate 10,000-19,999 markets may help account for the group's wors- 20,000-29,999 30,000-49,999 ened payment record in 1992.15 50,000-99,999 2O!O 100,000-249,9 Households with little net worth recorded the 250,000 or more . highest incidence of failure to meet a payment, and Net worth (1992 < in each survey the proportion tended to decline Zero or lets 36.9 39.1 35.8 1-9,999 25.4 25.8 20.1 as net worth increased; all groups showed declines 10,000-24,999 .. 21.4 : :: 28.6 16.4 25,000-49,999 .. 23.0 24.2 13.9 between 1989 and 1992. Younger households con- 50,000-99,999 .. 14.6 22.5 12.1 sistently showed a higher rate of late payments 100,000-499,999 7.7 12.1 10.0 500,000 or more 3.0 8.9 7.5 than older households, but all age groups reported Age of head (y fairly substantial drop-offs in 1992. Nonwhite and Less than 35 23.9 29.9 20.3 m Hispanic households had a higher incidence of 35-44 19.4 23.2 18.8 14.4 16.5 13.6 missed payments than did non-Hispanic white 8.2 16.1 11.1 6.5 9.4 2.6 households, but they also showed more * * 4.4 improvement from 1989 to 1992. 14.6 18.8 11.8 23.4 27.3 22.8 Race or ethnicity > _ m SUMMARY AND CONCLUSIONS Non-Hispanic whiti 14.5 17.6 13.4 Nonwhite or Hispanic . 31.8 33.8 22.3 Household sector debt grew substantially during * Fewer than five survey respondents. the 1983-89 economic expansion, slowed markfrom the most recent recession as they had been edly over the next two years, then began to climb just after the 1981-82 recession. This finding again in 1992 as the economy recovered from appears consistent with the fifteen- and twenty-year recession. Various aggregate measures of houselows observed in the aggregate delinquency rates hold financial positions suggest that the sector discussed earlier.14 emerged from this ten-year cycle of expansion, Regardless of the year surveyed, larger propor- recession, and recovery on relatively sound foottions of lower- and middle-income households had ing. Asset holdings had also surged over the missed a scheduled payment. The smallest changes period, increasing the sector's net worth. Estimates across the three surveys were for the middle of households' scheduled debt-service payments groups—income between $20,000 and $50,000— relative to disposable personal income had risen to for which the proportions of late payers fluctuated a peak in 1989; the ratio was significantly lower by only about 2 percentage points from survey to 1992. Likewise, loan delinquency rates by 1992 had fallen sharply from earlier cyclical peaks and, in fact, continued to decline through 1994. 14. Although both the aggregate and survey-based measures of delinquency rates paint a fairly positive picture of the financial Data collected from individual households in health of the household sector, the number of personal bankruptcies 1983, 1989, and 1992 generally confirm the obserhas risen sharply over most of the period studied here, tending to vations drawn from the aggregate statistics. At the lower delinquency rates by debt write-offs rather than by debt repayments. Since 1992, the number of personal bankruptcies has been falling, but it is still high compared with the number in the mid-1980s. For a discussion of some causes and effects of personal 15. Although median home prices did not change much between bankruptcies see Charles A. Luckett, "Personal Bankruptcies," 1989 and 1992, prices of the most expensive homes fell precipi- Federal Reserve Bulletin, vol. 74 (September 1988), pp. 591-603. tously in many localities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Household Sector Borrowing and the Burden of Debt 337 all-household level, the surveys show a pattern of banks and other depository institutions and finance rise and subsequent decline over 1983-92 in ratios companies. These data are published regularly of debt-service payments to income and indicate in statistical releases and as part of the Federal that the incidence of late payments on loans was Reserve's flow of funds accounts. In this framelower in 1992 than in the other survey years. work, mortgage debt secured by one- to four- The distributions of debt and debt payments family homes is attributed to the household sector. among households grouped by various economic Such mortgages include both primary homeand demographic characteristics add further per- purchase mortgages and all junior-lien debt, such spective on household sector finances. Although as borrowing against home equity lines of credit. the picture is not unambiguously positive, the Consumer debt has two components: consumer overall thrust of the evidence from the disaggre- installment credit, which covers most nonmortgage gated data is that much of the sector's debt is loans to consumers repayable in two or more payowed by households that have ample resources to ments, including automobile loans, credit card debt, service it. Households with high income and personal cash loans, and sales finance contracts; substantial net worth account for the bulk of the and noninstallment consumer credit, mostly very debt. For some households, required debt pay- short term credit such as bridge loans sometimes ments indeed loom large relative to their income, used to facilitate real estate or other transactions. but between 1989 and 1992 the share of debt (The amount of noninstallment credit carried by owed by these households fell significantly. For the household sector is relatively small, about many heavily indebted households, the condition $50 billion.) apparently is transitory. For instance, most households that had high ratios of debt payments to income in 1983 had substantially reduced their Survey of Consumer Finances payment burdens by 1989. Many of the households with high ratios in 1992 reported that their income Since 1983, the Survey of Consumer Finances, a for the year was atypically low. Although most survey of the finances of U.S. households, has been high-ratio households had debts exceeding their conducted every three years by the Board of Goverfinancial assets, the proportion of late payers in that nors of the Federal Reserve System, with the coopgroup did not differ greatly from the proportion in eration of the Statistics of Income group at the the population of debtors at large. Internal Revenue Service.16 Data from the 1986 survey are not cited in this article because they are not strictly comparable to the other crosssections.17 The design of the 1983, 1989, and 1992 TECHNICAL APPENDIX surveys has been discussed in detail in previous The analysis in this article is based on information issues of the Federal Reserve Bulletin.18 from three major sources: aggregate data from institutional sources; cross-section survey data from the 1983, 1989, and 1992 waves of the Survey of Consumer Finances; and survey data from a 16. The Survey of Consumer Finances has been conducted periodically over the past fifty years—annually through 1971, again panel of respondents to both the 1983 and 1989 in 1977, and triennially since 1983. waves of the survey. This appendix provides some 17. For information on changes in household debt using 1986 background on these sources and discusses some of survey data, see Robert B. Avery, Gregory E. Elliehausen, and Arthur B. Kennickell, "Changes in Consumer Installment Debt: the conceptual differences in what each measures. Evidence from the 1983 and 1986 Surveys of Consumer Finances," Federal Reserve Bulletin, vol. 73 (October 1987), pp. 761-78. 18. See Kennickell and Starr-McCluer, "Changes in Family Finances from 1989 to 1992"; Arthur Kennickell and Janice Shack- Aggregate Data Marquez, "Changes in Family Finances from 1983 to 1989: Evidence from the Survey of Consumer Finances," Federal Reserve The aggregate data on the debt of the household Bulletin, vol. 78 (January 1992), pp. 1—18; and Robert B. Avery and Gregory E. Elliehausen, "Financial Characteristics of Highsector (that is, all individuals in the economy) Income Families," Federal Reserve Bulletin, vol. 72 (March 1986), derive mainly from the reports of commercial pp.163-77. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

338 Federal Reserve Bulletin • April 1995 The design of the 1989 sample was particularly directly from survey respondents rather than complex. The survey provided both cross-sectional depository institutions; for credit card debt and information on 3,143 households and longitudinal some other types of loans for which fixed payments information on a sample of 1,497 households that are not regularly scheduled, payments were estiparticipated in the 1983 survey.19 The longitudinal mated using prevailing market interest rates or part of the survey oversampled households headed rates reported by respondents. In addition, the surby individuals more than forty-five years old and vey income figures are measures of total cash households whose residences had not changed income before taxes for the full calendar year presince 1983; no attempt was made to obtain a longi- ceding the survey, whereas the aggregate data tudinal interview with households headed by indi- include some noncash income as well, for example, viduals younger than twenty-two in 1983. Because employer contributions to pension plans. this group of young households excludes a large For consistency with the terminology commonly number of young people who were in college or the used with the aggregate data, the word household is military in 1983 or who were living with their used throughout the discussion of the survey data parents or in related living arrangements, it is not even though past reports on the surveys have used representative of independent households headed the term family. In this article, household is used by individuals younger than twenty-eight in 1989. with the same intent as the earlier term to refer to The survey-based measures of debt are broadly the primary economic unit (PEU) within each of similar to the aggregate measures, but they differ in the dwelling units that were included in the sample. important ways. The surveys obtain information The PEU is defined as the economically dominant about types of debt not included in the aggregates, single individual or pair of individuals (who may such as loans from individuals or borrowing against be married or living as partners) and all other 401(k) accounts. Payments data are obtained individuals who are financially dependent on that person or those persons. The term head used in this article is an artifact of the organization of the data and implies no judgment about the structure of 19. More detailed information on the longitudinal part of the households. The head is taken to be the central sample is available in Kennickell and McManus, "Multiple Imputation of the 1983 and 1989 Waves of the SCF." The data, along with person in a PEU, the male in a mixed-sex core further technical documentation, are available from the National couple, or the older person in a same-sex core Technical Information Service, Federal Computer Products, 5285 Port Royal Road, Springfield, VA 22161, (703) 487-4763. couple. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

339 Industrial Production and Capacity Utilization for February 1995 Released for publication March 15 to 1.1 percent. Output at utilities continued its rebound with a gain of 2Vi percent as temperatures Industrial production rose 0.5 percent in February; returned to about normal in February. Manufacturthe January increase was revised down, to 0.2 per- ing output increased 0.4 percent; this gain followed cent, and the December increase was revised up, a downwardly revised gain of 0.2 percent in Janu- Industrial production indexes Twelve-month percent change Twelve-month percent change 10 10 Materials 5 5 + Products Nondurable 0 manufacturing 5 1989 1990 1991 1992 1993 1994 1995 1989 1990 1991 1992 1993 1994 1995 Capacity and industrial production Ratio scale, 1987 production = 100 Ratio scale, 1987 production = 100 — Total industry Capacity . —•— - 140 — Manufacturing Capacity — 140 ^ ^^ ~ 120 - — - 120 100 100 ^— ^ Production —Production 80 80 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Percent of capacity Percent of capacity Total industry Manufacturing Utilization 90 Utilization 90 80 80 70 70 J L J I I L J I L J L 1981 1983 1985 1987 1989 1991 1993 1995 1981 1983 1985 1987 1989 1991 1993 1995 AH series are seasonally adjusted. Latest series, February. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

340 Federal Reserve Bulletin • April 1995 Industrial production and capacity utilization, February 1995 Industrial production, index, 1987=100 Percentage change CCCCaaaatttteeeeggggoooorrrryyyy 11999944 11999955 19941 1995 FFeebb.. 11999944 ttoo Nov.r Dec.r Jan.' Feb.P Nov.r Dec.r Jan/ Feb.P FFeebb.. 11999955 TTTToooottttaaaallll 120.3 121.7 122.0 122.6 .7 1.1 .2 .5 6.1 PPPPrrrreeeevvvviiiioooouuuussss eeeessssttttiiiimmmmaaaatttteeee 120.4 121.4 121.9 .8 .9 .4 MMMMaaaajjjjoooorrrr mmmmaaaarrrrkkkkeeeetttt ggggrrrroooouuuuppppssss PPPPrrrroooodddduuuuccccttttssss,,,, ttttoooottttaaaallll2222 117.5 118.7 119.1 119.7 .5 1.0 .4 .4 5.0 CCCCoooonnnnssssuuuummmmeeeerrrr ggggooooooooddddssss 113.9 115.2 115.3 115.9 .8 1.2 .1 .5 3.1 BBBBuuuussssiiiinnnneeeessssssss eeeeqqqquuuuiiiippppmmmmeeeennnntttt 151.0 153.1 154.7 155.2 .1 1.3 1.0 .4 9.3 CCCCoooonnnnssssttttrrrruuuuccccttttiiiioooonnnn ssssuuuupppppppplllliiiieeeessss 109.8 111.6 112.2 112.3 .0 1.7 .6 .1 9.4 MMMMaaaatttteeeerrrriiiiaaaallllssss 124.6 126.3 126.3 127.2 .9 1.4 .0 .7 7.7 MMMMaaaajjjjoooorrrr iiiinnnndddduuuussssttttrrrryyyy ggggrrrroooouuuuppppssss MMMMaaaannnnuuuuffffaaaaccccttttuuuurrrriiiinnnngggg 122.6 124.1 124.3 124.8 .9 1.2 .2 .4 6.9 DDDDuuuurrrraaaabbbblllleeee 129.1 131.3 131.9 132.5 .9 1.7 .5 .5 8.5 NNNNoooonnnndddduuuurrrraaaabbbblllleeee 115.4 116.2 115.9 116.3 1.0 .7 -.2 .3 5.0 MMMMiiiinnnniiiinnnngggg 98.3 100.1 100.0 100.2 -.9 1.9 -.1 .1 .7 UUUUttttiiiilllliiiittttiiiieeeessss 116.5 115.8 117.3 120.3 -.6 -.6 1.3 2.6 .6 Capacity utilization, percent MMMEEEMMMOOO CCCaaapppaaaccciiitttyyy,,, pppeeerrr--ccceeennntttaaagggeee 1994 1995 ccchhhaaannngggeee,,, AAvveerraaggee,, LLooww,, HHiigghh,, FFFeeebbb... 111999999444 11996677--9944 11998822 11998888--8899 tttooo Feb. Nov/ Dec/ Jan/ Feb/ FFFeeebbb... 111999999555 Total 82.0 71.8 84.9 83.2 84.8 85.5 85.5 85.7 2.9 Previous estimate 84.8 85.4 85.5 Manufacturing 81.3 70.0 85.2 82.2 84.4 85.2 85.1 85.1 3.3 Advanced processing 80.7 71.4 83.5 80.7 82.4 83.0 83.2 83.3 3.7 Primary processing 82.5 66.8 89.0 86.1 89.5 90.7 89.9 89.8 2.2 Mining 87.4 80.6 86.5 89.3 88.2 89.8 89.7 89.9 .0 Utilities 86.7 76.2 92.6 88.9 85.8 85.2 86.2 88.3 1.3 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. ary and advances that averaged 0,9 percent per The output of business equipment increased month in the final quarter of last year. Industrial 0.4 percent in February and 9.3 percent over the production in February was 122.6 percent of its past twelve months. Gains for February were evi- 1987 average and was 6.1 percent higher than in dent in office and computing equipment, industrial February 1994. Capacity utilization increased equipment, and business light trucks. The output of 0.2 percentage point, to 85.7 percent, its highest defense and space equipment declined 0.6 percent; level since October 1979. the cumulative drop over the past twelve months When analyzed by market group, the data show was 7.5 percent. that the output of consumer goods increased The output of construction supplies edged up, 0.5 percent. The production of consumer durables while that of business supplies rose 0.6 percent rose 0.1 percent; an increase in the production of largely because of a strong gain in commercial consumer light trucks and selected replacement electricity and gas sales. The production indexes auto parts was largely offset by declines in the for total materials and for durable goods materials output of other consumer durables. The production rose 0.7 percent and 0.6 percent respectively. The of consumer nondurables, boosted by the sharp output of nondurable goods materials increased gain at residential utilities, increased 0.7 percent; 0.5 percent, and the output of energy materials the production of consumer chemical products and increased 1.0 percent. Within durable materials, gasoline also rose. strong gains were again recorded in semiconduc- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Industrial Production and Capacity Utilization 341 tors and other computer parts. Within nondurables, Factories operated again at 85.1 percent of the output of paper, chemicals, and textiles all capacity, just below the recent cyclical peak increased. reached in January 1989. The utilization rate in When analyzed by industry group, the data show the primary-processing industries edged down that manufacturing output rose 0.4 percent, to a 0.1 percentage point, to 89.8 percent. Since level 6.9 percent higher than that of February 1994. November this rate has remained near 90 percent, The output in nondurable manufacturing increased the highest sustained level since 1973. Utilization 0.3 percent in February after a decline in Jan- for advanced-processing industries edged up uary. Within nondurable manufacturing, gains 0.1 percentage point, to 83.3 percent, but remained were widespread; only the output of apparel prod- 0.2 percentage point below the January 1989 high. ucts declined. Growth in durable manufacturing The output of utilities, which had fallen to a advanced another 0.5 percent; noticeable declines relatively low level in December, rose 1.3 percent in the production of steel, lumber, and furniture and in January and another 2.6 percent in February; the fixtures contrasted with increases in machinery and operating rate at utilities reached 88.3 percent, its computer equipment, light trucks, and miscella- highest level since the heat wave of last June. neous manufactures. Operating rates at mines rose, with gains in metal mining and oil and gas well drilling. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

342 Statements to the Congress Statement by Alan Greenspan, Chairman, Board of and unsustainable pace of late 1994. Although Governors of the Federal Reserve System, before hours of work lengthened in January, employment the Committee on Banking, Housing, and Urban growth slowed from its average of recent quarters Affairs, U.S. Senate, February 22, 1995 and the unemployment rate rose. Moreover, recent readings on retail sales suggest a more moderate I appreciate this opportunity to discuss the Federal rate of increase, and housing activity has shown Reserve's conduct of monetary policy. As required some softness. Nonetheless, the economy has conby law, we have already delivered to the Congress tinued to grow, without seeming to develop the our formal report detailing the performance of the types of imbalances that in the past have undereconomy and the implementation of policy.1 In my mined ongoing expansion. remarks this morning, I will summarize that dis- Of crucial importance to the sustainability of the cussion and expand further on some of the key gains over the past few years, they have been factors bearing on monetary policy. achieved without a deterioration in the overall inflation rate. The consumer price index (CPI) rose 2.7 percent last year, the same as in 1993. Inflation at the retail level, as measured by the CPI, has been RECENT DEVELOPMENTS a bit less than 3 percent for three years running Nineteen hundred and ninety-four was a good year now—the first time that has occurred since the for the U.S. economy. Economic growth quickened, early 1960s. This is a signal accomplishment, for it with real gross domestic product expanding 4 marks a move toward a more stable economic percent over the four quarters of the year. In environment in which households, businesses, and manufacturing, industrial production advanced governmental units can plan with greater confinearly 6 percent. We now have enjoyed more than dence and operate with greater efficiency. three years of relatively brisk advance in the As I have stated many times in congressional nation's output of goods and services, and this testimony, I believe firmly that a key ingredient in economic progress has been shared by many Amer- achieving the highest possible levels of productivicans. Payrolls swelled 2>Vi million last year, and ity, real incomes, and living standards is the the unemployment rate closed 1994 at 5VI percent, achievement of price stability. Thus, I see it as more than 1 percentage point below its level one crucial that we extend the period of low inflation, year ago. And workers were producing more on hopefully returning it to a downward trend in the average: Output per hour in the nonfarm sector years ahead. The prospects in this regard are increased about 1 Vi percent over the four quarters fundamentally good, but there are reasons for some of last year, suggesting some tilting up to the concern, at least with respect to the nearer term. underlying trend of labor productivity that prom- Those concerns relate primarily to the fact that ises sustained and substantial benefits in the com- resource utilization rates have already risen to high ing years. levels by recent historical standards. The current unemployment rate, for example, is only a bit The data that have been published in the first above the average of the late 1980s, when wages weeks of 1995 have offered some indications that and prices accelerated appreciably. The same holds the expansion may finally be slowing from its torrid true of the capacity utilization rate in the industrial sector. Clearly, one factor in judging the inflationary 1. See "Monetary Policy Report to the Congress." Federal Reserve Bulletin, vol. 81 (March 1995), pp. 219-43. risks in the economy is the potential for expansion Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

343 of our productive capacity. If "potential GDP" is actually is beginning to become strained—irrespecgrowing rapidly, actual output can also continue to tive of where current unemployment rates or cagrow rapidly without intensifying pressures on pacity utilization rates may lie. If we are endeavresources. In this regard, many commentators, my- oring to fend off instability before it becomes self included, have remarked that there might well debilitating to economic growth, direct evidence of be something of a more-than-cyclical character to the emerging process is essential. Consequently, the evident improvement of U.S. competitive capa- one must look beyond broad indicators to assess the bilities in recent years. Our dominance in computer inflationary tendencies in the economy. software, for example, has moved us back to a In this context, aggregate measures of pressure in position of clear leadership in advanced technology labor and product markets do seem to be validated after some faltering in the 1970s. But although by finer statistical and anecdotal indications of most analysts have increased their estimates of U.S. tensions. In the manufacturing sector, for example, long-term productivity growth, it is still too soon to purchasing managers have been reporting slower judge whether that improvement is a few tenths of supplier deliveries and increasing shortages of ma- 1 percentage point annually or even more, perhaps terials. Indeed, firms appear to have been building moving us closer to the more vibrant pace that their inventories of materials in recent months so as characterized the early post-World War II period. It to ensure that they will have adequate supplies on is fair to note, however, that the fact that labor and hand to meet their production schedules. These factory utilization rates have risen as much as they pressures have been mirrored in a sharp rise over have in the past year or so does argue that the rate the past year in the prices of raw materials and of increase in potential is appreciably below the 4 intermediate components. There are increasing repercent growth rate of 1994. ports that firms are considering marking up the Knowing in advance our true growth potential prices of final goods to offset those increased costs. obviously would be useful in setting policy because In that regard, January's core CPI posted its largest history tells us that economies that strain labor gain since October 1992, perhaps sounding a cauforce and capital stock limits tend to engender tionary note. In the labor market, anecdotal reports inflation instabilities that undermine growth. It is of "shortages" of workers have become more true, however, that, in modern economies, output common. To be sure, increased wages are a good levels may not be so rigidly constrained in the short thing if they can be achieved without commensurun as they used to be when large segments of rate acceleration in prices, but they are not benefioutput were governed by facilities such as the old cial if they are merely a part of a general pickup in open-hearth steel furnaces that had rated capacities inflation. A hopeful sign in this regard, however, is that could not be exceeded for long without break- that to date the trends in the expansion of money down. Rather, the appropriate analogy is a flexible have remained subdued, and aggregate credit is ceiling that can be stretched when pressed; but as growing moderately. These developments do not the degree of pressure increases, the extent of suggest that the financial tender needed to support flexibility diminishes. It is possible for the econ- the ongoing inflation process is in place. omy to exceed "potential" for a time without That kind of ongoing process would also be adverse consequences by extending work hours, by expected to involve a different expectational clideferring maintenance, and by forgoing longer- mate from what seems to prevail today. Despite the term improvements. Moreover, as world trade ex- marked improvement in consumer confidence over pands, access to foreign sources of supply aug- all, the survey readings on consumers' views of ments, to a degree, the flexibility of domestic whether jobs are easy to get fall far short of the productive facilities for goods and some services. previous cyclical peak in 1989. Moreover, there is Aggregative indicators, such as the unemploy- some evidence that the number of people voluntarment rate and capacity utilization, may be sugges- ily leaving their jobs is currently subnormal. This tive of emerging inflation and asset price instabil- suggests that deep-seated job insecurity has not ities. But they cannot be determinative. fully dissipated despite strong job growth recently. Policymakers must monitor developments on an Some analysts attribute this phenomenon to ongoing basis to gauge when economic potential workers' concerns about losing health insurance Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

344 Federal Reserve Bulletin • April 1995 and, for some, pension coverage if they change would begin to accelerate, jeopardizing the durajobs. Whatever the cause, the lingering sense of bility of the current expansion. In the event, the insecurity doubtless has been a factor damping strength in demand and the potential for intensifiwage growth and overall labor costs. Since the cation of pressures on prices were even more latter, on a consolidated basis, accounts for roughly substantial than envisioned when we started down two-thirds of overall costs in our economy, slower that road. As we thought might be possible at this wage growth, combined with strong cyclical pro- time last year, a significant upturn in inventory ductivity growth, has restrained increases in unit investment induced a stronger economy than was labor costs and hence in prices of final goods and generally anticipated. Additional strains on capacservices. ity became increasingly evident in higher prices at However, as overall output growth of necessity early stages of production processes. slows in an environment of high-resource utiliza- Moreover, in financial markets, the effects of the tion, so will cyclical productivity growth. More- policy Armings were muted to an extent by an over, if labor market tightness assuages job insecu- easing of terms and conditions on bank loans and rity, pressures to raise wages might well intensify, by a drop in the foreign exchange value of the and unit labor costs could accelerate. In the later dollar. In these circumstances, the Federal Reserve stages of previous business cycles, declines in needed to take further steps to head off potential profit margins absorbed some of the increases in instabilities that would threaten the economic exunit labor cost, but some were passed through into pansion. Over the past year, including our most final goods prices and inflation picked up. Thus far recent action, we have raised money market interest in the current cycle, price increases have been rates seven times, pulling the federal funds rate up muted, not only by subdued unit labor costs but 3 percentage points, to 6 percent. Four of these also by a prevailing concern among firms that, actions were associated with increases in the disdespite capacity pressures, enough slack remains in count rate. The discount rate now stands at 5 VA the system to foster competitive inroads on those percent, or 2VA percentage points, higher than it who try to price above the market. But this form of was at the onset of tightening. discipline may also become less effective if pres- A stronger track for economic activity, higher sures on resources persist. Consequently, it may be credit demands, and a revival of inflation fears that these pressures will lead to some deterioration pushed up yields on securities with intermediate- to in the price picture in the near term, but any such longer-term maturities from Wi percentage points deterioration should be contained if the Federal to 3 percentage points over the past year. Most of Reserve remains vigilant. that rise was posted in the first three quarters of 1994. As Federal Reserve action—particularly the 3A of 1 percentage point move in November—came to convince most market participants that policy POUCY ACTION AND FINANCIAL MARKETS would sufficiently restrain excess aggregate demand, those inflation fears and uncertainty premi- It was to preserve and to extend the gains associ- ums subsided a bit. This change in attitude, reinated with low and declining inflation—and to avoid forced by signs of moderating demand, has helped the instabilities and imbalances attendant to rising to trim interest rates on long-term Treasuries and inflation—that we began the process of tightening fixed rate mortgages more than Vi of 1 percentage one year ago. Our view at the time was that the point from their peaks in November. accommodative policy stance that we had adopted The adjustment in financial markets to rising in earlier years to contain the effects of financial interest rates was not, by any means, smooth. At the strains on borrowers and lenders was no longer beginning of this process of tightening, many appropriate once their balance sheets had been members of the Federal Open Market Committee greatly strengthened. In these changed circum- (FOMC) shared a concern that some market parstances, absent policy action, pressures on capital ticipants, made complacent by the relatively high and labor resources could build to the point where and stable returns on long-term assets that had imbalances would emerge and costs and prices prevailed for a considerable stretch of time, had Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 345 taken on substantial risk in their portfolios as they originations at flexible rates—often involving conreached for yield—in some instances leveraging cessionary initial terms—and, perhaps, some easheavily. Taking account of this, our first three steps ing of loan qualification standards permitted some were small—with each translating into a lA of 1 buyers who otherwise would not have been able to percentage point rise in the federal funds rate—to obtain financing to go ahead with their home allow market participants an extended opportunity purchases. All told, improved access to credit to readjust their portfolios in light of rising short- provided important support to spending. term rates. As markets became accustomed to the new direction of short rates, the FOMC picked up the pace of firming. Measures of bond-price volatility, both actual and those inferred from options SOME RECENT LESSONS prices, moved higher when monetary policy first began to firm but rolled back much of that run-up Events of the past two months have taught us once as the year progressed. again that the global nature of trade in goods, Although securities markets were turbulent from services, and financial instruments exerts an exacttime to time, in general, they remained quite ing discipline on the behavior of central banks. resilient and performed their economic function of Technology has defeated distance by slashing the allocating credit quite well. Indeed, in some re- costs of gathering information and of transacting. spects, credit has apparently been easier to get, Advances in computing and financial engineering likely in reflection of the improved assessment of during the past ten or fifteen years have enabled financial prospects for borrowers and the larger investors and speculators to choose among a wide capital cushions of many lenders. In many securi- array of investment instruments, allowing them to ties markets, quality spreads, when measured by manage risks better and, when they choose, to exert the difference between rates on private and Trea- their notions about future market movements forcesury instruments of comparable maturities, have fully through the use of leverage. The former, been quite thin. Commercial banks trimmed their improved risk management, has done much to own lending margins—effectively absorbing some make markets more resilient, while the latter, easier of the rise in market interest rates before they got to recourse to leverage, may add to the volatility of borrowers—and exhibited a renewed aggressive- financial prices at times. ness in competing for loans. Bankers themselves These developments have freed up the flow of reported to us further easing of terms and standards international capital, thus potentially improving the on business loans over the course of 1994 and into efficiency of the allocation of the world's resources 1995. The pickup in total borrowing by nonfinan- and raising the world's living standards. They have cial businesses was focused primarily on bank also permitted markets to respond more quickly loans and other shorter-term sources of funding. and with greater force to a country's macroeco- This shift toward shorter maturities, no doubt, nomic policies. This puts a special burden on the importantly resulted from the substantial run-up in Federal Reserve because the U.S. dollar is effeclonger-term interest rates over the year, but there tively the key reserve currency of the world trading probably was some role played by banks' efforts to system. In that role, we enjoy an increased demand make more loans and interest income, especially as for our financial instruments. However, this role trading income declined. also heightens the share of the demand for dollar Households also increased the pace of their assets that is related to more volatile portfolio borrowing. Double-digit annual growth of con- motives. The new world of financial trading can sumer credit helped to fund considerable outlays punish policy misalignments with amazing alacrity. for durable goods, especially autos. This, too, may This is a lesson repeated time and again, taught have been related, in part, to the eagerness of most recently by the breakdown of the European commercial banks to make consumer loans. And a Exchange Rate Mechanism in 1992 and the plunge wide menu of mortgage instruments gave home- in the exchange value of the peso over the past two buyers some flexibility in coping with the rise in months. In the process of pursuing their domestic interest rates. The increasing share of mortgage objectives, central banks cannot be indifferent to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

346 Federal Reserve Bulletin • April 1995 the signals coming from international financial slowing in interest-sensitive spending, but the markets. Although markets can be harsh teachers at slowing is mostly concentrated in housing activity. times, the constraints that they impose discipline Our reading of the historical record is that the our policy choices and remind us every day of our cumulative effect of higher interest rates should longer-run responsibilities. lead to a significant deceleration in spending. But to While there are many policy considerations that date, the jury remains out on whether the slowing arise as a consequence of the rapidly expanding that is in train will be sufficient to contain inflation global financial system, the most important is the pressures. necessity of maintaining stability in the prices of That judgment also rests importantly on a readgoods and services and confidence in domestic ing of business cycle developments more generalfinancial markets. Failure to do so is apt to exact far ly—cycles that often relate to the interaction of greater consequences as a result of cross-border physical stocks and flows. These dynamics are capital movements than those which might have most clearly seen in inventory investment, which prevailed a generation ago. has always been an important swing factor in the postwar era. In 1994, the increase in inventory investment in real terms added almost 1 percentage point to growth of gross domestic product. It THE ECONOMIC OUTLOOK appears most unlikely that business people will wish to build their stocks at the pace they did in Looking ahead to the prospects for the U.S. econ- 1994. But whether their actions with respect to omy, we must remember that the nation has entered inventories will turn that "plus" for growth last 1995 with its resources stretched. We do not now year into a significant "minus" in 1995 remains to have the substantial unused capacity that made be seen. possible the especially favorable macroeconomic Incoming information does not suggest that a outcomes of 1993 and 1994—rapid real growth and substantial inventory correction is imminent. Stanstable or declining inflation. As a result, the likely dard inventory-sales ratios remain on the low side performance of the economy in 1995 almost surely of historical experience; those ratios look even will pale in comparison with that of the previous lower compared with historical experience if one two years. The growth in output arguably must subtracts wholesale and retail markups from the slow to a more sustainable pace, and resource published inventory investment figures to get a utilization must settle in at its long-run potential to better handle on the underlying physical units of avoid inflationary instabilities. Inflation, itself, is stocks. Moreover, even if there were a swing in unlikely to moderate further and may even tick up inventory investment, it would have a more muted temporarily. But over all, the performance of the effect on domestic production than the inventory economy should still be good. We expect growth to cycles of just a few years ago. Rough estimates continue and inflation to be contained. suggest that, currently, perhaps a quarter of the The Federal Reserve, for its part, will be attempt- nominal value of all wholesale and retail stocks are ing to foster financial conditions that will extend imported, whereas the share was substantially less that good performance through 1995 and beyond. as recently as the late 1970s. Our policy actions will depend on an ongoing Similar stock-flow interactions should be at assessment of a number of forces acting on the work in spending for consumer durables. Large economy. One is the effects of the rise in interest increases in real outlays for consumer durables rates that has occurred over the past year. The over the past three years, partly financed in recent effects of higher interest rates on spending are quarters by unsustainably rapid growth in the voldifficult to pinpoint with any precision because they ume of credit, may well have exhausted most of the occur with a lag and have a diffuse influence on the pent-up demand that had accumulated when the behavior of households and firms throughout the economy was sluggish in the early 1990s. economy. Data rarely point in one direction, and In another area, actions of this Congress regardthe available information on spending fits this rule. ing the federal budget deficit will have important As yet, the performance of the economy suggests a consequences for the economic outlook. A credible Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 347 program of fiscal restraint that moves the govern- to contain inflation and keep the economy on a ment's finances to a sounder footing almost surely sustainable path. The 1 percent to 5 percent range will find a favorable reception in financial markets. for M2 provides a reasonable benchmark for longer- That market reaction, by itself, should serve as a run growth of this aggregate that could be source of stimulus that would help to offset, in expected if the behavior of its velocity was to whole or in part, the drag on spending that would return to its historical pattern under conditions of otherwise be associated with reductions in federal price stability. This would not be true for M3, outlays and transfers over time. It is also important however, which historically has grown faster than to remember that a larger issue is at stake during M2, but which has been depressed in recent years these deliberations on the federal budget. Too much by a number of factors, including the difficult of the small pool of national saving goes toward financial adjustment of banks and thrift institutions. funding the government, to the detriment of capital If the broader aggregate M3 returns to its previous formation. By trimming the deficit, those resources alignment, its range of 0 percent to 4 percent would will likely be put to more productive uses, leading have to be adjusted upward. At 3 percent to 7 to benefits in the form of improved living stan- percent, the monitoring range for the growth of dards. total domestic nonfinancial debt is centered on the Federal Reserve policymakers had to weigh actual growth of that aggregate over the past three these factors and more in determining their indi- years but is 1 percentage point lower than the vidual forecasts. As is detailed in the semiannual monitoring range in 1994. While the performance Monetary Policy Report, the central tendency of the of the monetary and debt aggregates compared with forecasts of the Board members and the Reserve these ranges will continue to inform the FOMC's Bank presidents was that real GDP would grow at deliberations, the uncertainties about the behavior a rate of 2 percent to 3 percent over the four of their velocities will necessitate careful interprequarters of 1995. This slowing from last year's tation of their behavior and a watchful eye toward unsustainable pace was viewed as sufficient to a wide variety of other financial and nonfinancial bring output growth more in line with that of its indicators. potential, helping to stabilize the unemployment rate in the range of the past few months, near 5!/2 percent. The governors and the Reserve Bank presidents forecast some edging up of consumer INFORMATION RELEASE price inflation in 1995, with the central tendency of their forecasts bracketed by 3 percent and V-h One final point: To make our policy intent as percent. If we are to do our part in helping the transparent as possible to market participants witheconomy operate at its fullest potential over time, out losing our flexibility or undermining our delibwe need to remain watchful to ensure that this erative process, at its latest meeting, the FOMC cyclical upswing in the inflation rate expected for decided to preserve the greater openness of its 1995 does not become firmly entrenched. policymaking that it established last year. To that end, all decisions to change reserve market conditions will be announced in a press release on the same day that the decision is made. MONETARY AND CREDIT AGGREGATES The debate surrounding each policy decision will be reported, as is currently the practice, in compre- In discussing these matters at its meeting earlier hensive minutes of the meeting that are released on this month, the FOMC determined that the provi- the Friday after the next regularly scheduled meetsional ranges it had chosen for the monetary aggre- ing of the FOMC. For students of monetary poligates and domestic nonfinancial debt in July 1994 cymaking, those minutes will be supplemented by remained consistent with its current outlook for lightly edited transcripts of the discussion at each economic activity and prices. Moreover, these FOMC meeting. Transcripts for an entire year will ranges conform to the projected deceleration in be released with a five-year lag. Continuing our nominal income that is associated with our efforts current practice, the raw transcripts will be circu- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

348 Federal Reserve Bulletin • April 1995 lated to each participant shortly after an FOMC or prices one way or another—there is no monetary meeting to verify his or her comments, and only policy "straw that broke the camel's back." The changes that clarify meaning, say to correct gram- cumulative effects of many policy actions may be mar or transcription errors, will be permitted. A substantial, but the historical record suggests that limited amount of material will be redacted from any given change in rates will have about the same these transcripts before they are released, primarily effect as a previous change of the same size. to protect the confidentiality of foreign and domes- Because the effects of monetary policy are felt tic sources of intelligence that would dry up if their only slowly and with a lag, policy will have a better information were made public. A complete, unre- chance of contributing to meeting the nation's dacted version of the transcripts of each FOMC macroeconomic objectives if we look forward as meeting will be turned over to the National Ar- we act—however indistinct our view of the road chives and Records Administration after thirty ahead. Thus, over the past year we have firmed years have elapsed, as required by law. policy to head off inflation pressures not yet evident After careful consideration, the FOMC believed in the data. Similarly, there may come a time when that these steps, which essentially formalize the we hold our policy stance unchanged, or even ease, procedures that we have been using over the past despite adverse price data, should we see signs that year, strike the appropriate balance between mak- underlying forces are acting ultimately to reduce ing our decisions and deliberations accessible as inflation pressures. Events will rarely unfold exsoon as feasible and retaining flexibility in policy- actly as we foresee them, and we need to be making, while preserving an unfettered deliberative flexible—to be willing to adjust our stance as the process. weight of new information suggests it is no longer appropriate. That flexibility applies to the particular stance of policy—not its objectives. We vary short- CHALLENGES AHEAD term interest rates to further the goals set for us in the Federal Reserve Act, namely promoting over I and my colleagues appreciate the time and the time "maximum employment, stable prices, and attention that the members of this committee de- moderate long-term interest rates." vote to oversight of monetary policy. Our shared Achieving those goals has become increasingly goal—the largest possible advance in living stan- more complex in the nearly two decades since they dards in the United States over time—can be best were put into the Federal Reserve Act, as a conseachieved if our actions ultimately allow concerns quence of technology-driven changes in financial about the variability of the purchasing power of markets in the United States and around the world. money to recede into the background. Price stabil- Suppressing inflationary instabilities—a necessary ity enables households and firms to have the great- condition of achieving our shared goals—requires est freedom possible to do what they do best—to not only containing prevalent price pressures but produce, invest, and consume efficiently. also diffusing unsustainable asset price perturba- But the best path to that long-run goal is not now, tions before they become systemic. These are and probably never will be, obvious. Policymaking formidable challenges, which will confront poliis an uncertain enterprise. Monetary policy actions cy—both fiscal and monetary—in the years ahead. work slowly and incrementally by affecting the It is, of course, unrealistic to assume that we can decisions of millions of households and businesses. eliminate the business cycle, human nature being And we adjust policy step by step as new informa- what it is. But containing inflation, and thereby tion becomes available on the effects of previous damping economic fluctuations, is a reasonable actions and on the economic background against goal. We at the Federal Reserve look forward to which policy will be operating. No individual step working with the Administration and the Congress is ever likely to be decisive in pushing the economy in meeting our common challenges. • Chairman Greenspan presented identical testimony before the Subcommittee on Domestic and International Monetary Policy of the Committee on Banking and Financial Services, U.S. House of Representatives, February 23, 1995. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 349 Statement by Alan Greenspan, Chairman, Board of challenging the institutional and market boundaries Governors of the Federal Reserve System, before that in an earlier day seemed so well defined. the Committee on Banking and Financial Services, Technological innovation has accelerated the sec- U.S. House of Representatives, February 28, 1995 ond major trend, financial globalization, that has been in process for at least three decades. Both developments have expanded cross-border asset I am pleased to be here today to present the views holdings, trading, and credit flows, and, in reof the Board of Governors of the Federal Reserve sponse, both securities firms and U.S. and foreign System on expanding permissible affiliations be- banks have increased their cross-border locations. tween banks and other financial services provid- Foreign offices of U.S. banking organizations have ers. The bills being introduced in this Congress, for some time been permitted, within limits, to such as the newly revised "Financial Services meet the competitive pressures of the local markets Competitiveness Act of 1995," introduced by in which they operate by conducting activities not Chairman Leach, would continue the moderniza- permitted to them at home. In the evolving intertion of our financial system begun with last national environment, these offshore activities have year's passage of the landmark interstate banking included global securities underwriting and deallegislation. The Leach bill would authorize the ing, through subsidiaries, an activity in which U.S. affiliation of banks and securities firms as well as banking organizations have been among the world permit banks to have affiliates engaged in most leaders, despite limitations on their authority to other financial activities. distribute securities in the United States. Before I present the Board's views, however, I Such a response to competition abroad is an first want to commend Chairman Leach for his example of the third major trend reshaping finanleadership in recognizing the importance of con- cial markets—market innovation—which has been gressional action in this area and for acting as much a reaction to technological change and promptly to bring his bill before the committee for globalization as an independent factor. These deits consideration. The new Leach bill would reform velopments make it virtually impossible to mainoutdated statutory prohibitions established for a tain some of the rules and regulations established financial system that no longer exists. It thus for a different economic environment. As a result, provides the Congress with the opportunity to make there is broad agreement that statutes governing the the financial system more competitive and more activities of banking organizations increasingly responsive to consumer needs, all within a frame- form an inconsistent patchwork. work that would maintain the safety and soundness For example, under federal standards, banking of insured depository institutions. The Board be- organizations may act as agents in private placelieves that modern global financial markets call for ments of securities and, in fact, have done so quite permitting financial organizations to operate over a successfully, accounting recently for one-third of wider range of activities. The approach contained all corporate bonds and one-seventh of all equity in the new Leach bill would be a major step, privately placed. Banking organizations may also providing realistic reform, and thus has the strong act as brokers of securities and as investment support of the Board of Governors of the Federal advisers for individuals and mutual funds. For Reserve System. many years, they have acted as major dealers in There is, I think, general agreement on the forces U.S. government and municipal general obligation shaping our evolving financial system—forces that bonds. Banking organizations are also the leading require that we modernize our statutory framework innovators and dealers in derivatives, and banking for financial institutions and markets. The most organizations operate futures commission merprofound is, of course, technology: the rapid chants as holding company subsidiaries. As just growth of computers and telecommunications. noted, banking organizations underwrite and deal Their spread has lowered the cost and broadened in securities abroad, and, since 1987, banking the scope of financial services, making possible organizations with the necessary infrastructure may new product development that would have been apply for limited underwriting and dealing of seinconceivable a short time ago and, in the process, curities through special bank holding company Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

350 Federal Reserve Bulletin • April 1995 subsidiaries under a Federal Reserve Board inter- decrease economic efficiency, and that, as a result, pretation of section 20 of the Glass-Steagall Act. limit choices and options for the consumer of In a pattern that is reminiscent of interstate financial services. Such statutory prohibitions result branching developments, the states for some time in higher costs and lower quality services for the have been removing restrictions on the activities of public and should be removed. That their removal state-chartered banks. The Federal Deposit Insur- would permit banking organizations to compete ance Corporation, as required by the Federal De- more effectively in their natural markets is an posit Insurance Corporation Improvement Act, re- important and desirable by-product, but not the views such activities but has not rejected an major objective, which ought to be a more efficient application to exercise any of these powers from financial system providing better services to the adequately or well-capitalized banks. According to public. Removal of such prohibitions moves us the Conference of State Bank Supervisors, in 1993, closer to such a system. seventeen states—including several large ones— Indeed, the Board urges that, as you consider the had authorized banks to engage in securities under- reforms before you, the focus not be on which set writing and dealing, with about half requiring such of financial institutions should be permitted to take activity in an affiliate. At the federal level, the on a new activity or which would, as a result, get a Office of the Comptroller of the Currency has new competitor. All are doing similar things now proposed a process to allow national bank subsid- and are now in competition with each other, offeriaries to conduct activities not permitted for the ing similar products. Securities firms have for some bank. time offered checking-like accounts linked to mu- And so it goes on. Technological change, glob- tual funds, their affiliates routinely extend signifialization, and regulatory erosion will eventually cant credit directly to businesses, and they are make it impossible to sustain outdated restrictions, becoming increasingly important in the syndicated and these forces will be supplemented by piece- loan market. Banking organizations are already meal revisions to federal regulation and sweeping conducting a securities business. While indicative changes in state laws. That is what we are here of the need for reform, which institution has leaped today to discuss—the need to remove outdated some earlier restraint is not the issue. The Board restrictions and to rationalize our system for deliv- believes that the focus should be as follows: Do the ering financial services. I might note that in this proposed bills promote a financial system that regard the United States is behind the rest of the makes the maximum contribution to the growth and industrial world. Virtually all the other Group of stability of the U.S. economy? Are existing re- Ten nations now permit banking organizations to straints serving a useful purpose? Do they increase affiliate with securities firms and with insurance the compatibility of our laws and regulations with and other financial entities. We are among the last the changing technological and global market realwho have not statutorily adjusted our system. That ities to ensure that these goals are achieved? Are might be acceptable, or even desirable, if there was they consistent with increased alternatives and a good reason to do so. We do not think there is convenience for the public at a manageable risk to such a reason to retain the status quo. the bank insurance fund? Let me be clear that the Board's position in favor Banking organizations are in a particularly good of expanding the permissible range of affiliations position to provide underwriting and other financial for banking organizations is not a reflection of a services to investors. They are knowledgeable concern for banks, their management, or their about the institutional structure of the market and stockholders. U.S. bank management has been quite skilled at evaluating risk. Moreover, for centuries, creative—indeed has led others—in developing banks' special expertise has been to accumulate and using both technology and the globalization of borrower-specific information that they can use to financial markets for profitable innovations that make credit judgments that issue-specific lenders have greatly benefited their customers. Rather, the and investors cannot make. Overcoming such in- Board's support for the expansion of permissible formation asymmetries has been the value added of activities reflects the desirability of removing out- banking on the credit side. Indeed, it would appear dated restrictions that serve no useful purpose, that that most companies want to deal with a full-ser- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 351 vice provider that can handle their entire range of I should also note that almost all bank holding financing needs. This preference for "one-stop companies that have set up section 20 subsidiaries shopping" is easy to understand. Starting a new believe that the diversification of revenues will financial relationship is costly for companies and, result in lower risks for the organization. While the by extension, for the economy as a whole. It takes empirical literature is inconclusive, and the section considerable time and effort for a company to 20s themselves have not been around very long, convey to an outsider a deep understanding of its and have operated under significant restrictions, it financial situation. This process, however, can be seems likely that some bank holding companies short-circuited by allowing the company to rely on could achieve risk reduction through diversification a single organization for loans, strategic advice, the of their financial services. underwriting of its debt and equity securities, and To be sure, with the benefits comes some risk, other financial services. As evidence that there are but I read the evidence as saying that the risks in economies from this sharing of information, most securities underwriting and dealing are manageof the section 20 underwriting has been for com- able. Underwriting is a deals-oriented, purchase panies that had a prior relationship with the bank- and rapid resale, mark-to-market business in which ing organization. losses, if any, are quickly cut as the firm moves to Our discussions with section 20 officials suggest the next deal. Since the enactment of the securities that the economic benefits of "one-stop shopping" acts—with their focus on investor protection—the are probably greatest for small and medium-sized broker-dealer regulator, the Securities and Exfirms. These firms, as a rule, do not attract the change Commission (SEC), is quick to liquidate a interest of major investment banks, and regional firm with insufficient capital relative to the market brokerage houses do not provide the full range of value of its assets, constraining the size of any financial services these companies require. Rather, disturbance to the market or affiliates. The SEC their primary financial relationship is with the now applies such supervision to section 20 affilicommercial bank where they borrow and obtain ates, and it would do so to securities affiliates under their services. Thus, from the firm's perspective, it the revised Leach bill and similar bills introduced makes sense to leverage this relationship when the so far in this Congress. Section 20 affiliates have time comes to access the capital markets for financ- operated during a period in which sharp swings ing. It is thus reasonable to anticipate that if have occurred in world financial markets, but they securities activities are authorized for bank affili- still were able to manage their risk exposures well ates, banking organizations, especially regional and with no measurable risks to their parent or affiliated smaller banking organizations, would use their banks. Indeed, to limit the exposure of the safety information base to facilitate securities offerings by net, the supervisors have insisted that securities smaller, regional firms, as well as local municipal affiliates have risk management and control sysrevenue bond issues. Many of these banking orga- tems that assure that risk can be managed and nizations cannot engage in such activities now contained. As would be the case with the new because they do not have a sufficient base of Competitiveness Act, the Federal Reserve has reeligible securities business revenue to take advan- quired that such an infrastructure exist before tage of the section 20 option that limits their individual section 20 affiliates are authorized and ineligible revenues to 10 percent of the total. that organizations engaging in these activities Investment banking services are now available for through nonbank affiliates have bank subsidiaries some of these smaller issues, but at a relatively high with strong capital positions. cost. Section 20 subsidiaries at regional banks The Leach bill continues the holding company indicate that they are eager to expand their invest- framework, which we believe is important to limit ment banking services to small and moderate-sized the direct risk of securities activities to banks and companies. These section 20 subsidiaries view such the safety net. The Board is of the view that the firms as underserved in the current market environ- risks from securities and most other financial acment and see an opportunity to provide a greater tivities are manageable using the holding company range of services at lower prices than those now framework proposed in that bill. But there is prevailing. another risk: the risk of transference to nonbank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

352 Federal Reserve Bulletin • April 1995 affiliates of the subsidy implicit in the federal safety that business. These powers are crucial to permit net—deposit insurance, the discount window, and securities firms to remain competitive domestically access to Fedwire—with the attendant moral haz- and internationally. Under the bill, the Board could ard. The Board believes that the holding company establish rules to ensure that these activities do not structure creates the best framework for limiting pose significant risks to banks affiliated with secuthe transference of that subsidy. We recognize that rities firms or serve as a "back door" to the foreign subsidiaries of U.S. banks have managed commingling of banking and commerce. such activities for years virtually without signifi- Some are concerned that an umbrella supervisor cant incident. Nonetheless, we have concluded that is incompatible with a financial services holding the further the separation from the bank the better company with an increasing number of subsidiaries the insulation. We are concerned that conducting that would be unregulated if they were indepenthese activities without limit in subsidiaries of U.S. dent. The Board too is concerned that, if bank-like banks does not create sufficient distance from the regulation were applied to an expanded range of bank. Moreover, even though the risks of under- activities, the market would believe that the govwriting and dealing are manageable, any losses in a ernment is as responsible for their operations as it is securities subsidiary of a bank would—under gen- for banks. This subtle transference of the appearerally accepted accounting principles—be consoli- ance of safety-net support to financial affiliates of dated into the bank's position, an entity protected banks creates a kind of moral hazard that is by the safety net. corrosive and potentially dangerous. An additional safeguard to protect the bank from Nonetheless, it is crucial to understand that both any risk from wider financial activities, and to limit the public and management now think—and will the transference of the safety net subsidy to such continue to think—of bank holding companies (and activities, is the adoption of prudential limitations financial services holding companies if authorized) through firewalls and rules that prohibit or limit as one integrated unit, especially if they enjoy the certain bank and affiliate transactions. However, it economic synergies that is the purpose of the would be folly to establish prohibitions and fire- reform proposals. Moreover, experience and the walls that would eliminate the economic synergy new computer technology are already adding cenbetween banks and their affiliates. The revised tralized risk management to the existing centralized Leach bill retains reasonable firewalls and other policy development for bank holding companies. prudential limitations but provides the Board with The purpose of the umbrella supervisor is to have the authority to adjust them up or down. Such an overview of the risks in the organization so that flexibility is highly desirable because it permits the the risks to the bank can be evaluated and, if rules to adjust in reflection of both changing market needed, addressed by supervisors. The umbrella realities and experience. supervisor, it seems to us, becomes more crucial, The Leach bill attempts to accommodate the not less, as the risk management and policy control merchant banking business currently conducted by moves from the bank to the parent. independent securities firms. Both bank holding Balancing the supervisory needs of the bank companies with section 20 subsidiaries and inde- regulators with concerns about the extension of pendent securities firms engage in securities under- bank-like supervision and regulation is not easy. In writing and dealing activities. However, indepen- an effort to eliminate unnecessary regulatory condent securities firms also directly provide equity straints and burdens, the Leach bill would require capital to a wide variety of companies without any that the banking agencies rely on examination intention to manage or operate them. The Leach bill reports and other information collected by funcwould permit securities firms that acquire commer- tional regulators. In addition, it would require that cial banks, as well as securities firms acquired by the banking agencies defer to the SEC in interprebank holding companies, to engage in all of these tations and enforcement of the federal securities activities—underwriting and dealing in securities, laws. The revised bill goes further and eliminates as well as merchant and investment banking the current application procedure for holding comthrough equity investment in any business without pany acquisitions by well-capitalized and wellbecoming involved in the day-to-day operations of managed banking organizations whose proposed Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 353 nonbank acquisitions or de novo entry are both mercial firms and some ownership of commercial authorized and pass some reasonable test of scale. firms by banks. In practice, despite the legal per- Your revised bill also streamlines the process for missibility, banking-commerce ties are limited. In evaluating the permissibility of new financial ac- none of the seven countries are any of the largest tivities. These are extremely important modifica- banks owned by commercial firms. Banking and tions both for existing bank holding companies and commerce affiliations are much more commonly in for securities firms that wish to affiliate with banks. the form of banks' holding sizable equity stakes in Such provisions would greatly enhance the "two- commercial firms, rather than vice versa. Only in way street" provisions by eliminating unnecessary Germany is bank control of commercial firms regulatory burden and red tape. We believe that this commonplace, and in that country a banking liconcept could also quite usefully be extended to cense is required to engage in any one of a number bank acquisition proposals. of credit services that are performed in the United The Board is also committed to continuing to States and in other countries by nonbank financial develop supervisory and examination policies that institutions. In Japan, banks' equity holdings are appropriately reduce unnecessary burdens on orga- substantial relative to bank capital, but, just as in nizations with bank subsidiaries that are well cap- the case of U.S. bank holding companies, a bank in italized and well managed. But we must not lose Japan may not hold more than 5 percent of another sight, and the Leach bill does not, that the umbrella company's shares. supervisor must still be permitted to monitor both There are two main benefits from bank ownerthe financial condition of the organization and the ship of commercial firms. One benefit is that such potential transfer of risks to the insured depository arrangements reduce the information costs associaffiliates. Moreover, we reiterate our concerns of ated with long-term projects, so that ex ante proflast year that, however any restructuring is ad- itable long-term projects are more likely to be dressed, the Federal Reserve's capability to moni- funded. A second benefit is that adding equities to tor large banking organizations to respond effec- the mix of instruments in a bank's portfolio intively to systemic crisis not be impaired. creases the potential for portfolio diversification. You asked for the Board's views on combining However, foreign experience demonstrates that commerce and banking. While the Board supports there are costs from bank ownership of commercial wider permissible affiliations between banks and firms. Banking-commerce ties may induce banks to other financial services companies, it does not continue to finance a project beyond the point at believe that, at this time, banks should be affiliated which it is prudent to do so. In addition, equity with commercial and industrial firms. The Board holdings increase the sensitivity of bank capital to believes that in a free market economy there is a equity market volatility, as has been the case in presumption of free entry into any business— Japan, thus exposing banks to additional risk. A including banking—although safeguards are re- third cost, illustrated by Germany, is the tendency quired when public monies are at risk. However, for capital markets—especially equity markets—to the Board believes it would be prudent to delay be less fully developed under a system of bankenacting the authority to link commerce and bank- dominated financing. ing until we have gained some actual experience Over the past three decades, deposit protection with wider financial ownership of, and wider activ- schemes have been established in all seven counities for, banking organizations. We should reflect tries to avoid runs by depositors at small banks. carefully on such a basic change in our institutional Financial problems at larger banks are normally framework because it is a step that would be dealt with by cooperative efforts of commercial difficult to reverse. banks and governments. I should note that all these Your invitation letter also asked about experi- countries impose restrictions on banking-comence with banking and commerce abroad. Our merce ties to limit the risks resulting from such ties. review of the industrial countries with internation- As I noted, the risks associated with commercial ally important banking sectors suggests that all firm control of banks appear to be limited by seven (the non-U.S. Group of Seven plus Switzer- permitting commercial firms to control only small land) permit limited ownership of banks by com- banks. In addition, all the countries except Japan Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

354 Federal Reserve Bulletin • April 1995 limit the risks associated with bank ownership of houses, as well as by the full Senate on several commercial firms by limiting banks' total equity occasions. In the meantime, technological change, holdings to a fraction of bank capital. Even with globalization, and market innovations have continthese limits, recent losses stemming from bank ued. In such a context, modernization of our finanaffiliations with commercial firms, most notably at cial system should be of high priority to better Metallgesellschaft in Germany and Credit Lyon- serve the U.S. public. Consequently, the Board nais in France, have sparked public debate in these believes it is timely, desirable, and prudent to countries about the advisability of banking-com- authorize wider affiliations between banks and merce ties. other financial service providers; the approach con- In the United States, the public debate continues tained in the revised Leach bill would be a major to focus on wider affiliations between banks and step in the modernization of our financial system, other financial firms. On more than one occasion, which sadly now operates under increasingly outbills to permit at least securities affiliates were dated restrictions and prohibitions. • approved by the banking committees in both Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

355 Announcements PUBLICATION OF EIGHTH EDITION day. The fee had been scheduled to increase to OF PURPOSES AND FUNCTIONS 20 basis points. At the same time, the Board announced that it would evaluate the desirability of The Federal Reserve Board on March 2, 1995, any further increases in the daylight overdraft fee announced publication of a revised and updated two years after the implementation of the 15-basispaperback book that explains the structure and point fee. operations of the Federal Reserve System. The Board's actions take into account the poten- This eighth edition of Purposes and Functions tial for further improvements in settlement prachas been redesigned to appeal to a general audience tices and reductions in payment system risk as well and can supplement college-level classroom texts as concerns about the possible effects of further on the Federal Reserve's role in monetary policy rapid fee increases. The Board's actions also recogand the global economy. nize that sizable reductions in daylight overdrafts The purpose of the book, first published in 1939, have already been achieved with a fee of 10 basis is to explain the structure, responsibilities, and points. operating techniques of the Federal Reserve System. The new edition reflects changes since the seventh edition was published in 1984—changes in monetary and regulatory policies, in laws govern- PUBLICATION OF A NEW INDEX ing the Federal Reserve, and in the financial sys- FOR THE LEGAL DEVELOPMENTS SECTION tem. Several appendixes have been added to OF THE FEDERAL RESERVE BULLETIN enhance the book's usefulness including a listing and brief explanation of Federal Reserve regula- Beginning with this issue of the Bulletin, the Legal tions, a glossary of terms, and a list of additional Developments section will carry in the January, publications. April, July, and October issues a quarterly index to Copies of Purposes and Functions may be orders issued or actions taken by the Board of obtained from any of the twelve Federal Reserve Governors. The index will list the applicant, the Banks or from Publications Services, Board of merged or acquired bank or approved activity, the Governors of the Federal Reserve System, Wash- date of approval, and the Bulletin volume and page ington, DC 20551. number of the discussion in Legal Developments for all Board actions or orders. The index will be cumulative, with the one in the January issue cover- MODIFICATION OF THE INCREASE ing the preceding year. The index for the actions SCHEDULED FOR THE DAYLIGHT taken from October through December 1994 OVERDRAFT FEE begins on page 398 of this issue. The Federal Reserve Board announced on March 2, 1995, that it had modified the increase in the daylight overdraft fee, scheduled to become effective REVISIONS TO THE MONEY STOCK DATA April 13, 1995. As a result of the Board's action, average intraday overdrafts in accounts with Measures of the money stock were revised in Feb- Reserve Banks above a capital-based deductible ruary of this year as a result of the annual benchwill be charged a fee of 15 basis points, based on mark and seasonal factor review. Data in tables the current ten-hour standard Fedwire operating 1.10 and 1.21 in the statistical appendix to the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

356 Federal Reserve Bulletin • April 1995 Bulletin reflect these changes beginning with this the level of M2 by as much as $5 billion and the issue. level of M3 by as much as $8 billion over the past Data for the monetary aggregates were bench- decade. The benchmark included other revisions as marked using data from Call Reports through well, such as the incorporation of deposits data September 1994 and other sources. The benchmark taken from the Call Reports of banks and thrift and seasonal review did not affect the annual institutions that did not report on one of the more growth rates of M2 over 1994. However, they detailed deposits reports. lowered the 1994 growth rate of Ml by 0.1 percent- Seasonal factors for the monetary aggregates age point and raised the 1994 growth rate of M3 by were revised using the benchmarked data through 0.2 percentage point. December 1994. As in the past few years, the The benchmark incorporated historical data for a X-11-ARIMA procedure was used to derive the number of money market mutual funds that began monthly seasonal factors. reporting for the first time during 1994, raising the Overall, the revisions to seasonal factors slightly levels of M2 and M3 by amounts that cumulate to shifted the growth of Ml and M3—but not of $15 billion and $22 billion respectively by late M2—from the second half to the first half of 1994. 1994. The benchmark also incorporated new esti- Complete historical data are available in printed mates of large time deposits held by banks. (This form from the Money and Reserves Projection item is one of several that are subtracted from gross Section, Mail Stop 72, Division of Monetary large time deposits to measure the quantity of such Affairs, Board of Governors of the Federal Reserve time deposits held by the nonbank public.) As a System, Washington, DC 20551, (202) 452-3062. result of the new estimates, this large time deposit The historical data are also available on floppy netting item revised upward over the past thirteen diskette for a fee of $25 per diskette from Publicayears, by as much as $14 billion in the mid-1980s, tions Services, Mail Stop 127, Board of Governors thereby reducing the level of M3 by the same of the Federal Reserve System, Washington, DC amount. 20551, (202) 452-3245. Revised monthly historical The benchmark also incorporated new estimates data for Ml, M2, M3, and total nonfinancial debt of money funds' holdings of both repurchase agree- also are available from the Economic Bulletin ments and Eurodollars, which were netted out of Board of the U.S. Department of Commerce. Call the aggregates at both M2 and M3 levels. These (202) 482-1986 for information on how to gain revisions, which extended back to 1984, shifted up access to the Economic Bulletin Board. Tables on seasonal factors follow. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 357 1. Monthly seasonal factors used to construct Ml, M2, and M3, January 1994-March 1996 NNoonnbbaannkk Other checkable deposits1 Nontransaction components DDeemmaanndd YYeeaarr aanndd mmoonntthh CCuurrrreennccyy ttrraavveelleerrss ddeeppoossiittss cchheecckkss Total Held at banks In M2 In M3 only 1994—January .9956 .9647 1.0132 1.0155 1.0211 .9987 1.0037 February .9950 .9625 .9765 .9956 1.0020 1.0000 1.0042 March .9956 .9632 .9769 1.0026 1.0062 1.0034 .9982 April .9994 .9589 1.0027 1.0228 1.0243 1.0030 .9941 May .9997 .9733 .9797 .9932 .9921 .9992 1.0029 June 1.0013 1.0192 .9898 .9966 .9950 1.0000 .9976 July 1.0055 1.0647 .9982 .9927 .9890 1.0001 .9922 August 1.0015 1.0735 .9911 .9889 .9874 .9997 1.0015 September .9994 1.0538 .9952 .9921 .9914 .9977 .9972 October .9988 1.0212 1.0088 .9902 .9869 .9991 .9972 November 1.0008 .9801 1.0219 .9982 .9941 1.0002 1.0089 December 1.0088 .9655 1.0473 1.0117 1.0102 .9991 1.0037 1995—January .9951 .9652 1.0138 1.0161 1.0212 .9987 1.0045 February .9951 .9620 .9763 .9956 1.0019 .9997 1.0034 March .9968 .9627 .9760 1.0022 1.0064 1.0032 .9970 April .9995 .9591 1.0020 1.0223 1.0241 1.0030 .9937 May .9993 .9736 .9796 .9932 .9923 .9994 1.0028 June 1.0021 1.0192 .9892 .9964 .9950 1.0000 .9975 July 1.0052 1.0645 .9980 .9929 .9895 1.0002 .9920 August 1.0019 1.0735 .9910 .9888 .9874 .9998 1.0009 September 1.0002 1.0533 .9958 .9922 .9915 .9977 .9969 October .9984 1.0207 1.0091 .9903 .9867 .9990 .9979 November 1.0016 .9808 1.0223 .9982 .9939 1.0002 1.0094 December 1.0095 .9658 1.0479 1.0119 1.0101 .9992 1.0043 1996—January .9948 .9654 1.0139 1.0163 1.0212 .9988 1.0051 February .9945 .9617 .9759 .9954 1.0018 .9995 1.0030 March .9969 .9624 .9755 1.0021 1.0065 1.0030 .9962 1. Seasonally adjusted other checkable deposits at thrift institutions are adjusted, and seasonally adjusted other checkable deposits at commercial derived as the difference between total other checkable deposits, seasonally banks. 2. Monthly seasonal factors for selected components of the monetary aggregates, January 1994-March 1996 Deposits1 Money market mutual funds Year and month Savings Small- Largeand denomination denomination In M2 In M3 only MMDAs time time 1994—January .9937 1.0010 .9943 1.0013 1.0307 February .9943 1.0003 .9952 1.0129 1.0491 March 1.0005 .9995 .9942 1.0232 1.0106 April 1.0028 .9988 .9935 1.0213 .9925 May 1.0009 .9979 1.0077 1.0051 .9963 June 1.0030 .9990 1.0049 .9946 .9699 July 1.0026 1.0013 .9963 .9927 .9729 August 1.0017 1.0011 1.0046 .9925 .9936 September .9999 1.0011 1.0039 .9839 .9789 October 1.0001 1.0012 1.0020 .9852 .9849 November 1.0028 .9994 1.0049 .9913 1.0112 December .9984 .9991 .9990 .9951 1.0127 1995—January .9938 1.0009 .9954 1.0018 1.0325 February .9939 1.0003 .9950 1.0123 1.0465 March 1.0001 .9996 .9933 1.0228 1.0096 April 1.0025 .9989 .9931 1.0220 .9918 May 1.0008 .9981 1.0078 1.0063 .9951 June 1.0029 .9992 1.0046 .9947 .9690 July 1.0025 1.0013 .9958 .9929 .9730 August 1.0018 1.0010 1.0044 .9926 .9927 September 1.0002 1.0009 1.0038 .9834 .9786 October 1.0002 1.0011 1.0025 .9844 .9865 November 1.0030 .9994 1.0053 .9910 1.0121 December .9986 .9990 .9990 .9951 1.0138 1996—January .9938 1.0009 .9960 1.0025 1.0339 February .9935 1.0005 .9951 1.0118 1.0450 March .9998 .9997 .9928 1.0227 1.0088 1. These seasonal factors are applied to deposits data at both commercial banks and thrift institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

358 Federal Reserve Bulletin • April 1995 3. Weekly seasonal factors used to construct Ml, M2, and M3, December 5, 1994-April 1, 1996 NNoonnbbaannkk Other checkable deposits1 Nontransaction components DDeemmaanndd WWeeeekk eennddiinngg CCuurrrreennccyy ttrraavveelleerrss ddeeppoossiittss cchheecckkss Total Held at banks In M2 In M3 only 1994—December 5 .9998 .9619 1.0404 1.0158 1.0087 1.0011 .9996 12 1.0053 .9637 1.0377 1.0141 1.0100 1.0020 1.0128 19 1.0082 .9655 1.0447 1.0078 1.0081 .9981 1.0085 26 1.0195 .9673 1.0422 1.0024 1.0049 .9942 1.0043 1995—January 2 1.0065 .9691 1.0753 1.0163 1.0151 .9976 .9873 9 1.0034 .9678 1.0596 1.0476 1.0523 1.0017 .9930 16 .9972 .9660 1.0237 1.0289 1.0321 1.0008 1.0088 23 .9906 .9642 .9883 1.0049 1.0118 .9985 1.0071 30 .9855 .9624 .9687 .9811 .9897 .9969 1.0137 February 6 .9941 .9615 .9879 1.0104 1.0144 .9984 1.0034 13 .9972 .9618 .9792 .9999 1.0038 .9999 1.0073 20 .9963 .9621 .9743 .9892 .9971 1.0002 1.0019 27 .9920 .9625 .9634 .9822 .9912 .9998 1.0023 March 6 .9994 .9627 .9893 1.0144 1.0228 1.0018 .9941 13 .9997 .9627 .9834 1.0101 1.0123 1.0038 1.0005 20 .9966 .9627 .9708 .9991 1.0031 1.0029 1.0007 27 .9928 .9628 .9530 .9864 .9919 1.0027 .9972 April 3 .9965 .9628 .9979 1.0084 1.0072 1.0052 .9884 10 1.0062 .9611 1.0104 1.0380 1.0334 1.0080 .9915 17 1.0027 .9594 1.0200 1.0407 1.0392 1.0050 .9968 24 .9952 .9577 .9867 1.0184 1.0285 .9996 .9941 May 1 .9929 .9561 .9873 .9892 .9950 .9976 .9947 8 1.0045 .9611 .9888 1.0091 1.0067 .9984 .9993 15 .9998 .9689 .9905 .9978 .9946 .9997 1.0012 22 .9971 .9767 .9712 .9869 .9864 .9998 1.0034 29 .9981 .9845 .9618 .9774 .9794 .9994 1.0088 June 5 1.0029 .9938 1.0029 1.0143 1.0112 1.0017 1.0016 12 1.0056 1.0070 .9962 1.0109 1.0072 1.0038 1.0046 19 1.0012 1.0201 .9868 .9986 .9974 .9994 .9992 26 .9966 1.0331 .9637 .9707 .9728 .9971 .9932 July 3 1.0047 1.0461 1.0103 .9900 .9879 .9978 .9849 10 1.0132 1.0543 1.0218 1.0163 1.0100 1.0021 .9867 17 1.0061 1.0624 1.0077 .9968 .9924 1.0014 .9919 24 1.0021 1.0706 .9757 .9795 .9773 .9991 .9959 31 .9979 1.0787 .9783 .9766 .9754 .9991 .9967 August 7 1.0086 1.0800 1.0030 1.0083 1.0004 .9999 .9982 14 1.0050 1.0762 1.0012 .9944 .9914 1.0008 1.0015 21 1.0012 1.0725 .9889 .9838 .9836 1.0004 1.0003 28 .9948 1.0688 .9692 .9701 .9743 .9985 1.0046 September 4 1.0040 1.0648 .9986 .9989 .9994 .9987 .9987 11 1.0052 1.0593 1.0153 1.0148 1.0115 1.0010 1.0020 18 .9995 1.0537 1.0012 .9983 .9979 .9972 1.0012 25 .9958 1.0481 .9656 .9682 .9686 .9949 .9957 October 2 .9940 1.0425 1.0008 .9751 .9751 .9967 .9843 9 1.0067 1.0338 1.0161 1.0078 1.0002 1.0007 .9958 16 1.0001 1.0246 1.0268 .9981 .9927 1.0008 .9942 23 .9961 1.0153 .9979 .9826 .9802 .9984 1.0005 30 .9917 1.0061 .9945 .9728 .9738 .9969 1.0038 November 6 1.0022 .9970 1.0215 1.0119 1.0059 1.0001 1.0048 13 1.0036 .9879 1.0244 1.0043 .9994 1.0010 1.0117 20 1.0005 .9789 1.0238 .9959 .9927 1.0013 1.0054 27 1.0022 .9698 1.0155 .9814 .9792 .9977 1.0178 December 4 1.0019 .9623 1.0370 1.0118 1.0040 1.0019 1.0034 11 1.0076 .9639 1.0371 1.0177 1.0131 1.0031 1.0110 18 1.0077 .9656 1.0417 1.0079 1.0065 .9998 1.0101 25 1.0165 .9672 1.0410 1.0039 1.0041 .9956 1.0034 11999966——JJaannuuaarryy 11 1.0074 .9689 1.0798 1.0128 1.0154 .9965 .9915 88 1.0037 .9681 1.0656 1.0520 1.0527 1.0009 .9966 15 .9982 .9664 1.0319 1.0311 1.0346 1.0007 1.0069 22 .9919 .9647 .9932 1.0085 1.0153 .9981 1.0072 29 .9862 .9630 .9643 .9808 .9890 .9962 1.0116 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 359 3. Continued NNoonnbbaannkk Other checkable deposits1 Nontransaction components DDeemmaanndd WWeeeekk eennddiinngg CCuurrrreennccyy ttrraavveelleerrss ddeeppoossiittss cchheecckkss Total Held at banks In M2 In M3 only 1996—February 5 .9938 .9618 .9893 1.0062 1.0138 .9978 1.0050 12 .9976 .9617 .9790 1.0026 1.0052 .9993 1.0085 19 .9962 .9617 .9775 .9916 .9972 .9997 1.0024 26 .9905 .9616 .9603 .9816 .9889 .9997 .9985 March 4 .9951 .9616 .9798 1.0076 1.0188 1.0018 .9990 11 .9994 .9620 .9813 1.0121 1.0158 1.0046 .9986 18 .9970 .9623 .9753 .9984 1.0024 1.0027 .9989 25 .9943 .9627 .9528 .9871 .9931 1.0021 .9962 April 1 .9946 .9630 .9902 1.0009 1.0019 1.0035 .9885 1. Seasonally adjusted other checkable deposits at thrift institutions are adjusted, and seasonally adjusted other checkable deposits at commercial derived as the difference between total other checkable deposits, seasonally banks. 4. Weekly seasonal factors for selected components of the monetary aggregates, December 5, 1994-April 1, 1996 Deposits1 Money market mutual funds WWeeeekk eennddiinngg Savings Small- Largeand denomination denomination In M2 J In M3 only MMDAs time time 1994—December 5 1.0023 .9995 1.0042 .9955 1.0073 12 1.0034 .9994 1.0056 1.0022 1.0180 19 .9978 .9986 1.0005 .9996 1.0167 26 .9936 .9985 .9959 .9925 1.0133 11999955——JJaannuuaarryy 2 .9948 1.0000 .9869 .9819 1.0040 9 .9999 1.0014 .9943 .9876 .9940 16 .9968 1.0012 .9976 1.0041 1.0355 23 .9908 1.0007 .9973 1.0110 1.0459 30 .9870 1.0004 .9943 1.0093 1.0605 FFeebbrruuaarryy 6 .9930 1.0010 .9950 1.0076 1.0492 13 .9957 1.0007 .9967 1.0110 1.0572 20 .9938 1.0002 .9947 1.0120 1.0420 27 .9925 .9996 .9938 1.0167 1.0411 March 6 .9971 1.0000 .9939 1.0199 1.0245 13 1.0006 .9998 .9956 1.0242 1.0190 20 .9997 .9994 .9935 1.0258 1.0105 27 .9987 .9994 .9922 1.0240 .9993 AApprriill 3 1.0066 .9997 .9900 1.0175 .9872 10 1.0126 .9996 .9925 1.0251 .9906 17 1.0053 .9989 .9907 1.0270 1.0006 24 .9949 .9981 .9939 1.0234 .9865 MMaayy 1 .9944 .9985 .9974 1.0131 .9912 8 1.0003 .9983 1.0029 1.0092 .9936 15 1.0025 .9981 1.0052 1.0043 .9952 22 1.0005 .9979 1.0073 1.0075 1.0077 29 .9994 .9980 1.0164 1.0054 .9896 June 5 1.0057 .9984 1.0113 .9997 .9771 12 1.0079 .9988 1.0120 1.0011 .9759 19 1.0021 .9989 1.0056 .9970 .9715 26 .9977 .9995 .9988 .9900 .9621 JJuullyy 3 1.0013 1.0010 .9918 .9817 .9542 10 1.0065 1.0015 .9930 .9925 .9637 17 1.0049 1.0015 .9949 .9960 .9696 24 1.0004 1.0013 .9972 .9949 .9811 31 .9989 1.0010 .9997 .9931 .9856 AAuugguusstt 7 1.0043 1.0015 .9997 .9927 .9856 14 1.0041 1.0013 1.0038 .9930 .9949 21 1.0005 1.0008 1.0043 .9947 .9938 28 .9980 1.0004 1.0089 .9942 1.0019 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

360 Federal Reserve Bulletin • April 1995 4. Continued Deposits1 Money market mutual funds Week ending Savings Small- Largeand denomination denomination In M2 IInn MM33 oonnllyy MMDAs time time 1995—September 4 1.0027 1.0011 1.0057 .9830 .9805 11 1.0057 1.0011 1.0083 .9855 .9871 18 1.0005 1.0006 1.0046 .9858 .9833 25 .9956 1.0004 1.0013 .9827 .9734 October 2 .9964 1.0015 .9982 .9785 .9657 9 1.0034 1.0028 1.0039 .9854 .9777 16 1.0032 1.0017 1.0015 .9856 .9804 23 .9985 1.0006 1.0021 .9843 .9890 30 .9964 .9996 1.0034 .9843 1.0025 November 6 1.0031 .9997 1.0048 .9829 1.0020 13 1.0049 .9997 1.0064 .9875 1.0148 20 1.0028 .9992 1.0041 .9928 1.0127 27 1.0010 .9990 1.0066 .9980 1.0193 December 4 1.0040 .9992 1.0037 .9949 1.0074 11 1.0044 .9991 1.0053 1.0034 1.0190 18 .9991 .9985 1.0020 1.0001 1.0207 25 .9939 .9985 .9972 .9919 1.0118 1996—January 1 .9933 1.0001 .9873 .9834 1.0061 8 .9997 1.0014 .9944 .9897 .9930 15 .9975 1.0012 .9976 1.0029 1.0344 22 .9913 1.0008 .9983 1.0097 1.0453 29 .9869 1.0004 .9953 1.0093 1.0615 February 5 .9927 1.0010 .9941 1.0062 1.0520 12 .9950 1.0008 .9978 1.0101 1.0580 19 .9928 1.0005 .9948 1.0108 1.0414 26 .9918 .9998 .9941 1.0156 1.0372 March 4 .9971 1.0003 .9933 1.0188 1.0296 11 1.0008 1.0002 .9958 1.0236 1.0110 18 .9986 .9997 .9926 1.0253 1.0118 25 .9973 .9992 .9927 1.0247 1.0014 April 1 1.0048 .9995 .9893 1.0187 .9973 1. These seasonal factors are applied to deposits data at both commercial banks and thrift institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

361 Minutes of the Federal Open Market Committee Meeting Held on December 20,1994 A meeting of the Federal Open Market Committee Mr. Fisher, Manager for Foreign Operations, was held in the offices of the Board of Governors System Open Market Account of the Federal Reserve System in Washington, D.C., on Tuesday, December 20, 1994, at 9:00 a.m. Mr. Ettin, Deputy Director, Division of Research and Statistics, Board of Governors Mr. Madigan, Associate Director, Division of Present: Monetary Affairs, Board of Governors Mr. Greenspan, Chairman Mr. Slifman, Associate Director, Division of Mr. McDonough, Vice Chairman Research and Statistics, Board of Governors Mr. Blinder Ms. Low, Open Market Secretariat Assistant, Mr. Broaddus Division of Monetary Affairs, Board of Mr. Forrestal Governors Mr. Jordan Mr. Kelley Mr. LaWare Messrs. Davis, Lang, Rolnick, and Rosenblum, Mr. Lindsey Senior Vice Presidents, Federal Reserve Banks Mr. Parry of Kansas City, Philadelphia, Minneapolis, and Ms. Phillips Dallas respectively Ms. Yellen Messrs. Gavin and McNees, Vice Presidents, Federal Reserve Banks of St. Louis and Messrs. Hoenig, Melzer, and Moskow and Boston respectively Ms. Minehan, Alternate Members of the Mr. Kuttner, Assistant Vice President, Federal Open Market Committee Federal Reserve Bank of Chicago Mr. Hilton, Manager, Open Market Operations, Messrs. Boehne,1 McTeer, and Stern, Presidents Federal Reserve Bank of New York of the Federal Reserve Banks of Philadelphia, Dallas, and Minneapolis respectively By unanimous vote, the minutes of the meeting Mr. Kohn, Secretary and Economist of the Federal Open Market Committee held on Mr. Bernard, Deputy Secretary November 15, 1994, were approved. Mr. Coyne, Assistant Secretary By unanimous vote, the Committee elected Mr. Gillum, Assistant Secretary Mark S. Sniderman as Associate Economist from Mr. Mattingly, General Counsel the Federal Reserve Bank of Cleveland to serve Mr. Patrikis, Deputy General Counsel Mr. Prell, Economist until the next election at the first meeting of the Mr. Truman, Economist Committee after December 31, 1994, with the understanding that in the event he discontinued his Messrs. Beebe, Goodfriend, Lindsey, Mishkin, official connection with the Federal Reserve Bank Promisel, Siegman, Simpson, Sniderman, of Cleveland, he would cease to have any offiand Stockton and Ms. Tschinkel, Associate cial connection with the Federal Open Market Economists Committee. Ms. Lovett, Manager for Domestic Operations, The Manager for Foreign Operations reported on System Open Market Account developments in foreign exchange markets since the November meeting. There were no System open market transactions in foreign currencies 1. Left before discussion of the economic situation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

362 Federal Reserve Bulletin • April 1995 during this period, and thus no vote was required of duction outpacing the expansion of capacity in the Committee. November, the rate of utilization of total industrial The Manager for Domestic Operations reported capacity moved up further from an already high on developments in domestic financial markets and level. on System open market transactions in government Retail sales continued to rise rapidly in Novemsecurities and federal agency obligations during the ber. Sales were up solidly at most types of stores, period November 15, 1994, through December 19, but gains were particularly large at durable goods 1994. By unanimous vote, the Committee ratified outlets. Consumer spending on services also had these transactions. grown significantly in October (latest data), with The Committee then turned to a discussion of the advances widespread among categories of sereconomic and financial outlook and the implemen- vices. Housing starts increased appreciably in tation of monetary policy over the intermeeting November, when construction activity apparently period ahead. A summary of the economic and was boosted by favorable weather in some parts of financial information available at the time of the the country. Multifamily starts rose in November to meeting and of the Committee's discussion is their highest level in four years, while singleprovided below, followed by the domestic policy family starts retraced a large part of their October directive that was approved by the Committee and decline. issued to the Federal Reserve Bank of New York. Business capital spending remained on a pro- The information reviewed at this meeting sug- nounced upward trend. Shipments of nondefense gested a further pickup in economic growth in capital goods other than aircraft were up slightly recent months. Consumer spending, supported by further in October after having advanced sharply in strong expansion of employment and income and the two previous months; shipments of computing by buoyant consumer sentiment, remained robust. equipment were brisk in October, while shipments Business capital spending and exports were rising of other capital goods were little changed. With briskly. Payroll employment remained on a strong regard to transportation equipment, outlays for airupward trend, and industrial output posted further craft continued to trend lower in October, while substantial gains. Broad indexes of prices of con- sales of heavy trucks rose appreciably. Recent data sumer goods and services increased moderately on on orders for nondefense capital goods pointed to average over recent months, although prices of continued vigorous expansion of spending on busimany industrial materials and intermediate supplies ness equipment. Nonresidential construction activcontinued to move up rapidly. ity advanced further in October, led by higher Nonfarm payroll employment rose sharply in spending for institutional and public utility struc- November after an appreciable expansion in Octo- tures. The uptrend in permits suggested further ber. Job gains in the service-producing sector were advances in nonresidential construction. stronger in November than in October, as a pickup Business inventory investment was relatively in hiring in business services more than offset robust in October. Manufacturing inventories slower growth in health services and retail trade. rebounded after a small decline in September; a Employment in manufacturing recorded another sizable amount of the October increase occurred at sizable advance in November, with increases wide- firms producing computers, office machinery, and spread by industry. Hiring in construction was up telecommunications equipment for which demand considerably in November after a small gain in had been strong. For manufacturing as a whole, the October. Job growth outpaced the expansion of the stocks-to-shipments ratio remained near a historilabor force in November, and the civilian unem- cally low level. Wholesale inventories continued ployment rate declined to 5.6 percent. to climb at a pace in line with sales, and the Industrial production, led by further increases in inventory-to-sales ratio for this sector stayed near manufacturing output, registered another large gain the middle of its range over recent years. Retail in November. Among major market groups, pro- inventory accumulation slowed substantially in duction of business equipment surged and sizable October; much of the slowdown reflected a sharp increases were recorded for the output of materials drop in stocks at automotive dealerships. With and construction supplies. With the growth of pro- sales up sharply, the inventory-to-sales ratio for the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 363 retail sector fell in October and remained near the consideration to economic, financial, and monetary middle of its range over recent years. developments, somewhat greater or somewhat The nominal deficit on U.S. trade in goods and lesser reserve restraint would be acceptable during services widened somewhat in October from its the intermeeting period. The reserve conditions September level and from its average rate for the associated with this directive were expected to be third quarter. The increase in the deficit from Sep- consistent with modest growth in M2 and M3 over tember's level reflected a small decline in the value coming months. of exports of goods and services, which resulted On the day of the meeting, the Board of Goverprimarily from reduced aircraft shipments, and a nors approved a 3/4 percentage point rise in the small rise in the value of imports. Economic activ- discount rate, to a level of 43/4 percent. The increase ity in the major foreign industrial countries contin- in the discount rate was made effective immediued to expand rapidly in the third quarter, and ately and was passed through fully to interest rates available indicators generally suggested further in the market for reserves. Open market operations substantial gains in the fourth quarter. during the intermeeting period were conducted with Despite further sizable increases in the prices of a view to maintaining the tighter policy stance many goods at the early stages of processing, infla- implemented immediately after the meeting, and tion at the consumer level remained moderate the federal funds rate remained near 5'A percent. in October and November. Energy prices were Adjustment plus seasonal borrowing, reflecting the unchanged on balance over the two months, while usual late-autumn pattern of ebbing demand for food prices edged higher. Excluding food and seasonal credit, declined over the intermeeting energy items, consumer prices advanced at a period; actual borrowing was close to anticipated slightly slower rate over October and November levels. than in earlier months of the year and also Short-term interest rates rose considerably over increased a little less over the twelve months ended the period after the November meeting. These rates in November than over the comparable year-earlier had increased before the meeting in anticipation of period. At the producer level, prices of finished a policy tightening move, but the size of the move goods other than food and energy were down over was larger than expected and rates firmed a little the October-November period, but they rose by a further as a result. Over the remainder of the interlittle larger amount for the twelve months ended in meeting interval, short-term rates responded to November than they had in the year-earlier period. incoming economic data, for a time rising in reac- The increase in average hourly earnings of produc- tion to indications of continuing strength in ecotion or nonsupervisory workers over the October- nomic activity and later retracing a portion of these November period remained in the moderate range increases in response to favorable news on inflathat had prevailed for some time, although a pickup tion. Rates on private money-market instruments in earnings growth was evident in a few sectors, with very short maturities also were lifted somenotably construction and services. Over the past what in anticipation of the usual year-end prestwelve months, hourly earnings increased at a sures. Long-term rates declined slightly over the slightly faster pace than they had over the year- intermeeting period. The more favorable inflation earlier period. data, together with the relatively aggressive tight- At its meeting on November 15, 1994, the Com- ening action, apparently were viewed by many mittee adopted a directive that called for a signifi- market participants as indicating that monetary polcant increase in the degree of pressure on reserve icy would be sufficiently firm to hold inflation in positions, taking account of a possible rise of check. The revelations in early December of finan- 3A percentage point in the discount rate. The Com- cial difficulties in Orange County, California and mittee did not include in the directive a presump- concerns about their potential spread had a disruption about likely further adjustments to policy dur- tive effect on financial markets, notably those for ing the intermeeting period. Accordingly, the municipal securities, but aside from the securities directive stated that in the context of the Commit- of the affected communities, the disruption genertee's long-run objectives for price stability and ally was brief. Most major indexes of equity prices sustainable economic growth, and giving careful fell, on balance, over the intermeeting period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

364 Federal Reserve Bulletin • April 1995 The trade-weighted value of the dollar in terms partial offset to those increased costs. The proof the other G-10 currencies increased further over jected robust pace of economic activity abroad was the intermeeting period, with the dollar gaining expected to bolster export demand. With the econabout equally against the mark and the yen. The omy having exceeded its noninflationary potential unexpected size of the monetary policy move in in the staff's judgment, wage and price inflation November, the economic news received over the was projected to pick up for a period before turning period, and the growing expectation that policy down as pressures on productive resources eased. would be tightened again before long all appeared In the Committee's discussion of current and to contribute to the dollar's rise. prospective economic developments, members Growth of M2 resumed in November after sev- referred to continuing indications of robust expaneral months of decline. M2's expansion largely sion in employment, output, and spending and reflected sizable inflows to small time deposits to very high and rising levels of resource utilizaand retail money market funds that in part might tion. They saw scant evidence at this point of any have been associated with accelerated outflows moderation in the growth of overall economic from bond mutual funds and reduced inflows to activity, including little apparent response thus far stock mutual funds. M3 growth slowed a little in in interest-sensitive sectors of the economy to ear- November as some investors shifted funds from lier policy tightening actions. Several observed that institution-only money market accounts, whose much of the expansionary momentum in the econopportunity costs had widened after the November omy was likely to carry into at least the early part policy tightening, into direct holdings of securities. of next year, with potential inflationary conse- For the year through November, M2 grew at a rate quences, but a number also commented that appreat the bottom of the Committee's range for 1994 ciable slowing during the year to a more susand M3 at a rate in the lower half of its range for tainable and less inflationary pace remained a the year. Total domestic nonfinancial debt had con- reasonable expectation. It was likely that much of tinued to expand at a moderate rate in recent the restraint from the policy firming actions implemonths, and through October (latest data) this debt mented this year had not yet been experienced; measure had grown at a rate in the lower half of its those actions had reversed an accommodative polmonitoring range. icy that had been in place through early 1994, the The staff forecast prepared for this meeting sug- effects of which probably were still being felt in the gested that growth of economic activity would latter part of 1994. The members acknowledged slow markedly over the next few quarters and then that the timing and extent of the slowing in the would average less than the rate of increase in the expansion were subject to considerable uncertainty. economy's potential output over the remainder of However, with the economy now operating at or the forecast horizon. In the staff's judgment, the even slightly above its noninflationary potential, economy currently was operating beyond its long- price and wage pressures were likely to build run noninflationary capacity, and the forecast unless the anticipated slowing occurred relatively assumed that monetary policy would not accom- soon. Key measures of inflation including conmodate any continuing tendency for aggregate sumer prices, wages, and producer prices of findemand to expand at a pace that could foster sus- ished goods did not display any evident uptrend at tained higher inflation. Growth of consumer spend- this juncture, but this could reflect a delay in the ing was expected to decline substantially in re- adjustment of inflation to capacity constraints and sponse to slower income growth, higher borrowing possibly some greater productivity and flexibility costs, and reductions in household net worth asso- in the economy than had been assumed. ciated with lower asset values. Business outlays for In the course of the Committee's discussion, new equipment were projected to be damped con- members reported on regional business conditions, siderably by slower growth in sales, higher financ- which continued to exhibit local variations ranging ing costs, and declining profits. Homebuilding also from modest expansion in some areas to robust was expected to soften in response to higher financ- growth in others. Reflecting widespread strength ing costs, but the relatively favorable cash-flow in new orders, manufacturing firms outside the affordability of housing was anticipated to act as a defense industry typically were operating at high Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 365 levels of capacity utilization, and there were moderate, business investment could be expected numerous anecdotal reports of tightening labor to soften. As in the case of consumer spending, markets. As they had at earlier meetings, members however, there were few signs of any slowing in remarked that despite the increases that had the current data or anecdotal reports. Indeed, memoccurred in interest rates, financial conditions bers saw growing indications of some improveremained generally supportive of vigorous eco- ment in nonresidential construction activity as brisk nomic activity. Some noted that the financial mar- economic expansion tended to absorb increasing kets were displaying a great deal of resilience and amounts of previously vacant commercial and in particular that they had on balance weathered industrial space and prices of such facilities tended fairly readily the recent financial problems of a to firm. In the homebuilding sector, the latest availnumber of local governments and private corpo- able data did not indicate any weakening in housrations that had experienced large unanticipated ing construction despite the rise in mortgage interlosses on their investments. Banking institutions est rates. However, anecdotal reports from different remained aggressive in their efforts to extend loans parts of the country suggested that the singleto businesses and consumers. family sector might be weakening. At the same In their comments on developments in key sec- time, construction of multifamily units continued tors of the economy, members noted that consumer to exhibit strength in a number of areas, and this spending had increased briskly in recent months sector appeared to be on a gradual uptrend as amid indications of favorable consumer sentiment falling vacancy rates brought increases in rents. On that in turn undoubtedly reflected the rapid growth balance, some modest softening in overall housing in employment and income. It was still too early to construction was seen as likely in response to the form reliable estimates of retail sales in the current rise that had occurred in mortgage interest rates. holiday season. The anecdotal reports pointed to Inventory investment was cited as another sector seasonal increases ranging from moderate to of the economy that probably would exert a negastrong in various regions, but some members tive influence on economic activity over the year emphasized that sales volumes were being but- ahead, though inventory developments are always tressed by unusual promotional efforts, including subject to a great deal of uncertainty. The strength relatively large discounts. Some members also of inventory investment in recent quarters reflected commented that consumer debt was growing rap- efforts to accommodate rapid growth in final idly and that increased debt levels were likely to demand and avoid disruptions to production in a exert a retarding effect on consumer spending, period when supply delivery times were tending to especially if consumer loan rates were to be lengthen. Inventory accumulation might remain adjusted more fully upward to reflect increases in elevated for a while longer, but as the projected market interest rates. Rates on adjustable home slowing in the growth of final demand began to mortages were moving higher to catch up with materialize, business firms were likely to curtail market rates, and these increases along with the the growth of their inventories, perhaps sharply wealth effects from losses suffered on bond and for some period, in order to maintain desired stock holdings were likely to damp spending. Up to inventory-to-sales ratios. now, however, the members saw few signs of any The government sector constituted another moderation in the growth of consumer spending, source of considerable uncertainty in the outlook including little apparent effect from somewhat for 1995. Members referred to major fiscal policy higher interest rates on normally interest-sensitive initiatives that were likely to be considered in the spending for motor vehicles and other consumer new Congress, and they discussed possible shortdurables. and long-term effects on the economy. However, Business fixed investment, which was contribut- the shape of any legislation was still to be detering substantially to the current strength of the mined and it was not possible at this point to gauge expansion, was likely to remain a positive factor in its effects on government or private spending. On sustaining the overall growth of the economy dur- the other hand, spending by state and local governing the year ahead. Even so, as the expansion ments was clearly trending higher and was likely to matured and growth in final demand tended to provide a mild impetus to the overall expansion: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

366 Federal Reserve Bulletin • April 1995 the financial difficulties of some local governments The subsequent behavior of prices and wages undoubtedly would serve to curb their spending but would depend importantly on fiscal and monetary were not seen at this point as having any significant policy developments, the extent of inflationary effect on the growth in overall expenditures by expectations among businesses and consumers, and state and local governments. the degree of pressure that further economic expan- With regard to the external sector of the econ- sion would exert on capacity in various industries omy, members continued to anticipate strengthen- and occupations. Given their projections of some ing markets for U.S. exports over the year ahead. moderation in the business expansion and assum- Projected growth in exports would be stimulated by ing appropriate fiscal and monetary policies, the the further expansion of economic activity in major members generally felt that any added inflation U.S. trading partners and by the delayed effects of emerging in 1995 would likely be mild and could the weakening of the dollar that had occurred on subside gradually during the year. balance over the course of 1994. Some members In the Committee's discussion of policy for the cited anecdotal indications of stronger foreign intermeeting period ahead, a majority of the memdemand for agricultural and other goods produced bers agreed on the desirability of maintaining an in the United States. unchanged policy posture at least through the Despite the evidence of vigorous expansion in beginning of 1995. Monetary policy had been tightoverall economic activity and very high levels of ened considerably in a series of steps starting in resource use, broad measures of inflation in mar- February, and much of the restraint stemming from kets for finished goods and overall wage inflation those policy moves had not yet been felt in the had been on the low side of expectations recently. economy. This was especially true with regard to Anecdotal reports continued to point to very strong the effects of the latest policy moves in August and competition in most markets for final goods, and November, which accounted for half the total tightbusiness firms continued to encounter widespread ening. In the circumstances, a pause seemed warresistance in their efforts to increase prices as the ranted to give the Committee more time to assess costs of their raw materials and other inputs moved the underlying strength of the economy and the higher. Likewise, no uptrend currently was discern- impact of previous monetary restraint. This would ible in broad measures of wages even though labor provide a firmer basis for gauging the appropriate markets were widely described as tight and labor scope and timing of any further monetary restraint shortages appeared to have increased further that might be needed to contain inflation. The level recently in some parts of the country. While of real short-term interest rates, which had risen examples of upward pressures on wages could be considerably this year and were now significantly found in a number of industries, such as construc- positive, the uniformly sluggish behavior of the tion where there were pronounced shortages of monetary aggregates, and the recent appreciation skilled labor in many local areas, most business of the dollar might indicate that policy was now firms were strongly resisting sizable increases in better positioned to restrain incipient inflation. It their wages and were making use of "hiring was noted that the Committee might have gained bonuses" and "performance bonuses" instead of some leeway to maintain an unchanged policy permanently higher wages to attract or retain work- without adverse expectational effects in light of the ers. At the same time, job insecurities, including relatively large policy tightening implemented just the potential loss of health and pension benefits, a few weeks ago and the publication of favorable appeared to be holding down labor mobility and price and wage data that probably had alleviated, at demands for higher compensation. However, many least temporarily, concerns about future inflation. members commented that rising pressures on A number of members also commented that financapacity, should they persist or intensify, could be cial markets might tend to be a bit unsettled over expected to foster greater inflation at some point. the balance of the year as a result of the expected Indeed, there were numerous reports of business year-end adjustments along with the uncertainty plans to raise prices early in the new year, and a about the effects and incidence of the sizable marnumber of members commented that inflation prob- ket losses incurred by some investors in 1994. In ably would worsen somewhat over the near term. these circumstances, where there did not appear to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 367 be an urgent need for a further policy move, a ahead, but that risk could not be ruled out and number of members viewed conditions in financial argued for a cautious approach to any further tightmarkets as arguing for a steady policy course pend- ening. Accordingly, the Committee should wait ing a reassessment early next year. until the next scheduled meeting when more infor- A few members expressed a preference for some mation, possibly including a better assessment of additional tightening of policy at this meeting. In the outlook for fiscal policy, would be available for their view, the considerable strength of the eco- evaluating the need for any further firming of monenomic expansion and the high level of resource tary policy. One member expressed the view that it utilization argued for further monetary restraint to would be desirable to make any further short-run counter inflationary pressures; immediate action policy moves in the context of the Committee's also would moderate inflationary expectations by long-run strategy to be considered at the next meetreinforcing the credibility of the System's anti- ing. Despite their preferences, these members said inflationary effort. All but one of these members that they would not dissent from an asymmetric indicated, however, that they could accept an directive. unchanged directive that was biased toward pos- At the conclusion of the Committee's discussion, sible firming during the intermeeting period. all but one of the members indicated that they On the issue of possible adjustments to policy could support a directive that called for maintainduring the period until the next meeting, a majority ing the existing degree of pressure on reserve posiof the members expressed a preference for an tions and that included a bias toward the possible asymmetric directive tilted toward restraint. While firming of reserve conditions during the intermeetmost of these members preferred not to tighten ing period. Accordingly, in the context of the Compolicy at this point, they believed that the need for mittee's long-run objectives for price stability and further monetary restraint was highly likely, though sustainable economic growth, and giving careful it would remain contingent on the tenor of the new consideration to economic, financial, and monetary information, including data on holiday retail sales, developments, the Committee decided that somethat would begin to arrive shortly after the turn of what greater reserve restraint would be acceptable the year. Should the need for more restraint become or slightly lesser reserve restraint might be acceptapparent, it would be desirable in this view for the able during the intermeeting period. The reserve appropriate policy move to be made promptly to conditions contemplated at this meeting were exarrest any worsening of inflation and inflationary pected to be consistent with modest growth in the expectations, thereby minimizing the cumulative broader monetary aggregates over coming months. policy tightening that would be required and the At the conclusion of the meeting, the Federal ultimate cost of bringing inflation under control. Reserve Bank of New York was authorized and The Committee always had the option of adjusting directed, until instructed otherwise by the Commitits policy during intermeeting periods even under a tee, to execute transactions in the System Account symmetric directive, but the balance of risks in the in accordance with the following domestic policy outlook argued in the view of these members for a directive: policy reaction to new information that was best characterized by an asymmetric directive. The information reviewed at this meeting suggests a The other members who favored an unchanged further pickup in economic growth in recent months. policy preferred a symmetric directive. In their Nonfarm payroll employment rose sharply in November, view, the information that would be released in the and the civilian unemployment rate declined to 5.6 percent. Industrial production registered another large weeks immediately ahead was not likely to depart increase in November and capacity utilization moved up sufficiently from current expectations to warrant a further from already high levels. Retail sales have conpolicy tightening move during the intermeeting tinued to rise rapidly. Housing starts increased appreciaperiod. Moreover, current forecasts were subject to bly in November. Orders for nondefense capital goods some risks in both directions. Those in the direc- point to a continued strong expansion in spending on business equipment; permits for nonresidential construction of appreciably greater-than-projected slowing tion have been trending higher. The nominal deficit on in the expansion might have a relatively low prob- U.S. trade in goods and services widened somewhat in ability, at least over the quarters immediately October from its average rate in the third quarter. Prices Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

368 Federal Reserve Bulletin • April 1995 of many materials have continued to move up rapidly, Votes for this action: Messrs. Greenspan, McDonbut broad indexes of prices for consumer goods and ough, Blinder, Broaddus, Forrestal, Jordan, Kelley, services have increased moderately on average over Lindsey, and Parry and Mses. Phillips and Yellen. recent months. Vote against this action: Mr. LaWare. On November 15, 1994, the Board of Governors approved an increase from 4 to 43A percent in the dis- Mr. LaWare dissented because he favored an count rate, and in line with the Committee's decision the immediate policy tightening action. In his opinion, increase was allowed to show through fully to interest the expansion remained quite strong, with high and rates in reserve markets. In the period since the November meeting, short-term interest rates have risen consid- increasing levels of utilization in labor and capital erably while long-term rates have declined slightly. The markets, and he saw a serious risk of rising inflatrade-weighted value of the dollar in terms of the other tion. In the circumstances, he also feared that a G-10 currencies recovered further over the intermeeting failure by the Committee to take restraining action period. could heighten inflationary expectations by raising Growth of M2 resumed in November after several months of decline, while M3 expanded moderately fur- concerns about the System's commitment to the ther. For the year through November, M2 grew at a rate objective of sustainable, noninflationary economic at the bottom of the Committee's range for 1994 and M3 growth. at a rate in the lower half of its range for the year. Total domestic nonfinancial debt has continued to expand at a moderate rate in recent months and for the year-to-date it has grown at a rate in the lower half of its monitoring TEMPORARY INCREASE range. IN RECIPROCAL CURRENCY AGREEMENT The Federal Open Market Committee seeks monetary WITH THE BANK OF MEXICO and financial conditions that will foster price stability and promote sustainable growth in output. In furtherance of these objectives, the Committee at its meeting in At a meeting conducted via a telephone conference July reaffirmed the ranges it had established in February on December 30, 1994, the Committee approved a for growth of M2 and M3 of 1 to 5 percent and 0 to temporary increase from $3 billion to %AVi billion 4 percent respectively, measured from the fourth quarter in the System's reciprocal currency (swap) agreeof 1993 to the fourth quarter of 1994. The Committee ment with the Bank of Mexico; it was understood anticipated that developments contributing to unusual velocity increases could persist during the year and that that all drawings, including those under the permamoney growth within these ranges would be consistent nent tranche of the System's swap agreement with with its broad policy objectives. The monitoring range the Bank of Mexico, would be subject to a determifor growth of total domestic nonfinancial debt was nation that appropriate terms and conditions had maintained at 4 to 8 percent for the year. For 1995, the been met. The U.S. Treasury also increased its Committee agreed on tentative ranges for monetary growth, measured from the fourth quarter of 1994 to the swap facility with the Bank of Mexico by $1 lA bilfourth quarter of 1995, of 1 to 5 percent for M2 and 0 to lion to $4V2 billion, thereby raising the total for 4 percent for M3. The Committee provisionally set the official U.S. facilities to $9.0 billion. The increases associated monitoring range for growth of domestic nonwere in response to recent financial developments financial debt at 3 to 7 percent for 1995. The behavior of in Mexico. The Committee was informed at this the monetary aggregates will continue to be evaluated in the light of progress toward price level stability, move- meeting that the Bank of Canada would be conments in their velocities, and developments in the econ- sidering an increase in its own Can$1.0 billion omy and financial markets. facility with the Bank of Mexico, and that addi- In the implementation of policy for the immediate tional official financing assistance was being negofuture, the Committee seeks to maintain the existing tiated with the other G-10 central banks and the degree of pressure on reserve positions. In the context of the Committee's long-run objectives for price stability Bank of Spain. and sustainable economic growth, and giving careful consideration to economic, financial, and monetary Votes for this action: Messrs. Greenspan, McDonough, developments, somewhat greater reserve restraint would Blinder, Jordan, Kelley, LaWare, Lindsey, Melzer, and or slightly lesser reserve restraint might be acceptable in Parry and Ms. Yellen. Vote against this action: the intermeeting period. The contemplated reserve con- Mr. Broaddus. Absent and not voting: Mr. Forrestal ditions are expected to be consistent with modest growth and Ms. Phillips. Mr. Melzer voted as alternate for in M2 and M3 over coming months. Mr. Forrestal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 369 Mr. Broaddus dissented because he continued to this particular enlargement would support. In his question the desirability of the System's foreign view, the expansion of this arrangement was exchange market intervention and therefore the equivalent in many respects to a fiscal policy initiadesirability of maintaining or enlarging the swap tive of a kind that should be explicitly authorized arrangements that facilitate them. In his view con- by the Congress. tinued System participation in such operations with It was agreed that the next meeting of the Comthe U.S. Treasury presented an unacceptable risk of mittee would be held on Tuesday-Wednesday, reducing the System's credibility and its ability to January 31-February 1, 1995. conduct monetary policy effectively. He felt this The meeting adjourned at 12:45 p.m. risk was particularly high in this instance. Moreover, as at the March 22, 1994, meeting of the Donald L. Kohn Committee, he had serious concerns about the Secretary appropriateness of the foreign exchange operations Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

371 Legal Developments Adequacy Guidelines), its risk-based capital guidelines FINAL RULE—AMENDMENT TO REGULATION A for state member banks and bank holding companies The Board of Governors is amending 12 C.F.R. Part (banking organizations) to implement section 350 of the 201, its Regulation A (Extensions of Credit by Federal Riegle Community Development and Regulatory Im- Reserve Banks); to reflect its approval of an increase in provement Act of 1994 (Riegle Act). Section 350 states the basic discount rate at each Federal Reserve Bank. that the amount of risk-based capital required to be The Board acted on requests submitted by the Boards of maintained by any insured depository institution, with Directors of the twelve Federal Reserve Banks. respect to assets transferred with recourse, may not The amendments to 12 C.F.R. Part 201 were effective exceed the maximum amount of recourse for which the February 13, 1995. The rate changes for adjustment institution is contractually liable under the recourse credit were effective on the dates specified and 12 agreement. This rule will have the effect of correcting C.F.R. Part 201 is amended as follows: the anomaly that currently exists in the risk-based capital treatment of recourse transactions under which an insti- Part 201—Extensions of Credit by Federal tution could be required to hold capital in excess of the Reserve Banks (Regulation A) maximum amount of loss possible under the contractual terms of the recourse obligation. 1. The authority citation for 12 C.F.R. Part 201 contin- Effective March 22, 1995, 12 C.F.R. Parts 208 and ues to read as follows: 225 are amended as follows: Authority: 12 U.S.C. 343 et seq., 347a, 347b, 347c, Part 208—Membership of State Banking 347d, 348 et seq., 357, 374, 374a and 461. Institutions in the Federal Reserve System (Regulation H) 2. Section 201.51 is revised to read as follows: 1. The authority citation for Part 208 continues to read as Section 201.51—Adjustment credit for depository follows: institutions. Authority: 12 U.S.C. 36, 248(a), 248(c), 321-338a, The rates for adjustment credit provided to depository 37 Id, 461, 481-486, 601, 611, 1814, 18230), 1828(o), institutions under section 201.3(a) are: 1831o, 1831p-l, 3105, 3310, 3331-3351 and 3906-3909; 15 U.S.C. 78b, 781(b), 781(g), 781(i), 78o- 4(c)(5), 78q, 78q-l and 78w; 31 U.S.C. 5318. Federal Reserve Bank Rate Effective 2. In Part 208, Appendix A, section III.D.l. is revised to Boston 5.25 February 1, 1995 New York 5.25 February 1, 1995 read as follows: Philadelphia 5.25 February 2, 1995 Cleveland 5.25 February 9, 1995 Richmond 5.25 February 1, 1995 Atlanta 5.25 February 2, 1995 Chicago 5.25 February 1, 1995 APPENDIX A TO PART 208—CAPITAL ADEQUACY St. Louis 5.25 February 1, 1995 GUIDELINES FOR STATE MEMBER BANKS: Minneapolis 5.25 February 2, 1995 Kansas City 5.25 February 1, 1995 RISK-BASED MEASURE Dallas 5.25 February 2, 1995 San Francisco 5.25 February 1, 1995 JJJ * * * £) * * * FINAL RULE—AMENDMENTS TO REGULATIONS H AND Y 1. Items with a 100 percent conversion factor. a. A 100 percent conversion factor applies to direct The Board of Governors is amending 12 C.F.R. Parts credit substitutes, which include guarantees, or 208 and 225 (Regulations H and Y; Capital and Capital equivalent instruments, backing financial claims, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

372 Federal Reserve Bulletin • April 1995 such as outstanding securities, loans, and other fi- c. In the case of direct credit substitutes that take nancial liabilities, or that back off-balance sheet the form of a syndication as defined in the instrucitems that require capital under the risk-based capi- tions to the commercial bank Call Report, that is, tal framework. Direct credit substitutes include, for where each bank is obligated only for its pro rata example, financial standby letters of credit, or other share of the risk and there is no recourse to the equivalent irrevocable undertakings or surety ar- originating bank, each bank will only include its rangements, that guarantee repayment of financial pro rata share of the direct credit substitute in its obligations such as: commercial paper, tax-exempt risk-based capital calculation. securities, commercial or individual loans or debt d. Financial standby letters of credit are distinobligations, or standby or commercial letters of guished from loan commitments (discussed below) credit. Direct credit substitutes also include the in that standbys are irrevocable obligations of the acquisition of risk participations in bankers accepbank to pay a third-party beneficiary when a custances and standby letters of credit, since both of tomer (account party) fails to repay an outstanding these transactions, in effect, constitute a guarantee loan or debt instrument (direct credit substitute). by the acquiring bank that the underlying account Performance standby letters of credit (performance party (obligor) will repay its obligation to the origibonds) are irrevocable obligations of the bank to nating, or issuing, institution.41 (Standby letters of pay a third-party beneficiary when a customer (accredit that are performance-related are discussed count party) fails to perform some other contractual below and have a credit conversion factor of 50 non-financial obligation. percent.) e. The distinguishing characteristic of a standby b. The full amount of a direct credit substitute is letter of credit for risk-based capital purposes is the converted at 100 percent and the resulting credit combination of irrevocability with the fact that equivalent amount is assigned to the risk category funding is triggered by some failure to repay or appropriate to the obligor or, if relevant, the guaranperform an obligation. Thus, any commitment (by tor or the nature of the collateral. In the case of a whatever name) that involves an irrevocable obligadirect credit substitute in which a risk participation to make a payment to the customer or to a third tion42 has been conveyed, the full amount is still party in the event the customer fails to repay an converted at 100 percent. However, the credit outstanding debt obligation or fails to perform a equivalent amount that has been conveyed is ascontractual obligation is treated, for risk-based capsigned to whichever risk category is lower: the risk ital purposes, as respectively, a financial guarantee category appropriate to the obligor, after giving standby letter of credit or a performance standby. effect to any relevant guarantees or collateral, or the f. A loan commitment, on the other hand, involves risk category appropriate to the institution acquiring an obligation (with or without a material adverse the participation. Any remainder is assigned to the risk category appropriate to the obligor, guarantor, change or similar clause) of the bank to fund its or collateral. For example, the portion of a direct customer in the normal course of business should credit substitute conveyed as a risk participation to the customer seek to draw down the commitment. a U.S. domestic depository institution or foreign g. Sale and repurchase agreements and asset sales bank is assigned to the risk category appropriate to with recourse (to the extent not included on the claims guaranteed by those institutions, that is, the balance sheet) and forward agreements also are 20 percent risk category43 This approach recog- converted at 100 percent. The risk-based capital nizes that such conveyances replace the originating definition of the sale of assets with recourse, includbank's exposure to the obligor with an exposure to ing the sale of 1- to 4-family residential mortgages, the institutions acquiring the risk participations.44 is the same as the definition contained in the instructions to the commercial bank Call Report. Accordingly, the entire amount of any assets transferred with recourse that are not already included 41. Credit equivalent amounts of acquisitions of risk participations are assigned to the risk category appropriate to the account party obligor, or, if on the balance sheet, including pools of 1- to relevant, the nature of the collateral or guarantees. 4-family residential mortgages, are to be converted 42. That is, a participation in which the originating bank remains liable to at 100 percent and assigned to the risk weight the beneficiary for the full amount of the direct credit substitute if the party that has acquired the participation fails to pay when the instrument is drawn. appropriate to the obligor, or if relevant, the nature 43. Risk participations with a remaining maturity of over one year that are of any collateral or guarantees. The terms of a conveyed to non-OECD banks are to be assigned to the 100 percent risk category, unless a lower risk category is appropriate to the obligor, guarantor, or collateral. 44. A risk participation in bankers acceptances conveyed to other institu- acquiring the participation or, if relevant, the guarantor or nature of the tions is also assigned to the risk category appropriate to the institution collateral. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 373 transfer of assets with recourse may contractually ties and the cash collateral received and any reinlimit the amount of the institution's liability to an vestment risk associated with that cash collateral is amount less than the effective risk-based capital borne by the customer. requirement for the assets being transferred with recourse. If such a transaction (including one that is reported as a financing, i.e., the assets are not Part 225—Bank Holding Companies and Change removed from the balance sheet) meets the criteria in Bank Control (Regulation Y) for sales treatment under GAAP, the amount of total capital required is equal to the maximum amount of 1. The authority citation for part 225 continues to read as loss possible under the recourse provision. If the follows: transaction is also treated as a sale for regulatory reporting purposes, then the required amount of Authority. 12 U.S.C. 1817(j)(13), 1818, 1831i, 1831p-l, capital may be reduced by the balance of any asso- 1843(c)(8), 1844(b), 1972(1), 3106, 3108, 3310, 3331ciated non-capital liability account established pur- 3351, 3907, and 3909. suant to GAAP to cover estimated probable losses under the recourse provision. So-called "loan 2. In Part 225, Appendix A, section III.D.l. is revised to strips" (that is, short-term advances sold under read as follows: long-term commitments without direct recourse) are defined in the instructions to the commercial bank Call Report and for risk-based capital purposes as assets sold with recourse. APPENDIX A TO PART 225—CAPITAL ADEQUACY GUIDELINES FOR BANK HOLDING COMPANIES: h. Forward agreements are legally binding contrac- RISKED-BASED MEASURE tual obligations to purchase assets with certain drawdown at a specified future date. Such obligations include forward purchases, forward forward JJJ * * * deposits placed,45 and partly-paid shares and securi- D * * * ties; they do not include commitments to make 1. Items with a 100 percent conversion factor. residential mortgage loans or forward foreign ex- a. A 100 percent conversion factor applies to direct change contracts. credit substitutes, which include guarantees, or i. Securities lent by a bank are treated in one of two equivalent instruments, backing financial claims, ways, depending upon whether the lender is at risk such as outstanding securities, loans, and other fiof loss. If a bank, as agent for a customer, lends the nancial liabilities, or that back off-balance sheet customer's securities and does not indemnify the items that require capital under the risk-based capicustomer against loss, then the transaction is ex- tal framework. Direct credit substitutes include, for cluded from the risk-based capital calculation. If, example, financial standby letters of credit, or other alternatively, a bank lends its own securities or, equivalent irrevocable undertakings or surety aracting as agent for a customer, lends the customer's rangements, that guarantee repayment of financial securities and indemnifies the customer against loss, obligations such as: commercial paper, tax-exempt the transaction is converted at 100 percent and securities, commercial or individual loans or debt assigned to the risk weight category appropriate to obligations, or standby or commercial letters of the obligor, to any collateral delivered to the lend- credit. Direct credit substitutes also include the ing bank, or, if applicable, to the independent custo- acquisition of risk participations in bankers accepdian acting on the lender's behalf. Where a bank is tances and standby letters of credit, since both of acting as agent for a customer in a transaction these transactions, in effect, constitute a guarantee involving the lending or sale of securities that is by the acquiring banking organization that the uncollateralized by cash delivered to the bank, the derlying account party (obligor) will repay its oblitransaction is deemed to be collateralized by cash gation to the originating, or issuing, institution.44 on deposit in the bank for purposes of determining (Standby letters of credit that are performancethe appropriate risk-weight category, provided that any indemnification is limited to no more than the difference between the market value of the securi- 44. Risk participations with a remaining maturity of over one year that are conveyed to non-OECD banks are to be assigned to the 100 percent risk 45. Forward forward deposits accepted are treated as interest rate category, unless a lower risk category is appropriate to the obligor, guarantor, contracts. or collateral. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

374 Federal Reserve Bulletin • April 1995 related are discussed below and have a credit con- ficiary when a customer (account party) fails to version factor of 50 percent.) perform some other contractual non-financial oblib. The full amount of a direct credit substitute is gation. converted at 100 percent and the resulting credit e. The distinguishing characteristic of a standby equivalent amount is assigned to the risk category letter of credit for risk-based capital purposes is the appropriate to the obligor or, if relevant, the guaran- combination of irrevocability with the fact that tor or the nature of the collateral. In the case of a funding is triggered by some failure to repay or direct credit substitute in which a risk participa- perform an obligation. Thus, any commitment (by tion45 has been conveyed, the full amount is still whatever name) that involves an irrevocable obligaconverted at 100 percent. However, the credit tion to make a payment to the customer or to a third equivalent amount that has been conveyed is as- party in the event the customer fails to repay an signed to whichever risk category is lower: the risk outstanding debt obligation or fails to perform a category appropriate to the obligor, after giving contractual obligation is treated, for risk-based capeffect to any relevant guarantees or collateral, or the ital purposes, as respectively, a financial guarantee risk category appropriate to the institution acquiring standby letter of credit or a performance standby. the participation. Any remainder is assigned to the f. A loan commitment, on the other hand, involves risk category appropriate to the obligor, guarantor, an obligation (with or without a material adverse or collateral. For example, the portion of a direct change or similar clause) of the banking organizacredit substitute conveyed as a risk participation to tion to fund its customer in the normal course of a U.S. domestic depository institution or foreign business should the customer seek to draw down bank is assigned to the risk category appropriate to the commitment. claims guaranteed by those institutions, that is, the g. Sale and repurchase agreements and asset sales 20 percent risk category.46 This approach recogwith recourse (to the extent not included on the nizes that such conveyances replace the originating balance sheet) and forward agreements also are banking organization's exposure to the obligor with converted at 100 percent.48 So-called "loan strips" an exposure to the institutions acquiring the risk (that is, short-term advances sold under long-term participations.47 commitments without direct recourse) are treated c. In the case of direct credit substitutes that take for risk-based capital purposes as assets sold with the form of a syndication, that is, where each bank- recourse and, accordingly, are also converted at ing organization if obligated only for its pro rata 100 percent. share of the risk and there is no recourse to the h. Forward agreements are legally binding contracoriginating banking organization, each banking or- tual obligations to purchase assets with certain ganization will only include its pro rata share of the drawdown at a specified future date. Such obligadirect credit substitute in its risk-based capital cal- tions include forward purchases, forward forward culation. d. Financial standby letters of credit are distinguished from loan commitments (discussed below) in that standbys are irrevocable obligations of the 48. In regulatory reports and under GAAP, bank holding companies are banking organization to pay a third-party benefi- permitted to treat some asset sales with recourse as "true" sales. For ciary when a customer (account party) fails to repay risk-based capital purposes, however, such assets sold with recourse and reported as "true" sales by bank holding companies are converted at 100 an outstanding loan or debt instrument (direct credit percent and assigned to the risk category appropriate to the underlying substitute). Performance standby letters of credit obligor or, if relevant, the guarantor or nature of the collateral, provided that (performance bonds) are irrevocable obligations of the transactions meet the definition of assets sold with recourse (including assets sold subject to pro rata and other loss sharing arrangements), that is the banking organization to pay a third-party benecontained in the instructions to the commercial bank Consolidated Reports of Condition and Income (Call Report). This treatment applies to any assets, including the sale of 1- to 4-family and multifamily residential mortgages, sold with recourse. Accordingly, the entire amount of any assets transferred 45. That is, a participation in which the originating banking organization with recourse that are not already included on the balance sheet, including remains liable to the beneficiary for the full amount of the direct credit pools of 1- to 4-family residential mortgages, are to be converted at 100 substitute if the party that has acquired the participation fails to pay when the percent and assigned to the risk category appropriate to the obligor, or if instrument is drawn. relevant, the nature of any collateral or guarantees. The terms of a transfer of 46. Risk participations with a remaining maturity of over one year that are assets with recourse may contractually limit the amount of the institution's liability to an amount less than the effective risk-based capital requirement conveyed to non-OECD banks are to be assigned to the 100 percent risk for the assets being transferred with recourse. If such a transaction is category, unless a lower risk category is appropriate to the obligor, guarantor, recognized as a sale under GAAP, the amount of total capital required is or collateral. equal to the maximum amount of loss possible under the recourse provision, 47. A risk participation in bankers acceptances conveyed to other instituless any amount held in an associated non-capital liability account estabtions is also assigned to the risk category appropriate to the institution lished pursuant to GAAP to cover estimated probable losses under the acquiring the participation or, if relevant, the guarantor or nature of the recourse provision. collateral. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 375 deposits placed,49 and partly-paid shares and securi- Authority: 12 U.S.C. 248(i) and (k). ties; they do not include commitments to make residential mortgage loans or forward foreign ex- 2. Section 265.6 is amended by revising paragraph (b)(2) change contracts. and by adding paragraph (b)(3) to read as follows: i. Securities lent by a banking organization are treated in one of two ways, depending upon whether Section 265.6—Functions delegated to General the lender is at risk of loss. If a banking organiza- Counsel. tion, as agent for a customer, lends the customer's securities and does not indemnify the customer against loss, then the transaction is excluded from (b) * * * the risk-based capital calculation. If, alternatively, a (2) Disclosure to foreign authorities. To make the banking organization lends its own securities or, determinations required for disclosure of information acting as agent for a customer, lends the customer's to a foreign bank regulatory or supervisory authority, securities and indemnifies the customer against loss, and to obtain, to the extent necessary, the agreement the transaction is converted at 100 percent and of such authority to maintain the confidentiality of assigned to the risk weight category appropriate to such information to the extent possible under applicathe obligor, to any collateral delivered to the lend- ble law. ing banking organization, or, if applicable, to the (3) Assistance to foreign authorities. To approve reindependent custodian acting on the lender's be- quests for assistance from any foreign bank regulatory half. Where a banking organization is acting as or supervisory authority that is conducting an investiagent for a customer in a transaction involving the gation regarding violations of any law or regulation lending or sale of securities that is collateralized by relating to banking matters or currency transactions cash delivered to the banking organization, the administered or enforced by such authority, and to transaction is deemed to be collateralized by cash make the determinations required for any investigaon deposit in a subsidiary lending institution for tion or collection of information and evidence pertipurposes of determining the appropriate risk-weight nent to such request. In deciding whether to approve category, provided that any indemnification is lim- requests for assistance under this paragraph, the Genited to no more than the difference between the eral Counsel shall consider: market value of the securities and the cash collat- (i) Whether the requesting authority has agreed to eral received and any reinvestment risk associated provide reciprocal assistance with respect to bankwith that cash collateral is borne by the customer. ing matters within the jurisdiction of any appropriate Federal banking agency; (ii) Whether compliance with the request would FINAL RULE—AMENDMENT TO RULES REGARDING prejudice the public interest of the United States; DELEGATION OF AUTHORITY and (iii) Whether the request is consistent with the The Board of Governors is amending 12 C.F.R. Part requirement that the Board conduct any such inves- 265, its Rules Regarding Delegation of Authority, to tigation in compliance with the laws of the United approve requests for assistance from, and to share infor- States and the policies and procedures of the Board. mation with, foreign banking authorities pursuant to the Federal Deposit Insurance Act (FDI Act). This delegation of authority is intended to aid in the expeditious ORDERS ISSUED UNDER BANK HOLDING COMPANY processing of requests for assistance from foreign bank- ACT ing authorities. Effective February 17, 1995, 12 C.F.R. Part 265 is Orders Issued Under Section 3 of the Bank amended as follows: Holding Company Act Part 265—Rules Regarding Delegation of Cheyenne Banking Corporation Authority Cheyenne, Oklahoma 1. The authority citation for Part 265 continues to read as Order Approving Formation of a Bank Holding follows: Company Cheyenne Banking Corporation, Cheyenne, Oklahoma 49. Forward forward deposits accepted are treated as interest rate contracts. ("Cheyenne"), has applied under section 3(a)(1) of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

376 Federal Reserve Bulletin • April 1995 Bank Holding Company Act ("BHC Act") (12U.S.C. its findings and decision, and, as such, may be enforced § 1842(a)(1)) to become a bank holding company by in proceedings under applicable law. acquiring all the voting shares of Security State Bank, This transaction shall not be consummated before the Cheyenne, Oklahoma ("Bank"). fifteenth calendar day following the effective date of this Notice of the application, affording interested persons order, or later than three months after the effective date an opportunity to submit comments, has been published of this order, unless such period is extended for good (59 Federal Register 64,206 (1994)). The time for filing cause by the Board or by the Federal Reserve Bank of comments has expired, and the Board has considered the Kansas City, acting pursuant to delegated authority. application and all comments received in light of the By order of the Board of Governors, effective Febfactors set forth in section 3(c) of the BHC Act. ruary 15, 1995. Cheyenne is a non-operating corporation formed for the purpose of becoming a bank holding company by the Voting for this action: Vice Chairman Blinder and Governors Lindsey, Phillips, and Yellen. Absent and not voting: Chairman acquisition of Bank. Bank is the 104th largest commer- Greenspan and Governors Kelley and LaWare. cial banking organization in Oklahoma, with deposits of $59.8 million, representing less than 1 percent of total WILLIAM W. WILES deposits in commercial banking organizations in the Secretary of the Board state.1 Based on all the facts of record, consummation of this proposal would not have a significantly adverse Commerce Bancshares, Inc. effect on competition or the concentration of banking Kansas City, Missouri resources in any relevant banking market. Considerations relating to the financial and managerial CBI-Illinois, Inc. resources and future prospects of Cheyenne and Bank, Kansas City, Missouri the convenience and needs of the communities to be served, and the other supervisory factors that the Board Order Approving Acquisition of a Bank Holding is required to consider under section 3 of the BHC Act Company are consistent with approval of this application.2 In addition, the Board has received commitments to ensure that Commerce Bancshares, Inc. ("Commerce"), and its it will have access to information on the operations and wholly owned subsidiary, CBI-Illinois, Inc. ("CBI"), activities of Cheyenne and its affiliates, in order to both of Kansas City, Missouri, and bank holding compapermit the Board to determine and enforce compliance nies within the meaning of the Bank Holding Company with the BHC Act and other federal banking laws. Act ("BHC Act"), have applied under section 3 of the Based on the foregoing and after a review of all the BHC Act (12 U.S.C. § 1842) to acquire by merger facts of record, the Board has determined that this appli- Peoples Mid-Illinois Corporation ("Peoples") and cation should be, and hereby is, approved. The Board's thereby indirectly acquire its wholly owned subsidiary, approval of this proposal is specifically conditioned on The Peoples Bank ("Bank"), both of Bloomington, compliance by Cheyenne and one of its principal share- Illinois.1 holders with all the commitments made in connection Notice of the applications, affording interested persons with this application. For purposes of this action, these an opportunity to submit comments, has been published commitments and conditions are deemed to be condi- (59 Federal Register 62,732 (1994)). The time for filing tions imposed in writing by the Board in connection with comments has expired, and the Board has considered the applications and all comments received in light of the factors set forth in section 3(c) of the BHC Act. Section 3(d) of the BHC Act, the Douglas Amend- 1. Deposit and market data are as of June 30, 1993. 2. As part of this review, the Board has carefully considered a comment ment, prohibits the Board from approving an application received from an individual ("Protestant") alleging that Bank failed to by a bank holding company to acquire control of any release liens against his property that secured loans the Bank had made to bank located outside the bank holding company's home him, engaged in improper debt collection practices, and misled the court concerning its actions in his personal bankruptcy proceedings. Protestant state unless the acquisition is "specifically authorized by also alleges that Bank's assets are declining and that several other Bank the statute laws of the State in which such bank is customers have informed him of their dissatisfaction with Bank and of located, by language to that effect and not merely by possible instances of insider abuse. The Board has carefully considered these comments in light of all the facts of record, including information provided by Bank and reports of examination by Bank's primary banking supervisor, the Federal Deposit Insurance Corporation. The Board notes that the Court of Appeals of the State of Oklahoma has considered Protestant's claims against Bank concerning the release of its liens and its debt collection practices and 1. Commerce also has acquired an option to purchase up to 19.9 percent of has upheld the actions of Bank. In addition, the bankruptcy court has the the voting shares of Peoples upon the occurrence of certain events relating to authority to adjudicate Protestant's claims of misrepresentations by Bank and a change of control of Peoples. This option has not been exercised and would afford Protestant adequate relief if his allegations can be sustained. expire upon consummation of this proposal. 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Legal Developments 377 implication."2 For purposes of the Douglas Amendment, nience and needs of the communities to be served also the home state of Commerce and CBI is Missouri, and are consistent with approval.6 the home state of Peoples and Bank is Illinois. Based on the foregoing and all other facts of record, The Board has previously determined that the inter- the Board has determined that the applications should state banking statutes of Illinois permit a Missouri bank be, and hereby are, approved. The Board's approval is holding company to acquire established banking organi- expressly conditioned on Commerce's compliance with zations in Illinois.3 In addition, the office of the Illinois all the commitments made in connection with these banking supervisor has informally advised the Board applications. The commitments and conditions relied on that this transaction is permissible under Illinois law. by the Board in reaching this decision shall be deemed to Based on all the facts of record, the Board has deter- be conditions imposed in writing by the Board in conmined that its approval of this proposal is not prohibited nection with its findings and decision, and, as such, may by the Douglas Amendment. Approval of this proposal be enforced in proceedings under applicable law. is conditioned upon Commerce's receiving all required The acquisition of Peoples shall not be consummated state regulatory approvals. before the fifteenth calendar day following the effective Commerce, with total assets of $7.9 billion, operates date of this order, or later than three months after the 19 banking subsidiaries in Illinois, Kansas, Missouri, effective date of this order, unless such period is exand Nebraska.4 Commerce is the 40th largest commer- tended for good cause by the Board or by the Federal cial banking organization in Illinois, controlling deposits Reserve Bank of Kansas City, acting pursuant to deleof approximately $520 million, representing less than 1 gated authority. percent of total deposits in commercial banking organi- By order of the Board of Governors, effective Febzations in the state. Peoples is the 53d largest commer- ruary 21, 1995. cial banking organization in Illinois, controlling deposits of approximately $294.4 million, representing less than Voting for this action: Chairman Greenspan, Vice Chairman 1 percent of total deposits in commercial banking organi- Blinder, and Governors LaWare, Phillips, and Yellen. Absent and zations in the state. Upon consummation of this transac- not voting: Governors Kelley and Lindsey. tion, Commerce would become the 26th largest commercial banking organization in Illinois, controlling JENNIFER J. JOHNSON Deputy Secretary of the Board approximately $814.3 million in deposits, representing less than 1 percent of total deposits in commercial banking organizations in the state. Commerce and Peoples do not compete directly in any interests, insufficient disclosures in Peoples's proxy statement, unequal treatbanking market. Based on all the facts of record, the ment of minority shareholders, and inadequate protection of the interests of Peoples's shareholders in the terms of the merger. Board concludes that consummation of this proposal After considering all the facts of record, including information from would not have a significantly adverse effect on competi- examination reports, the size and condition of the companies involved, the tion or the concentration of banking resources in any continuing service of Peoples's president to Commerce after the merger, and the capitalization and financial strength of the surviving entity, the Board relevant banking market. concludes that the allegations of excessive compensation of Peoples's presi- The Board also concludes that the financial and mana- dent do not reflect so adversely on the managerial and financial resources of Commerce and CBI as to warrant denial of the proposal. Protestant presents gerial resources and future prospects of Commerce, Peono facts to demonstrate that the disclosures in the proxy statement, or the ples, and their respective subsidiary banks, and the other interests in Commerce held by Bank's financial advisor and the law firm supervisory factors that the Board must consider under advising Peoples's management, violate guidelines established by the Securities and Exchange Commission, the Federal agency responsible for regulatsection 3 of the BHC Act, are consistent with approval ing the content of such statements, or that the absence of pre-emptive rights of this proposal.5 Considerations relating to the conve- for Peoples' s shareholders violates applicable state corporate law. Moreover, courts have held that matters such as the valuation and merits of a merger to shareholders are not factors under the Board's jurisdiction under the BHC Act. See Western Bancshares, Inc. v. Board of Governors, 480 F.2d 749 (10th 2. 12 U.S.C. § 1842(d). A bank holding company's home state is that state Cir. 1973). Authority over these matters is vested in courts and other in which the operations of the bank holding company's banking subsidiaries governmental agencies that can afford Protestant adequate relief if he can were principally conducted on July 1, 1966, or the date on which the sustain his allegations. In this light, and based on all the facts of record, the company became a bank holding company, whichever is later. Board concludes that the allegations raised by Protestant do not warrant 3. See United Missouri Bancshares, Inc., 73 Federal Reserve Bulletin 604 denial of this proposal. (1987). Under Illinois law, an out-of-state bank holding company may 6. Protestant also objects to the acquisition of an independent, locally acquire an Illinois bank, if the state in which that bank holding company is owned bank. The Board notes that all the banking subsidiaries of Commerce located has reciprocal statutes and the Illinois bank to be acquired has been in and Bank were rated either "outstanding" or "satisfactory" at their most existence and continuously operating for more than ten years. S.H.A. 205 recent examinations for performance in assisting to meet the credit needs of ILCS 10/3.071 (West 1993). Bank has been in existence and continuously their local communities under the Community Reinvestment Act (12 U.S.C. operating for more than ten years. § 2901 et seq.). The Board also notes that Commerce plans to expand the 4. Asset and state deposit data are as of June 30, 1994. products and services offered to Bank's customers. On the basis of the 5. The Board has carefully reviewed comments from an individual ("Prot- foregoing and all other facts of record, the Board has concluded that estant") objecting to this proposal on a number of grounds, including convenience and needs considerations are consistent with approval of this allegations of excessive compensation of Peoples's president and conflicts of proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

378 Federal Reserve Bulletin • April 1995 Commercial Bancorp total deposits in depository institutions in the market. Salem, Oregon The Herfindahl-Hirschman Index ("HHI") for the market would increase by less than 1 point to 2002.5 Based Order Approving Merger of Bank Holding Companies on all the facts of record, the Board concludes that consummation of this proposal is not likely to have a sig- Commercial Bancorp, Salem, Oregon ("Commercial"), nificantly adverse effect on competition or on the cona bank holding company within the meaning of the Bank centration of resources in any relevant banking market. Holding Company Act ("BHC Act"), has applied under The Board also has concluded that the financial and section 3 of the BHC Act (12 U.S.C. § 1842) to merge managerial resources and future prospects of Commerwith West Coast Bancorp ("West Coast"), and thereby cial and West Coast and their respective subsidiaries, indirectly acquire Bank of Newport, both of Newport, and all other supervisory factors the Board must con- Oregon.1 sider under section 3 of the BHC Act, are consistent with Notice of the application, affording interested persons approval of this proposal.6 Considerations relating to the an opportunity to submit comments, has been published convenience and needs of the communities to be served (59 Federal Register 62,731 (1994)). The time for filing also are consistent with approval. comments has expired, and the Board has considered the Based on the foregoing and all the other facts of application and all comments received in light of the record, the Board has determined that the application factors set forth in section 3 of the BHC Act. should be, and hereby is, approved. The Board's ap- Commercial is the seventh largest commercial bank- proval of this proposal is expressly conditioned on Coming organization in Oregon, controlling deposits of mercial's compliance with all commitments made in $254.9 million, representing 1.2 percent of total deposits connection with this application. For purposes of this in commercial banking organizations in the state.2 West action, these commitments and conditions are deemed to Coast is the tenth largest commercial banking organiza- be conditions imposed in writing by the Board in contion in Oregon, controlling deposits of $134.9 million, nection with its findings and decision, and, as such, may representing less than 1 percent of total deposits in be enforced in proceedings under applicable law. commercial banking organizations in the state. Upon The merger shall not be consummated before the consummation of this proposal, Commercial would re- fifteenth calendar day following the effective date of this main the seventh largest commercial banking organiza- order, or consummated later than three months after the tion in Oregon, controlling deposits of $389.8 million, effective date of this order, unless such period is exrepresenting 1.8 percent of total deposits in commercial tended for good cause by the Board or by the Federal banking organizations in the state. Commercial and West Coast compete in the Portland, Oregon banking market,3 where Commercial is the 16th 5. Under the revised Department of Justice Merger Guidelines, 49 Federal largest depository institution,4 controlling deposits of Register 26,823 (June 29, 1984), a market in which the post-merger HHI is $28.8 million, representing less than 1 percent of total 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 deposits in depository institutions in the market. West more than 50 points. The Justice Department has informed the Board that a Coast is the 19th largest depository institution in the bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anti-competitive effects) unless the post-merger market, controlling deposits of $4.5 million, represent- HHI is at least 1800 and the merger or acquisition increases the HHI by at ing less than 1 percent of total deposits in depository least 200 points. The Justice Department has stated that the higher than institutions in the market. Upon consummation of this normal threshold for an increase in the HHI when screening bank mergers and acquisitions for anti-competitive effects implicitly recognizes the comproposal, Commercial would remain the 16th largest petitive effect of limited-purpose lenders and other non-depository financial depository institution in the market, controlling $33.3 entities. million in deposits, representing less than 1 percent of 6. In reaching this conclusion, the Board has carefully reviewed a settlement between Commercial's subsidiary bank, Commercial Bank, Salem Oregon ("Bank"), and the Securities and Exchange Commission ("SEC") that concluded an SEC enforcement action resulting from the sale of unregistered interests in an individual retirement account common fund operated by 1. In connection with this application, both Commercial and West Coast Bank's trust department. Under the terms of this settlement, Bank has have requested approval to acquire options to purchase up to 19.9 percent of retained an outside consultant to advise Bank on securities-related issues, to the voting shares of each other. These options would terminate upon consum- review Bank's compliance programs, and to train staff. In addition, Bank has mation of this proposal. ceased selling new interests in the fund, and will either dissolve the fund or 2. All banking data are as of September 30, 1994. offer present investors a registered mutual fund alternative investment by 3. The Portland banking market is defined as the Portland, Oregon, RMA. December 31, 1995. The Board has also carefully considered information 4. In this context, depository institutions include commercial banks, sav- received from Bank's primary federal supervisor, the Federal Deposit Insurings banks, and savings associations. Market share data are based on calcula- ance Corporation ("FDIC"), including Bank's most recent reports of examitions in which the deposits of thrift institutions are included at 50 percent. nation assessing its managerial resources, and the FDIC's review of this The Board previously has indicated that thrift institutions have become, or matter. The Board notes that the FDIC did not object to this proposal. Based have the potential to become, significant competitors of commercial banks. on these and all the facts of record, the Board does not believe that this single incident, which has been addressed through corrective actions, warrants See WM Bancorp, 76 Federal Reserve Bulletin 788 (1990); National City adverse consideration under the BHC Act. Corporation, 70 Federal Reserve Bulletin 743 (1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 379 Reserve Bank of San Francisco, acting pursuant to dele- state. Upon consummation of this proposal, FCC would gated authority. remain the largest commercial banking organization in By order of the Board of Governors, effective Feb- Louisiana, controlling deposits of $5.5 billion, representruary 13, 1995. ing approximately 16.5 percent of total deposits in commercial banking organizations in the state. Voting for this action: Chairman Greenspan and Governors FCC competes directly with City in the Lafayette, Lindsey, Phillips, and Yellen. Absent and not voting: Vice Chair- Louisiana, banking market and with Bancshares in the man Blinder and Governors Kelley and LaWare. New Orleans, Louisiana, banking market.3 After consummation of this proposal, numerous competitors WILLIAM W. WILES would remain in each of these markets and the increase Secretary of the Board in market concentration, as measured by the Herfindahl- Hirschman Index ("HHI"), would not exceed the De- First Commerce Corporation partment of Justice merger guidelines.4 Based on all the New Orleans, Louisiana facts of record, the Board concludes that consummation of this proposal would not result in significantly adverse Order Approving the Acquisition of Bank Holding effects on competition or the concentration of banking Companies resources in these or any other relevant banking markets. First Commerce Corporation, New Orleans, Louisiana Convenience and Needs Considerations ("FCC"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has In acting on an application to acquire a depository instiapplied under section 3(a)(5) of the BHC Act (12 U.S.C. tution under the BHC Act, the Board must consider the § 1842(a)(5)) to merge with City Bancorp, Inc. ("City"), convenience and needs of the communities to be served, and thereby indirectly acquire City Bank and Trust Comand take into account the records of the relevant deposipany ("City Bank"), both of New Iberia, Louisiana. tory institutions under the Community Reinvestment Act FCC also has applied to merge with First Bancshares, (12 U.S.C. § 2901 et seq.) ("CRA"). The CRA requires Inc. ("Bancshares"), and thereby indirectly acquire First the federal financial supervisory agencies to encourage Bank ("First Bank"), both of Slidell, Louisiana.1 financial institutions to help meet the credit needs of the Notice of the applications, affording interested persons local communities in which they operate, consistent with an opportunity to submit comments, has been published the safe and sound operation of such institutions. To (59 Federal Register 50,916 (1994)). The time for filing accomplish this end, the CRA requires the appropriate comments has expired, and the Board has considered the federal supervisory authority to "assess the institution's applications and all comments received in light of the record of meeting the credit needs of its entire commufactors set forth in section 3 of the BHC Act. nity, including low- and moderate-income neighbor- FCC is the largest commercial banking organization hoods, consistent with the safe and sound operation of in Louisiana, controlling five subsidiary banks with desuch institution," and to take that record into account in posits of $5.2 billion, which represent approximately its evaluation of bank expansion proposals.5 16 percent of the total deposits in commercial banking organizations in the state.2 City, with total consolidated assets of $85.9 million, is the 83d largest commercial banking organization in Louisiana, controlling deposits 3. The Lafayette, Louisiana, banking market is approximated by Acadia, of $70.7 million, representing less than 1 percent of total Iberia, Lafayette, St. Landry, St. Martin and Vermilion Parishes (excluding the city of Mermentau). The New Orleans, Louisiana, banking market is deposits in commercial banking organizations in the approximated by Jefferson, Orleans, Plaquemine, St. Bernard, St. Charles, state. Bancshares, with total consolidated assets of St. John the Baptist and St. Tammany Parishes. $242.1 million, is the 19th largest commercial banking 4. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in which the post-merger HHI is organization in Louisiana, controlling deposits of above 1800 is considered to be highly concentrated. In such markets, the $216.7 million, representing less than 1 percent of total Justice Department is likely to challenge a merger that increases the HHI by deposits in commercial banking organizations in the more than 50 points. The Justice Department has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by more than 200 1. FCC proposes to merge City Bank into FCC's lead bank, First National points. The Justice Department has stated that the higher than normal HHI Bank of Commerce, New Orleans, Louisiana ("New Orleans Bank"), and thresholds for screening bank mergers for anticompetitive effects implicitly First Bank with its wholly owned subsidiary, First National Bank of Lafay- recognize the competitive effect of limited-purpose lenders and other nonette, Lafayette, Louisiana ("Lafayette Bank"), with New Orleans Bank and depository financial entities. After consummation of this proposal, the postmerger HHI would increase by approximately 53 points to 668 in the Lafayette Bank surviving the mergers. On January 12, 1995, New Orleans Lafayette banking market; and 87 points to 1561 in the New Oileans banking Bank and Lafayette Bank's primary supervisor, the Office of the Comptroller market. of the Currency ("OCC"), approved these mergers. 2. All asset and state deposit data are as of June 30, 1994. 5. 12 U.S.C. § 2903. 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380 Federal Reserve Bulletin • April 1995 The Board has received comments from the Plaisance rating from its primary federal supervisor, the OCC, at Development Corporation ("Protestant") maintaining its most recent examination for CRA performance as of that FCC and its subsidiary banks have failed to meet the January 11, 1993. The remaining subsidiary banks and banking needs of all segments of its communities, espe- FCC's savings association received either "outstanding" cially African-American neighborhoods,6 and have or "satisfactory" ratings from their primary supervisor failed to comply with fair lending laws.7 Protestant also in the most recent examination of their CRA perforcontends that data collected under the Home Mortgage mance.11 Of the banks to be acquired, First Bank re- Disclosure Act ("HMDA") for 1992 and 1993 show ceived a performance rating of "satisfactory" and City disparities in the rates of home-related loan applications Bank received a performance rating of "outstanding" from and loan originations to African Americans, com- from the Federal Deposit Insurance Corporation in their pared with those for white residents, that indicate illegal most recent CRA examinations as of October 27, 1993, discrimination by FCC's subsidiary banks. Protestant and as of November 12, 1993, respectively. also maintains that FCC has not fulfilled certain CRArelated commitments made to the Board in connection B. HMDA Data and Lending Activities with FCC's acquisition of First Acadiana National Bancshares, New Iberia, Louisiana ("First Acadiana").8 The Board has carefully reviewed FCC's 1992 and 1993 The Board has carefully reviewed the CRA perfor- HMDA data in light of Protestant's comments. These mance records of FCC, City, Bancshares, and their re- data show that since 1992 the number of loan originaspective subsidiary banks; all comments received on tions to African Americans has increased for home purthese applications; all responses to those comments; and chase loans and home improvement loans reported under all other relevant facts of record in light of the CRA, the HMDA at each of FCC's subsidiary banks. Moreover, Board's regulations, and the Statement of the Federal New Orleans Bank has increased the overall number of Financial Supervisory Agencies Regarding the Commu- applications and originations to African Americans in its nity Reinvestment Act ("Agency CRA Statement").9 delineated community from 1992 levels. Lafayette Bank has increased mortgage originations to Record of Performance Under the CRA African Americans in its Metropolitan Statistical Area ("MSA") from 1992 to 1993, and the bank's ratio of A. CRA Performance Examinations denials for loans from census tracts with predominately minority residents is substantially less than this ratio for The Agency CRA Statement provides that a CRA exam- the aggregate of all lenders in these census tracts. Denial ination is an important and often controlling factor in the rates at the Lake Charles Bank for African-American consideration of an institution's CRA record and that borrowers in its MSA declined in every type of reported reports of these examinations will be given great weight loan from 1992 to 1993.12 Denial rates at the Alexandria in the applications process.10 The Board notes that New Bank for African-American borrowers in its MSA have Orleans Bank, which represents approximately 65 per- also decreased for FHA/VA and conventional home purcent of FCC's total assets, received a "satisfactory" chase loans from 1992 to 1993. These data also reflect disparities in the rate of loan originations, denials, and applications by racial group 6. In particular, Protestant alleges that FCC and its subsidiary banks have and income level. The Board is concerned when the failed to: record of an institution indicates disparities in lending to (1) Provide capital and financing to African-American homeowners; minority applicants, and it believes that all banks are (2) Provide funds, grants and loans to African-American community organizations; obligated to ensure that their lending practices are based (3) Provide capital to businesses owned by African Americans; on criteria that assure not only safe and sound lending, (4) Participate in community development projects to improve economic opportunities in the African-American community; (5) Locate branches in African-American communities; and (6) Develop and implement adequate CRA policies. 7. Protestant maintains that several factors contribute to FCC's failure to 11. Of FCC's remaining subsidiary institutions, the following banks comply with fair lending laws, including concerns alleging that FCC em- received a CRA performance rating of "satisfactory" from the OCC as of ploys few African-American loan officers; uses a compensation program for January 11, 1993: Lafayette Bank; City National Bank of Baton Rouge, lending officers that provides incentives to solicit and originate mortgages Baton Rouge, Louisiana ("Baton Rouge Bank"); and First National Bank of only on higher-priced homes; fails to use media and images oriented to the Lake Charles, Lake Charles, Louisiana ("Lake Charles Bank"). Rapides African-American community in advertising its loan products; and fails to Bank & Trust Company, Alexandria, Louisiana ("Alexandria Bank"), readequately market its Federal Housing Administration ("FHA"), Veterans ceived a CRA performance rating of "outstanding" from the Federal Re- Administration ("VA"), and Small Business Administration ("SBA") loan serve Bank of Atlanta ("Atlanta Reserve Bank") as of May 2, 1994, in its products in the African-American community. most recent examination of CRA performance. 8. See First Commerce Corporation, 80 Federal Reserve Bulletin 37, 39 12. Under HMDA, lenders are required to report the following categories (1994). of loans: home improvement, conventional home purchase, refinance of 9. 54 Federal Register 13,742 (1989). home purchase and loans made under government-sponsored home mortgage 10. Id. at 13,745. programs. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 381 but also equal access to credit by creditworthy applicants Examiners have concluded that each FCC subsidiary regardless of race. The Board recognizes, however, that bank has instituted or participated in a number of loan HMDA data alone provide an incomplete measure of an programs designed to identify or address significant institution's lending in its community. The Board also community credit needs. In response to its annual georecognizes that HMDA data have limitations that make coding analysis, FCC established a system-wide Comthe data an inadequate basis, absent other information, munity Mortgage Pool Loan Program for customers who for concluding that an institution has engaged in illegal do not qualify for conventional, FHA, or VA financing discrimination in making lending decisions. terms. The program uses flexible underwriting criteria The Board has carefully reviewed Protestant's allega- that reduce the closing costs for low- and moderatetions in light of information from the OCC and the income customers, in an effort to stimulate applications Atlanta Reserve Bank. The CRA performance examina- for mortgage loans from low- and moderate-income tions of New Orleans Bank, Lafayette Bank, Lake home buyers. FCC has allocated $30 million to the pool Charles Bank, and Baton Rouge Bank by the OCC found since the pool was established in 1992. no evidence of prohibited discriminatory or other illegal FCC also participates in government-insured lending credit practices. The examination reports also found programs, such as FHA and VA. For example, in 1994, these banks to be in substantial compliance with the New Orleans Bank originated 61 home mortgages totalsubstantive provisions of antidiscrimination laws and ling approximately $3.7 million under these programs. regulations, including the Equal Credit Opportunity Act In 1994, Alexandria, Baton Rouge, Lafayette and Lake ("ECOA"), Fair Housing Act, and HMDA. The exami- Charles Banks, collectively originated 107 mortgage nation reports for each of FCC's subsidiary banks found loans under these programs, totalling approximately $6.6 that each institution solicits credit applications from all million. segments of their local communities, and that their FCC also engages in small business lending through boards and management have adequate policies, proce- the Louisiana Linked Deposit Loan Program ("Linked dures, and training programs to support nondiscrimina- Program"), a program that provides financing to small tion in credit activities. The Atlanta Reserve Bank's May businesses at below market rates. In 1994, New Orleans 1994 CRA examination report on Alexandria Bank simi- Bank originated loans to 14 borrowers for a total of larly found no evidence of discriminatory or other illegal approximately $384,000, while FCC's other subsidiary credit practices, noted that the institution is in compli- banks together originated loans to three borrowers for a ance with antidiscrimination laws and regulations, and total of approximately $81,000. As of December 31, stated that the bank has implemented policies and proce- 1994, New Orleans Bank had originated 38 percent of all dures to ensure that applicants are given equal access to of the state's Linked Program loans. FCC also has estabthe loans and services listed in the bank's CRA state- lished a system of Small Business Loan Centers to ment.13 provide financial services to small businesses, including FCC has designed special procedures to enhance its SBA loans. The Centers work with the Louisiana Ecolending to low- and moderate-income and minority resi- nomic Development Corporation ("LEDEC") and other dents. For example, all FCC subsidiary banks perform government entities in supporting their efforts to enable an annual detailed geo-coding analysis on census tract small businesses to acquire capital. LEDEC is a state demographics of its loan and deposit penetration, in agency responsible for the administration of a variety of order to enhance service to meet identified credit and loan programs including the Linked Program. deposit needs. In addition, FCC's subsidiary banks have FCC also contributes to the Gulf Coast Business and implemented the "Second Look Program," which re- Industrial Development Corporation ("Gulf Coast quires a second review of all HMDA-reportable loan BIDCO"), a minority-owned organization that provides applications by an experienced loan officer before denial. financing to minority-owned small businesses in dis- The banks have also implemented a CRA credit score tressed areas. FCC also participates in numerous SBA adjustment for applicants who do not meet the usual loan programs. In 1994, New Orleans Bank originated underwriting criteria and whose incomes are less than 80 42 SBA loans totalling approximately $4.9 million. In percent of the median income in the relevant census 1994, Alexandria, Baton Rouge, Lafayette, and Lake tracts. Charles Banks originated 28 SBA loans that collectively totalled approximately $4.4 million. The Board also has carefully reviewed Protestant's allegations about FCC's community development activi- 13. FCC responds to Protestant's comments that FCC employs an inadeties. The examination reports revealed that all of FCC's quate number of minorities by noting that 11.4 percent of all mortgage lenders are minorities, with 9.1 percent of them identified as African Ameri- subsidiary banks have undertaken a variety of commucans, within FCC's mortgage division. Among all identified FCC lenders, nity development programs with government agencies, including loan officers and branch managers, 13.4 percent are members of non-profit organizations and private developers designed minority groups, with 10.4 percent identified as African Americans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

382 Federal Reserve Bulletin • April 1995 to benefit their communities, including low- and munity and civic organizations to assure that FCC mainmoderate-income and African-American residents. For tains an effective dialogue with small and minority busiexample, all FCC subsidiary banks participate in the nesses, and local community leaders. First Commerce Community Development Corporation At Lafayette Bank, for example, the CRA examination ("FCCDC"), a non-profit real estate development com- found that officials regularly communicated with a wide pany affiliate that seeks to develop housing in predomi- range of individuals and groups representing civic, relinately low- to moderate-income urban residential areas. gious, minority, and small business organizations. The To date, FCC's total capital investment in FCCDC from CRA examination found that a bank officer discussed its subsidiary banks is $200,000. New Orleans Bank also credit needs and the bank's efforts to meet those needs at has been a corporate member of the Gulf South Minority the Economic Development Summit hosted by the Purchasing Council ("GSMPC") since 1991. GSMPC is Southern Consumers Development Corporation. This a non-profit agency that provides educational programs group represented African-American business leaders in and support services for corporations and businesses the Lafayette community. The examination report for owned by minorities and women throughout the State of several FCC subsidiary banks found management in- Louisiana. volved in reviewing CRA activities, plans, and their bank's involvement in the community. The marketing C. Other Aspects of CRA Performance program for Lafayette Bank includes a marketing plan for low- and moderate-income areas. Advertising cam- Ascertainment and Marketing Efforts paigns by FCC's subsidiaries included the use of minority-owned newspapers, billboards in low- and The CRA examination reports noted that each of FCC's moderate-income neighborhoods, and advertisements on subsidiary banks has regular contact with a wide range a local minority-owned radio station. of individuals and groups representing civic, religious, minority, and small business organizations.14 New Orleans Bank's Community Development Advisory Branch Location Board includes media representatives from African- American communities and has sponsored and under- The Board has carefully considered Protestant's allegawritten the New Orleans Chamber of Commerce's mi- tions of FCC's failure to locate branches in Africannority vendor business directory. The bank uses American communities. The most recent CRA examinamultimedia marketing campaigns featuring minority tions of FCC's subsidiary banks state that FCC's branch models, and advertises in minority-owned publications locations are reasonably accessible to all segments of that focus on the minority community of New Orleans. their local communities, including low- and moderate- The New Orleans Bank also is a member of the Commu- income neighborhoods. Several of the affiliate banks' nity Outreach Association, an organization of CRA Of- branches are near low- and moderate-income areas. The ficers from local financial institutions whose primary CRA examinations for each of FCC's subsidiary banks objective is to establish a broader dialogue with the found that the banks' community delineations have not community. The CRA examination of the New Orleans arbitrarily excluded low- and moderate-income areas Bank found that it had developed an extensive network and have reasonably met the purposes of the CRA. of community contacts, including individuals with Similarly, the examinations found that, in general, the knowledge of the needs of low- and moderate-income banks' branch hours and policies on the opening and community members. At New Orleans Bank, the ascer- closing of branches are reasonable and the banks' tainment program is conducted through a formal CRA branches are readily accessible to all segments of their program approved by the bank's board of directors. The local communities. examination also noted that management met informally The examination report for New Orleans Bank conwith its minority officers to discuss how the bank was cluded that the 38 full-service branches are reasonably perceived within minority communities. Management convenient and accessible throughout the New Orleans also planned program initiatives, and ensured that the MSA. The examination also concluded that 80 percent bank's marketing campaigns consistently included indi- of the banks' branch locations were readily accessible to viduals that reflect the diversity of the bank's delineated low- and moderate-income community residents and that community. Officers and staff of FCC and its affiliates the bank did not offer services in branches located in also serve in leadership positions with a variety of com- high-income areas that were not available in low- and moderate-income communities. The Lafayette Bank has several branches located in moderate-income census 14. Officers of the Baton Rouge Bank recently participated in the Small tracts near low-income census tracts. The examinations Business Summit and the Sixth Annual Black Economic Development Conference. also noted one instance in which the Lake Charles Bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 383 was the only banking organization with a branch accessi- FCC held one basic banking workshop in Plaisance ble to a predominantly African-American and largely with the cooperation of Protestant, but FCC and Proteslow-to moderate-income community. tant have been unable to agree on a proposal to carry out FCC's commitment for ongoing counseling and educational programs. FCC is not currently conducting any Policies and Programs programs in Plaisance, either in cooperation with Protestant or otherwise. The Board has carefully considered FCC has formal CRA policies and procedures consistent FCC's efforts to comply with this commitment, and the with an effective CRA program. The CRA examinations Atlanta Reserve Bank has investigated the matter. In of FCC's subsidiary banks found that each of the subsidlight of all the facts of record, the Board concludes that iaries' boards of directors participated in formulating the FCC has not fulfilled the terms of its commitment to the subsidiaries' CRA policies and reviewing their CRA Board regarding these programs. performance. The examinations found, in general, that The Board notes that FCC has fulfilled another comthe boards of directors were involved in the CRA activimitment made in connection with the First Acadiana ties and programs of the subsidiaries and properly superacquisition. In particular, FCC has a community outvised compliance with CRA. For example, these examireach office in Plaisance that will operate one day a week nation reports also state that each bank has policies, for at least two years, in office space shared with the procedures, and training programs supporting nondis- Protestant. The Board also recognizes the inherent difficrimination in lending and credit activities. Moreover, culty in FCC's voluntary agreement to provide credit FCC subsidiary banks also provide diversity and fair counseling activities only in cooperation with a single lending training to their employees at all levels, includcommunity group. Nevertheless, the Board notes that ing the boards of directors. FCC also has established a FCC has not to date accomplished the purpose of its Fair Lending Task Force that reviews the bank's lending commitment or provided counseling and education propolicies and procedures. grams in the Plaisance area in any comprehensive At the New Orleans Bank, the CRA examination manner. report noted that the board's commitment to comply Accordingly, the Board's action in this case is exwith both the spirit and the intent of CRA was clearly pressly conditioned on FCC submitting, prior to consumarticulated in the corporate policy statement and that mation of this proposal, a written plan satisfactory to the ongoing CRA activities were well documented. The Federal Reserve System to initiate financial counseling examination report also found that the bank had an and home buyer education programs to the Plaisance active CRA Committee composed of officers, a CRA community.15 It is also conditioned on FCC's implestrategic plan, and a training program for all employees. menting that plan. FCC also must provide quarterly Directors, as well as employees throughout the bank, reports on the progress made under its program to the were found to be involved in activities designed to Atlanta Reserve Bank for the next two years, or such develop, improve, and enhance the local community. shorter time as the Reserve Bank determines is neces- The CRA examinations for the other FCC subsidiary sary. The Board will consider these reports in connection banks found that their boards of directors and senior with its examination and supervision of FCC. management were involved in the CRA process and were often involved in activities designed to improve the local community. E. Conclusion on Convenience and Needs Considerations On the basis of all the facts of record, including informa- D. Compliance with Previous CRA-Related tion provided by the Protestant, FCC's responses, rele- Commitments vant reports of examination, and the conditions discussed in this order, the Board concludes that Protestant maintains that FCC has failed to provide convenience and needs considerations, including the financial counseling and home buyer awareness and education programs in cooperation with Protestant under a commitment made to the Board in connection with the 15. If FCC elects to proceed without the cooperation of Protestant, FCC's First Acadiana application. This commitment was pro- plan must include detailed descriptions of the number and proposed locations, structure, and content of the programs, efforts to ascertain the credit posed by FCC to assist in meeting the credit needs of needs of the Plaisance community and to design programs to assist in residents in Plaisance, a small, rural, low-income com- meeting those needs, methods to ensure that Plaisance residents are aware of munity in the St. Landry Parish, Louisiana. Because this the programs, measurable goals for originating loans and providing other banking services in Plaisance, loan data for the Plaisance area to evaluate the commitment was made to the Board in connection with success of the programs, and methods for obtaining opinions from the an application, it is enforceable by the Board. community on the structure of this program. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

384 Federal Reserve Bulletin • April 1995 overall CRA performance records of the institutions months following the effective date of this order, unless involved in this proposal, are consistent with approval of such period is extended for good cause by the Board or these applications. The Board will monitor and assess by the Federal Reserve Bank of Atlanta, acting pursuant the success of FCC's continued efforts to increase its to delegated authority. lending to minorities and low- and moderate-income By order of the Board of Governors, effective Febborrowers in, and to residents in minority and low- and ruary 2, 1995. moderate-income areas of, each of its delineated communities, including Plaisance, in future applications requir- Voting for this action: Chairman Greenspan, Vice Chairman Blinder, and Governors Kelley, Lindsey, and Yellen. Absent and ing consideration of the performance records of FCC's not voting: Governor Phillips. Voting against this action: Governor subsidiary banks under the CRA.16 LaWare. WILLIAM W. WILES Other Considerations Secretary of the Board The Board also concludes that the financial and managerial resources and future prospects of FCC, City, Banc- Dissenting Statement of Governor LaWare shares, and their respective subsidiaries, and other supervisory factors the Board must consider under section 3 I dissent because I do not believe it is appropriate for the of the BHC Act, are consistent with approval of this Board to condition its action regarding these applications proposal. on the submission of an additional CRA plan. Applicant has an overall satisfactory CRA performance record and Based on the foregoing, including the conditions dehas implemented numerous programs throughout its scribed in this order, commitments by FCC in connecmany communities to comply with the CRA. In this tion with these applications, and in light of all the facts situation, I believe that it is more appropriate for the of record, the Board has determined that these applications should be, and hereby are, approved.17 The Board's Board to investigate and resolve any question about applicant's compliance with the single commitment chalapproval is specifically conditioned on compliance by lenged by the protestant in an isolated segment of appli- FCC with all conditions and commitments made in cant's community under the Board's general supervisory connection with these applications as well as the condiauthority and not in the course of processing these tions discussed in this order and in the Board's previous applications. For this reason, I believe that the Board order as modified by the order. The commitments and should have approved these applications without condiconditions relied on by the Board in reaching this decition, and should review compliance with this single sion are both deemed to be conditions imposed in writcommitment under the Board's supervisory authority. ing by the Board in connection with its findings and decision, and, as such, may be enforced in proceedings February 2, 1995 under applicable law. The acquisition of the subsidiary banks of City and South Texas Capital Group, Inc. Bancshares shall not be consummated before the fif- San Antonio, Texas teenth calendar day following the effective date of this order, and shall not be consummated later than three Order Approving Formation of a Bank Holding Company 16. Protestant also alleges that a request by FCC to withdraw Protestant's pending complaint with the Department of Housing and Urban Development South Texas Capital Group, Inc., San Antonio, Texas ("HUD") while negotiating an acceptable program for Plaisance constitutes ("South Texas"), has applied under section 3(a)(1) of illegal retaliation. The HUD complaint involves the alleged denial by First the Bank Holding Company Act (12 U.S.C. Acadiana of Protestant's application for a construction loan before it was acquired by FCC. This complaint, and Protestant's allegation of illegal § 1842(a)(1)) ("BHC Act") to become a bank holding retaliation, are under consideration by HUD, the federal agency with full company by acquiring all the voting shares of Plaza statutory authority to grant Protestant relief if these allegations can be substantiated. Bank, N.A., San Antonio, Texas ("Bank").1 17. Protestant also appears to maintain that FCC's subsidiary banks Notice of the application, affording interested persons discriminate against African Americans in their employment practices. The an opportunity to submit comments, has been published Board notes that, because FCC's subsidiary banks employ more than 50 people, serve as a depository of government funds, and act as agents in (59 Federal Register 30,003 (1994)). The time for filing selling or redeeming U.S. savings bonds and notes, they are required by Department of Labor regulations that require: (1) The filing of annual reports with the Equal Employment Opportunity 1. South Texas proposes to merge Bank with Plaza International Bank, Commission; and N.A., San Antonio, Texas ("Interim"), a newly chartered national bank and (2) A written affirmative action compliance program which states efforts wholly owned subsidiary of South Texas, with Interim surviving the merger. and plans to achieve equal opportunity in the employment, hiring, promo- The merger of Bank with Interim has received preliminary approval from the tion, and separation of personnel. Office of the Comptroller of the Currency under the Bank Merger Act. See 41 C.F.R. 60-1.7(a), 60-1.40. 12 U.S.C. § 1828(c). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 385 comments has expired, and the Board has considered the Woodforest Bancshares, Inc. application and all comments received in light of the Houston, Texas factors set forth in section 3(c) of the BHC Act. South Texas is a nonoperating company formed for Woodforest Holdings Corporation the purpose of acquiring Bank. Bank is the 741st largest Houston, Texas commercial banking organization in Texas, controlling deposits of approximately $21 million, representing less Sun Belt Bancshares Corporation than 1 percent of total deposits in commercial banking Conroe, Texas organizations in the state.2 Bank operates in the San Antonio banking market,3 controlling less than 1 percent Order Approving the Acquisition of a Bank Holding of total deposits in commercial banking organizations in Company and Banks this market. Based on all the facts of record in this case, the Board believes that consummation of this proposal Woodforest Bancshares, Inc., Houston, Texas ("Woodwould not have a significantly adverse effect on competi- forest"), a bank holding company within the meaning of tion or the concentration of banking resources in any the Bank Holding Company Act ("BHC Act"), has relevant banking market. Accordingly, the Board con- applied under section 3 of the BHC Act (12 U.S.C. cludes that competitive considerations are consistent § 1842) to acquire all the voting shares of Sun Belt with approval. Bancshares Corporation, Conroe, Texas ("Sun Belt"), The Board also concludes that the financial and mana- and thereby indirectly acquire the National Bank of gerial resources and future prospects of South Texas and Conroe, Conroe, Texas ("Conroe").1 Bank are consistent with approval, as are the conve- Notice of the applications, affording interested persons nience and needs and other supervisory factors the Board an opportunity to submit comments, has been published is required to consider under section 3 of the BHC Act. (59 Federal Register 48,325 (1994)). The time for filing Based on the foregoing and all the other facts of comments has expired, and the Board has considered the record, the Board has determined that the application applications and all comments received in light of the should be, and hereby is, approved. The Board's ap- factors set forth in section 3(c) of the BHC Act. proval is specifically conditioned upon compliance by Woodforest, with total deposits of approximately South Texas with all the commitments, including those $117 million, controls one commercial bank in Texas. made by the principals of South Texas and related par- Woodforest is the 158th largest commercial banking ties, made in connection with this application. For pur- organization in Texas, controlling less than 1 percent of poses of this action, the commitments and conditions total deposits in commercial banks in the state.2 Sun Belt relied on by the Board in reaching its decision are is the 173d largest commercial banking organization in deemed to be conditions imposed in writing by the Texas, controlling approximately $110 million in depos- Board in connection with its findings and decision, and, its, representing less than 1 percent of total deposits in as such, may be enforced in proceedings under applica- commercial banks in the state. Upon consummation of ble law. the proposal, Woodforest would become the 62d largest This transaction shall not be consummated before the commercial banking organization in Texas, controlling fifteenth calendar day following the effective date of this two banks, with approximately $227 million in deposits, order, or later than three months after the effective date representing less than 1 percent of total deposits in of this order, unless such period is extended for good commercial banks in the state. cause by the Federal Reserve Bank of Dallas, pursuant to Woodforest competes directly with Sun Belt in the delegated authority. Houston, Texas, banking market.3 After consummation By order of the Board of Governors, effective Feb- of this proposal, numerous competitors would remain ruary 8, 1995. and the market would be considered unconcentrated, as Voting for this action: Chairman Greenspan, Vice Chairman Blinder, and Governors Lindsey, Phillips, and Yellen. Absent and 1. Woodforest has applied to the Board to establish a wholly owned not voting: Governors Kelley and LaWare. subsidiary, Woodforest Holdings Corporation, Houston, Texas, that would merge with, and into, Sun Belt, with Sun Belt becoming a subsidiary of Woodforest. Sun Belt also has applied to the Board to acquire the shares of JENNIFER J. JOHNSON Woodforest's existing bank subsidiary, Woodforest National Bank, Houston, Deputy Secretary of the Board Texas ("Woodforest Bank"), and Sun Belt would reincorporate in Delaware. After completing these steps, Woodforest would own all the voting shares of Sun Belt, and Sun Belt, as an intermediate bank holding company, would own Conroe and Woodforest Bank. 2. Deposit data are as of June 30, 1994. 2. Deposit and state data are as of June 30, 1994. 3. The San Antonio banking market is approximated by the San Antonio 3. The Houston, Texas, banking market is defined as the Houston Ranally Ranally Metropolitan Area, and the city of Boerne in Kendall County, Texas. Metro Area. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

386 Federal Reserve Bulletin • April 1995 measured by the Herfindahl-Hirschman Index ("HHI"), Orders Issued Under Section 4 of the Bank under the Department of Justice merger guidelines.4 Holding Company Act Based on all the facts of record, the Board concludes that consummation of this proposal would not result in sig- Banque Nationale de Paris nificantly adverse effects on competition or the concen- Paris, France tration of banking resources in this or any other relevant banking market. Order Approving an Application to Engage in Certain The Board also concludes that financial and manage- Nonbanking Activities rial resources and future prospects of Woodforest, Sun Belt, and their respective subsidiary banks, and the other Banque Nationale de Paris, Paris, France ("BNP"), a supervisory factors that the Board must consider under bank holding company within the meaning of the Bank section 3 of the BHC Act, are consistent with approval Holding Company Act ("BHC Act"), has applied under of this proposal. Considerations relating to the conve- section 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) nience and needs of the communities to be served also and section 225.23 of the Board's Regulation Y (12 are consistent with approval. C.F.R. 225.23), to engage through its wholly owned Based on the foregoing and all other facts of record, subsidiary, BNP/Cooper Neff, Inc., Radnor, Pennsylvathe Board has determined that these applications should nia ("Company"), in the following activities: be, and hereby are, approved. The Board's approval is (1) Providing discount and full-service securities broexpressly conditioned on Woodforest's compliance with kerage services pursuant to 12 C.F.R. 225.25(b)(15)(i) all the commitments made in connection with these & (ii); applications. The commitments and conditions relied on (2) Providing investment advisory services pursuant by the Board in reaching this decision shall be deemed to to 12 C.F.R. 225.25(b)(4); be conditions imposed in writing by the Board in con- (3) Trading for its own account in options on foreign nection with its findings and decision, and, as such, may exchange for nonhedging purposes; be enforced in proceedings under applicable law. (4) Acting as a registered options trader ("Trader") The acquisition of Sun Belt shall not be consummated on the Philadelphia Stock Exchange ("PHLX") with before the fifteenth calendar day following the effective respect to options on the British pound, Canadian date of this order, or later than three months after the dollar, Japanese yen, and Swiss franc; effective date of this order, unless such period is ex- (5) Acting as a Specialist on the PHLX with respect to tended for good cause by the Board or by the Federal options on the Australian dollar, Deutsche mark, Euro- Reserve Bank of Dallas, acting pursuant to delegated pean Currency Unit, and French franc; authority. (6) Purchasing and selling options, futures, and op- By order of the Board of Governors, effective Feb- tions on futures on foreign exchange for its own ruary 15, 1995. account for hedging purposes in accordance with 12 C.F.R. 225.142; Voting for this action: Vice Chairman Blinder and Governors (7) Providing data processing services pursuant to Lindsey, Phillips, and Yellen. Absent and not voting: Chairman 12 C.F.R. 225.25(b)(7); Greenspan and Governors Kelley and LaWare. (8) Executing transactions with respect to futures and options on futures on financial commodities;1 and WILLIAM W. WILES (9) Acting as a commodity trading advisor ("CTA") Secretary of the Board by providing those investment advisory services permitted by 12 C.F.R. 225.25(b)(19) and discretionary portfolio management services.2 4. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in which the post-merger HHI is less than 1000 points is considered to be unconcentrated. The Justice Depart- 1. Company would provide execution services only with respect to conment is likely to challenge a merger that increases the HHI by more than 50 tracts previously approved by the Board. Company may conduct the propoints in a highly concentrated market in which the post-merger HHI is posed futures commission merchant ("FCM") activities through omnibus above 1800 points. The Justice Department has informed the Board that a trading accounts established in its own name with clearing members of bank merger or acquisition generally will not be challenged (in the absence exchanges on which Company would not itself be a member. See Northern of other factors indicating anticompetitive effects) unless the post-merger Trust Corporation, 79 Federal Reserve Bulletin 723, 724 (1993) ("Northern HHI is at least 1800 and the merger increases the HHI b ymore than 200 Trust"). BNP would conduct the proposed execution-only and omnibus points. The Justice Department has stated that the higher than normal HHI account activities subject to the limitations, conditions and commitments thresholds for screening bank mergers for anticompetitive effects implicitly relied on by the Board in Northern Trust. recognize the competitive effects of limited-purpose lenders and other non- 2. Company would provide these advisory services with respect to those depository financial entities. After consummation of this proposal, the Hous- contracts for which it would provide FCM execution services, as well as ton, Texas, banking market would remain unchanged with a post-merger Options on Three Month Euroyen Futures traded on the Tokyo International HHI of 842 points. Financial Futures Exchange. BNP has committed that Company will not Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 387 BNP also has applied pursuant to section 4(c)(8) of the change Act of 1934 (15 U.S.C. § 78a et seq.) and BHC Act, through its wholly owned subsidiary, BNP become members of the National Association of Securi- Futures, Inc., Chicago, Illinois ("BNP Futures"), to ties Dealers, Inc. ("NASD"). Company also would regprovide FCM clearing-only services with respect to those ister as an investment adviser under the Investment contracts for which Company would provide execution Advisers Act of 1940 (15 U.S.C. § 80b-l et seq.). Thereservices.3 BNP Futures also would provide clearing-only fore, Company and BNP Futures would be subject to the services with respect to options traded on securities recordkeeping, reporting, fiduciary standards, and other exchanges.4 BNP would engage in these activities requirements of the Securities Exchange Act of 1934, through Company and BNP Futures worldwide. Investment Advisers Act of 1940, the SEC, and the Notice of the application, affording interested persons NASD. an opportunity to submit comments, has been published Section 4(c)(8) of the BHC Act provides that a bank (59 Federal Register 51,977 (1994)). The time for filing holding company may, with Board approval, engage in comments has expired, and the Board has considered the any activity that the Board determines to be "so closely application and all comments received in light of the related to banking or managing or controlling banks as factors set forth in section 4(c)(8) of the BHC Act. to be a proper incident thereto." An activity may be BNP, with total consolidated assets equivalent to ap- deemed to be closely related to banking if it is demonproximately $244 billion, is the 13th largest commercial strated that banks generally provide the proposed serbanking organization in the world, and the third largest vices; banks generally provide services that are operabanking organization in France.5 In the United States, tionally or functionally so similar to the proposed BNP controls a bank in San Francisco, California;6 oper- services as to equip them particularly well to provide the ates branches in New York, New York, and Chicago, proposed services; or banks generally provide services Illinois; and maintains agencies in Los Angeles and San that are so integrally related to the proposed services as Francisco; California, Miami, Florida; and Houston, to require their provision in a specialized form.7 In order Texas. to approve this proposal, the Board also must determine Company and BNP Futures would register as FCMs that the proposed activities "can reasonably be expected and, with respect to Company, as a CTA, with the to produce benefits to the public, such as greater conve- Commodity Futures Trading Commission ("CFTC"), nience, increased competition, or gains in efficiency, that and become members of the National Futures Associa- outweigh possible adverse effects, such as undue concention ("NFA"). Therefore, Company and BNP Futures tration of resources, decreased or unfair competition, would be subject to the recordkeeping, reporting, fidu- conflicts of interests, or unsound banking practices." ciary standards, and other requirements of the Commod- 12 U.S.C. § 1843(c)(8). ity Exchange Act (7 U.S.C. § 1 et seq.), the CFTC, and The Board previously has determined by regulation the NFA. In addition, Company and BNP Futures would that several of the proposed activities, when conducted register with the Securities and Exchange Commission within limitations established by the Board in its regula- ("SEC") as broker-dealers under the Securities Ex- tions and in related interpretations and orders, are closely related to banking.8 BNP has committed that it will conduct these activities in accordance with the limitaprovide foreign exchange-related advisory or transactional services to unaffiltions established by the Board. The Board also previiated customers. BNP also has committed that Company will not provide futures-related discretionary portfolio management services to FDIC-insured ously has determined by order that the remaining activiaffiliates, and that Company will not provide advice to any FDIC-insured ties, with the exception of providing discretionary affiliate with respect to any instrument as to which Company acts as a portfolio management services with respect to futures market-maker, Specialist or Trader. 3. BNP Futures and Company only would provide FCM services to and options on futures on financial commodities, are institutional customers, as defined in Regulation Y. 12 C.F.R. 225.2(g). BNP has stated that BNP Futures would provide clearing-only services to customers pursuant to customer agreements and give-up agreements that would afford BNP Futures the right to refuse to clear customer trades that BNP Futures reasonably deems unsuitable in light of market conditions or a customer's financial situation or objectives. This activity previously has been 7. See National Courier Association v. Board of Governors of the Federal approved by the Board. See Northern Trust. BNP Futures would conduct the Reserve System, 516 F.2d 1229, 1237 (D.C. Cir. 1975). In addition, the Board proposed clearing-only activities in accordance with the limitations, condi- may consider any other basis that may demonstrate that the proposed activity tions and commitments relied on by the Board in Northern Trust. In this has a reasonable or close connection or relationship to banking or managing regard, BNP has committed that BNP Futures will not serve as the primary or or controlling banks. See Board Statement Regarding Regulation Y, 49 qualifying clearing firm for any unaffiliated parties. Federal Register 806 (1984); Securities Industry Association v. Board of 4. With respect to clearing options traded on securities exchanges, BNP Governors of the Federal Reserve System, 468 U.S. 207, 210-211 n. 5 has committed that BNP Futures only will clear transactions that have been (1984). executed by Company. 8. See 12 C.F.R. 225.25(b)(4) (securities-related investment advisory 5. Asset and ranking data are as of June 30, 1994, and employ exchange activities); 12 C.F.R. 225.25(b)(15)(i) and (ii) (discount and full-service rates then in effect. securities brokerage); 12 C.F.R. 225.25(b)(7) (data processing); 12 C.F.R. 6. BNP's subsidiary bank is Bank of the West, San Francisco, California, a 225.25(b)(19) (limited advisory services with respect to certain futures and state-chartered non-member bank. options on futures). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

388 Federal Reserve Bulletin • April 1995 closely related to banking.9 BNP proposes to engage in providing portfolio management services in the securithese activities in accordance with the limitations and ties context. In this regard, BNP admits that it would conditions set forth in previous Board orders. have a fiduciary relationship with all customers to which it provides these discretionary management services and Discretionary portfolio management with respect to has committed that Company will comply with applicafutures and options on futures ble law, including fiduciary principles. As one method of meeting its fiduciary obligations, BNP has committed BNP proposes that Company provide discretionary port- that Company would obtain the consent of customers folio management services with respect to futures and before engaging, as principal or as agent in a transaction options on futures on financial commodities. Company in which an affiliate of Company acts as principal, in would provide such services in combination with provid- futures or options on futures transactions on the customing FCM transactional services, and would only provide er's behalf. Company and its affiliates have also agreed such services to institutional customers. Company would not to share any confidential information concerning not purchase or sell over-the-counter instruments for their respective customers without the consent of the accounts over which it exercises discretion. customer. In addition, Company proposes to exercise its The Board has permitted bank holding company discretionary management authority only in purchasing FCMs and CTAs to provide investment advice with and selling exchange-traded instruments. Therefore, conrespect to futures and options on futures on financial and cerns surrounding over-the-counter instruments, such as non-financial commodities.10 BNP argues that discre- the potential for abuses due to the lack of price transpartionary management is a normal manner of providing ency, are not presented by BNP's proposal. Under these investment advice to institutional customers. Indeed, the circumstances, the Board has determined that BNP's Board permits bank holding companies to act as discre- proposal to provide discretionary portfolio management tionary portfolio managers as part of providing invest- services with respect to futures and options on futures on ment advisory and full-service brokerage services with financial commodities is a proper incident to banking for respect to securities.11 In addition, the Office of the purposes of section 4(c)(8) of the BHC Act. Comptroller of the Currency permits national banks to engage in discretionary funds management with respect Other proposed activities to futures and options on futures.12 For these reasons, and based on all the facts of record, the Board concludes In considering this proposal under the proper incident to that providing discretionary portfolio management ser- banking standard of section 4(c)(8) of the BHC Act, the vices with respect to futures and options on futures on Board carefully has considered the potential adverse financial commodities is closely related to banking effects that might stem from BNP's proposal that Comwithin the meaning of section 4 of the BHC Act. pany trade exchange-traded and over-the-counter op- The Board also must determine that the proposed tions on foreign currencies for nonhedging purposes in futures-related discretionary management services are a light of the risk management policies, procedures, and proper incident to banking. The Board expects that con- systems proposed by BNP. The Board believes that these summation of BNP's proposal could be expected to potential adverse effects are sufficiently minimized by provide added convenience to BNP's customers. In addi- several considerations. tion, BNP has stated that Company would provide the As previously noted by the Board, the Specialist or proposed futures-related discretionary portfolio manage- Trader on the PHLX is required to deal for its own ment services in accordance with the limitations and account as necessary to maintain a "fair and orderly conditions that would be imposed if Company were market."13 The rules of the PHLX permit a Specialist or Trader to set the price and quantity that it will buy and sell in order to minimize its risk in an adverse or volatile 9. See Swiss Bank Corporation, 77 Federal Reserve Bulletin 126 (1991) market. In addition, under the PHLX's rules, a Trader is ("Swiss Bank") (acting as a Specialist and Trader with respect to foreign permitted to leave the trading floor, provided it has met currency options traded on the PHLX); The Long-Term Credit Bank of the minimum trading requirements for each quarter. Japan, Limited, 79 Federal Reserve Bulletin 347 (1993) (trading options on foreign exchange for nonhedging purposes); Nippon Credit Bank, Limited, Therefore, a Trader may refrain from dealing when 75 Federal Reserve Bulletin 308 (1989) (trading options, futures, and options potential profits do not appear likely. on futures on foreign exchange for hedging purposes); Northern Trust and In addition, the rules of the PHLX are intended to Sakura Bank, Limited, 79 Federal Reserve Bulletin 723 (1993) (providing execution-only and clearing-only services with respect to futures and options prohibit Specialists and Traders from speculating.14 BNP on futures on financial commodities). 10. 12 C.F.R. 225.25(b)(19) and J.P. Morgan & Company Incorporated, 80 Federal Reserve Bulletin 151 (1994). 11. 12 C.F.R. 225.25(b)(4) & (15)(ii). 13. See Swiss Bank. 12. See OCC Interpretive Letter No. 494 (December 20, 1989), reprinted 14. Exchange Rule 1014 provides that a Specialist or Trader should not in Fed. Banking L. Rep. (CCH) 1 83,083. enter into transactions for its own account unless those transactions "are Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 389 states that Company would generate profits from the dent to banking standard of section 4(c)(8) of the BHC spread between its bid and offer quotations. BNP also Act. states that Company would be carefully hedged at all In every case under section 4 of the BHC Act, the times and would operate pursuant to trading limits that Board also must consider the financial condition and would limit its exposure to potential losses. resources of the applicant and its subsidiaries and the The record indicates that BNP has experience in trad- effect of the proposal on these resources.17 In this case, ing foreign currency options and hedging such trades on the Board notes that BNP's capital ratios satisfy applicaexchanges and in the over-the-counter market.15 In this ble risk-based standards established under the Basle regard, BNP's computerized risk management system Accord, and are considered equivalent to the capital includes an ongoing risk exposure and hedging require- levels that would be required of a U.S. banking organizament analysis; "what if' studies for different market tion. In view of these and other facts of record, the Board scenarios; continuous review of compliance by Com- has determined that financial factors are consistent with pany with its internal risk limits; and systems that would approval of this application. The managerial resources of permit back-office surveillance of Company's floor trad- BNP also are consistent with approval. ing activities. Company would maintain internal finan- Based on the foregoing and all the facts of record, cial and audit controls, reporting personnel, and experi- including all the representations and commitments made enced management and support staff to facilitate the by BNP, the Board has determined to, and hereby does, processing, reporting and supervision of foreign ex- approve the application subject to all the terms and change transactions. Company also would establish op- conditions set forth in this order, and in the above-noted erational, accounting and control systems to monitor Board regulations and orders. The Board's determinapositions resulting from trading in the proposed foreign tion also is subject to all the terms and conditions set exchange contracts. In addition, BNP has stated that forth in Regulation Y, including those in sections 225.7 Company would conduct the proposed trading activities and 225.23(b), and to the Board's authority to require in a manner consistent with the limitations, methods and modification or termination of the activities of a bank procedures previously established by the Board to ad- holding company or any of its subsidiaries as the Board dress the potential for conflicts of interests, unsound finds necessary to assure compliance with, and to prebanking practices, or other adverse effects.16 vent evasion of, the provisions of the BHC Act, and the The Board notes that Company would be a registered Board's regulations and orders issued thereunder. The broker-dealer with the Securities and Exchange Commis- Board's decision is specifically conditioned on complision, and hence would be subject to the net capital ance with all of the commitments made by BNP in this requirements applicable to registered broker-dealers. application, including the commitments discussed in this BNP has committed that Company will be adequately order and the conditions set forth in this order and in the capitalized to conduct the businesses in which it en- above-noted Board regulations and orders. For purposes gages. of this action, these commitments and conditions are deemed to be conditions imposed in writing by the The Board expects that engaging in the proposed Board in connection with its findings and decision, and, activities would enable BNP to provide added conveas such, may be enforced in proceedings under applicanience to its customers, and would not significantly ble law. reduce the level of competition among existing providers of these services. Accordingly, based on all the facts of This transaction shall not be consummated later than record, including the commitments provided by BNP three months after the effective date of this order, unless and the conditions specified above, the Board has con- such period is extended for good cause by the Board or cluded that approval of the application can reasonably by the Federal Reserve Bank of San Francisco, pursuant be expected to produce public benefits that would to delegated authority. outweigh possible adverse effects under the proper inci- By order of the Board of Governors, effective February 9, 1995. Voting for this action: Chairman Greenspan, Vice Chairman Blinder, and Governors Lindsey, Phillips, and Yellen. Absent and reasonably calculated to contribute to a fair and orderly market." In addition, Rule 1015 states that no member of the PHLX should enter into a transaction not voting: Governors Kelley and La Ware. which is "excessive in view of his financial resources or in view of the market for such security." JENNIFER J. JOHNSON 15. The Board previously denied an application to act as a Specialist with Deputy Secretary of the Board respect to options on the French franc. Compagnie Financiere de Suez and Banque Indosuez, 72 Federal Reserve Bulletin 141 (1986). Since that decision, however, the market for options has expanded and the involvement of banks has become more widespread. See Swiss Bank at 130 n. 27. 17. 12 C.F.R. 225.24; The Fuji Bank, Limited, 75 Federal Reserve 16. See the Appendix for a list of commitments made by BNP to address Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 Federal Reserve Bulletin potential adverse effects that arise from this proposal. 155 (1987). 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390 Federal Reserve Bulletin • April 1995 Appendix Frankfurt am Main, Germany ("BHF") (collectively, "Applicants"), foreign banks subject to the provisions of BNP has made the following commitments: the Bank Holding Company Act ("BHC Act"),1 have applied pursuant to section 4(c)(8) of the BHC Act (1) Company will adopt and periodically review and (12 U.S.C. § 1843(c)(8)) and section 225.23(a) of the revise written policies, position limits, internal review Board's Regulation Y (12 C.F.R. 225.23(a)) to retain procedures and financial controls regarding its trading of control of all the voting shares of Charterhouse North foreign exchange for its own account; America Inc., New York, New York, and its subsidiaries (2) Management of Company will review its foreign ("Company").2 Company would be owned indirectly by exchange activity on a regular basis, and the internal European Corporate Finance Holding, S.A., a Luxemaudit department will review such activities regularly to bourg corporation whose shares would be owned equally ensure conformity with established policies and position by CCF and BHF.3 limits; (3) Company will not engage in pit arbitrage activities; Applicants propose to engage through Company in the (4) Floor traders will not have discretion to execute following nonbanking activities: trades other than in accordance with Company's instruc- (1) Acting as agent in the private placement of all tions, and will be authorized to trade only within posi- types of securities; tion limits established by senior management; (2) Providing advice, including rendering fairness (5) Company will not engage in additional market- opinions and providing valuation services, in connecmaking or specialist activities without prior Board ap- tion with mergers, acquisitions, divestitures, joint venproval; tures, leveraged buyouts, recapitalizations, capital structurings, and financing transactions (including pri- (6) No United States nonbanking subsidiary of Applicant vate and public financings and loan syndications), and will, without prior Board approval, advise third parties conducting financial feasibility studies, pursuant to regarding foreign exchange futures, options or options section 225.25(b)(4)(vi)(A)(l) of Regulation Y; on futures transactions; (7) Company will not knowingly enter into an over-the- (3) Providing financial and transaction advice regardcounter foreign exchange contract with any person that ing the structuring and arranging of swaps, caps, and has received advisory or transactional services that relate similar transactions relating to interest rates, currency to the proposed over-the-counter contract from a U.S. exchange rates or prices, and economic and financial subsidiary of BNP or a U.S. branch or other office of indices, and similar transactions, pursuant to section BNP; and 225.25(b)(4)(vi)(A)(2) of Regulation Y; and (8) If foreign exchange advisory or transactional services (4) Providing portfolio investment advice, pursuant to provided by BNP-N&B Global Asset Management, L.P. section 225.25(b)(4)(iii) of Regulation Y. to a customer results in the customer's entering into an over-the-counter foreign exchange transaction with an Applicants seek approval to conduct the proposed activiaffiliate of Company, Company will not knowingly enter ties throughout the United States, and intend to conduct into a transaction with such affiliate for the purpose of the activities worldwide. transferring market risk from the affiliate to Company. Notice of the applications, affording interested persons BNP has committed to implement procedures to ensure an opportunity to submit comments, has been published compliance with commitments 7 and 8. BNP-N&B Global Asset Management, L.P. provides foreign ex- 1. Each of the Applicants is a foreign bank with a branch in New York, change advisory and transactional services as permitted New York, and is subject to the BHC Act by operation of section 8(a) of the under section 225.25(b)(17) of Regulation Y. See Banque International Banking Act of 1978 ("IBA") (12 U.S.C. § 3106(a)). 2. As used herein, the term "Company" includes both Charterhouse North Nationale de Paris, 80 Federal Reserve Bulletin 638 America Inc. and its subsidiaries Charterhouse Inc.; Charterhouse North (1994). America Securities, Inc.; and Charterhouse Properties, Inc.; all of New York, New York, and Continental Capital Partners, Jupiter, Florida, except where the context clearly indicates otherwise. Applicants were granted temporary Credit Commercial de France S.A. authority to acquire Company pursuant to section 4(c)(9) of the BHC Act Paris, France (12 U.S.C. § 1843(c)(9)), subject to certain commitments and conditions, including a commitment to file applications to retain their ownership inter- Berliner Handels-und Frankfurter Bank ests in Company. 3. This joint venture corporation would retain, indirectly through a subsid- Frankfurt am Main, Germany iary ("Charterhouse Holding"), 90.1 percent of the voting and nonvoting shares of Charterhouse pic, London, England ("Charterhouse"), and Order Approving Applications to Engage in Certain Charterhouse would retain, indirectly through subsidiaries, all the voting Private Placement and Investment Advisory Activities shares of Company. The remaining 9.9 percent interest in Charterhouse has been retained by The Royal Bank of Scotland Group pic, Edinburgh, Scot- Credit Commercial de France S.A., Paris, France land, which held all the voting shares of Charterhouse before transferring a majority interest to Charterhouse Holding. See The Royal Bank of Scotland ("CCF"), and Berliner Handels-und Frankfurter Bank, Group pic, 76 Federal Reserve Bulletin 866 (1990) ("Royal Bank Order"). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 391 (59 Federal Register 16,814 (1994)). The time for filing tial conflicts of interests, unsound banking practices, and comments has expired, and the Board has considered the other adverse effects imposed by the Board in connecapplications and all comments received in light of the tion with proposals to underwrite and deal in bankfactors set forth in section 4(c)(8) of the BHC Act. ineligible securities.7 CCF, with total consolidated assets of $53.9 billion, is the ninth largest commercial banking organization in Other Activities France.4 BHF, with total consolidated assets of $32.3 billion, is the 20th largest commercial banking organiza- The Board has previously determined by regulation that tion in Germany. Each of the Applicants operates a Company's other proposed activities are so closely rebranch in New York, New York, and engages through lated to banking as to be proper incidents thereto within subsidiaries in various nonbanking activities in the the meaning of the BHC Act.8 Applicants have commit- United States. ted that Company will conduct these activities in conformity with the limitations established by the Board in Private Placement Activities Regulation Y and in related interpretations and orders.9 Private placement involves the placement of new securi- Other Considerations ties with a limited number of sophisticated purchasers in a nonpublic offering. A financial intermediary in a pri- In every case under section 4(c)(8) of the BHC Act, the vate placement transaction acts solely as an agent for the Board considers the financial and managerial resources issuer in soliciting purchasers, and does not purchase the of the applicants and their subsidiaries and the effect of securities and attempt to resell them. Securities that are the transaction on those resources.10 The Board notes privately placed are not subject to the registration re- that Applicants' capital ratios satisfy applicable riskquirements of the Securities Act of 1933. Company based standards established under the Basle Accord, and would not privately place registered securities, and are considered equivalent to the capital levels that would would only place securities with customers who qualify be required of a United States banking organization. The as accredited investors under the rules of the Securities Board also has reviewed the capitalization of CNA Secuand Exchange Commission ("SEC"). rities using the standards established in the J. P. Morgan The Board has previously determined that, subject to Order and the Bankers Trust Order, and has determined prudential limitations that address the potential for con- that Applicants' proposal would meet those standards. flicts of interests, unsound banking practices, and other On the basis of all the facts of record, the Board has adverse effects, the proposed private placement activities are so closely related to banking as to be proper incidents thereto within the meaning of section 4(c)(8) of the BHC Act.5 The Board also has previously determined 7. The Board also notes that Charterhouse North America Securities, Inc., that acting as agent in the private placement of securities New York, New York ("CNA Securities"), through which the proposed private placement activities would be conducted, is and will continue to be a does not constitute underwriting or dealing in securities broker-dealer registered with the SEC and a member of the National Associfor purposes of section 20 of the Glass-Steagall Act ation of Securities Dealers, Inc. ("NASD"). Accordingly, CNA Securities is subject to the recordkeeping and reporting obligations, fiduciary standards, when conducted in the manner established in prior Board and other requirements of the Securities Exchange Act of 1934 (15 U.S.C. orders, and, accordingly, that revenue derived from these § 78a et seq.), the SEC, and the NASD. activities is not subject to the 10 percent revenue limita- 8. See 12 C.F.R. 225.25(b)(4)(iii) (portfolio investment advice); tion on bank-ineligible securities activities.6 Applicants 12 C.F.R. 225.25(b)(4)(vi)(A)(l) (certain transactional advisory services); and 12 C.F.R. 225.25(b)(4)(vi)(A)(2) (certain derivatives advisory services). have committed that Company will conduct its private Company's portfolio investment advisory services would include certain placement activities using the same methods and proce- real-estate-related investment advisory services that would be conducted through a joint venture with deMorgan Investment Management, Inc., Jupidures, and subject to the same prudential limitations, as ter, Florida ("Investment Management"). Applicants have made committhose established by the Board in the Bankers Trust ments similar to those relied on by the Board in previous joint venture cases Order and the J.P. Morgan Order. These methods, proce- which are designed to ensure a separation between the activities of the joint venture and those of the nonbanking co-venturer, to ensure that the activities dures, and prudential limitations include the comprehen- of the joint venture comply with the limitations of the BHC Act, and to sive framework of restrictions designed to avoid poten- address other potential adverse effects of the joint venture. See Cardinal Bancshares, Inc., 80 Federal Reserve Bulletin 447 (1994). Applicants have provided similar commitments with respect to the activities of Company, CCF, and BHF in the United States. Based on these and other commitments, the Board believes that the structures of these joint ventures are consistent with the provisions of section 4 of the BHC Act and prior Board cases. 4. Asset data are as of December 31, 1993, and use exchange rates then in effect. 9. These limitations include those set forth in the Royal Bank Order. See 5. See J.P. Morgan & Company Incorporated, 76 Federal Reserve Bulletin also 12 C.F.R. 225.25(b)(4)(iii) and (b)(4)(vi). 26 (1990) ("J.P. Morgan Order"); Bankers Trust New York Corporation, 75 10. See 12 C.F.R. 225.24. See also The Fuji Bank, Limited, 75 Federal Federal Reserve Bulletin 829 (1989) ("Bankers Trust Order"). Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG , 73 Federal Reserve 6. See Bankers Trust Order. Bulletin 155 (1987). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

392 Federal Reserve Bulletin • April 1995 concluded that these financial and managerial consider- conditions set forth in this order and the above-noted ations are consistent with approval. Board regulations and orders. These commitments and In order to approve these applications, the Board also conditions are deemed to be conditions imposed in writmust determine that the proposed activities are a proper ing by the Board in connection with its findings and incident to banking, that is, that the performance of the decision, and, as such, may be enforced in proceedings proposed activities by Company "can reasonably be under applicable law. expected to produce benefits to the public . . . that This proposal shall not be consummated later than outweigh possible adverse effects, such as undue concen- three months after the effective date of this order, unless tration of resources, decreased or unfair competition, such period is extended for good cause by the Board or conflicts of interests, or unsound banking practices." by the Federal Reserve Bank of New York, acting pursu- 12 U.S.C. § 1843(c)(8). Under the framework and con- ant to delegated authority. ditions established in this and prior Board decisions, By order of the Board of Governors, effective Febconsummation of this proposal is not likely to result in ruary 21, 1995. any significant adverse effects, such as undue concentration of resources, decreased or unfair competition, con- Voting for this action: Chairman Greenspan, Vice Chairman flicts of interests, or unsound banking practices.11 More- Blinder, and Governors LaWare, Phillips, and Yellen. Absent and over, the Board expects that Company's continued not voting: Governors Kelley and Lindsey. presence in the market for the proposed services in the United States would maintain the level of competition JENNIFER J. JOHNSON among existing providers of those services, and would Deputy Secretary of the Board provide added convenience to Applicants' customers. For these reasons, the Board has determined, under the The Union Bank of Switzerland proper incident to banking standard of section 4(c)(8) of Zurich, Switzerland the BHC Act, that the performance of the proposed activities by Company can reasonably be expected to Order Approving the Acquisition of a Community produce public benefits that outweigh possible adverse Development Corporation effects. On the basis of the foregoing and all the facts of The Union Bank of Switzerland, Zurich, Switzerland record, including the commitments furnished by Appli- ("Applicant"), a foreign bank subject to the provisions cants, the Board has determined that the applications of the Bank Holding Company Act ("BHC Act"), has should be, and hereby are, approved, subject to all the applied under section 4(c)(8) of the BHC Act (12 U.S.C. terms and conditions of this order. The Board's determi- § 1843(c)(8)) to engage de novo through its wholly nation also is subject to all the terms and conditions set owned subsidiary, UBS Community Development Corforth in Regulation Y, including those in sections 225.7 poration, New York, New York ("UBS CDC"),1 in and 225.23(b) of Regulation Y, and to the Board's au- making equity investments in, and loans and grants to, thority to require such modification or termination of the community development corporations that are designed activities of a bank holding company or any of its to promote community welfare pursuant to section subsidiaries as the Board finds necessary to ensure com- 225.25(b)(6) of the Board's Regulation Y (12 C.F.R. pliance with, and to prevent evasion of, the provisions of 225.25(b)(6)). the BHC Act and the Board's regulations and orders Notice of the application, affording interested persons issued thereunder. The Board's decision is specifically an opportunity to submit comments, has been published conditioned on compliance by Applicants with all the (59 Federal Register 15,733 (1994)). The time for filing commitments made in connection with these applica- comments has expired, and the Board has considered the tions, including those discussed in this order, and the application and all comments received in light of the factors set forth in section 4(c)(8) of the BHC Act. Applicant, a bank organized under the laws of Swit- 11. The Board notes that Applicants have made a number of commitments zerland, with total consolidated assets of approximately designed to separate the operations of Company (representing BHF's only $209 billion, is the largest banking organization in Switsubsidiaries operating pursuant to section 4(c)(8) of the BHC Act) from the operations of BHF Securities Corp., New York, New York ("BHF Securi- zerland.2 Applicant operates branches in New York, ties"), a securities firm that BHF is permitted to retain under the grandfather provisions of the IBA. See 12 U.S.C. § 3106(c). Under these commitments, Company and BHF Securities would remain completely separate from each other, and would not engage in any business with or on behalf of the other. 1. The shares of UBS CDC would be held by UBS Holdings Inc., New These commitments are substantially similar to those relied on by the Board York, New York, which is an intermediate holding company and a wholly in previous applications by foreign banking organizations with grandfathered owned subsidiary of Applicant. subsidiaries in the United States. See Deutsche Bank AG, 79 Federal Reserve 2. Asset and ranking data are as of December 31, 1993, and employ Bulletin 133 (1992). exchange rates then in effect. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 393 New York; Los Angeles, California; and Chicago, Illi- adverse effects under section 4(c)(8) of the BHC Act.7 nois; an agency in Houston, Texas; and a representative Consummation of this proposal can reasonably be exoffice in San Francisco, California. Accordingly, under pected to result in public benefits that outweigh adverse section 8(a) of the International Banking Act ("IBA") effects. The Board expects that the de novo entry of UBS (12 U.S.C. § 3106(a)), Applicant is subject to the non- CDC into the market for community development serbanking restrictions of section 4 of the BHC Act as if it vices would provide additional equity capital and financwere a domestic bank holding company. ing directly to housing projects for the benefit of low- In addition to its banking operations, Applicant en- and moderate-income individuals and would aid other gages in securities activities in the United States through community based organizations in helping to meet the UBS Securities, Inc., New York, New York, under the housing needs in low- and moderate-income areas. grandfather provisions of section 8(c) of the IBA.3 Ap- Moreover, consummation of this proposal is not likely to plicant also engages in various permissible nonbanking result in any significantly adverse effect, such as an activities through other subsidiaries. undue concentration of resources, decreased or unfair The Board has recognized the benefits of allowing competition, conflicts of interests, or unsound banking bank holding companies to participate in community practices. Accordingly, the Board concludes that the development activities based on their unique role in the balance of the public interest factors it is required to community4 and has previously determined by regula- consider under section 4(c)(8) of the BHC Act is favortion that providing community development activities is able and consistent with approval of the application. closely related to banking and permissible for bank In weighing these factors under section 4 of the BHC holding companies under section 4(c)(8) of the BHC Act, the Board considers the financial condition and Act.5 resources of the applicant and its subsidiaries and the UBS CDC proposes to conduct its community devel- effect of the transaction on these resources. Applicant opment activities through: meets the relevant risk-based capital standards consistent (1) Equity investments in nonprofit organizations that with the Basle Accord, and has capital equivalent to that identify affordable housing investments and provide which would be required for a United States banking equity capital to nonprofit community development organization. The Board also has considered that this corporations; proposal requires a de minimis capital investment. In (2) Loans to organizations that provide financing to view of these and other facts of record, the Board nonprofit developers of low-income, very-low in- concludes that financial factors are consistent with apcome, and special needs housing; and proval of this application. The managerial resources of (3) Grants to organizations that promote community Applicant, and its subsidiaries, also are consistent with welfare in the areas of economic development, educa- approval. tion, and job training.6 Based on the foregoing and all the other facts of record, the Board has determined to, and hereby does, Based on all the facts of record, the Board believes that approve the application. The Board's decision is specifi- Applicant's proposed community development activities cally conditioned on Applicant's compliance with all the are permissible under section 4(c)(8) of the BHC Act commitments made in this application. The Board's and section 225.25(b)(6) of Regulation Y. determination is also subject to the terms and conditions In order to approve this application, the Board is also set forth in Regulation Y, including those in sections required to determine whether the performance of the 225.7 and 225.23(b), and to the Board's authority to proposed activity by Applicant can reasonably be ex- require modification or termination of the activities of a pected to produce benefits that would outweigh possible bank holding company or any of its subsidiaries as the Board finds necessary to assure compliance with, and to prevent evasion of, the provisions of the BHC Act and the Board's regulations and orders issued thereunder. 3. Because section 8(c) of the IBA does not permit Applicant to expand its For the purpose of this action, these commitments and grandfathered activities through the acquisition of a going concern, Applicant has made commitments to the Board to ensure that UBS CDC and UBS conditions are considered conditions imposed in writing Securities, Inc., will remain separate entities and will not engage in any by the Board and, as such, may be enforced in proceedbusiness with, or on behalf of, each other. ings under applicable law. 4. See 12 C.F.R. 225.127 "Bank holding companies possess a unique combination of financial and managerial resources making them particularly This transaction shall not be consummated later than suited for a meaningful and substantial role in remedying our social ills." three months after the effective date of this order, unless 5. See 12 C.F.R. 225.25(b)(6). 6. To ensure that UBS CDC's activities conform with Regulation Y, such period is extended for good cause by the Board or Applicant commits that prior to engaging through UBS CDC in any activities that are substantially different from those described in this application, it will consult with the Federal Reserve System to determine whether any additional approval is required to engage in the activities. 7. 12 U.S.C. § 1843(c)(8). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

394 Federal Reserve Bulletin • April 1995 by the Federal Reserve Bank of New York, pursuant to visory agencies to encourage financial institutions to delegated authority. help meet the credit needs of the local communities in By order of the Board of Governors, effective Feb- which they operate, consistent with the safe and sound ruary 13, 1995. operation of such institutions. To this end, the CRA requires the appropriate federal supervisory authority to Voting for this action: Chairman Greenspan, and Governors "assess the institution's record of meeting the credit Lindsey, Phillips, and Yellen. Absent and not voting: Vice Chair- needs of its entire community, including low- and man Blinder and Governors Kelley and LaWare. moderate-income neighborhoods, consistent with the safe and sound operation of such institution," and to take WILLIAM W. WILES that record into account in its evaluation of branch Secretary of the Board applications.3 The Board received comments from The Broome County CRA Coalition, Binghamton, New York ("Prot- ORDERS ISSUED UNDER FEDERAL RESERVE ACT estant"), criticizing Bank's CRA performance in Broome County, New York.4 In particular, based on Manufacturers and Traders Trust Company 1993 data filed under the Home Mortgage Disclosure Buffalo, New York Act ("HMDA")5 and Bank's record of lending to small businesses in low-income and minority communities, Order Approving Establishment of Branches Protestant alleges possible discriminatory lending practices. Protestant also alleges poor outreach and market- Manufacturers and Traders Trust Company, Buffalo, ing to low-income and minority communities, and be- New York ("Bank"), a state member bank, has applied lieves that Bank has insufficient branches in minority under section 9 of the Federal Reserve Act ("Act") areas.6 (12 U.S.C. § 321 et seq.) to establish seven branch The Board has carefully reviewed the entire record of offices in Tops Markets stores in the Rochester, New Bank's CRA performance, the comments received on York, area.1 this application, and all other relevant facts of record, in Notice of the applications, affording interested persons light of the CRA, the Board's regulations, and the an opportunity to submit comments, has been published Agency CRA Statement.7 in accordance with the Board's Rules of Procedure The Board recently reviewed Bank's CRA perfor- (12 C.F.R. 262.3(b)). The time for filing comments has mance record in connection with the Citizens Merger expired, and the Board has considered the applications applications. This review included consideration of and all comments received in light of the factors in the Bank's special mortgage programs, small business lend- Federal Reserve Act. ing, community development activities, ascertainment Bank is the 13th largest commercial banking organizaand marketing efforts, and other CRA programs and tion in New York State, controlling deposits of $6 bilpolicies in light of comments received from a number of lion, representing 2.4 percent of the total deposits in commenters, including Protestant. For reasons set forth commercial banks in the state.2 Bank is wholly owned in the October Order, and specifically incorporated by by First Empire State Corporation, Buffalo, New York, reference herein, the Board concluded that Bank's overwhich also owns East New York Savings Bank, New York, New York. 3. 12 U.S.C. § 2903. 4. Protestant also contends that Bank has not complied with certain Community Reinvestment Act Performance commitments to the Board in connection with Bank's applications to acquire Record Citizens Savings Bank, F.S.B., Ithaca, New York, and to acquire seven branches of Chemical Bank, New York, New York (the "Citizens Merger"). See First Empire State Corporation and Manufacturers and Traders Trust In acting on branch applications, the Board is required to Company, 80 Federal Reserve Bulletin 1111 (1994) (the "October Order"). take into account the bank's record under the Commu- 5. 12 U.S.C. §2801 etseq.. nity Reinvestment Act (12 U.S.C. § 2901 et seq.) 6. In addition, Protestant objects to Bank's failure to reach an agreement with it to support CRA-related initiatives and programs. The Board has ("CRA"). The CRA requires the federal financial superindicated in previous orders and in the Statement of the Federal Financial Supervisory Agencies Regarding the Community Reinvestment Act ("Agency CRA Statement") that communication with community groups provides a valuable method of assessing and determining how best to address the credit 1. The proposed branch locations are: 3507 Mount Read Boulevard, Town needs of a community. However, neither the CRA nor the Agency CRA of Greece, New York; 3740 Ridge Road, Town of Greece, New York; 2345 Statement requires depository institutions to enter into agreements with Buffalo Road, Town of Gates, New York; 1100 Jefferson Road, Town of particular organizations. Accordingly, the Board's review has focused on the Henrietta, New York; 1900 Clinton Avenue, Town of Brighton, New York; programs and policies Bank has in place in Broome County and other areas 734 South Panorama Trail, Town of Penfield, New York; and 1854 Empire to serve the credit needs of its entire community. See Fifth Third Bancorp, 80 Boulevard, Town of Webster, New York. Federal Reserve Bulletin 838 (1994). 2. Deposit data are as of June 30, 1994. 7. 54 Federal Register 13,742 (1989). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 395 all performance record was generally consistent with also notes that the 1993 Examination found that Bank approval of the applications. solicits credit applications from all segments of its community, and that the geographic distribution of its A. CRA Performance Examinations HMDA loans and small business loans reflects substantial penetration of its delineated community, including The Agency CRA Statement provides that a CRA exam- low- to moderate-income areas. Bank also has taken ination is an important and often controlling factor in the steps, described in the October Order, to improve its consideration of an institution's CRA record, and that lending to minorities and low- and moderate-income reports on these examinations will be given great weight residents. in the applications process.8 The Board notes that Bank As noted in the October Order, Bank only recently received an "outstanding" rating for CRA performance began operations in Broome County, and did not expand from the Federal Reserve Bank of New York ("Reserve its operations there until the end of 1994, when it ac- Bank") in its examination, as of June 14, 1993 (the quired three branches as part of the Citizens Merger. "1993 Examination").9 Nevertheless, Bank offers a variety of affordable housing products in the area, including products for low- to B. HMDA Data and Lending Practices moderate-income borrowers. For example, in 1994, Bank originated 19 affordable mortgage loans totaling The Board reviewed Bank's 1992,1993, and preliminary more than $1 million and representing 13 percent of the 1994 HMDA data in light of Protestant's allegations total mortgage originations in Broome County. This concerning Bank's performance in Broome County. In includes four State of New York Mortgage Association some categories, the HMDA data indicate that Bank is ("SONYMA") and Federal Housing Administration performing at a level that meets or exceeds its peers. For ("FHA") loans totaling over $225,000 to first-time example, the ratio of HMDA-reported loan applications homebuyers and 15 loans totaling over $826,000 under to Bank from low- to moderate-income residents to total its various Community Homebuyers and other special loan applications to Bank in Broome County exceeds the programs described in the October Order. In addition, Bank is engaged with other local institutions, the Federal ratio of similar applications received by Bank's peer Home Loan Bank of New York, and local government organizations. However, these data also reflect some officials in an effort to locate in Broome County a branch disparities in the rate of housing loan applications, origiof the Community Lending Corporation, which pools nations, and denials by racial group or income level. In private and public grant funds to support affordable particular, preliminary 1994 data indicate a decline in the housing programs in low- to moderate-income neighbornumber of applications from and originations to minorihoods. ties. The Board is concerned when an institution's record In connection with the Citizens Merger, Bank commitindicates disparities in lending to minority applicants, ted to the Board to take additional steps to enhance its and it believes that all banks are obligated to ensure that affordable mortgage lending program in Broome County. their lending practices are based on criteria that assure In accordance with these commitments, Bank is implenot only safe and sound lending, but also equal access to menting a new affordable mortgage product for low- to credit by creditworthy applicants regardless of race. The moderate-income residents, the "M&T Down Payment Board recognizes, however, that HMDA data alone pro- and Closing Cost Assistance Pilot Program," which provide an incomplete measure of an institution's lending in vides home purchase mortgage loans with cash down its community. The Board also recognizes that HMDA payments as low as $500 and closing cost financing.11 data have limitations that make the data an inadequate Bank is allocating $1 million for this program in the first basis, absent other information, for concluding that an year. In order to increase the success of this and other institution has engaged in illegal discrimination in lend- affordable mortgage programs, and in accordance with ing. its commitments,12 Bank is implementing a third-party The 1993 Examination found that Bank's loan policies and underwriting criteria were reasonable and did not discriminate on any prohibited basis.10 The Board denials were appropriate. The investigation of these complaints is still in progress. 11. Protestant maintains that Bank has failed to implement this pilot program. Bank committed to commence implementation of this pilot program in January 1995. Bank has presented the program to local realtors and a 8. Id. at 13,745. HUD-certified community-based loan counseling organization, and is pro- 9. The New York Banking Department also rated Bank "outstanding" at it cessing its first applications under the program. The Board concludes that most recent CRA performance examination, as of December 27, 1993. Bank is complying with its commitment. 10. Protestant alleges Bank failed to investigate properly three consumer 12. Bank committed to provide $15,000 in financing for a communitycomplaints about loan denials. Board staff has reviewed Bank's explanations based organization to develop a credit counseling program designed to assist of two of these complaints and, based on the explanations, believes that the low- to moderate-income residents to achieve home ownership. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

396 Federal Reserve Bulletin • April 1995 loan counseling program for first-time homebuyers, D. Ascertainment and Marketing which four other banks in the area have joined. In addition, Bank committed to provide flexible underwrit- Bank uses various methods to ascertain the credit needs ing standards for its housing-related loans and, for the of its entire delineated community, including surveys, three-year period beginning January 1, 1995, to provide focus groups, small business study groups, advisory residential mortgage and home improvement loans at a councils, interviews with community leaders, and formal target level of $4.5 million to residents within low- to call programs by branch managers and loan officers.15 moderate-income census tracts in Binghamton and to These call programs include a business call program low- and moderate-income residents elsewhere in throughout Bank's delineated community, including Broome County. Bank also committed to conduct a Broome County, that encompasses businesses owned by second review of all initially declined residential applica- women and minorities. tions of these residents.13 Bank markets its products through television, radio, and print advertising, including minority publications and radio stations with large minority audiences. Bank C. Other Initiatives in Broome County also conducts both small business and home buyer semi- As of December 1994, Bank had 114 small business nars to market its affordable housing programs throughloans aggregating $4.5 million in Broome County, of out its delineated community, including Broome County. which more than $321,000 was to borrowers in low- to To expand its marketing and outreach to minority and moderate-income census tracts in its delineation. In low- to moderate-income residents and meet its lending 1994, Bank originated eight SBA loans totalling over targets in Broome County, Bank has committed to mar- $2.8 million in the area. During the SBA fiscal year that ket its affordable housing and small business loan prodended September 30, 1994, Bank originated more SBA ucts aggressively in local media, including advertising in loans in dollar terms than any other financial institution journals and publications of community-based organizain the SBA's Elmira district, which includes Broome tions intended to reach such residents. Bank also has County. committed to expand its outreach and marketing efforts Bank has allocated up to $10.5 million for three years in these communities through seminars and workshops beginning January 1, 1995, for loans to small businesses with local realtors and community-based organizations,16 in the area, including enterprises owned by minorities an active calling program designed specifically for lowand women and community-based not-for-profit organi- to moderate-income areas, and small business fairs inzations. In addition, Bank refers denied start-up business tended for businesses owned by women and minorities. loan applicants to various small business counseling services. Bank also has provided financial support to E. Branches Broome County Partnership 2000, a group of community leaders organized to bring businesses and jobs to the The 1993 Examination found that Bank's offices are area, and to other community-based charitable, civic and reasonably accessible to all segments of its local commueducational organizations, including First Ward Action nity and provide a full range of deposit and credit Council, Endicott Development Association, and the services. Five of Bank's 11 branches in Broome County United Way of Broome County. Bank also participates in are either located in or adjoin 12 of the 15 low- to local development corporations.14 moderate-income tracts in Bank's Broome County delineation. In addition, Bank has a comprehensive, written branch closure policy, which states that the decision to close a branch shall be made only after a thorough evaluation of the potential impact of the closure. 13. Bank further committed to deposit $100,000 with a new community development credit union upon its receipt of deposit insurance from the F. Conclusion Regarding CRA Performance National Credit Union Share Insurance Fund, and to provide technical assistance to the credit union. In response to Protestant's comment that Bank The Board has carefully considered the entire record, has not made the deposit, Bank has indicated that this commitment will be including Protestant's comments, Bank's responses, fulfilled upon confirmation of deposit insurance. 14. A Bank representative serves on the Board of Directors of the Binghamton Local Development Corporation, which is designed to assist individuals in obtaining financing for business ventures, whether provided by 15. Bank's management periodically reviews internal analyses of the that Corporation or done in conjunction with one of a number of lending geographic distribution of its credit originations, including small business institutions. A Bank representative also chairs the regional loan committee of loans, and uses them to evaluate marketing efforts in targeted geographic the New York Business Development Corporation, which is chartered to areas and develop new products to make credit more widely available. provide credit to businesses in the southern tier of the state that might not 16. Bank sponsored an "Emerging Business" seminar in Binghamton in otherwise qualify for bank financing. The latter organization provides man- December 1994, and, jointly with city government, realtors, and local agement assistance and counseling and both use public funds to help subsi- financial institutions, is planning a series of showcases aimed at low- to dize lenders' risks. moderate-income individuals that highlight affordable housing opportunities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 397 Bank's CRA performance examination reports, and the ing is not necessary to develop the record on this issue.19 representations and commitments referenced in the Octo- The Board also does not believe a hearing is necessary to ber Order. In light of all the facts of record, the Board address Protestant's disagreement with the Board's conconcludes that CRA considerations are consistent with clusions in the October Order. approval of these applications and that Protestant's com- Moreover, the Board notes that interested parties have ments do not warrant their denial. The Board expects had ample opportunity to submit their views, and have Bank to comply with all the commitments discussed in submitted substantial written comments that the Board the October Order. These commitments include semian- has considered. In light of these and all other facts of nual reports to the Reserve Bank for two years on record, the Board has determined that a public hearing or Bank's progress in fulfilling its commitments in Broome meeting is not necessary to clarify the factual record or County. The Board will assess the success of Bank's otherwise warranted in this case. Accordingly, Protescontinued efforts in connection with future applications tant's request is hereby denied.20 to expand its deposit-taking facilities. Protestant has requested that the Board hold a public Other Considerations hearing or public meeting on these applications. The Board notes that the Federal Reserve Act does not re- The Board has also concluded that the factors it is quire a hearing on branch applications. The Board's required to consider under section 9 of the Federal Rules of Procedure generally provide that the Board Reserve Act, including Bank's financial condition, the may, in its discretion, hold a public hearing or meeting to general character of its management, and the proposed clarify factual issues related to an application and proexercise of corporate powers, are consistent with apvide an opportunity for testimony, if appropriate.17 proval of these applications. Protestant seeks a hearing to present testimony on its Based on the foregoing and all other facts of record, unsuccessful attempts to negotiate a private agreement including commitments made by Bank in connection with Bank regarding CRA activities in Broome County. with these applications and the October Order, the Board In addition, Protestant seeks to demonstrate that Bank has determined that the applications should be, and has not complied with certain commitments made to the hereby are, approved. The Board's approval is specifi- Board in connection with the October Order. Protestant cally conditioned on Bank's compliance with all comalso asserts that at a hearing it would dispute conclusions mitments made in connection with these and previous drawn by the Board in the October Order.18 applications. The commitments and conditions relied on The Board has carefully considered this request and by the Board are deemed to be conditions imposed in concludes that the matters identified in Protestant's re- writing by the Board in connection with its findings and quest can either be resolved without holding a public decision, and, as such, may be enforced in proceedings hearing or meeting, or are matters not relevant to the under applicable law. This approval is subject to comple- Board's consideration of these applications. As noted tion of the facilities and their being in operation within above, the CRA does not require depository institutions one year of the date of this order, and to approval by the to enter into private agreements with particular organiza- appropriate state authorities. tions and, therefore, testimony regarding Protestant's By order of the Board of Governors, effective Febnegotiations with Bank would not resolve any material ruary 27, 1995. issue. Protestant's allegations concerning the specific commitments made by Bank have been reviewed by the Voting for this action: Chairman Greenspan, Vice Chairman Board and are discussed above. Based on the existing Blinder, and Governors Kelley, LaWare, Lindsey, Phillips, and record, the Board finds that Bank has not failed to Yellen. comply with its previous commitments, and that a hear- JENNIFER J. JOHNSON Deputy Secretary of the Board 17. See 12 C.F.R. 262.3(e). 18. Protestant also seeks to obtain additional information about Bank's 19. See, for example, footnotes 10, 11, and 13 above. programs and activities. These requests do not raise any factual dispute. The 20. Protestant does not indicate why written submissions are inadequate in Board does not believe that a formal hearing is necessary to gather additional this case to present its views. See 12 C.F.R. 262.3(e) (requiring a statement data where no material factual dispute has been raised. of why a written presentation would not suffice in lieu of a hearing). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

398 Federal Reserve Bulletin • April 1995 INDEX OF ORDERS ISSUED OR ACTIONS TAKEN BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (OCTOBER 1, 1994-DECEMBER 31,1994) Merged or Acquired Date of Bulletin Volume Applicant Bank or Activity Approval and Page Abrams Centre Bancshares, Inc., Abrams Centre National Bank, November 15, 1994 81, 42 Dallas, Texas Dallas, Texas Banco Roberts, S.A., To establish a representative office in December 21, 1994 81, 202 Buenos Aires, Argentina New York, New York BankAmerica Corporation, BA Securities, Inc., October 11, 1994 80,1104 San Francisco, California San Francisco, California The Bank of New York Company, InfiNet Payment Services, Inc., October 3, 1994 80,1108 Inc., Hackensack, New Jersey New York, New York Banpais, S.A., To establish a representative office in December 21, 1994 81,204 Mexico City, Mexico New York, New York Cariplo-Cassa di Risparmio delle Order approving establishment of a October 25, 1994 80,1136 Provincie Lombarde, S.p.A., representative office in Los Milan, Italy Angeles, California China Trust Holdings N.V., Trans Bankcorp, Inc., December 19, 1994 81, 155 Curacao, Netherlands Antilles Monterey Park, California Citicorp, Citicorp Futures Corporation, December 13, 1994 81, 164 New York, New York New York, New York Citizens State Bank, To establish a branch office in November 14, 1994 81, 59 Arlington, South Dakota Castlewood, South Dakota CNB Bancshares, Inc., King City Federal Savings Bank, December 5, 1994 81, 166 Evansville, Indiana Mount Vernon, Illinois Crestar Bank, Independent Bank, December 14, 1994 81, 200 Richmond, Virginia Manassas, Virginia CS Holding, BEA Associates, November 1, 1994 81, 46 Zurich, Switzerland New York, New York First Bank System, Inc., Metropolitan Financial Corporation, December 23, 1994 81, 169 Minneapolis, Minnesota Minneapolis, Minnesota First Empire State Corporation, Citizens Savings Bank, F.S.B., October 12, 1994 80, 1111 Buffalo, New York Ithaca, New York First International Bancorp Texas, First International Bank, December 12, 1994 81, 156 Inc., Bedford, Texas Bedford, Texas First National Corporation of Bank of Love County, October 3, 1994 80,1101 Ardmore, Inc., Marietta, Oklahoma Ardmore, Oklahoma First of America Bank First of America Securities, Inc., October 11, 1994 80,1120 Corporation, Kalamazoo, Michigan Kalamazoo, Michigan First Security Bank, World Savings and Loan Association, November 28, 1994 81, 60 Fort Lupton, Colorado Oakland, California Fleet Financial Group, Inc., Order approving an exemption from October 19, 1994 80,1134 Providence, Rhode Island the anti-tying provisions Fourth Financial Corporation, Blackwell Security Bancshares, Inc., December 21, 1994 81, 156 Wichita, Kansas Blackwell, Oklahoma Huntington Bancshares FirstFed Northern Kentucky Bancorp, November 14, 1994 81, 47 Incorporated, Inc., Columbus, Ohio Covington, Kentucky Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 399 Index of Orders—Continued Merged or Acquired Date of Bulletin Volume Applicant Bank or Activity Approval and Page Intrust Financial Corporation, First Moore Bancshares, Inc., October 25, 1994 80, 1127 Wichita, Kansas Moore, Oklahoma Jefferson Bancshares, Inc., Pine Bluff National Bank, October 12, 1994 80, 1102 Pine Bluff, Arkansas Pine Bluff, Arkansas KeyCorp, BANKVERMONT Corporation, December 19, 1994 81, 160 Cleveland, Ohio Burlington, Vermont Mercantile Bancorporation Inc., UNSL Financial Corporation, December 5, 1994 81, 180 St. Louis, Missouri Lebanon, Missouri Marine Midland Bank, Hongkong and Shanghai Banking November 21, 1994 81, 56 Buffalo, New York Corporation Limited, Hong Kong National Bank of Canada, Natbank, F.S.B., December 5, 1994 81, 181 Montreal, Quebec, Canada Pompano Beach, Florida New American Bank Holding December 6, 1994 81, 163 Corporation, Corpus Christi, Texas American Bank Holding Corporation, Corpus Christi, Texas Northwest Bancorp, MHC, Northwest Savings Bank, October 18, 1994 80, 1131 Warren, Pennsylvania Warren, Pennsylvania Peoples Bancorp Inc., Woodsfield Savings & Loan October 3, 1994 80, 1125 Marietta, Ohio Company, Woodsfield, Ohio Regions Financial Corporation, Union Bank & Trust Company, November 7, 1994 81, 44 Birmingham, Alabama Montgomery, Alabama Section 20 Firewall Interpretation Interpretation of the Cross-Marketing December 14, 1994 81, 200 Limitation Applicable to Section 20 Subsidiaries Stichting Prioriteit ABN AMRO ABN AMRO Securities (USA) Inc., December 12, 1994 81, 182 Holding, New York, New York Amsterdam, The Netherlands Swiss Bank Corporation, To engage in underwriting and December 23, 1994 81, 185 Basel, Switzerland dealing in all types of debt and equity securities on a limited basis, and certain other securities- and derivatives-related activities Union Planters Corporation, Grenada Sunburst System November 7, 1994 81, 49 Memphis, Tennessee Corporation, Grenada, Mississippi Union Planters Corporation, Mid South Bancshares, Inc., November 7, 1994 81, 45 Memphis, Tennessee Paragould, Arkansas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

400 Federal Reserve Bulletin • April 1995 APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Effective Applicant(s) Bank(s) Date CCB Financial Corporation, Security Capital Bancorp, February 10, 1995 Durham, North Carolina Salisbury, North Carolina Old National Bancorp., Oblong Bancshares, Inc., February 8, 1995 Evansville, Indiana Oblong, Illinois Signature Bancshares, Inc., First State Bank, February 17, 1995 Dallas, Texas Coolidge, Texas Signature Delaware Financial Corporation, Dover, Delaware Simmons First National Corporation, Dumas Bancshares, Inc., February 23, 1995 Pine Bluff, Arkansas Dumas, Arkansas SunTrust Banks, Inc., Peoples State Bank, February 28, 1995 Atlanta, Georgia New Port Richey, Florida Section 4 Effective Applicants) Bank(s) Date First National of Nebraska, Inc. Platte Valley Finance Company, February 3, 1995 Omaha, Nebraska North Platte, Nebraska Old National Bancorp, The ONB Trust Company, N.A.—Illinois, February 24, 1995 Evansville, Indiana Mt. Carmel, Illinois The Old National Trust Company—Kentucky, Morganfield, Kentucky U.S. Bancorp., U.S. Trade Services, Inc., February 16, 1995 Portland, Oregon Portland, Oregon Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 401 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 The ANB Corporation, The American National Bank of Dallas February 3, 1995 Terrell, Texas Terrell, The ANB Delaware Corporation, Terrell, Texas Terrell, Texas A.N.B. Holding Company, Ltd., The ANB Corporation, Dallas February 3, 1995 Terrell, Texas Terrell, Texas The ANB Delaware Corporation, Terrell, Texas The American National Bank of Terrell, Terrell, Texas A. Wilbert's Sons Lumber and Bayoulands Financial Corporation, Atlanta February 13, 1995 Shingle Co., Plattenville, Louisiana Plaquemine, Louisiana Banco Santander, S.A., First State Bank, New York February 15, 1995 Santander, Spain Wilmington, Delaware FFB Participacoes e Servicos, S.A., Funchal, Portugal Barry Limited Partnership, Valparaiso Enterprises, Inc., Kansas City February 8, 1995 Valparaiso, Nebraska Valparaiso, Nebraska The Bridger Company, Norwest Bank Wyoming Lovell, Minneapolis January 31, 1995 Bridger, Montana N.A., Lovell, Wyoming Byron State Inc., Byron State Bank, Kansas City January 31, 1995 Byron, Nebraska Byron, Nebraska Campello Co-operative Bank, The Community Bank, Boston January 27, 1995 Brockton, Massachusetts Brockton, Massachusetts Campello Bancorp, Brockton, Massachusetts Chittenden Corporation, The Bank of Western Massachusetts, Boston February 15, 1995 Burlington, Vermont Springfield, Massachusetts Citizens Independent Bancorp, The Citizens Bank of Logan, Cleveland February 14, 1995 Inc., Logan, Ohio Logan, Ohio Commercial Bancshares, Inc., The Commercial Savings Bank, Cleveland February 13, 1995 Upper Sandusky, Ohio Upper Sandusky, Ohio Community Bancorp, Inc., Community State Bank, Chicago January 27, 1995 Norwalk, Wisconsin Norwalk, Wisconsin Community First Bankshares, Inc. First Community Bankshares, Inc., Minneapolis February 22, 1995 Fargo, North Dakota Englewood, Colorado Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

402 Federal Reserve Bulletin • April 1995 Section 3—Continued Reserve Effective Applicant(s) BBaannkk((ss)) Bank Date Eiden Interests, Ltd., First Waukegan Corporation, Chicago February 10, 1995 Gurnee, Illinois Glenview, Illinois Elgin Bancshares, Inc., Farmers State Bank, Minneapolis February 7, 1995 Elgin, North Dakota Elgin, North Dakota The Estes Park Bank Restated Estes Bank Corporation, Kansas City February 3, 1995 Employee Stock Ownership Estes Park, Colorado 401 (k) Plan & Retirement Trust, Estes Park, Colorado Firstar Corporation, Investors Bank Corporation, Chicago January 27, 1995 Milwaukee, Wisconsin Wayzata, Minnesota Firstar Corporation of Minnesota, Bloomington, Minnesota First Banks, Inc., HNB Financial Group, Huntington St. Louis January 27, 1995 Clayton, Missouri Beach, California First Bank System, Inc., First Western Corporation, Minneapolis January 30, 1995 Minneapolis, Minnesota Sioux Falls, South Dakota First Fidelity Bancorporation, First State Bank, Philadelphia February 15, 1995 Lawrenceville, New Jersey Wilmington, Delaware First Michigan Bank Corporation, Superior Financial Corporation, Chicago February 8, 1995 Holland, Michigan Sault Sainte Marie, Michigan Sault Bank, Sault Sainte Marie, Michigan First Tennessee National Peoples Commercial Services St. Louis February 6, 1995 Corporation, Corporation, Memphis, Tennessee Senatobia, Mississippi Greater Delaware Valley Holdings, Greater Delaware Valley Savings Philadelphia February 16, 1995 A Mutual Company, Bank, Broomall, Pennsylvania Broomall, Pennsylvania Hoeme Family Partnership, First National Bancshares of Scott Kansas City February 17, 1995 Scott City, Kansas City, Inc., Scott City, Kansas Kidd Partners, Ltd., Chandler Bancorp, Inc., Dallas January 27, 1995 Chandler, Texas Chandler, Texas Citizens State Bank, Chandler, Texas Linn Holding Company, Inc., Heritage Bank, St. Louis February 7, 1995 Linn, Missouri Loose Creek, Missouri Longview Capital Corporation, First Praire Bankshares, Inc., Chicago January 27, 1995 Newman, Illinois Georgetown, Illinois Norwest Corporation, First American National Bank, Minneapolis February 14, 1995 Minneapolis, Minnesota Chandler, Arizona Norwest Corporation, Goldenbanks of Colorado, Inc., Minneapolis February 23, 1995 Minneapolis, Minnesota Golden, Colorado Regions Financial Corporation, First Commercial Bancshares, Inc., Atlanta February 7, 1995 Birmingham, Alabama Chalmette, Louisiana First National Bank of St. Bernard Parish, Chalmette, Louisiana Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 403 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank Date Riverside Bancshares, Inc., The Bank of Logansport, Dallas February 10, 1995 Logansport, Louisiana Logansport, Louisiana Synovus Financial Corp., NBSC Corporation, Atlanta January 30, 1995 Columbus, Georgia Columbia, South Carolina TB&C Bancshares, Inc., Columbus, Georgia Texas Bancshares, Inc., State Bank of La Vernia, Dallas January 31, 1995 San Antonio, Texas La Vernia, Texas Texas Bancshares Subsidiary Corporation, Inc., Wilmington, Delaware Waupaca Bancorporation, Inc. NBC Bancshares, Inc., Chicago January 31, 1995 Waupaca, Wisconsin Pampa, Texas Section 4 Nonbanking Reserve Effective Applicant(s) Activity/Company Bank Date BancorpSouth Inc., LF Bancorp, Inc., St. Louis January 30, 1995 Tupelo, Mississippi Laurel, Mississippi The Bank of Kentucky Financial Burnett Federal Savings Bank, Cleveland January 27, 1995 Corporation, Covington, Kentucky Florence, Kentucky Banner Bancorp, Ltd., To engage de novo in insurance Chicago January 26, 1995 Birnamwood, Wisconsin agency activities Eitzen Independents, Inc., Eitzen, Minnesota Barnett Banks, Inc., BancPLUS Financial Corporation, Atlanta February 17, 1995 Jacksonville, Florida San Antonio, Texas Central Louisiana Capital Community Credit Centers, Inc., Dallas February 16, 1995 Corporation, Vidalia, Louisiana Lake Providence, Louisiana Cooperative Centrale Utrecht-America Finance Co., New York February 10, 1995 Raiffeisen-Boerenleenbank B.A., New York, New York Robobank Nederland, Utrecht, The Netherlands Country Bank Shares Corporation, Belleville State Bank, Chicago February 15, 1995 Mt. Horeb, Wisconsin Belleville, Wisconsin Middleton Community Bank, Middleton, Wisconsin Dauphin Deposit Corporation, Loans USA, Incorporated, Philadelphia February 3, 1995 Harrisburg, Pennsylvania Pasadena, Maryland First of America Bank To engage de novo in the nonbanking Chicago February 16, 1995 Corporation, activity of high residual value Kalamazoo, Michigan leasing First Union Corporation, Ameribanc Investors Group, Richmond February 16, 1995 Charlotte, North Carolina Annandale, Virginia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

404 Federal Reserve Bulletin • April 1995 Section 4—Continued Nonbanking Reserve Effective Applicant(s) Activity/Company Bank Date KeyCorp, To engage de novo in making, Cleveland February 3, 1995 Cleveland, Ohio acquiring, and servicing loans Nashville Holding Company, To engage de novo in making, Atlanta February 9, 1995 Nashville, Georgia acquiring, or servicing loans National Westminster Bank Pic, BRS Capital Management, Inc., New York February 3, 1995 London, England Boston, Massachusetts Natwest Holdings Inc., New York, New York Norwest Corporation, Bank of Montana, N.A., Minneapolis January 31, 1995 Minneapolis, Minnesota Great Falls, Montana Montana Bank, N.A., Billings, Montana The Palmer National Bancorp, Palmer National Mortgage, Inc., Richmond February 10, 1995 Inc., Rockville, Maryland Washington, D.C. The Shorebank Corporation, ShoreTrust Trading Group, Inc., Chicago January 27, 1995 Chicago, Illinois Ilwaco, Washington Societe Generale, To engage de novo in higher- New York February 9, 1995 Paris, France residual-value leasing Union Bank of Switzerland, Timberland Resources, Inc., New York February 13, 1995 Zurich, Switzerland West Lebanon, New Hampshire Sections 3 and 4 Nonbanking Reserve Effective Applicant(s) Activity/Company Bank Date West Town Bancorp, Inc.. West Town Savings Bank, Chicago January 30, 1995 Cicero, Illinois Cicero, Illinois Whipple Family Limited Central Arkansas Bancshares, Inc. St. Louis February 17, 1995 Partnership, Arkadelphia, Arkansas Arkadelphia, Arkansas First Banc Securities, Inc., Arkadelphia, Arkansas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 405 APPLICATIONS APPROVED UNDER BANK MERGER ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Reserve Effective Applicant(s) Bank(s) Bank Date Bank of Great Neck, North Fork Bank, New York February 23, 1995 Great Neck, New York Mattituck, New York The Callaway Bank, Steedman Bank, St. Louis January 27, 1995 Fulton, Missouri Mokane, Missouri Centura Bank, Progressive Savings & Loan, Ltd., Richmond February 10, 1995 Rocky Mount, North Carolina Lumberton, North Carolina Farmers Trust Bank, Meridian Bank, Philadelphia February 17, 1995 Lebanon, Pennsylvania Reading, Pennsylvania Integra Bank/Pittsburgh, Integra Bank/North, Cleveland February 8, 1995 Pittsburgh, Pennsylvania Titusville, Pennsylvania Integra Bank/South, Uniontown, Pennsylvania Minden Bank & Trust Company, Hibernia National Bank, Dallas February 15, 1995 Minden, Louisiana New Orleans, Louisiana Premier Bank-North, Premier Bank-Central, Richmond February 22, 1995 Haysi, Virginia Honaker, Virginia CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the Corp., Burlington, Vermont. On February 10, 1995, the Federal Reserve Banks in which the Board of Governors is Board filed its motion to dismiss. not named a party. Zemel v. Board of Governors, No. 95-5007 (D.C. Cir., filed December 30, 1994). Appeal of district court's dismissal In re Subpoena Duces Tecum, No. 95-5034 (D.C. Cir., filed of Age Discrimination in Employment Act case. January 26, 1995). Appeal of partial denial of plaintiff's motion to compel production of examination and other In re Subpoena Duces Tecum, Misc. No. 95-06 (D.D.C., supervisory material in connection with a shareholder filed January 6, 1995). Action to enforce subpoena seekderivative action against a bank holding company. ing pre-decisional supervisory documents sought in con- Kuntz v. Board of Governors, No. 95-3044 (6th Cir., filed nection with an action by Bank of New England Corpora- January 12, 1995). Petition for review of a Board order tion's trustee in bankruptcy against the Federal Deposit dated December 19, 1994, approving an application by Insurance Corporation. The Board filed its opposition on KeyCorp, Cleveland, Ohio, to acquire BANKVERMONT January 20, 1995. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

406 Federal Reserve Bulletin • April 1995 Cavallari v. Board of Governors, No. 94-4183 (2d Cir., to freeze assets of individual pending administrative adjufiled October 17, 1994). Petition for review of Board dication of civil money penalty assessment by the Board. order of prohibition against a former outside counsel to a On September 17, 1991, the court issued an order temponational bank (80 Federal Reserve Bulletin 1046 (1994)). rarily restraining the transfer or disposition of the individ- The case was consolidated with a petition for review of ual's assets. orders of the Comptroller of the Currency imposing a civil money penalty and cease and desist order against petitioner (Cavallari v. OCC, No. 94-4151). Oral argument is scheduled for March 23, 1995. FINAL ENFORCEMENT ORDERS ISSUED BY THE BOARD OF GOVERNORS In re Subpoena Duces Tecum, No. 94-MS-214 (D. D.C., filed June 27, 1994). Subpoena enforcement case in Daniel E. Besler which the plaintiff in a securities fraud class action seeks Inverness, Illinois examination reports and internal Board memos. On February 1, 1995, the court granted the plaintiff's motion to The Federal Reserve Board announced on February 28, compel, subject to the Board's right to claim privilege 1995, the issuance of an Order of Removal and of Prohibiwith respect to the documents sought. tion against Daniel E. Besler, Vice President, the Royal National Title Resource Agency v. Board of Governors, No. American Bank, Inverness, Illinois. 94-2050 (8th Cir., filed April 28, 1994). Petition for review of Board's order, issued under section 4 of the Robert L. Hotchkiss Bank Holding Company Act, approving the application Genoa, Ohio of Norwest Corp., Minneapolis, Minnesota, to acquire Double Eagle Financial Corp., Phoenix, Arizona, and its The Federal Reserve Board announced on February 7, 1995, subsidiary, United Title Agency, Inc., and thereby engage the issuance of a Combined Order to Cease and Desist and in title insurance agency activities and real estate settleof Prohibition against Robert L. Hotchkiss, the former ment services (80 Federal Reserve Bulletin 453). On president, chief executive officer, and director of The Genoa January 10, 1995, the court denied the petition and af- Banking Company, Genoa, Ohio. firmed the Board's order. Beckman v. Greenspan, No. CV 94-41-BCG-RWA (D. Mont., filed April 13, 1994). Action against Board and others seeking damages for alleged violations of constitu- WRITTEN AGREEMENTS APPROVED BY FEDERAL tional and common law rights. The Board's motion to RESERVE BANKS dismiss was filed May 19, 1994. Bennett v. Greenspan, No. 93-1813 (D. D.C., filed April 20, First Security Banshares, Inc. 1993). Employment discrimination action. A jury verdict Lake Park, Iowa for the plaintiff was rendered on October 13, 1994. The Board's motion for a new trial on the issue of damages The Federal Reserve Board announced on February 6,1995, was denied on January 9, 1995. the execution of a Written Agreement between the Federal Board of Governors v. Ghaith R. Pharaon, No. 91-CIV- Reserve Bank of Chicago and First Security Banshares, 6250 (S.D. New York, filed September 17, 1991). Action Inc., Lake Park, Iowa. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 Financial and Business Statistics CONTENTS WEEKLY REPORTING COMMERCIAL BANKS Assets and liabilities A3 Guide to Tabular Presentation A21 Large reporting banks A23 Branches and agencies of foreign banks Domestic Financial Statistics MONEY STOCK AND BANK CREDIT FINANCIAL MARKETS A4 Reserves, money stock, liquid assets, and debt A24 Commercial paper and bankers dollar measures acceptances outstanding A5 Reserves of depository institutions, Reserve Bank A25 Prime rate charged by banks on short-term credit business loans A6 Reserves and borrowings—Depository A26 Interest rates—money and capital markets institutions 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 • April 1995 Domestic Financial Statistics—Continued REPORTED BY BANKS IN THE UNITED STATES REAL ESTATE A55 Liabilities to and claims on foreigners A37 Mortgage markets A56 Liabilities to foreigners A38 Mortgage debt outstanding A58 Banks' own claims on foreigners A59 Banks' own and domestic customers' claims on foreigners CONSUMER INSTALLMENT CREDIT A59 Banks' own claims on unaffiliated foreigners A39 Total outstanding A60 Claims on foreign countries—Combined A39 Terms domestic offices and foreign branches FLOW OF FUNDS REPORTED BY NONBANKING BUSINESS A40 Funds raised in U.S. credit markets ENTERPRISES IN THE UNITED STATES A42 Summary of financial transactions A43 Summary of credit market debt outstanding A61 Liabilities to unaffiliated foreigners A44 Summary of financial assets and liabilities A62 Claims on unaffiliated foreigners Domestic Nonfinancial Statistics SECURITIES HOLDINGS AND TRANSACTIONS SELECTED MEASURES A63 Foreign transactions in securities A64 Marketable U.S. Treasury bonds and A45 Nonfinancial business activity—Selected notes—Foreign transactions measures A45 Labor force, employment, and unemployment A46 Output, capacity, and capacity utilization INTEREST AND EXCHANGE RATES A47 Industrial production—Indexes and gross value A49 Housing and construction A65 Discount rates of foreign central banks A50 Consumer and producer prices A65 Foreign short-term interest rates A51 Gross domestic product and income A66 Foreign exchange rates A52 Personal income and saving A67 Guide to Statistical Releases and Special Tables International Statistics SUMMARY STATISTICS A53 U.S. international transactions—Summary A54 U.S. foreign trade A54 U.S. reserve assets A54 Foreign official assets held at Federal Reserve Banks A55 Selected U.S. liabilities to foreign official institutions Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A3 Guide to Tabular Presentation SYMBOLS AND ABBREVIATIONS c Corrected G-10 Group of Ten e Estimated GNMA Government National Mortgage Association n.a. Not available GDP Gross domestic product n.e.c. Not elsewhere classified HUD Department of Housing and Urban P Preliminary Development r Revised (Notation appears on column heading IMF International Monetary Fund when about half of the figures in that column 10 Interest only are changed.) IPCs Individuals, partnerships, and corporations * Amounts insignificant in terms of the last decimal IRA Individual retirement account place shown in the table (for example, less than MMDA Money market deposit account 500,000 when the smallest unit given is millions) MSA Metropolitan statistical area 0 Calculated to be zero NOW Negotiable order of withdrawal Cell not applicable OCD Other checkable deposit ATS Automatic transfer service OPEC Organization of Petroleum Exporting Countries BIF Bank insurance fund OTS Office of Thrift Supervision CD Certificate of deposit PO Principal only CMO Collateralized mortgage obligation REIT Real estate investment trust FFB Federal Financing Bank REMIC Real estate mortgage investment conduit FHA Federal Housing Administration RP Repurchase agreement FHLBB Federal Home Loan Bank Board RTC Resolution Trust Corporation FHLMC Federal Home Loan Mortgage Corporation SAIF Savings Association Insurance Fund FmHA Farmers Home Administration SCO Securitized credit obligation FNMA Federal National Mortgage Association SDR Special drawing right FSLIC Federal Savings and Loan Insurance Corporation SIC Standard Industrial Classification G-7 Group of Seven VA Department of Veterans Affairs GENERAL INFORMATION In many of the tables, components do not sum to totals because include not fully guaranteed issues) as well as direct obligaof rounding. tions of the Treasury. "State and local government" also in- Minus signs are used to indicate (1) a decrease, (2) a negative cludes municipalities, special districts, and other political figure, or (3) an outflow. subdivisions. "U.S. government securities" may include guaranteed issues of U.S. government agencies (the flow of funds figures also Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic Nonfinancial Statistics • April 1995 1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 1994r 1994r 1995 MMoonneettaarryy oorr ccrreeddiitt aaggggrreeggaattee Q1 Q2 Q3 Q4 Sept. Oct. Nov. Dec. Jan. Reserves of depository institutions2 1 Total 3.1 -4.4 -2.5 -3.6 -.7 -6.3 -3.2 .3 1.5 2 Required 2.5 -3.6 -2.6 -3.2 -1.9 -1.2 -7.4 -3.1 -1.9 3 Nonborrowed 3.7 -5.4 -4.2 -2.3 -1.1 -4.2 -.6 1.1 3.0 4 Monetary base3 9.7 8.2 7.4 6.9 6.3 7.4 8.4 4.3 8.6 Concepts of money, liquid assets, and debt4 5 Ml 5.5 2.7 2.4 -1.2 .2 -3.0 -.6 .3 1.2 6 M2 1.8 1.7 .8 -.4 -.5 -1.3 .3 1.4 4.4 7 M3 .6 1.3 2.0 1.6 1.5 2.0 1.6 3.0 6.9 8 L 2.4 1.6 1.7 3.4 .5 5.3 2.7 8.8 n.a. 9 Debt 5.3 5.6 4.4 5.5 5.7 5.0 6.5 3.9 n.a. Nontransaction components 10 In M25 .1 1.3 .1 -.1 -.8 -.5 .7 2.0 5.9 11 In M3 only6 -5.8 -1.3 8.7 12.7 12.4 19.5 8.2 11.6 20.2 Time and savings deposits Commercial banks 12 Savings, including MMDAs 5.0 -3.7 -4.6 -8.5 -4.5 -11.5 -9.7 -10.9 -12.9 13 Small time7 -5.1 .3 9.4 16.0 12.9 16.5 15.5 20.4 24.1 14 Large time8,9 -.9 .8 13.1 18.8 20.6 19.8 18.7 13.5 -6.5 Thrift institutions 15 Savings, including MMDAs .2 -.4 -11.5 -17.8 -17.6 -15.5 -21.3 -20.8 -19.0 16 Small time7 -11.1 -5.9 -1.7 8.6 2.8 11.4 17.5 5.4 19.9 17 Large time8 -7.4 -3.5 6.8 12.0 19.4 19.1 3.8 7.5 33.6 Money market mutual funds 18 General purpose and broker-dealer 3.4 11.9 5.0 8.9 1.3 9.9 14.2 17.2 8.9 19 Institution-only -20.5 -15.7 -4.5 7.3 -7.4 30.6 -2.0 2.0 36.5 Debt components4 20 Federal 7.3 5.4 3.9 5.9 6.0 5.4 8.5 1.2 n.a. 21 Nonfederal 4.6 5.6 4.6 5.4 5.5 4.8 5.7 4.9 n.a. 1. Unless otherwise noted, rates of change are calculated from average amounts Kingdom and Canada, and (3) balances in both taxable and tax-exempt, institution-only outstanding during preceding month or quarter. money market funds. Excludes amounts held by depository institutions, the U.S. govern- 2. Figures incorporate adjustments for discontinuities, or "breaks," associated with ment, money market funds, and foreign banks and official institutions. Also excluded is regulatory changes in reserve requirements. (See also table 1.20.) the estimated amount of overnight RPs and Eurodollars held by institution-only money 3. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally market funds. Seasonally adjusted M3 is computed by adjusting its non-M2 component as adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency a whole and then adding this result to seasonally adjusted M2. component of the money stock, plus (3) (for all quarterly reporters on the "Report of L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasury Transaction Accounts, Other Deposits and Vault Cash" and for all weekly reporters securities, commercial paper, and bankers acceptances, net of money market fund holdwhose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted ings of these assets. Seasonally adjusted L is computed by summing U.S. savings bonds, difference between current vault cash and the amount applied to satisfy current reserve short-term Treasury securities, commercial paper, and bankers acceptances, each seasonrequirements. ally adjusted separately, and then adding this result to M3. 4. Composition of the money stock measures and debt is as follows: Debt: The debt aggregate is the outstanding credit market debt of the domestic Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of nonfinancial sectors—the federal sector (U.S. government, not including governmentdepository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all sponsored enterprises or federally related mortgage pools) and the nonfederal sectors commercial banks other than those owed to depository institutions, the U.S. government, (state and local governments, households and nonprofit organizations, nonfinancial corpoand foreign banks and official institutions, less cash items in the process of collection and rate and nonfarm noncorporate businesses, and farms). Nonfederal debt consists of Federal Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable mortgages, tax-exempt and corporate bonds, consumer credit, bank loans, commercial order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository paper, and other loans. The data, which are derived from the Federal Reserve Board's flow institutions, credit union share draft accounts, and demand deposits at thrift institutions. of funds accounts, are break-adjusted (that is, discontinuities in the data have been Seasonally adjusted Ml is computed by summing currency, travelers checks, demand smoothed into the series) and month-averaged (that is, the data have been derived by deposits, and OCDs, each seasonally adjusted separately. averaging adjacent month-end levels). M2: Ml plus (1) overnight (and continuing contract) repurchase agreements (RPs) 5. Sum of (1) overnight RPs and overnight Eurodollars, (2) money market fund issued by all depository institutions and overnight Eurodollars issued to U.S. residents by balances (general purpose and broker-dealer), (3) savings deposits (including MMDAs), foreign branches of U.S. banks worldwide, (2) savings (including MMDAs) and small and (4) small time deposits. time deposits (time deposits—including retail RPs—in amounts of less than $100,000), 6. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S. residents, and (3) balances in both taxable and tax-exempt general-purpose and broker-dealer and (4) money market fund balances (institution-only), less (5) a consolidation adjustment money market funds. Excludes individual retirement accounts (IRAs) and Keogh balances that represents the estimated amount of overnight RPs and Eurodollars held by institutionat depository institutions and money market funds. Also excludes all balances held by only money market funds. This sum is seasonally adjusted as a whole. U.S. commercial banks, money market funds (general purpose and broker-dealer), foreign 7. Small time deposits—including retail RPs—are those issued in amounts of less governments and commercial banks, and the U.S. government. Seasonally adjusted M2 is than $100,000. All IRA and Keogh account balances at commercial banks and thrift computed by adjusting its non-Mi component as a whole and then adding this result to institutions are subtracted from small time deposits. seasonally adjusted Ml. 8. Large time deposits are those issued in amounts of $100,000 or more, excluding M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of $100,000 or those booked at international banking facilities. more) issued by all depository institutions, (2) term Eurodollars held by U.S. residents at 9. Large time deposits at commercial banks less those held by money market funds, foreign branches of U.S. banks worldwide and at all banking offices in the United depository institutions, the U.S. government, and foreign banks and official institutions. 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 1995 Dec. 14 Dec. 21 Dec. 28 Jan. 4 Jan. 11 Jan. 18 Jan. 25 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 399,252 405,187 404,337 402,024 405,775 410,033r 411,956 407,550 406,094 U.S. government securities2 2 Bought outright—System account 357,686 364,374 363,467 364,693 364,572 364,225 364,635 366,654 364,185 3 Held under repurchase agreements 2,899 3,278 2,758 718 3,086 6,832 9,590 3,187 2,772 Federal agency obligations 4 Bought outright 3,730 3,653 3,600 3,661 3,644 3,642 3,637 3,629 3,610 6 5 Ac H ce e p ld ta u n n ce d s e r repurchase agreements 969 0 648 0 440 0 300 0 1,157 0 1,046 0 802 0 509 0 743 0 Loans to depository institutions 7 Adjustment credit 103 87 111 28 133 65 237 15 43 9 8 E Se x a te s n on d a e l d c c r r e e d d i i t t 15 0 9 10 0 1 43 4 91 0 10 0 4 11 0 8 72 0 40 0 3 0 6 10 Float 720 825 730 575 834 1,478' 8 812 1,355 11 Other Federal Reserve assets 32,987 32,220 33,184 31,957 32,244 32,626 32,975 32,704 33,350 12 Gold stock 11,052 11,051 11,050 11,051 11,051 11,051 11,051 11,050 11,050 13 Special drawing rights certificate account 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 14 Treasury currency outstanding 22,905 22,97 lr 23,031 22,96 lr 22,974r 22,987r 23,001 23,015 23,029 ABSORBING RESERVE FUNDS 15 Currency in circulation 393,906 398,875 399,371 397,002r 398,299r 401,973r 403,958 401,478 399,552 16 Treasury cash holdings 379 350 332 347 342 335 334 330 331 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 5,250 6,113 7,147 6,044 6,697 6,973 7,148 7,421 6,525 18 Foreign 192 195 198 189 178 219 241 170 206 19 Service-related balances and adjustments .. 4,612 4,573 4,460 4,876 4,546 4,462r 4,463 4,440 4,361 20 Other 316 342 333 320 317 278 687 223 284 21 Other Federal Reserve liabilities and capital . 12,020 12,000 12,367 11,706 12,403 12,584 12,104 12,127 12,492 22 Reserve balances with Federal Reserve Banks' 24,553 24,778 22,227 23,570 25,035 25,266 25,091 23,444 24,440 End-of-month figures Wednesday figures Dec. 14 Dec. 21 Dec. 28 Jan. 4 Jan. 11 Jan. 18 Jan. 25 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 402,176 411,368' 403,818 402,658 408,235 413,612' 413,059 406,330 410,028 U.S. government securities2 2 Bought outright—System account 359,190 364,519 362,987 364,100 365,323 364,942 364,756 367,578 364,434 3 Held under repurchase agreements 6,510 9,565 2,010 1,675 5,120 6,020 9,878 249 5,821 Federal agency obligations 4 Bought outright 3,674 3,637 3,546 3,644 3,644 3,637 3,637 3,610 3,610 5 6 Ac H ce e p ld t an u c n e d s e r repurchase agreements 1,655 0 1,025 0 1,320 0 700 0 10 0 0 1,00 0 0 413 0 300 0 1,10 0 1 Loans to depository institutions 7 Adjustment credit 31 148 48 22 811 53 1.003 20 53 9 8 E Se x a te s n o d n e a d l c c r r e e d d i i t t 113 0 75 0 30 0 97 0 104 0 114 0 50 0 27 0 38 3 10 Float -424 -716' 156 244 657 5,060 673 1,777 1,691 11 Other Federal Reserve assets 31,428 33,115 33,722 32,177 32,476 32,786' 32,650 32,769 33,278 12 Gold stock 11,052 11,051 11,050 11,051 11,051 11,051 11,050 11,051 11,050 13 Special drawing rights certificate account 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 14 Treasury currency outstanding 22,934 23,001' 23,057 22,961' 22,974' 22,987' 23,001 23,015 23,029 ABSORBING RESERVE FUNDS 15 Currency in circulation 396,795 403,850' 396,025 398,353' 400,564' 404,501' 403,951 400,964 399,642 16 Treasury cash holdings 389 335 335 344 335 335 329 331 332 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 5,348 7,161 13,964 5,977 8,751 7,677 8,632 7,276 6,888 18 Foreign 230 250 185 206 192 173 170 197 157 19 Service-related balances and adjustments .. 4,451 4,463' 4,810 4,876 4,546 4,462' 4,463 4,440 4,361 20 Other 302 876 308 314 319 271 222 273 296 21 Other Federal Reserve liabilities and capital .. 11,133 11,959 12,854 11,837 12,376 12,273 12,168 12,009 12,495 22 Reserve balances with Federal Reserve Banks- 25,532 24,543 17,461 22,782 23,194 25,976' 25,192 22,924 27,955 1. Amounts of cash held as reserves are shown in table 1.12, line 2. 3. Excludes required clearing balances and adjustments to compensate for float. 2. Includes securities loaned—fully guaranteed by US. government securities pledged with Federal Reserve Banks—and excludes securities sold and scheduled to be bought back under matched sale-purchase transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Nonfinancial Statistics • April 1995 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RReesseerrvvee ccllaassssiiffiiccaattiioonn 1992 1993 1994 1994 1995 Dec. Dec. Dec. July Aug. Sept. Oct. Nov. Dec/ Jan. 1 Reserve balances with Reserve Banks2 25,368 29,374 24,658 25,996 25,284 25,157 - 24,745 24,715 24,658 22,291 2 Total vault cash3 34,54 lr 36,818r 40,365 37,644r 37,618r 38,433r 38,231 38,933r 40,365 42,289 3 Applied vault cash4 31,172 33,484 36,682 34,096 34,052 34,794 34,745 35,291 36,682 38,232 4 Surplus vault cash5 3,370 3,334r 3,683 3,548r 3,566r 3,639r 3,486 3,642r 3,683 4,058 5 Total reserves6 56,540 62,858 61,340 60,092 59,337 59,951 59,490 60,006 61,340 60,523 6 Required reserves 55,385 61,795 60,172 58,985 58,333 58,891 58,686 58,999 60,172 59,184 7 Excess reserve balances at Reserve Banks7 1,155 1,063 1,168 1,107 1,004 1,060 804 1,008 1,168 1,339 8 Total borrowings at Reserve Banks8 124 82 209 458 469 487 380 249 209 136 9 Seasonal borrowings 18 31 100 364 445 444 339 164 100 46 10 Extended credit9 1 0 0 0 0 0 0 0 0 4 Biweekly averages of daily figures for two week periods ending on dates indicated 1994 1995 Sept. 28 Oct. 12 Oct. 26 Nov. 9 Nov. 23 Dec. T Dec. 21 Jan. 4r Jan. 18 Feb. 1 1 Reserve balances with Reserve Banks2 24,641 24,824 25,025 23,771 25,360 24,638 24,288 25,189 23,958 19,603 2 Total vault cash3 38,399r 38,539 37,609r 39,238' 38,237r 39,936r 40,864r 39,967 42,165 43,139 3 Applied vault cash4 34,700 35,138 34,137 35,506 34,677 36,245 37,082 36,429 38,223 38,796 4 Surplus vault cash5 3,699r 3,401 3,472 3,733r 3,560r 3,69 lr 3,782r 3,539 3,942 4,343 5 Total reserves6 59,341 59,962 59,161 59,276 60,037 60,883 61,370 61,618 62,181 58,399 6 Required reserves 58,138 58,907 58,587 58,435 59,092 59,538 60,291 60,451 60,822 57,030 7 Excess reserve balances at Reserve Banks7 1,204 1,055 574 841 945 1,346 1,080 1,167 1,360 1,369 8 Total borrowings at Reserve Banks8 535 433 346 351 201 216 179 246 68 176 9 Seasonal borrowings 458 403 326 223 152 112 98 95 38 41 10 Extended credit9 0 0 0 0 0 0 0 0 0 10 1. Data in this table also appear in the Board's H.3 (502) weekly statistical release. For cash applied during the maintenance period by "nonbound" institutions (that is, those ordering address, see inside front cover. whose vault cash exceeds their required reserves) to satisfy current reserve requirements. 2. Excludes required clearing balances and adjustments to compensate for float and 5. Total vault cash (line 2) less applied vault cash (line 3). 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 may be 7. Total reserves (line 5) less required reserves (line 6). used to satisfy reserve requirements. The maintenance period for weekly reporters ends 8. Also includes adjustment credit. sixteen days after the lagged computation period during which the vault cash is held. 9. Consists of borrowing at the discount window under the terms and conditions Before Nov. 25, 1992, the maintenance period ended thirty days after the lagged established for the extended credit program to help depository institutions deal with computation period. sustained liquidity pressures. Because there is not the same need to repay such borrowing 4. All vault cash held during the lagged computation period by "bound" institutions promptly as with traditional short-term adjustment credit, the money market impact of (that is, those whose required reserves exceed their vault cash) plus the amount of vault extended credit is similar to that of nonborrowed 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 Banks' Millions of dollars, averages of daily figures 1994, week ending Monday 1995, week ending Monday SSoouurrccee aanndd mmaattuurriittyy Dec. 5 Dec. 12 Dec. 19 Dec. 26 Jan. 2 Jan. 9 Jan. 16 Jan. 23 Jan. 30 Federal funds purchased, repurchase agreements, and other selected borrowings From commercial banks in the United States 1 For one day or under continuing contract 81,910 78,942 78,752 77,920 74,369 78,380 75,218 75,713 73,981 2 For all other maturities 13,801 13,651 14,003 14,640 13,891 12,820 13,670 13,954 15,165 From other depository institutions, foreign banks and official institutions, and U.S. government agencies 3 For one day or under continuing contract 18,989 17,824 17,591' 22,326 17,486 18,953 17.856 18,354 14,575 4 For all other maturities 20,252 20,683 20,087 20,807r 20,101 17,422 17,940 19,076 20,508 Repurchase agreements on US. government and federal agency securities Brokers and nonbank dealers in securities 5 For one day or under continuing contract 24,632 19,819 20,422 20,530 25,756 26,281 23,152 20,963 20,598 6 For all other maturities 28,624 31,472 31,867 26,825 25,588 27,735 33,496 33,118 36,418 All other customers 7 For one day or under continuing contract 35,109 35,423r 35,089 34,904 37,512 38,237 37,952 38,303 38,572 8 For all other maturities 17,824 18,391 18,726 19,546 16,874 15,842 16,597 17,609 18,936 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 64,465 63,837r 70,480 73,702r 68,735 69,356 69,328 71,078 68,464 10 To all other specified customers2 23,074 22,093 21,769 20,303' 22,477 22,646 25,209 23,779 24,888 1. Banks with assets of $4 billion or more as of Dec. 31,1988. 2. Brokers and nonbank dealers in securities, other depository institutions, foreign Data in this table also appear in the Board's H.S (507) weekly statistical release. For banks and official institutions, and US. government agencies, ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Nonfinancial Statistics • April 1995 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels Adjustment credit1 Seasonal credit Extended credit Federal Reserve Bank On On On 3/10/95 3/10/95 3/10/95 Boston 2/1/95 New York.. . . 2/1/95 Philadelphia. . 2/2/95 Cleveland 2/9/95 Richmond.. .. 2/1/95 Atlanta 2/2/95 Chicago 2/1/95 St. Louis 2/1/95 Minneapolis. . 2/2/95 Kansas City . 2/1/95 Dallas 2/2/95 San Francisco. 2/1/95 Range of rates for adjustment credit in recent years Range (or F.R. Range (or F.R. Range (or F.R. l A e l v l e F l) . — R. B o an f k l A e l v l e F l) . — R. B o a f n k Effective date l A e l v l e F l . s R - . B o an f k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1977 1981—Nov. 2 13-14 13 1987—Sept. 4 5.5-6 6 6 13 13 11 6 6 1978—Jan. 9 6-6.5 6.5 Dec. 4 12 12 20 6.5 6.5 1988—Aug. 9 6-6.5 6.5 May 11 6.5-7 7 1982—July 20 11.5-12 11.5 11 6.5 6.5 12 7 7 23 11.5 11.5 July 3 7-7.25 7.25 Aug. 2 11-11.5 11 1989—Feb. 24 6.5-7 7 10 7.25 7.25 3 11 11 27 7 7 Aug. 21 7.75 7.75 16 10.5 10.5 Sept. 22 8 8 27 10-10.5 10 1990—Dec. 19 6.5 6.5 Oct. 16 8-8.5 8.5 30 10 10 20 8.5 8.5 Oct. 12 9.5-10 9.5 1991—Feb. 1 6-6.5 6 Nov. 1 8.5-9.5 9.5 13 9.5 9.5 4 6 6 3 9.5 9.5 Nov. 22 9-9.5 9 Apr. 30 5.5-6 5.5 26 9 9 May 2 5.5 5.5 1979—July 20 10 10 Dec. 14 8.5-9 9 Sept. 13 5-5.5 5 Aug. 17 10-10.5 10.5 15 8.5-9 8.5 17 5 5 20 10.5 10.5 17 8.5 8.5 Nov. 6 4.5-5 4.5 Sept. 19 10.5-11 11 7 4.5 4.5 21 11 11 1984—Apr. 9 8.5-9 9 Dec. 20 3.5-4.5 3.5 Oct. 8 11-12 12 13 9 9 24 3.5 3.5 10 12 12 Nov. 21 8.5-9 8.5 26 8.5 8.5 1992—July 2 3-3.5 3 1980—Feb. 15 12-13 13 Dec. 24 8 8 7 3 3 19 13 13 May 29 12-13 13 1985—May 20 7.5-8 7.5 1994—May 17 3-3.5 3.5 30 12 12 24 7.5 7.5 18 3.5 3.5 June 13 11-12 11 Aug. 16 3.5-4 4 16 11 11 1986—Mar. 7 7-7.5 7 18 4 4 July 28 10-11 10 10 7 7 Nov. 15 4-4.75 4.75 29 10 10 Apr. 21 6.5-7 6.5 17 4.75 4.75 Sept. 26 11 11 23. 6.5 6.5 Nov. 17 12 12 July 11 6 6 1995—Feb. 1 4.75-5.25 5.25 Dec. 5 12-13 13 Aug. 21 5.5-6 5.5 9 5.25 5.25 8 13 13 22 5.5 5.5 1981—May 5 13-14 14 In effect Mar. 10, 1995 5.25 5.25 14 14 1. Available on a short-term basis to help depository institutions meet temporary needs thirty days; however, at the discretion of the Federal Reserve Bank, this time period may for funds that cannot be met through reasonable alternative sources. The highest rate be shortened. Beyond this initial period, a flexible rate somewhat above rates charged on established for loans to depository institutions may be charged on adjustment credit loans market sources of funds is charged. The rate ordinarily is reestablished on the first of unusual size that result from a major operating problem at the borrower's facility. business day of each two-week reserve maintenance period, but it is never less than the 2. Available to help relatively small depository institutions meet regular seasonal needs discount rate applicable to adjustment credit plus 50 basis points. for funds that arise from a clear pattern of intrayearly movements in their deposits and 4. For earlier data, see the following publications of the Board of Governors: Banking loans and that cannot be met through special industry lenders. The discount rate on and Monetary Statistics, 1914-1941, and 1941-1970; and the Annual Statistical Digest, seasonal credit takes into account rates charged by market sources of funds and ordinarily 1970-1979. is reestablished on the first business day of each two-week reserve maintenance period; In 1980 and 1981, the Federal Reserve applied a surcharge to short-term adjustmenthowever, it is never less than the discount rate applicable to adjustment credit. credit borrowings by institutions with deposits of $500 million or more that had borrowed 3. May be made available to depository institutions when similar assistance is not in successive weeks or in more than four weeks in a calendar quarter. A 3 percent reasonably available from other sources, including special industry lenders. Such credit surcharge was in effect from Mar. 17, 1980, through May 7, 1980. A surcharge of 2 may be provided when exceptional circumstances (including sustained deposit drains, percent was reimposed on Nov. 17, 1980; the surcharge was subsequently raised to 3 impaired access to money market funds, or sudden deterioration in loan repayment percent on Dec. 5,1980, and to 4 percent on May 5,1981. The surcharge was reduced to 3 performance) or practices involve only a particular institution, or to meet the needs of percent effective Sept. 22, 1981, and to 2 percent effective Oct. 12, 1981. As of Oct. 1, institutions experiencing difficulties adjusting to changing market conditions over a longer 1981, the formula for applying the surcharge was changed from a calendar quarter to a period (particularly at times of deposit disintermediation). The discount rate applicable to moving thirteen-week period. The surcharge was eliminated on Nov. 17, 1981. adjustment credit ordinarily is charged on extended-credit loans outstanding less than Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Requirement TTyyppee ooff ddeeppoossiitt22 Percentage of deposits Effective date Net transaction accounts3 1 $0 million-$54.0 million 33333 1111122222/////2222200000/////9999944444 2 More than $54.0 million4 1111100000 1111122222/////2222200000/////9999944444 00000 1111122222/////2222277777/////9999900000 00000 1111122222/////2222277777/////9999900000 1. Required reserves must be held in the form of deposits with Federal Reserve no more than three may be checks (accounts subject to such limits are considered savings Banks or vault cash. Nonmember institutions may maintain reserve balances with a deposits). Federal Reserve Bank indirectly, on a pass-through basis, with certain approved The Monetary Control Act of 1980 requires that the amount of transaction accounts institutions. For previous reserve requirements, see earlier editions of the Annual against which the 3 percent reserve requirement applies be modified annually by 80 Report or the Federal Reserve Bulletin. Under provisions of the Monetary Control Act percent of the percentage change in transaction accounts held by all depository instituof 1980, depository institutions include commercial banks, mutual savings banks, tions, determined as of June 30 of each year. Effective Dec. 20, 1994, the amount was savings and loan associations, credit unions, agencies and branches of foreign banks, increased from $51.9 million to $54.0 million. and Edge Act corporations. 4. The reserve requirement was reduced from 12 percent to 10 percent on 2. The Gam-St Germain Depository Institutions Act of 1982 requires that $2 million Apr. 2, 1992, for institutions that report weekly, and on Apr. 16,1992, for institutions that of reservable liabilities of each depository institution be subject to a zero percent reserve report quarterly. requirement. The Board is to adjust the amount of reservable liabilities subject to this zero 5. For institutions that report weekly, the reserve requirement on nonpersonal time percent reserve requirement each year for the succeeding calendar year by 80 percent of deposits with an original maturity of less than 1 l/i years was reduced from 3 percent to the percentage increase in the total reservable liabilities of all depository institutions, 1 vi percent for the maintenance period that began Dec. 13, 1990, and to zero for the measured on an annual basis as of June 30. No corresponding adjustment is to be made in maintenance period that began Dec. 27, 1990. The reserve requirement on nonpersonal the event of a decrease. On Dec. 20, 1994, the exemption was raised from $4.0 million to time deposits with an original maturity of 1 Vi years or more has been zero since Oct. 6, $4.2 million. The exemption applies only to accounts that would be subject to a 3 percent 1983. reserve requirement. For institutions that report quarterly, the reserve requirement on nonpersonal time 3. Includes all deposits against which the account holder is permitted to make with- deposits with an original maturity of less than 1 l/i years was reduced from 3 percent to drawals by negotiable or transferable instruments, payment orders of withdrawal, and zero on Jan. 17, 1991. telephone and preauthorized transfers for the purpose of making payments to third persons 6. The reserve requirement on Eurocurrency liabilities was reduced from 3 percent to or others, other than money market deposit accounts (MMDAs) and similar accounts that zero in the same manner and on the same dates as was the reserve requirement on permit no more than six preauthorized, automatic, or other transfers per month, of which nonpersonal time deposits with an original maturity of less than 1 Vi years (see note 5). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Nonfinancial Statistics • April 1995 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS' Millions of dollars 1994 TTyypp aa ee nn dd oo ff mm ttrr aa aa tt nn uu ss rrii aa tt cc yy tt iioonn 11999922 11999933 11999944 June July Aug. Sept. Oct. Nov. Dec. US. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 14,714 17,717 17,484 4,143 0 1,610 0 518 6,109 444 2 Gross sales 1,628 0 0 0 0 0 0 0 0 0 3 Exchanges 308,699 332,229 380,326 39,484 29,559 36,281 29,668 29,361 36,543 29,883 4 Redemptions 1,600 0 0 0 0 0 0 0 0 0 Others within one year 5 Gross purchases 1,096 1,223 1,238 0 0 0 151 450 0 125 6 Gross sales 0 0 0 0 0 0 0 0 0 0 7 Maturity shifts 36,662 31,368 0 1,197 1,692 6,131 961 460 1,790 0 8 Exchanges -30,543 -36,582 0 -3,192 -1,626 -4,089 -2,203 0 -5,795 0 9 Redemptions 0 0 0 0 0 0 0 0 0 0 One to five years 10 Gross purchases 13,118 10,350 9,168 0 0 0 2,530 0 200 2,208 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shifts -34,478 -27,140 0 -1,197 -1,692 -5,506 -837 -460 -1,123 0 13 Exchanges 25,811 0 0 3,192 1,626 2,889 2,203 0 44,,119922 0 Five to ten years 14 Gross purchases 2,818 4,168 3,818 0 0 0 938 0 0 660 15 Gross sales 0 0 0 0 0 0 0 0 0 0 16 Maturity shifts -1,915 0 0 0 0 -549 -125 0 -278 0 17 Exchanges 3,532 0 0 0 0 750 0 0 11,,660033 0 More than ten years 18 Gross purchases 2,333 3,457 3,606 0 0 0 840 0 0 1,252 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shifts -269 0 0 0 0 -76 0 0 -389 0 21 Exchanges 1,200 0 0 0 0 450 0 0 0 0 All maturities 22 Gross purchases 34,079 36,915 35,314 4,143 0 1,610 4,459 968 6,309 4,689 23 Gross sales 1,628 0 0 0 0 0 0 0 0 0 24 Redemptions 1,600 767 2,337 0 302 0 0 979 0 0 Matched transactions 25 Gross sales 1,482,467 1,475,085 1,701,309 133,939 125,181 170,356 151,589 137,242 147,858 166,007 26 Gross purchases 1,480,140 1,475,941 1,700,836 133,075 126,677 169,018 151,029 136,556 148,425 166,648 Repurchase agreements 27 Gross purchases 378,374 475,447 309,276 10,059 28,085 44,948 4,975 17,088 35,456 29,406 28 Gross sales 386,257 470,723 311,898 4,405 35,374 41,199 9,354 15,613 32,561 26,351 29 Net change in US. Treasury securities 20,642 41,729 29,882 8,933 -6,095 4,022 -479 778 9,771 8,385 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 0 0 0 0 0 0 0 0 0 0 31 Gross sales 0 0 0 0 0 0 0 0 0 0 32 Redemptions 632 774 1,002 58 20 63 31 62 70 37 Repurchase agreements 33 Gross purchases 14,565 35,063 52,696 580 9,472 8,491 3,620 2,868 8,615 5,090 34 Gross sales 14,486 34,669 52,696 1,300 8,702 8,109 4,982 2,838 7,360 5,720 35 Net change in federal agency obligations -554 -380 -1,002 -778 750 319 -1,393 -32 1,185 -667 36 Total net change in System Open Market Account... 20,089 41,348 28,880 8,155 —5,345 4^41 —1,872 746 10,956 7,718 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 1995 1994 1995 Dec. 28 Jan. 4 Jan. 11 Jan. 18 Jan. 25 Nov. 30 Dec. 31 Jan. 31 Consolidated condition statement ASSETS 1 Gold certificate account 11,051 11,050 11,051 11,050 11,050 11,052 11,051 11,050 2 Special drawing rights certificate account 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 3 Coin 321 310 329 351 380 321 320 402 Loans 4 To depository institutions 168 1,053 47 94 538 144 223 77 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 3,637 3,637 3,610 3,610 3,546 3,674 3,637 3,546 8 Held under repurchase agreements 1,000 413 300 1,101 0 1,655 1,025 1,320 9 Total U.S. Treasury securities 370,962 374,634 367,827 370,254 361,284 365,700 374,084 364,997 10 Bought outright2 364,942 364,756 367,578 364,434 361,284 359,190 364,519 362,987 11 Bills 177,801 177,615 180,437 177,914 174,764 176,294 177,378 176,467 1? Notes 144,143 144,143 144,143 143,522 143,522 141,150 144,143 143,522 13 Bonds 42,998 42,998 42,998 42,998 42,998 41,746 42,998 42,998 14 Held under repurchase agreements 6,020 9,878 249 5,821 0 6,510 9,565 2,010 15 Total loans and securities 375,767 379,736 371,784 375,058 365,369 371,172 378,969 369,940 16 Items in process of collection 11,921 9,591 6,784 11,203 5,620 4,983 4,688 6,979 17 Bank premises 1,075 1,076 1,077 1,076 1,076 1,067 1,076 1,076 Other assets 18 Denominated in foreign currencies 21,974 21,209 22,305 22,572 22,589 21,909 22,031 22,829 19 All other4 9,853 10,368 9,591 9,665 9,802 8,373 10,333 9,833 20 Total assets 439,979 441,358 430,938 438,993 423,905 426,895 436,487 430,126 LIABILITIES 21 Federal Reserve notes 382,170 381,589 378,609 377,296 374,849 374,571 381,505 373,705 22 Total deposits 38,769 39,221 35,175 40,268 31,806 36,554 39,075 37,224 23 Depository institutions 30,648 30,197 27,430 32,927 23,619 30,674 30,789 22,768 24 U.S. Treasury—General account 7,677 8,632 7,276 6,888 7,672 5,348 7,161 13,964 25 Foreign—Official accounts 173 170 197 157 200 230 250 185 26 Other 271 222 273 296 315 302 876 308 27 Deferred credit items 6,767 8,380 5,145 8,935 5,001 4,637 3,948 6,343 28 Other liabilities and accrued dividends5 4,473 4,659 4,299 4,681 4,414 4,210 4,592 4,423 29 Total liabilities 432,179 433,849 423,228 431,180 416,071 419,973 429,120 421,696 CAPITAL ACCOUNTS 30 Capital paid in 3,685 3,685 3,694 3,693 3,697 3,668 3,683 3,696 31 Surplus 3,401 3,676 3,683 3,683 3,683 3,178 3,683 3,683 32 Other capital accounts 714 149 333 437 453 77 0 1,051 33 Total liabilities and capital accounts 439,979 441,358 430,938 438,993 423,905 426,895 436,487 430,126 MEMO 34 Marketable U.S. Treasury securities held in custody for foreign and international accounts 411,727 412,970 411,713 408,202 405,890 416,344 410,405 408,118 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to Banks) 455,472 453,906 454,314 454,275 455,381 453,444 454,642 455,470 36 LESS: Held by Federal Reserve Banks 73,302 72,316 75,705 76,980 80,532 78,873 73,137 81,765 37 Federal Reserve notes, net 382,170 381,589 378,609 377,296 374,849 374,571 381,505 373,705 Collateral held against notes, net 38 Gold certificate account 11,051 11,050 11,051 11,050 11,050 11,052 11,051 11,050 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 363,101 362,522 359,540 358,228 355,781 355,502 362,437 354,637 42 Total collateral 382,170 381,589 378,609 377,296 374,849 374,571 381,505 373,705 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 in 2. Includes securities loaned—fully guaranteed by US. Treasury securities pledged Treasury bills maturing within ninety days. with Federal Reserve Banks—and excludes securities sold and scheduled to be bought 5. Includes exchange-translation account reflecting the monthly revaluation at market back under matched sale-purchase transactions. exchange rates of foreign exchange commitments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 DomesticN onfinancial Statistics • April 1995 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holding Millions of dollars Wednesday End of month TTTyyypppeee ooofff hhhooollldddiiinnnggg aaannnddd mmmaaatttuuurrriiitttyyy 1994 1995 1994 1995 Dec. 28 Jan. 4 Jan. 11 Jan. 18 Jan. 25 Nov. 30 Dec. 31 Jan. 31 1 Total loans 168 1,053 47 94 538 224 223 77 2 Within fifteen days' 159 1,019 32 91 536 201 202 67 3 Sixteen days to ninety days 8 34 15 3 3 23 21 10 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 364,948 364,765 364,765 364,439 361,284 359,196 364,519 362,988 10 Within fifteen days1 18,210 16,694 16,694 13,063 17,673 15,444 11,685 14,385 11 Sixteen days to ninety days 81,254 82,353 82,353 86,357 79,448 83,053 87,450 84,818 12 Ninety-one days to one year 112,555 112,040 112,039 112,568 112,478 111,940 112,455 112,969 13 One year to five years 90,031 90,781 90,781 90,242 90,242 87,773 90,031 89,373 14 Five years to ten years 28,053 28,053 28,053 27,364 26,597 27,036 28,053 26,597 15 More than ten years 34,845 34,845 34,845 34,845 34,845 33,950 34,845 34,845 16 Total federal agency obligations 3,638 3,637 3,637 3,611 3,546 3,675 3,637 3,546 17 Within fifteen days' 253 27 27 181 116 334 252 116 18 Sixteen days to ninety days 573 788 788 608 628 494 573 683 19 Ninety-one days to one year 912 922 922 922 902 915 912 847 20 One year to five years 1,387 1,387 1,387 1,387 1,393 1,390 1,387 1,393 21 Five years to ten years 488 488 488 488 482 518 488 482 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 1994 1995 1991 1992 1993 1994r Dec. Dec. Dec. Dec. June July Aug. Sept. Oct. Nov. Dec.r Jan. Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS2 1 Total reserves3 45.53 54.34 60.48 59.03 59.71 59.82 59.52 59.48 59.17 59.01 59.03 59.10 2 Nonborrowed reserves4 45.34 54.22 60.39 58.82 59.37 59.36 59.05 59.00 58.79 58.76 58.82 58.97 3 Nonborrowed reserves plus extended credit5 45.34 54.22 60.39 58.82 59.37 59.36 59.05 59.00 58.79 58.76 58.82 58.97 4 Required reserves 44.55 53.19 59.41 57.86 58.60 58.71 58.51 58.42 58.37 58.00r 57.86 57.76 5 Monetary base6 317.43r 351.13r 386.60r 418.00 403.98r 406.95r 408.95r 411.09r 413.62r 416.51r 418.00 421.00 Not seasonally adjusted 6 Total reserves7 46.98 56.06 62.37 60.84 59.56 59.66 58.84 59.39 58.87 59.32 60.84 60.54 7 Nonborrowed reserves 46.78 55.93 62.29 60.63 59.22 59.20 58.37 58.90 58.49 59.07 60.63 60.40 8 Nonborrowed reserves plus extended credit5 46.78 55.93 62.29 60.63 59.22 59.20 58.37 58.90 58.49 59.07 60.63 60.40 9 Required reserves8 46.00 54.90 61.31 59.67 58.45 58.55 57.84 58.33 58.06 58.32 59.67 59.20 10 Monetary base9 321.07 354.55 390.59 422.28 404.72 408.17 408.97 411.10 412.85 416.75 422.28 421.85 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS10 11 Total reserves'1 55.53 56.54 62.86 61.34 59.92 60.09 59.34 59.95 59.49 60.01 61.34 60.52 12 Nonborrowed reserves 55.34 56.42 62.78 61.13 59.59 59.63 58.87 59.47 59.11 59.76 61.13 60.39 13 Nonborrowed reserves plus extended credit5 55.34 56.42 62.78 61.13 59.59 59.64 58.87 59.47 59.11 59.76 61.13 60.39 14 Required reserves 54.55 55.39 61.80 60.17 58.82 58.99 58.33 58.89 58.69 59.00 60.17 59.18 15 Monetary base12 333.61 360.90 397.62 427.25 410.94 414.39 414.92 416.70 418.19 421.90 427.25 426.31 16 Excess reserves13 .98 1.16 1.06 1.17 1.11 1.11 1.00 1.06 .80 1.01 1.17 1.34 17 Borrowings from the Federal Reserve .19 .12 .08 .21 .33 .46 .47 .49 .38 .25 .21 .14 1. Latest monthly and biweekly figures are available from the Board's H.3 (502) 8. To adjust required reserves for discontinuities that are due to regulatory changes in weekly statistical release. Historical data starting in 1959 and estimates of the impact on reserve requirements, a multiplicative procedure is used to estimate what required required reserves of changes in reserve requirements are available from the Money and reserves would have been in past periods had current reserve requirements been in effect. Reserves Projections Section, Division of Monetary Affairs, Board of Governors of the Break-adjusted required reserves include required reserves against transactions deposits Federal Reserve System, Washington, DC 20551. and nonpersonal time and savings deposits (but not reservable nondeposit liabilities). 2. Figures reflect adjustments for discontinuities, or "breaks," associated with regula- 9. The break-adjusted monetary base equals (1) break-adjusted total reserves (line 6), tory changes in reserve requirements. (See also table 1.10) plus (2) the (unadjusted) currency component of the money stock, plus (3) (for all 3. Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, break- quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault adjusted required reserves (line 4) plus excess reserves (line 16). Cash" and for all those weekly reporters whose vault cash exceeds their required 4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally ad- reserves) the break-adjusted difference between current vault cash and the amount applied justed, break-adjusted total reserves (line 1) less total borrowings of depository institu- to satisfy current reserve requirements. tions from the Federal Reserve (line 17). 10. Reflects actual reserve requirements, including those on nondeposit liabilities, with 5. Extended credit consists of borrowing at the discount window under no adjustments to eliminate the effects of discontinuities associated with regulatory the terms and conditions established for the extended credit program to help depository changes in reserve requirements. institutions deal with sustained liquidity pressures. Because there is not the same need to 11. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy repay such borrowing promptly as with traditional short-term adjustment credit, the reserve requirements. money market impact of extended credit is similar to that of nonborrowed reserves. 12. The monetary base, not break-adjusted and not seasonally adjusted, consists of (1) 6. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally total reserves (line 11), plus (2) required clearing balances and adjustments to compensate adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency for float at Federal Reserve Banks, plus (3) the currency component of the money stock, component of the money stock, plus (3) (for all quarterly reporters on the "Report of plus (4) (for all quarterly reporters on the "Report of Transaction Accounts, Other Transaction Accounts, Other Deposits and Vault Cash" and for all those weekly reporters Deposits and Vault Cash" and for all those weekly reporters whose vault cash exceeds whose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted their required reserves) the difference between current vault cash and the amount applied difference between current vault cash and the amount applied to satisfy current reserve to satisfy current reserve requirements. Since the introduction of contemporaneous reserve requirements. requirements in February 1984, currency and vault cash figures have been measured over 7. Break-adjusted total reserves equal break-adjusted required reserves (line 9) plus the computation periods ending on Mondays. excess reserves (line 16). 13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Financial Statistics • April 1995 1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES1 Billions of dollars, averages of daily figures 1994r 1995 em D 19 e 9 c 1 / D 19 e 9 c 2 .r D 19 e 9 c 3 / D 19 e 9 c 4 / Oct/ Nov/ Dec. Jan. Seasonally adjusted Measures2 1 Ml 897.3 1,024.4 1,128.6 1,147.8 1,148.1 1,147.5 1,147.8 1,148.9 2 M2 3,457.9 3,515.3 3,583.6 3,612.7 3,607.5 3,608.5 3,612.7 3,625.9 3 M3 4,176.0 4,182.9 4,242.5 4,300.3 4,283.9 4,289.5 4,300.3 4,325.1 4 L 4,990.9 5,061.1 5,150.3 5,281.7 5,231.3 5,243.2 5,281.7 n.a. 5 Debt 11,171.1 11,706.1 12,335.4 12,973.8 12,862.7 12,932.1 12,973.8 n.a. Ml components 6 Currency3 267.4 292.8 322.1 354.5 350.0 353.0 354.5 357.7 7 Travelers checks4 7.7 8.1 7.9 8.4 8.3 8.4 8.4 8.4 8 Demand deposits5 289.5 338.9 383.9 382.0 384.4 382.3 382.0 383.5 9 Other checkable deposits6 332.7 384.6 414.7 402.9 405.4 403.8 402.9 399.3 Nontransaction components 10 In M27 2,560.6 2,490.9 2,455.0 2,464.9 2,459.4 2,460.9 2,464.9 2,477.0 11 In M38 only 718.1 667.6 658.9 687.6 676.4 681.0 687.6 699.2 Commercial banks 12 Savings deposits, including MMDAs 665.6 754.7 785.8 752.3 765.4 759.2 752.3 744.2 13 Small time deposits9 602.5 508.1 468.6 502.4 487.7 494.0 502.4 512.5 14 Large time deposits10' 11 333.3 286.7 271.2 297.1 289.3 293.8 297.1 295.5 Thrift institutions 15 Savings deposits, including MMDAs 375.6 428.9 429.8 391.5 405.6 398.4 391.5 385.3 16 Small time deposits9 464.1 361.1 316.5 314.2 308.3 312.8 314.2 319.4 17 Large time deposits10 83.3 67.1 61.6 64.3 63.7 63.9 64.3 66.1 Money market mutual funds 18 General purpose and broker-dealer 374.2 356.9 360.1 389.7 379.7 384.2 389.7 392.6 19 Institution-only 180.0 200.2 198.1 180.8 180.8 180.5 180.8 186.3 Debt components 20 Federal debt 2,763.3 3,067.9 3,328.0 3,497.4 3,469.4 3,494.0 3,497.4 n.a. 21 Nonfederal debt 8,407.8 8,638.1 9,007.4 9,476.4 9,393.2 9,438.1 9,476.4 n.a. Not seasonally adjusted Measures2 22 Ml 916.0 1,046.0 1,153.7 1,173.5 1,147.3 1,155.3 1,173.5 1,158.5 23 M2 3,472.7 3,533.6 3,606.1 3,636.3 3,604.5 3,616.8 3,636.3 3,632.3 24 M3 4,189.4 4,201.4 4,266.3 4,326.4 4,279.0 4,303.9 4,326.4 4,334.7 25 L 5,015.5 5,090.8 5,184.9 5,319.2 5,222.5 5,265.3 5,319.2 n.a. 26 Debt 11,168.5 11,708.9 12,327.6 12,965.5 12,822.2 12,903.2 12,965.5 n.a. Ml components 27 Currency3 269.9 295.0 324.8 357.6 349.6 353.2 357.6 355.9 28 Travelers checks4 7.4 7.8 7.6 8.1 8.5 8.2 8.1 8.1 29 Demand deposits5 302.4 354.4 401.8 400.1 387.8 390.7 400.1 388.8 30 Other checkable deposits6 336.3 388.9 419.4 407.6 401.4 403.1 407.6 405.7 Nontransaction components 31 In M27 2,556.6 2,487.7 2,452.4 2,462.8 2,457.2 2,461.5 2,462.8 2,473.8 32 In M38 716.7 667.7 660.2 690.1 674.5 687.1 690.1 702.4 Commercial banks 33 Savings deposits, including MMDAs 664.0 752.9 784.3 751.1 765.5 761.4 751.1 739.5 34 Small time deposits9 601.9 507.8 468.2 502.0 488.3 493.7 502.0 513.0 35 Large time deposits10' 11 332.6 286.2 270.8 296.8 289.9 295.2 296.8 294.1 Thrift institutions 36 Savings deposits, including MMDAs 374.8 427.9 429.0 390.9 405.7 399.5 390.9 382.9 37 Small time deposits9 463.7 360.9 316.2 313.9 308.7 312.6 313.9 319.7 38 Large time deposits10 83.1 67.0 61.5 64.3 63.8 64.2 64.3 65.8 Money market mutual funds 39 General purpose and broker-dealer 372.2 355.1 358.3 387.7 374.1 380.8 387.7 393.3 40 Institution-only 180.8 201.7 200.0 183.1 178.1 182.5 183.1 192.4 Repurchase agreements and Eurodollars 41 Overnight and continuing 79.9 83.2 96.5 117.2 115.0 113.4 117.2 125.5 42 Term 132.7 127.8 144.1 157.9 155.4 158.1 157.9 162.7 Debt components 43 Federal debt 2,765.0 3,069.8 3,329.5 3,499.0 3,448.7 3,485.3 3,499.0 n.a. 44 Nonfederal debt 8,403.5 8,639.1 8,998.1 9,466.5 9,373.5 9,417.9 9,466.5 n.a. Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary and Credit Aggregates A15 NOTES TO TABLE 1.21 1. Latest monthly and weekly figures are available from the Board's H.6 (508) short-term Treasury securities, commercial paper, and bankers acceptances, each seasonweekly statistical release. Historical data starting in 1959 are available from the Money ally adjusted separately, and then adding this result to M3. and Reserves Projections Section, Division of Monetary Affairs, Board of Governors of Debt: The debt aggregate is the outstanding credit market debt of the domestic the Federal Reserve System, Washington, DC 20551. nonfinancial sectors—the federal sector (U.S. government, not including government- 2. Composition of the money stock measures and debt is as follows: sponsored enterprises or federally related mortgage pools) and the nonfederal sectors Ml: (1) currency outside the US. Treasury, Federal Reserve Banks, and the vaults of (state and local governments, households and nonprofit organizations, nonfinancial corpodepository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all rate and nonfarm noncorporate businesses, and farms). Nonfederal debt consists of commercial banks other than those owed to depository institutions, the U.S. government, mortgages, tax-exempt and corporate bonds, consumer credit, bank loans, commercial and foreign banks and official institutions, less cash items in the process of collection and paper, and other loans. The data, which are derived from the Federal Reserve Board's flow Federal Reserve float, and (4), other checkable deposits (OCDs), consisting of negotiable of funds accounts, are break-adjusted (that is, discontinuities in the data have been order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository smoothed into the series) and month-averaged (that is, the data have been derived by institutions, credit union share draft accounts, and demand deposits at thrift institutions. averaging adjacent month-end levels). Seasonally adjusted Ml is computed by summing currency, travelers checks, demand 3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of deposideposits, and OCDs, each seasonally adjusted separately. tory institutions. M2: Ml plus (1) overnight (and continuing contract) repurchase agreements (RPs) 4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issued by all depository institutions and overnight Eurodollars issued to U.S. residents by issuers. Travelers checks issued by depository institutions are included in demand foreign branches of U.S. banks worldwide, (2) savings (including MMDAs) and small deposits. time deposits (time deposits—including retail RPs—in amounts of less than $100,000), 5. Demand deposits at commercial banks and foreign-related institutions other than and (3) balances in both taxable and tax-exempt general-purpose and broker-dealer those owed to depository institutions, the U.S. government, and foreign banks and official money market funds. Excludes individual retirement accounts (IRAs) and Keogh balances institutions, less cash items in the process of collection and Federal Reserve float. at depository institutions and money market funds. Also excludes all balances held by 6. Consists of NOW and ATS account balances at all depository institutions, credit US. commercial banks, money market funds (general purpose and broker-dealer), foreign union share draft account balances, and demand deposits at thrift institutions. governments and commercial banks, and the U.S. government. Seasonally adjusted M2 is 7. Sum of (1) overnight RPs and overnight Eurodollars, (2) money market fund computed by adjusting its non-Mi component as a whole and then adding this result to balances (general purpose and broker-dealer), (3) savings deposits (including MMDAs), seasonally adjusted Ml. and (4) small time deposits. M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of $100,000 or 8. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S. residents, more) issued by all depository institutions, (2) term Eurodollars held by U.S. residents at and (4) money market fund balances (institution-only), less (5) a consolidation adjustment foreign branches of U.S. banks worldwide and at all banking offices in the United that represents the estimated amount of overnight RPs and Eurodollars held by institution- Kingdom and Canada, and (3) balances in both taxable and tax-exempt, institution-only only money market funds. money market funds. Excludes amounts held by depository institutions, the U.S. govern- 9. Small time deposits—including retail RPs—are those issued in amounts of less ment, money market funds, and foreign banks and official institutions. Also excluded is than $100,000. All IRAs and Keogh accounts at commercial banks and thrift institutions the estimated amount of overnight RPs and Eurodollars held by institution-only money are subtracted from small time deposits. market funds. Seasonally adjusted M3 is computed by adjusting its non-M2 component as 10. Large time deposits are those issued in amounts of $100,000 or more, excluding a whole and then adding this result to seasonally adjusted M2. those booked at international banking facilities. L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasury 11. Large time deposits at commercial banks less those held by money market funds, securities, commercial paper, and bankers acceptances, net of money market fund hold- depository institutions, the US. government, and foreign banks and official institutions. ings of these assets. Seasonally adjusted L is computed by summing U.S. savings bonds, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Nonfinancial Statistics • April 1995 1.22 DEPOSIT INTEREST RATES AND AMOUNTS OUTSTANDING Commercial and BIF-insured saving banks1 1994 1995 I em 1992 1993 Dec. Dec. May June July Aug. Sept. Oct. Nov. Dec. Jan. Interest rates (annual effective yields)2 INSURED COMMERCIAL BANKS 1 Negotiable order of withdrawal accounts 2.33 1.86 1.83 1.82 1.83 1.85 1.87 1.88 1.92 1.96 1.98 2 Savings deposits3 2.88 2.46 2.50 2.54 2.57 2.63 2.67 2.72 2.81 2.91 2.98 Interest-bearing time deposits with balances of less than $100,000, by maturity 3 7 to 91 days 2.90 2.65 2.99 3.08 3.17 3.29 3.36 3.47 3.68 3.81 3.96 4 92 to 182 days 3.16 2.91 3.28 3.36 3.44 3.61 3.75 3.93 4.22 4.44 4.67 5 183 days to 1 year 3.37 3.13 3.64 3.76 3.88 4.11 4.27 4.49 4.85 5.12 5.39 6 More than 1 year to 2'/i years 3.88 3.55 4.12 4.26 4.39 4.61 4.80 5.08 5.42 5.74 6.00 7 More than 2 Vi years 4.77 4.29 4.89 5.02 5.14 5.33 5.47 5.76 6.09 6.30 6.46 BIF-INSURED SAVINGS BANKS4 8 Negotiable order of withdrawal accounts 2.45 1.87 1.86 1.88 1.89 1.89 1.91 1.88 1.91 1.95 1.99 9 Savings deposits3 3.20 2.63 2.67 2.69 2.67 2.74 2.78 2.76 2.83 2.89 2.92 Interest-bearing time deposits with balances of less than $100,000, by maturity 10 7 to 91 days 3.13 2.70 2.77 2.84 2.98 3.03 3.11 3.31 3.49 3.78 4.07 11 92 to 182 days 3.44 3.02 3.21 3.41 3.53 3.69 3.87 4.09 4.41 4.88 5.19 12 183 days to 1 year 3.61 3.31 3.67 3.92 4.02 4.24 4.47 4.78 5.15 5.49 5.76 13 More than 1 year to 2 Vi years 4.02 3.66 4.12 4.38 4.56 4.83 5.04 5.36 5.68 6.06 6.34 14 More than 2V2 years 5.00 4.62 5.08 5.24 5.35 5.47 5.64 5.78 6.16 6.40 6.72 Amounts outstanding (millions of dollars) INSURED COMMERCIAL BANKS 15 Negotiable order of withdrawal accounts 286,541 305,223 292,797 290,220 290,631 295,320 286,787 294,069 294,276 303,707 291,795 16 Savings deposits3 738,253 766,413 773,170 767,539 765,751 764,035 755,249 751,300 746,618 734,493 723,554 17 Personal 578,757 597,838 612,648 608,132 605,881 600,892 595,175 591,304 584,645 578,533 569,287 18 Nonpersonal 159,496 168,575 160,522 159,407 159,870 163,143 160,074 159,996 161,973 155,961 154,266 Interest-bearing time deposits with balances of less than $100,000, by maturity 19 7 to 91 days 38,474 29,455 29,950 28,763 28,659 27,959 28,312 31,387 31,312 32,686 31,899 20 92 to 182 days 127,831 110,069 104,400 102,439 100,424 98,085 96,398 95,328 94,573 95,777 96,975 21 183 days to 1 year 163,098 146,565 148,102 151,165 152,216 155,964 157,253 158,564 159,697 161,804 163,845 22 More than 1 year to 2V5 years 152,977 141,223 140,764 144,686 146,875 150,807 152,514 155,251 158,417 162,462 168,740 23 More than 2 Vl years 169,708 181,528 180,381 181,843 182,944 186,490 190,209 188,456 189,243 190,959 190,852 24 IRA and Keogh plan deposits 147,350 143,985 142,047 142,513 142,649 142,617 142,700 142,742 143,075 143,321 143,974 BIF-INSURED SAVINGS BANKS4 25 Negotiable order of withdrawal accounts 10,871 11,151 11,052 10,792 10,925 11,016 10,769 11,136 10,998 11,317 11,137 26 Savings deposits3 81,786 80,115 78,817 77,289 77,337 75,108 74,659 73,416 72,597 70,643 71,668 27 Personal 78,695 77,035 75,474 74,121 74,064 72,040 71,525 70,215 69,387 67,674 68,793 28 Nonpersonal 3,091 3,079 3,344 3,168 3,273 3,068 3,134 3,201 3,210 2,969 2,876 Interest-bearing time deposits with balances of less than $100,000, by maturity 29 7 to 91 days 3,867 2,793 2,702 2,614 2,531 2,523 2,402 2,258 2,205 2,166 2,044 30 92 to 182 days 17,345 12,946 12,822 12,515 12,511 12,292 12,276 11,896 11,895 11,793 12,117 31 183 days to 1 year 21,780 17,426 17,444 17,310 17,591 17,593 17,928 18,213 18,483 18,753 19,370 32 More than 1 year to 2 l/i years 18,442 16,546 16,477 16,493 16,901 16,824 17,287 17,521 17,932 17,802 20,505 33 More than 2 Vl years 18,845 20,464 21,546 21,079 21,573 21,531 21,923 21,625 21,652 21,598 21,958 34 IRA and Keogh plan accounts 21,713 19,356 19,772 19,511 19,757 19,445 19,532 19,550 19,521 19,312 19,821 1. BIF, Bank Insurance Fund. Data in this table also appear in the Board's H.6 (508) 2. As of October 31, 1994, interest rate data for NOW accounts and savings deposits Special Supplementary Table monthly statistical release. For ordering address, see inside reflect a series break caused by a change in the survey used to collect these data. front cover. Estimates are based on data collected by the Federal Reserve System from a 3. Includes personal and nonpersonal money market deposits. stratified random sample of about 425 commercial banks and 75 savings banks on the last 4. Includes both mutual and federal savings banks. day of each month. Data are not seasonally adjusted and include IRA and Keogh deposits and foreign currency-denominated deposits. Data exclude retail repurchase agreements and deposits held in U.S. branches and agencies of foreign banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary and Credit Aggregates A17 1.23 BANK DEBITS AND DEPOSIT TURNOVER1 Debits are in billions of dollars; turnover is ratio of debits to deposits; monthly data are at annual rates 1994 BBaannkk ggrroouupp,, oorr ttyyppee ooff ddeeppoossiitt June July Aug. Sept. Oct. Nov. DEBITS Seasonally adjusted Demand deposits3 1 All insured banks 277,741.7 313,179.6 334,375.0 371,498.9 345,258.7 384,044.9 370,520.1 346,126.1 374,698.6 2 Major New York City banks 137,337.2 165,484.6 171,310.7 195,079.6 182,408.2 196,505.6 186,294.9 176,701.9 190,921.2 3 Other banks 140,404.5 147,695.1 163,064.2 176,419.3 162,850.5 187,539.3 184,225.2 169,424.2 183,777.4 4 Other checkable deposits4 3,643.1 3,780.7 3,468.9 3,861.3 3,508.5 3,873.5 3,925.7 3,826.4 4,105.9 5 Savings deposits (including MMDAs)5 3,206.4 3,310.6 3,511.0 3,784.9 3,405.8 3,852.0 3,802.7 3,545.8 3,875.1 DEPOSIT TURNOVER Demand deposits3 6 All insured banks 803.7 825.8 785.4 828.6 756.3 852.3 820.1 766.8 837.5 7 Major New York City banks 4,267.1 4,794.5 4,200.5 4,480.9 4,074.6 4,635.6 4,503.6 4,300.5 4,635.3 8 Other banks 448.1 428.7 423.7 435.8 395.5 459.4 448.9 412.9 452.4 9 Other checkable deposits4 16.2 14.4 11.8 12.8 11.5 12.8 13.0 12.8 13.8 10 Savings deposits (including MMDAs)5 5.2 4.7 4.6 4.9 4.4 5.0 5.0 4.7 5.1 DEBITS Not seasonally adjusted Demand deposits3 11 All insured banks 277,752.4 313,344.9 334,354.6 387,201.1 347,403.9 394,394.4 365,063.0 352,652.7 359,334.0 12 Major New York City banks 137,307.2 165,595.0 171,283.5 204,251.8 182,452.9 202,845.6 186,161.8 181,406.6 184,656.3 13 Other banks 140,445.2 147,749.9 163,071.0 182,949.3 164,951.0 191,548.8 178,901.2 171,246.1 174,677.6 14 Other checkable deposits4 3,645.2 3,783.6 3,467.5 3,918.9 3,515.0 3,861.2 3,960.9 3,797.0 3,845.6 15 Savings deposits (including MMDAs)5 3,209.2 3,310.0 3,509.5 3,906.8 3,521.8 3,873.3 3,716.4 3,472.3 3,640.6 DEPOSIT TURNOVER Demand deposits3 16 All insured banks 803.6 826.1 785.4 868.5 761.9 889.5 811.9 774.8 786.1 17 Major New York City banks 4,269.0 4,803.5 4,197.9 4,878.2 4,150.3 4,960.2 4,539.5 4,435.8 4,391.6 18 Other banks 448.1 428.8 423.8 452.9 400.4 475.9 437.8 413.4 420.9 19 Other checkable deposits4 16.2 14.4 11.8 13.1 11.8 13.0 13.3 12.9 13.0 20 Savings deposits (including MMDAs)5 5.2 4.7 4.6 5.0 4.6 5.0 4.9 4.6 4.8 1. Historical tables containing revised data for earlier periods can be obtained from the 4. As of January 1994, other checkable deposits (OCDs), previously defined as Publications Section, Division of Support Services, Board of Governors of the Federal automatic transfer to demand deposits (ATSs) and negotiable order of withdrawal (NOW) Reserve System, Washington, DC 20551. accounts, were expanded to include telephone and preauthorized transfer accounts. This Data in this table also appear in the Board's G.6 (406) monthly statistical release. For change redefined OCDs for debits data to be consistent with OCDs for deposits data. ordering address, see inside front cover. 5. Money market deposit accounts. 2. Annual averages of monthly figures. 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 • April 1995 1.26 ASSETS AND LIABILITIES OF COMMERCIAL BANKS' Billions of dollars Monthly averages Wednesday figures Account 1994r 1995 1995 Jan. July Aug. Sept. Oct. Nov. Dec. Jan. Jan. 4 Jan. 11 Jan. 18 Jan. 25 ALL COMMERCIAL Seasonally adjusted BANKING INSTITUTIONS Assets 1 Bank credit 3,146.6 3,256.5 3,269.2 3,281.4 3,290.6 3300.5 3319.7 3351.1 3334.7 3345.9 3348.1 33628 2 Securities in bank credit 942.2 975.0 969.4 967.3 959.0 952.0 948.1 946.4 944.2 947.7 949.1 949.9 3 U.S. government securities 734.8 750.8 745.2 740.1 730.5 722.9 718.8 720.2 720.6 723.1 721.0 719.6 4 Other securities 207.4 224.2 224.2 227.2 228.5 229.1 229.3 226.2 223.6 224.6 228.1 230.3 5 Loans and leases in bank credit2 ... 2204.4 2315 2,299.8 2314.1 2331.6 2348.5 2371.6 2404.7 2390.4 2398.2 2399.0 2,4128 6 Commercial and industrial 591.2 618.7 623.4 627.9 634.2 640.4 645.6 658.5 648.6 653.7 657.6 661.9 7 Real estate 943.1 965.7 973.2 980.7 985.7 991.1 998.8 1,013.3 1,004.8 1,010.8 1.013.3 1,016.4 8 Revolving home equity 73.2 74.1 74.4 74.9 75.3 75.9 76.3 76.6 76.3 76.5 76.6 76.7 9 Other 869.9 891.6 898.8 905.8 910.5 915.2 9225 936.6 928.5 934.3 936.6 939.6 10 Consumer 394.8 423.5 429.7 435.0 441.5 444.4 449.8 454.7 452.9 454.6 454.7 454.5 11 Security3 81.3 77.2 75.0 69.7 71.2 71.8 73.5 71.6 75.4 73.9 67.4 729 12 Other 194.0 196.3 198.4 200.9 198.9 200.8 203.8 206.6 208.7 205.2 206.0 207.2 13 Interbank loans4 153.2 159.5 160.3 161.5 165.5 1717 175.8 179.5 175.6 178.1 178.4 181.5 14 Cash assets5 219.2 211.0 205.7 203.2 209.2 205.7 208.2 218.3 228.6 215.0 219.7 202.8 15 Other assets6 201.9 224.8 223.4 220.0 219.4 221.9 230.5 2424 237.1 239.8 240.6 243.4 16 Total assets7 3,663.1 3,794.7 3301.6 3*809.1 3,827.8 33443 3377.6 3,933.9 3,918.7 3,921.4 3,929.4 3,933.1 Liabilities 17 Deposits 2,534.5 2315.5 2,518.5 2319.1 2,530.0 2,526.4 2531.0 2545.0 2546.5 2,538.6 2,538.0 2543.8 18 Transaction 814.6 811.5 809.6 803.6 804.6 196.1 795.8 806.6 812.8 803.7 8021 798.2 19 Nontransaction 1,719.9 1,704.0 1,709.0 1,715.4 1,725.4 1,729.7 1,735.3 1,738.5 1,733.7 1,735.0 1,736.0 1,745.6 20 Large time 348.6 339.0 3425 347.7 356.7 361.0 362.5 365.7 359.3 363.5 366.6 369.6 21 Other 1,371.3 1,365.0 1,366.5 1367.7 1368.7 1368.7 1372.7 1372.8 1,374.5 1,371.5 1369.4 1376.0 22 Borrowings 542.6 577.2 577.0 579.7 583.8 591.2 607.0 639.5 615.6 633.3 637.8 646.6 23 From banks in the U.S 155.1 160.0 158.5 160.5 165.7 170.0 177.6 181.6 178.1 179.5 179.4 184.4 24 From nonbanks in the U.S 387.5 417.3 418.5 419.2 418.1 421.2 429.4 457.9 437.5 453.7 458.3 462.2 25 Net due to related foreign offices 122.2 196.1 205.3 209.6 213.2 212.2 225.1 244.5 239.9 237.8 249.7 245.6 26 Other liabilities8 161.6 179.7 175.9 175.3 175.8 175.7 183.1 179.9 179.2 177.4 177.9 181.5 27 Total liabilities 3,360.8 3,4683 3,476.7 3,483.7 3,5023 3,505.5 3,546.1 3,609.0 3,581.3 3387.1 3,603.4 3,617.5 28 Residual (assets less liabilities)9 302.3 326.2 324.9 325.5 324.9 338.8 331.5 325.0 337.4 334.3 326.1 315.6 Not seasonally adjusted Assets 29 Bank credit 3,143.1 3,244.5 3,262.7 3,280.3 3,290.9 3308.8 3,336.0 3347.6 3,347.7 3,342.9 3346.4 3345.1 30 Securities in bank credit 936.6 970.2 967.9 965.5 957.9 953.4 943.3 940.4 939.6 942.4 942.5 940.3 31 U.S. government securities 728.9 746.6 746.4 742.5 729.9 723.9 717.6 714.1 713.2 715.6 716.0 7127 32 Other securities 207.7 223.6 221.5 223.0 228.0 229.5 225.7 226.3 226.3 226.9 226.5 227.7 33 Loans and leases in bank credit2 ... 2206.5 2274.2 2,294.8 2314.8 2333.0 2355.5 2392.7 2,407.1 2408.2 2400.5 2,404.0 2404.7 34 Commercial and industrial 588.2 618.0 620.5 624.3 6320 640.4 646.4 655.2 649.9 650.0 653.9 656.5 35 Real estate 941.6 965.2 972.7 982.0 988.4 995.9 1,005.2 1,011.6 1,006.8 1,010.5 1,011.9 1,012.5 36 Revolving home equity 73.2 74.1 74.5 75.2 75.9 76.3 76.3 76.6 76.3 76.5 76.6 76.6 37 Other 868.4 891.2 898.2 906.8 912.5 919.6 928.9 935.0 930.5 934.0 935.3 935.9 38 Consumer 398.9 421.4 429.3 436.0 441.5 444.7 454.8 459.4 460.6 460.3 459.3 458.2 39 Security3 83.8 72.7 726 68.4 71.0 73.4 78.5 74.1 75.9 74.7 72.0 73.5 40 Other 194.0 196.9 199.7 204.0 200.1 201.2 207.8 206.8 214.9 205.1 206.9 204.0 41 Interbank loans4 158.4 156.4 156.5 158.6 163.7 174.3 186.6 186.4 190.7 184.6 187.1 181.5 42 Cash assets5 224.6 208.0 198.2 204.6 209.7 212.2 222.0 223.7 256.8 210.0 243.6 196.7 43 Other assets6 201.8 224.3 225.0 220.5 221.2 224.7 236.5 242.3 242.5 239.6 238.4 240.4 44 Total assets7 3,670.5 3,7763 3,7854 3306.9 33283 3,863.2 3,924.1 3,943.0 3,980.9 3,9203 3,958.7 3,906.7 Liabilities 45 Deposits 2538.6 2,506.7 2504.3 2515.9 2,525.6 2541.4 2,563.7 2549.0 2611.7 2346.1 25624 2304.0 46 Transaction 825.1 802.3 793.2 800.9 801.9 810.8 831.4 816.9 883.6 814.4 831.3 769.3 47 Nontransaction 1,713.4 1,704.4 1,711.1 1,715.0 1,723.7 1,730.6 1,7323 1,732.1 1,728.1 1,731.7 1,731.1 1,734.7 48 Large time 345.6 338.6 343.2 347.7 354.6 360.1 361.1 362.5 354.6 359.5 363.3 367.3 49 Other 1,367.8 1,365.8 1,367.9 1,367.4 1,369.1 1,370.5 1,371.2 1,369.6 1,373.5 1,372.2 1,367.7 1,367.4 50 Borrowings 542.5 580.3 584.0 589.5 591.5 604.2 619.6 6329 616.1 621.0 635.5 631.3 51 From banks in the U.S 158.9 156.7 156.5 158.6 163.7 174.3 186.6 186.4 190.7 184.6 187.1 181.5 52 From nonbanks in the U.S 383.6 423.5 427.5 430.9 427.9 429.9 433.0 446.5 425.4 436.3 448.4 449.8 53 Net due to related foreign offices 127.7 193.0 200.7 204.1 213.0 2120 229.9 251.2 245.6 244.7 254.4 259.7 54 Other liabilities8 164.1 177.4 175.2 175.1 177.6 180.7 186.2 182.8 1823 181.6 179.6 183.9 55 Total liabilities 33729 3/J574 3464J 3,484.6 3,507.8 3,538.4 3^99.5 3,6153 3,655.7 33934 3,631.8 3378.9 56 Residual (assets less liabilities)9 297.6 319.1 321.2 322.3 321.0 324.8 324.5 327.1 325.2 326.8 326.9 327.8 Footnotes appear on following 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 1994r 1995 1995 Jan. July Aug. Sept. Oct. Nov. Dec. Jan. Jan. 4 Jan. 11 Jan. 18 Jan. 25 DOMESTICALLY CHARTERED Seasonally adjusted COMMERCIAL BANKS Assets 57 Bank credit 2,813.1 2,905.9 2,918.1 2,927.9 2,939.1 2,947.8 2,962.1 2,991.1 2,978.7 2,987.5 2,991.2 2,998.1 58 Securities in bank credit 864.5 892.3 885.9 881.6 875.2 870.9 868.6 863.9 864.2 867.2 866.2 865.4 59 U.S. government securities 680.3 691.4 685.8 680.1 673.3 668.9 667.1 666.5 667.6 670.2 667.7 664.9 60 Other securities 184.2 200.9 200.1 201.4 201.9 202.0 201.5 197.4 196.6 197.0 198.6 200.5 61 Loans and leases in bank credit2 1,948.6 2,013.7 2,032.2 2,046.4 2,063.8 2,076.8 2,093.5 2,127.2 2,114.5 2,120.3 2,125.0 2,132.8 6? Commercial and industrial 441.1 460.8 464.9 468.8 472.9 475.7 479.0 490.2 484.2 487.0 489.7 492.3 63 897.8 922.8 930.5 938.4 944.2 949.8 957.6 972.7 964.3 970.0 972.6 975.7 64 Revolving home equity 73.2 74.0 74.4 74.9 75.3 75.9 76.3 76.6 76.3 76.5 76.6 76.7 65 Other 824.6 848.7 856.1 863.5 868.9 873.9 881.3 896.1 888.0 893.5 896.0 899.0 66 394.8 423.5 429.7 435.0 441.5 444.4 449.8 454.7 452.9 454.6 454.7 454.5 67 Security3 54.7 47.6 47.0 43.6 45.6 46.2 45.7 45.7 47.7 45.9 43.8 46.7 68 Other 160.2 159.0 160.0 160.6 159.7 160.7 161.4 163.9 165.4 162.8 164.2 163.6 69 133.9 133.5 135.9 137.9 140.9 149.5 153.0 156.2 154.7 154.8 156.1 157.5 70 Cash assets5 193.7 185.6 181.3 180.8 185.2 181.2 181.2 191.4 200.3 188.2 193.0 176.4 71 Other assets6 156.1 169.2 169.1 166.1 164.8 166.0 167.2 172.7 171.5 171.7 170.3 172.1 72 Total assets7 3,239.0 3^37.2 3,347.5 3355.9 3373.2 3388.0 3,406.9 3,454.2 3,448.0 3,444.8 3,4533 3,446.9 Liabilities 73 Deposits 2,382.0 2,372.5 2,373.7 2,369.1 2,374.3 2,370.7 2,372.0 2,390.1 2,390.7 2,383.2 2,384.9 2,386.6 74 Transaction 803.8 801.4 799.5 793.6 794.8 787.1 786.0 797.1 802.6 794.1 793.0 788.9 75 Nontransaction 1,578.2 1,571.1 1,574.2 1,575.5 1,579.5 1,583.7 1,586.0 1,593.0 1,588.1 1,589.1 1,591.9 1,597.7 76 Large time 210.8 209.9 211.3 210.6 215.8 220.1 219.8 226.1 220.5 223.5 226.0 229.2 77 Other 1,367.4 1,361.1 1,362.9 1,364.9 1,363.7 1,363.6 1,366.1 1,367.0 1,367.7 1,365.6 1,365.9 1,368.5 78 Borrowings 433.2 469.0 470.9 475.5 483.1 488.3 500.9 534.1 511.2 526.2 534.1 541.6 79 From banks in the U.S 133.4 141.0 140.7 143.4 149.3 153.7 161.4 163.3 161.2 158.2 160.5 168.2 80 From nonbanks in the U.S 299.8 328.1 330.2 332.2 333.8 334.5 339.5 370.8 350.0 368.0 373.6 373.4 81 Net due to related foreign offices .... 4.4 43.9 52.2 58.8 64.4 65.6 77.2 91.3 94.1 89.2 96.9 92.3 82 Other liabilities8 120.3 133.0 130.2 130.8 129.4 128.4 126.3 119.5 121.0 117.6 117.2 120.1 83 Total liabilities 2,939.9 3,0185 3,026.9 3,0343 3,051.2 3,053.0 3,076.4 3,135.0 3,117.1 3,116.2 3,133.1 3,140.6 84 Residual (assets less liabilities)9 299.1 318.7 320.6 321.6 322.0 335.0 330.4 319.3 330.9 328.6 320.2 306.3 Not seasonally adjusted Assets 85 2,804.1 2,897.1 2,912.5 2,928.6 2,941.1 2,955.7 2,969.5 2,982.1 2,983.3 2,979.8 2,983.0 22,,997777..77 86 Securities in bank credit 857.2 888.5 884.7 880.4 873.6 871.4 862.2 856.5 857.7 860.4 858.2 854.8 87 U.S. government securities 672.9 688.2 687.3 683.0 672.5 668.7 663.9 659.0 659.1 661.8 661.1 656.5 88 Other securities 184.3 200.3 197.4 197.4 201.2 202.8 198.2 197.5 198.6 198.5 197.1 198.3 89 Loans and leases in bank credit2 1,947.0 2,008.6 2,027.8 2,048.2 2,067.5 2,084.3 2,107.3 2,125.7 2,125.6 2,119.4 2,124.8 2,122.8 90 Commercial and industrial 437.9 459.7 461.6 465.7 471.8 475.9 478.7 486.7 483.7 482.4 485.9 487.4 91 Real estate 896.4 922.4 929.9 939.5 946.8 954.4 964.1 971.1 966.4 970.0 971.4 9720 9? Revolving home equity 73.1 74.0 74.5 75.2 75.9 76.3 76.3 76.6 76.3 76.5 76.6 76.6 93 Other 823.2 848.4 855.4 864.3 870.9 878.1 887.7 894.6 890.1 893.5 894.8 895.4 94 398.9 421.4 429.3 436.0 441.5 444.7 454.8 459.4 460.6 460.3 459.3 458.2 95 54.1 45.8 46.1 43.7 46.1 47.4 46.2 45.2 45.6 44.7 44.0 45.0 96 Other 159.6 159.3 160.9 163.3 161.3 161.9 163.6 163.3 169.4 162.0 164.2 160.2 97 Interbank loans4 138.0 130.1 133.1 134.5 138.2 151.3 161.3 161.7 166.1 161.2 163.7 154.9 98 199.5 182.4 173.2 181.0 184.9 187.8 194.8 197.2 228.8 183.7 217.1 171.0 99 Other assets6 155.7 169.5 169.9 167.5 167.0 167.6 169.4 172.2 174.6 170.2 169.0 169.3 100 Total assets7 3,239.8 33225 3331.8 3354.6 3374.6 3,405.7 3,438.2 3,4563 3,496.0 3,438.0 3,476.0 3,415.9 Liabilities 101 Deposits 2,386.6 2,363.7 2,359.9 2,366.5 2,373.6 2,387.4 2,404.8 2,394.4 2,457.8 2,393.0 2,409.3 2,345.8 10? Transaction 814.2 792.2 783.3 790.1 791.8 801.2 821.4 807.2 872.9 804.9 821.9 760.1 103 Nontransaction 1,572.4 1,571.5 1,576.6 1,576.4 1,581.7 1,586.2 1,583.4 1,587.2 1,584.9 1,588.1 1,587.4 1,585.7 104 Large time 208.9 210.0 212.8 211.5 216.6 220.3 218.2 223.9 217.3 221.7 224.1 226.9 105 Other 1,363.5 1,361.5 1,363.8 1,364.9 1,365.1 1,365.9 1,365.2 1,363.3 1,367.6 1,366.4 1,363.3 1,358.7 106 Borrowings 434.3 469.7 476.0 484.7 490.8 501.6 512.1 528.2 510.3 515.6 531.9 528.9 107 From banks in the U.S 136.6 137.4 138.8 141.0 147.9 157.4 168.9 167.4 172.2 162.2 168.1 165.7 108 From nonbanks in the U.S 297.6 332.3 337.2 343.7 342.8 344.2 343.2 360.9 338.2 353.3 363.8 363.2 109 Net due to related foreign offices .... 3.0 43.6 51.0 55.4 62.3 64.1 74.2 90.2 85.6 86.9 94.2 96.9 110 Other liabilities8 122.1 131.9 129.1 130.6 131.9 132.6 127.5 121.2 1220 120.6 118.6 121.5 111 Total liabilities 2^46.0 3,00&8 3,015.9 3,037.2 3,0585 3,085.8 3,118.6 3,134.1 3,175.7 3,116.1 3,154.0 3,093.0 112 Residual (assets less liabilities)9 293.8 313.7 315.9 317.4 316.1 319.9 319.6 322.2 320.2 321.9 322.0 322.9 Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Nonfinancial Statistics • April 1995 NOTES TO TABLE 1.26 1. Covers the following types of institutions in the fifty states and the District of 4. Consists of federal funds sold to, reverse repurchase agreements with, and loans to Columbia: domestically chartered commercial banks that submit a weekly report of commercial banks in the United States. condition (large domestic); other domestically chartered commercial banks (small domes- 5. Includes vault cash, cash items in process of collection, demand balances due from tic); branches and agencies of foreign banks; New York State investment companies, and depository institutions in the United States, balances due from Federal Reserve Banks, Edge Act and agreement corporations (foreign-related institutions). Excludes interna- and other cash assets. tional banking facilities. Data are Wednesday values, or pro rata averages of Wednesday 6. Excludes the due-from position with related foreign offices, which is included in values. Large domestic banks constitute a universe; data for small domestic banks and lines 25, 53, 81, and 109. foreign-related institutions are estimates based on weekly samples and on quarter-end 7. Excludes unearned income, reserves for losses on loans and leases, and reserves for condition reports. Data are adjusted for breaks caused by reclassifications of assets and transfer risk. Loans are reported gross of these items. liabilities. 8. Excludes the due-to position with related foreign offices, which is included in lines 2. Excludes federal funds sold to, reverse repurchase agreements with, and loans to 25, 53, 81, and 109. commercial banks in the United States. 9. This balancing item is not intended as a measure of equity capital for use in capital 3. Consists of reserve repurchase agreements with broker-dealers and loans to pur- adequacy analysis. chase 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 1994r 1995 AAccccoouunntt Nov. 30 Dec. 7 Dec. 14 Dec. 21 Dec. 28 Jan. 4 Jan. 11 Jan. 18 Jan. 25 ASSETS 1 Cash and balances due from depository institutions 119,632 109,554 115,474 117,958 132,064 142,740 113,041 138,980 105,982 ?. US. Treasury and government securities 302,730 303,960 303,538 299,058 293,581 299,779 302,120 302,092 298,435 Trading account 24,125 24,765 23,768 21,152 17,116 18,990 21,645 21,955 20,114 4 Investment account 278,605 279,195 279,770 277,906 276,465 280,789 280,475 280,137 278,321 5 Mortgage-backed securities' 94,615 94,807 95,691 95,953 95,238 96,323 96,442 95,960 95,246 All others, by maturity 6 One year or less 45,063 45,730 44,878 43,420 43,583 44,761 45,728 45,201 4455,,227766 7 One year through five years 73,844 73,574 74,478 74,432 73,645 75,510 74,799 75,177 74,806 8 More than five years 65,083 65,083 64,724 64,101 63,999 64,196 63,505 63,799 62,993 9 Other securities 114,472 112,137 111,911 110,931 112,166 112,436 112,015 110,972 112,514 10 Trading account 1,849 1,660 1,758 2,053 2,135 2,002 2,035 1,941 2,128 11 Investment account 62,670 62,360 62,341 62,126 62,084 62,039 62,327 62,290 62,257 12 State and local government, by maturity 21,697 21,447 21,426 21,413 21,441 21,306 21,297 21,368 21,390 H One year or less 5,469 5,463 5,457 5,482 5,472 5,475 5,573 5,615 5,624 14 More than one year 16,227 15,984 15,969 15,931 15,969 15,831 15,724 15,753 15,766 15 Other bonds, corporate stocks, and securities 40,973 40,913 40,915 40,713 40,643 40,732 41,030 40,922 40,867 16 Other trading account assets 49,953 48,117 47,812 46,752 47,947 48,396 47,654 46,742 48,130 17 Federal funds sold2 107,882 105,518 105,276 111,556 107,395 113,284 107,548 112,092 106,989 18 To commercial banks in the United States 77,877 74,436 74,867 80,411 79,541 81,434 77,138 82,477 75,640 19 To nonbank brokers and dealers in securities 24,406 25,029 24,761 26,152 21,494 24,928 24,206 23,286 24,539 ?0 To others3 5,599 6,053 5,647 4,994 6,361 6,922 6,205 6,329 6,810 ?1 Other loans and leases, gross 1,142,810 1,137,188 1,142,977 1,154,995 1,156,160 1,167,223 1,162,966 1,168,039 1,167,067 ?? Commercial and industrial 311,484 309,068 309,761 314,764 314,284 316,514 315,785 318,496 319,632 23 Bankers acceptances and commercial paper 3,420 3,252 2,976 3,019 2,680 2,605 2,536 2,523 2,434 ?4 All other 308,064 305,816 306,785 311,745 311,604 313,909 313,249 315,973 317,198 ?5 U.S. addressees 305,790 303,513 304,603 309,665 309,526 311,838 311,176 313,876 315,026 ?6 Non-U.S. addressees 2,274 2,302 2,183 2,081 2,078 2,071 2,073 2,097 2,171 71 Real estate loans 453,835 455,740 456,955 457,395 456,921 460,406 462,968 463,904 463,851 28 Revolving, home equity 46,812 46,858 46,720 46,774 46,686 46,912 47,038 47,090 47,106 ?9 All other 407,023 408,882 410,236 410,622 410,235 413,494 415,930 416,814 416,745 30 To individuals for personal expenditures 236,702 232,179 234,373 237,249 240,169 241,470 241,312 240,827 239,566 31 To depository and financial institutions 48,380 51,102 50,978 52,298 52,955 54,328 54,428 54,087 55,671 32 Commercial banks in the United States 27,923 31,444 31,607 32,516 32,792 33,522 33,286 32,752 35,247 33 Banks in foreign countries 3,608 2,796 2,697 2,884 2,844 3,410 2,830 3,141 2,785 34 Nonbank depository and other financial institutions 16,849 16,862 16,674 16,898 17,319 17,397 18,311 18,194 17,639 35 For purchasing and carrying securities 18,628 15,668 16,059 17,636 16,050 15,112 15,068 15,302 15,417 36 To finance agricultural production 6,347 6,236 6,232 6,286 6,389 6,580 6,468 6,338 6,321 37 To states and political subdivisions 11,493 11,396 11,324 11,338 11,299 11,234 11,083 11,111 11,089 38 To foreign governments and official institutions 1,077 924 931 888 942 912 914 1,034 904 39 All other loans4 23,899 23,830 24,984 25,601 25,407 28,804 22,852 24,657 22,265 40 Lease-financing receivables 30,965 31,044 31,382 31,540 31,743 31,861 32,087 32,283 32,352 41 LESS: Unearned income 1,595 1,606 1,756 1,769 1,764 1,755 1,760 1,756 1,769 47 Loan and lease reserve5 34,721 34,616 34,554 34,460 34,267 34,329 34,340 34,337 34,356 43 Other loans and leases, net 1,106,495 1,100,966 1,106,667 1,118,766 1,120,129 1,131,139 1,126,865 1,131,945 1,130,942 44 All other assets 140,533 136,429 138,771 141,050 136,418 135,609 134,468 132,309 133,059 45 Total assets6 1,891,745 1,868,564 1,881,636 1,899,319 1,901,753 1,934,988 1,896,058 1,928,391 1,887,922 Footnotes appear on the following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Nonfinancial Statistics • April 1995 1.27 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued Millions of dollars, Wednesday figures 1994R 1995 AAccccoouunntt Nov. 30 Dec. 7 Dec. 14 Dec. 21 Dec. 28 Jan. 4 Jan. 11 Jan. 18 Jan. 25 LIABILITIES 46 Deposits 1,158,352 1,152,415 1,155,165 1,157,235 1,171,898 1,202,073 1,157,465 1,173,998 1,133,588 47 Demand deposits7 308,990 298,537 306,954 307,963 327,647 340,463 298,284 315,649 281,155 48 Individuals, partnerships, and corporations 259,554 252,667 259,477 259,194 274,439 285,612 252,923 263,060 236,447 49 Other holders 49,435 45,870 47,477 48,769 53,208 54,851 45,360 52,588 44,707 50 States and political subdivisions 9,648 8,807 9,375 10,405 9,845 10,336 8,642 9,189 9,203 51 U.S. government 2,342 1,821 3,058 2,506 2,144 3,109 2,253 3,428 1,905 52 Depository institutions in the United States 20,655 20,093 19,260 19,612 23,143 25,535 18,786 24,587 18,382 53 Banks in foreign countries 6,508 5,574 5,772 5,538 5,910 5,007 5,675 5,784 5,734 54 Foreign governments and official institutions 680 761 598 846 816 794 673 658 815 55 Certified and officers' checks 9,603 8,813 9,414 9,862 11,350 10,069 9,332 8,943 8,669 56 Transaction balances other than demand deposits4 125,698 128,745 126,770 128,378 127,581 136,150 131,460 130,198 124,859 57 Nontransaction balances 723,665 725,133 721,441 720,894 716,670 725,459 727,721 728,151 727,574 58 Individuals, partnerships, and corporations 702,567 705,373 702,131 700,709 696,718 705,834 707,525 707,757 705,485 59 Other holders 21,097 19,760 19,309 20,185 19,952 19,626 20,196 20,394 22,089 60 States and political subdivisions 17,372 17,341 17,015 16,965 16,833 17,796 18,095 18,265 18,508 61 U.S. government 1,426 304 301 1,278 1,279 330 331 336 1,715 62 Depository institutions in the United States 1,773 1,592 1,470 1,409 1,327 995 1,273 1,298 1,372 63 Foreign governments, official institutions, and banks . . 526 523 523 533 513 504 496 495 494 64 Liabilities for borrowed money5 380,588 365,098 366,424 383,294 365,997 367,917 373,357 384,433 377,912 65 Borrowings from Federal Reserve Banks 0 607 0 765 0 890 0 0 350 66 Treasury tax and loan notes 15,354 139 2,785 27,985 9,835 8,128 10,344 19,297 19,731 67 Other liabilities for borrowed money6 365,234 364,353 363,639 354,543 356,163 358,899 363,013 365,135 357,831 68 Other liabilities (including subordinated notes and debentures) . . . 178,976 176,345 184,800 185,351 189,824 189,765 189,585 193,384 198,984 69 Total liabilities 1,717,917 1,693,859 1,706,389 1,725,879 1,727,719 1,759,754 1,720,406 1,751,814 1,710,484 70 Residual (total assets less total liabilities)7 173,828 174,705 175,247 173,440 174,034 175,234 175,652 176,577 177,438 MEMO 71 Total loans and leases, gross, adjusted, plus securities8 1,562,094 1,552,923 1,557,228 1,563,614 1,556,970 1,577,766 1,574,225 1,577,966 1,574,119 72 Time deposits in amounts of $100,000 or more 100,218 99,766 97,102 96,405 95,606 96,582 99,944 101,659 103,408 73 Loans sold outright to affiliates9 670 660 668 667 617 603 602 597 580 74 Commercial and industrial 340 340 340 339 298 296 296 295 295 75 Other 330 320 328 328 319 307 306 302 285 76 Foreign branch credit extended to U.S. residents10 23,211 23,196 23,205 23,222 23,048 23,343 23,458 23,821 23,893 77 Net owed to related institutions abroad 56,131 60,516 64,502 65,832 75,876 79,264 81,218 88,440 90,942 1. Includes certificates of participation, issued or guaranteed by agencies of the U.S. 8. Excludes loans to and federal funds transactions with commercial banks in the government, in pools of residential mortgages. United States. 2. Includes securities purchased under agreements to resell. 9. Affiliates include a bank's own foreign branches, nonconsolidated nonbank affiliates 3. Includes allocated transfer risk reserve. of the bank, the bank's holding company (if not a bank), and nonconsolidated nonbank 4. Includes negotiable order of withdrawal (NOWs) and automatic transfer service subsidiaries of the holding company. (ATS) accounts, and telephone and preauthorized transfers of savings deposits. 10. Credit extended by foreign branches of domestically chartered weekly reporting 5. Includes borrowings only from other than directly related institutions. banks to nonbank U.S. residents. Consists mainly of commercial and industrial loans, but 6. Includes federal funds purchased and securities sold under agreements to repur- includes an unknown amount of credit extended to other than nonfinancial businesses. chase. 7. This balancing item is not intended as a measure of equity capital for use in capital-adequacy analysts. 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 Liabilities Millions of dollars, Wednesday figures 1994 1995 AAccccoouunntt Nov. 30 Dec. 7 Dec. 14 Dec. 21 Dec. 28 Jan. 4 Jan. 11 Jan. 18 Jan. 25 ASSETS 1 Cash and balances due from depository institutions 15,481 15,723 16,633 17,115 17,987 17,500 16,455 16,542 16,043 2 U.S. Treasury and government agency securities 37,757 36,749 35,935R 36,322' 37,614' 37,116 36,875 37,634 3388,,550022 3 Other securities 12,550 12,605 12,839' 12,760R 12,855' 12,962 13,241 13,725 13,685 4 Federal funds sold' 30,071 33,324 31,769 29,973 35,824 30,802 30,250 28,238 30,776 5 To commercial banks in the United States 10,018 7,230 7,181 6,614 9,094 7,412 6,791 6,588 8,099 6 To others2 20,053 26,094 24,588 23,359 26,730 23,390 23,459 21,650 22,677 7 Other loans and leases, gross 166,162 166,958 168,189 172,187 170,760 169,593 168,067 168,535 169,430 8 Commercial and industrial 106,891 106,511 106,882 108,268 107,588 106,613 107,583 107,629 108,283 9 Bankers acceptances and commercial paper . 3,101 3,179 3,328 3,620 3,668 3,730 3,501 3,500 3,455 10 All other 103,790 103,332 103,553 104,649 103,920 102,883 104,082 104,129 104,828 11 U.S. addressees 99,692 99,289 99,485 100,397 99,746 98,829 100,115 100,023 100,656 1? Non-U.S. addressees 4,098 4,043 4,069 4,251 4,174 4,054 3,967 4,106 4,171 13 Loans secured by real estate 26,079 25,902 25,914 25,845 25,788 25,425 25,477 25,466 25,414 14 Loans to depository and financial institutions 25,288 26,395R 27,024' 28,694' 28,595' 28,440 26,503 26,780 27,299 1*) Commercial banks in the United States 5,361 5,417 5,736 6,013 5,806 5,471 5,506 5,725 5,852 16 Banks in foreign countries 1,800 1,987 1,912 2,052 2,097 2,019 2,184 2,152 2,101 17 Nonbank financial institutions 18,127 18,991R 19,375' 20,629' 20,692' 20,950 18,812 18,903 19,345 18 For purchasing and carrying securities 4,057 3,943R 4,325' 5,090' 4,701' 4,850 4,181 4,334 3,947 19 To foreign governments and official institutions 372 356 395 423 337788 374 401 333388 334444 ?N All other 3,476 3,850 3,650 3,867 3,710 3,891 3,923 3,988 4,143 21 Other assets (claims on nonrelated parties) 38,679 45,231 45,571 43,442 42,775 44,952 46,189 46,063 47,344 22 Total assets3 325,715 337,310 338,716 338,782 343,193 338,281 338,509 334,410 338,745 LIABILITIES 23 Deposits or credit balances owed to other than directly related institutions 98,952 101,054 102,211 99,722 99,639 95,015 96,035 95,750 99,404 74 Demand deposits4 3,864 3,892 3,885 4,126 4,737 4,499 3,840 3,822 3,716 25 Individuals, partnerships, and corporations .... 3,253 3,120 3,184 3,211 3,911 3,755 3,229 3,093 3,059 76 Other 611 772 701 915 826 744 610 728 657 7,7 Nontransaction accounts 95,088 97,162 98,326 95,596 94,902 90,516 92,196 91,928 95,688 28 Individuals, partnerships, and corporations .... 63,757 64,854 65,416 63,580 63,532 61,330 62,645 62,474 64,678 29 Other 31,331 32,308 32,910 32,016 31,370 29,186 29,551 29,454 31,010 30 Borrowings from other than directly related institutions 75,076 78,632 75,112 77,236 79,948 74,847 74,770 73,861 7733,,229944 31 Federal funds purchased5 38,259 42,585 39,217 40,877 43,489 42,698 42,908 41,284 38,998 32 From commercial banks in the United States . . 7,894 7,443 6,633 7,556 6,620 7,515 8,929 7,656 5,393 33 From others 30,365 35,142 32,584 33,320 36,869 35,183 33,979 33,629 33,605 34 Other liabilities for borrowed money 36,817 36,046 35,895 36,360 36,459 32,149 31,862 32,576 34,296 35 To commercial banks in the United States 6,232 5,838 5,765 6,746 6,425 6,122 6,738 6,262 6,448 36 To others 30,585 30,209 30,130 29,614 30,034 26,027 25,123 26,314 27,848 37 Other liabilities to nonrelated parties 35,844 42,825 43,190 40,588 40,192 42,079 43,263 43,065 44,288 38 Total liabilities6 325,715 337,310 338,716 338,782 343,193 338,281 338,509 334,410 338,745 MEMO 39 Total loans (gross) and securities, adjusted 231,160 236,989 235,815 238,615 242,153 237,589 236,135 235,819 238,441 40 Net owed to related institutions abroad 90,827 88,079 90,423 94,253 98,037 100,984 97,009 98,062 98,793 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. For U.S. branches and agencies of foreign banks having a net "due to" position, 3. For U.S. branches and agencies of foreign banks having a net "due from" position, includes net owed to related institutions abroad. includes net due from related institutions abroad. 7. Excludes loans to and federal funds transactions with commercial banks in the 4. Includes other transaction deposits. United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Nonfinancial Statistics • April 1995 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period Year ending December 1994 IItteemm 1990 1991 1992 1993 1994 July Aug. Sept. Oct. Nov. Dec. Commercial paper (seasonally adjusted unless noted otherwise) 11 AAUU iissssuueerrss 562,656 528,832 545,619 555,075 601,940 572,925 564,639 574,471 592,518 580,673 601,940 FFiinnaanncciiaall ccoommppaanniieess11 DDeeaalleerr--ppllaacceedd ppaappeerr22 22 TToottaall 214,706 212,999 226,456 218,947 225,413 222,780 214,769 214,349 224,280 215,748 225,413 33 BBaannkk--rreellaatteedd ((nnoott sseeaassoonnaallllyy aaddjjuusstteedd))33 .. .... n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. DDiirreeccttllyy ppllaacceedd ppaappeerr44 44 TToottaall 200,036 182,463 171,605 180,389 211,017 199,561 199,031 203,573 207,296 202,781 211,017 55 BBaannkk--rreellaatteedd ((nnoott sseeaassoonnaallllyy aaddjjuusstteedd))33 ...... n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 66 NNoonnffiinnaanncciiaall ccoommppaanniieess55 147,914 133,370 147,558 155,739 165,510 150,584 150,839 156,549 160,942 162,144 165,510 Bankers dollar acceptances (not seasonally adjusted)6 7 Total 54,771 43,770 38,194 32,348 29,835 30,390 30,448 31,164 30,413 29,760 29,835 By holder 8 Accepting banks 9,017 11,017 10,555 12,421 11,783 11,608 11,543 11,299 11,061 11,689 11,783 9 Own bills 7,930 9,347 9,097 10,707 10,462 10,838 10,824 10,475 9,931 10,548 10,462 10 Bills bought from other banks 1,087 1,670 1,458 1,714 1,321 770 719 824 1,130 1,142 1,321 Federal Reserve Banks7 11 Foreign correspondents 918 1,739 1,276 725 410 386 325 388 332 234 410 12 Others 44,836 31,014 26,364 19,202 17,642 18,396 18,580 19,477 19,020 17,836 17,642 By basis 13 Imports into United States 13,095 12,843 12,209 10,217 10,062 10,956 10,486 10,985 10,674 10,272 10,062 14 Exports from United States 12,703 10,351 8,096 7,293 6,355 6,399 6,458 6,575 6,754 6,688 6,355 15 Allother 28,973 20,577 17,890 14,838 13,417 13,035 13,505 13,604 12,986 12,800 13,417 1. Institutions engaged primarily in commercial, savings, and mortgage banking; sales, 6. Data on bankers dollar acceptances are gathered from approximately 100 institupersonal, and mortgage financing; factoring, finance leasing, and other business lending; tions. The reporting group is revised every January. insurance underwriting; and other investment activities. 7. In 1977 the Federal Reserve discontinued operations in bankers dollar acceptances 2. Includes all financial-company paper sold by dealers in the open market. for its own account. 3. Series were discontinued in January 1989. 4. As reported by financial companies that place their paper directly with investors. 5. Includes public utilities and firms engaged primarily in such activities as communications, construction, manufacturing, mining, wholesale and retail trade, transportation, and services. 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 te a ge Period Av r e a r te a ge Period Av r e a r te a ge 1992—Jan. 1 6.50 1992 6.25 1993—JAN 6.00 1994—Jan 6.00 JJuullyy 22 6.00 1993 6.00 Feb 6.00 Feb 6.00 1994 7.15 Mar. 6.00 Mar. 6.06 1994—Mar. 24 6.25 Apr. 6.00 Apr. 6.45 Apr. 19 6.75 1992—Jan 6.50 May 6.00 May 6.99 May 17 7.25 Feb 6.50 June 6.00 June 7.25 Aug. 16 7.75 Mar. 6.50 July 6.00 July 7.25 Nov. 15 8.50 Apr 6.50 Aug 6.00 Aug 7.51 May 6.50 Sept 6.00 Sept 7.75 1995—Feb. 1 9.00 June 6.50 Ocl 6.00 Oct 7.75 July 6.02 Nov 6.00 Nov 8.15 Aug 6.00 Dec 6.00 Dec 8.50 Sept 6.00 Oct 6.00 1995—Jan 8.50 Nov 6.00 Feb 9.00 Dec 6.00 1. The prime rate is one of several base rates that banks use to price short-term recent Call Report. Data in this table also appear in the Board's H.15 (519) weekly and business loans. The table shows the date on which a new rate came to be the predominant G.13 (415) monthly statistical releases. For ordering address, see inside front cover, one quoted by a majority of the twenty-five largest banks by asset size, based on the most Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Nonfinancial Statistics • April 1995 1.35 INTEREST RATES Money and Capital Markets Percent per year; figures are averages of business day data unless otherwise noted 1994 1995 1994 and 1995, week ending IItteemm 11999922 11999933 11999944 Oct. Nov. Dec. Jan. Dec. 30 Jan. 6 Jan. 13 Jan. 20 Jan. 27 MONEY MARKET INSTRUMENTS 1 Federal funds1,2,3 3.52 3.02 4.21 4.76 5.29 5.45 5.53 5.45 5.40 5.53 5.45 5.42 2 Discount window borrowing2,4 3.25 3.00 3.60 4.00 4.40 4.75 4.75 4.75 4.75 4.75 4.75 4.75 Commercial paper*'5'6 3 1-month 3.71 3.17 4.43 5.02 5.40 6.08 5.86 6.06 5.85 5.75 5.82 5.94 4 3-month 3.75 3.22 4.66 5.51 5.81 6.26 6.22 6.29 6.29 6.17 6.17 6.24 5 6-month 3.80 3.30 4.93 5.70 6.01 6.62 6.63 6.70 6.71 6.62 6.59 6.63 Finance paper, directly placed3,5,7 6 1-month 3.62 3.12 4.33 4.91 5.30 5.93 5.76 5.86 5.74 5.66 5.72 5.83 7 3-month 3.65 3.16 4.53 5.36 5.67 6.12 6.10 6.11 6.21 6.06 6.03 6.10 8 6-month 3.63 3.15 4.56 5.30 5.58 6.17 6.25 6.19 6.34 6.26 6.21 6.23 Bankers acceptances3,5,8 9 3-month 3.62 3.13 4.56 5.41 5.71 6.18 6.12 6.23 6.21 6.09 6.12 6.10 10 6-month 3.67 3.21 4.83 5.59 5.93 6.53 6.45 6.61 6.59 6.45 6.42 6.41 Certificates of deposit, secondary market5,9 11 1-month 3.64 3.11 4.38 4.98 5.38 6.01 5.84 5.96 5.83 5.73 5.81 5.92 12 3-month 3.68 3.17 4.63 5.51 5.79 6.29 6.24 6.36 6.36 6.20 6.22 6.22 13 6-month 3.76 3.28 4.96 5.79 6.11 6.78 6.71 6.88 6.87 6.71 6.66 6.65 14 Eurodollar deposits, 3-month3,10 3.70 3.18 4.63 5.52 5.78 6.27 6.23 6.34 6.34 6.25 6.15 6.23 US. Treasury bills Secondary market3,5 1155 3-month 3.43 3.00 4.25 4.95 5.29 5.60 5.71 5.52 5.67 5.66 5.70 5.77 16 6-month 3.54 3.12 4.64 5.39 5.72 6.21 6.21 6.23 6.30 6.24 6.19 6.18 1/ 1-year 3.71 3.29 5.02 5.75 6.13 6.67 6.59 6.74 6.74 6.66 66..5588 66..5500 Auction average3,5,11 1188 3-month 3.45 3.02 4.29 4.96 5.25 5.64 5.81 5.56 5.78 5.87 5.77 5.80 19 6-month 3.57 3.14 4.66 5.39 5.69 6.21 6.31 6.24 6.37 6.42 6.19 6.24 20 1-year 3.75 3.33 4.98 5.72 6.09 6.75 6.86 n.a. n.a. 6.86 n.a. n.a. U.S. TREASURY NOTES AND BONDS Constant maturities12 21 1-year 3.89 3.43 5.32 6.11 6.54 7.14 7.05 7.21 7.24 7.12 7.02 6.95 22 2-year 4.77 4.05 5.94 6.73 7.15 7.59 7.51 7.69 7.66 7.57 7.48 7.45 2i 3-year 5.30 4.44 6.27 7.04 7.44 7.71 7.66 7.79 7.81 7.73 7.65 7.60 24 5-year 6.19 5.14 6.69 7.40 7.72 7.78 7.76 7.81 7.86 7.80 7.73 7.74 25 7-year 6.63 5.54 6.91 7.58 7.83 7.80 7.79 7.81 7.88 7.83 7.76 7.78 26 10-year 7.01 5.87 7.09 7.74 7.96 7.81 7.78 7.81 7.86 7.80 7.74 7.78 27 20-year n.a. 6.29 7.49 8.08 8.20 7.99 7.97 7.% 8.02 7.99 7.95 7.97 28 30-year 7.67 6.59 7.37 7.94 8.08 7.87 7.85 7.83 7.89 7.86 7.82 7.86 Composite 29 More than 10 years (long-term) 7.52 6.45 7.41 8.02 8.16 7.97 7.93 7.93 7.99 7.95 7.91 7.94 STATE AND LOCAL NOTES AND BONDS Moody's series^ 30 6.09 5.38 5.77 6.05 6.57 6.62 n.a. 6.65 6.65 6.45 6.45 n.a. 31 Baa 6.48 5.82 6.17 6.37 6.89 7.17 n.a. 7.18 7.18 7.00 7.00 n.a. 32 Bond Buyer series14 6.44 5.60 6.18 6.52 6.97 6.80 6.53 6.71 6.66 6.53 6.44 6.49 CORPORATE BONDS 33 Seasoned issues, all industries15 8.55 7.54 8.26 8.83 8.94 8.73 8.71 8.70 8.76 8.73 8.69 8.73 Rating group 34 8.14 7.22 7.97 8.57 8.68 8.46 8.46 8.43 8.49 8.46 8.44 8.49 35 Aa 8.46 7.40 8.15 8.71 8.83 8.62 8.60 8.59 8.65 8.62 8.58 8.62 36 A 8.62 7.58 8.28 8.82 8.94 8.73 8.70 8.70 8.76 8.72 8.68 8.72 37 Baa 8.98 7.93 8.63 9.20 9.32 9.10 9.08 9.08 9.13 9.10 9.06 9.10 38 A-rated, recently offered utility bonds16 8.52 7.46 8.29 8.80 8.95 8.78 8.75 8.78 8.77 8.70 8.81 8.69 MEMO Dividend-price ratio17 39 Common stocks 2.99r 2.78' 2.82 2.82 2.86 2.91 2.87 2.89 2.89 2.89 2.84 2.87 1. The daily effective federal funds rate is a weighted average of rates on trades 12. Yields on actively traded issues adjusted to constant maturities. Source: U.S. through New York brokers. Department of the Treasury. 2. Weekly figures are averages of seven calendar days ending on Wednesday of the 13. General obligations based on Thursday figures; Moody's Investors Service. current week; monthly figures include each calendar day in the month. 14. State and local government general obligation bonds maturing in twenty years are 3. Annualized using a 360-day year for bank interest. used in compiling this index. The twenty-bond index has a rating roughly equivalent to 4. Rate for the Federal Reserve Bank of New York. Moodys' A1 rating. Based on Thursday figures. 5. Quoted on a discount basis. 15. Daily figures from Moody's Investors Service. Based on yields to maturity on 6. An average of offering rates on commercial paper placed by several leading dealers selected long-term bonds. for firms whose bond rating is AA or the equivalent. 16. Compilation of the Federal Reserve. This series is an estimate of the yield on 7. An average of offering rates on paper directly placed by finance companies. recently offered, A-rated utility bonds with a thirty-year maturity and five years of call 8. Representative closing yields for acceptances of the highest-rated money center protection. Weekly data are based on Friday quotations. banks. 17. Standard & Poor's corporate series. Preferred stock ratio is based on a sample of 9. An average of dealer offering rates on nationally traded certificates of deposit. ten issues: four public utilities, four industrials, one financial, and one transportation. 10. Bid rates for Eurodollar deposits at 11:00 a.m. London time. Data are for indication Common stock ratio is based on the 500 stocks in the price index. purposes only. NOTE. Some of the data in this table also appear in the Board's H.15 (519) weekly and 11. Auction date for daily data; weekly and monthly averages computed on an G.13 (415) monthly statistical releases. For ordering address, see inside front cover. issue-date basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A27 1.36 STOCK MARKET Selected Statistics 1994 1995 IInnddiiccaattoorr 11999922 11999933 11999944 May June July Aug. Sept. Oct. Nov. Dec. Jan. Prices and trading volume (averages of daily figures) Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 229.00 249.71 254.16 249.56 251.21 249.29 256.08 257.61 255.22 252.48 248.65 253.56 2 Industrial 284.26 300.10 315.32 307.58 308.66 307.34 316.56 322.19 321.53 319.33 313.92 319.93 3 Transportation 201.02 242.68 247.17 244.75 246.64 244.21 244.67 239.10 230.71 227.44 218.93 230.25 4 Utility 99.48 114.55 104.96 102.89 103.27 102.73 105.61 102.30 101.67 100.07 100.01 100.58 5 Finance 179.29 216.55 209.75 211.30 215.89 210.91 214.77 211.90 203.33 198.38 195.25 201.05 6 Standard & Poor's Corporation (1941-43 = 10)' 415.75 451.63 460.42 450.90 454.83 451.40 464.24 466.96 463.81 461.01 455.19 465.25 7 American Stock Exchange (Aug. 31, 1973 = 50)2 391.28 438.77 449.49 437.54 436.08 430.10 444.89 456.31 456.25 445.16 427.39 436.09 Volume of trading (thousands of shares) 8 New York Stock Exchange 202,558 263,374 290,652 269,812 265,341 250,382 277,877 292,356 301,327 297,001 302,049 326,652 9 American Stock Exchange 14,171 18,188 17,951 15,727 18,400 14,378 15,874 18,785 20,731 18,465 18,745 18,829 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers3 43,990 60,310 61,160 59,870 60,800 61,930 63,070 61,630 62,150 61,000 61,160 64,380 Free credit balances at brokers4 11 Margin accounts5 8,970 12,360 14,095 12,715 12,560 12,620 12,090 12,415 12,875 13,635 14,095 13,225 12 Cash accounts 22,510 27,715 28,870 23,265 28,585 25,790 24,400 25,230 24,180 25,625 28,870 24,440 Margin requirements (percent of market value and effective date)6 Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 13 Margin stocks 70 80 65 55 65 50 14 Convertible bonds 50 60 50 50 50 50 15 Short sales 70 80 65 55 65 50 1. In July 1976 a financial group, composed of banks and insurance companies, was credit is collateralized by securities. Margin requirements on securities other than options added to the group of stocks on which the index is based. The index is now based on 400 are the difference between the market value (100 percent) and the maximum loan value of industrial stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public utility collateral as prescribed by the Board. Regulation T was adopted effective Oct. 15, 1934; (formerly 60), and 40 financial. Regulation U, effective May 1, 1936; Regulation G, effective Mar. 11, 1968; and 2. On July 5, 1983, the American Stock Exchange rebased its index, eifectively cutting Regulation X, effective Nov. 1, 1971. previous readings in half. On Jan. 1, 1977, the Board of Governors for the first time established in Regulation T 3. Since July 1983, under the revised Regulation T, margin credit at broker-dealers has the initial margin required for writing options on securities, setting it at 30 percent of the included credit extended against stocks, convertible bonds, stocks acquired through the current market value of the stock underlying the option. On Sept. 30, 1985, the Board exercise of subscription rights, corporate bonds, and government securities. Separate changed the required initial margin, allowing it to be the same as the option maintenance reporting of data for margin stocks, convertible bonds, and subscription issues was margin required by the appropriate exchange or self-regulatory organization; such maintediscontinued in April 1984. nance margin rules must be approved by the Securities and Exchange Commission. 4. Free credit balances are amounts in accounts with no unfulfilled commitments to Effective Jan. 31, 1986, the SEC approved new maintenance margin rules, permitting brokers and are subject to withdrawal by customers on demand. margins to be the price of the option plus 15 percent of the market value of the stock 5. Series initiated in June 1984. underlying the option. 6. Margin requirements, stated in regulations adopted by the Board of Governors Effective June 8, 1988, margins were set to be the price of the option plus 20 percent of pursuant to the Securities Exchange Act of 1934, limit the amount of credit that can be the market value of the stock underlying the option (or 15 percent in the case of used to purchase and carry "margin securities" (as defined in the regulations) when such stock-index options). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Financial Statistics • April 1995 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Fiscal year Calendar year TTTyyypppeee ooofff aaaccccccooouuunnnttt ooorrr ooopppeeerrraaatttiiiooonnn 1994 1995 11999922 11999933 11999944 Aug. Sept. Oct. Nov. Dec. Jan. US. budget 1 Receipts, total 1,090,453 1,153,226 1,257,187 97,338 135,895 89,024 87,673 130,810 131,801 2 On-budget 788,027 841,292 922,161 70,949 105,212 65,385 62,083 103,859 101,036 3 Off-budget 302,426 311,934 335,026 26,389 30,683 23,639 25,590 26,951 30,765 4 Outlays, total 1,380,856 1,408,532 1,460,557 121,608 131,903 121,480R 125,131 134,874 116,688 On-budget 1,128,518 1,141,945 1,181,185 95,279 103,189 95,307R 99,464 123,490 91,084 6 Off-budget 252,339 266,587 279,372 26,329 28,714 26,174 25,668 11,383 25,604 7 Surplus or deficit (-), total -290,403 -255,306 -203,370 -24,270 3,993 —32,457R -37,458 -4,063 15,113 8 On-budget -340,490 -300,653 -259,024 -24,330 2,024 -29,922R -37,381 -19,631 9,952 9 Off-budget 50,087 45,347 55,654 60 1,969 -2,535 -78 15,568 5,161 Source of financing (total) 10 Borrowing from the public 310,918 248,594 184,998 52,350 -11,996 32,457 40,528 -13,316 13,337 1 1 1 2 O O p th er e a r t 2 i ng cash (decrease, or increase (-)) -1 -3 7 , ,3 2 0 1 5 0 6, 4 2 2 8 9 3 1 1 6 , , 8 5 0 6 8 4 -1 -9 8 , , 8 3 0 7 2 4 - 1 5 3 , , 8 8 5 5 5 8 -4 4 8 8 0 0 R -12 9 , , 4 3 3 6 6 6 16, 4 9 7 0 6 3 -2 -5 3 , , 1 2 8 6 6 4 MEMO 13 Treasury operating balance (level, end of period) 58,789 52,506 35,942 30,087 35,942 36,422 27,056 26,580 49,844 14 Federal Reserve Banks 24,586 17,289 6,848 5,994 6,848 5,164 5,348 7,161 13,964 IS Tax and loan accounts 34,203 35,217 29,094 24,093 29,094 31,258 21,709 19,419 35,880 1. Since 1990, off-budget items have been the social security trust funds (federal gold; net gain or loss for U.S. currency valuation adjustment; net gain or loss for IMF old-age survivors insurance and federal disability insurance) and the U.S. Postal Service. loan-valuation adjustment; and profit on sale of gold. 2. Includes special drawing rights (SDRs); reserve position on the U.S. quota in the SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of Receipts International Monetary Fund (IMF); loans to the IMF; other cash and monetary assets; and Outlays of the U.S. Government; and U.S. Office of Management and Budget, Budget accrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneous of the U.S. Government. liability (including checks outstanding) and asset accounts; seigniorage; increment on Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A3 3 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS' Millions of dollars Fiscal year Calendar year SSSooouuurrrccceee ooorrr tttyyypppeee 1993 1994 1994 1995 11999933 11999944 HI H2 HI H2 Nov. Dec. Jan. RECEIPTS 1 All sources 1,153,226 1,257,453 593,212 582,038 652,236 625,557 87,673 130,810 131,801 2 Individual income taxes, net 509,680 543,055 255,556 262,073 275,053 273,474 37,414 54,315 79,162 3 Withheld 430,211 459,699 209,517 228,423 225,387 240,062 37,882 50,680 49,432 4 Presidential Election Campaign Fund 28 70 25 2 63 10 2 0 0 5 Nonwithheld 154,989 160,364 113,510 41,768 118,245 42,031 1,857 3,635 29,980 6 Refunds 75,546 77,077 67,468 8,115 68,642 9,207 2,327 579 245 Corporation income taxes 7 Gross receipts 131,548 154,205 69,044 68,266 80,536 78,392 2,682 32,616 5,415 8 Refunds 14,027 13,820 7,198 6,514 6,933 7,331 1,185 700 2,157 9 Social insurance taxes and contributions, net ... 428,300 461,475 227,177 206,176 248,301 220,141 37,387 36,358 40,442 10 Employment taxes and contributions2 396,939 428,810 208,776 192,749 228,714 206,613 33,786 35,708 26,096 11 Self-employment taxes and contributions . 20,604 24,433 16,270 4,335 20,762 4,135 0 0 1,279 12 Unemployment insurance 26,556 28,004 16,074 11,010 17,301 11,177 3,249 230 1,069 13 Other net receipts4 4,805 4,661 2,326 2,417 2,284 2,349 352 420 372 14 Excise taxes 48,057 55,225 23,398 25,994 26,444 30,062 5,518 4,587 4,555 15 Customs deposits 18,802 20,099 8,860 10,215 9,500 11,042 1,827 1,747 1,539 16 Estate and gift taxes 12,577 15,225 6,494 6,617 8,197 7,071 1,220 1,092 1,005 17 Miscellaneous receipts5 18,273 22,041 9,879 9,227 11,170 13,305 2,811 1,375 1,839 OUTLAYS 18 All types 1,408,532 1,461,067 673,915 727,685 710,620 753,255 125,131 134,874 116,688 19 National defense 291,086 281,451 140,535 146,672 133,739 141,092 22,428 26,348 18,499 20 International affairs 16,826 17,249 6,565 10,186 5,800 12,056 2,177 1,334 999 21 General science, space, and technology 17,030 17,602 7,996 8,880 8,502 8,979 1,673 1,529 1,194 22 Energy 4,319 5,398 2,462 1,663 2,036 2,949 166 417 488 23 Natural resources and environment 20,239 20,902 8,592 11,221 9,179 12,373 1,797 1,622 1,571 24 Agriculture 20,443 15,131 11,872 7,516 7,451 7,697 2,784 1,938 1,049 25 Commerce and housing credit -22,725 -4,851 -14,537 -1,490 -5,114 -2,678 -1,244 -2,166 -1,469 26 Transportation 35,004 36,835 16,076 19,570 16,765r 20,489 3,506 3,021 3,080 27 Community and regional development 9,051 11,877 4,929 4,288 5,592 7,070 1,109 1,102 1,140 28 Education, training, employment, and social services 50,012 44,730 24,080 26,753 19,000r 25,887 44,,002255 55,,777799 44,,665500 29 Health 99,415 106,495 49,882 52,958 53,121 54,123 9,525 9,246 9,440 30 Social security and Medicare 435,137 464,314 195,933 223,735 232,777 236,819 39,299 41,216 39,734 31 Income security 207,257 213,972 107,870 102,380 109,080r 101,743 16,151 19,331 16,326 32 Veterans benefits and services 35,720 37,637 16,385 19,852 16,686 19,757 3,337 4,277 1,996 33 Administration of justice 14,955 15,283 7,482 7,400 7,718 7,800 1,176 1,278 1,568 34 General government 13,009 11,348 5,205 6,531 5,076 7,393 1,556 1,972 -233 35 Net interest6 198,811 202,957 99,635 99,914 99,844 109,435 18,242 19,302 19,568 36 Undistributed offsetting receipts7 -37,386 -37,772 -17,035 -20,344 -17,308 -20,065 -2,575 -2,671 -2,911 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 total for 6. Includes interest received by trust funds. outlays does not correspond to calendar year data because revisions from the Budget have 7. Rents and royalties for the outer continental shelf, U.S. government contributions for not been fully distributed across months. 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 Receipts 3. Old-age, disability, and hospital insurance. and Outlays of the U.S. Government; and U.S. Office of Management and Budget, Budget 4. Federal employee retirement contributions and civil service retirement and of the U.S. Government, Fiscal Year 1996. disability fund. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 DomesticN onfinancial Statistics • April 1995 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1992 1993 1994 IItteemm Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 1 Federal debt outstanding 4,196 4,250 4,373 4,436 4,562 4,602 4,673 4,721 4,800 2 Public debt securities 4,177 4,231 4,352 4,412 4,536 4,576 4,646 4,693 n.a. 3 Held by public 3,129 3,188 3,252 3,295 3,382 3,434 3,443 3,480 n.a. 4 Held by agencies 1,048 1,043 1,100 1,117 1,154 1,142 1,203 1,213 n.a. 5 Agency securities 19 20 21 25 27 26 28 29 n.a. 6 Held by public 19 20 21 25 27 26 27 29 n.a. 7 Held by agencies 0 0 0 0 0 0 0 0 n.a. 8 Debt subject to statutory limit 4,086 4,140 4,256 4,316 4,446 4,491 4,559 4,605 4,711 9 Public debt securities 4,085 4,139 4,256 4,315 4,445 4,491 4,559 4,605 4,711 10 Other debt1 0 0 0 0 0 0 0 0 0 MEMO 11 Statutory debt limit 4,145 4,145 4,370 4,900 4,900 4,900 4,900 4,900 4,900 1. Consists of guaranteed debt of U.S. Treasury and other federal agencies, specified SOURCES. U.S. Department of the Treasury, Monthly Statement of the Public Debt of participation certificates, notes to international lending organizations, and District of the United States and Treasury Bulletin. Columbia stadium bonds. 1.41 GROSS PUBLIC DEBT OF U.S. TREASURY Types and Ownership Billions of dollars, end of period 1994 TTyyppee aanndd hhoollddeerr 11999911 11999922 11999933 11999944 Ql Q2 Q3 Q4 1 Total gross public debt 3,801.7 4,177.0 4,535.7 n.a. 4,575.9 4,645.8 4,692.8 n.a. By type 2 Interest-bearing 3,798.9 4,173.9 4,532.3 4,769.2 4,572.6 4,642.5 4,689.5 4,769.2 3 Marketable 2,471.6 2,754.1 2,989.5 3,126.0 3,042.9 3,051.0 3,091.6 3,126.0 4 Bills 590.4 657.7 714.6 733.8 721.2 698.5 697.3 733.8 5 Notes 1,430.8 1,608.9 1,764.0 1,867.0 1,802.5 1,835.7 1,867.5 1,867.0 6 Bonds 435.5 472.5 495.9 510.3 504.2 501.8 511.8 510.3 7 Nonmarketable1 1,327.2 1,419.8 1,542.9 1,643.1 1,529.7 1,591.5 1,597.9 1,643.1 8 State and local government series 159.7 153.5 149.5 132.6 145.5 143.4 137.4 132.6 9 Foreign issues2 41.9 37.4 43.5 42.5 42.7 42.2 42.0 42.5 10 Government 41.9 37.4 43.5 42.5 42.7 42.2 42.0 42.5 11 Public .0 .0 .0 .0 .0 .0 .0 .0 12 Savings bonds and notes 135.9 155.0 169.4 177.8 172.6 174.9 176.4 177.8 13 Government account series3 959.2 1,043.5 1,150.0 1,259.8 1,138.4 1,200.6 1,211.7 1,259.8 14 Non-interest-bearing 2.8 3.1 3.4 31.0 3.3 3.3 3.2 31.0 By holder4 15 U.S. Treasury and other federal agencies and trust funds 968.7 1,047.8 1,153.5 1,141.7 1,203.0 1,213.1 16 Federal Reserve Banks 281.8 302.5 334.2 342.6 357.7 355.2 17 Private investors 2,563.2 2,839.9 3,047.7 3,094.6 3,088.2 3,127.8 18 Commercial banks 233.4 294.0 316.0 345.0r 330.7' 325.0 19 Money market funds 80.0 79.4 80.5 70.5 59.5 59.9 20 Insurance companies 168.7 197.5 216.0 236.9r 244.1' 250.0 21 Other companies 150.8 192.5 213.0 n.a. 216.3 226.3 229.3 n.a. 22 State and local treasuries 520.3 534.8 564.0 517.4r 520.1' 521.0 Individuals 23 Savings bonds 138.1 157.3 171.9 175.0 177.1 178.6 24 Other securities 125.8 131.9 137.9 140.1 144.0 148.6 25 Foreign and international5 491.8 549.7 623.3 632.7' 632.5' 653.8 26 Other miscellaneous investors6 651.3 702.4 725.0 760.7r 754.0' 761.6 1. Includes (not shown separately) securities issued to the Rural Electrification Admin- 5. Consists of investments of foreign balances and international accounts in the United istration, depository bonds, retirement plan bonds, and individual retirement bonds. States. 2. Nonmarketable series denominated in dollars, and series denominated in foreign 6. Includes savings and loan associations, nonprofit institutions, credit unions, mutual currency held by foreigners. savings banks, corporate pension trust funds, dealers and brokers, certain U.S. Treasury 3. Held almost entirely by U.S. Treasury and other federal agencies and trust funds. deposit accounts, and federally sponsored agencies. 4. Data for Federal Reserve Banks and U.S. government agencies and trust funds are SOURCES. U.S. Treasury Department, data by type of security, Monthly Statement of the actual holdings; data for other groups are Treasury estimates. Public Debt of the United States; data by holder, Treasury Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A3 3 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions1 Millions of dollars, daily averages 1994 1994, week ending 1995, week ending IItteemm Oct/ Nov/ Dec. Nov. 30 Dec. 7 Dec. 14 Dec. 21 Dec. 28 Jan. 4 Jan. 11 Jan. 18 Jan. 25 OUTRIGHT TRANSACTIONS2 By type of security 1 U.S. Treasury bills 53,162 53,255 55,792 46,143r 57,688r 58,222r 58,171r 49,061' 55,855 66,421 66,093 5522,,220033 Coupon securities, by maturity 2 Five years or less 87,960 101,981 83,764 97,232r 111155,,1155cc 90,970r 80,915r 57,849' 59,195 90,630 109,568 109,685 3 More than five years 42,391 51,851 34,619 46,445r 50,49^ 38,283r 28,409r 25,146' 24,992 39,174 45,847 39,817 4 Federal agency 17,773 18,993 23,472 21,497r 22,97 lr 22,667r 22,36lr 25,435' 24,608 25,552 28,506 26,378 5 Mortgage-backed 37,022 30,516 24,508 18,616r 31,402r 35,749r 23,337' 10,989' 15,892 40,358 30,241 24,790 By type of counterparty With interdealer broker 6 U.S. Treasury 106,257 120,872 100,469 107,727r 131,609r 111,200' 95,645' 73,664' 74,860 114,424 129,744 117,266 7 Federal agency 647 543 510 525r 468 684r 484' 399 523 597 655 714 8 Mortgage-backed 13,013 9,765 8,208 6,339 9,304r 11,065 9,975 3,380 5,982 13,741 11,492 11,019 With other 9 U.S. Treasury 77,256 86,216 73,707 82,093r 91,719r 76,275r 71,850' 58,392' 65,182 81,801 91,764 84,438 10 Federal agency 17,125 18,450 22,962 20,972r 22,504r 21,983r 21,876' 25,036' 24,086 24,956 27,851 25,664 11 Mortgage-backed 24,009 20,751 16,300 12,277r 22,098r 24,685r 13,362' 7,609' 9,911 26,618 18,749 13,771 FUTURES TRANSACTIONS3 By type of deliverable security 12 U.S. Treasury bills 1,080 1,667 1,377 1,675 2,672 1,442 843 865 589 504 1,577 11,,006677 Coupon securities, by maturity 13 Five years or less 2,593 3,642 3,097 4,728 5,549 2,806 2,658 1,714 2,249 2,574 3,503 2,952 14 More than five years 12,402 14,287 10,277 14,202 17,302 11,238 8,474 5,509 6,740 11,893 12,927 10,268 15 Federal agency 0 0 0 0 0 0 0 0 0 0 0 0 16 Mortgage-backed 0 0 0 0 0 0 0 0 0 0 0 0 OPTIONS TRANSACTIONS4 By type of underlying security 17 U.S. Treasury bills 0 0 0 0 0 0 0 00 0 0 00 00 Coupon securities, by maturity 18 Five years or less 4,712 2,722 1,353 1,866 1,877 864 1,548 1,063 1,504 2,498 4,455 2,254 19 More than five years 5,527 5,327 2,938 4,084 3,649 3,201 2,825 2,034 3,047 3,678 4,594 4,524 20 Federal agency 0 0 0 0 0 0 0 0 0 0 0 0 21 Mortgage-backed 559 463 330 458 467 268 235 324 392 581 342 390 1. Transactions are market purchases and sales of securities as repotted to the Federal Forward transactions are agreements made in the over-the-counter market that specify Reserve Bank of New York by the U.S. government securities dealers on its published list delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt of primary dealers. Monthly averages are based on the number of trading days in the securities are included when the time to delivery is more than five business days. Forward month. Transactions are assumed evenly distributed among the trading days of the report contracts for mortgage-backed agency securities are included when the time to delivery is week. Immediate, forward, and futures transactions are reported at principal value, which more than thirty business days. does not include accrued interest; options transactions are reported at the face value of the 3. Futures transactions are standardized agreements arranged on an exchange. All underlying securities. futures transactions are included regardless of time to delivery. Dealers report cumulative transactions for each week ending Wednesday. 4. Options transactions are purchases or sales of put and call options, whether arranged 2. Outright transactions include immediate and forward transactions. Immediate deliv- on an organized exchange or in the over-the-counter market, and include options on ery refers to purchases or sales of securities (other than mortgage-backed federal agency futures contracts on U.S. Treasury and federal agency securities. securities) for which delivery is scheduled in five business days or less and "when- NOTE, "n.a." indicates that data are not published because of insufficient activity. issued" securities that settle on the issue date of offering. Transactions for immediate delivery Major changes in the report form filed by primary dealers induced a break in the dealer of mortgage-backed agency securities include purchases and sales for which delivery is scheduled data series as of the week ending July 6, 1994. in thirty business days or less. Stripped securities are reported at market value by maturity of coupon or corpus. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Nonfinancial Statistics • April 1995 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 1994, week ending 1995, week ending item Oct. Nov. Dec. Nov. 30 Dec. 7 Dec. 14 Dec. 21 Dec. 28 Jan. 4 Jan. 11 Jan. 18 Positions2 NET OUTRIGHT POSITIONS3 By type of security 1 U.S. Treasury bills 3,177 12,980 15,045 18,418 16,225 22,114 15,696 7,999 10,715 6,451 66..006633 Coupon securities, by maturity 2 Five years or less -17,072' -6,880' -6,583 -6,746' -8,827 -12,985' -3,760' -1,628 -4,560 -11,478 -12.416 3 More than five years —27,176r -30,331' -31,305 -28,874' -32,519 -30,416' -32,084' -31,123 -29,150 -33,434 -35,026 4 Federal agency 22,584 20,097' 20,263 17,977 21,742 19,650 19,508 21,122 17,995 18,012 19,871 5 Mortgage-backed 37,098r 35,323' 32,889 34,173' 31,719' 31,467 34,319' 33,082 35,146 31,658 31,304 NET FUTURES POSITIONS By type of deliverable security 6 U.S. Treasury bills -776 -275 -906 1,035 -383 -1,691 -1,612 -446 277 -1,485 81 Coupon securities, by maturity 7 Five years or less 8,205 7,470 5,292 7,264 8,240 6,901 3,916 3,167 2,832 5,314 3,853 8 More than five years 83 2,308 860 1,566 1,506 342 345 766 1,978 3,403 2,685 9 Federal agency 0 0 0 0 0 0 0 0 0 0 0 10 Mortgage-backed 0 0 0 0 0 0 0 0 0 0 0 Financing5 Reverse repurchase agreements 11 Overnight and continuing 253,257' 248,670 238,704 257,407 267,953 245,936 227,393 215,630 233,813 236,713 244,351 12 Term 380,100' 343,089 355,245 300,136 364,244 374,706 353,877 350,856 302,271 345,503 353,508 Securities borrowed 13 Overnight and continuing 181,291 180,702 181,785 176,715 183,995 176,735 183,162 180,017 189,326 181,843 175,727 14 Term 45,783 46,394 46,339 41,881 44,203 48,395 45,331 46,874 47,633 52,023 50,255 Securities received as pledge 15 Overnight and continuing 2,058 2,392 3,346 3,146 3,472 3,258 3,016 3,351 4,011 4,318 3,268 16 Term 53 32 37 n.a. n.a. n.a. 26 16 110 n.a. 58 Repurchase agreements 17 Overnight and continuing 454,948' 438,464 432,430 446,770 462,503 447,454 423,925 394,035 436,633 431,608 447,158 18 Term 352,177' 338,786 341,663 282,076 343,304 362,227 345,402 345,223 272,824 306,085 313,968 Securities loaned 19 Overnight and continuing 5,592 6,262 5,994 6,454 6,407 6,119 5,403 5,750 6,689 6,877 6,031 20 Term 1,234 1,285 1,328 904 1,631 1,355 1,351 1,037 1,187 1,529 1,755 Securities pledged 21 Overnight and continuing 34,263 33,695 35,928 35,831 38,562 33,544 34,771 35,697 38,583 35,606 33,191 22 Term 4,095 3,416 1,609 2,619 1,646 1,753 1,450 1,566 1,660 1,397 1,899 Collateralized loans 23 Overnight and continuing 19,273 17,871 14,021 17,771 16,354 13,060 11,828 14,414 15,023 15,822 16,650 24 Term n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. MEMO: Matched book6 Securities in 25 Overnight and continuing 226,604' 224,758 223,889 213.850 246,477 228,039 217,211 201,905 228,378 228,823 232,307 26 Term 358,449' 323,287 326,161 282,540 336,578 341,469 325,365 322,628 276,235 319,933 324,174 Securities out 27 Overnight and continuing 271,475' 260,138 255,975 251,808 280,575 261,263 244,323 233,666 265,477 275,129 282,169 28 Term 294,282' 272,124 279,824 223,467 280,174 294,017 284,788 286,163 219,517 255,201 262,886 1. Data for positions and financing are obtained from reports submitted to the Federal 4. Futures positions reflect standardized agreements arranged on an exchange. All Reserve Bank of New York by the U.S. government securities dealers on its published list futures positions are included regardless of time to delivery. of primary dealers. Weekly figures are close-of-business Wednesday data. Positions for 5. Overnight financing refers to agreements made on one business day that mature on calendar days of the report week are assumed to be constant. Monthly averages are based the next business day; continuing contracts are agreements that remain in effect for more on the number of calendar days in the month. than one business day but have no specific maturity and can be terminated without 2. Securities positions are reported at market value. advance notice by either party; term agreements have a fixed maturity of more than one 3. Net outright postitions include immediate and forward positions. Net immediate business day. Financing data are reported in terms of actual funds paid or received, positions include securities purchased or sold (other than mortgage-backed agency securi- including accrued interest. ties) that have been delivered or are scheduled to be delivered in five business days or less 6. Matched-book data reflect financial intermediation activity in which the borrowing and "when-issued" securities that settle on the issue date of offering. Net immediate and lending transactions are matched. Matched-book data are included in the financing positions for mortgage-backed agency securities include securities purchased or sold that breakdowns given above. The reverse repurchase and repurchase numbers are not always have been delivered or are scheduled to be delivered in thirty business days or less. equal because of the "matching" of securities of different values or different types of Forward positions reflect agreements made in the over-the-counter market that specify collateralization. delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt NOTE. "n.a." indicates that data are not published because of insufficient activity. securities are included when the time to delivery is more than five business days. Forward Major changes in the report form filed by primary dealers induced a break in the dealer contracts for mortgage-backed agency securities are included when the time to delivery is data series as of the week ending July 6, 1994. more than thirty business days. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A3 3 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1994 AAggeennccyy 11999900 11999911 11999922 11999933 July Aug. Sept. Oct. Nov. 1 Federal and federally sponsored agencies 434,668 442,772 483,970 570,711 659,206 674,020 0 0 0 2 Federal agencies 42,159 41,035 41,829 45,193 43,416 43,861 42,544 39,037 39,662 3 Defense Department1 7 7 7 6 6 6 6 6 6 4 Export-Import Bank2-3 11,376 9,809 7,208 5,315 4,389 4,389 3,932 3,932 3,932 5 Federal Housing Administration4 393 397 374 255 82 101 112 114 117 6 Government National Mortgage Association certificates of participation5 0 0 0 0 0 0 0 0 0 7 Postal Service6 6,948 8,421 10,660 9,732 9,473 9,773 8,973 7,773 8,073 8 Tennessee Valley Authority 23,435 22,401 23,580 29,885 29,466 29,592 29,521 27,212 27,534 9 United States Railway Association6 0 0 0 0 0 0 0 0 0 10 Federally sponsored agencies7 392,509 401,737 442,141 525,518 615,790 630,159 0 0 0 11 Federal Home Loan Banks 117,895 107,543 114,733 141,577 166,137 169,284 174,414 185,894 193,920 12 Federal Home Loan Mortgage Corporation 30,941 30,262 29,631 49,993 78,929 81,270 83,947 88,680 90,709 13 Federal National Mortgage Association 123,403 133,937 166,300 201,112 230,484 237,564 239,320 242,575 247,743 14 Farm Credit Banks8 53,590 52,199 51,910 53,123 52,276 53,844 54,333 53,609 54,800 15 Student Loan Marketing Association9 34,194 38,319 39,650 39,784 48,069 48,313 49,692 0 0 16 Financing Corporation10 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 17 Farm Credit Financial Assistance Corporation11 1,261 1,261 1,261 1,261 1,261 1,261 1,261 1,261 1,261 18 Resolution Funding Corporation12 23,055 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 MEMO 19 Federal Financing Bank debt 179,083 185,576 154,994 128,187 113,689 112,804 109,357 106,935 105,662 Lending to federal and federally sponsored agencies 20 Export-Import Bank3 11,370 9,803 7,202 5,309 4,383 4,383 3,926 3,926 3,926 21 Postal Service6 6,698 8,201 10,440 9,732 9,473 9,773 8,973 7,773 8,073 22 Student Loan Marketing Association 4,850 4,820 4,790 4,760 0 0 0 0 0 23 Tennessee Valley Authority 14,055 10,725 6,975 6,325 4,375 4,375 3,400 3,200 3,200 24 United States Railway Association6 0 0 0 0 0 0 0 0 0 Other lending14 2b Farmers Home Administration 52,324 48,534 42,979 38,619 35,104 34,594 34,129 33,869 33,719 26 Rural Electrification Administration 18,890 18,562 18,172 17,578 17,372 17,402 17,316 17,322 17,365 27 Other 70,896 84,931 64,436 45,864 42,982 42,322 41,613 40,845 39,379 1. Consists of mortgages assumed by the Defense Department between 1957 and 1963 10. The Financing Corporation, established in August 1987 to recapitalize the Federal under family housing and homeowners assistance programs. Savings and Loan Insurance Corporation, undertook its first borrowing in October 1987. 2. Includes participation certificates reclassified as debt beginning Oct. 1, 1976. 11. The Farm Credit Financial Assistance Corporation, established in January 1988 to 3. On-budget since Sept. 30, 1976. provide assistance to the Farm Credit System, undertook its first borrowing in July 1988. 4. Consists of debentures issued in payment of Federal Housing Administration 12. The Resolution Funding Corporation, established by the Financial Institutions insurance claims. Once issued, these securities may be sold privately on the securities Reform, Recovery, and Enforcement Act of 1989, undertook its first borrowing in October market. 1989. 5. Certificates of participation issued before fiscal year 1969 by the Government 13. The FFB, which began operations in 1974, is authorized to purchase or sell National Mortgage Association acting as trustee for the Farmers Home Administration, obligations issued, sold, or guaranteed by other federal agencies. Because FFB incurs debt the Department of Health, Education, and Welfare, the Department of Housing and Urban solely for the purpose of lending to other agencies, its debt is not included in the main Development, the Small Business Administration, and the Veterans' Administration. portion of the table in order to avoid double counting. 6. Off-budget. 14. Includes FFB purchases of agency assets and guaranteed loans; the latter are loans 7. Includes outstanding noncontingent liabilities: notes, bonds, and debentures. In- guaranteed by numerous agencies, with the amounts guaranteed by any one agency cludes Federal Agricultural Mortgage Corporation, therefore details do not sum to total. generally being small. The Farmers Home Administration entry consists exclusively of Some data are estimated. agency assets, whereas the Rural Electrification Administration entry consists of both 8. Excludes borrowing by the Farm Credit Financial Assistance Corporation, which is agency assets and guaranteed loans. shown on line 17. 9. Before late 1982, the association obtained financing through the Federal Financing Bank (FFB). Borrowing excludes that obtained from the FFB, which is shown on line 22, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic Nonfinancial Statistics • April 1995 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1994 1995 TTyyppee ooff iissssuuee oorr iissssuueerr,, oorr uussee 11999922 11999933 11999944 June July Aug. Sept. Oct. Nov. Dec/ Jan. 1 All issues, new and refunding1 226,818 279,945 152,917 15,076 13,400 12,175 7,810 10,537 11,685 9,754 7,331 By type of issue 2 General obligation 78,611 90,599 54,258 5,556 7,110 4,177 2,309 2,891 5,592 2,284 3,780 3 Revenue 136,580 189,346 92,100 9,223 5,340 8,133 5,325 6,899 6,093 7,970 3,551 By type of issuer 4 State 24,874 27,999 19,363 1,733 4,686 1,675 1,009 952 1,528 151 739 5 Special district or statutory authority2 138,327 178,714 87,751 9,335 4,931 7,963 4,962 6,511 6,148 7,501 4,484 6 Municipality, county, or township 63,617 73,232 40,524 3,711 2,833 2,672 1,663 2,327 4,009 2,102 2,108 7 Issues for new capital 101,865 91,434 107,288 9,913 10,843 10,479 6,155 8,893 10,137 8,637 5,473 By use of proceeds 8 Education 18,852 16,831 20,675 1,945 1,147 2,075 883 1,596 1,716 1,554 1,333 9 Transportation 14,357 9,167 10,387 2,033 290 1,088 334 1,135 799 301 587 10 Utilities and conservation 12,164 12,014 8,950 856 694 784 433 1,887 644 1,259 524 11 Social welfare 16,744 13,837 19,917 1,312 1,698 2,117 1,897 1,887 11,,553355 2,172 1,036 12 Industrial aid 6,188 6,862 9,054 935 959 1,128 403 420 668888 1,085 260 13 Other purposes 33,560 32,723 37,250 2,645 5,560 3,401 2,011 2,396 4,750 2,063 1,733 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 1994 TTyyppee ooff iissssuuee,, ooffffeerriinngg,, oorr iissssuueerr 11999922 11999933 11999944 May June' July' Aug. Sept. Oct/ Nov/ Dec. 1 All issues' 559,827 754,969' . n.a. 44,161r 49,578 29,818 37,871r 29,416r 34,297 38,834 22,999 2 Bonds2 471,502 641,498 n.a. 40,456r 43,210 26,159 34,495r 25,983' 30,725 33,309 20,493 By type of offering 3 Public, domestic 378,058 486,879 364,942 33,280r 38,472 22,441 30,088' 22,736' 25,094 27,268 17,809 4 Private placement, domestic3 65,853 116,240 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5 Sold abroad 27,591 38,379 56,184 7,175 4,738 3,718 4,406 3,248 5,631 6,040 2,684 By industry group 6 Manufacturing 82,058 88,002 31,971 3,266 2,093 2,316 2,596' 2,167' 2,498 2,481 1,508 7 Commercial and miscellaneous 43,111 60,293r 27,885 2,496 3,277 997 3,570' 2,112' 2,189 1,578 2,469 8 Transportation 9,979 10,756 4,573 150 1,082 248 315 229 227 239 269 9 Public utility 48,055 56,272 11,713 1,071 681 487 575' 707 695 744 273 10 Communication 15,394 31,950 11,986 944 618 429 345 526 279 333 419 11 Real estate and financial 272,904 394,226r 332,999 32,529r 35,459 21,682 27,094' 20,242' 24,837 27,934 15,556 12 Stocks2 88,325 113,472 n.a. 3,705r 6,368 3,659 3,376 3,433 3,572 5,525 2,506 By type of offering 13 Public preferred 21,339 18,897 12,952 702' 1,396 584 710 555 1,202 279 178 14 Common 57,118 82,657 47,670 3,003' 4,972 3,075 2,666 2,877 2,370 5,246 2,327 15 Private placement3 9,867 11,917 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. By industry group 1 1 7 6 M Co a m nu m fa er c c tu ia r l i n a g n d miscellaneous 2 2 2 0 , , 7 23 2 1 3 2 25 2 , , 7 2 6 7 1 1 T 9 8 5 5 6 4 ' 1 1 , , 8 1 3 0 4 6 4 7 9 0 2 1 5 8 6 0 9 5 ' 9 8 0 2 4 1 1, 7 1 4 0 5 5 1 1 , , 7 9 8 6 3 3 1, 8 1 3 4 0 8 18 Transportation 2,595 2,237 n.a. 105 449 75 50 223 79 76 0 2 2 1 0 1 9 P C R u o e b a m l l i m c e s u u t n a ti i t l c e i a ty a ti n o d n financial 3 6 2 3 , , , 5 3 8 3 7 6 2 9 6 5 7 2 3 , , , 0 0 4 2 3 5 9 0 r \ I1 1, 2 5 3 3 1 2 9 9 ' 2,6 2 5 9 2 4 7 8 2,38 0 6 0 1, 1 7 8 6 0 0 7 ' 1,4 7 0 8 7 0 1,63 4 0 9 1, 3 3 3 5 0 3 1 3 1 2 4 6 0 3 5 1. Figures represent gross proceeds of issues maturing in more than one year; they are 2. Monthly data cover only public offerings. the principal amount or number of units calculated by multiplying by the offering price. 3. Monthly data are not available. Figures exclude secondary offerings, employee stock plans, investment companies other SOURCES. Beginning July 1993, Securities Data Company and the Board of Governors than closed-end, intracorporate transactions, equities sold abroad, and Yankee bonds. of the Federal Reserve System. 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 1994 IItteemm 11999922 11999933 May June July Aug. Sept. Oct. Nov. Dec. 1 Sales of own shares2 647,055 851,885 65,179 65,333 59,258 64,833 62,263 59,285 56,849 74,215 2 Redemptions of own shares 447,140 567,881 55,036 56,068 50,275 53,242 53,383 53,743 55,757 70,777 3 Net sales3 199,915 284,004 10,144 9,265 8,983 1,592 8,880 5,543 1,092 3,438 4 Assets4 1,056,310 1,510,209 1,529,478 1,509,998 1,552,652 1,604,961 1,588,277 1,601,363 1,549,186 1,553,069 5 Cash5 73,999 100,209 119,982 114,885 120,129 120,315 121,575 126,766 125,843 122,137 6 Other 982,311 1,409,838 1,409,496 1,395,113 1,432,523 1,484,646 1,466,702 1,474,597 1,423,344 1,430,932 1. Data on sales and redemptions exclude money market mutual funds but include 4. Market value at end of period, less current liabilities. limited-maturity municipal bond funds. Data on asset positions exclude both money 5. Includes all U.S. Treasury securities and other short-term debt securities. market mutual funds and limited-maturity municipal bond funds. SOURCE. Investment Company Institute. Data based on reports of membership, which 2. Includes reinvestment of net income dividends. Excludes reinvestment of capital comprises substantially all open-end investment companies registered with the Securities gains distributions and share issue of conversions from one fund to another in the same and Exchange Commission. Data reflect underwritings of newly formed companies after group. their initial offering of securities. 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 1993 1994 AAccccoouunntt 11999922 11999933 11999944 Qi Q2 Q3 Q4 Qi Q2 Q3 Q4 1 Profits with inventory valuation and 405.1 485.8 n.a. 442.5 473.1 493.5 533.9 508.2 546.4 556.0 n.a. 395.9 462.4 n.a. 432.7 456.6 458.7 501.7 483.5 523.1 538.1 n.a. 139.7 173.2 n.a. 159.8 171.8 169.9 191.5 184.1 201.7 208.6 n.a. 256.2 289.2 n.a. 273.0 284.8 288.9 310.2 299.4 321.4 329.5 n.a. 171.1 191.7 205.2 188.2 190.7 193.2 194.6 196.3 202.5 207.9 213.9 85.1 97.5 n.a. 84.7 94.1 95.6 115.6 103.0 118.9 121.6 n.a. -6.4 -6.2 -18.7 -11.2 -10.0 3.0 -6.5 -12.3 -14.1 -19.6 -31.2 15.7 29.5 37.7 21.0 26.5 31.7 38.8 37.0 37.4 37.5 38.8 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 1993 1994 IInndduussttrryy 11999922 11999933 1199994411 QI Q2 Q3 Q4 Ql Q2 Q31 Q41 1 546.60 586.73 638.37 563.48 578.95 594.56 604.51 619.34 637.08 651.92 645.13 Manufacturing 7 73.32 81.45 92.78 78.19 80.33 82.74 83.64 86.03 91.71 98.97 94.44 3 100.69 98.02 99.77 95.80 97.22 99.74 98.51 99.02 102.28 98.39 99.39 Nonmanufacturing 4 8.88 10.08 11.24 8.98 9.10 11.09 10.92 11.43 10.70 11.57 11.27 Transportation 5 6.67 6.14 6.72 6.16 5.94 5.89 6.55 7.46 5.36 6.65 7.40 6 Air 8.93 6.42 3.95 7.26 6.63 6.70 5.06 4.23 4.53 3.86 3.16 7 Other 7.04 9.22 10.53 8.96 8.92 8.74 10.23 10.77 9.70 10.22 11.42 Public utilities 8 48.22 52.55 52.25 49.98 50.61 52.96 55.60 48.68 53.55 54.15 52.60 9 23.99 23.43 24.20 23.79 23.83 22.98 23.27 24.51 22.96 24.35 24.97 1100 268.84 299.44 336.93 284.35 296.35 303.74 310.73 327.20 336.28 343.76 340.48 1. Figures are amounts anticipated by business. SOURCE. U.S. Department of Commerce, Survey of Current Business. 2. "Other" consists of construction, wholesale and retail trade, finance and insurance, personal and business services, and communication. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Nonfinancial Statistics • April 1995 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1 Billions of dollars, end of period; not seasonally adjusted 1993 1994 AAccccoouunntt 11999911 11999922 11999933 Ql Q2 Q3 04 Ql Q2 Q3 ASSETS 1 Accounts receivable, gross2 484.6 491.8 482.8 477.9 473.7 474.0 482.8 494.5 511.3 524.1 2 Consumer 121.7 118.3 116.5 112.6 110.6 111.0 116.5 120.1 124.3 130.3 3 Business 295.8 301.3 294.6 292.7 291.8 291.9 294.6 302.3 313.2 317.2 4 Real estate 67.1 72.2 71.7 72.5 71.4 71.1 71.7 72.1 73.8 76.6 5 LESS: Reserves for unearned income 56.1 53.2 50.7 50.1 49.7 49.5 50.7 51.2 51.9 51.1 6 Reserves for losses 13.1 16.2 11.2 15.2 10.8 11.2 11.2 11.6 12.1 12.1 7 Accounts receivable, net 415.4 422.4 420.9 412.6 413.2 413.3 420.9 431.7 447.3 460.9 8 All other 144.9 142.5 170.9 150.6 151.5 163.9 170.9 171.2 174.6 177.2 9 Total assets 560.3 564.9 591.8 563.3 564.7 577.3 591.8 602.9 621.9 638.1 LIABILITIES AND CAPITAL 10 Bank loans 42.3 37.6 25.3 34.1 29.4 25.8 25.3 24.2 23.3 21.6 11 Commercial paper 159.5 156.4 159.2 149.8 144.5 149.9 159.2 165.9 171.2 171.0 Debt 12 Other short-term n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 13 Long-term n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 14 Owed to parent 35.5 39.5 42.7 43.1 45.0 44.6 42.7 41.1 44.7 50.0 15 Not elsewhere classified 190.2 196.3 206.0 197.3 199.9 204.2 206.0 211.7 219.6 228.2 16 All other liabilities 68.4 68.0 87.1 72.5 77.8 83.8 87.1 90.5 89.9 95.0 17 Capital, surplus, and undivided profits 64.5 67.1 71.4 66.5 68.1 68.9 71.4 69.5 73.2 72.3 18 Total liabilities and capital 560.3 564.9 591.8 563.3 564.7 577.3 591.8 602.9 621.9 638.1 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 Type of credit July Aug. Sept. Seasonally adjusted 1 Total .... 540,679 546,020 609,503 571,470 579,032 590,512 596,397 602,463 609,503 2 Consumer., 157,857 160,802 174,240 166,639 166,921 172,547 173,178 174,324 174,240 3 Real estate2 72,496 71,991 79,317 75,321 75,524 76,424 76,971 77,991 79,317 4 Business.. 310,325 313,226 355,947 329,510 336,587 341,542 346,248 350,148 355,947 Not seasonally adjusted 5 Total 544,691 550,387 614,535 568,648 575,769 588,525 596,054 603305 614,535 6 Consumer 159,558 162,770 176,499 164,749 166,501 172,002 172,813 174,118 176,499 7 Motor vehicles 57,259 56,057 61,170 58,107 58,589 60,522 60,750 61,372 61,170 8 Other consumer3 61,020 60,396 73,970 65,095 66,608 69,784 70,812 71,502 73,970 9 Securitized motor vehicles4 29,734 36,024 31,769 31,848 31,787 32,372 31,592 31,494 31,769 10 Securitized other consumer4 11,545 10,293 9,590 9,699 9,517 9,324 9,659 9,750 9,590 11 Real estate2 72,243 71,727 79,020 75,379 76,012 76,585 77,235 77,907 79,020 12 Business 312,890 315,890 359,016 328,520 333,256 339,938 346,006 351,280 359,016 13 Motor vehicles 89,011 95,173 119,159 101,878 102,655 106,365 110,089 113,222 119,159 14 Retail5 20,541 18,091 21,464 20,670 20,272 21,164 21,645 22,113 21,464 15 Wholesale6 29,890 31,148 36,158 26,154 25,875 27,201 29,302 30,614 36,158 16 Leasing 38,580 45,934 61,537 55,054 56,508 58,000 59,142 60,495 61,537 17 Equipment 151,424 145,452 156,508 151,480 151,388 152,782 152,675 154,312 156,508 18 Retail 33,521 35,513 39,757 39,348 39,629 39,357 38,584 38,912 39,757 19 Wholesale6 8,680 8,001 9,812 8,859 8,968 9,119 9,134 9,484 9,812 20 Leasing 109,223 101,938 106,939 103,273 102,791 104,306 104,957 105,916 106,939 21 Other business7 60,856 53,997 60,079 54,444 56,389 58,101 59,314 59,893 60,079 22 Securitized business assets4 11,599 21,268 23,270 20,718 22,824 22,690 23,928 23,853 23,270 23 Retail 1,120 2,483 3,065 2,480 2,656 2,564 2,956 2,853 3,065 24 Wholesale 5,756 10,584 14,499 12,817 14,147 14,411 15,173 15,311 14,499 25 Leasing 4,723 8,201 5,706 5,421 6,021 5,715 5,799 5,689 5,706 1. Includes finance company subsidiaries of bank holding companies but not of 4. Outstanding balances of pools upon which securities have been issued; these retailers and banks. Data are before deductions for unearned income and losses. Data in balances are no longer carried on the balance sheets of the loan originator. this table also appear in the Board's G.20 (422) monthly statistical release. For ordering 5. Passenger car fleets and commercial land vehicles for which licenses are required. address, see inside front cover. 6. Credit arising from transactions between manufacturers and dealers, that is, floor 2. Includes all loans secured by liens on any type of real estate, for example, first and plan financing. junior mortgages and home equity loans. 7. Includes loans on commercial accounts receivable, factored commercial accounts, 3. Includes personal cash loans, mobile home loans, and loans to purchase other types and receivable dealer capital; small loans used primarily for business or farm purposes; of consumer goods such as appliances, apparel, general merchandise, and recreation and wholesale and lease paper for mobile homes, campers, and travel trailers. vehicles. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate A3 7 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 1994 1995 IItteemm 11999922 11999933 11999944 July Aug. Sept. Oct. Nov. Dec. Jan. Terms and yields in primary and secondary markets PRIMARY MARKETS Terms' 1 Purchase price (thousands of dollars) 158.1 163.1 170.4 166.0 167.6 170.6 173.4 178.2 184.9 176.5 2 Amount of loan (thousands of dollars) 118.1 123.0 130.8 129.0 129.3 133.7 131.9 136.2 136.2 134.2 3 Loan-to-price ratio (percent) 76.6 78.0 78.8 79.4 79.0 79.4 78.3 78.0 76.9 78.0 4 Maturity (years) 25.6 26.1 27.5 27.5 28.0 27.9 27.6 27.9 28.0 28.0 5 Fees and charges (percent of loan amount)2 1.60 1.30 1.29 1.35 1.38 1.36 1.22 1.30 1.38 1.31 Yield (percent per year) 6 Contract rate1 7.98 7.02 7.26 7.50 7.45 7.48 7.55 7.59 7.61 7.96 7 Effective rate1,3 8.25 7.24 7.47 7.71 7.67 7.70 7.76 7.81 7.83 8.18 8 Contract rate (HUD series)4 8.43 7.37 8.58 8.64 8.68 8.96 9.19 9.34 9.32 9.11 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (Section 203)5 8.46 7.46 8.68 8.65 8.66 9.10 9.23 9.53 9.54 9.10 10 GNMA securities6 7.71 6.65 7.96 8.23 8.15 8.28 8.66 8.86 8.76 8.69 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 158,119 190,861 222,057 210,666 212,680 215,249 218,479 220,377 222,057 222,774 12 FHAA'A insured 22,593 23,857 28,377 25,477 25,604 25,800 26,226 27,118 28,377 28,368 13 Conventional 135,526 167,004 194,499 185,189 187,076 189,449 192,253 193,259 194,499 195,170 Mortgage transactions (during period) 14 Purchases 75,905 92,037 62,389 4,628 4,077 4,266 5,003 3,549 3,399 2,154 Mortgage commitments (during period) 15 Issued7 74,970 92,537 54,038 3,798 3,776 4,880 3,421 2,696 2,910 1,720 16 To sell8 10,493 5,097 1,820 0 0 0 48 20 55 57 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period f 17 Total 33,665 55,012 72,693 62,993 64,118 66,478 69,340 70,757 72,693 73,553 18 FHAA'A insured 352 321 276 296 291 287 284 279 276 272 19 Conventional 33,313 54,691 72,416 62,697 63,827 66,191 69,057 70,477 72,416 73,281 Mortgage transactions (during period) 20 Purchases 191,125 229,242 124,697 6,535 6,407 5,512 8,351 3,022 4,890 3,254 21 Sales 179,208 208,723 117,110 6,338 5,828 5,213 8,139 2,865 3,769 2,862 Mortgage commitments (during periodf 22 Contracted 261,637 274,599 136,067 5,820 5,649 5,035 7,288 3,454 2,412 6,541 1. Weighted averages based on sample surveys of mortgages originated by major 6. Average net yields to investors on fully modified pass-through securities backed by institutional lender groups for purchase of newly built homes; compiled by the Federal mortgages and guaranteed by the Government National Mortgage Association (GNMA), Housing Finance Board in cooperation with the Federal Deposit Insurance Corporation. assuming prepayment in twelve years on pools of thirty-year mortgages insured by the 2. Includes all fees, commissions, discounts, and "points" paid (by the borrower or Federal Housing Administration or guaranteed by the Department of Veterans Affairs. the seller) to obtain a loan. 7. Does not include standby commitments issued, but includes standby commitments 3. Average effective interest rate on loans closed for purchase of newly built homes, converted. 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 mortgages; from 9. Includes conventional and government-underwritten loans. The Federal Home Loan U.S. Department of Housing and Urban Development (HUD). Based on transactions on Mortgage Corporation's mortgage commitments and mortgage transactions include activthe first day of the subsequent month. ity under mortgage securities swap programs, whereas the corresponding data for FNMA 5. Average gross yield on thirty-year, minimum-downpayment first mortgages exclude swap activity. 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 • April 1995 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1993 1994 TTyyppee ooff hhoollddeerr aanndd pprrooppeerrttyy 11999900 11999911 11999922 Q3 04 QL Q2 Q3P 1 All holders 3,763,628 3,926,154 4,056,233 4,174,202 4,215,480 4,239,496 4,290,640 4,346,606 By type of property 2 One- to four-family residences 2,617,044 2,781,416 2,963,391 3,098,344 3,147,255 3,178,389 3,225,062 3,276,039 3 Multifamily residences 309,369 306,410 295,417 290,690 290,489 288,988 290,109 291,907 4 Commercial 758,313 759,023 716,687 704,032 696,542 690,726 692,584 694,842 5 Farm 78,903 79,306 80,738 81,136 81,194 81,393 82,886 83,818 By type of holder 6 Major financial institutions 1,914,315 1,846,726 1,769,187 1,769,950 1,767,835 1,746,474 1,763,249 1,784,191 7 Commercial banks2 844,826 876,100 894,513 922,670 940,444 937,944 956,793 981,350 8 One- to four-family 455,931 483,623 507,780 537,661 556,538 554,117 570,325 590,244 9 Multifamily 37,015 36,935 38,024 37,655 38,635 38,451 37,948 38,130 10 Commercial 334,648 337,095 328,826 326,507 324,409 324,122 326,605 330,568 11 Farm 17,231 18,447 19,882 20,848 20,862 21,254 21,916 22,408 12 Savings institutions3 801,628 705,367 627,972 609,654 598,330 584,531 585,671 587,375 13 One- to four-family 600,154 538,358 489,622 478,456 469,959 458,075 462,240 466,414 14 Multifamily 91,806 79,881 69,791 68,440 67,362 66,914 66,245 65,611 15 Commercial 109,168 86,741 68,235 62,439 60,704 59,245 56,887 55,058 16 Farm 500 388 324 320 305 297 299 292 17 Life insurance companies 267,861 265,258 246,702 237,626 229,061 223,999 220,785 215,466 18 One- to four-family 13,005 11,547 11,441 9,835 9,458 9,245 9,107 8,877 19 Multifamily 28,979 29,562 27,770 26,844 25,814 25,232 24,855 24,227 20 Commercial 215,121 214,105 198,269 191,660 184,305 180,152 177,463 172,977 21 Farm 10,756 10,044 9,222 9,287 9,484 9,370 9,360 9,385 22 Federal and related agencies 239,003 266,146 286,263 306,578 317,486 323,464 327,690 334,284 23 Government National Mortgage Association 20 19 30 43 22 20 12 12 24 One- to four-family 20 19 30 37 15 13 12 12 25 Multifamily 0 0 0 7 7 7 0 0 26 Farmers Home Administration4 41,439 41,713 41,695 41,424 41,386 41,209 41,370 41,390 27 One- to four-family 18,527 18,496 16,912 15,714 15,303 14,870 14,459 14,063 28 Multifamily 9,640 10,141 10,575 10,830 10,940 11,037 11,147 11,254 29 Commercial 4,690 4,905 5,158 5,347 5,406 5,399 5,526 5,587 30 Farm 8,582 8,171 9,050 9,533 9,739 9,903 10,239 10,485 31 Federal Housing and Veterans' Administrations 8,801 10,733 12,581 11,797 12,215 11,344 11,169 10,657 32 One- to four-family 3,593 4,036 5,153 4,850 5,364 4,738 4,826 4,503 33 Multifamily 5,208 6,697 7,428 6,947 6,851 6,606 6,343 6,154 34 Resolution Trust Corporation 32,600 45,822 32,045 19,925 17,284 14,241 13,908 15,401 35 One- to four-family 15,800 14,535 12,960 8,381 7,203 6,308 6,045 6,984 36 Multifamily 8,064 15,018 9,621 6,002 5,327 4,208 4,230 4,528 37 Commercial 8,736 16,269 9,464 5,543 4,754 3,726 3,633 3,889 38 Farm 0 0 0 0 0 0 0 0 39 Federal National Mortgage Association 104,870 112,283 137,584 160,721 166,642 172,343 175,377 177,200 40 One- to four-family 94,323 100,387 124,016 146,009 151,310 156,576 159,437 161,255 41 Multifamily 10,547 11,896 13,568 14,712 15,332 15,767 15,940 15,945 42 Federal Land Banks 29,416 28,767 28,664 28,810 28,460 28,181 28,475 28,538 43 One- to four-family 1,838 1,693 1,687 1,695 1,675 1,658 1,675 1,679 44 Farm 27,577 27,074 26,977 27,115 26,785 26,523 26,800 26,859 45 Federal Home Loan Mortgage Corporation 21,857 26,809 33,665 43,858 51,476 56,127 57,379 61,087 46 One- to four-family 19,185 24,125 31,032 41,314 48,929 53,571 54,799 58,432 47 Multifamily 2,672 2,684 2,633 2,544 2,547 2,556 2,580 2,655 48 Mortgage pools or trusts5 1,079,103 1,250,666 1,425,546 1,517,003 1,550,818 1,604,449 1,643,627 1,668,496 49 Government National Mortgage Association 403,613 425,295 419,516 415,076 414,066 423,446 435,709 444,976 50 One- to four-family 391,505 415,767 410,675 405,963 404,864 414,194 426,363 435,511 51 Multifamily 12,108 9,528 8,841 9,113 9,202 9,251 9,346 9,465 52 Federal Home Loan Mortgage Corporation 316,359 359,163 407,514 433,090 443,029 459,949 470,183 469,062 53 One- to four-family 308,369 351,906 401,525 428,155 438,494 455,779 466,361 465,614 54 Multifamily 7,990 7,257 5,989 4,935 4,535 4,170 3,822 3,448 55 Federal National Mortgage Association 299,833 371,984 444,979 481,880 495,525 507,376 514,855 523,512 56 One- to four-family 291,194 362,667 435,979 473,599 486,804 498,489 505,730 514,375 57 Multifamily 8,639 9,317 9,000 8,281 8,721 8,887 9,125 9,137 58 Farmers Home Administration4 66 47 38 30 28 26 22 20 59 One- to four-family 17 11 8 6 5 5 4 3 60 Multifamily 0 0 0 0 0 0 0 0 61 Commercial 24 19 17 14 13 12 10 9 62 Farm 26 17 13 10 10 9 8 8 63 Private mortgage conduits 59,232 94,177 153,499 186,927 198,171 213,653 222,858 230,926 64 One- to four-family 53,335 84,000 132,000 158,000 164,000 177,000 179,500 182,300 65 Multifamily 731 3,698 6,305 7,991 8,701 9,202 11,514 13,891 66 Commercial 5,166 6,479 15,194 20,936 25,469 27,451 31,844 34,735 67 Farm 0 0 0 0 0 0 0 0 68 Individuals and others6 531,208 562,616 575,237 580,670 579,341 565,109 556,074 559,635 69 One- to four-family 350,247 370,246 382,572 388,669 387,334 373,752 364,178 365,772 70 Multifamily 85,969 83,796 85,871 86,391 86,516 86,700 87,014 87,462 71 Commercial 80,761 93,410 91,524 91,588 91,482 90,621 90,617 92,020 72 Farm 14,232 15,164 15,270 14,023 14,009 14,037 14,264 14,380 1. Multifamily debt refers to loans on structures of five or more units. 6. Other holders include mortgage companies, real estate investment trusts, state and 2. Includes loans held by nondeposit trust companies but not loans held by bank trust local credit agencies, state and local retirement funds, noninsured pension funds, credit departments. unions, and finance companies. 3. Includes savings banks and savings and loan associations. SOURCES. Based on data from various institutional and government sources. Separation 4. FmHA-guaranteed securities sold to the Federal Financing Bank were reallocated of nonfarm mortgage debt by type of property, if not reported directly, and interpolations from FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4 because of and extrapolations, when required for some quarters, are estimated in part by the Federal accounting changes by the Farmers Home Administration. Reserve. Line 64 from Inside Mortgage Securities. 5. Outstanding principal balances of mortgage-backed securities insured or guaranteed by the agency indicated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Consumer Installment Credit A39 1.55 CONSUMER INSTALLMENT CREDIT1 Millions of dollars, amounts outstanding, end of period 1994 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11999922 11999933 11999944 July Aug. Sept. Oct. Nov.' Dec. Seasonally adjusted 1 Total 731,098 794,300 911,214 854,469 869,628 879,961 891,603 903,832 911,214 2 Automobile 257,678 282,036 324,444 305,193 309,721 315,162 318,036 322,684 324,444 3 Revolving 257,304 287,875 337,217 313,591 321,365 322,823 327,707 334,501 337,217 4 Other 216,117 224,389 249,552 235,685 238,542 241,976 245,860 246,646 249,552 Not seasonally adjusted 5 Total 747,690 812,782 932,771 847,727 868,049 880,609 891,442 905,508 932,771 By major holder 6 Commercial banks 330,088 368,549 433,954 393,927 404,438 410,312 414,833 421,790 433,954 7 Finance companies 118,279 116,453 135,140 123,202 125,197 130,306 131,562 132,874 135,140 8 Credit unions 91,694 101,634 121,699 109,838 113,122 114,699 116,325 118,050 121,699 9 Savings institutions 37,049 37,855 38,750 38,055 37,975 37,943 38,122 38,275 38,750 10 Nonfinancial business 49,184 57,637 65,438 55,775 56,496 55,967 56,020 58,591 65,438 11 Pools of securitized assets 121,396 130,654 137,790 126,930 130,821 131,382 134,580 135,928 137,790 By major type of credit* 12 Automobile 258,226 282,825 325,461 304,026 310,925 316,778 320,182 322,980 325,461 13 Commercial banks 109,623 123,358 148,626 138,907 142,452 144,260 146,456 148,004 148,626 14 Finance companies 57,259 56,057 61,170 58,107 58,589 60,522 60,750 61,372 61,170 15 Pools of securitized assets 33,888 39,490 33,765 34,436 34,584 35,149 34,394 33,664 33,765 16 Revolving 271,368 303,444 355,357 309,716 319,003 321,205 325,872 336,232 355,357 17 Commercial banks 132,966 149,527 180,206 156,940 161,417 164,724 165,561 171,318 180,206 18 Nonfinancial business 43,974 52,113 59,364 50,218 50,873 50,314 50,332 52,819 59,364 19 Pools of securitized assets2 74,931 79,887 92,701 81,704 85,644 85,051 88,762 90,775 92,701 20 Other 218,096 226,513 251,953 233,985 238,121 242,626 245,388 246,2% 251,953 21 Commercial banks 87,499 95,664 105,122 98,080 100,569 101,328 102,816 102,468 105,122 22 Finance companies 61,020 60,396 73,970 65,095 66,608 69,784 70,812 71,502 73,970 23 Nonfinancial business 5,210 5,524 6,074 5,557 5,623 5,653 5,688 5,772 6,074 24 Pools of securitized assets 12,577 11,277 11,324 10,790 10,593 11,182 11,424 11,489 11,324 1. The Board's series on amounts of credit covers most short- and intermediate-term 2. Outstanding balances of pools upon which securities have been issued; these credit extended to individuals that is scheduled to be repaid (or has the option of balances are no longer carried on the balance sheets of the loan originator. repayment) in two or more installments. 3. Totals include estimates for certain holders for which only consumer credit totals are Data in this table also appear in the Board's G.19 (421) monthly statistical release. For available. ordering address, see inside front cover. 1.56 TERMS OF CONSUMER INSTALLMENT CREDIT1 Percent per year except as noted 1994 IItteemm 11999922 11999933 11999944 June July Aug. Sept. Oct. Nov. Dec. INTEREST RATES Commercial banks2 9.29 8.09 8.12 n.a. n.a. 8.41 n.a. n.a. 8.75 n.a. 14.04 13.47 13.19 n.a. n.a. 13.33 n.a. n.a. 13.59 n.a. 12.67 11.87 11.73 n.a. n.a. 12.04 n.a. n.a. n.a. n.a. 17.78 16.83 16.15 n.a. n.a. 16.25 n.a. n.a. n.a. n.a. Auto finance companies 9.93 9.48 9.79 9.96 10.17 10.32 10.13 10.39 10.53 10.72 13.80 12.79 13.49 13.78 13.86 13.92 13.98 14.01 14.19 14.48 OTHER TERMS3 Maturity (months) 54.0 54.5 54.0 53.3 53.9 54.2 54.3 54.9 54.6 53.9 47.9 48.8 50.2 50.0 50.2 50.1 50.2 50.2 50.3 50.3 Loan-to-value ratio 89 91 92 94 93 93 93 92 93 92 97 98 99 100 100 100 100 100 100 100 Amount financed (dollars) 13,584 14,332 15,375 15,180 15,319 15,283 15,419 15,827 15,971 16,187 9,119 9,875 10,709 10,656 10,735 10,755 10,906 10,554 11,202 11,309 1. The Board's series on amounts of credit covers most short- and intermediate-term 2. Data are available for only the second month of each quarter, credit extended to individuals that is scheduled to be repaid (or has the option of 3. At auto finance companies, repayment) in two or more installments. Data in this table also appear in the Board's G.19 (421) monthly statistical release. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • April 1995 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 1993 1994 Q1 Q2 Q3 Q4 Ql Q2 Q3 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors.... 729.0 635.6 475.8 536.1 628.1 481.4 740.5 6133 677.2 651.2 543.4 612.3 By sector and instrument 2 U.S. government 146.4 246.9 278.2 304.0 256.1 240.5 336.4 173.4 274.2 210.6 122.9 134.1 3 Treasury securities 144.7 238.7 292.0 303.8 248.3 237.4 332.3 157.2 266.5 211.8 118.2 129.8 4 Budget agency issues and mortgages 1.6 8.2 -13.8 .2 7.8 3.2 4.1 16.3 7.7 -1.3 4.7 4.4 5 Private 582.7 388.7 197.5 232.1 372.0 240.9 404.1 439.9 403.0 440.6 420.5 478.1 By instrument 6 Tax-exempt obligations 69.8 48.7 68.7 31.1 78.1 88.7 130.3 66.2 27.4 22.6 -9.8 -41.2 7 Corporate bonds 73.8 47.1 78.8 67.5 75.2 85.7 75.7 72.0 67.4 35.1 38.9 24.6 8 Mortgages 281.2 199.5 161.4 123.9 155.6 99.8 152.2 222.1 148.5 151.5 162.2 219.4 9 Home mortgages 224.5 185.6 163.8 179.5 183.9 120.9 193.5 236.5 184.5 180.2 144.9 199.6 10 Multifamily residential 11.5 4.8 -3.1 -11.2 -6.1 -5.5 -11.4 -4.9 -2.6 -6.1 4.3 7.1 11 Commercial 47.8 9.3 .4 -45.5 -22.5 -15.7 -30.9 -9.9 -33.6 -23.4 7.1 8.9 12 Farm -2.5 -.3 .4 1.1 .5 .2 1.0 .4 .2 .8 6.0 3.7 13 Consumer credit 45.8 16.0 -15.0 5.5 62.3 20.3 41.6 76.2 111.3 72.7 121.9 127.1 14 Bank loans n.e.c 27.3 .4 -40.9 -13.8 5.0 -16.2 -.2 7.8 28.5 74.2 73.0 93.5 15 Commercial paper 21.4 9.7 -18.4 8.6 10.0 -14.1 33.2 17.2 3.8 8.0 16.4 33.8 16 Other loans 63.3 67.4 -37.1 9.2 -14.3 -23.3 -28.6 -21.7 16.2 76.5 17.8 20.9 By borrowing sector 17 Household 281.6 218.9 170.9 217.7 284.5 167.5 264.1 368.5 337.7 299.4 303.6 370.5 18 Nonfinancial business 233.1 123.7 -35.9 -2.0 21.9 -11.6 26.7 24.1 48.2 131.4 144.7 156.4 19 Farm .6 2.3 2.1 1.0 2.0 -2.3 2.7 4.1 3.6 3.1 11.8 3.6 20 Nonfarm noncorporate 40.3 10.1 -28.5 -43.9 -26.0 -28.6 -33.4 -26.2 -15.6 8.4 16.5 26.9 21 Corporate 192.1 111.3 -9.6 40.9 45.8 19.3 57.4 46.3 60.2 119.9 116.4 125.9 22 State and local government 68.0 46.0 62.6 16.4 65.7 85.0 113.2 47.3 17.1 9.9 -27.8 -48.8 23 Foreign net borrowing in United States 10.2 23.9 13.9 21.3 46.9 38.9 42.8 83.1 22.9 -66.3 -1.9 -3.4 24 Bonds 4.9 21.4 14.1 14.4 59.4 66.5 45.3 84.5 41.4 29.0 11.1 6.6 25 Bank loans n.e.c -.1 -2.9 3.1 2.3 .7 1.5 6.6 1.0 -6.3 6.0 -.8 .9 26 Commercial paper 13.1 12.3 6.4 5.2 -9.0 -21.7 -.6 -1.6 -12.0 -101.8 -5.2 -8.1 27 U.S. government and other loans -7.6 -7.0 -9.8 -.6 -4.2 -7.5 -8.4 -.8 -.1 .5 -7.0 -2.7 28 Total domestic plus foreign 739.2 659.4 489.6 557.4 675.0 520.3 783.3 696.4 700.2 584.9 541.5 608.9 Financial sectors 29 Total net borrowing by financial sectors 225.1 202.9 152.6 237.1 286.1 180.4 175.5 438.9 349.8 477.0 294.9 345.6 By instrument 30 U.S. government-related 149.5 167.4 145.7 155.8 161.2 169.4 56.6 287.3 131.3 320.8 245.2 224.9 31 Government-sponsored enterprises securities 25.2 17.1 9.2 40.3 80.6 32.2 68.8 167.8 53.4 160.0 146.6 152.1 32 Mortgage pool securities 124.3 150.3 136.6 115.6 80.6 137.2 -12.2 119.5 77.9 180.0 98.6 72.8 33 Loans from U.S. government .0 -.1 .0 .0 .0 .0 .0 .0 .0 -19.2 .0 .0 34 Private 75.7 35.5 6.8 81.3 125.0 11.0 118.9 151.6 218.5 156.2 49.7 120.7 35 Corporate bonds 41.5 46.3 67.6 78.5 118.3 99.0 92.4 143.4 138.3 148.6 59.9 65.3 36 Mortgages .3 .6 .5 .6 3.6 1.4 1.4 6.2 5.5 .2 .6 .1 37 Bank loans n.e.c 13.5 4.7 8.8 2.2 -14.0 -34.6 12.8 -16.1 -18.0 -18.3 -45.1 -17.6 38 Open market paper 31.3 8.6 -32.0 -.7 -6.2 -75.1 -16.2 -9.4 76.0 36.6 2.1 42.1 39 Loans from Federal Home Loan Banks -11.0 -24.7 -38.0 .8 23.3 20.4 28.4 27.4 16.8 -10.8 32.3 30.7 By borrowing sector 40 Government-sponsored enterprises 25.2 17.0 9.1 40.2 80.6 32.2 68.8 167.8 53.4 140.8 146.6 152.1 41 Federally related mortgage pools 124.3 150.3 136.6 115.6 80.6 137.2 -12.2 119.5 77.9 180.0 98.6 72.8 42 75.7 35.5 6.8 81.3 125.0 11.0 118.9 151.6 218.5 156.2 49.7 120.7 43 Commercial banks -1.4 -.7 -11.7 8.8 5.6 3.5 11.3 6.5 1.2 2.0 12.4 22.8 44 Bank holding companies 6.2 -27.7 -2.5 2.3 8.8 21.1 1.3 .5 12.2 3.5 8.2 11.7 45 Funding corporations 12.5 15.4 -6.5 13.2 2.9 -31.4 -1.6 7.9 36.7 47.4 -17.1 47.0 46 Savings institutions -15.1 -30.2 -44.5 -6.7 11.1 9.7 12.6 13.5 8.8 -5.6 5.8 14.8 47 Credit unions .0 .0 .0 .0 .2 .0 .3 .3 .1 .1 .2 .5 48 Life insurance companies .0 .0 .0 .0 .2 .1 .6 -.1 .4 .0 .0 .0 49 Finance companies 27.4 24.0 18.6 -3.6 .2 -19.6 -13.6 17.5 16.3 63.3 67.0 16.9 50 Mortgage companies 10.1 .0 -2.4 8.0 -1.0 -25.2 32.4 -.8 -10.4 -27.6 -33.2 -10.0 51 Real estate investment trusts (REITs) 1.4 .8 1.2 .3 3.5 .4 1.3 6.0 6.2 1.2 2.2 2.3 52 Issuers of asset-backed securities (ABSs) 28.3 52.3 51.0 56.3 81.5 62.0 60.5 85.8 117.6 81.8 4.0 22.3 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 1993 1994 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999911 11999922 11999933 Ql Q2 Q3 Q4 Ql Q2 Q3 All sectors 53 Total net borrowing, all sectors 964.4 8623 642.2 794.5 961.2 700.7 958.8 1,1353 1,050.0 1,061.9 836.4 954.5 54 U.S. government securities 295.8 414.4 424.0 459.8 417.3 409.9 393.0 460.7 405.5 550.5 368.1 359.0 55 Tax-exempt securities 69.8 48.7 68.7 31.1 78.1 88.7 130.3 66.2 27.4 22.6 -9.8 -41.2 56 Corporate and foreign bonds 120.2 114.7 160.5 160.4 252.9 251.2 213.4 299.9 247.1 212.6 109.8 96.5 57 Mortgages 281.6 200.1 161.9 124.5 159.2 101.2 153.5 228.3 154.0 151.8 162.7 219.6 58 Consumer credit 45.8 16.0 -15.0 5.5 62.3 20.3 41.6 76.2 111.3 72.7 121.9 127.1 59 Bank loans n.e.c 40.7 2.2 -29.1 -9.4 -8.3 -49.2 19.2 -7.3 4.2 61.9 27.1 76.8 60 Open market paper 65.9 30.7 -44.0 13.1 -5.1 -110.9 16.4 6.3 67.7 -57.2 13.3 67.8 61 Other loans 44.7 35.6 -84.9 9.5 4.7 -10.4 -8.7 4.9 32.9 47.0 43.1 49.0 Funds raised through mutual funds and corporate equities 62 Total net share issues -60.8 19.7 215.4 296.0 436.9 343.9 471.9 498.0 434.0 214.5 218.6 117.4 63 Mutual funds 37.2 65.3 151.5 211.9 316.8 268.9 358.0 348.9 291.5 114.0 152.7 131.2 64 Corporate equities -98.0 -45.6 64.0 84.1 120.1 75.0 113.9 149.1 142.4 100.5 65.8 -13.8 65 Nonfinancial corporations -124.2 -63.0 18.3 27.0 21.3 8.2 23.2 32.3 21.5 -9.6 -2.0 -50.0 66 Financial corporations 9.0 10.0 15.1 26.4 38.2 35.2 38.6 38.2 40.9 40.7 29.0 21.6 67 Foreign shares purchased in United States 17.2 7.4 30.7 30.7 60.6 31.6 52.1 78.6 80.0 69.4 38.9 14.6 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables F.2 through F.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 DomesticN onfinancial Statistics • April 1995 1.58 SUMMARY OF FINANCIAL TRANSACTIONS1 Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates 1993 1994 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11998899 11999900 11999911 11999922 11999933 QL Q2 Q3 Q4 QL Q2 Q3 NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets 964.4 8623 642.2 794.5 961.2 700.7 958.8 1,1353 1,050.0 1,061.9 836.4 954.5 2 Private domestic nonfinancial sectors 137.0 190.1 -7.5 72.0 6.8 -23.1 -3.7 -39.5 93.3 458.8 346.1 208.8 3 Households 94.7 157.2 -39.6 70.7 -9.6 -74.8 -75.6 -69.7 181.8 462.2 412.3 316.4 4 Nonfarm noncorporate business -.8 -1.7 -3.7 -1.1 -3.2 -3.0 -3.2 -3.3 -3.5 -3.6 -1.8 -1.9 I Nonfinancial corporate business 13.7 -3.7 6.7 29.2 18.0 -2.4 17.3 41.2 16.0 21.9 23.8 -1.7 6 State and local governments 29.3 38.3 29.2 -26.8 1.5 57.0 57.7 -7.7 -101.0 -21.6 -88.2 -104.0 7 U.S. government -3.1 33.7 10.5 -11.9 -18.4 -23.2 -27.1 -15.4 -7.9 -40.8 -8.2 -6.6 8 Foreign 86.6 85.5 26.6 100.5 126.0 65.9 93.4 123.5 221.2 127.5 51.9 113.1 9 Financial sectors 743.8 553.0 612.5 633.9 846.8 681.1 896.2 1,066.6 743.3 516.4 446.7 639.3 10 Government sponsored enterprises -4.1 13.9 15.2 69.0 90.2 16.7 128.0 144.8 71.2 92.4 101.1 135.6 11 Federally related mortgage pools 124.3 150.3 136.6 115.6 80.6 137.2 -12.2 119.5 77.9 180.0 98.6 72.8 12 Monetary authority -7.3 8.1 31.1 27.9 36.2 42.5 35.7 28.2 38.5 48.8 17.9 24.0 13 Commercial banking 177.2 125.1 80.8 95.3 142.2 100.5 133.4 146.7 188.1 184.7 112.7 183.5 14 U.S. commercial banks 146.1 94.9 35.7 69.5 149.6 103.4 137.4 160.3 197.3 120.6 128.4 164.7 15 Foreign banking offices 26.7 28.4 48.5 16.5 -9.8 -1.4 -14.3 -16.9 -6.5 59.0 -17.8 19.2 16 Bank holding companies 2.8 -2.8 -1.5 5.6 .0 -4.5 7.9 1.2 -4.8 3.1 .2 -2.4 17 Banks in U.S. affiliated areas 1.6 4.5 -1.9 3.7 2.4 3.0 2.4 2.2 2.1 2.1 1.9 1.9 18 Funding corporations 8.0 16.1 15.8 23.5 18.1 -3.8 1.1 32.4 42.6 17.8 35.3 18.7 19 Thrift institutions -90.0 -154.0 -123.5 -61.3 -2.0 -30.7 15.2 21.0 -13.3 13.5 42.1 44.7 20 Life insurance companies 101.8 94.4 83.2 79.1 105.1 113.0 109.4 111.8 86.4 53.7 6.1 33.3 21 Other insurance companies 29.7 26.5 32.6 12.8 33.3 27.3 36.0 37.6 32.1 27.9 20.8 16.0 22 Private pension funds 81.1 17.2 85.7 37.3 40.2 118.0 11.1 91.9 -60.1 -97.7 -30.7 -13.4 23 State and local government retirement funds 46.1 34.9 46.0 34.4 25.5 -9.8 47.5 27.4 36.9 45.3 51.2 41.1 24 Finance companies 32.0 29.0 -12.7 1.7 -9.0 -33.3 -34.7 9.4 22.6 72.1 49.8 59.0 25 Mortgage companies 20.1 .0 11.2 .1 .0 -50.4 65.1 -1.6 -13.3 -55.4 -66.2 -20.0 26 Mutual funds 23.8 41.4 90.3 123.7 164.0 148.6 194.4 174.6 138.4 -72.6 11.3 -18.6 27 Closed-end funds 6.6 .2 14.7 17.4 10.2 16.7 10.5 5.9 7.7 8.7 3.6 1.4 28 Money market funds 67.1 80.9 30.1 1.3 12.9 -57.3 33.3 25.3 50.3 -37.4 33.7 54.4 29 Real estate investment trusts (REITs) .5 -.7 -.7 1.1 .6 .2 .8 1.0 .2 .7 .7 .7 30 Brokers and dealers 80.2 2.8 17.5 -6.9 9.2 75.2 52.5 -7.8 -82.8 -56.1 -52.6 -14.4 31 Asset-backed securities issuers (ABSs) 27.1 51.1 48.9 53.8 80.1 61.5 59.4 88.6 111.1 81.0 6.2 17.5 32 Bank personal trusts 19.7 15.9 10.0 8.0 9.5 9.1 10.0 9.9 8.9 9.3 5.2 2.9 RELATION OF LIABILITIES TO FINANCIAL ASSETS 33 Net flows through credit markets 964.4 8623 642.2 794.5 961.2 700.7 958.8 1,1353 1,050.0 1,061.9 836.4 954.5 Other financial sources 34 Official foreign exchange 24.8 2.0 -5.9 -1.6 .8 3.4 -4.0 1.7 2.2 -.2 -11.2 -.6 35 Special drawing rights certificates 3.5 1.5 .0 -2.0 .0 .0 .0 .0 .0 .0 .0 .0 36 Treasury currency .6 1.0 .0 .2 .4 .3 .4 .4 .7 .7 .6 .8 37 Life insurance reserves 28.8 25.7 25.7 27.3 35.2 38.6 35.3 46.6 20.5 20.0 8.1 23.8 38 Pension fund reserves 321.2 165.1 360.3 249.7 304.7 331.7 333.7 359.9 193.6 -18.8 64.3 197.8 39 Interbank claims -16.2 35.4 -3.9 61.7 42.1 63.8 130.2 -7.6 -18.1 150.8 195.7 -44.5 40 Checkable deposits and currency 6.4 43.3 86.4 113.8 117.3 99.7 214.4 73.1 81.9 173.1 -68.0 -81.0 41 Small time and savings deposits 98.7 63.7 1.5 -57.2 -70.3 -108.5 -67.8 -68.1 -36.6 2.5 -59.9 -61.5 42 Large time deposits 16.9 -66.1 -58.5 -73.2 -23.5 -21.6 -26.8 -59.5 13.7 -39.6 -4.8 80.6 43 Money market fund shares 90.1 70.3 41.2 3.9 15.8 -46.8 61.8 .6 47.7 -10.9 67.8 50.3 44 Security repurchase agreements 77.8 -24.2 -16.5 35.5 65.5 170.7 37.9 67.8 -14.4 12.8 176.3 68.3 45 Foreign deposits 35.7 38.2 -16.7 -7.2 -22.1 -11.9 -17.1 -50.7 -8.6 24.9 35.9 5.0 46 Mutual fund shares 37.2 65.3 151.5 211.9 316.8 268.9 358.0 348.9 291.5 114.0 152.7 131.2 47 Corporate equities -98.0 -45.6 64.0 84.1 120.1 75.0 113.9 149.1 142.4 100.5 65.8 -13.8 48 Security credit 15.6 3.5 51.4 4.2 61.9 44.8 40.0 76.6 86.5 29.7 -17.3 -62.3 49 Trade debt 68.2 37.0 3.6 41.5 49.0 43.4 51.0 49.6 51.9 30.3 67.2 61.6 50 Taxes payable 2.4 -4.8 -6.2 8.5 4.6 7.9 7.3 -1.8 4.9 13.7 -3.4 5.9 51 Noncorporate proprietors' equity -25.8 -28.3 -3.3 18.4 -10.2 -6.6 -14.8 6.2 -25.8 -45.8 -47.2 -39.9 52 Investment in bank personal trusts 19.6 29.7 16.1 -7.1 1.6 -4.2 -7.2 .1 17.6 15.4 -15.5 6.7 53 Miscellaneous 313.8 135.7 197.2 257.6 302.1 197.9 404.0 222.3 384.0 279.6 204.8 316.8 54 Total financial sources 1,985.7 1,410.6 1,530.2 1,764.5 2,273.0 1,847.1 2,608.9 2350.7 2,285.5 1,914.8 1,648.4 1,599.4 Floats not included in assets (—) 55 U.S. government checkable deposits 8.4 3.3 -13.1 .7 -1.5 4.7 2.9 2.1 -15.5 -2.4 .3 14.7 56 Other checkable deposits -2.2 8.5 4.5 1.6 -1.3 -2.0 8.3 -5.2 -6.2 .6 -1.1 -6.2 57 Trade credit 7.0 9.1 9.7 4.1 16.5 5.8 25.7 22.2 12.5 -27.0 -10.3 -2.2 Liabilities not identified as assets ( — ) 58 Treasury currency -.2 .2 -.6 -.2 -.2 -.2 -.2 -.2 -.2 -.2 -.2 .0 59 Interbank claims -4.4 1.6 26.2 -4.9 4.2 2.7 .5 -10.4 24.0 -29.1 5.3 11.4 60 Security repurchase agreements 32.4 -24.0 6.2 27.9 81.1 179.6 60.8 66.6 17.3 7.1 119.1 63.8 61 Taxes payable 2.7 .1 1.3 14.0 1.0 -6.9 18.2 1.2 -8.6 -.7 12.4 -1.4 62 Miscellaneous -55.6 -35.4 -45.3 -46.0 -45.3 -101.5 -97.6 -18.4 36.4 -87.6 -173.7 79.9 63 Total identified to sectors as assets 1,997.6 1,447.2 1,541.2 1,767.2 2,218.5 1,765.0 2,590.2 2,292.9 2,225.9 2,054.2 1,696.6 1,439.4 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, 2. Excludes corporate equities and mutual fund shares, tables E6 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 1993 1994 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999900 11999911 11999922 11999933 QI Q2 Q3 Q4 Ql Q2 Q3 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 10,712.6 11,181.5 11,720.7 12,363.1 11,816.1 12,008.9 12,1553 12363.1 12,485.5 12,629.7 12,775.0 By sector and instrument 2 U.S. government 2,498.1 2,776.4 3,080.3 3,336.5 3,140.2 3,201.2 3,247.3 3,336.5 3,387.7 3,395.5 3,432.5 3 Treasury securities 2,465.8 2,757.8 3,061.6 3,309.9 3,120.6 3,180.6 3,222.6 3,309.9 3,361.4 3,368.0 3,403.9 4 Budget agency issues and mortgages 32.4 18.6 18.8 26.6 19.6 20.6 24.7 26.6 26.3 27.5 28.6 5 Private 8,214.5 8,405.1 8,640.4 9,026.6 8,675.9 8,807.7 8,908.1 9,026.6 9,097.8 9,234.3 9,342.5 By instrument 6 Tax-exempt obligations 1,039.9 1,108.6 1,139.7 1,217.8 1,160.7 1,202.2 1,210.0 1,217.8 1,222.3 1,229.5 1,209.9 7 Corporate bonds 1,008.2 1,086.9 1,154.4 1,229.6 1,175.9 1,194.8 1,212.8 1,229.6 1,238.4 1,248.1 1,254.3 8 Mortgages 3,758.5 3,920.0 4,043.9 4,206.5 4,061.5 4,109.9 4,166.6 4,206.5 4,230.5 4,281.5 4,337.4 9 Home mortgages 2,616.3 2,780.0 2,959.6 3,147.3 2,979.3 3,038.1 3,098.3 3,147.3 3,178.4 3,225.1 3,276.0 10 Multifamily residential 307.9 304.8 293.6 287.5 292.3 289.4 288.2 287.5 286.0 287.1 288.8 11 Commercial 755.4 755.8 710.3 690.6 709.2 701.4 699.0 690.6 684.7 686.5 688.7 1? Farm 78.9 79.3 80.4 81.2 80.8 81.0 81.1 81.2 81.4 82.9 83.8 13 Consumer credit 812.4 797.4 803.0 866.5 788.2 800.2 824.3 866.5 863.6 895.3 932.1 14 Bank loans n.e.c 726.9 686.0 672.1 677.2 660.9 666.3 665.6 677.2 688.8 712.6 732.7 15 Commercial paper 116.9 98.5 107.1 117.8 113.9 124.0 123.2 117.8 129.9 135.7 138.7 16 Other loans 751.8 707.8 720.2 711.1 714.9 710.2 705.5 711.1 724.3 731.4 737.5 By borrowing sector 17 Household 3,614.3 3,784.7 4,002.3 4,292.0 4,012.6 4,093.0 4,190.9 4,292.0 4,330.4 44,,442200..77 44,,551188..55 18 Nonfinancial business 3,751.7 3,709.3 3,710.5 3,741.5 3,715.7 3,729.8 3,729.1 3,741.5 3,772.9 3,816.4 3,848.4 19 135.4 135.0 136.0 138.3 133.4 136.7 138.7 138.3 136.7 142.4 144.3 ?0 Nonfarm noncorporate 1,147.0 1,116.4 1,074.1 1,049.1 1,067.2 1,059.4 1,052.2 1,049.1 1,050.4 1,055.1 1,061.2 ?1 Corporate 2,469.2 2,458.0 2,500.4 2,554.1 2,515.1 2,533.7 2,538.3 2,554.1 2,585.7 2,618.9 2,642.9 22 State and local government 848.6 911.1 927.5 993.2 947.6 984.9 988.0 993.2 994.4 997.2 975.7 ?3 Foreign credit market debt held in United States 285.0 298.8 310.9 357.8 319.8 332.0 3513 357.8 3403 341.2 339.0 ?4 115.4 129.5 143.9 203.4 160.6 171.9 193.0 203.4 210.6 213.4 215.0 75 18.5 21.6 23.9 24.6 24.3 25.9 26.2 24.6 26.2 26.0 26.2 26 Commercial paper 75.3 81.8 77.7 68.7 72.3 72.1 71.7 68.7 43.3 42.0 39.9 27 U.S. government and other loans 75.7 65.9 65.3 61.1 62.7 62.0 60.3 61.1 60.3 59.9 57.8 28 Total credit market debt owed by nonfinancial sectors, domestic and foreign 10,997.6 11,480.3 12,031.6 12,720.8 12,135.9 12,340.9 12,506.6 12,720.8 12,825.8 12,971.0 13,114.0 Financial sectors 29 Total credit market debt owed by financial sectors 2,599.5 2,752.1 3,004.7 3,297.3 3,047.0 3,096.6 3,204.7 3,297.3 3,412.3 3,492.5 3,577.1 By instrument 30 U.S. government-related 1,418.4 1,564.2 1,720.0 1,881.1 1,755.8 1,774.5 1,845.2 1,881.1 1,954.5 2,021.1 2,075.9 31 Government-sponsored enterprises 393.7 402.9 443.1 523.7 451.2 468.4 510.3 523.7 563.7 600.3 638.3 32 Mortgage pool securities 1,019.9 1,156.5 1,272.0 1,352.6 1,299.8 1,301.3 1,330.1 1,352.6 1,390.8 1,420.8 1,437.6 33 Loans from U.S. government 4.9 4.8 4.8 4.8 4.8 4.8 4.8 4.8 .0 .0 .0 34 Private 1,181.1 1,187.9 1,284.8 1,416.1 1,291.3 1,322.2 1,359.5 1,416.1 1,457.9 1,471.4 1,501.1 35 Corporate bonds 572.4 640.0 724.8 844.1 751.0 774.8 810.5 844.1 879.3 895.0 911.1 36 Mortgages 4.3 4.8 5.4 8.9 5.7 6.0 7.6 8.9 9.0 9.1 9.2 37 Bank loans n.e.c 69.6 78.4 80.5 66.5 70.3 73.3 69.2 66.5 60.3 48.9 44.5 38 Open market paper 417.7 385.7 394.3 393.5 379.3 375.9 373.2 393.5 408.8 409.9 420.1 39 Loans from Federal Home Loan Banks . 117.1 79.1 79.9 103.1 85.0 92.1 98.9 103.1 100.4 108.5 116.2 By borrowing sector 40 Government-sponsored enterprises 398.5 407.7 447.9 528.5 456.0 473.2 515.1 528.5 563.7 600.3 638.3 41 Federally related mortgage pools 1,019.9 1,156.5 1,272.0 1,352.6 1,299.8 1,301.3 1,330.1 1,352.6 1,390.8 1,420.8 1,437.6 42 Private financial sectors 1,181.1 1,187.9 1,284.8 1,416.1 1,291.3 1,322.2 1,359.5 1,416.1 1,457.9 1,471.4 1,501.1 43 Commercial banks 76.7 65.0 73.8 79.5 73.1 76.6 77.9 79.5 78.4 82.1 87.5 44 Bank holding companies 114.8 112.3 114.6 123.4 119.9 120.2 120.3 123.4 124.2 126.3 129.2 45 Funding corporations 145.7 139.1 161.6 169.9 162.2 166.5 166.3 169.9 190.4 191.1 200.3 46 Savings institutions 139.1 94.6 87.8 99.0 90.3 93.4 96.8 99.0 97.6 99.0 102.7 47 Credit unions .0 .0 .0 .2 .0 .1 .2 .2 .3 .3 .4 48 Life insurance companies .0 .0 .0 .2 .0 .2 .1 .2 .3 .3 .3 49 Finance companies 374.4 393.0 389.4 390.5 381.3 373.8 380.0 390.5 401.9 414.2 420.9 50 Mortgage companies 24.6 22.2 30.2 29.2 23.9 32.0 31.8 29.2 22.3 14.0 11.5 51 Real estate investment trusts (REITs). . . 12.4 13.6 13.9 17.4 14.0 14.4 15.8 17.4 17.7 18.3 18.8 52 Issuers of asset-backed securities (ABSs) 278.1 329.1 391.7 473.2 407.2 422.3 443.8 473.2 493.6 494.6 500.2 53 Total credit market debt, domestic and foreign.... 13,597.1 14,232.3 15,0363 16,018.1 15,183.0 15,437.5 15,7113 16,018.1 16,238.1 16,463.5 16,691.0 54 U.S. government securities 3,911.7 4,335.7 4,795.5 5,212.8 4,891.2 4,970.9 5,087.7 5,212.8 5,342.2 5,416.5 5,508.3 55 Tax-exempt securities 1,039.9 1,108.6 1,139.7 1,217.8 1,160.7 1,202.2 1,210.0 1,217.8 1,222.3 1,229.5 1,209.9 56 CCoorrppoorraattee aanndd ffoorreeiiggnn bboonnddss 1,696.0 1,856.5 2,023.1 2,277.0 2,087.4 2,141.5 2,216.3 2,277.0 2,328.3 2,356.5 2,380.4 57 3,762.9 3,924.8 4,049.3 4,215.5 4,067.2 4,116.0 4,174.2 4,215.5 4,239.5 4,290.6 4,346.6 58 812.4 797.4 803.0 866.5 788.2 800.2 824.3 866.5 863.6 895.3 932.1 59 815.0 785.9 776.6 768.4 755.4 765.5 761.0 768.4 775.4 787.5 803.5 60 Open market paper 609.9 565.9 579.0 580.0 565.5 572.0 568.2 580.0 582.0 587.5 598.7 61 Other loans 949.4 857.5 870.2 880.1 867.4 869.1 869.6 880.1 884.9 899.8 911.5 Digitized for FRASER 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, http://fraser.statblolesu Lis.2f ethdro.uogrhg L/. 4. For ordering address, see inside front cover. Federal Reserve Bank of St. Louis

A44 Domestic Financial Statistics • April 1995 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 1993 1994 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999900 11999911 11999922 11999933 Q1 Q2 Q3 Q4 Ql Q2 Q3 CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 13,597.1 14,232.3 15,036.3 16,018.1 15,183.0 15,437.5 15,7113 16,018.1 16,238.1 16,463.5 16,691.0 2 Private domestic nonfinancial sectors 2,260.8 2,240.2 2,318.0 2,340.9 2,301.4 2,296.4 2,285.0 2,340.9 2,429.1 2,511.5 2,562.9 3 Households 1,499.3 1,446.5 1,523.1 1,557.5 1,501.8 1,501.4 1,488.3 1,557.5 1,657.1 1,747.0 1,826.8 4 Nonfarm noncoiporate business 47.8 44.1 42.9 39.7 42.2 41.4 40.6 39.7 38.8 38.4 37.9 5 Nonfinancial corporate business 189.6 196.2 225.4 248.1 220.1 227.3 234.7 248.1 243.7 252.5 249.6 6 State and local governments 524.1 553.3 526.5 495.6 537.3 526.2 521.5 495.6 489.5 473.6 448.6 / U.S. government 239.0 246.9 235.0 216.6 229.4 223.1 218.8 216.6 206.3 204.7 202.6 y 8 F F o in r a e n ig c n ia l sectors 10, 9 1 1 7 8 9 . . 3 0 10, 9 7 5 8 8 7 . . 1 2 11 1 , , 4 05 3 2 0 . . 7 6 12 1 , , 2 1 8 7 5 5 . . 5 1 11 1 , , 5 06 9 1 0 . . 8 3 11 1 , , 8 0 3 8 4 4 . . 0 0 12 1 , , 0 1 8 1 9 8. . 1 4 12 1 , , 2 1 8 7 5 5. . 1 5 12 1 , , 3 2 9 0 5 6. . 8 9 12 1 , , 5 2 2 19 8 . . 1 2 12 1 , , 6 2 7 5 5 0 . . 1 4 10 Government-sponsored enterprises 375.6 390.7 459.7 549.8 463.0 495.5 531.8 549.8 572.0 597.9 631.9 11 Federally related mortgage pools 1,019.9 1,156.5 1,272.0 1,352.6 1,299.8 1,301.3 1,330.1 1,352.6 1,390.8 1,420.8 1,437.6 12 Monetary authority 241.4 272.5 300.4 336.7 303.6 318.2 324.2 336.7 341.5 351.6 356.8 13 Commercial banking 2,772.5 2,853.3 2,948.6 3,090.8 2,956.6 2,998.8 3,036.4 3,090.8 3,120.2 3,157.1 3,203.1 14 U.S. commercial banks 2,466.7 2,502.5 2,571.9 2,721.5 2,589.4 2,628.5 2,670.2 2,721.5 2,743.8 2,780.3 2,822.4 lb Foreign banking offices 270.8 319.2 335.8 326.0 326.7 327.1 322.3 326.0 331.8 331.7 335.7 16 Bank holding companies 13.4 11.9 17.5 17.5 16.4 18.4 18.7 17.5 18.2 18.3 17.7 17 Banks in U.S. affiliated areas 21.6 19.7 23.4 25.8 24.2 24.8 25.3 25.8 26.4 26.8 27.3 18 Funding corporations 35.7 51.5 75.0 93.1 74.0 74.3 82.4 93.1 97.5 106.3 111.0 19 Thrift institutions 1,320.5 1,192.6 1,134.5 1,132.5 1,124.8 1,129.8 1,136.2 1,132.5 1,134.0 1,145.7 1,157.9 20 Life insurance companies 1,116.5 1,199.6 1,278.8 1,383.9 1,313.3 1,343.9 1,372.1 1,383.9 1,404.2 1,409.1 1,417.8 21 Other insurance companies 344.0 376.6 389.4 422.7 396.3 405.3 414.6 422.7 429.6 434.8 438.8 22 Private pension funds 607.4 693.0 730.4 770.6 759.8 762.6 785.6 770.6 746.2 738.5 735.1 23 State and local government retirement funds 433.9 479.9 514.3 542.6 514.6 526.5 533.4 542.6 553.9 566.7 577.0 24 Finance companies 497.6 484.9 486.6 482.8 477.9 473.7 474.0 482.8 494.5 511.3 524.2 25 Mortgage companies 49.2 60.3 60.5 60.4 47.9 64.1 63.8 60.4 46.6 30.0 25.0 2B Mutual funds 360.2 450.5 574.2 738.2 611.4 659.9 703.6 738.2 720.0 722.9 718.2 27 Closed-end funds 35.6 50.3 67.7 77.9 71.9 74.5 76.0 77.9 80.1 81.0 81.3 28 Money market funds 372.7 402.7 404.1 417.0 404.5 403.9 400.6 417.0 422.2 422.0 425.1 29 Real estate investment trusts (REITs) 7.7 7.0 8.1 8.6 8.1 8.3 8.6 8.6 8.8 9.0 9.1 30 Brokers and dealers 106.5 124.0 117.1 126.3 135.9 149.0 147.1 126.3 112.3 99.2 95.6 31 Asset-backed securities issuers (ABSs) 268.9 317.8 377.9 458.0 393.3 408.1 430.2 458.0 478.2 479.8 484.2 32 Bank personal trusts 213.4 223.5 231.5 240.9 233.7 236.2 238.7 240.9 243.3 244.6 245.3 RELATION OF LIABILITIES TO FINANCIAL ASSETS 33 Total credit market debt 13,597.1 14,232.3 15,036.3 16,018.1 15,183.0 15,437.5 15,7113 16,018.1 16,238.1 16,463.5 16,691.0 Other liabilities 34 Official foreign exchange 61.3 55.4 51.8 53.4 54.5 53.9 55.6 53.4 56.4 54.9 55.5 3B Special drawing rights certificates 10.0 10.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 36 Treasury currency 16.3 16.3 16.5 17.0 16.6 16.7 16.8 17.0 17.1 17.3 17.5 3/ Life insurance reserves 380.0 405.7 433.0 468.2 442.6 451.4 463.1 468.2 473.2 475.2 481.2 38 Pension fund reserves 3,484.2 4,138.3 4,516.5 4,945.1 4,652.7 4,710.4 4,869.4 4,945.1 4,890.7 4,880.8 5,016.8 39 Interbank claims 95.3 96.4 132.8 175.2 135.7 144.3 165.4 175.2 201.6 223.9 238.9 40 Deposits at financial institutions 5,005.3 5,044.8 5,059.1 5,141.8 5,055.3 5,097.1 5,088.5 5,141.8 5,155.8 5,182.8 5,201.3 41 Checkable deposits and currency 934.2 1,020.6 1,134.4 1,251.7 1,089.1 1,168.0 1,181.9 1,251.7 1,220.5 1,229.3 1,206.5 42 Small time and savings deposits 2,349.2 2,350.7 2,293.5 2,223.2 2,275.7 2,255.0 2,236.6 2,223.2 2,233.8 2,214.7 2,198.3 43 Large time deposits 546.9 488.4 415.2 391.7 410.6 401.1 389.4 391.7 382.6 378.9 402.0 44 Money market fund shares 498.4 539.6 543.6 559.4 556.6 549.8 547.9 559.4 582.4 576.4 586.1 4b Security repurchase agreements 372.3 355.8 392.3 457.8 446.2 450.4 472.5 457.8 472.4 510.3 534.0 46 Foreign deposits 304.3 289.6 280.1 258.0 277.1 272.8 260.2 258.0 264.3 273.2 274.5 4/ Mutual fund shares 602.1 813.9 1,042.1 1,429.3 1,134.6 1,225.8 1,342.4 1,429.3 1,439.0 1,443.1 1,563.7 48 Security credit 137.4 188.9 217.3 279.3 225.0 234.7 254.5 279.3 282.7 278.1 263.2 49 Trade debt 942.2 935.9 977.4 1,026.4 976.9 989.7 1,009.6 1,026.4 11,,002222..33 1,039.5 11,,006622..55 50 Taxes payable 77.4 71.2 79.6 84.2 82.9 81.2 82.8 84.2 8888..88 84.4 8888..11 51 Investment in bank personal trusts 522.1 608.3 629.6 660.9 639.0 637.6 651.2 660.9 655.3 640.2 656.8 52 Miscellaneous 2,820.4 2,992.2 3,160.2 3,414.6 3,174.9 3,249.9 3,316.5 3,414.6 3,503.2 3,550.8 3,673.6 53 Total liabilities 27,751.1 29,609.6 31360.1 33,7213 31,781.7 32338.1 33,035.0 33,721.3 34,»32.4 34342.6 35,018.1 Financial assets not included in liabilities (+) 54 Gold and special drawing rights 22.0 22.3 19.6 20.1 19.8 20.0 20.3 20.1 20.4 20.8 21.0 55 Corporate equities 3,530.2 4,863.6 5,462.9 6,186.5 5,647.3 5,683.7 5,941.7 6,186.5 6,052.2 5,877.7 6,135.1 36 Household equity in noncorporate business 2,529.1 2,444.4 2,411.5 2,427.7 2,419.5 2,434.2 2,445.3 2,427.7 2,457.8 2,478.9 2,487.3 Floats not included in assets ( —) 57 U.S. government checkable deposits 15.0 3.8 6.8 5.6 3.4 3.5 2.2 5.6 .3 .9 1.2 58 Other checkable deposits 35.9 40.4 42.0 40.7 36.7 41.6 33.7 40.7 36.3 38.7 30.6 59 Trade credit -130.3 -129.3 -124.6 -101.7 -130.9 -135.0 -130.4 -101.7 -121.6 -135.1 -136.0 Liabilities not identified as assets (—) 60 Treasury currency -4.1 -4.8 -4.9 -5.1 -5.0 -5.0 -5.1 -5.1 -5.2 -5.2 -5.3 61 Interbank claims -32.0 -4.2 -9.3 -4.7 -5.8 -5.7 -7.8 -4.7 -7.7 -7.4 -3.5 62 Security repurchase agreements 3.0 9.2 38.1 119.2 94.9 108.0 132.6 119.2 133.0 160.3 186.3 63 Taxes payable 17.8 17.8 25.2 26.2 14.5 24.3 24.3 26.2 15.2 23.6 23.8 64 Miscellaneous -261.2 -330.7 -398.4 -451.0 -432.7 -409.3 -452.6 -451.0 -470.3 -441.1 -456.3 65 Total identified to sectors as assets 34,1883 37,337.6 39,679.1 42,726.5 40,293.1 40,853.6 41,845.5 42,726.5 42,982.9 43,085.3 44,020.8 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, 2. Excludes corporate equities and mutual fund shares, 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 1994 1995 MMeeaassuurree 11999922 11999933 11999944 May June July Aug. Sept. Oct. Nov.' Dec. Jan. 1 Industrial production1 107.6 112.0 118.1 117.4 118.0 118.2 119.1 119.0 119.5r 120.4 121.4 121.9 Market groupings 2 Products, total 106.5 110.7 115.9 115.3 115.9 116.2 116.7 116.4 111166..99rr 111177..66 111188..55 111188..99 3 Final, total 109.0 113.4 118.4 117.8 118.4 118.5 119.2 118.9 119.2r 119.9 121.1 121.7 4 Consumer goods 105.9 109.4 113.2 112.8 113.5 113.3 113.8 113.0 113.0r 113.9 115.0' 115.4 5 Equipment 113.4 119.3 126.5 125.4 125.8 126.4 127.5 128.0 128.8r 129.2 130.5' 131.5 6 Intermediate 98.8 102.4 108.1 107.7 108.5 109.1 109.2 108.6 109.9 110.7 110.7' 110.5 7 Materials 109.2 114.1 121.4 120.5 121.2 121.4 122.8 122.9 123.4 124.6 125.9 126.4 Industry groupings 8 Manufacturing 108.0 112.9 119.7 119.0 119.3 119.8 120.9 120.9 112211..55rr 112222..66 112233..88'' 112244..22 9 Capacity utilization, manufacturing (percent)2.. 79.2 80.9 83.4 83.2 83.2 83.3 83.8 83.6 83.8 84.4 85.0' 85.1 10 Construction contracts3 97.7 104.4 106.9 108.0 105.0 109.0 110.0 109.0 107.0 111.0 101.0 n.a. 11 Nonagricultural employment, total4 106.5 108.4 111.3 110.8 111.2 111.4 111.7 112.0 112.2 112.7 112.9 113.0 12 Goods-producing, total 94.2 94.3 95.6 95.3 95.6 95.6 95.8 95.9 96.1 96.6 96.7 97.0 13 Manufacturing, total 95.3 94.8 95.1 94.8 95.0 95.0 95.2 95.3 95.5 95.7 95.9' 96.1 14 Manufacturing, production workers 94.9 94.9 96.1 95.7 96.0 96.0 96.3 96.4 96.7 97.1 97.4' 97.6 15 Service-producing 110.5 112.9 116.3 115.7 116.1 116.5 116.8 117.1 117.3 117.8 118.1' 118.1 16 Personal income, total 135.6 141.4 150.0 149.0 149.3 150.0 150.7 151.7 153.7r 153.6 154.9 n.a. 17 Wages and salary disbursements 131.6 136.2 145.0 144.3 144.5 145.2 145.5 146.4 148.2r 148.1 149.1 n.a. 18 Manufacturing 118.0 120.0 126.0 124.9 125.3 125.6 126.2 126.7 128.8' 127.9 128.9 n.a. 19 Disposable personal income5 137.0 142.5 150.8 149.8 150.1 150.9 151.6 152.6 154.7' 154.6 155.9 n.a. 20 Retail sales5 126.9 135.2 145.4 143.0 144.3 144.5 146.6 147.8 149.6 150.2 150.4' 150.7 Prices6 21 Consumer (1982-84=100) 140.3 144.5 148.2 147.5 148.0 148.4 149.0 149.4 149.5 149.7 149.7 150.3 22 Producer finished goods (1982=100) 123.2 124.7 125.5 125.3 125.6 126.0 126.5r 125.6r 125.8 126.1 126.2 126.5 1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. covers employees only, excluding personnel in the armed forces. For the ordering address, see the inside front cover. The latest historical revision of the 5. Based on data from U.S. Department of Commerce, Survey of Current Business. industrial production index and the capacity utilization rates was released in November 6. Based on data not seasonally adjusted. Seasonally adjusted data for changes in the 1994. See "Industrial Production and Capacity Utilization: A Revision," Federal Reserve price indexes can be obtained from the U.S. Department of Labor, Bureau of Labor Bulletin, vol. 81 (January 1995), pp. 16-26. For a detailed description of the industrial Statistics, Monthly Labor Review. production index, see "Industrial Production: 1989 Developments and Historical Revi- NOTE. Basic data (not indexes) for series mentioned in notes 4 and 5, and indexes for sion," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. series mentioned in notes 3 and 6, can also be found in the Survey of Current Business. 2. Ratio of index of production to index of capacity Based on data from the Federal Figures for industrial production for the latest month are preliminary, and many figures Reserve, DRI McGraw-Hill, U.S. Department of Commerce, and other sources. for the three months preceding the latest month have been revised. See "Recent Develop- 3. Index of dollar value of total construction contracts, including residential, nonresi- ments in Industrial Capacity and Utilization," Federal Reserve Bulletin, vol. 76 (June dential, and heavy engineering, from McGraw-Hill Information Systems Company, F.W. 1990), pp. 411-35. See also "Industrial Production Capacity and Capacity Utilization Dodge Division. since 1987," Federal Reserve Bulletin, vol. 79 (June 1993), pp. 590-605. 4. Based on data from U.S. Department of Labor, Employment and Earnings. Series 2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data seasonally adjusted except as noted Category 1992r 1993r July Aug. Sept. Nov/ Dec/ HOUSEHOLD SURVEY DATA1 1 Civilian labor force2 126,982 128,040 131,056 131,086 131,646 131,718 131,725 2 E N m on p a lo g y r m ic e u n lt t ural industries3 11 3 4 , , 2 3 0 9 7 1 11 3 6 , , 0 2 7 3 4 2 11 3 9 , ,6 4 5 0 1 9 11 3 9 , , 2 3 9 4 4 1 11 3 9 , ,4 3 4 3 8 3 11 3 9 , ,7 4 6 3 1 6 12 3 0 , , 4 2 1 3 1 3 12 3 0 , ,6 4 4 9 7 4 12 3 0 , , 5 90 0 3 0 12 3 1 , , 5 03 3 8 2 3 Agriculture Unemployment 9,384 8,734 7,996 7,903 7,993 7,647 7,505 7,315 7,155 4 Number 7.4 6.8 6.1 6.1 6.1 5.8 5.7 5.6 5.4 5 Rate (percent of civilian labor force). ESTABLISHMENT SURVEY DATA 6 Nonagricultural payroll employment4. 108,604 110,525 113,423 113,334 113,624 113,914 114,186 114,348 114,882 115,092 18,104 18,003 18,064 18,044 18,045 18,095 18,096 18,142 18,183 18,218 7 Manufacturing 635 611 604 605 601 603 605 599 600 596 8 Mining 4,492 4,642 4,916 4,927 4,944 4,942 4,972 4,974 5,044 5,044 9 Contract construction 5,721 5,787 5,842 5,849 5,857 5,866 5,865 5,867 5,888 5,915 10 Transportation and public utilities 25,354 25,675 26,362 26,328 26,439 26,484 26,565 26,629 26,772 26,868 11 Trade 6,602 6,712 6,789 6,798 6,797 6,801 6,794 6,786 6,791 6,791 12 Finance 29,052 30,278 31,805 31,765 31,918 32,036 32,138 32,231 32,414 32,497 13 Service 18,653 18,817 19,041 19,018 19,023 19,087 19,151 19,120 19,190 19,163 14 Government 1. Beginning January 1994, reflects redesign of current population survey and popula- 4. Includes all full- and part-time employees who worked during, or received pay for, tion controls from the 1990 census. the pay period that includes the twelfth day of the month; excludes proprietors, self- 2. Persons sixteen years of age and older, including Resident Armed Forces. Monthly employed persons, household and unpaid family workers, and members of the armed figures are based on sample data collected during the calendar week that contains the forces. Data are adjusted to the March 1992 benchmark, and only seasonally adjusted data twelfth day; annual data are averages of monthly figures. By definition, seasonality does are available at this time. not exist in population figures. SOURCE. Based on data from U.S. Department of Labor, Employment and Earnings. 3. Includes self-employed, unpaid family, and domestic service workers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • April 1995 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1994 1994 1994 Ql Q2 Q3r 04 Ql Q2 Q3 Q4 Ql Q2 Q3r Q4r Output (1987=100) Capacity (percent of 1987 output) Capacity utilization rate (percent)2 1 Total industry 115.7 117.4 118.8 120.4 139.0 140.0 140.9 141.9 83.2 83.8 84.3 84.9 2 Manufacturing 116.8 118.9 120.5 122.7 142.0 143.1 144.2 145.3 82.3 83.1 83.6 84.4 3 Primary processing3 112.4 114.7 115.9 118.1 130.3 131.0 131.6 132.3 86.3 87.6 88.1 89.3 4 Advanced processing4 118.9 120.9 122.7 124.8 147.4 148.7 150.0 151.3 80.7 81.3 81.8 82.5 5 Durable goods 122.0 124.1 126.5 129.4 148.8 150.2 151.6 153.0 82.0 82.6 83.4 84.6 6 Lumber and products 104.4 105.4 106.6 107.2 115.1 115.5 116.0 116.5 90.7 91.2 91.9 92.0 7 Primary metals 110.6 114.4 114.1 119.5 124.7 125.0 125.2 125.4 88.6 91.6 91.1 95.3 8 Iron and steel 114.5 120.2 115.8 123.7 127.5 127.9 128.4 128.8 89.8 93.9 90.2 96.0 9 Nonferrous 105.3 106.9 111.4 113.9 120.6 120.5 120.5 120.5 87.3 88.7 92.4 94.5 10 Industrial machinery and equipment 152.1 157.6 162.6 167.8 176.5 179.0 181.6 184.1 86.2 88.0 89.6 91.1 11 Electrical machinery 150.3 156.8 163.5 169.3 175.8 179.9 184.1 188.3 85.5 87.1 88.8 89.9 12 Motor vehicles and parts 140.0 133.3 135.0 141.5 156.7 158.5 160.3 162.2 89.4 84.1 84.2 87.2 13 Aerospace and miscellaneous transportation equipment 83.7 84.2 82.1 80.9 130.1 129.8 129.4 129.1 64.4 64.9 63.5 62.6 14 Nondurable goods 111.0 113.1 113.8 115.1 134.0 134.8 135.5 136.3 82.9 83.9 84.0 84.5 15 Textile mill products 106.8 108.7 108.9 111.4 120.1 120.8 121.4 122.0 88.9 90.1 89.7 91.3 16 Paper and products 115.1 115.9 118.5 120.5 126.0 126.6 127.1 127.7 91.4 91.6 93.2 94.4 17 Chemicals and products 122.1 123.6 124.4 125.3 150.5 151.9 153.3 154.7 81.1 81.4 81.1 81.0 18 Plastics materials 120.6 124.3 126.9 129.2 130.0 130.8 93.4 95.6 97.0 19 Petroleum products 103.7 106.3 104.9 106.6 115.4 115.3 115.2 115.1 89.9 92.2 91.1 92.7 20 Mining 99.3 100.7 100.1 99.2 111.5 111.5 111.5 111.4 89.1 90.3 89.8 89.0 21 Utilities 119.3 117.2 118.1 116.7 134.6 135.0 135.4 135.8 88.6 86.8 87.2 85.9 22 Electric 117.6 118.0 118.2 117.3 132.1 132.6 133.1 133.6 89.0 89.0 88.8 87.8 1973 1975 Previous cycle5 Latest cycle6 1994 1994 1995 High Low High Low High Low Jan. Aug. Sept. Oct.r Nov.r Dec. Jan.p Capacity utilization rate (percent) 2 1 Total industry 89.2 72.6 87.3 71.8 84.9 78.0 82.7 84.5 84.2 84.4 84.8 85.4 85.5 2 Manufacturing 88.9 70.8 87.3 70.0 85.2 76.6 81.8 83.8 83.6 83.8 84.4 85.0 85.1 3 Primary processing3 92.2 68.9 89.7 66.8 89.0 77.9 85.9 88.3 88.2 88.3 89.4 90.2 89.7 4 Advanced processing4 87.5 72.0 86.3 71.4 83.5 76.2 80.1 82.1 81.8 82.1 82.4 83.0 83.2 5 Durable goods 88.8 68.5 86.9 65.0 84.0 73.7 81.5 83.7 83.6 83.9 84.4 85.3 85.6 6 Lumber and products 90.1 62.2 87.6 60.9 93.3 76.3 91.6 91.0 92.6 91.7 91.5 92.9 91.7 7 Primary metals 100.6 66.2 102.4 46.8 92.8 74.0 86.6 90.7 92.6 92.5 95.0 98.3 96.1 8 Iron and steel 105.8 66.6 110.4 38.3 95.7 72.1 87.0 88.0 92.0 92.4 94.7 101.0 97.4 9 Nonferrous 92.9 61.3 90.5 62.2 88.7 75.0 86.3 94.2 93.5 92.7 95.6 95.1 94.6 10 Industrial machinery and equipment 96.4 74.5 92.1 64.9 84.0 72.5 85.6 89.5 90.2 90.9 91.0 91.5 92.2 11 Electrical machinery 87.8 63.8 89.4 71.1 84.9 76.6 84.9 89.2 88.9 89.3 89.7 90.8 91.3 12 Motor vehicles and parts 93.4 51.1 93.0 44.5 85.1 57.6 88.9 86.1 85.3 85.7 87.2 88.8 89.6 13 Aerospace and miscellaneous transportation equipment 77.0 66.6 81.1 66.9 88.4 79.4 64.6 63.6 62.9 62.6 62.6 62.8 62.4 14 Nondurable goods 87.9 71.8 87.0 76.9 86.7 80.4 82.2 84.1 83.8 83.9 84.6 84.9 84.6 15 Textile mill products 92.0 60.4 91.7 73.8 92.1 78.9 88.4 89.8 89.0 90.8 91.5 91.5 91.3 16 Paper and products 96.9 69.0 94.2 82.0 94.8 86.5 90.6 94.6 93.2 93.2 95.0 94.9 93.0 17 Chemicals and products 87.9 69.9 85.1 70.1 85.9 78.9 80.9 81.4 80.4 80.2 81.3 81.4 81.7 18 Plastics materials 102.0 50.6 90.9 63.4 97.0 74.8 92.5 97.3 95.7 93.3 98.5 19 Petroleum products 96.7 81.1 89.5 68.2 88.5 83.7 90.0 91.4 91.4 90.4 93.5 94.1 93.3 20 Mining 94.4 88.4 96.6 80.6 86.5 86.0 87.7 89.7 89.8 89.0 88.3 89.6 89.9 21 Utilities 95.6 82.5 88.3 76.2 92.6 83.2 89.5 87.8 86.0 86.4 86.1 85.4 86.4 22 Electric 99.0 82.7 88.3 78.7 94.8 86.5 89.5 89.0 87.9 88.3 88.0 87.1 88.2 1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. 3. Primary processing includes textiles; lumber; paper; industrial chemicals; petroleum For the ordering address, see the inside front cover. The latest historical revision of the refining; rubber and plastics; stone, clay, and glass; and primary and fabricated metals. industrial production index and the capacity utilization rates was released in November 4. Advanced processing includes food, tobacco, apparel, furniture, printing, chemical 1994. See "Industrial Production and Capacity Utilization: A Revision," Federal Reserve products such as drugs and toiletries, leather and products, machinery, transportation Bulletin, vol. 81 (January 1995), pp. 16-26. For a detailed description of the industrial equipment, instruments, and miscellaneous manufacturing. production index, see "Industrial Production: 1989 Developments and Historical Revi- 5. Monthly highs, 1978-80; monthly lows, 1982. sion," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. 6. Monthly highs, 1988-89; monthly lows, 1990-91. 2. Capacity utilization is calculated as the ratio of the Federal Reserve's 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 1992 1994 1995 1994 GGrroouupp por- aavvgg.. tion Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct.' Nov.' Dec. Jan.p Index (1987 = 100) MAJOR MARKETS 1 Total index 100.0 118.1 114.7 115.6 116.6 116.7 117.4 118.0 118.2 119.1 119.0 119.5 120.4 121.4 121.9 2 Products 60.9 115.9 113.1 114.0 114.7 114.7 115.3 115.9 116.2 116.7 116.4 116.9 117.6 118.5 118.9 3 Final products 46.6 118.4 115.9 117.0 117.4 117.3 117.8 118.4 118.5 119.2 118.9 119.2 119.9 121.1 121.7 4 Consumer goods, total 28.5 113.2r 111.5 112.4 112.9 112.3 112.8 113.5 113.3 113.8 113.0 113.0 113.9 115.0 115.4 Durable consumer goods 5.5 119.4 118.6 121.1 119.0 117.8 116.4 118.0 118.0 120.7 119.1 119.4 120.6 123.3 124.1 6 Automotive products 2.5 125.5 126.6 131.5 126.4 124.1 120.1 121.0 119.5 124.9 123.8 124.5 127.1 131.3 132.2 7 Autos and trucks 1.6 125.4 128.3 134.8 127.7 125.0 118.1 118.5 115.0 126.0 122.5 122.3 126.5 131.5 132.7 8 Autos, consumer .9 94.9 98.7 102.7 98.8 96.0 90.4 89.6 86.5 91.7 90.2 92.9 94.0 100.5 103.6 9 Trucks, consumer .7 180.7 181.5 192.7 179.6 177.2 168.0 170.7 166.6 189.0 181.5 175.5 185.8 187.3 184.6 10 Auto parts and allied goods .9 123.2r 120.4 121.9 121.1 119.8 121.9 123.8 126.6 120.0 123.9 126.6 125.7 128.3 128.4 11 Other 3.0 114.1r 111.8 112.2 112.7 112.5 113.2 115.4 116.7 117.1 115.2 115.2 115.1 116.5 117.2 12 Appliances televisions and air conditioners .7 126. lr 124.0 121.6 124.3 120.7 125.6 132.8 129.7 135.1 130.2 124.9 127.5 131.2 113300..55 N Carpeting and furniture .8 104.9 102.3 103.5 103.1 104.5 103.3 103.6 108.4 106.9 104.1 107.4 105.8 107.2 108.0 14 Miscellaneous home goods 1.5 113.8 111.4 112.7 112.8 113.2 113.1 114.2 115.3 114.6 114.6 114.9 114.5 114.9 116.3 15 Nondurable consumer goods 23.0 111.7' 109.8 110.4 111.5 111.0 112.0 112.5 112.2 112.2 111.7 111.5 112.4 113.1 113.4 16 Foods and tobacco 10.3 110.5' 106.5 107.6 109.8 110.2 110.9 110.5 110.6 111.2 111.9 112.2 112.6 113.3 113.8 17 Clothing 2.4 95.8 93.6 94.5 95.7 96.4 97.2 96.3 96.5 95.9 95.5 96.2 96.0 96.3 95.0 18 Chemical products 4.5 129.5' 127.7 128.7 130.3 128.4 129.5 131.4 131.1 129.8 127.5 127.2 129.9 132.0 133.7 19 Paper products 2.9 104.8 104.0 103.9 103.9 105.1 105.6 105.8 105.2 105.9 105.2 103.6 104.6 105.6 104.1 20 Energy 2.9 113.9' 118.4 117.3 114.5 110.0 112.4 115.5 114.3 113.1 110.5 109.8 110.8 109.8 110.9 ?1 Fuels .9 106.8' 105.8 105.4 105.8 108.3 107.4 106.5 105.8 105.8 107.4 103.9 109.8 109.2 108.6 22 Residential utilities 2.1 116.9 123.6 122.2 118.1 110.5 114.4 119.3 117.8 116.1 111.8 112.2 111.0 110.0 111.7 ?3 Equipment 18.1 126.5' 122.7 123.8 124.3 124.9 125.4 125.8 126.4 127.5 128.0 128.8 129.2 130.5 131.5 ?4 Business equipment 14.0 146.8' 140.4 142.0 142.6 143.5 144.5 145.5 146.9 148.9 149.5 150.9 151.4 153.1 154.5 75 Information processing and related 5.7 176.5 167.1 168.5 170.0 170.2 171.8 173.7 177.1 179.7 181.1 183.2 185.1 188.1 189.8 76 Computer and office equipment 1.5 284.3' 265.5 267.6 270.9 270.8 271.6 276.5 282.6 288.9 295.8 300.5 306.1 312.2 318.6 ?7 Industrial 4.0 121.0' 114.6 116.4 117.8 119.2 120.7 120.6 122.1 122.3 123.0 124.4 124.3 125.5 126.5 28 Transit 2.6 138.0' 140.1 142.3 139.3 138.0 135.3 136.1 132.6 137.9 136.8 137.1 137.5 138.5 140.2 ?9 Autos and trucks 1.2 148.0 149.1 154.6 148.1 145.9 140.0 141.7 138.2 149.4 147.7 149.2 151.7 152.6 157.2 30 Other 1.7 129.4 121.1 122.3 123.3 127.1 129.4 130.5 132.6 133.5 133.3 134.3 133.1 132.7 134.0 31 Defense and space equipment 3.4 71.1 74.5 73.6 73.7 73.6 72.4 71.3 69.9 69.2 68.8 68.7 68.9 69.1 6699..11 3? Oil and gas well drilling .5 90.8 88.9 91.9 92.1 93.2 94.6 94.2 93.7 89.6 93.9 88.3 86.0 86.0 8866..77 33 Manufactured homes .2 137.3' 132.4 131.5 135.6 132.4 135.2 137.8 133.3 134.5 138.4 142.0 143.1 153.6 34 Intermediate products, total 14.3 108.1 104.6 104.9 106.3 106.9 107.7 108.5 109.1 109.2 108.6 109.9 110.7 110.7 110.5 35 Construction supplies 5.3 106.7 102.9 102.7 103.2 104.7 106.1 106.4 107.9 108.2 108.6 109.7 109.7 110.6 110.7 36 Business supplies 9.0 109.2 105.8 106.5 108.4 108.5 108.8 110.1 110.0 109.9 108.7 110.1 111.5 111.0 110.5 37 39.1 121.4 117.1 118.1 119.5 119.7 120.5 121.2 121.4 122.8 122.9 123.4 124.6 125.9 126.4 38 Durable goods materials 20.6 131.2 125.2 126.2 128.3 129.2 129.8 130.0 130.9 132.6 133.3 134.2 136.0 138.3 139.1 39 Durable consumer parts 3.9 132.2 129.9 129.7 131.5 130.1 129.7 129.2 130.4 133.2 133.1 133.8 135.8 139.3 140.1 40 Equipment parts 7.5 143.1' 134.1 135.6 137.9 139.6 140.5 142.1 143.8 145.2 146.7 149.0 150.7 152.4 154.3 41 Other 9.1 121.3' 116.0 117.1 119.3 120.4 121.2 120.8 121.1 122.3 122.8 122.7 124.6 126.8 126.8 4? Basic metal materials 3.0 119.7 114.4 116.9 117.6 119.7 120.0 119.6 118.8 119.3 121.1 121.3 123.3 126.0 124.1 43 Nondurable goods materials 8.9 118.3 114.6 115.6 116.7 115.9 118.2 118.1 118.6 120.3 119.8 120.3 121.4 121.3 120.6 44 Textile materials 1.1 105.3' 101.8 102.7 104.0 104.4 104.2 104.8 104.8 105.7 105.9 106.9 110.3 109.2 109.1 45 Paper materials 1.8 118.7 113.8 116.3 117.8 116.1 118.9 118.4 117.5 122.5 121.5 120.5 122.1 120.8 118.1 46 Chemical materials 4.0 123.0 119.5 120.0 120.6 120.6 123.8 122.9 123.4 124.8 124.0 124.6 125.5 125.4 125.2 47 Other 2.0 116.7' 113.4 114.0 115.6 113.3 114.8 116.5 118.6 118.1 118.2 119.5 119.5 120.9 120.7 48 Energy materials 9.6 105.2 103.8 104.7 105.0 104.8 104.6 106.7 105.2 106.1 105.6 105.2 105.1 105.8 106.6 49 Primary energy 6.3 100.3' 97.3 99.4 100.5 100.9 100.4 100.2 100.3 100.9 100.8 100.3 100.8 102.1 102.6 50 Converted fuel materials 3.3 ns.o' 116.9 115.2 114.0 112.5 112.8 119.9 114.9 116.3 115.1 115.1 113.7 113.1 114.6 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.2 117.6 114.1 114.8 116.1 116.2 117.1 117.7 118.1 118.7 118.6 119.1 119.9 120.9 121.3 52 Total excluding motor vehicles and parts 95.2 117.1 113.5 114.3 115.5 115.7 116.6 117.3 117.7 118.2 118.0 118.5 119.3 120.3 120.6 53 Total excluding computer and office equipment 98.3 115.4' 112.2 113.1 114.0 114.1 114.8 115.4 115.5 116.4 116.1 116.6 117.4 118.4 111188..88 54 Consumer goods excluding autos and trucks . 26.9 112.4' 110.4 111.0 111.9 111.5 112.4 113.2 113.2 113.0 112.4 112.4 113.1 114.0 114.3 55 Consumer goods excluding energy 25.6 113.1' 110.7 111.9 112.7 112.5 112.8 113.2 113.2 113.8 113.3 113.3 114.2 115.6 115.9 56 Business equipment excluding autos and trucks 12.8 146.5' 139.4 140.7 142.0 143.2 144.8 145.7 147.7 148.8 149.5 151.0 115511..33 115533..00 115544..11 57 Business equipment excluding computer and office equipment 12.5 130.8' 125.6 127.2 127.6 128.5 129.4 113300..00 113311..11 132.7 132.7 113333..88 113344..00 113355..22 113366..22 58 Materials excluding energy 29.5 127.2 121.9 122.9 124.8 125.1 126.2 126.4 127.2 128.8 129.2 129.9 131.6 133.1 133.5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • April 1995 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value'—Continued 1992 SIC pro- 1994 Group code2 por- avg. tion Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct.r Nov.r Dec. Jan.P Index (1987 = 100) MAJOR INDUSTRIES 59 Ibtal index 100.0 118.1 114.7 115.6 116.6 116.7 117.4 118.0 118.2 119.1 119.0 119.5 120.4 121.4 121.9 60 Manufacturing 85.5 119.7 115.8 116.7 118.0 118.4 119.0 119.3 119.8 120.9 120.9 121.5 122.6 123.8 124.2 61 Primary processing 26.5 115.2 111.7 112.2 113.3 114.0 115.2 114.7 115.3 116.3 116.2 116.6 118.3 119.5 119.0 62 Advanced processing 59.0 121.8 117.7 118.9 120.2 120.5 120.8 121.5 121.9 123.1 123.1 123.8 124.7 125.9 126.7 63 Durable goods 45.1 125.5r 121.0 122.1 122.9 123.7 124.0 124.6 125.2 127.0 127.2 128.0 129.2 131.0 131.9 64 Lumber and products "'24 2.0 105.9r 105.3 103.8 104.0 103.9 106.0 106.2 106.8 105.5 107.6 106.7 106.5 108.3 107.1 65 Furniture and fixtures 25 1.4 111.3r 105.8 107.6 107.7 110.2 110.1 111.8 114.0 115.5 112.4 114.8 112.9 114.0 115.2 66 Stone, clay, and glass predicts 32 2.1 104.8 101.8 101.8 103.7 105.0 105.5 104.4 104.3 105.8 105.8 105.4 106.9 108.6 109.0 67 Primary metals 33 3.1 114.5r 108.0 111.6 112.1 114.8 114.8 113.7 112.7 113.5 116.0 115.9 119.2 123.4 120.7 68 Iron and steel 331,2 1.7 118.3r 110.8 116.0 116.7 121.5 120.9 118.2 116.1 113.0 118.2 118.8 121.9 130.2 125.8 69 Raw steel .1 107.9 102.0 105.8 106.0 105.3 105.7 106.3 104.7 107.0 109.9 109.0 114.2 121.9 70 Nonfenous 333-6,9 1.4 109.3 104.1 105.8 106.0 106.2 106.9 107.6 108.0 113.6 112.7 111.8 115.2 114.6 m!o 71 Fabricated metal products... 34 5.0 110.7 107.2 106.6 108.5 109.6 110.0 110.2 111.7 112.4 111.6 112.2 113.3 114.4 115.7 72 Industrial and commercial machinery and computer equipment... 35 7.9 160.0 150.3 151.9 154.0 156.1 157.7 158.9 160.6 162.6 164.6 166.5 167.6 169.3 171.5 73 Computer and office equipment 357 1.7 284.3r 265.5 267.6 270.9 270.8 271.6 276.5 282.6 288.9 295.8 300.5 306.1 312.2 318.6 74 Electrical machinery 36 7.3 160.0r 148.1 150.1 152.6 154.3 156.5 159.5 161.5 164.1 165.0 166.9 168.9 172.2 174.6 75 Transportation equipment... 37 9.6 109.7r 110.8 112.3 110.7 109.5 107.6 107.5 105.7 109.5 108.8 109.0 110.4 112.1 112.6 76 Motor vehicles and parts . 371 4.8 137.9r 138.7 142.6 138.8 136.2 131.6 132.2 129.6 138.1 137.4 138.4 141.5 144.5 146.3 77 Autos and light trucks . 371 2.5 131.9 135.2 141.9 134.7 131.7 124.4 124.6 120.8 131.9 128.4 128.6 132.8 138.4 140.0 78 Aerospace and miscellaneous transportation equipment 372-6,9 4.8 82.7r 84.1 83.3 83.8 84.1 84.6 83.8 82.8 82.3 81.4 80.8 80.7 81.0 80.4 79 Instruments 38 5.4 107.5 105.9 106.3 106.9 106.6 106.4 106.8 108.5 108.7 108.0 108.2 108.4 108.8 109.4 80 Miscellaneous 39 1.3 116.2 112.6 113.5 114.1 115.2 115.4 115.8 118.6 117.1 117.0 118.4 118.6 117.8 118.4 81 Nondurable goods 40.5 113.2 110.0 110.7 112.5 112.4 113.4 113.4 113.6 114.0 113.7 114.2 115.3 115.9 115.7 82 Foods 20 9.4 112.8 109.9 109.9 112.9 111.9 112.8 112.8 113.4 113.7 114.6 113.4 114.2 114.8 115.0 83 Tobacco products 21 1.6 96.2r 87.0 93.6 93.0 98.1 98.5 95.9 93.7 96.2 96.1 104.5 101.2 102.9 103.8 84 Textile mill products 22 1.8 109.0 106.0 106.4 107.9 108.6 108.9 108.7 109.4 109.0 108.3 110.6 111.7 111.8 111.8 85 Apparel products 23 2.2 96.2 93.5 94.9 95.7 96.2 97.1 97.0 97.0 96.8 96.8 96.9 96.8 96.8 96.0 86 Paper and predicts 26 3.6 117.4 114.0 115.7 115.7 114.4 116.7 116.6 116.6 120.2 118.7 118.9 121.3 121.4 119.1 87 Printing and publishing 27 6.8 101.2r 98.2 98.8 101.3 101.7 101.6 102.4 102.1 101.5 100.9 101.4 102.1 102.4 101.5 88 Chemicals and products .... 28 9.9 123.9 121.3 121.8 123.1 122.4 124.0 124.4 124.7 124.7 123.7 123.8 125.7 126.3 127.2 89 Petroleum products 29 1.4 105.3r 104.0 103.8 103.4 107.5 107.0 104.5 104.3 105.2 105.3 104.0 107.6 108.3 107.3 90 Rubber and plastic products . 30 3.5 133.5r 128.3 128.2 130.9 130.8 132.4 132.8 134.5 134.5 134.7 136.7 138.3 139.9 139.8 91 Leather and products 31 .3 85.9 86.8 85.4 87.0 87.6 85.9 85.5 86.3 85.5 85.4 85.6 85.1 84.9 83.4 92 Mining 6.8 99.8 97.8 99.5 100.5 100.7 100.7 100.6 100.1 100.0 100.1 99.2 98.4 99.9 100.2 93 Metal 10 .4 159.4r 164.2 161.6 165.2 157.0 156.4 162.8 159.5 156.6 160.0 158.9 154.3 156.5 157.2 94 Coal 12 1.0 112.0 101.6 112.0 117.7 118.3 111.5 113.4 108.6 111.4 110.7 110.2 110.1 117.8 119.2 95 Oil and gas extraction 13 4.7 92.9 92.4 92.7 92.9 93.2 94.3 93.8 93.9 93.5 93.7 92.2 91.4 91.8 91.8 96 Stone and earth minerals 14 .6 107.0r 103.6 104.8 104.7 105.9 108.1 105.6 107.9 106.6 106.7 109.3 109.8 110.3 111.0 97 Utilities 7.7 118.2r 120.3 119.6 117.9 114.7 115.8 121.1 119.0 118.8 116.5 117.2 116.9 116.0 117.6 98 Electric 491.3PT 6.1 117.8r 118.1 117.5 117.2 116.4 116.2 121.4 119.0 118.4 117.1 117.9 117.5 116.6 118.1 99 Gas 492,3PT 1.6 119.9 128.9 128.1 120.5 107.9 114.1 120.0 118.9 120.4 114.2 114.4 114.3 113.9 115.7 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 80.7 118.6 114.4 115.2 116.7 117.3 118.2 118.6 119.2 119.8 119.9 120.5 121.5 122.6 122.9 101 Manufacturing excluding office and computing machines ... 83.8 116.5 112.8 113.7 114.9 115.3 115.9 116.2 116.6 117.6 117.5 118.1 119.2 120.3 120.6 Gross value (billions of 1987 dollars, annual rates) MAJOR MARKETS 102 Products, total 1,707.0 2,006.5 1,964.4 1,977.8 1,985.6 1,985.8 1,990.7 2,002.5 2,002.1 2,020.2 2,015.6 2,020.4r 2,039.0r 2,056.4r 2,062.3 103 Final 1,314.6 1,576.6 1,547.1 1,559.9 1,563.6 1,559.9 1,561.7 1,571.1 1,569.3 1,586.6 1,584.2 l,584.4r LEOO.C l,615.8r 1,623.2 104 Consumer goods 866.6 982.6 972.5 979.6 981.3 976.0 977.1 983.0 979.0 987.3 981.5 977.(f 989.1r 998.8r 999.8 105 Equipment 448.0 594.0r 574.6 580.4 582.3 583.9 584.5 588.1 590.3 599.3 602.7 607.3r 610.9r 617.0r 623.3 106 Intermediate 392.5 429.9r 417.3 417.8 422.0 425.9 429.0 431.4 432.9 433.5 431.4 436.0r 439.0' 440.6r 439.2 1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. Bulletin, vol. 81 (January 1995), pp. 16-26. For a detailed description of the industrial For the ordering address, see the inside front cover. The latest historical revision of the production index, see "Industrial Production: 1989 Developments and Historical Reviindustrial production index and the capacity utilization rates was released in November sion," Federal Reserve Bulletin, vol. 76, (April 1990), pp. 187-204. 1994. See "Industrial Production and Capacity Utilization: A Revision," Federal Reserve 2. Standard industrial classification. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A49 2.14 HOUSING AND CONSTRUCTION Monthly figures at seasonally adjusted annual rates except as noted 1994 IItteemm 11999922 11999933 11999944 Mar. Apr. May June July Aug. Sept. Oct.' Nov.' Dec. Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 1,095 1,199 1,369 1,331r 1,377' 1,383' 1,336' 1,347' 1,382' 1,416' 1,391 1,355 1,421 2 One-family 911 986 1,061 l,073r 1,068' 1,099' 1,054' 1,036' 1,047' 1,052 1,028 1,011 1,094 3 Two-family or more 184 213 307 258r 309' 284' 282' 311' 335' 364' 363 344 327 4 Started 1,200 1,288 1,455 l,499r 1,463' 1,489' 1,370' 1,440' 1,463 1,511' 1,451 1,536 1,527 5 One-family 1,030 1,126 1,197 1,259r 1,209' 1,197' 1,174' 1,219 1,174' 1,235' 1,164 1,186 1,223 6 Two-family or more 169 162 259 240r 254' 292' 196' 221' 289' 276' 287 350 304 1 Under construction at end of period1 612 680 772 732 740 748 751 758 768 772 779 791 803 8 One-family 473 543 566 585 585 582 584 585 587 589 587 590 595 9 Two-or-more-family 140 137 207 147 155 166 167 173 181 183 192 201 208 10 Completed 1,158 1,193 1,343 1,273 1,354 1,446 1,329 1,282 1,342 1,400 1,364 1,372 1,350 11 One-family 964 1,040 1,157 1,115 1,192 1,257 1,151 1,160 1,145 1,157 1,157 1,136 1,144 12 Two-or-more-family 194 153 186 158 162 189 178 122 197 243 207 236 206 13 Mobile homes shipped 210 254 304 304r 292' 296' 295' 289' 295' 307' 314 322 347 Merchant builder activity in one-family units 14 Number sold 610 666 670 722 673 692 628 630 673 692' 709 664411 663377 15 Number for sale at end of period1 266 294 347 298 298 301 313 317 322 328' 337 339 347 Price of units sold (thousands of dollars)2 16 Median 121.3 126.1 130.3 132.3 129.0 129.9 133.5 124.4 133.3 112299..77'' 132.5 112288..33 113355..00 17 Average 144.9 147.6 153.6 152.8 152.9 151.8 158.4 144.4 154.9 157.2' 153.0 154.3 159.4 EXISTING UNITS (one-family) 18 Number sold 3,520 3,800 3,946 4,110r 4,110' 4,110 4,010' 3,940' 3,910' 3,870' 3,820 3,690 3,760 Price of units sold (thousands of dollars)1 19 103.6 106.5 109.6 107.9' 109.1' 109.9' 113.3' 112.4' 113.0' 110088..99'' 107.5 108.7 109.1 20 Average 130.8 133.1 136.4 134.7' 135.7' 136.7' 141.3' 139.7' 141.2' 135.8' 133.0 134.7 135.6 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 435355 466365 506,846 496,042 497,035 504,356 506,144 505,445 505,470 514,197 521,376 524366 530,041 ?? 316,115 341,101 377,646 371,681 374,091 378,235 379,345 376,463 376,216 382,287 384,888 392,293 394,365 73 187,870 210,455 237,984 236,767 238,049 241,162 240,694 237,775 236,871 238,529 239,337 242,440 244,385 ?4 Nonresidential 128,245 130,646 139,662 134,914 136,042 137,073 138,651 138,688 139,345 143,758 145,551 149,853 149,980 Industrial buildings 20,720 19,533 21,670 19,905 21,221 21,338 20,960 21,117 22,012 22,621 22,318 24,804 23,802 76 Commercial buildings 41,523 42,627 48,235 46,602 47,481 47,912 48,410 48,607 48,185 50,180 50,535 51,797 52,497 77 Other buildings 21,494 23,626 23,843 23,918 23,824 23,956 24,439 23,838 23,648 24,784 24,107 24,368 25,186 28 Public utilities and other 44,508 44,860 45,914 44,489 43,516 43,867 44,842 45,126 45,500 46,173 48,591 48,884 48,495 ?9 Public 119,238 125,262 129,197 124,361 122,944 126,121 126,799 128,982 129,255 131,910 136,488 132,073 135,676 30 2,502 2,454 2,338 2,231 1,959 2,024 2,277 2,351 2,357 2,364 2,585 2,273 2,437 31 Highway 34,899 37,355 40,220 38,830 39,508 40,655 40,300 40,305 40,057 40,797 41,685 40,011 39,651 3? Conservation and development 6,021 5,976 6,262 5,206 5,851 5,677 4,605 5,935 5,754 7,521 7,155 7,007 7,997 33 Other 75,816 79,477 80,377 78,094 75,626 77,765 79,617 80,391 81,087 81,228 85,063 82,782 85,591 1. Not at annual rates. SOURCES. Bureau of the Census estimates for all series except (1) mobile homes, which 2. Not seasonally adjusted. are private, domestic shipments as reported by the Manufactured Housing Institute and 3. Recent data on value of new construction may not be strictly comparable with data seasonally adjusted by the Census Bureau, and (2) sales and prices of existing units, for previous periods because of changes by the Bureau of the Census in its estimating which are published by the National Association of Realtors. All back and current figures techniques. For a description of these changes, see Construction Reports (C-30-76-5), are available from the originating agency. Permit authorizations are those reported to the issued by the Census Bureau in July 1976. Census Bureau from 17,000 jurisdictions beginning in 1984. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics • April 1995 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 1994r 1994r lll JJJ eee aaa vvv nnn eee ... lll ,,, 11999944 11999955 111999999555 111 JJaann.. JJaann.. Mar. June Sept. Dec. Sept. Oct. Nov. Dec. Jan. CONSUMER PRICES2 (1982-84=100) 1 AU items 2.5 2.8 Z2 2.7 3.6 1.9 .2 .1 .1 .2 3 150.3 2 2.8 2.6 -.3 2.8 5.1 3.9 .2 .1 .1 .8 -.3 147.5 3 Energy items -2.0 2.9 3.1 -3.0 9.2 .4 -.6 -.3 .5 -.1 .3 104.2 4 All items less food and energy 2.9 2.9 2.9 3.1 2.6 2.0 .2 .2 .2 .1 .4 158.7 5 Commodities 1.3 1.7 .6 3.9 .9 .3 .2 .0 .0 .1 .4 137.7 6 Services 3.6 3.5 3.9 2.7 3.6 2.6 .2 .2 .2 .2 .5 170.8 PRODUCER PRICES (1982=100) 7 Finished goods .2 1.6 2.9 .0 1.9 2.2 -.3 -.4 .6 .4 .3 126.5 8 Consumer foods 2.2 .6 -.9 -5.5 1.9 9.2 -.2 .0 .8 1.4 -.6 127.8 9 Consumer energy -3.9 3.9 14.7 -2.6 3.2 .0 -2.4 -1.2 2.2 -1.0 2.3 76.5 10 Other consumer goods -.3 1.2 1.5 2.0 1.7 .6 .1 -.3 .1 .3 .1 140.3 11 Capital equipment 1.9 1.9 2.7 3.0 2.1 .0 .2 -.5 .1 .4 .3 135.8 Intermediate materials 12 Excluding foods and feeds .7 5.6 3.1 2.8 6.2 7.6 .4 .3 1.0 .5 1.0 122.7 13 Excluding energy 1.5 6.0 1.9 3.9 6.8 8.3 .8 .6 .9 .5 1.0 132.3 Crude materials 14 6.3 -9.0 -4.9 -18.0 -13.5 -.8 -.2 -1.1 .7 .2 -.1 102.1 IS Energy -7.3 -5.9 10.1 21.0 -19.2 -13.8 -5.7 -.4 -1.0 -2.3 -.1 68.6 16 Other 10.1 17.4 25.1 -.8 20.3 26.7 .8 .6 3.1 2.3 3.0 173.7 1. Not seasonally adjusted. SOURCE. U.S. Department of Labor, Bureau of Labor Statistics. 2. Figures for consumer prices are for all urban consumers and reflect a rentalequivalence measure of homeownership. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A51 2.16 GROSS DOMESTIC PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1993 1994 AAccccoouunntt 11999922 11999933 11999944 Q4 Ql Q2 Q3 Q4 GROSS DOMESTIC PRODUCT 1 Total 6,020.2 6,343.3 6,736.9 6,478.1 6,574.7 6,689.9 6,791.7 6,891.1 By source 2 Personal consumption expenditures 4,136.9 4,378.2 4,627.0 4,469.6 4,535.0 4,586.4 4,657.5 4,728.9 3 Durable goods 492.7 538.0 590.9 562.8 576.2 580.3 591.5 615.6 4 Nondurable goods 1,295.5 1,339.2 1,393.8 1,355.2 1,368.9 1,381.4 1,406.1 1,418.9 5 Services 2,348.7 2,501.0 2,642.2 2,551.6 2,589.9 2,624.7 2,659.9 2,694.5 6 Gross private domestic investment 788.3 882.0 1,037.5 922.5 966.6 1,034.4 1,055.1 1,093.9 7 Fixed investment 785.2 866.7 979.8 913.5 942.5 967.0 992.5 1,017.1 8 Nonresidential 561.4 616.1 697.5 646.3 665.4 683.3 709.1 732.0 9 Structures 171.1 173.4 182.6 176.7 172.7 181.8 184.6 191.3 10 Producers' durable equipment 390.3 442.7 514.9 469.6 492.7 501.5 524.5 540.8 11 Residential structures 223.8 250.6 282.3 267.2 277.1 283.6 283.4 285.1 12 Change in business inventories 3.0 15.4 57.7 9.0 24.1 67.4 62.6 76.8 13 Nonfarm -2.7 20.1 51.3 10.7 22.3 60.4 53.4 68.9 14 Net exports of goods and services -30.3 -65.3 -102.1 -71.2 -86.7 -97.6 -109.6 -114.3 IS Exports 638.1 659.1 716.1 680.3 674.2 704.5 730.5 755.3 16 Imports 668.4 724.3 818.2 751.4 760.9 802.1 840.1 869.6 17 Government purchases of goods and services 1,125.3 1,148.4 1,174.5 1,157.2 1,159.8 1,166.7 1,188.8 1,182.6 18 Federal 449.0 443.6 436.6 439.8 437.8 435.1 444.3 429.2 19 State and local 676.3 704.7 737.9 717.4 722.0 731.5 744.5 753.4 By major type of product 20 Final sales, total 6,017.2 6,327.9 6,679.1 6,469.2 6,550.6 6,622.5 66,,772299..11 66,,881144..33 21 Goods 2,292.0 2,390.4 2,528.1 2,452.6 2,489.1 2,493.7 2,543.6 2,585.9 22 Durable 968.6 1,032.4 1,116.7 1,072.9 1,098.2 1,099.4 1,125.8 1,143.2 23 Nondurable 1,323.4 1,358.1 1,411.4 1,379.7 1,390.9 1,394.3 1,417.8 1,442.7 24 Services 3,227.2 3,405.5 3,574.7 3,459.3 3,503.8 3,555.4 3,603.6 3,635.9 25 Structures 498.1 532.0 576.4 557.2 557.7 573.4 581.9 592.6 26 Change in business inventories 3.0 15.4 57.7 9.0 24.1 67.4 62.6 76.8 27 Durable goods -13.0 8.6 37.5 9.0 20.6 38.2 44.1 46.9 28 Nondurable goods 16.0 6.7 20.3 .0 3.5 29.2 18.5 29.9 MEMO 29 Total GDP in 1987 dollars 4,979.3 5,134.5 5,342.3 5,218.0 5,261.1 5,314.1 5,367.0 5,426.8 NATIONAL INCOME 30 Total 4,829.5 5,131.4 n.a. 5,262.0 5,308.7 5,430.7 5,494.9 n.a. 31 Compensation of employees 3,591.2 3,780.4 4,005.1 3,845.8 3,920.0 3,979.3 4,023.7 4,097.4 32 Wages and salaries 2,954.8 3,100.8 3,279.2 3,148.4 3,208.3 3,257.2 3,293.9 3,357.4 33 Government and government enterprises 567.3 583.8 602.7 587.8 595.7 601.9 604.4 608.9 34 Other 2,387.5 2,517.0 2,676.5 2,560.7 2,612.6 2,655.4 2,689.6 2,748.5 35 Supplement to wages and salaries 636.4 679.6 725.9 697.4 711.7 722.0 729.7 740.0 36 Employer contributions for social insurance 307.7 324.3 344.8 330.6 338.5 343.6 346.0 350.9 37 Other labor income 328.7 355.3 381.1 366.8 373.2 378.4 383.7 389.1 38 Proprietors' income1 418.7 441.6 473.1 462.9 471.0 471.3 467.0 483.3 39 Business and professional' 374.4 404.3 433.9 418.5 423.8 431.9 437.1 442.7 40 Farm' 44.4 37.3 39.2 44.4 47.2 39.3 29.8 40.7 41 Rental income of persons2 -5.5 24.1 27.7 30.3 15.3 34.1 32.6 28.7 42 Corporate profits' 405.1 485.8 n.a. 533.9 508.2 546.4 556.0 n.a. 43 Profits before tax3 395.9 462.4 n.a. 501.7 483.5 523.1 538.1 n.a. 44 Inventory valuation adjustment -6.4 -6.2 -18.7 -6.5 -12.3 -14.1 -19.6 -28.8 45 Capital consumption adjustment 15.7 29.5 37.7 38.8 37.0 37.4 37.5 38.6 46 Net interest 420.0 399.5 n.a. 389.1 394.2 399.7 415.7 n.a. 1. With inventory valuation and capital consumption adjustments. 3. For after-tax profits, dividends, and the like, see table 1.48. 2. With capital consumption adjustment. SOURCE. U.S. Department of Commerce, Survey of Current Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 Domestic Nonfinancial Statistics • April 1995 2.17 PERSONAL INCOME AND SAVING Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1993 1994 AAccccoouunntt 11999922 11999933 Q4 Qi Q2 Q3 Q4 PERSONAL INCOME AND SAVING 1 Total personal income 5,154-3 5,375.1 5,701.8 5,484.6 5,555.8 5,659.9 5,734.5 5,857.1 2 Wage and salary disbursements 2,974.8 3,080.8 3,279.2 3,148.4 3,208.3 3,257.2 3,293.9 3,357.4 3 Commodity-producing industries 757.6 773.8 818.2 791.0 801.9 811.6 821.8 837.7 578.3 588.4 617.6 601.7 609.4 612.8 618.3 630.0 682.3 701.9 748.6 712.6 728.6 742.5 753.5 769.9 967.6 1,021.4 1,109.6 1,057.0 1,082.0 1,101.2 1,114.3 1,140.9 7 Government and government enterprises 567.3 583.8 602.7 587.8 595.7 601.9 604.4 608.9 328.7 355.3 381.1 366.8 373.2 378.4 383.7 389.1 418.7 441.6 473.1 462.9 471.0 471.3 467.0 483.3 10 Business and professional' 374.4 404.3 433.9 418.5 423.8 431.9 437.1 442.7 11 Farm1 44.4 37.3 39.2 44.4 47.2 39.3 29.8 40.7 12 Rental income of persons2 -5.5 24.1 27.7 30.3 15.3 34.1 32.6 28.7 161.0 181.3 194.3 184.1 185.7 191.7 196.9 202.7 665.2 637.9 664.3 627.7 631.1 649.4 674.2 702.3 15 Transfer payments 860.2 915.4 963.7 931.0 947.4 957.6 969.0 980.7 16 Old-age survivors, disability, and health insurance benefits 414.0 444.4 473.7 452.1 463.8 470.7 476.5 483.7 17 LESS: Personal contributions for social insurance 248.7 261.3 281.5 266.6 276.3 279.9 282.9 287.0 18 EQUALS: Personal income 5,154.3 5,375.1 5,701.8 5,484.6 5,555.8 5,659.9 5,734.5 5,857.1 19 LESS: Personal tax and nontax payments 648.6 686.4 742.5 707.0 723.0 746.4 744.1 756.5 20 EQUALS: Disposable personal income 4,505.8 4,688.7 4,959.3 4,777.6 4,832.8 4,913.5 4,990.3 5,100.7 21 LESS: Personal outlays 4,257.8 4,496.2 4,755.1 4,588.2 4,657.3 4,712.4 4,787.0 4,863.8 22 EQUALS: Personal saving 247.9 192.6 204.2 189.4 175.5 201.1 203.3 236.9 MEMO Per capita (1987 dollars) 23 Gross domestic product 19,489.7 19,878.8 20,469.3 20,119.1 20,235.2 20,389.7 2200,,553366..55 2200,,771133..00 24 Personal consumption expenditures 13,110.4 13,390.8 13,711.2 13,518.9 13,639.8 13,650.9 13,716.6 13,836.3 25 Disposable personal income 14,279.0 14,341.0 14,696.0 14,451.0 14,535.0 14,625.0 14,697.0 14,924.0 26 Saving rate (percent) 5.5 4.1 4.1 4.0 3.6 4.1 4.1 4.6 GROSS SAVING 27 Gross saving 722.9 787.5 n.a. 825.8 886.2 923.3 922.6 n.a. 28 Gross private saving 980.8 1,002.5 n.a. 1,011.4 1,037.3 1,041.4 1,052.7 n.a. 29 Personal saving 247.9 192.6 204.2 189.4 175.5 201.1 203.3 236.9 30 Undistributed corporate profits 94.3 120.9 n.a. 147.9 127.7 142.3 139.5 n.a. 31 Corporate inventory valuation adjustment -6.4 -6.2 -18.7 -6.5 -12.3 -14.1 -19.6 -28.8 Capital consumption allowances 396.8 407.8 432.2 411.1 432.2 425.9 443322..66 443388..22 33 Noncorporate 261.8 261.2 283.2 263.0 301.8 272.1 277.3 281.6 34 Government surplus, or deficit (-), national income and -257.8 -215.0 n.a. -185.6 -151.1 -118.1 -130.1 n.a. -282.7 -241.4 n.a. -220.1 -176.2 -145.1 -154.0 n.a. 36 State and local 24.8 26.3 n.a. 34.5 25.2 27.0 23.9 n.a. 37 Gross investment 731.7 789.8 n.a. 809.3 850.2 899.3 901.5 n.a. 38 Gross private domestic investment 788.3 882.0 1,037.5 922.5 966.6 1,034.4 1,055.1 1,093.9 39 Net foreign investment -56.6 -92.3 n.a. -113.2 -116.4 -135.1 -153.6 n.a. 40 Statistical discrepancy 8.8 23 n.a. -16.5 -36.1 -24.0 -21.1 n.a. 1. With inventory valuation and capital consumption adjustments. SOURCE. U.S. Department of Commerce, Survey of Current 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A53 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data seasonally adjusted except as noted1 1993 1994 IItteemm ccrreeddiittss oorr ddeebbiittss 11999911 11999922 11999933 Q3 Q4 Ql Q2 Q3P 1 Balance on current account -6,952 -67,886 -103,896 -27,856 -30,587 -32,317 -37,906 -41,722 2 Merchandise trade balance2 -74,068 -96,097 -132,575 -36,488 -33,169 -36,962 -41,632 -44,633 3 Merchandise exports 416,913 440,361 456,866 111,736 119,679 118,018 122,683 127,817 4 Merchandise imports -490,981 -536,458 -589,441 -148,224 -152,848 -154,980 -164,315 -172,450 5 Military transactions, net -5,485 -3,034 -763 -87 -444 -338 177 376 6 Other service transactions, net 51,082 58,747 57,613 14,317 13,637 12,972 14,809 14,746 7 Investment income, net 14,833 4,540 3,946 2,015 -590 -811 -2,809 -3,948 8 U.S. government grants 23,959 -15,010 -14,620 -3,114 -5,591 -2,371 -3,590 -2,789 9 U.S. government pensions and other transfers -3,461 -3,735 -3,785 -986 -987 -968 -974 -1,550 10 Private remittances and other transfers -13,811 -13,297 -13,712 -3,513 -3,443 -3,839 -3,887 -3,924 11 Change in U.S. government assets other than official reserve assets, net (increase, —) 2,900 -1,652 -306 -192 -321 490 462 -118 12 Change in U.S. official reserve assets (increase, —) 5,763 3,901 -1,379 -545 -673 -59 3,537 -165 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -177 2,316 -537 -118 -113 -101 -108 -111 15 Reserve position in International Monetary Fund -367 -2,692 -44 -48 -80 -3 251 273 16 Foreign currencies 6,307 4,277 -797 -378 -480 45 3,394 -327 17 Change in U.S. private assets abroad (increase, —) -60,175 -63,759 -146,213 -34,915 -62,628 -48,667 -11,030 -20,111 18 Bank-reported claims3 4,763 22,314 32,238 7,335 -9,293 -1,236 15,248 -3,458 19 Nonbank-reported claims 11,097 45 -598 4,838 -303 1,941 -4,264 20 U.S. purchases of foreign securities, net -44,740 -45,114 -119,983 -40,777 -30,349 -24,605 -14,007 -7,146 21 U.S. direct investments abroad, net -31,295 -41,004 -57,870 -6,311 -22,683 -24,767 -8,007 -9,507 22 Change in foreign official assets in United States (increase, +) 17,199 40,858 71,681 19,259 23,962 11,530 8,925 17,496 23 U.S. Treasury securities 14,846 18,454 48,702 19,098 22,856 1,193 6,033 15,207 24 Other U.S. government obligations 1,301 3,949 4,062 1,345 970 50 2,355 2,003 25 Other U.S. government liabilities4 1,177 2,572 1,666 1,121 825 938 252 526 26 Other U.S. liabilities reported by U.S. banks3 -1,484 16,571 14,666 -2,489 -587 10,139 1,241 539 27 Other foreign official assets5 1,359 -688 2,585 184 -102 -790 -956 -779 28 Change in foreign private assets in United States (increase, +) 80,935 105,646 159,017 52,675 66,200 83,548 40,332 49,943 29 U.S. bank-reported liabilities3 3,994 15,461 18,452 27,618 7,370 35,200 25,539 16,826 30 U.S. nonbank-reported liabilities -3,115 13,573 14,282 1,169 4,733 5,867 3,662 31 Foreign private purchases of U.S. Treasury securities, net 18,826 36,857 24,849 3,474 7,996 9,260 -7,434 5,661 32 Foreign purchases of other U.S. securities, net 35,144 29,867 80,068 17,445 38,008 21,258 13,152 14,162 33 Foreign direct investments in United States, net 26,086 9,888 21,366 2,969 8,093 11,963 5,413 13,294 34 Allocation of special drawing rights 0 0 0 0 0 0 0 0 35 Discrepancy -39,670 -17,108 21,096 -8,427 4,047 -14,525 -4,320 -5,323 36 Due to seasonal adjustment -6,643 103 5,810 639 -6,919 37 Before seasonal adjustment -39,670 -17,108 2i,096 -1,785 3,944 -20,335 -4,959 1,596 Memo Changes in official assets 38 U.S. official reserve assets (increase, -) 5,763 3,901 -1,379 -545 -673 -59 33,,553377 --116655 39 Foreign official assets in United States, excluding line 25 (increase, +) 16,022 38,286 70,015 18,138 23,137 10,592 8,673 16,970 40 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) -4,882 5,942 -3,847 -3,194 -229 -1,674 --44,,114499 33,,559922 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 arranged 2. Data are on an international accounts basis. The data differ from the Census basis with or through foreign official agencies. data, shown in table 3.11, for reasons of coverage and timing. Military exports are 5. Consists of investments in U.S. corporate stocks and in debt securities of private excluded from merchandise trade data and are included in line 5. corporations and state and local governments. 3. Reporting banks include all types of depository institution as well as some brokers SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, Survey of and dealers. Current Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics • April 1995 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data seasonally adjusted 1994 IItteemm 11999922 11999933 11999944 June July Aug. Sept. Oct. Nov. Dec.p 1 Goods and services, balance -40,384 -75,725 -106,109 -8,845 -10,953 -9,060 -9,354 -10,097 -10,035 -7,340 2 Merchandise -96,097 -132,575 -166,287 -14,020 -15,955 -14,101 -14,433 -15,051 -15,140 -12,660 3 Services 55,713 56,850 58,178 5,175 5,002 5,041 5,079 4,954 5,105 5,320 4 Goods and services, exports 616,924 641,677 696,430 58,333 56,297 60,292 60,063 59,847 61,613 63,572 5 Merchandise 440,361 456,866 502,804 42,028 40,128 44,121 43,596 43,380 44,872 46,699 6 Services 176,563 184,811 193,626 16,305 16,169 16,171 16,467 16,467 16,741 16,873 7 Goods and services, imports -657,308 -717,402 -804,539 -67,178 -67,250 -69,352 -69,417 -69,944 -71,648 -70,912 8 Merchandise -536,458 -589,441 -669,091 -56,048 -56,083 -58,222 -58,029 -58,431 -60,012 -59,359 9 Services -120,850 -127,961 -135,448 -11,130 -11,167 -11,130 -11,388 -11,513 -11,636 -11,553 MEMO 10 Balance on merchandise trade, Census basis —84,501 -115,568 -151,098 -13,028 -14,845 -12,758 — 13,388 -13,815 -14,062 -11,410 1. Data show monthly values consistent with quarterly figures in the U.S. balance of SOURCE. FT900, U.S. Department of Commerce, Bureau of the Census and Bureau of payments accounts. Economic Analysis. 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1994 1995 AAsssseett 11999911 11999922 11999933 July Aug. Sept. Oct. Nov. Dec. Jan.p 1 Total 77,719 71,323 73,442 75,443 75,740 76,532 78,172 74,000 74,335 76,027 2 Gold stock, including Exchange Stabilization Fund' 11,057 11,056 11,053 11,052 11,054 11,054 11,053 11,052 11,051 11,050 3 Special drawing rights2,3 11,240 8,503 9,039 9,696 9,837 9,971 10,088 10,017 10,039 10,154 4 Reserve position in International Monetary Fund2 9,488 11,759 11,818 12,183 12,161 12,067 12,339 12,037 12,030 12,120 5 Foreign currencies4 45,934 40,005 41,532 42,512 42,688 43,440 44,692 40,894 41,215 42,703 1. Gold held "under earmark" at Federal Reserve Banks for foreign and international been used. U.S. SDR holdings and reserve positions in the IMF also have been valued on accounts is not included in the gold stock of the United States; see table 3.13, line 3. Gold this basis since July 1974. stock is valued at $42.22 per fine troy ounce. 3. Includes allocations of SDRs by the International Monetary Fund on Jan. 1 of the 2. Special drawing rights (SDRs) are valued according to a technique adopted by the year indicated, as follows: 1970—$867 million; 1971—$717 million; 1972—$710 mil- International Monetary Fund (IMF) in July 1974. Values are based on a weighted average lion; 1979—$1,139 million; 1980—$1,152 million; 1981—$1,093 million; plus net of exchange rates for the currencies of member countries. From July 1974 through transactions in SDRs. December 1980, sixteen currencies were used; since January 1981, five currencies have 4. Valued at current market exchange rates. 3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS1 Millions of dollars, end of period 1994 1995 AAsssseett 11999911 11999922 11999933 July Aug. Sept. Oct. Nov. Dec. Jan.p 1 Deposits 968 205 386 181 188 342 223 230 250 185 Held in custody 2 U.S. Treasury securities2 281,107 314,481 379,394 423,715 427,574 429,819 439,854 444,339 441,866 439,139 3 Earmarked gold3 13,303 13,118 12,327 12,056 12,044 12,044 12,039 12,037 12,033 12,033 1. Excludes deposits and U.S. Treasury securities held for international and regional 3. Held in foreign and international accounts and valued at $42.22 per fine troy ounce; organizations. 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, in each case measured at face (not market) 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 1994 IItteemm 11999922 11999933 June July Aug. Sept. Oct. Nov. Dec.p 1 Total1 412,624 482,858 501,827 516,466 518,785 520,585 531,073 523,530 518,959 By type 2 Liabilities reported by banks in the United States'' 54,967 69,808 80,887 84,889 79,806 82,582 79,436 73,525 71,824 3 US. Treasury bills and certificates 104,596 150,900 141,338 146,244 143,400 138,261 147,849 143,132 139,450 US. Treasury bonds and notes 4 Marketable 210,931 212,253 228,823 233,720 242,936 247,624 250,465 253,111 253,691 5 Nonmarketable4 4,532 5,652 5,875 5,913 5,952 5,990 6,031 6,069 6,109 6 U.S. securities other than U.S. Treasury securities5 37,598 44,245 44,904 45,700 46,691 46,128 47,292 47,693 47,885 By area 7 Europe1 189,230 206,921 221,957 227,466 226,234 225,600 223,205 217,415 214,398 8 Canada 13,700 15,285 15,9% 18,656 18,597 19,287 18,402 17,339 17,046 9 Latin America and Caribbean 37,973 55,898 42,646 42,749 44,224 44,427 47,844 45,303 41,331 10 Asia 164,690 197,758 211,250 217,931 221,100 222,971 232,191 233,654 236,176 11 Africa 3,723 4,052 4,110 3,862 4,259 4,388 4,232 4,673 4,179 12 Other countries6 3,306 2,942 5,866 5,800 4,369 3,910 5,197 5,144 5,827 1. Includes the Bank for International Settlements. 5. Debt securities of US. government corporations and federally sponsored agencies, 2. Principally demand deposits, time deposits, bankers acceptances, commercial paper, and U.S. corporate stocks and bonds. negotiable time certificates of deposit, and borrowings under repurchase agreements. 6. Includes countries in Oceania and Eastern Europe. 3. Includes nonmarketable certificates of indebtedness (including those payable in SOURCE. Based on US. Department of the Treasury data and on data reported to the foreign currencies through 1974) and Treasury bills issued to official institutions of department by banks (including Federal Reserve Banks) and securities dealers in the foreign countries. United States, and on the 1989 benchmark survey of foreign portfolio investment in the 4. Excludes notes issued to foreign official nonreserve agencies. Includes bonds and United States. 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 States' Payable in Foreign Currencies Millions of dollars, end of period 1993 1994 IItteemm 11999900 11999911 11999922 Dec. Mar. June Sept. 1 Banks' liabilities 70,477 75,129 72,796 78,120 86,459 72,312 82,183 2 Banks' claims 66,796 73,195 62,799 59,262 72,6% 55,978 58,536 3 Deposits 29,672 26,192 24,240 19,404 19,684 20,499 19,623 4 Other claims 37,124 47,003 38,559 39,858 53,012 35,479 38,913 5 Claims of banks' domestic customers2 6,309 3,398 4,432 3,058 3,655 4,182 4,987 1. Data on claims exclude foreign currencies held by U.S. monetary authorities. 2. Assets owned by customers of the reporting bank located in the United 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 • April 1995 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States' Payable in U.S. dollars Millions of dollars, end of period 1994 IItteemm 11999922 11999933 11999944 June July Aug. Sept. Oct. Nov. Dec.p BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 810,259 920,995 1,000,713 991,779 997,239 993,475 993,564 l,006,836r 983,777 1,000,713 2 Banks' own liabilities 606,444 622,847 711,367 685,581 697,021 692,920 706,331 708,805' 685,895 711,367 3 Demand deposits 21,828 21,574 25,217 24,521 23,549 22,962 23,541 24,627 23,969 25,217 4 Time deposits2 160,385 175,116 185,702 183,568 185,826 184,552 178,006 181,169 178,629 185,702 5 Other3 93,237 110,144 107,954 118,657 127,500 118,816 134,614 133,661' 123,874 107,954 6 Own foreign offices4 330,994 316,013 392,494 358,835 360,146 366,590 370,170 369,348 359,423 392,494 7 Banks' custodial liabilities5 203,815 298,148 289,346 306,198 300,218 300,555 287,233 298,031' 297,882 289,346 8 U.S. Treasury bills and certificates6 127,644 176,523 162,502 171,315 170,064 170,592 164,341 174,239' 168,832 162,502 9 Other negotiable and readily transferable instruments7 21,974 36,289 41,555 49,915 46,257 46.416 39,033 37,681 39,886 41,555 10 Other 54,197 85,336 85,289 84,968 83,897 83,547 83,859 86,111' 89,164 85,289 11 Nonmonetary international and regional organizations8.. . 9,350 10,936 4,639 9,042 7,318 5,323 7,279 7,574' 6,207 4,639 12 Banks' own liabilities 6,951 5,639 4,209 5,667 5,511 4,328 6,302 5,797' 5,441 4,209 13 Demand deposits 46 15 29 31 29 36 28 83 35 29 14 Time deposits2 3,214 2,780 2,641 3,223 3,469 2,691 2,699 2,845 2,817 2,641 15 Other3 3,691 2,844 1,539 2,413 2,013 1,601 3,575 2,869' 2,589 1,539 16 Banks' custodial liabilities5 2,399 5,297 430 3,375 1,807 995 977 1,777 766 430 17 US. Treasury bills and certificates6 1,908 4,275 281 2,825 1,082 836 767 1,572 501 281 18 Other negotiable and readily transferable instruments7 486 1,022 149 548 725 159 205 205 265 149 19 Other 5 0 0 2 0 0 5 0 0 0 20 Official institutions9 159,563 220,708 211,274 222,225 231,133 223,206 220,843 227,285' 216,657 211,274 21 Banks' own liabilities 51,202 64,231 58,373 67,641 73,967 67,619 72,109 67,580' 60,735 58,373 22 Demand deposits 1,302 1,601 1,642 2,029 1,472 1,232 1,691 2,028 1,682 1,642 23 Time deposits2 17,939 21,654 22,997 24,925 27,497 25,948 26,909 23,801 20,634 22,997 24 Other3 31,961 40,976 33,734 40,687 44,998 40,439 43,509 41,751' 38,419 33,734 25 Banks' custodial liabilities5 108,361 156,477 152,901 154,584 157,166 155,587 148,734 159,705 155,922 152,901 26 U.S. Treasury bills and certificates6 104,596 150,900 139,450 141,338 146.244 143,400 138,261 147,849 143,132 139,450 27 Other negotiable and readily transferable instruments7 3,726 5,482 13,245 13,112 10,863 12,054 10,407 11,820 12,773 13,245 28 Other 39 95 206 134 59 133 66 36 17 206 29 Banks10 547,320 588,448 672,104 646,058 649,670 652,508 646,547 653,356' 642,150 672,104 30 Banks' own liabilities 476,117 476,426 563,155 530,866 536,234 536,398 538,016 545,107' 531,993 563,155 31 Unaffiliated foreign banks 145,123 160,413 170,661 172,031 176,088 169,808 167,846 175,759' 172,570 170,661 32 Demand deposits 10,170 9,719 13,080 12,323 11,792 11,837 10,555 11,023 11,259 13,080 33 Time deposits2 90,296 105,192 111,544 108,366 106,888 107,110 101,741 106,646 106,317 111,544 34 Other3 44,657 45,502 46,037 51,342 57,408 50,861 55,550 58,090' 54,994 46,037 35 Own foreign offices4 330,994 316,013 392,494 358,835 360,146 366,590 370,170 369,348 359,423 392,494 36 Banks' custodial liabilities5 71,203 112,022 108,949 115,192 113,436 116,110 108,531 108,249' 110,157 108,949 37 U.S. Treasury bills and certificates6 11,087 10,707 11,073 10,834 10,138 12,249 10,951 10,771 11,675 11,073 38 Other negotiable and readily transferable instruments7 7,555 17,020 14,279 22,347 21,446 22,049 15,388 13,248 13,565 14,279 39 Other 52,561 84,295 83,597 82,011 81,852 81,812 82,192 84,230' 84,917 83,597 40 Other foreigners 94,026 100,903 112,696 114,454 109,118 112,438 118,895 118,621' 118,763 112,696 41 Banks' own liabilities 72,174 76,551 85,630 81,407 81,309 84,575 89,904 90,321 87,726 85,630 42 Demand deposits 10,310 10,239 10,466 10,138 10,256 9,857 11,267 11,493 10,993 10,466 43 Time deposits2 48,936 45,490 48,520 47,054 47,972 48,803 46,657 47,877 48,861 48,520 44 Other3 12,928 20,822 26,644 24,215 23,081 25,915 31,980 30,951 27,872 26,644 45 Banks' custodial liabilities5 21,852 24,352 27,066 33,047 27,809 27,863 28,991 28,300' 31,037 27,066 46 U.S. Treasury bills and certificates6 10,053 10,641 11,698 16,318 12,600 14,107 14,362 14,047' 13,524 11,698 47 Other negotiable and readily transferable instruments7 10,207 12,765 13,882 13,908 13,223 12,154 13,033 12,408 13,283 13,882 48 Other 1,592 946 1,486 2,821 1,986 1,602 1,596 1,845' 4,230 1,486 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 9,111 17,567 17,928 27,075 25,589 25,338 19,160 16,813 17,417 17,928 1. Reporting banks include all types of depository institutions, as well as some brokers 6. Includes nonmarketable certificates of indebtedness and Treasury bills issued to and dealers. official institutions of foreign countries. 2. Excludes negotiable time certificates of deposit, which are included in "Other 7. Principally bankers acceptances, commercial paper, and negotiable time certificates negotiable and readily transferable instruments." of deposit. 3. Includes borrowing under repurchase agreements. 8. Principally the International Bank for Reconstruction and Development, the Inter- 4. For U.S. banks, includes amounts owed to own foreign branches and foreign American Development Bank, and the Asian Development Bank. Excludes "holdings of subsidiaries consolidated in quarterly Consolidated Reports of Condition filed with bank dollars" of the International Monetary Fund. regulatory agencies. For agencies, branches, and majority-owned subsidiaries of foreign 9. Foreign central banks, foreign central governments, and the Bank for International banks, consists principally of amounts owed to the head office or parent foreign bank, and Settlements. to foreign branches, agencies, or wholly owned subsidiaries of the head office or parent 10. Excludes central banks, which are included in "Official institutions." 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 States'—Continued 1994 IItteemm 11999922 11999933 11999944 June July Aug. Sept. Oct. Nov. Dec.P AREA 1 Total, all foreigners 810,259 920,995 1,000,713 991,779 997,239 993,475 993,564 l,006,836r 983,777 1,000,713 2 Foreign countries 800,909 910,059 996,074 982,737 989,921 988,152 986,285 999,262r 977,570 996,074 Europe 307,670 376,988 389,631 412,178 422,577 419,932 406,937 413,278R 393,101 389,631 4 Austria 1,611 1,917 3,649 3,578 3,364 3,349 3,014 3,610 4,264 3,649 5 Belgium and Luxembourg 20,567 28,627 21,757 25,298 25,145 27,159 27,593 23,591 22,346 21,757 6 Denmark 3,060 4,517 2,776 3,473 2,877 2,634 2,128 2,374 2,307 2,776 7 Finland 1,299 1,872 1,433 2,649 2,504 1,747 2,319 2,601 1,587 1,433 8 France 41,411 39,741 44,703 43,246 41,410 41,911 43,143 44,209 41,160 44,703 9 Germany 18,630 26,613 27,002 33,114 30,838 31,046 31,889 33,136 31,049 27,002 10 Greece 913 1,519 1,390 1,377 1,153 1,199 1,227 1,711 1,477 1,390 11 Italy 10,041 11,559 10,699 12,771 11,537 11,725 10,781 10,701 9,685 10,699 1? Netherlands 7,365 16,096 15,990 18,691 18,446 17,199 18,754 18,034 17,310 15,990 N Norway 3,314 2,966 2,336 4,018 3,731 3,195 2,861 3,400 2,807 2,336 14 Portugal 2,465 3,366 2,845 2,920 2,865 2,867 3,023 2,86 lr 2,919 2,845 15 Russia 577 2,511 2,063 4,497 4,593 3,794 2,899 2,337 2,367 2,063 16 Spain 9,793 20,493 14,587 15,839 17,137 15,455 14,198 16,324 15,037 14,587 17 Sweden 2,953 2,572 3,093 4,043 5,709 4,149 4,651 3,467 3,361 3,093 18 Switzerland 39,440 41,555 41,861 38,075 41,378 43,486 41,050 41,834 41,756 41,861 19 Turkey 2,666 3,227 3,303 3,250 3,515 3,238 3,013 3,133 3,032 3,303 ?0 United Kingdom 111,805 133,936 163,120 163,338 171,239 174,078 160,361 171,954R 162,775 163,120 ?1 Yugoslavia" 504 570 245 434 230 227 224 220 240 245 22 Other Europe and other former U.S.S.R.12 29,256 33,331 26,979 31,567 34,906 31,474 33,909 27,98 lr 27,822 26,979 23 Canada 22,420 20,227 23,948 25,480 26,625 26,341 24,660 23,115 23,295 23,948 ?4 Latin America and Caribbean 317,228 357,380 414,550 381,263 375,700 377,864 384,805 386,867R 391,946 414,550 75 Argentina 9,477 14,477 17,177 13,750 14,592 14,806 13,783 15,577 15,950 17,177 76 82,284 73,150 105,265 85,817 87,264 83,260 86,011 88,168' 89,597 105,265 77 Bermuda 7,079 7,830 7,801 8,975 10,103 8,422 10,334 8,936 7,615 7,801 ?8 5,584 5,301 9,120 5,708 6,261 5,697 5,670 6,195 6,722 9,120 79 British West Indies 153,033 190,446 220,629 206,466 198,471 204,677 208,452 205,671' 210,511 220,629 30 Chile 3,035 3,183 3,114 3,523 3,353 2,988 3,407 3,078 3,741 3,114 31 Colombia 4,580 3,171 4,600 3,929 3,773 3,726 4,027 4,471 4,413 4,600 3?, Cuba 3 33 13 11 12 13 13 7 7 13 33 Ecuador 993 880 874 812 819 847 823 830 825 874 34 Guatemala 1,377 1,207 1,116 1,143 1,207 1,142 1,103 1,076 1,035 1,116 35 Jamaica 371 410 520 475 518 531 565 589 513 520 36 Mexico 19,454 28,018 12,227 21,286 20,182 20,821 19,937 21,254 19,191 12,227 37 Netherlands Antilles 5,205 4,195 4,518 4,885 4,301 5,058 4,268 4,146 4,838 4,518 38 Panama 4,177 3,582 4,540 3,861 4,087 3,843 4,082 4,077 4,598 4,540 39 Peru 1,080 926 896 930 916 1,027 1,079 1,027 935 896 40 Uruguay 1,955 1,611 1,594 1,597 1,420 1,336 1,399 1,471 1,189 1,594 41 Venezuela 11,387 12,786 13,949 11,655 12,004 13,157 13,297 13,805 13,829 13,949 42 Other 6,154 6,174 6,597 6,440 6,417 6,513 6,555 6,489' 6,437 6,597 43 143,540 144,639 155,108 148,721 151,279 152,530 158,328 163,346 157,086 155,108 China 44 People's Republic of China 3,202 4,011 10,063 6,158 5,018 4,394 5,062 5,625 8,017 10,063 45 Republic of China (Taiwan) 8,408 10,633 9,795 8,375 8,811 8,737 8,863 9,483 10,929 9,795 46 Hong Kong 18,499 17,233 17,188 19,111 18,759 18,679 18,819 18,244 17,572 17,188 47 India 1,399 1,114 2,337 2,136 1,695 1,777 2,187 2,376 2,378 2,337 48 Indonesia 1,480 1,986 1,560 2,002 1,676 1,835 1,828 1,734 1,613 1,560 49 Israel 3,773 4,435 5,149 3,762 3,822 3,436 3,204 6,607 5,066 5,149 50 Japan 58,435 61,466 64,030 64,084 65,671 65,755 68,242 66,145 63,331 64,030 51 Korea (South) 3,337 4,913 5,104 4,581 5,310 4,873 4,622 4,740 5,016 5,104 57, Philippines 2,275 2,035 2,709 3,150 3,396 3,214 3,135 3,158 3,064 2,709 53 Thailand 5,582 6,137 6,466 4,851 5,222 6,364 6,503 5,682 5,926 6,466 54 Middle Eastern oil-exporting countries13 21,437 15,824 15,435 14,374 14,935 15,928 17,138 17,232 17,678 15,435 55 Other 15,713 14,852 15,272 16,137 16,964 17,538 18,725 22,320 16,496 15,272 56 5,884 6,633 6,457 6,411 6,153 6,360 6,278 6,375 6,939 6,457 57 Egypt 2,472 2,208 1,840 1,999 1,706 1,914 2,014 1,996 2,097 1,840 58 Morocco 76 99 93 78 80 82 72 66 67 93 59 South Africa 190 451 433 290 289 417 197 245 693 433 60 Zaire 19 12 9 7 8 8 9 9 10 9 61 Oil-exporting countries 1,346 1,303 1,343 1,204 1,291 1,156 1,186 1,176 1,227 1,343 62 Other 1,781 2,560 2,739 2,833 2,779 2,783 2,800 2,883 2,845 2,739 63 Other 4,167 4,192 6,380 8,684 7,587 5,125 5,277 6,281 5,203 6,380 64 Australia 3,043 3,308 5,144 5,804 6,288 3,935 3,966 5,114 4,094 5,144 65 Other 1,124 884 1,236 2,880 1,299 1,190 1,311 1,167 1,109 1,236 66 Nonmonetary international and regional organizations.... 9,350 10,936 4,639 9,042 7,318 5,323 7,279 7,574' 6,207 4,639 67 International15 7,434 6,851 3,634 7,058 5,446 3,998 5,350 5,847 4,361 3,634 68 Latin American regional16 1,415 3,218 551 847 612 418 1,058 950 1,094 551 69 Other regional17 501 867 454 1,137 1,260 907 871 777' 752 454 11. Since December 1992, has excluded Bosnia, Croatia, and Slovenia. 14. Comprises Algeria, Gabon, Libya, and Nigeria. 12. Includes the Bank for International Settlements. Since December 1992, has 15. Principally the International Bank for Reconstruction and Development. Excludes included all parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and "holdings of dollars" of the International Monetary Fund. Slovenia. 16. Principally the Inter-American Development Bank. 13. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United 17. Asian, African, Middle Eastern, and European regional organizations, except the Arab Emirates (Trucial States). Bank for International Settlements, which is included in "Other Europe." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics • April 1995 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 1994 AArreeaa oorr ccoouunnttrryy 11999922 11999933 11999944 June July Aug. Sept. Oct. Nov. Dec.p 1 Total, all foreigners 499,437 483,600 478,500 476,201 468,933 478,179 474,585 478,822r 463,235 478,500 2 Foreign countries 494,355 481,195 474367 473,780 467,537 476,220 471321 476,8ir 461,942 474367 3 Europe 123,377 121,253 123,897 119,779 123,072 124,237 119,758 131,486r 119,232 123,897 4 Austria 331 413 692 416 470 442 282 440 369 692 5 Belgium and Luxembourg 6,404 6,535 6,640 7,113 6,915 6,543 7,250 6,323 6,237 6,640 6 Denmark 707 382 1,039 539 622 464 521 880 668 1,039 7 Finland 1,418 594 696 695 735 507 599 591 718 6% 8 France 14,723 11,497 12,127 13,750 13,263 15,992 14,829 16,292 12,906 12,127 9 Germany 4,222 7,693 6,651 7,264 7,927 9,996 8,650 8,4% 8,114 6,651 10 Greece 717 679 592 661 583 657 613 520 518 592 11 Italy 9,047 8,845 6,052 6,093 6,039 5,518 5,308 6,652 5,920 6,052 12 Netherlands 2,468 3,063 2,914 3,003 3,006 2,948 2,854 3,358 3,360 2,914 13 Norway 355 396 504 620 751 826 650 905 981 504 14 Portugal 325 834 938 989 1,035 1,040 1,182 1,056 1,006 938 15 Russia 3,147 2,310 1,587 1,605 1,541 1,378 1,272 1,220 1,172 1,587 16 Spain 2,755 2,766 3,521 2,497 1,900 2,664 2,211 2,731 2,174 3,521 17 Sweden 4,923 4,082 4,122 3,383 3,601 4,168 3,903 3,156 3,5% 4,122 18 Switzerland 4,717 6,567 7,484 6,674 9,028 6,938 5,854 7,670 6,544 7,484 19 Turkey 962 1,287 860 1,210 1,208 1,152 1,024 1,142 909 860 20 United Kingdom 63,430 60,997 66,039 61,170 62,492 61,264 60,518 68,21 lr 62,525 66,039 21 Yugoslavia' 569 536 265 340 275 273 258 266 266 265 22 Other Europe and other former U.S.S.R.3 2,157 1,777 1,174 1,757 1,681 1,467 1,980 1,577 1,249 1,174 23 Canada 13,845 18,413 17,878 20,496 19,888 19,678 19,226 16,384 17,749 17,878 24 Latin America and Caribbean 218,078 224,112 220,108 221,604 215,608 223,297 220,137 221,254 216,044 220,108 25 Argentina 4,958 4,427 5,781 5,506 5,811 5,876 5,585 5,588 5,715 5,781 26 Bahamas 60,835 65,060 66,584 64,088 67,955 63,358 63,0% 65,196 61,209 66,584 27 Bermuda 5,935 8,034 7,492 6,276 5,783 7,328 5,430 5,186 6,697 7,492 28 Brazil 10,773 11,812 9,493 11,285 10,547 10,051 10,278 10,188 9,759 9,493 29 British West Indies 101,507 97,997 94,163 98,112 89,528 100,519 100,657 99,345 95,773 94,163 30 Chile 3,397 3,616 3,773 3,419 3,327 3,410 3,391 3,429 3,624 3,773 31 Colombia 2,750 3,179 4,003 3,366 3,326 3,414 3,459 3,670 3,768 4,003 32 Cuba 0 0 0 0 8 0 0 12 3 0 33 Ecuador 884 680 685 707 683 604 624 628 632 685 34 Guatemala 262 286 365 312 308 320 310 337 335 365 35 Jamaica 162 195 254 194 186 210 204 255 251 254 36 Mexico 14,991 15,838 17,513 16,463 16,378 16,459 16,223 16,825 17,290 17,513 37 Netherlands Antilles 1,379 2,367 1,025 2,366 2,118 2,139 1,295 1,158 1,781 1,025 38 Panama 4,654 2,892 2,193 2,197 2,335 2,386 2,372 2,307 2,304 2,193 39 Peru 730 653 959 908 926 924 943 857 884 959 40 Uruguay 936 952 485 608 748 706 711 800 652 485 41 Venezuela 2,525 2,907 1,832 2,428 2,240 2,146 2,055 1,934 1,921 1,832 42 Other 1,400 3,217 3,508 3,369 3,401 3,447 3,504 3,539 3,446 3,508 43 131,789 110,751 106,319 104,859 102,408 110022,,339911 110055,,559977 110011,,119977'' 110033,,004488 110066,,331199 China 44 People's Republic of China 906 2,299 835 784 951 764 1,177 822 817 835 45 Republic of China (Taiwan) 2,046 2,628 1,388 1,948 1,786 1,807 1,256 1,467 1,485 1,388 46 Hong Kong 9,642 10,878 9,173 9,782 10,045 9,921 13,066 10,354 11,228 9,173 47 India 529 589 986 784 791 829 950 971r 1,021 986 48 Indonesia 1,189 1,522 1,454 1,319 1,369 1,363 1,343 1,326 1,361 1,454 49 Israel 820 826 691 671 638 675 663 860 696 691 50 Japan 79,172 59,616 58,880 55,4% 53,286 52,597 52,872 50,032 53,356 58,880 51 Korea (South) 6,179 7,569 9,998 7,974 8,112 8,553 8,639 8,948r 8,933 9,998 52 Philippines 2,145 1,408 636 654 514 533 562 639 583 636 53 Thailand 1,867 2,154 2,818 2,979 2,839 2,784 2,686 2,756 2,676 2,818 54 Middle Eastern oil-exporting countries4 18,540 14,398 13,733 16,565 16,342 16,080 15,293 15,424 14,454 13,733 55 Other 8,754 6,864 5,727 5,903 5,735 6,485 7,090 7,598 6,438 5,727 56 4,279 3,857 2,989 3,784 3,456 3,659 3,473 3,147 3,085 2,989 57 Egypt 186 196 225 281 234 229 250 237 229 225 58 Morocco 441 481 429 518 479 485 490 468 480 429 59 South Africa 1,041 633 649 556 492 656 569 480 454 649 60 Zaire 4 4 2 4 3 3 3 3 3 2 61 Oil-exporting countries3 1,002 1,129 843 1,235 1,194 1,189 1,103 955 879 843 62 Other 1,605 1,414 841 1,190 1,054 1,097 1,058 1,004 1,040 841 63 Other 2,987 2,809 3,176 3,258 3,105 2,958 3,130 3,349 2,784 3,176 64 Australia 2,243 2,072 2,224 1,489 1,587 1,390 1,810 2,158 1,687 2,224 65 Other 744 737 952 1,769 1,518 1,568 1,320 1,191 1,097 952 66 Nonmonetary international and regional organizations6... 5,082 2,405 4,133 2,421 1,396 1,959 3,264 2,005 1,293 4,133 1. Reporting banks include all types of depository institutions, as well as some brokers 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab and dealers. 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, has included 6. Excludes the Bank for International Settlements, which is included in "Other all parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia. Europe." 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 1994 TTyyppee ooff ccllaaiimm 11999922 11999933RR 11999944 June July Aug. Sept. Oct/ Nov. Dec.p 1 Total 559,495 535,131 532,770 528,287r ? Banks' claims 499,437 483,600 478,500 476,201 468,933 478,179 474,585 478,822 463,235 478,500 3 Foreign public borrowers 31,367 28,904 22,859 21,250 21,536 22,392 24,419 22,144 20,551 22,859 4 Own foreign offices2 303,991 286,880 283,657 289,930 283,848 287,022 283,308 287,017 276,364 283,657 5 Unaffiliated foreign banks 109,342 98,165 109,214 101,908 100,922 102,200 100,414 106,566 102,768 109,214 6 Deposits 61,550 47,039 57,953 51,016 50,849 49,809 50,736 52,709 50,413 57,953 7 Other 47,792 51,126 51,261 50,892 50,073 52,391 49,678 53,857 52,355 51,261 8 All other foreigners 54,737 69,651 62,770 63,113 62,627 66,565 66,444 63,095 63,552 62,770 9 Claims of banks' domestic customers3 60,058 51,531 56,569 53,702R 10 Deposits 15,452 20,006 24,051 24,441 11 Negotiable and readily transferable instruments4 31,474 17,842 18,853 16,246R 12 Outstanding collections and other claims 13,132 13,683 13,665 13,015 MEMO 13 Customer liability on acceptances 8,655 7,854 7,493 7,605 14 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States5 38,623 26,073 n.a. 23,748 22,880 23,026 2244,,557744RR 2233,,115544 2277,,553322 n.a. 1. For banks' claims, data are monthly; for claims of banks' domestic customers, data and to foreign branches, agencies, or wholly owned subsidiaries of the head office or are for quarter ending with month indicated. parent foreign bank. Reporting banks include all types of depository institution, as well as some brokers and 3. Assets held by reporting banks in the accounts of their domestic customers. dealers. 4. Principally negotiable time certificates of deposit and bankers acceptances. 2. For U.S. banks, includes amounts due from own foreign branches and foreign 5. Includes demand and time deposits and negotiable and nonnegotiable certificates of subsidiaries consolidated in quarterly Consolidated Reports of Condition filed with bank deposit denominated in U.S. dollars issued by banks abroad. For description of changes in regulatory agencies. For agencies, branches, and majority-owned subsidiaries of foreign data reported by nonbanks, see Federal Reserve Bulletin, vol. 65 (July 1979), p. 550. banks, consists principally of amounts due from the head office or parent foreign bank, 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 Maturity, by borrower and area 1 Total 206,903 195,302 195,119 195,180 193,306 185,359 By borrower 2 Maturity of one year or less . .. 165,985 162,573 163,325 166,567 166,741 160,270 3 Foreign public borrowers . .. 19,305 21,050 17,813 17,563 15,953 12,786 4 6 7 5 Ma F A A t o u l l l l r r e i o o t i y g t t h h n o e e r r f p u f f m o o b o r r l e e i r c e i i g g b n t n h o e e a r r r r n s s o w on e e r s ye . a . r . 1 4 2 4 1 2 0 6 8 , , , , 2 9 6 6 6 1 4 8 9 8 9 0 1 3 1 4 1 2 6 1 5 , , , , 7 8 5 8 2 7 2 5 9 0 3 9 1 3 4 1 1 1 8 3 5 , , , , 7 5 2 5 2 9 6 1 8 4 6 2 1 2 4 1 1 8 9 7 0 , , , , 6 0 8 8 1 0 0 1 3 4 0 3 1 2 5 1 9 6 0 7 , , , , 2 5 3 7 6 6 0 8 0 5 5 8 1 2 4 1 5 8 7 7 , , , , 0 0 0 4 8 5 3 8 9 6 3 4 By area Maturity of one year or less 8 Europe 49,184 51,835 53,300 56,432 58,919 51,037 1 1 1 1 9 1 2 0 3 L C A A A a a s f ll t n r i i a i n a o c d a t A h a e m r3 e rica and Caribbean 4 5 9 3 5 3 5 , , , , , 7 2 4 0 2 8 5 5 4 7 2 8 0 0 2 4 5 3 6 1 2 7 , , , , , 5 4 0 5 0 9 4 5 4 8 7 4 9 9 9 4 5 5 6 0 6 1 , , , , , 7 0 3 0 7 0 9 7 6 8 9 1 6 5 4 4 5 0 6 7 3 1 , , , , , 3 7 5 7 8 4 2 4 0 2 1 0 5 8 1 5 3 8 7 6 3 1 , , , , , 9 2 0 9 6 0 7 4 8 2 7 2 2 1 0 5 3 6 8 4 7 1 , , , , , 5 9 2 6 7 5 9 5 3 9 2 2 8 3 8 Maturity of more than one year 14 Europe 3,859 3,878 5,367 4,404 3,840 3,327 15 Canada 3,290 3,595 3,287 2,553 2,548 2,451 1 1 6 7 L A a s t i i a n America and Caribbean 25 5 2 , , , 7 1 3 7 6 7 4 5 4 1 4 2 8 , , , 4 3 2 5 3 7 9 5 7 1 5 2 5 , , , 0 3 3 3 8 1 8 0 2 1 5 3 1 , , , 4 8 9 1 6 3 2 3 4 1 4 2 3 , , , 7 0 0 0 0 2 4 1 3 1 4 2 1 , , , 6 4 8 0 2 4 7 0 9 1 1 8 9 A A l f l r i o c t a h er3 456 185 410 447 449 435 1. Reporting banks include all kinds of depository institutions besides commercial 2. Maturity is time remaining to maturity. 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 • April 1995 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. and Foreign Offices of U.S. Banks' Billions of dollars, end of period 1992 1993 1994 AArreeaa oorr ccoouunnttrryy 11999900 11999911 Sept. Dec. Mar. June Sept. Dec. Mar. June Sept. 1 Total 320.1 343.6 344.5 346.5 361.1r 377.1r 388.4r 404.1r 489.3r 493.9r 503.0r 2 G-10 countries and Switzerland 132.2 137.6 136.0 132.9 142.5r 150.0 153.3 161.1' 178.1' 165.9' 184.0' 3 Belgium and Luxembourg .0 6.0 6.2 5.6 6.1 7.0 7.1 7.4 8.1' 8.8' 9.6' 4 France 10.4 11.0 15.3 15.3 13.5 14.0 12.3 11.7 16.4 18.8 19.3 5 Germany 10.6 8.3 10.9 9.3 9.9 10.8 12.4 12.6 28.7 24.4' 24.3 6 Italy 5.0 5.6 6.4 6.5 6.7 7.9 8.7 7.7' 15.5 14.0 11.6 7 Netherlands .0 4.7 3.7 2.8 3.6 3.7 3.7 4.7 4.1 3.6 3.4 8 Sweden 2.2 1.9 2.2 2.3 3.0 2.5 2.5 2.5 2.8 2.9 2.6 9 Switzerland 4.4 3.4 5.2 4.8 5.3 4.7 5.6 5.9 6.3 6.5 6.2 10 United Kingdom 60.9 68.5 61.0 60.8 65.7 73.5 74.7 84.5 69.9' 57.7 81.1' 11 Canada 5.9 5.8 6.3 6.3 8.2 8.0 9.7 6.7' 7.6 9.5 9.8 12 Japan 24.0 22.6 18.9 19.3 20.4 17.9 16.8 17.4 18.7' 19.5' 16.0 13 Other industrialized countries 22.9 22.8 25.0 24.0 25.4 27.2 26.0 24.6 41.2 41.6' 41.5 14 Austria 1.4 .6 .7 1.2 1.2 1.3 .6 .4 1.0 1.0 1.0 15 Denmark 1.1 .9 1.5 .9 .8 1.0 1.1 1.0 1.1 1.1 .8 16 Finland .7 .7 1.0 .7 .7 .9 .6 .4 1.0 .8 .8 17 Greece 2.7 2.6 3.0 3.0 2.7 3.1 3.2 3.2 3.8 4.6 4.3 18 Norway 1.6 1.4 1.6 1.2 1.8 1.8 2.1 1.7 1.6 1.6 1.6 19 Portugal .6 .6 .5 .4 .7 .9 1.0 .8 1.2 1.1 1.0 20 Spain 8.3 8.3 9.7 8.9 9.5 10.5 9.3 8.9 12.3 11.7' 13.1' 21 Turkey 1.7 1.4 1.5 1.3 1.4 2.1 2.1 2.1 2.4 2.1 1.8 22 Other Western Europe 1.2 1.8 1.5 1.7 2.0 1.7 2.2 2.6 3.0 2.8 1.0 23 South Africa 1.8 1.9 1.7 1.7 1.6 1.3 1.2 1.1 1.2 1.2 1.2 24 Australia 1.8 2.7 2.3 2.9 2.9 2.5 2.8 2.3 12.7 13.7 15.0 25 OPEC2 12.8 14.5 15.9 16.1 16.6 15.7 14.8 16.7 22.5' 21.5 21.5 26 Ecuador 1.0 .7 .7 .6 .6 .6 .5 .5 .5 .5 .4 27 Venezuela 5.0 5.4 5.4 5.2 5.1 5.5 5.4 5.1 4.7 4.4 3.9 28 Indonesia 2.7 2.7 3.0 3.0 3.1 3.1 2.8 3.2 3.4 3.2 3.2 29 Middle East countries 2.5 4.2 5.4 6.2 6.6 5.4 4.9 6.7 12.8 12.4 13.0 30 African countries 1.7 1.5 1.4 1.1 1.1 1.1 1.1 1.2 1.1' 1.1 1.0 31 Non-OPEC developing countries 65.4 63.9 72.8 72.1 74.4 76.7' 77.0 82.6' 93.5' 93.9 91.9 Latin America 32 Argentina 5.0 4.8 6.2 6.6 7.1r 6.6 7.2 7.7 8.7 9.8 10.5 33 Brazil 14.4 9.6 10.8 10.8 11.6 12.3 11.7 12.0 12.5 11.8 9.1 34 Chile 3.5 3.6 4.2 4.4 4.6 4.6 4.7 4.7 5.1 5.1 5.4 35 Colombia 1.8 1.7 1.7 1.8 1.9 1.9 2.0 2.1 2.2 2.4 2.4 36 Mexico 13.0 15.5 17.1 16.0 16.8 16.8 17.5 17.7 18.7 18.3 19.5 37 Peru .5 .4 .5 .5 .4 .4 .3 .4 .5 .6 .6 38 Other 2.3 2.1 2.5 2.6 2.7r 2.7 2.1' 3.0 2.7' 2.7 2.7 Asia China 39 Peoples Republic of China .2 .3 .3 .7 .6 1.6 .5 2.0 .8 .7 1.0 40 Republic of China (Taiwan) 3.5 4.1 5.0 5.2 5.3 5.9 6.4 7.3 7.5 7.1 6.9 41 India 3.3 3.0 3.6 3.2 3.1 3.1 2.9 3.2 3.6 3.7 3.9 42 Israel .5 .5 .4 .4 .5 .4 .4 .5 .4 .4 .4 43 Korea (South) 6.2 6.8 7.4 6.6 6.5 6.9 6.5 6.7 13.9 14.1 13.9 44 Malaysia 1.9 2.3 3.0 3.1 3.4 3.7 4.1 4.4 5.2 5.2 3.9 45 Philippines 3.8 3.7 3.6 3.6 3.4 2.9 2.6 3.1 3.4 3.2 2.9 46 Thailand 1.5 1.7 2.2 2.2 2.2 2.4 2.8 3.1 2.9 3.3 3.4 47 Other Asia 1.7 2.0 2.7 2.7 2.7 2.6 3.0 2.9 3.1 3.5 3.6 Africa 48 Egypt .4 .4 .3 .2 .2 .2 .2 .4 .4 .5 .3 49 Morocco .8 .7 .6 .6 .5 .6 .6 .7' .7 .7 .7 50 Zaire .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 51 Other Africa3 1.0 .7 .9 1.0 .8 .9 .8 .8 1.0 .9 .9 52 Eastern Europe 2.3 2.4 3.1 3.1 2.9 3.2 3.0 3.1' 3.4' 3.0 3.4 53 Russia4 .2 .9 1.8 1.9 1.7 1.9 1.7 1.6 1.5 1.2 1.1 54 Yugoslavia5 1.2 .9 .7 .6 .6 .6 .6 .6 .5 .5 .5 55 Other .9 .7 .7 .6 .7 .8' .7 .9 1.4 1.4 1.9 56 Offshore banking centers 44.7 54.2 54.5 58.3 60.3' 58.0 67.9 72.5 78.3 76.6 77.8' 57 Bahamas 2.9 11.9 8.9 6.9 9.7 7.1 12.7 12.6 15.5' 13.6' 16.5' 58 Bermuda 4.4 2.3 3.8 6.2 4.1 4.5 5.5 8.1 8.4 6.1 5.3 59 Cayman Islands and other British West Indies 11.7 15.8 16.9 21.8 17.6 15.6 15.1 17.0' 17.2 20.0' 20.2' 60 Netherlands Antilles 7.9 1.2 .7 1.1 1.6 2.5 2.8 2.3 2.7 2.4 1.7 61 Panama6 1.4 1.4 2.0 1.9 2.0 2.1 2.1 2.4 2.0 1.9 1.8 62 Lebanon .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 63 Hong Kong 9.7 14.4 15.2 13.8 16.7 16.9 19.1 18.7 19.7 21.8 20.3 64 Singapore 6.6 7.1 6.8 6.5 8.4 9.3 10.4 11.2 12.7 10.7' 11.8' 65 Other' .0 .0 .0 .0 .0 .0 .0 .1 .0 .0 .1 66 Miscellaneous and unallocated8 39.9 48.0 36.8 39.7 38.8 46.2 46.3 43.3 72.0 91.0 82.6' 1. The banking offices covered by these data include U.S. offices and foreign branches 3. Excludes Liberia. Beginning March 1994 includes Namibia. of U.S. banks, including U.S. banks that are subsidiaries of foreign banks. Offices not 4. As of December 1992, excludes other republics of the former Soviet Union. covered include U.S. agencies and branches of foreign banks. Beginning March 1994, the 5. As of December 1992, excludes Croatia, Bosnia and Hercegovinia, and Slovenia. data include large foreign subsidiaries of U.S. banks. The data also include other types of 6. Includes Canal Zone. U.S. depository institutions as well as some types of brokers and dealers. To eliminate 7. Foreign branch claims only. duplication, the data are adjusted to exclude the claims on foreign branches held by a U.S. 8. Includes New Zealand, Liberia, and international and regional organizations. office or another foreign branch of the same banking institution. 2. Organization of Petroleum Exporting Countries, shown individually; other members of OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates); and Bahrain and Oman (not formally members of OPEC). 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 1993 1994 Type of liability, and area or country 11999900 11999911 11999922 June Sept. Dec. Mar. June Sept.p 1 Total 46,043 44,708 45,331 46,502 48,513 49,645 51,728 55,265 56,377 2 Payable in dollars 40,786 39,029 37,276 36,988 39,270 38,361 38,074 42,463 41,900 3 Payable in foreign currencies 5,257 5,679 8,055 9,514 9,243 11,284 13,654 12,802 14,477 By type 4 Financial liabilities 21,066 22,518 23,661 25,100 26,731 28,254 30,111 33,226 35,148 5 Payable in dollars 16,979 18,104 16,780 16,935 18,705 18,175 18,481 22,424 22,553 6 Payable in foreign currencies 4,087 4,414 6,881 8,165 8,026 10,079 11,630 10,802 12,595 7 Commercial liabilities 24,977 22,190 21,670 21,402 21,782 21,391 21,617 22,039 21,229 8 Trade payables 10,683 9,252 9,566 9,358 9,215 8,787 8,944 9,855 9,504 9 Advance receipts and other liabilities . .. 14,294 12,938 12,104 12,044 12,567 12,604 12,673 12,184 11,725 10 Payable in dollars 23,807 20,925 20,496 20,053 20,565 20,186 19,593 20,039 19,347 11 Payable in foreign currencies 1,170 1,265 1,174 1,349 1,217 1,205 2,024 2,000 1,882 By area or country Financial liabilities 12 Europe 10,978 12,003 13,207 14,199 16,445 18,185 20,293 23,564 23,120 13 Belgium and Luxembourg 394 216 414 268 278 175 525 503 650 14 France 975 2,106 1,623 2,219 2,077 2,326 2,589 1,590 2,241 15 Germany 621 682 889 863 855 975 1,214 939 1,467 16 Netherlands 1,081 1,056 606 585 573 534 564 533 648 17 Switzerland 545 408 569 491 378 634 1,200 631 633 18 United Kingdom 6,357 6,528 8,430 9,118 11,694 12,925 13,595 18,151 16,166 19 Canada 229 292 544 493 663 859 508 698 618 20 Latin America and Caribbean 4,153 4,784 4,053 4,199 3,719 3,359 3,553 3,282 3,159 21 Bahamas 371 537 379 476 1,301 1,148 1,157 1,052 1,112 22 Bermuda 0 114 114 124 114 0 120 115 15 23 Brazil 0 6 19 18 18 18 18 18 7 24 British West Indies 3,160 3,524 2,850 2,901 1,600 1,533 1,613 1,454 1,364 25 Mexico 5 7 12 11 15 17 14 13 15 26 Venezuela 4 4 6 5 5 5 5 5 5 27 Asia2 5,295 5,381 5,818 6,039 5,754 5,689 5,601 5,643 8,099 28 Japan 4,065 4,116 4,750 4,857 4,725 4,620 4,589 4,709 6,897 29 Middle Eastern oil-exporting countries" 5 13 19 19 23 23 24 24 31 30 Africa 2 6 6 130 132 133 133 9 133 0 4 0 123 124 123 124 0 123 31 Oil-exporting countries4 409 52 33 40 18 29 23 30 19 32 All other5 Commercial liabilities 10,310 8,701 7,398 6,804 7,048 6,830 6,545 6,903 6,830 33 Europe 275 248 298 269 257 239 252 254 287 34 Belgium and Luxembourg 1,218 1,039 700 774 642 654 553 711 741 35 France 1,270 1,052 729 603 571 684 577 669 551 36 Germany 844 710 535 576 600 688 628 642 648 37 Netherlands 775 575 350 441 536 375 387 472 390 38 Switzerland 2,792 2,297 2,505 2,186 2,319 2,051 2,155 2,309 2,349 39 United Kingdom 40 Canada 1,261 1,014 1,002 939 845 881 1,037 1,062 1,061 41 Latin America and Caribbean 1,672 1,355 1,533 1,824 1,754 1,663 1,907 2,004 1,784 42 Bahamas 12 3 3 6 4 21 8 2 6 43 Bermuda 538 310 307 356 340 348 493 416 198 44 Brazil 145 219 209 226 214 216 211 217 148 45 British West Indies 30 107 33 16 35 26 19 23 32 46 Mexico 475 307 457 658 576 483 556 705 670 47 Venezuela 130 94 142 172 173 126 150 194 192 48 Asia2 9,483 9,334 10,594 10,518 10,915 10,961 10,904 10,898 10,427 49 Japan , 3,651 3,721 3,612 3,390 3,726 4,310 4,612 4,385 4,231 50 Middle Eastern oil-exporting countries 2,016 1,498 1,889 1,815 1,968 1,526 1,533 1,813 1,675 51 Africa 844 715 568 665 641 464 490 523 482 52 Oil-exporting countries4 422 327 309 378 320 171 199 247 271 53 Other5 1,406 1,071 575 652 579 592 734 649 645 1. For a description of the changes in the international statistics tables, see Federal 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Reserve Bulletin, vol. 65, (July 1979), p. 550. Emirates (Trucial States). 2. Revisions include a reclassification of transactions, which also affects the totals for 4. Comprises Algeria, Gabon, Libya, and Nigeria. Asia and the grand totals. 5. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics • April 1995 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1993 1994 TTyyppee ooff ccllaaiimm,, aanndd aarreeaa oorr ccoouunnttrryy 11999900 11999911 11999922 June Sept. Dec. Mar. June Sept.p 1 Total 35,348 45,262 45,073 45,680 46,002 48,853 48,849 50,664 49,046 2 Payable in dollars 32,760 42,564 42,281 42,245 42,314 45,523 45,312 47,028 45,750 3 Payable in foreign currencies 2,589 2,698 2,792 3,435 3,688 3,330 3,537 3,636 3,296 By type 4 Financial claims 19,874 27,882 26,509 25,632 26,902 28,537 28,607 29,706 27,782 5 Deposits 13,577 20,080 17,695 14,298 14,512 16,815 16,943 17,449 17,563 6 Payable in dollars 12,552 19,080 16,872 13,329 13,503 16,041 16,117 16,598 16,914 7 Payable in foreign currencies 1,025 1,000 823 969 1,009 774 826 851 649 8 Other financial claims 6,297 7,802 8,814 11,334 12,390 11,722 11,664 12,257 10,219 y Payable in dollars 5,280 6,910 7,890 10,185 11,282 10,641 10,575 11,163 9,274 10 Payable in foreign currencies 1,017 892 924 1,149 1,108 1,081 1,089 1,094 945 11 Commercial claims 15,475 17,380 18,564 20,048 19,100 20,316 20,242 20,958 21,264 12 Trade receivables 13,657 14,468 16,007 17,565 16,122 17,372 17,404 18,187 18,542 13 Advance payments and other claims 1,817 2,912 2,557 2,483 2,978 2,944 2,838 2,771 2,722 14 Payable in dollars 14,927 16,574 17,519 18,731 17,529 18,841 18,620 19,267 19,562 15 Payable in foreign currencies 548 806 1,045 1,317 1,571 1,475 1,622 1,691 1,702 By area or country Financial claims 16 Europe 9,645 13,441 9,331 9,745 8,376 8,136 7,545 8,093 8,000 17 Belgium and Luxembourg 76 13 8 74 70 131 122 83 114 18 France 371 269 764 781 708 785 753 859 825 19 Germany 367 283 326 383 362 452 419 407 331 20 Netherlands 265 334 515 500 485 502 503 480 503 21 Switzerland 357 581 490 494 512 515 520 495 747 22 United Kingdom 7,971 11,534 6,252 6,579 5,230 4,608 4,136 4,696 4,416 23 Canada 2,934 2,642 1,833 2,034 2,103 2,206 2,573 3,547 3,126 24 Latin America and Caribbean 6,201 10,717 13,893 10,095 12,965 15,834 15,363 15,393 14,019 25 Bahamas 1,090 827 778 827 980 968 1,157 1,187 1,005 26 Bermuda 3 8 40 258 197 125 34 65 52 21 Brazil 68 351 686 590 590 599 567 370 341 28 British West Indies 4,635 9,056 11,747 7,484 10,000 12,807 12,463 12,940 11,786 29 Mexico 177 212 445 665 882 865 782 507 453 30 Venezuela 25 40 29 24 25 161 26 33 32 31 860 640 864 3,016 2,754 1,785 2,646 2,209 2,154 32 Japan 523 350 668 2,485 2,213 1,047 1,782 1,351 662 33 Middle Eastern oil-exporting countries2 8 5 3 10 5 3 5 2 19 34 Africa 37 57 83 125 88 99 76 74 87 3b Oil-exporting countries3 0 1 9 1 1 1 0 1 1 36 All other4 195 385 505 617 616 477 404 390 396 Commercial claims 37 Europe 7,044 8,193 8,451 9,083 8,201 8,897 8,534 8,726 8,604 38 Belgium and Luxembourg 212 194 189 173 163 184 173 179 172 39 France 1,240 1,585 1,537 1,511 1,438 1,941 1,817 1,761 1,759 40 Germany 807 955 933 1,046 935 999 923 920 861 41 Netherlands 555 645 552 565 410 417 351 288 323 42 Switzerland 301 295 362 442 376 424 404 675 532 43 United Kingdom 1,775 2,086 2,094 2,561 2,287 2,268 2,219 2,338 2,377 44 Canada 1,074 1,121 1,286 1,359 1,360 1,355 1,440 1,451 1,486 45 Latin America and Caribbean 2,375 2,655 3,043 3,456 3,071 3,210 3,505 3,809 3,857 46 Bahamas 14 13 28 17 20 11 12 17 33 47 Bermuda 246 264 255 239 225 173 210 285 236 48 Brazil 326 427 357 788 407 462 422 494 470 49 British West Indies 40 41 40 43 39 70 58 66 48 50 Mexico 661 842 924 913 866 946 986 1,000 1,043 51 Venezuela 192 203 345 317 286 295 291 303 384 52 4,127 4,591 4,866 5,220 5,538 5,836 5,772 6,041 6,359 53 Japan 1,460 1,899 1,903 1,885 2,519 2,154 2,339 2,327 2,437 b4 Middle Eastern oil-exporting countries2 460 620 693 673 456 709 656 601 606 55 Africa 488 430 554 516 493 513 512 483 456 56 Oil-exporting countries3 67 95 78 99 107 84 101 90 68 57 Other4 367 390 364 414 437 505 479 448 502 1. For a description of the changes in the international statistics tables, see Federal 3. Comprises Algeria, Gabon, Libya, and Nigeria. 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 1994 Transaction, and area or country 1993 1994 Jan.- June July Aug. Sept. Oct. Nov. Dec.p Dec. U.S. corporate securities STOCKS 1 Foreign purchases 319,728 355,264 355,264 28,273 24,332 29,312 28,849 27,794 28,728 28,223 2 Foreign sales 298,145 352,654 352,654 30,249 25,174 26,400 30,431 29,841 27,656 30,172 3 Net purchases, or sales (—) 21,583 2,610 2,610 -1,976 -842 2,912 -1,582 -2,047 1,072 -1,949 4 Foreign countries 21,311 2,600 2,600 -1,967 -846 2,914 —1,596 -2,079 1,049 -1,951 5 Europe 10,665 6,597 6,597 -378 -291 1,424 -1,198 -1,394 216 -1,445 6 France -103 -216 -216 -241 -68 -22 -63 -198 -25 -117 7 Germany 1,647 2,362 2,362 119 56 73 -104 -158 -57 -159 8 Netherlands -600 1,851 1,851 89 357 266 -134 316 264 211 9 Switzerland 2,986 30 30 74 82 136 -104 -655 -555 10 10 United Kingdom 4,560 642 642 -322 -830 866 -641 -557 565 -1,256 11 Canada -3,213 -1,109 -1,109 -529 -313 -366 57 -416 -116 157 12 Latin America and Caribbean 5,724 -1,601 -1,601 -839 -476 989 -625 -516 673 -565 13 Middle East1 -328 -1,076 -1,076 -111 -94 -281 -431 -75 1 -85 14 Other Asia 8,198 -1,040 -1,040 -219 280 1,031 589 335 273 -149 15 Japan 3,825 1,284 1,284 171 555 1,132 761 251 272 -171 16 Africa 63 30 30 6 -7 0 10 12 -4 -25 17 Other countries 202 799 799 103 55 117 2 -25 6 161 18 Nonmonetary international and regional organizations 272 10 10 -9 4 -2 14 32 23 2 BONDS2 19 Foreign purchases 283,946 291,771 291,771 31,875 25,166 22,963 19,131 20,204 22,169 18,939 20 Foreign sales 217,932 230,888 230,888 21,123 18,898 15,686 17,540 16,304 15,306 14,745 21 Net purchases, or sales (-) 66,014 60,883 60,883 10,752 6,268 7,277 1,591 3,900 6,863 4,194 22 Foreign countries 65,476 59,948 59,948 10,624 5,883 7,344 1,574 3,901 6,879 3,854 23 Europe 22,586 38,197 38,197 6,031 4,531 5,152 2,406 3,546 4,401 2,704 24 France 2,346 243 243 47 21 -18 -16 105 -106 4 25 Germany 885 647 647 52 52 34 -355 449 200 451 26 Netherlands -290 3,018 3,018 868 29 610 -64 125 344 28 27 Switzerland -627 1,156 1,156 144 -192 -9 292 4 489 117 28 United Kingdom 19,686 32,212 32,212 5,624 4,409 4,497 1,997 1,475 3,137 1,741 29 Canada 1,668 3,018 3,018 422 625 519 194 460 201 462 30 Latin America and Caribbean 15,697 5,081 5,081 1,553 -527 -81 -1,852 -981 1,290 694 31 Middle East1 3,257 750 750 339 375 157 -76 56 -86 -176 32 Other Asia 20,846 12,171 12,171 2,263 766 1,558 857 745 1,079 146 33 Japan 11,569 5,431 5,431 1,396 712 763 340 375 445 -277 34 Africa 1,149 44 44 9 -23 18 2 20 -4 8 35 Other countries 273 687 687 7 136 21 43 55 -2 16 36 Nonmonetary international and regional organizations 538 935 935 128 385 -67 17 -1 -16 340 Foreign securities 37 Stocks, net purchases, or sales (-) -63,287 -47,071 -47,071 -6,715 -3,093 -4,568 679 —4,372r -2,546 -2,017 38 Foreign purchases 245,561 384,025 384,025 31,098 29,291 30,534 37,367 29,813r 28,230 25,666 39 Foreign sales3 308,848 431,096 431,0% 37,813 32,384 35,102 36,688 34,185' 30,776 27,683 40 Bonds, net purchases, or sales (—) -70,136 -20,272 -20,272 427 -2,282 861 -1,150 -4,638' -2,862 1,206 41 Foreign purchases 828,922 904,587 904,587 71,762 59,351 67,288 78,604 66,413' 66,459 68,804 42 Foreign sales 899,058 924,859 924,859 71,335 61,633 66,427 79,754 71,051' 69,321 67,598 43 Net purchases, or sales (—), of stocks and bonds .... -133,423 —67,343 -67,343 -6,288 —5,375 -3,707 -471 —9,©10r -5,408 -811 44 Foreign countries — 133,584 —67,863 -67,863 -6,281 —5,557 -3,890 56 -8,860' -5,361 -1,566 45 Europe -90,005 -9,719 -9,719 4,268 -2,490 -174 -2,931 -4,891' -906 -654 46 Canada -14,997 -7,319 -7,319 -769 -2,041 -600 865 -814' -910 1,679 47 Latin America and Caribbean -9,229 -22,350 -22,350 -4,997 -1,437 -2,287 4,819 -1,481' -2,296 -510 48 Asia -15,300 -23,457 -23,457 -4,309 339 -321 -1,913 -1,503' 454 -2,070 49 Africa -185 -875 -875 -45 29 48 -22 -73 -519 -96 50 Other countries -3,868 -4,143 -4,143 -429 43 -556 -762 -98 -1,184 85 51 Nonmonetary international and regional organizations 161 520 520 -7 182 183 -527 -150 -47 755 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, Oman, agencies and corporations. Also includes issues of new debt securities sold abroad by U.S. Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). corporations organized to finance direct investments abroad. 2. Includes state and local government securities and securities of U.S. government Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 International Statistics • April 1995 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions' Millions of dollars; net purchases, or sales (—) during period 1994 1994 AArreeaa oorr ccoouunnttrryy 11999933 11999944 J D an e .— c. June July Aug. Sept. Oct. Nov. Dec.p 1 Total estimated 23,451 77,648 77,648 -5,353 1,710 15,160 11,085 10,587r 13,106 11,549 2 Foreign countries 23,225 77,667 77,667 -4,901 2,043 14,744 11,163 9,492r 13,069 11,898 3 Europe -2,403 38,418 38,418 -2,702 4,891 8,274 3,922 -1,430 7,780 8,224 4 Belgium and Luxembourg 1,218 1,053 1,053 -170 -78 529 -15 32 19 430 5 Germany -9,975 6,669 6,669 143 714 1,795 -243 254 924 725 6 Netherlands -515 1,412 1,412 560 120 -15 -68 954 -2 156 7 Sweden 1,421 794 794 257 100 -158 105 -37 211 61 8 Switzerland -1,501 395 395 158 -416 -259 441 -718 -1,512 656 9 United Kingdom 6,167 22,657 22,657 -5,562 4,820 5,361 3,522 -1,822 7,728 6,196 10 Other Europe and former U.S.S.R 782 5,438 5,438 1,912 -369 1,021 180 -93 412 0 11 Canada 10,309 3,178 3,178 -11 2,937 1,888 1,515 -420 -1,352 -557 12 Latin America and Caribbean -4,572 -9,845 -9,845 -7,080 -7,273 -2,310 -666 6,680r 713 984 13 Venezuela 390 -270 -270 -9 17 -132 19 7 43 91 14 Other Latin America and Caribbean -5,806 -20,048 -20,048 -6,744 -7,663 3,172 1,487 —449r -2,086 80 15 Netherlands Antilles 844 10,473 10,473 -327 373 -5,350 -2,172 7,122 2,756 813 16 Asia 20,581 46,247 46,247 5,128 2,522 5,987 6,761 4,386 4,942 3,642 17 Japan 17,070 29,584 29,584 5,099 -812 3,681 3,210 2,190 4,551 2,067 18 Africa 1,156 240 240 16 5 80 200 135 -11 58 19 Other -1,846 -571 -571 -252 -1,039 825 -569 141 997 -453 20 Nonmonetary international and regional organizations 226 -19 -19 -452 -333 416 -78 1,095 37 -349 21 International -279 108 108 -395 -425 317 -65 1,074 73 -268 22 Latin American regional 654 75 75 54 23 -4 -1 6 4 -3 Memo 23 Foreign countries 23,225 77,667 77,667 -4,901 2,043 14,744 11,163 9,492r 13,069 11,898 24 Official institutions 1,322 41,438 41,438 2,679 4,897 9,216 4,688 2,84 lr 2,646 580 25 Other foreign2 21,903 36,229 36,229 -7,580 -2,854 5,528 6,475 6,651r 10,423 11,318 Oil-exporting countries 26 Middle East2 -8,836 21 21 -495 12 621 3 445 623 -405 27 -5 0 0 0 0 1 0 0 0 -1 1. Official and private transactions in marketable U.S. Treasury securities having an 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab original maturity of more than one year. Data are based on monthly transactions reports. Emirates (Trucial States). Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of 3. Comprises Algeria, Gabon, Libya, and Nigeria. 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, averages of daily figures Rate on Feb. 28, 1995 Rate on Feb. 28, 1995 Rate on Feb. 28, 1995 Country Country Country Month Month effective effective Month effective Austria.. 4.5 May 1994 Germany... 4.5 May 1994 Norway 4.75 Feb. 1994 Belgium. 4.5 May 1994 Italy 8.25 Feb. 1995 Switzerland 3.5 Apr. 1994 Canada.. 8.38 Feb. 1995 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 makes 2. Since February 1981, the rate has been that at which the Bank of France discounts advances against eligible commercial paper or government securities for commercial Treasury bills for seven to ten days. 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 1995 TTyyppee oorr ccoouunnttrryy 11999922 11999933 11999944 Aug. Sept. Oct. Nov. Dec. Jan. Feb. 3.70 3.18 4.63 4.80 5.01 5.52 5.78 6.27 6.23 6.14 9.56 5.88 5.45 5.47 5.65 5.83 5.98 6.30 6.50 6.68 6.76 5.14 5.57 5.71 5.61 5.56 5.77 6.75 7.86 8.14 9.42 7.17 5.25 4.89 4.95 5.12 5.10 5.29 5.04 5.00 7.67 4.79 4.03 4.21 4.00 4.02 3.86 4.07 3.95 3.77 9.25 6.73 5.09 4.88 4.98 5.12 5.15 5.35 5.09 5.03 10.14 8.30 5.72 5.46 5.50 5.52 5.49 5.82 5.76 5.70 8 Italy 13.91 10.09 8.45 8.88 8.68 8.80 8.72 8.98 9.10 9.07 9.31 8.10 5.65 5.47 5.34 5.15 5.09 5.42 5.29 5.33 4.39 2.96 2.24 2.28 2.31 2.33 2.33 2.34 2.31 2.27 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 • April 1995 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar except as noted 1994 1995 CCoouunnttrryy//ccuurrrreennccyy uunniitt 11999922 11999933 11999944 Sept. Oct. Nov. Dec. Jan. Feb. 1 Australia/dollar2 73.521 67.993 73.161 74.200 73.787 75.492 77.389 76.469 74.473 2 Austria/schilling 10.992 11.639 11.409 10.904 10.695 10.838 11.063 10.769 10.573 3 Belgium/franc 32.148 34.581 33.426r 31.895' 31.284 31.694 32.329 31.542 30.908 4 Canada/dollar 1.2085 1.2902 1.3664 1.3540 1.3503 1.3647 1.3893 1.4132 1.4005 5 China, P.RJyuan 5.5206 5.7795 8.6295 8.5581 8.5492 8.5370 8.3833 8.4608 8.4553 6 Denmark/krone 6.0372 6.4863 6.3561 6.1038 5.9479 6.0268 6.1614 6.0311 5.9302 7 Finland/markka 4.4865 5.7251 5.2340 4.9689 4.6866 4.7388 4.8590 4.7505 4.6547 8 France/franc 5.2935 5.6669 5.5459 5.2975 5.2025 5.2867 5.4132 5.2912 5.2252 9 Germany/deutsche mark 1.5618 1.6545 1.6216 1.5491 1.5195 1.5396 1.5716 1.5302 1.5022 10 Greece/drachma 190.81 229.64 242.50 235.98 233.06 237.38 242.96 238.21 236.17 11 Hong Kong/dollar 7.7402 7.7357 7.7290 7.7275 7.7276 7.7306 7.7379 7.7439 7.7314 12 India/rupee 28.156 31.291 31.394 31.372 31.373 31.394 31.389 31.374 31.380 13 Ireland/pound2 170.42 146.47 149.69 154.61 158.64 156.39 153.36 155.67 156.20 14 Italy/lira 1,232.17 1,573.41 1,611.49 1,565.79 1,548.29 1,583.81 1,633.71 1,611.53 1,620.58 15 Japan/yen 126.78 111.08 102.18 98.77 98.35 98.04 100.18 99.72 98.24 16 Malaysia/ringgit 2.5463 2.5738 2.6237 2.5575 2.5589 2.5604 2.5626 2.5556 2.5526 17 Netherlands/guilder 1.7587 1.8585 1.8190 1.7372 1.7028 1.7261 1.7601 1.7159 1.6844 18 New Zealand/dollar2 53.792 54.127 59.358 60.297 60.898 62.093 63.726 64.018 63.448 19 Norway/krone 6.2142 7.1009r 7.0553 6.7961 6.6166 6.7297 6.8561 6.6968 6.5974 20 Portugal/escudo 135.07 161.08 165.93 157.91 155.26 157.27 161.21 157.86 155.36 21 Singapore/dollar 1.6294 1.6158 1.5275 1.4885 1.4761 1.4682 1.4657 1.4532 1.4541 22 South Africa/rand 2.8524 3.2729 3.5526r 3.5570 3.5420 3.5256 3.5614' 3.5404 3.5629 23 South Korea/won 784.66 805.75 806.93 803.69 801.98 799.46 794.81 793.08 793.19 24 Spain/peseta 102.38 127.48 133.88r 128.60' 126.34 128.34 132.31 132.62 130.52 25 Sri Lanka/rupee 44.013 48.211 49.170 49.260 49.112 49.163 49.531 49.870 49.895 26 Sweden/krona 5.8258 7.7956 7.7161 7.5227 7.2631 7.3637 7.5161 7.4774 7.3914 27 Switzerland/franc 1.4064 1.4781 1.3667 1.2892 1.2648 1.2956 1.3289 1.2863 1.2715 28 Taiwan/dollar 25.160 26.416 26.465r 26.210 26.132 26.188 26.381' 26.300 26.339 29 Thailand/baht 25.411 25.333 25.161 24.968 25.001 24.992 25.109 25.133 25.020 30 United Kingdom/pound2 176.63 150.16 153.19 156.61 160.64 158.92 155.87 157.46 157.20 MEMO 31 United States/dollar3 86.61 93.18 91.32 88.08' 86.66 87.71 89.64 88.29 87.29 1. Averages of certified noon buying rates in New York for cable transfers. Data in this world trade of that country divided by the average world trade of all ten countries table also appear in the Board's G.5 (405) monthly statistical release. For ordering combined. Series revised as of August 1978 (see Federal Reserve Bulletin, vol. 64 address, see inside front cover. (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 the 1972-76 average Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A67 Guide to Statistical Releases and Special Tables STATISTICAL RELEASES—List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases December 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 February 1994 May 1994 A74 May 1994 August 1994 A68 August 1994 November 1994 A68 November 1994 February 1995 A68 Assets and liabilities of U.S. branches and agencies of foreign banks December 31, 1993 May 1994 A78 March 31, 1994 August 1994 All June 30, 1994 November 1994 A72 September 30, 1994 February 1995 A72 Pro forma balance sheet and income statements for priced service operations June 30, 1991 November 1991 A80 September 30, 1991 January 1992 A70 March 30, 1992 August 1992 A80 June 30, 1992 October 1992 A70 Assets and liabilities of life insurance companies June 30, 1991 December 1991 A79 September 30, 1991 May 1992 A81 December 31, 1991 August 1992 A83 September 30, 1992 March 1993 A71 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 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 CAPACITY utilization, 46 Federal finance Capital accounts Debt subject to statutory limitation, and types and ownership Banks, by classes, 18 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

A69 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, 32 Mutual savings banks (See Thrift institutions) Federal Reserve Bank holdings, 5, 11, 12, 30 Foreign and international holdings and NATIONAL defense outlays, 29 transactions, 11, 30, 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 PERSONAL income, 52 Utilities, production, 48 Prices Consumer and producer, 45, 50 VETERANS Administration, 37, 38 Stock market, 27 Prime rate, 25 WEEKLY reporting banks, 22-24 Producer prices, 45, 50 Wholesale (producer) prices, 45, 50 Production, 45, 47 Profits, corporate, 35 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 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 PORTIA W. THOMPSON, Equal Employment Opportunity KAREN H. JOHNSON, Assistant Director Programs Adviser CATHERINE L. MANN, Assistant Director RALPH W. SMITH, JR., Assistant Director LEGAL DIVISION J. VIRGIL MATTINGLY, JR., General Counsel DIVISION OF RESEARCH AND STATISTICS SCOTT G. ALVAREZ, Associate General Counsel MICHAEL J. PRELL, Director RICHARD M. ASHTON, Associate General Counsel EDWARD C. ETTIN, Deputy Director OLIVER IRELAND, Associate General Counsel DAVID J. STOCKTON, Deputy Director KATHLEEN M. O'DAY, Associate General Counsel MARTHA BETHEA, Associate Director ROBERT DEV. FRIERSON, Assistant General Counsel WILLIAM R. JONES, Associate Director KATHERINE H. WHEATLEY, Assistant General Counsel MYRON L. KWAST, Associate Director PATRICK M. PARKINSON, Associate Director OFFICE OF THE SECRETARY THOMAS D. SIMPSON, Associate Director WILLIAM W. WILES, Secretary LAWRENCE SLIFMAN, Associate Director JENNIFER J. JOHNSON, Deputy Secretary MARTHA S. SCANLON, Deputy Associate Director BARBARA R. LOWREY, Associate Secretary PETER A. TINSLEY, Deputy Associate Director DAY W. RADEBAUGH, JR., Assistant Secretary1 FLINT BRAYTON, Assistant Director DAVID S. JONES, Assistant Director DIVISION OF BANKING STEPHEN A. RHOADES, Assistant Director SUPERVISION AND REGULATION CHARLES S. STRUCKMEYER, Assistant Director RICHARD SPILLENKOTHEN, Director ALICE PATRICIA WHITE, Assistant Director STEPHEN C. SCHEMERING, Deputy Director JOYCE K. ZICKLER, Assistant Director DON E. KLINE, Associate Director JOHN J. MINGO, Senior Adviser WILLIAM A. RYBACK, Associate Director GLENN B. CANNER, Adviser FREDERICK M. STRUBLE, Associate Director DIVISION OF MONETARY AFFAIRS HERBERT A. BIERN, Deputy Associate Director ROGER T. COLE, Deputy Associate Director DONALD L. KOHN, Director JAMES I. GARNER, Deputy Associate Director DAVID E. LINDSEY, Deputy Director HOWARD A. AMER, Assistant Director BRIAN F. MADIGAN, Associate Director GERALD A. EDWARDS, JR., Assistant Director RICHARD D. PORTER, Deputy Associate Director JAMES D. GOETZINGER, Assistant Director VINCENT R. REINHART, Assistant Director STEPHEN M. HOFFMAN, JR., Assistant Director NORMAND R.V. BERNARD, Special Assistant to the Board LAURA M. HOMER, Assistant Director JAMES V. HOUPT, Assistant Director DIVISION OF CONSUMER JACK P. JENNINGS, Assistant Director AND COMMUNITY AFFAIRS MICHAEL G. MARTINSON, Assistant Director GRIFFITH L. GARWOOD, Director RHOGER H PUGH, Assistant Director GLENN E. LONEY, Associate Director SIDNEY M. SUSSAN, Assistant Director DOLORES S. SMITH, Associate Director MOLLY S. WASSOM, Assistant Director MAUREEN P. ENGLISH, Assistant Director WILLIAM SCHNEIDER, Project Director, IRENE SHAWN MCNULTY, Assistant Director National Information Center 1. On loan from the Division of Information Resources Management Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A71 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 SHEILA CLARK, EEO Programs Director DAVID L. ROBINSON, Deputy Director (Finance and Control) DIVISION OF HUMAN RESOURCES LOUISE L. ROSEMAN, Associate Director MANAGEMENT CHARLES W. BENNETT, Assistant Director DAVID L. SHANNON, Director JACK DENNIS, JR., Assistant Director JOHN R. WEIS, Associate Director EARL G. HAMILTON, Assistant Director ANTHONY V. DIGIOIA, Assistant Director JEFFREY C. MARQUARDT, Assistant Director JOSEPH H. HAYES, JR., Assistant Director JOHN H. PARRISH, Assistant Director FRED HOROWITZ, Assistant Director FLORENCE M. YOUNG, Assistant Director OFFICE OF THE INSPECTOR GENERAL OFFICE OF THE CONTROLLER GEORGE E. LIVINGSTON, Controller BRENT L. BOWEN, Inspector General STEPHEN J. CLARK, Assistant Controller (Programs and DONALD L. ROBINSON, Assistant Inspector General Budgets) BARRY R. SNYDER, Assistant Inspector General 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 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 • April 1995 Federal Open Market Committee and Advisory Councils FEDERAL OPEN MARKET COMMITTEE MEMBERS ALAN GREENSPAN, Chairman WILLIAM J. MCDONOUGH, Vice Chairman ALAN S. BLINDER LAWRENCE B. LINDSEY MICHAEL H. MOSKOW THOMAS M. HOENIG THOMAS C. MELZER SUSAN M. PHILLIPS EDWARD W. KELLEY, JR. CATHY E. MINEHAN JANET L. YELLEN JOHN P. LAWARE ALTERNATE MEMBERS EDWARD G. BOEHNE ROBERT D. MCTEER GARY H. STERN JERRY L. JORDAN JAMES H. OLTMAN STAFF DONALD L. KOHN, Secretary and Economist THOMAS E. DAVIS, Associate Economist NORMAND R.V. BERNARD, Deputy Secretary WILLIAM G. DEWALD, Associate Economist JOSEPH R. COYNE, Assistant Secretary DAVID E. LINDSEY, Associate Economist GARY P. GILLUM, Assistant Secretary FREDERIC S. MISHKIN, Associate Economist J. VIRGIL MATTINGLY, JR., General Counsel LARRY J. PROMISEL, Associate Economist ERNEST T. PATRIKIS, Deputy General Counsel CHARLES J. SIEGMAN, Associate Economist MICHAEL J. PRELL, Economist LAWRENCE SLIFMAN, Associate Economist EDWIN M. TRUMAN, Economist DAVID J. STOCKTON, Associate Economist LYNN E. BROWNE, Associate Economist CARL E. VANDER WILT, Associate Economist PETER R. FISHER, Manager, System Open Market Account FEDERAL ADVISORY COUNCIL ANTHONY P. TERRACCIANO, President MARSHALL N. CARTER, Vice President MARSHALL N. CARTER, First District ROGER L. FITZSIMONDS, Seventh District WALTER V. SHIPLEY, Second District ANDREW B. CRAIG, III, Eighth District ANTHONY P. TERRACCIANO, Third District RICHARD M. KOVACEVICH, Ninth District FRANK V. CAHOUET, Fourth District CHARLES E. NELSON, Tenth District RICHARD G. TILGHMAN, Fifth District CHARLES R. HRDLICKA, Eleventh District CHARLES E. RICE, Sixth District EDWARD A. CARSON, Twelfth District HERBERT V. PROCHNOW, Secretary Emeritus JAMES ANNABLE, Co-Secretary WILLIAM J. KORSVIK, Co-Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A73 CONSUMER ADVISORY COUNCIL JAMES L. WEST, Tijeras, New Mexico, Chairman KATHARINE W. MCKEE, Washington, D.C., Vice Chairman D. DOUGLAS BLANKE, St. Paul, Minnesota THOMAS L. HOUSTON, Dallas, Texas THOMAS R. BUTLER, Riverwoods, Illinois TERRY JORDE, Cando, North Dakota ROBERT A. COOK, Baltimore, Maryland EUGENE I. LEHRMANN, Madison, Wisconsin ALVIN J. COWANS, Orlando, Florida RONALD A. PRILL, Minneapolis, Minnesota MICHAEL FERRY, St. Louis, Missouri LISA RICE-COLEMAN, Toledo, Ohio ELIZABETH G. FLORES, Laredo, Texas JOHN R. RINES, Detroit, Michigan EMANUEL FREEMAN, Philadelphia, Pennsylvania JULIA M. SEWARD, Richmond, Virginia NORMA L. FREIBERG, New Orleans, Louisiana ANNE B. SHLAY, Philadelphia, Pennsylvania DAVID C. FYNN, Cleveland, Ohio REGINALD J. SMITH, Kansas City, Missouri LORI GAY, Los Angeles, California JOHN E. TAYLOR, Washington, D.C. ROBERT G. GREER, Houston, Texas LORRAINE VANETTEN, Troy, Michigan KENNETH R. HARNEY, Chevy Chase, Maryland GRACE W. WEINSTEIN, Englewood, New Jersey GAIL K. HILLEBRAND, San Francisco, California LILY K. YAO, Honolulu, Hawaii RONALD A. HOMER, Boston, Massachusetts ROBERT O. ZDENEK, Greenwich, Connecticut THRIFT INSTITUTIONS ADVISORY COUNCIL CHARLES JOHN KOCH, Cleveland, Ohio, President STEPHEN D. TAYLOR, Miami, Florida, Vice President E. LEE BEARD, Hazleton, Pennsylvania DAVID F. HOLLAND, Burlington, Massachusetts JOHN E. BRUBAKER, San Mateo, California JOSEPH C. SCULLY, Chicago, Illinois MALCOLM E. COLLIER, Lakewood, Colorado JOHN M. TIPPETS, DFW Airport, Texas GEORGE L. ENGELKE, JR., Lake Success, New York LARRY T. WILSON, Raleigh, North Carolina BEVERLY D. HARRIS, Livingston, Montana WILLIAM W. ZUPPE, Spokane, Washington Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Federal Reserve Board Publications For ordering assistance, write PUBLICATIONS SERVICES, FEDERAL RESERVE REGULATORY SERVICE. Loose-leaf; updated MS-127, Board of Governors of the Federal Reserve System, monthly. (Requests must be prepaid.) Washington, DC 20551 or telephone (202) 452-3244 or FAX Consumer and Community Affairs Handbook. $75.00 per (202) 728-5886. When a charge is indicated, payment should year. accompany request and be made payable to the Board of Monetary Policy and Reserve Requirements Handbook. Governors of the Federal Reserve System or may be ordered $75.00 per year. via Mastercard or Visa. Payment from foreign residents should Securities Credit Transactions Handbook. $75.00 per year. be drawn on a U.S. bank. The Payment System Handbook. $75.00 per year. Federal Reserve Regulatory Service. Four vols. (Contains all four Handbooks plus substantial additional material.) $200.00 per year. THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNCTIONS. Rates for subscribers outside the United States are as follows 1994. 157 pp. and include additional air mail costs: ANNUAL REPORT. Federal Reserve Regulatory Service, $250.00 per year. ANNUAL REPORT: BUDGET REVIEW, 1994-95. Each Handbook, $90.00 per year. FEDERAL RESERVE BULLETIN. Monthly. $25.00 per year or THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A MULTI- $2.50 each in the United States, its possessions, Canada, COUNTRY MODEL, May 1984. 590 pp. $14.50 each. and Mexico. Elsewhere, $35.00 per year or $3.00 each. WELCOME TO THE FEDERAL RESERVE. March 1989. 14 pp. ANNUAL STATISTICAL DIGEST: period covered, release date, INDUSTRIAL PRODUCTION—1986 EDITION. December 1986. number of pages, and price. 440 pp. $9.00 each. 1981 October 1982 239 pp. $ 6.50 FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY. 1982 December 1983 266 pp. $ 7.50 December 1986. 264 pp. $10.00 each. 1983 October 1984 264 pp. $11.50 FINANCIAL SECTORS IN OPEN ECONOMIES: EMPIRICAL ANALY- 1984 October 1985 254 pp. $12.50 SIS AND POLICY ISSUES. August 1990.608 pp. $25.00 each. 1985 October 1986 231 pp. $15.00 1986 November 1987 288 pp. $15.00 1987 October 1988 272 pp. $15.00 EDUCATION PAMPHLETS 1988 November 1989 256 pp. $25.00 Short pamphlets suitable for classroom use. Multiple copies are 1980-89 March 1991 712 pp. $25.00 available without charge. 1990 November 1991 185 pp. $25.00 1991 November 1992 215 pp. $25.00 Consumer Handbook on Adjustable Rate Mortgages 1992 December 1993 215 pp. $25.00 Consumer Handbook to Credit Protection Laws 1993 December 1994 281 pp. $25.00 A Guide to Business Credit for Women, Minorities, and Small Businesses Series on the Structure of the Federal Reserve System SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES The Board of Governors of the Federal Reserve System OF CHARTS. Weekly. $30.00 per year or $.70 each in the The Federal Open Market Committee United States, its possessions, Canada, and Mexico. Else- Federal Reserve Bank Board of Directors where, $35.00 per year or $.80 each. Federal Reserve Banks Organization and Advisory Committees THE FEDERAL RESERVE ACT and other statutory provisions A Consumer's Guide to Mortgage Lock-Ins affecting the Federal Reserve System, as amended through A Consumer's Guide to Mortgage Settlement Costs August 1990. 646 pp. $10.00. A Consumer's Guide to Mortgage Refinancings REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL Home Mortgages: Understanding the Process and Your Right RESERVE SYSTEM. to Fair Lending ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— How to File a Consumer Complaint Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. Making Deposits: When Will Your Money Be Available? Vol. II (Irregular Transactions). 1969. 116 pp. Each vol- Making Sense of Savings ume $2.25. SHOP: The Card You Pick Can Save You Money GUIDE TO THE FLOW OF FUNDS ACCOUNTS. 672 pp. $8.50 When Your Home is on the Line: What You Should Know each. About Home Equity Lines of Credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A75 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 163. 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

A76 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- recentiy in December 1991. Digitized for FRtAoSriEeRs as follows: the New York Bank serves the http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A77 1-A 2-B 3-C 4-D 5-E Pittsburgh Baltimore MD / •Cincinnati Buffalo / I CT R\ I MA NJ NY BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F 7-G 8-H WI MI Birmingham Detroit • sville LA Jacksonville ™ f1 •Memphis Little) New Orleans Rock / MS Miami* ATLANTA CHICAGO ST. LOUIS 9-1 l^^fcpliplfSiPte,,.^,: ho m • Helena SD J MINNEAPOLIS 10-J 12-L WY - m Omaha* CCOO \ ™ Denver • M \ Oklahoma City • CMC KANSAS CITY 11-K TX NM • 7 " r*^" 1 EL Paso •Los Angeles A j~rV'Hpiisttin San Antonio^ DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 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 William C. Brainard Paul M. Connolly 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 Michael R. Watson Ronald B. Duncan1 Charlotte 28230 James O. Roberson Walter A. Varvel1 Culpeper 22701 Julius Malinowski, Jr.2 ATLANTA 30303 Leo Benatar Robert P. Forrestal Hugh M. Brown Jack Guynn Donald E. Nelson1 Birmingham 35283 Patricia B. Compton Fred R. Herr1 Jacksonville 32231 Lana Jane Lewis-Brent James D. Hawkins1 Miami 33152 Michael T. Wilson James T. Curry III Nashville 37203 James E. Dalton, Jr. Melvyn K. Purcell New Orleans 70161 Jo Ann Slaydon Robert J. Musso CHICAGO* 60690 Robert M. Healey Michael H. Moskow Richard G. Cline William C. Conrad Detroit 48231 John D. Forsyth Roby L. Sloan1 ST. LOUIS 63166 Robert H. Quenon Thomas C. Melzer John F. McDonnell James R. Bowen Little Rock 72203 Janet M. Jones Karl W. Ashman Louisville 40232 Daniel L. Ash Howard Wells Memphis 38101 Woods E. Eastland John P. Baumgartner MINNEAPOLIS 55480 Gerald A. Rauenhorst Gary H. Stern Jean D. Kinsey Colleen K. Strand Helena 59601 Matthew J. Quinn John D. Johnson KANSAS CITY 64198 Herman Cain Thomas M. Hoenig A. Drue Jennings Richard K. Rasdall Denver 80217 Sandra K. Woods Kent M. Scott1 Oklahoma City 73125 Ernest L. Holloway David J. France Omaha 68102 Sheila Griffin Harold L. Shewmaker DALLAS 75201 Cece Smith Robert D. McTeer, Jr. Roger R. Hemminghaus Tony J. Salvaggio El Paso 79999 W. Thomas Beard, III Sammie C. Clay Houston 77252 Isaac H. Kempner, III Robert Smith, III1 San Antonio 78295 Carol L. Thompson James L. Stull1 SAN FRANCISCO 94120 Judith M. Runstad Robert T. Parry James A. Vohs Patrick K. Barron Los Angeles 90051 Anita E. Landecker John F. Moore1 Portland 97208 Ross R. Runkel A. Kenneth Ridd 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. 2. Assistant Vice President. 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 Consumer's Guide to Mortgage Lock-Ins Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Publications of Interest FEDERAL RESERVE REGULATORY SERVICE To promote public understanding of its regulatory of marginable OTC stocks and its list of foreign functions, the Board publishes the Federal Reserve margin stocks. Regulatory Service, a four-volume loose-leaf service The Consumer and Community Affairs Handbook containing all Board regulations as well as related contains Regulations B, C, E, M, Z, AA, BB, and DD, statutes, interpretations, policy statements, rulings, and associated materials. and staff opinions. For those with a more specialized The Payment System Handbook deals with expeinterest in the Board's regulations, parts of this ser- dited funds availability, check collection, wire transvice are published separately as handbooks pertaining fers, and risk-reduction policy. It includes Regulato monetary policy, securities credit, consumer affairs, tions CC, J, and EE, related statutes and commenand the payment system. taries, and policy statements on risk reduction in the These publications are designed to help those who payment system. must frequently refer to the Board's regulatory mate- For domestic subscribers, the annual rate is $200 rials. They are updated monthly, and each contains for the Federal Reserve Regulatory Service and $75 citation indexes and a subject index. for each Handbook. For subscribers outside the The Monetary Policy and Reserve Requirements United States, the price including additional air mail Handbook contains Regulations A, D, and Q, plus costs is $250 for the Service and $90 for each Handrelated materials. book. All subscription requests must be accompanied The Securities Credit Transactions Handbook 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